UNION OF INDIAversusAJOY KUMAR PATNAIK

                                UNION OF INDIA                                   A
                                        v.
                           AJOY KUMAR PATNAIK

                              SEPTEMBER 8, 1995

                [K. RAMASWAMY AND B.L. HANSARIA, JJ.]                            B

          Service Law :

          Fundamental Rules :

/
           F.R. 56(j)-Compulsory retirement-Government servant-Perfomiing C
    quasi judicial functions as Collector of Customs (Appeals)-Conduct reflect-
    ing upon his integdty-Held amenable to disciplinary proceedings-Conduct
    of an officer in discharge of his quasi judicial act or omission relates to
    activity in the course of discharge of his duties as a servant of Govemment
    and bears reasonable relation or nexus with nature and conduct and when it D
    amounts to misconduct, the competent authodty is entitled to take a decision
    whether the officer has impeccable integrity and absolute devotion to duty for
    funher continuation in service-Mere retirement of government servant by
    efflux of time pending proceedings would not provide a ground to dispose of
    matter without giving any finding on action taken by competent authodty.       E
          The respondent was the Collector of Customs (Appeals). After com-
    pletion of 50 years of age, his case was reviewed by the screening commit-
    tee, which recommended his compulsory retirement under Fundamental
    Rule 56(j) on "doubtful integrity". Specific instances were cited wherein the
    respondent was said to have wrongly classified certain tariff item contrary F
    to the Departmental Tariff Advice, and, while working as the Collector of
    Customs (Appeals), he disposed of 32 appeals contrary to the Import
    Policy, which resulted in huge benefits to the dealers. The competent
    authority, on considering the recommendations of the screening committee
    and the view of the reviewing authority, passed the order under F.R. 56(j) G
    compulsorily retiring the respondent in public interest. The respondent
    challenged the order before the Central Administrative Tribunal, which set
    aside the order holding that in the absence of entry in Character Rolls of
    "doubtful integrity", the instances cited should not be taken into considera-
    tion in compulsorily retiring the respondent from service. Aggrieved, the
    State filed the appeal by special leave.                                      H
                                          449
    450                   SUPREME COURT REPORTS [1995) SUPP. 3 S.C.R.

A         It was contended on behalf of the respondent that the order was bad
    in law in as much as while working as collector of Customs (Appeals) the
    respondent was entitled to dispose of the matters on merits and accord-
    ingly he took judicial decision on the basis of the material placed before
    him as an appellate authority and he was not responsible for the clearance
    of the goods.
B
          Allowing the appeal, the Court

          HELD : 1.1 An officer though performs official quasi Judicial func-
    tions, his conduct in the discharge of the quasi judicial act or omission
C   relates to the activity in the course of the discharge of his duties as a
    servant of the Government and bears reasonable relation or nexus with
    the nature and conduct of the service and when it cast reflection upon his
    reputation, integrity or devotion to duty as a public servant, that would
    be squarely referable to the conduct of the public servant amenable to
    disciplinary proce~ding. When it is a misconduct, the competent authority
D   is equally entitled to take a decision whether an officer has impeccable
    integrity and absolute devotion to duty for further continuation in service.
    The competent authority would be free to consider the material, particular-
    ly the latest one, and form a bona fide decision in the public interest to
    compulsorily retire an officer from service. [455-A-C]
E                                                                                   ,•
          S. Govinda Menon v. Union of India &Anr., AIR (1967) SC 1274, V.R.
    Katarki v. State of Kamataka, C.A. No. 4392/86 dated March 22, 1990 and
    Periyar and Pareekanni Rubbers Ltd. v. State of Kera/a, AIR (1990) SC 2192,
    relied on.

F        1.2. When the authorities had material before them and considered
  that material to be sufficient to doubt the integrity of the officer, it is
  settled law that the authority competent to take the decision to compul-
  sorily retire the officer can form an opinion whether continuance of such
  ,officer is in the public interest. It has gone into the conduct of the officer
G and that his Conduct in the manner of disposing of the appeals as quasi
  judicial authority does encompass into misconduct for taking disciplinary
   action. Since the competent authorities at different levels had considered
   the material and ultimately had decided to compulsorily retire the respon-
  dent from service, it cannot be said that it is an arbitrary decision. (453-D]

H         2. Though pending the proceedings, the respondent has already
                         U.O.I. v. AK. PATNAIK                         451

retired from service on attaining the age of superannuation, that would      A
not provide a ground to dispose of the matter without giving any finding
on the action taken by the competent authority. Otherwise, in all cases it
would cause grave damage to public justice. The employee would get away
with it due to pending proceedings. Therefore, it needs to be considered
and decision rendered thereon whether the action taken by the Govern-
                                                                             B
ment or the competent authority is valid in law. In that perspective, mere
retirement of the officer by effiux of time pending proceedings would not
be a ground to close the matter. [455-E]

      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8371 of
~                                                                            c
      From the Judgment and Order dated 19.7.91 of the Central Ad-
ministrative Tribunal at Bombay in 0.A. No. 425 of 1986

      N.N. Goswami, C.V.S. Rao and Y.P. Mahajan for the Appellant.
                                                                             D
      Devendra Singh for the Respondents.

      The following Order of the Court was delivered :

      Leave granted.

      This appeal by special leave arises from the order of the Central E
Administrative Tribunal, Bombay Bench dated July 19, 1991 made in O.A
No. 425 of 1986. The respondent's case, while working as Collector of
Customs (Appeals) at Bombay, after completing 50 years of service, had
come up before a screening committee consisting of senior officers to
review the respondent's performance for continuance in service. The com~ F
mittee met on February 11, 1984. On consideration of the entire material
placed before it, it recommended to compulsorily retire the respondent
from service under Fundamental Rule 56G) on "doubtful integrity". The
competent authority passed the order on February 10, 1986 under F.R.
56G) of the Fundamental rules compulsorily retiring him in public interest. G
As stated earlier, the respondent had questioned the correctness thereof
in the Administrative Tribunal which by its order had set aside the order
on the ground that there are no adverse entry in the Character Rolls of
"doubtful integrity" of the respondent and that, therefore, the two instances
should not be taken into consideration in compulsorily retiring the respon-
dent from service.                                                            H
    452                  SUPREME COURT REPORTS [1995] SUPP. 3 S.C.R.

A         To satisfy ourselves whether the action of the appellant is based on
    any material, since the Tribunal had given finding that it had perused the
    record and was not satisfied, we had directed Shri N.N. Goswami, the
    learned senior counsel for the appellant, to keep the record ready and
    place before us the Character Rolls as well as the report submitted to the
    Review Committee, views of the Review Committee made in that behalf.
B   This has been done. We have perused the proceedings of the Review
    Committee dated December 24, 1985, stating :

            "The Review Committee considered the report of the Screening
            Committee, forwarded to us under Chairman CBEC's note dated
c           18.12.1985. The Review Committee considered the report and the
            records and agrees with the recommendation that Shri D.P. Arya
            and Shri A.K. Patnaik are fit to be prematurely retired under FR
            560)."


D          We have seen the material placed before the Screening Committee,
    the Review Committee and the competent Authority in the proceedings
    referred to hereinbefore. It is stated that the department had given clas-
    sification guidance for classifying Dodecyl Benzene under Heading
    17.10(1) as against Ht<ading 38.01/19. The Collector of Customs, Bombay,
    had issued a Departmental Tariff Advice on the basis of the minutes of the
E   Tariff Conference held at Mangalore in September, 1984 according to
    which Dodecyl Benzene was to be classified under Heading 38.19. The
    Advice of the C.C.C. Nomenclature Directorate was mentioned in the
    Tariff Advice. The date of this advice is 28.12.1984 and the date of the
    appellate decision bears dated 31.12.1984 which is very close to the date
F   of the advice. Even as late as October, 1985, Shri Patnaik (the respondent
    herein) continued to classify Dodecyl Benzene as before the issue of the
    Tariff Advice. They concluded that by the wrong classification, the respon-
    dent had given benefit to a single party, namely, M/s. Rajesh & Sons of
    Bombay alone to the tune of more than Rs. 2 crores Similarly, in 32 appeals
    which the respondent has disposed of, he classified Saccharine to be
G   cleared under REP Licence as "Electroplating Brightener", in spite of the
    fact that the Import Policy in condition No. 5 of Appendix 17 is clear that
    this cannot be done, as Saccharine has been specifically banned under
    Appendix 4, and an item allowed on a REP Licence under Appendix 17
    of the Policy should either be one which has been specifically named in
H   that Appendix which, Saccharine was not, or it should not be a banned
                          U.0.1. v. AK. PATNAIK                             453

item, which Saccharinr-:....was. On the basis of this material, they doubted the   A
integrity of the respofdent and had taken decision to compulsorily retire
the officer from service.

      It is contended by the counsel for the respondent that he was not
communicated the instructions regarding the first item. It is also contended
with regard to the second item that he was entitled to dispose of the matter
                                                                                   B
on merits and had taken judicial decision on the basis of the material
placed before him as an appellate authority and he was not responsible for
the clearance of the goods.

      We are not concerned with the merits in the matter of disposal or            C
manner of disposal of the appeals or classification. We are concerned with
regard to the integrity of the officer in the decision making process. When
the authorities had material before them and considered that material to
be sufficient to doubt the integrity of the officer, it is settled law that the
authority competent to take the decision to compulsorily retire the officer        D
can form an opinion whether continuance of such officer is in the public
interest. It has gone into the conduct of the officer and that his conduct in
the manner of disposal of the appeals as quasi judicial authority does
encompass into misconduct for taking disciplinary action.

       In S. Govinda Menon v. Union of India & Anr., AIR (1967) SC 1274, E
the appellant, an ICS officer was Commissioner of Hindu Religious and
Charitable Endowments. He disposed of grant of lease of the endowment
lands contrary to the statute. He was charged for misconduct. He ques-
tioned the show cause notice by filing a writ petition. Pending writ petition,
the enquiry officer submitted his report. Thereafter, he amended and writ F
of prohibition was sought. The principal contention raised therein was that
his order was quasi judicial. Mathew, J. as he then was negatived the
contention while S.V. Pillai, J. accepted the contention that quasi judicial
decision having become final and conclusive, the conduct of quasi judicial
orders cannot be the subject of an enquiry for misconduct. On reference,
Govinda Menon, .J. agreed with justice Mathew and dismissed the writ G
petition. When appeal was filed, this Court held that although the Com-
missioner acted as an authority under the Hindu Religious & Edowment
Acts and was not subject to administrative control of the Government as
a master and servant, still the proceeding for such acts can be instituted
against him, if there is prima facie material to show recklessness or mis- H
    454                   SUPREME COURT REPORTS (1995] SUPP. 3 S.C.R.

A   conduct on his part. It is not necessary that the appellant should .have
    committed the alleged act or omission in the course of discharge of his
    duties as a servant of the Government in order that it may form the subject
    matter of disciplinary proceedings. If the act or omission is such as to
    reflect on the reputation of the officer or his integrity or good faith or
    devotion to duty, there is no reason why disciplinary proceeding should 11ot
B   be taken against him for that act or omission relating to an activity in regard
    to which there is no actual master and servant relationship. To put it
    differently, this Court said that the test is not whether the act or omission
    was committed by the appellant in the course of his discharge of his duties
    as servant of the Government. The test is whether the act or omission has
C   some reasonable connection with the nature and condition of his service
    or whether_ the act or omission has cast any reflection upon the reputation
    of the member of the service for doubting integrity or devotion to duty as
    a public servant.


D         In V.R. Katarki v. State of Kamataka, C.A. No. 4392/86, dated March
    22, 1990, a Bench of this Court to which one of us (K. Ramaswamy, J.) was
  a member, the appellant was imputed with misconduct in Fixing, in his
  capacity as Civil Judge at Baglkot, "higher valuation than was legitimate of
  the lands." After conducting an enquiry and finding guilty of misconduct,
E he was dismissed from service which was confirmed by the High Court on
  judicial side. When the appeal had come up, this Court was requested not
  to go into the question of the valuation since that was subject matter of an
  appeal in the High Court. This court disposed of the appeal holding thus
  : "We would like to make a special mention on the position that even if the
  assessment of valuation is modified or affirmed in an appeal as a part of
F the judicial process, the conduct of the judicial officer drawable from an
  overall picture of the matter would yet be available to be looked into. "In
  appropriate cases it may be opened to draw inferences even from judicial
  acts". Thus the appeal was dismissed confirming dismissal from service.
  This ratio was followed in Pe1iyar and Pareekanni Rubbers Ltd. v. State of
G Kerala, AIR (1990) SC 2192 at 2198, to which one of us (K. Ramaswamy,
  J.) was a member, and this Court held that "The rule of conduct spurned
  by this Court squarely put the nail on the official act as a refuge to fix
  arbitrary and unreasonable market value and the person concerned shall
  not comouflage the official act to a hidden conduct in the function of fixing
H arbitrary or unreasonable compensation to the acquired land."
                               U.0.1. v. A.K. PATNAIK                            455

           It would thus be clear that an officer though performs official quasi        A
    judicial functions, his conduct in the discharge of the quasi judicial act or
    omission relates to the activity in the course of the discharge of his duties
    as a servaiit of the Government and bears reasonable relation or nexus with
    the nature1and conduct of the service and when it casts reflection upon his
    reputation, integrity or devotion to duty as a public servant, that would be
                                                                                        B
    squarely referable to the conduct of the public servant amenable to dis-
    ciplinary proceeding. When it is a misconduct, the competent authority is
    equally entitled to take a decision whether an officer has impeccable
    integrity and absolute devotion to duty for further continuation in service.
    The competent authority would be free to consider the material, particular-
    ly the latest one, and form a bona fide decision in the public interest to          c
    compulsorily retire an officer from service.
             I
.         Since the competent authorities at different levels had considered the
    material and ultimately had decided to compulsorily retire the respondent
    from service, it cannot be said that it is an arbitrary decision. It is true that
    pending the proceedings the respondent has already retired from service             D
    on attaining the age of superannuation, but that would not provide a
    ground to dispose of this matter without giving any finding on the action
    taken by the competent authority. Otherwise, in all cases it would cause
    grave damage to public justice. The employee would get away with it due
    to pending proceedings. Therefore, it needs to be considered and decision           E
    rendered thereon whether the action taken by the Government or the
    competent authority is v~lid in law. In that perspective, mere retirement of
    the officer by efflux of time pending proceedings would not be a ground
    to close the matter.

          The appeal is accordingly allowed and the order of the Tribunal is            F
    set aside and that of the appellant is upheld. But in the circumstances
    without costs.

    R.P.                                                           Appeal allowed.