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PETITIONER:

B.C. CHATURVEDI

Vs.

RESPONDENT:

UNION OF INDIA AND ORS.

DATE OF JUDGMENT01/11/1995

BENCH:

RAMASWAMY, K.

BENCH:

RAMASWAMY, K.

JEEVAN REDDY, B.P. (J)

HANSARIA B.L. (J)

CITATION:

1996 AIR 484 1995 SCC (6) 749

JT 1995 (8) 65 1995 SCALE (6)188

ACT:

HEADNOTE:

JUDGMENT:

W I T H

CIVIL APPEAL NO. 3604 OF 1988.

Union of India & Anr.

V.

B.C. Chaturvedi

J U D G M E N T

K. Ramaswamy, J.

Leave granted.

This appeal and the companion appeal filed by the Union

of India arise from the order of the Administrative Tribunal

in O.A. No. 609 of 1986 dated March 14, 1989. Appellant's

integrity, while he was working as Income-tax officer, had

come under cloud. On an investigation made by the C.B.I., it

had stated to the respondent that though the evidence

collected during investigation disclosed that the appellant

had assets disproportionate to his known source of income,

as the evidence was not strong enough to lay prosecution

under Section 5 (1) (e) of the Prevention of Corruption Act,

1947 [for short, `the Act'], the competent authority might

proceed against the appellant in a departmental inquiry.

In furtherance thereof on March 2, 1982 the appellant

was served with the charge-sheet containing four specific

charges for violating different conduct rules and misconduct

of being in possession of property disproportionate to his

known source of income. After giving reasonable opportunity

and conducting inquiry, the Inquiry Officer submitted his

report on January 28, 1984 holding the charges to have been

proved. After consultation with the Union Public Service

Commission on March 11, 1985, the appellant was dismissed

from service by order dated October 29, 1986. The Tribunal

after appreciating the evidence upheld all the charges

having been proved but converted the order of dismissal into

one of compulsory retirement. The appeal was filed by the

delinquent officer challenging the findings on merits, and

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the Union filed an appeal canvassing the jurisdiction of the

Tribunal to interfere with punishment imposed by it.

Shri Krishnamani, learned senior counsel for the

appellant, raised three-fold contention. It is firstly urged

that a public servant's possession of assets

disproportionate to the known source of his income is not

defined to be a `misconduct' under the Civil Service

(Classification & Control) Appeal Rules. There is abnormal

delay in laying the charges. Despite the pendency of

inquiry, the appellant was promoted as Asstt. Commissioner

of Income-tax. In consequence, no departmental action could

be taken to dismiss him from service. It is also submitted

that he was an intervener when all the cases including the

appeal filed against Union of India & Ors. v. Mohd. Ramzan

Khan [JT (1990) 4 SCC 456] were argued before three-judge

Bench. All of them had been given the benefit of the

judgment. Misfortune of the appellant that his appeal was

directed to be posted after the decision in Ramzan Khan's

case. Since the appellant was admittedly not supplied with

the inquiry report, the order of dismissal with the inquiry

report, the order of dismissal is invalid in law. This Court

in Krishnanand v. State of M.P. [(1977) 1 SCC 816] had held

that 10% of the disproportionate assets need to be deducted

in arriving at the finding that the appellant had

disproportionate assets. The appellant was found to be in

possession of Rs. 1,04,585/-. The disproportionate assets

were only to the tune of about Rs. 30,000/-. It would not be

axiomatic that 10% would be a cut-off deduction. In an

appropriate case deduction could be extended upto 15% and if

so extended, the appellant must be held to be not in

possession of any disproportionate assets. The gifts made to

his wife at the time of their marriage and to his children

at the time of their birthdays are not his assets. If these

amounts are excluded, which indeed must be excluded, he is

not in possession of disproportionate assets. The wife of

the appellant is a teacher. The income from her salary and

her gifts of the extent of Rs. 21,000/- require to be

excluded from his assets. Therefore, the findings of the

Tribunal on merits were not valid in law.

While resisting the contention, the learned counsel for

the Union argued that the Tribunal was not empowered to

appreciate the evidence nor to consider the evidence on

merits to reach a finding whether the appellant was in

possession of disproportionate assets. The Tribunal went

wrong in appreciating the evidence. The disciplinary

authority had undoubted power and authority to impose

punishment. On the facts found by the inquiry Officer and

disciplinary authority that the appellant was in possession

of the assets disproportionate to the known source of his

income, the Tribunal was unjustified in interfering with the

punishment of dismissal from service, and ordering for

compulsory retirement, instead.

Having regard to the respective contentions, the first

question that arises for consideration is whether the order

dismissing the appellant from service is invalid in law for

non-supply of the inquiry report. True, in Ramzan Khan's

case, a Bench of three Judges to which one of us (K.

Ramaswamy, J.) was a member, had held that the delinquent is

entitled to the supply of the inquiry report. It was

contended from the appellant therein that after Amendment to

Article 311(2) of the Constitution by Constitution [42nd

Amendment] Act, 1976, the need to supply the inquiry report

was obviated. Rejecting the contention, it was held that the

supply of the copy of the inquiry report is inconsistent

with fair procedure and non-supply thereof violates the

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principles of natural justice. Therefore, copy of the

inquiry report is required to be supplied to the delinquent

officer. However, it was held that the said ratio was

prospective in operation. The judgment therein was rendered

on November 20, 1990.

A question thereafter had arisen whether the ratio

would be applicable to the order passed earlier to the

judgment. On reference to the Constitution Bench, to which

two of us (K. Ramaswamy & B.P. Jeevan Reddy, JJ.) were

members, it was held in Managing Director, ECIL, Hyderabad

v. B. Karunakar & Ors. [JT (1993) 6 SC 1] that the relief

granted in Ramzan Khan's case was erroneous and that the

ratio in Ramzan Khan's case would apply to the punishment

imposed by the disciplinary authority after the date of the

judgment. Since the controversy is no longer res integra,

the appellant is not entitled to the benefit of Ramzan

Khan's ratio as admittedly he was dismissed from service on

October 29, 1986 and the order of dismissal from service is

valid.

It is true that pending disciplinary proceeding, the

appellant was promoted as Asstt. Commissioner of Income-tax.

Two courses in this behalf are open to competent authority,

viz., sealed cover procedure which is usually followed, or

promotion, subject to the result of pending disciplinary

action. Obviously, the appropriate authority adopted the

latter course and gave the benefit of promotion to the

appellant. Such an action would not stand as an impediment

to take pending disciplinary action to its logical

conclusion. The advantage of promotion gained by the

delinquent officer would be no impediment to take

appropriate decision and to pass an order consistent with

the finding of proved misconduct.

The next question is whether the charge of being in

possession of assets disproportionate to his known source of

income is a misconduct. Section 5(1) (e) of the Act (which

is equivalent to Section 13(1)(e) of the Prevention of

Corruption Act, 1988) defines "criminal misconduct". A

public servant is said to commit the offences of criminal

misconduct if he or any person of his behalf is in

possession or has, at any time during the period of his

office, been in possession, for which the public servant

cannot satisfactorily account for. Thus, pecuniary resources

or property disproportionate to his known source of income

is a criminal misconduct. In the 1988 Act an explanation has

been added to Section 13(1)(e) to explain that "known

sources of income" means income received from any lawful

source and such receipt has been intimated in accordance

with the provision of any law, rules or orders for the time

being applicable to a public servant. The charged officer

must be a public servant. He must be found to be in

possession of, by himself, or through any person on his

behalf, at any time during the period of his office,

pecuniary resources or property disproportionate to his

known source of income. If he cannot satisfactorily account

thereof, he is said to have committed criminal misconduct.

No doubt it s a presumptive finding but that finding is

based on three facts. Being a public servant, if at any

time, during the period of his office, he is proved to have

been in possession, by himself or through any person on his

behalf, of pecuniary resources or property disproportionate

to his known source of income, he is enjoined to

satisfactorily account for the same. If he fails to account

for, he commits misconduct. Therefore, as in a prosecution

laid under Section 5(1)(e) of the Act (equivalent to Section

13(1)(e) of 1988 Act), a public servant is liable to

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punishment. The need to make this misconduct expressly a

part of enumerated items of misconduct under Central Civil

Services, CCA Rules is obviated.

The ratio in A.L. Kalra v. Project & Equipment Corpn.

[(1984 (3) SCC 316] has no application to the facts in this

case. Therein, the misconduct alleged was failure of the

appellant to refund the advance taken from the Corporation.

His omission was charged to be a misconduct. The question

therein was that when Rule 5 of the PEC Employees (Conduct,

Discipline and Appeal) Rules, 1975, defined "specific

misconduct", whether in the general norm of behaviour the

omission to return advance amount, which was not

specifically defined, would constitute a misconduct. This

Court held that in the gray area it is not amenable to

disciplinary action unless the act is constituted to be

misconduct under Rule 5 of the said Rules. We, therefore,

hold that a public servant in possession of assets

disproportionate to his known source of income, when he had

not satisfactorily accounted for, commits a misconduct

amenable to disciplinary action under the CSCCA Rules and

the Conduct Rules.

The next question is whether the delay in initiating

disciplinary proceeding is an unfair procedure depriving the

livelihood of a public servant offending Article 14 or 21 of

the Constitution. Each case depends upon its own facts. In a

case of the type on hand, it is difficult to have evidence

of disproportionate pecuniary resources or assets or

property. The public servant, during his tenure, may not be

known to be in possession of disproportionate assets or

pecuniary resources. He may hold either himself or through

somebody on his behalf, property or pecuniary resources. To

connect the officer with the resources or assets is a

tardious journey, as the Government has to do a lot to

collect necessary material in this regard. In normal

circumstances, an investigation would be undertaken by the

police under the Code of Criminal Procedure, 1973 to collect

and collate the entire evidence establishing the essential

links between the public servant and the property or

pecuniary resources. Snap of any link may prove fatal to the

whole exercise. Care and dexterity are necessary. Delay

thereby necessarily entails. Therefore, delay by itself is

not fatal in this type of cases. It is seen that the C.B.I.

had investigated and recommended that the evidence was not

strong enough for successful prosecution of the appellant

under Section 5 (1)(e) of the Act. It had, however,

recommended to take disciplinary action. No doubt, much time

elapsed in taking necessary decisions at different levels.

So, the delay by itself cannot be regarded to have violated

Article 14 or 21 of the Constitution.

Judicial review is not an appeal from a decision but a

review of the manner in which the decision is made. Power of

judicial review is meant to ensure that the individual

receives fair treatment and not to ensure that the

conclusion which the authority reaches is necessarily

correct in the eye of the court. When an inquiry is

conducted on charges of misconduct by a public servant, the

Court/Tribunal is concerned to determine whether the inquiry

was held by a competent officer or whether the inquiry was

held by a competent officer or whether rules of natural

justice are complied with. Whether the findings or

conclusions are based on some evidence, the authority

entrusted with the power to hold inquiry has jurisdiction,

power and authority to reach a finding of fact or

conclusion. But that finding must be based on some evidence.

Neither the technical rules of Evidence Act nor of proof of

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fact or evidence as defined therein, apply to disciplinary

proceeding. When the authority accepts that evidence and

conclusion receives support therefrom, the disciplinary

authority is entitled to hold that the delinquent officer is

guilty of the charge. The Court/Tribunal in its power of

judicial review does not act as appellate authority to re-

appreciate the evidence and to arrive at its own independent

findings on the evidence. The Court/Tribunal may interfere

where the authority held the proceedings against the

delinquent officer in a manner inconsistent with the rules

of natural justice or in violation of statutory rules

prescribing the mode of inquiry or where the conclusion or

finding reached by the disciplinary authority is based on no

evidence. If the conclusion or finding be such as no

reasonable person would have ever reached, the

Court/Tribunal may interfere with the conclusion or the

finding, and mould the relief so as to make it appropriate

to the facts of each case.

The disciplinary authority is the sole judge of facts.

Where appeal is presented. The appellate authority has co-

extensive power to reappreciate the evidence or the nature

of punishment. In a disciplinary inquiry the strict proof of

legal evidence and findings on that evidence are not

relevant. Adequacy of evidence or reliability of evidence

cannot be permitted to be canvassed before the

Court/Tribunal. In Union of India v. H.C. Goel [(1964) 4 SCR

781], this Court held at page 728 that if the conclusion,

upon consideration of the evidence, reached by the

disciplinary authority, is perverse or suffers from patent

error on the face of the record or based on no evidence at

all, a writ of certiorari could be issued.

In Union of India & Ors. v. S.L. Abbas [(1993) 4 SCC

357], when the order of transfer was interfered by the

Tribunal, this Court held that the Tribunal was not an

appellate authority which could substitute its own judgment

to that bona fide order of transfer. The Tribunal could not,

in such circumstances, interfere with orders of transfer of

a Government servant. In Administrator of Dadra & Nagar

Haveli v. H.P. Vora [(1993) Supp. 1 SCC 551], it was held

that the Administrative Tribunal was not an appellate

authority and it could not substitute the role of

authorities to clear the efficiency bar of a public servant.

Recently, in State bank of India & Ors. v. Samarendra

Kishore Endow & Anr. [J] (1994) 1 SC 217], a Bench of this

Court to which two of us (B.P. Jeevan Reddy & B.L. Hansaria,

JJ.) were members, considered the order of the Tribunal,

which quashed the charges as based on no evidence, went in

detail into the question as to whether the Tribunal had

power to appreciate the evidence while exercising power of

judicial review and held that a Tribunal could not

appreciate the evidence and substitute its own conclusion to

that of the disciplinary authority. It would, therefore, be

clear that the Tribunal cannot embark upon appreciation of

evidence to substitute its own findings of fact to that of a

disciplinary/appellate authority.

It is, therefore, difficult to go into the question

whether the appellant was in possession of property

disproportionate to the known source of his income. The

findings of the disciplinary authority and that of Inquiry

Officer are based on evidence collected during the inquiry,

They reached the findings that the appellant was in

possession of Rs.30,000/- in excess of his satisfactorily

accounted for assets from his known source of income. The

alleged gifts to his wife as stridhana and to his children

on their birthdays were disbelieved. It is within the

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exclusive domain of the disciplinary authority to reach that

conclusion. There is evidence in that behalf.

It is true that a three-judge Bench of this Court in

Krishanand's case (supra) held in para 33, that if the

excess was comparatively small (it was less than 10% of the

total income in that case), it would be right to hold that

the assets found in the possession of the accused were not

disproportionate to his known source of income raising the

presumption under sub-section (3) of Section 5. It is to be

remembered that the said principle was evolved by this Court

to give benefit of doubt, due to inflationary trend in the

appreciation of the value of the assets. The benefit thereof

appears to be the maximum. The reason being that if the

percentage begins to rise in each case, it gets extended

till it reaches the level of incredulity to give the benefit

of doubt. It would, therefore, be inappropriate, indeed

undesirable, to extend the principle of deduction beyond 10%

in calculating disproportionate assets of a delinquent

officer. The salary of his wife was not included in the

assets of the appellant. The alleged stridhana of his wife

and fixed deposits or gifts of his daughter, in appreciation

of evidence, were held to be the property of the appellant.

It is in the domain of appreciation of evidence. The

Court/Tribunal has no power to appreciate the evidence and

reach its own contra conclusions.

The next question is whether the Tribunal was justified

in interfering with the punishment imposed by the

disciplinary authority. A Constitution Bench of this Court

in State of Orissa Ors. v. Bidyabhushan Mohapatra [AIR 1963

SC 779] held that having regard to the gravity of the

established misconduct, the punishing authority had the

power and jurisdiction to impose punishment. The penalty was

not open to review by the High Court under Article 226. If

the High Court reached a finding that there was some

evidence to reach the conclusion, it became unassessable.

The order of the Governor who had jurisdiction and

unrestricted power to determine the appropriate punishment

was final. The High Court had no jurisdiction to direct the

Governor to review the penalty. It was further held that if

the order was supported on any finding as to substantial

misconduct for which punishment "can lawfully be imposed",

it was not for the Court to consider whether that ground

alone would have weighed with the authority in dismissing

the public servant. The court had no jurisdiction, if the

findings prima facie made out a case of misconduct, to

direct the Governor to reconsider the order of penalty. This

view was reiterated in Union of India v. Sardar Bahadur

[(1972) 2 SCR 218]. It is true that in Bhagat Ram v. State

of Himachal Pradesh & Ors. [AIR 1983 SC 454], a Bench of two

Judges of this Court, while holding that the High Court did

not function as a court of appeal, concluded that when the

finding was utterly perverse, the High Court could always

interfere with the same. In that case, the finding was that

the appellant was to supervise felling of the trees which

were not hammer marked. The Government had recovered from

the contractor the loss caused to it by illicit felling of

trees. Under those circumstances, this Court held that the

finding of guilt was perverse and unsupported by evidence.

The ratio, therefore, is not an authority to conclude that

in every case the Court/Tribunal is empowered to interfere

with the punishment imposed by the disciplinary authority.

In Rangaswami v. State of Tamil Nadu [AIR 1989 SC 1137], a

Bench of three Judges of this Court, while considering the

power to interfere with the order of punishment, held that

this Court. while exercising the jurisdiction under Article

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136 of the Constitutions, is empowered to alter or interfere

with the penalty; and the Tribunal had no power to

substitute its own discretion for that of the authority. It

would be seen that this Court did not appear to have

intended to lay down that in no case, the High

Court/Tribunal has the power to alter the penalty imposed by

the disciplinary or the appellate authority. The controversy

was again canvassed in State Bank of India's case (supra),

where the court elaborately reviewed the case law on the

scope of judicial review and powers of the Tribunal in

disciplinary matters and nature of punishment. On the facts

in that case, since the appellate authority had not adverted

to the relevant facts, it was remitted to the appellate

authority to impose appropriate punishment.

A review of the above legal position would establish

that the disciplinary authority, and on appeal the appellate

authority, being fact-finding authorities have exclusive

power to consider the evidence with a view to maintain

discipline. They are invested with the discretion to impose

appropriate punishment keeping in view the magnitude or

gravity of the misconduct. The High Court/Tribunal, while

exercising the power of judicial review, cannot normally

substitute its own conclusion on penalty and impose some

other penalty. It the punishment imposed by the disciplinary

authority or the appellate authority shocks the conscience

of the High Court/Tribunal, it would appropriately mould the

relief, either directing the disciplinary/appellate

authority to reconsider the penalty imposed, or to shorten

the litigation, it may itself, in exceptional and rare

cases. impose appropriate punishment with cogent reasons in

support thereof.

The Tribunal in this case held that the appellant had

put in 30 years of service. He had brilliant academic

record. He was successful in the competitive examination and

was selected as a Class I Officer. He earned promotion after

the disciplinary proceeding was initiated. It would be

difficult to get a new job or to take a new profession after

50 years and he is "no longer fit to continue in government

service". Accordingly, it substituted the punishment of

dismissal from service to one of compulsory retirement

imposed by the disciplinary authority. We find that the

reasoning is wholly unsupportable. The reasons are not

relevant nor germane to modify the punishment. In view of

the gravity of the misconduct, namely, the appellant having

been found to be in possession of assets disproportionate to

the known source of his income, the interference with the

imposition of punishment was wholly unwarranted. We find no

merit in the main appeal which is accordingly dismissed with

no order as to costs.

C.A. No.3604 of 1988

Consequently, the appeal of the Union of India is

allowed. The order of the Tribunal modifying the punishment

is set side and that of the disciplinary authority is

maintained. In the circumstances parties to bear their own

costs.

B.C. Chaturvedy

V.

Union of India & Ors.

J U D G M E N T

HANSARIA, J.

I am in respepctful agreement with all the conclusions

reached by learned brother Ramaswamy, J. This concurring

note is to express my view on two facets the case. The first

of these relates to the power of the High Court. The to do

"complete justice", which power has been invoked in some

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cases by this Court to alter the punishment/penalty where

the one awarded has been regarded as dispropotionate, but

denied to the High Courts. No doubt, Article 142 of the

Constitution has specifically conferred the power of doing

complete justice on this Court, to achieve which result it

may pass such decree or order as deemed necessary; it would

be wrong to think that other courts are not to do complete

justice between the parties. If the power of modification of

punishment/penalty were to be available to this Court only

under Article 142, a very large percentage of litigants

would be denied this small relief merely because they are

not in a position to approach this Court, which may, inter

alia, be because of the poverty of the concerned person. It

may be remembered that the framers of the Constitution

permitted the High Courts to even strike down a

parliamentary enactment, on such a case being made out, and

we have hesitated to concede the power of even substituting

a punishment/penalty, on such a case being made out. What a

difference? May it be pointed out that Service Tribunals

too, set up with the aid of Article 323-A have the power of

striking down a legislative act.

2. The aforesaid has, therefore, to be avoided and I have

no doubt that a High Court would be within its jurisdiction

to modify the punishment/penalty by moulding the relief,

which power it undoubtedly has, in view of long line of

decisions of this Court, to which reference is not deemed

necessary, as the position is well settled in law. It may,

however, be stated that this power of moulding relief in

cases of the present nature can be invoked by a High Court

only when the punishment/penalty awarded shocks the judicial

conscience.

3. It deserves to be pointed out that the mere fact that

there is no provision parallel to Article 142 relating to

the High Courts, can be no ground to think that they have

not to do complete justice between the parties, the same

cannot be ordered. Absence of provision like Article 142 is

not material, according to me. This may be illustrated by

pointing out that despite there being no provision in the

Constitution parallel to Article 137 conferring power of

review on the High Court, this Court held as early as 1961

in Shivdeo Singh's case, AIR 1963 SC 1909, that the High

Courts too can exercise power of review, which inheres in

every court of plenary jurisdiction. I would say that power

to do complete justice also inheres in every court, not to

speak of a court of plenary jurisdiction like a High Court.

of course, this power is not as wide which this Court has

under Article 142. That, however, is a different matter.

4. What has been stated above may be buttressed by putting

the matter a little differently. The same is that in a case

of dismissal, Article 21 gets attracted. And, in view of the

inter-dependence of fundamental rights, which concept was

first accepted in the case commonly known as Bank

Nationalisation case, 1970 (3) SCR 530, which thinking was

extended to cases attracting Article 21 in Maneka Gandhi vs.

Union of India. AIR 1978 SC 597, the punishment/penalty

awarded has to be reasonable; and if it be unreasonable,

Article 14 would be violated. That Article 14 gets attracted

in a case of disproportionate punishment was the view of

this Court in Bhagat Ram vs. State of Himachal Pradesh, 1983

(2) SCC 442 also. Now if Article 14 were to be violated, it

cannot be doubted that a High Court can take care of the

same by substituting, in appropriate cases, a punishment

deemed reasonable by it.

5. No doubt, while exercising power under Article 226 of

the Constitution, the High Courts have to bear in mind the

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restraints inherent in exercising power of judicial review.

It is because of this that substitution of High Court's view

regarding appropriate punishment is not permissible. But for

this constraint, I would have thought that the law makers do

desire application of judicial mind to the question of even

proportionality of punishment/penalty. I have said so

because the Industrial Disputes Act, 1947 was amended to

insert section 11A in it to confer this power even on a

Labour Court/Industrial Tribunal. It may be that this power

was conferred on these adjudicating authorities because of

the prevalence of unfair labour practice or victimisation by

the management. Even so, the power under section 11A is

available to be exercised, even if there be no victimisation

or taking recourse to unfair labour practice. In this

background, I do not think if we would be justified in

giving much weight to the decision of the employer on the

question of appropriate punishment in service matters

relating to Government employees or employees of the public

corporations. I have said so because if need for maintenance

of office discipline be the reason of our adopting a strict

attitude qua the public servants, discipline has to be

maintained in the industrial sector also. The availability

of appeal etc. to public servants does not make a real

difference, as the appellate/revisional authority is known

to have taken a different view on the question of sentence

only rarely. I would, therefore, think that but for the

self-imposed limitation while exercising power under Article

226 of the Constitution, there is no inherent reason to

disallow application of judicial mind to the question of

proportionately of punishment/penalty. But then, while

seized with this question as a writ court interference is

permissible only when the punishment/penalty is shockingly

disproportionate.

6. I had expressed my unhappiness qua the first facet of

the case, as Chief Justice of the Orissa High Court in paras

20 and 21 of Krishna Chandra v. Union of India, AIR 1992

Orissa 261 (FB), by asking why the power of doing complete

justice has been denied to the High Courts ? I feel happy

that I have been able to state, as a Judge of the Apex

Court, that the High Courts too are to do complete justice.

This is also the result of what has been held in the leading

judgment.