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Judgment
P.K. Misra, J.—Heard the counsel appearing for the parties.
The present writ petition has been filed by the Union of India challenging the Order passed by the Central Administrative Tribunal in O.A. No.
890 of 2006 dated 01.04.2008. Such Original application has been filed by the present second respondent challenging the order of punishment of
stoppage of increment without cumulative effect for a period of three years. Such order of punishment was imposed by following the procedures
contemplated under Rule 15 of CCS (CCA) Rules 1965.
The allegation against the second respondent was that he did not follow the guidelines laid down in the appraisal report. The substance of the
imputation, which ultimately resulted in punishment is found at Page No. 2 of the typed set of papers, which is to the following effect:
1.1. In this case, during the course of search on 8.3.96, a kacha balance sheet was found at the business premises of the assessee, depicting the
true state of affairs of the firm as on 31.3.95. The balance sheet showed the total capital balance in the accounts of the partners at Rs.
1,26,51,810/- as on 31.3.95. The assessee had filed the return for the asst.year 1995-96 before the search and the balance sheet filed with the
return showed the balance in the capital account at Rs. 14,62,633/-. It was thus clear that in the return filed the capital balance in the accounts of
the partners had been suppressed to the tune of Rs. 112 lakhs. On consideration of this and the credit balance in the accounts of agriculturists, Sri
Sathyanarayana Rathi, husband of the partner Smt. Srirangabai and brother of partner Sri Om Prakash Rathi, admitted that under creditors, the
balance outstanding as on 31.3.95 had been inflated to the extent of Rs. 117 lakhs. He made a disclosure of this amount u/s 132(4). He also made
disclosure of Rs. 12.80 lakhs towards unexplained cash and Rs. 5 lakhs towards jewellery. A total disclosure of Rs. 134.80 lakhs was thus made.
In the appraisal report the modus operandi of the assessee in generating the unaccounted income was discussed in detail. The appraisal report also
pointed out that the Assessing Officer should enquire into the genuineness of the balance shown under other agricultural creditors as on 8.3.96 to
the extent of Rs. 6,78,99,042/-. This was based on the list of creditors prepared by the assessee on the date of search. Subsequent to the
declaration, the assessee made an adhoc payment of Rs. 25 lakhs towards tax liability. The assessee has also filed an affidavit, duly notarized,
confirming the disclosure made by Sri Rathi on 19.4.96.
The second respondent has replied to the charges on 23.06.2003. The disciplinary authority, after going through the imputation and reply has
considered the case as follows:
DA''s views:
The CO''s reply on allegation (i) above cannot be accepted. He accepted the version of the assessee ignoring the fact that a surrender was made in
the statement recorded u/s 132(4) and that the assessee had also filed an affidavit in this regard. He did not discharge his duties with the
seriousness which is called for in completing the search & seizure cases and accepted the fabricatory story of the assessee. He did not apply the
rates as were applicable in the block assessment cases. As regards the information given to the CIT at the time of seeking his approval, this does
not absolve the CO of his guilt.
On the allegation at (ii) above, the CO, in spite of his such a long experience in service, failed to understand that in the case of creditors, the onus
lies on the assessee to prove the identity, genuineness and creditworthiness of the creditors. Therefore, his brushing aside the Inspector''s report
and getting satisfied merely with the current books of accounts, clearly speaks of a lapse on his part.
The charge on both the above counts has been viewed as ''proved'' at this stage.
On the aforesaid basis, the punishment of stoppage of increment for a period of three years, without cumulative effect, was imposed on the
second respondent as per the Order dated 16.10.2006, after obtaining the opinion of the UPSC. Challenging such order of punishment, the
second respondent has approached the Tribunal.
The Tribunal, under the impugned judgment, has set aside the order of punishment imposed on the second respondent. The Tribunal was of the
view that the allegations related to the year 1997, the departmental proceedings were initiated only in the year 2003 and even though the reply to
the charge memo was sent by the second respondent in the month of June 2003, the order of punishment was passed only on 16.10.2006 and
therefore, there was a delay, which was not properly explained by the Department.
It is no doubt true that the allegations against the second respondent related to the year 1997, but in normal course, obviously, it would consume
time for the department to look into the matter and to initiate proceedings against the delinquent. Therefore, initiation of proceedings in the year
2003 cannot be said to have delayed inordinately. Moreover, at that stage, the second respondent had not raised any objection regarding the delay
in initiating departmental proceedings. After initiating departmental proceedings in the year 2003, the order, imposing punishment, was issued in the
year 2006. Obviously, in the meantime, the opinion of UPSC had to be obtained as required under Law. Under such circumstance, we are unable
to accept the conclusion arrived at by the Tribunal with regard to delay in imposing the punishment.
The other conclusion of the Tribunal is to the effect that the second respondent was discharging a quasi judicial function like making the
assessment and therefore, no disciplinary proceedings could have been initiated against him. For the aforesaid purpose, the Tribunal relied on the
decision of the Supreme Court reported in Zunjarrao Bhikaji Nagarkar Vs. U.O.I. and Others, .
The learned counsel appearing for the petitioners contended that the law laid down in Nagarkar''s case relied on by the Tribunal was
subsequently clarified in several decisions of the Supreme Court including one reported in Union of India and Ors. v. Duli Chand (2006) 5 SCC
As a matter of fact, in the aforesaid decision, the Supreme Court had gone to the extent of holding that the opinion rendered in Nagarkar''s
case is contrary to the decision of a larger bench of the Supreme Court reported in Union of India and Others Vs. K.K. Dhawan, . It is also held
that mere exercise of quasi judicial powers by itself does not afford immunity to an authority. In Union of India and Others Vs. K.K. Dhawan, , it
was observed by the Supreme Court as follows:
Certainly, therefore, the officer who exercises judicial or quasi-judicial powers acts negligently or recklessly or in order to confer undue favour
on a person is not acting as a Judge. Accordingly, the contention of the respondent has to be rejected. It is important to bear in mind that in the
present case, we are not concerned with the correctness or legality of the decision of the respondent but the conduct of the respondent in
discharge of his duties as an officer. The legality of the orders with reference to the nine assessments may be questioned in appeal or revision under
the Act. But we have no doubt in our mind that the Government is not precluded from taking the disciplinary action for violation of the Conduct
Rules. Thus, we conclude that the disciplinary action can be taken in the following cases:
(i) Where the officer had acted in a manner as would reflect on his reputation for integrity or good faith or devotion to duty;
(ii) if there is prima facie material to show recklessness or misconduct in the discharge of his duty;
(iii) if he has acted in a manner which is unbecoming of a Government servant;
(iv) if he had acted negligently or that he omitted the prescribed conditions which are essential for the exercise of the statutory powers;
(v) if he had acted in order to unduly favour a party;
(vi) if he had been actuated by corrupt motive, however small the bribe may be because Lord Coke said long ago ""though the bribe may be small,
yet the fault is great.
In a recent decision of the Division bench of this Court reported in T.K.K. Tharmar v. Registrar, Central Administrative Tribunal, Chennai
Bench, Chennai � 600104 and Ors. 2008 3 MLJ 877, a Division Bench of this Court, in which, one of us was a party (P.K. Misra, J) held that
the disciplinary proceedings can be initiated if there is negligence even while discharging judicial or quasi judicial function.
On the aforesaid contention, the learned counsel for the second respondent submitted that there is no conclusion arrived it in the order of the
disciplinary authority that there has been any negligence in the discharge of duty by the second respondent and therefore the order passed by the
Tribunal is sustainable.
In our opinion, a bare reading of the order passed by the disciplinary authority clearly points to the negligence of the second respondent while
discharging his duties. In such view of the matter, the ratio laid down in Union of India and Others Vs. K.K. Dhawan, will be applicable.
Once it is held that the departmental proceedings could have been initiated, the Tribunal or the High Court is not expected to interfere with
such conclusion arrived at by the disciplinary authority. In the present case, the disciplinary authority has considered the imputation and explanation
and has come to a particular conclusion, which cannot be characterised as arbitrary. In such view of the matter, the order passed by the Tribunal
cannot be sustained.
The learned counsel for the second respondent submitted that on the basis of very same allegations, proceedings had been initiated by the
respondents against the Commissioner of Income Tax and he was let off only with a warning and therefore, the punishment of stoppage of
increment without cumulative effect imposed on the second respondent is grossly disproportionate to the charges. It is also submitted that because
of the pendency of such proceedings, the second respondent could not get his promotion in normal course and therefore a lenient view must be
taken.
In normal course, we would have remanded the matter to the disciplinary authority for re-considering the question of punishment. However, in
view of the fact that the occurrence took place in the year 1997 for which punishment was imposed against the second respondent only in October
2006, remanding the matter would only further delay and prolong the agony of the second respondent. Accordingly, we feel that interest of justice
would be served by directing that instead of punishment of stoppage of increment for three years without cumulative effect, stoppage of increment
for a period of one year without cumulative effect would meet the ends of justice.
Accordingly, the writ petition is allowed in part. No costs.