DR. H. MUKHERJEE AND ORS.versusUNION OF INDIA AND ORS.

                   DR. H. MUKHERJEE AND ORS.                                   A
                               v.
                    UNION OF INDIA AND ORS.

                          SEPTEMBER 28, 1993

   [AM. AHMADI, M.M. PUNCHHI AND K. RAMASWAMY, JJ.]                            B

      Service Law-Selection by Union Public Service Commission---lnitia-
tion of CBI enquiry and communication of adverse remark against selected
candidate subsequent to selection-Government rejecting the recommendation
of U.P.S.C. taking into account events subsequent to selection-Validity of     C
Government's decision-Held events subsequent to selection can be taken into
account for adjudgi.ng suitability of candidates.

       Constitution of India, 1950: Articles 320 and 323 Public Service Com-
mission-Selection made by-Held recommendatmy--Government can by-
pass the recommendation of Commission for valid reasons-Government's           D
decision can be challenged on the ground of mala fide or arbitrariness.

      'S' was selected by the Union Public Service Commission on June 10,
1987 for the post of Chief Controller of Explosives. On June 18, 1987 the
approval of Appointments Committee of Cabinet, (ACC) was sought. While· E
the matter was pending before the ACC, a C.B.I. inquiry was initiated
against S and consequently the ACC could not process the proposal. The
inquiry ended in his exoneration in December, 1987 and immediately there-
after when the ACC considered the proposal of his appointment it was
found that in the Annual Confidential Report of 1987 there was an adverse
remark made by Reviewing Authority which was communicated to 'S' on F
May 20, 1988 and in regard to which he had made a representation on June
10, 1988. Till that representation was disposed of on October 4, 1988, the
ACC could not take a decision on the question whether or not to accept the
recommendation of the U.P.S.C. That representation was partially allowed
and the remark was partially expunged. The ACC took into consideration G
the adverse remark made subsequent to the recommendation of U.P.S.C.
and came to the conclusion that 'S' was not suitable for appointment.

     'S' challenged the decision of ACC before the Central Administration
Tribunal which held that (i) the ACC was not justified in taking into
consideration the events subsequent to the recommendation of U.P.S.C H
                                    529
    530                   SUPREME COURT REPORTS [1993] SUPP. 2 S.C.R.

A viz., the communication of adverse remarks and the initiation of C.B.I.
    inquiry against 'S' for by-passing the recommendation of the U.P.S.C., (ii)
    the decision of the ACC was not sustainable in law because it had assigned
    no reasons for rejecting the recommendation made by U.P.S.C. According-
    ly, the Tribunal remitted the matter to ACC to reconsider the suitability
    of S for appointment without taking into consideration the adverse
B   remarks made in the year 1987 and the outcome of C.B.I. inquiry.

          Against the decision of the Tribunal, appeals were filed in this Court.

         Allowing the appeals and setting aside the order of the Tribunal, this
C   Court

           HELD : 1. There is nothing in Article 323 or in the rules to suggest
    that the Government cannot take into consideration the developments
    subsequent to the selection made by the U.P.S.C. Such a view would not
    be in public interest and may lead to serious complications if the Govern-
D   ment is enjoined to made the appointment notwithstanding certain serious
    matters having come to its notice subsequent to the recommendation made
    by the Commission. All that Article 323 requires is that along with the copy
    of the report of the Commission a Memorandum containing the reason for
    declining to accept the recommendations of the Commission should be
E   placed before the concerned legislature. Therefore, the Tribunal wrongly
    thought that subsequent events could not be taken into consideration.
                                                          [537-F, 536-H, 539-C]
          2. The Tribunal is not right in coming to tbe coqclusion that no
    reason had been given by the ACC for departing from the recommendation
F   of the U.P.S.C. The reason for declining to accept the recommendation of
    the U.P.S.C. is the adverse remark made in the Confidential Report for
    the year 1987. This reason for disapproval was stated on file. [537-A-B]

          3. The function of the Public Service Commission being advisory, the
G Government may for valid reasons to be recorded on the file, disapprove
    of the advice or recommendation tendered by the Commission, which
    decision can, if at an, be tested on the limited ground of it being thoroughly
    arbitrary, malafide or capricious. In the circumstances of the case, it
    cannot be said that the ACC had deliberately delayed the decision. The
    facts do not reveal that the decision taken by the ACC was either malafide
H   or arbitrary. [539-E, 538-C]
                   MUKHERJEE v. U.O.I. [AHMADI,J.]                       531

      Jatinder Kumar & Ors. v. State of Punjab [1985] 1 S.C.R. 899, ex- A
plained.

      Mrs. Asha Kaul and Anr. v. State of J&K & Ors., J.T. (1993) 2,688 and
Jagtar Singh v. Director, Central Bureau of Investigation & Ors., J.T. (1993)
2, 703, held inapplicable.
                                                                                 B·
      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3668 &
3671-71A of 1993.

     From the Judgment and Order dated 09.02.1993 of the Central
Administrative Tribunal, Principal Bench, New Delhi in O.A. Nos. 512 and         C
2473 of 1989.

      S.K. Dholakia and Arvind Minocha for the Appellant in CA No.
3668/93.

      K.T.S. Tulsi, Addi. Solicitor General, Ms. K. Amareshwari, Ms. A. D
Subhashini and Girish Chandra for the Appellants in C.A. No. 3671-71A
and for the Respondent in C.A. No. 3668/93.

      G.D. Gupta and Ashok K. Mahajan for the Respondent in C.A. No.
3668/93 and C.A. Nos. 3671-71A.
                                                                                 E
      The Judgment of the Court was delivered by

       AHMADI, J. These appeals by special leave are directed against the
decision rendered by the Principal Bench of the Central Administrative
Tribunal on February 9, 1993 where by it directed the Appointments
Committee of the Cabinet (for short 'ACC') to reconsider the suitability of      F
respondent No. 1 S.K. Bhargava for appointment to the post of Chief
Controller of Explosives without taking into consideration the adverse
remarks made in the year 1987 and the outcome of the Central Bureau of
Investigation's (for short 'CBI') enquiry in which he was exonerated and in
the light of the observations contained in its judgment. The facts giving rise   G
to these two appeals, briefly stated are as under.

      Shri B.R. Dave, the Chief Controller of Explosives superannuated on
June 30 , 1984 but as no suitable candidate was available for appointment
to the. post he was granted re-employment for a period of one year i.e.,
from w.e.f. July 1, 1985. On his vacating the post w.e.f. July 1, 1985 as no     H
    532                  SUPREME COURT REPORTS (1993) SUPP. 2 S.C.R.

A suitable candidate was available for manning the said post the seniormost
    Joint Chief Controller of Explosives was appointed on ad-hoc basis as
    Chief Controller of Explosives w.e.f. July 1, 1985 Dr. H. Mukherjee who
    was the seniormost Joint Chief Controller of Explosives thus functioned as
    the Chief Controller of Explosives on an ad-hoc basis w.e.f. July 1, 1985.
    The ACC approved the ad-hoc appointment on condition that he will
B
    vacate the post on regular appointment being made in accordance with
    rules. It may be mentioned that under the relevant rules the post of Chief
    Controller of Explosives could be filled in by promotion/transfer on
    deputation (including short term contract) or by direct recruitment. Since
    no suitable candidate was available for filling the post by promotion/trans-
C   fer a decision was taken to fill the post by direct recruitment. An adver-
    tisement was issued inviting applications for appointment to the said post
    on July 13, 1985. Pursuant thereto one R.C. Srivastava was selected for
    appointment but his selection was not approved by the ACC. A fresh
    advertisement was issued by the Union Public Service Commission on
D   February 7, 1987, in pusuance whereof respondent No.l came to be
    selected on June 10, 1987. On June 18, 1987 the approval of ACC was
    sought but while the matter was_!!'pending before the ACC, a CBI enquiry
    was commenced against him in September, 1987 in regard to some incident
    of 1985. This enquiry ended in his exoneration in December, 1987. After
    he came to be exonerated the ACC took up the question regarding his
E   appointment pursuant to the selection made by UPSC. It, however, appears
    that in his Confidential Report pertaining to the year 1987 an adverse
    comment was made to the following effect :

            ".......... he has not the ability to give leadership in a department
            which has all India jurisdiction. He has also been orally advised
F
            not to bring outside influence in his service matters. He needs to
            develop a proper perspective about the role and functioning of the
            department. He has not done any meritorious work."

    The said adverse remarks were communicated to him on May 20, 1988. He
G made a representation for expunging the said adverse remarks on June 10,
    1988. His representation was partly accepted by the order dated October
    4, 1988 in that, the remark 'He has not done any meritorious work' was
    ordered to be expunged. Thereafter on December 7, 1988, the ACC took
    the decision not to appoint him to the post in question. He challenged this
H   decision by moving the Central Administrative Tribunal which allowed the
                   MUKHERJEE v. U.0.1. [AHMADI,J.]                        533

application and gave directions as stated hereinabove. It is this order of       A
the Tribunal which is questioned in these appeals. As the issue involved is
the same we proceed to dispose of these appeals by this common judgment.

     It may be mentioned that on the facts narrated above the Tribunal
came to the following conclusion :
                                                                                 B
         "In the instant case no adverse remarks had been communicated
         to the appellant at the time of selection of the appellant by the
         UPSC in J unc, 1987 for the post of Chief Controller of Explosives.
         There was no investigation or enquiry pending against him in
         regard to any alleged misconduct on his part at that point of time.     C
         That being. so we are of the opinion that subsequent events such
         as communication of remarks to the applicant for the year 1987
         and the CBI enquiry initiated against him into alleged acts of
         misconduct which was dropped would have no bearing on the
         suitability of the applicant for the post of Chief Controller of
         Explosives. The subsequent events and developments should not           D
         be taken into account by the ACC which adjudging his suitability."

Proceeding further the Tribunal came to the conclusion that since no
reason was assigned by the ACC for rejecting the recommendation made
by the UPSC for the appointment of respondent No. 1 as Chief Controller          E
of Explosives by way of direct recruitment, the decision was vitiated. In this
view of the matter the Tribunal remitted the matter to the ACC to
reconsider the recommendation of the UPSC without taking into account
the adverse remarks of 1987 and the outcome of the CBI enquiry. It further
directed that the ACC may take a decision in the light of the observations
contained in the judgment which we have e"xtracted earlier.                      F

       In view of the above, the short question. which arises for considera-
tion is whether the Tribunal was justified in taking the view that events
subsequent to the recommendation made by the UPSC could not be taken
into consideration for deciding whether or not the candidate recommended         G
was suitable for appointment and whether .the omission on the part of the
ACC to state the reason for departing from the recommendation of the
UPSC was fatal and vitiated the decision?

      Before we answer the questions which arise for consideration it is
necessary to correct certain factual errors in the order of the Tribunal. It     H
    534                  SUPREME COURT REPORTS [1993] SUPP. 2 S.C.R.

A is not in dispute that in the ACR for the year 1987 an adverse remark was
    made by the Reviewing Authority which was duly communicated to respon-
    dent No. 1. Respondent No. 1 had made a representation on June 10, 1988
    for expunging that remark. That remark was partially expunged by the
    order of October 4, 1988. The Tribunal was, therefore, wrong in thinking
    that the representation was not disposed of before the ACC decided on
B   December 7, 1988 that respondent No. 1 was not suitable to be appointed
    to the post of Chief Controller of Explosives. The observation of the
    Tribunal in this behalf in the concluding line of paragraph 27 of the
    judgment is, therefore, factually inaccurate.

C          It is indeed true that till the UPSC made the recommendation for
    the appointment of respondent No. 1 to the post of Chief Controller of
    Explosives on June 18, 1987, there was no adverse remark in his ACRs but
    in the ACR of 1986 shown to us the Reviewing Authority did state that he
    lacked the qualities of leadership. However, since that remark was not
D   communicated to him as it was not considered to be adverse it had to be
    ignored. The learned counsel for respondent No. 1 was, therefore, right in
    saying that there was no adverse remark in the Confidential Report of
    respondent No. 1 upto the point of time when the UPSC made the
    recommendation on June 18, 1987. However, certain developments took
    place after that recommendation was made and before ACC could reach
E   a decision thereon. In September, 1987 a CBI enquiry was commenced
    against respondent No. 1 and hence the ACC could not process the
    proposal till the outcome of that enquiry. That enquiry ended in the
    exoneration of respondent No. 1 and immediately thereafter when the ACC
    took up the proposal it was found that in the ACR of 1987 there was an
F   adverse remark made by the Reviewing Authority which was communi-
    cated to respondent No. 1 on May 20, 1988 and in regard to which
    respondent No. 1 had made a representation on June 10, 1988. Till that
    representation was disposed of on October 4, 1988 the ACC could not take
    a decision on the question whether or not to accept the recommendation        1


G   of the UPSC. That representation was partially allowed, in that, the last
    line in the adverse remark came to be quashed whereas the rest of the
    adverse remark was retained. The ACC, therefore, took into consideration
    the said adverse remark and came to the conclusion that respondent No.
    1 was not suitable for appointment to the high post of the Chief Controller
    of Explosives. This decision taken on December 7, 1988 was, therefore,
H   based on an adverse remark made subsequent to the recommendation of
                  MUKHERJEE v. U.0.1. [AHMADI, J.]                   535

the UPSC. The question is whether the ACC was justified in taking into A
consideration this subsequent development for by-passing the recommen-
dation of the UPSC. The second question is whether the ACC was bound
to state the reason in support of its decision? The Tribunal has come to
the conclusion, relying on the decision of this Court in Jatinder Kumar &
Ors. v. State of Punjab & Ors., [1985) 1 SCR 899, that the ACC was bound B
to give reasons for not accepting the recommendation of the UPSC.
Finding that no reasons were given by the ACC for by-passing the recom-
mendation of the UPSC, it held that the decision of the ACC could not be
sustained.

       In Jatinder Kumar's case the facts reveal that the Inspector General C
of Police, Punjab had sent a requisition to the Selection Board to select
and recommend 7 suitable persons for the post of Assistant Sub Inspector
of Police. While the matter was pending consideration 50 more post fell
vacant whereupon the Board was requested to recommend 57 persons for
those posts. The candidates were interviewed and physically tested on D
various dates. Before the select list could be finalised the Inspector General
of Police sent a further requisition to recommend 170 more persons in
anticipation of further vacancies likely to occur on re-organisation of the
police force. Thus in all 227 candidates were to be selected by the Selection
Board but the Board prepared a panel of 144 candidates only. It appears
that the proposal for disbandment of the Punjab Armed Police Battalion E
and creation of additional posts did not materialise and hence the addi-
tional 170 posts were not available to be filled in by direct recruitment. Out
of the earlier 57 posts 9 were offered to the wards of the deceased police
officers and the remaining 48 posts were offered to candidates recom-
mended by the Board in the order of merit. As the remaining candidates F
recommended by the Board could not be appointed for want of vacancies,
writ petitions were filed in the High Court but they were rejected by a
learned Single Judge as well as by the Division Bench to which a Letters
Patent appeal was preferred. Thereupon an appeal was preferred by
special leave to this Court wherein the question raised was whether the
selection of a candidate by the Selection Board confers an unfettered right G
to be appointed on the recommendation made by the said Board. Dealing
with this contention this Court after referring to the duties to be performed
by the Union or State Public Service Commissions under Article 320
observed that the establishment of an independent body like Public Service
Commission is to ensure selection of best available persons for appoint- H
    536                   SUPREME COURT REPORTS [1993) SUPP. 2 S.C.R.

A ment in a post to avoid arbitrariness and nepotism in the matter of
  appointment. The selection by the Commission, however, is only a recom-
  mendation and the final authority for appointment is the Government. This
  Court, therefore, pointed out that the Government may accept the recom-
  mendation or may decline to do so but if it chooses not to accept the
B recommendation of the Commission, the Constitution enjoins the Govern-
  ment to place on the table of concerned Legislat•1re its reasons for so
  doing. The Government is made answerable to the Legislature for any
  departure, vide Article 323 of the Constitution. This Court further pointed
  out that this, however, did not clothe the candidate with any right to
  appointment pursuant to the recommendation of the Commission. It, how-
c ever, the vacancy is to be filled up the Government must make the appoint-
  ment in the order of merit fixed by the Commission. So also the
  Government cannot appoint a person whose name does not appear in the
  list but it is always open to the Government to decide how many appoint-
  ments it will make. It will thus be seen that this Court clearly laid down
D that the selection made by the Commission is only recommendatory in
  nature and the Government may or may not accept the same but if it
  chooses not to accept the same. Article 323 enjoins it to place on the table
  of the Legislature its reasons or report for not accepting the recommen-
  dation. Article 323 provides that it shall be the duty of the Commission to
E present anually to the President Governor a report as to the work done
  by the Commission and on receipt of such report the latter shall cause a
  copy thereof together with a Memorandum explaining, as respects the
  cases, if any, where the advice of the Commission was not accepted, the
  reason for such non-acceptance to be laid before the concerned Legisla-
  ture. Thus the reasons have to be communicated to the Legislature if the
F
  advice of the Commission has not been accepted while placing a copy of
  the report as to the work done by the Commission before the concerned
  Legislature. On a plain reading of the said Article it is, therefore, clear that
  the reasons have to be assigned in a Memorandum to be placed along with
  a copy of the report of the Commission before the concerned Legislature ..
G Therefore, the decision in Jatinder Kumar's case is not an authority for the
  proposition that when the ACC does not accept the recommendation of
  the UPSC it is bound to communicate the reasons for departing from the
  said recommendation to either the UPSC or the concerned candidate. All
  that Article 323 requires is that along with the copy of the report of the
H Commission a Memorandum containing the reasons for declining to accept
                  MUKHERJEE v. U.O.L [AHMADI, J.]                     537

the recommendations of the UPSC shall be placed before the House of A
Parliament. In the instant case the reason for declining to accept the
recommendation of the UPSC is tht adverse remark made in the Confiden-
 tail Report for the year 1987. Therefore, the Tribunal is not right in coming
 to the conclusion that no reason had been given by the ACC for departing
 from the recommendation of the UPSC. In order to satisfy our conscious B
that the ACC had given due consideration to the recommendation made
.by the UPSC we called for the relevant file on which the ACC took its
 decision and satisfied ourselves that it had declined to appoint respondent
No. 1 as the Chief Controller of Explosives on account of the adverse
remark in the ACR for the Year 1987.
                                                                            c
       It is obvious from what we have stated above that this Court clearly
observed in Jatinder Kumar's case that the selection made by the Commis-
sion was only recommendatory in nature and it was open to the Govern-
ment to either accept the recommendation or to depart therefrom.
Observations on which the Tribunal relies merely convey that if the D
Government does not depart from the recommendation of the Commission
t!J.e Government must make the appointments strictly adhering to the order
of merit as recommended by the Commission. It cannot disturb the order ·
of merit according to its own sweet will except for good reasons, namely,
bad conduct or character but that does not mean that the Government
cannot depart from the recommendation of the Commission. lf it departs E
from the recommendation it must ultimately comply with the requirement
of Article 323 of the Constitution. There is nothing in· that Article or in the
rules to suggest that the Government cannot take into consideration the
developments subsequent to the selection made by the UPSC. Such a view
would not be in public interest and may lead to serious complications if p
the Government is enjoined to make the appointment notwithstanding
certain serious matters having come to its notice subsequent to the recom-
mendation made by the Commission. Counsel for the respondent No. 1,
however, submitted that a line of demarcation must be drawn some where
because the Government cannot be allowed to delay it decision till adverse
circumstances appear against the candidate recommended for appoint- G
ment. He submitted that this demarcation must coincide with the date on
which the recommendation is made by the Commission and at any rate
must be confined to a reasonable period subsequent thereto. We are afraid
no hard -and fast line can be drawn in this· connection. Besides, in the
instant case we do not find as a fact that the Government had deliberately H
    538                    SUPREME COURT REPORTS (1993) SUPP. 2 S.C.R.

A delayed its decision. In fact immediately after the recommendation wa~
    made by the Commission on June 18, 1987, the CBI enquiry commenced
    in September, 1987 and ended in December, 1987. The ACC could not
    take a decision during the pendency of the enquiry. Immediately after the
    enquiry concluded and respondent No. 1 was exonerated, the ACC
    proceeded to process the proposal and found an adverse remark in the
B   ACR for the year 1987. This adverse remark was immediately communi-
    cated to respondent No.1 and after his representation was disposed of in
    October, 1988 and his appeal against the decision also failed, the ACC took
    the final decision on December 7, 1988. In the circumstances it cannot be
    said that the ACC had deliberately delayed the decision. Assuming the
c   decision taken by the ACC is justiciable, there can be no doubt that it can
    be challenged only on the ground that it smacks of mala fides or arbitrari-
    ness. The facts do not reveal that the decision taken by the ACC was either
    mala fide or arbitrary.

D            Counsel for respondent No. 1 then placed rel~ance on two decisions,
      namely, Mrs. Asha Kaul and Anr. v. State of .Tammu & Kashmir and Ors.,
      JT (1993) 2 688 and Jagtar Singh v. The Director, Central Bureau of
      Investigation & Ors., JT (1993) 2 703. In our view both these decisions do
      not assist respondent No.l. The former was a case pertaining to the
      approval and publication of the select list of District Munsifs prepared by
E the J & K Public Service Commission. Several complaints were received in
      regard to the select lists prepared by the commission and forwarded to the
      Government. The Government found prima-facie substance in the com-
      plaints and, therefore, kept the lists pending. However, the High Court
      kept on pressing for approval as it was keen to fill in the existing vacancies.
F The Government, therefore, approved thirteen names and published the
      list. Those persons were duly appointed but in the meanwhile a writ
      petition was filed for a mandamus to command the Government to approve
      the lists prepared by the Commission. On the Advocate General' statement
      that the matter was under the active consideration of the Government, the
,.... petition was dismissed. Since the Government did not accord approval a
u     fresh writ petition was filed which came to be allowed against which
      decision the appeals by special leave came to this Court. In the backdrop
      of these facts, this Court, while repelling the extreme submission that the
       Government as the appointing authority weilds absolute power to approve
      or disapprove of the list at its sweet-will, observed, that where the Govern-
H ment is satisfied after due enquiry that the selection has been vitiated on
                   MUKHERJEE v. U.O.I.[AHMADI,J.]                       539

 account of violation of rules or for the reason that it smacks of corruption, A
 favouritism, nepotism or the like, it may refuse to approve the list in which
 case it must record the reason for its action and produce the same in court,
 if and when called upon, besides placing the same before the legislature as
 required by article 323 of the Constitution. This decision is not an authority
 for the proposition that the Government must make an order disapproving B
 the list along with the reasons therefor and convey the same to the High
 Court or the Commission. All that it says is that the government must
 record its reasons for the disapproval on the file and if its action is
 questioned in court it must disclose the same to the court if called upon
 to do so. That requirement has been satisfied in the present case. The High
 Court, however, wrongly thought that subsequent events could not be taken C
 into consideration and that is why it directed the ACC to reconsider its
 decision without noticing the adverse entry as well as the contents of the
 CBI report. In fact to satisfy ourselves we perused the file and found that
 the reason for disapproval was stated on the file. The subsequent decision
 turned on its own facts as the court came to the conclusion that the D
 material placed before the court did not justify Government's refusal to
 make the appointment. Therefore, neither of the two decisions on which
 reliance is placed come to the rescue of respondent No.1. It seems well
-eettled that the function of the Public Service Commission being advisory,
 the Government may for valid reasons to be recorded on the file, disap-
 prove of the advice or recommendation tendered by the Commission, E
 which decision can, if at all, be tested on the limited ground of it being
 thoroughly arbitrary, malafide or capricious.

       In view of the above discussion we cannot sustain the impugned
decision of the Tribunal. We, therefore, allow the two Civil Appeals Nos.
3671 & 3671A of 1993, set aside the decision of the Tribunal and direct        F
that the petitions filed in the Tribunal shall stand dismissed. We, however,
make no order as to costs. In view of the order allowing the appeals, Mr.
Dholakia concedes that Civil Appeal No. 3668 of 1993 is rendered infruc-
tuous. It will stand so disposed of with no order as to costs.
                                                                               G
T.N.A.                                                    Appeals allowed.