TaxTMI 
TaxTMI 
2018 (3) TMI 715
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....ions for constitution of the Appellate Authority of five members and a restraint order against the four member Appellate Authority from proceeding with Appeal No.01/ICAI/2014, till reconstitution. Petitioner has also challenged validity of Rules 13 and 16 of the 'Procedure to be Followed for Appeals by the Appellate Authority, 2013' being repugnant to the provisions of the CA Act. 2. Petitioner has filed aforesaid appeal before the Appellate Authority constituted under Section 22A of the CA Act challenging the order dated 21st October, 2013 of the Disciplinary Committee holding him guilty of professional misconduct within the meaning of clauses (5) to (9) of the Second Schedule to the CA Act. 3. Order dated 26th July, 2017 passed by the Appellate Authority holds that absence or recusal of one or more members for justifiable reasons does not create any temporary or permanent vacancy and four members of the Appellate Forum could hear and decide the appeal. Plea of non-quorum was rejected. We have to examine correctness and validity of the said order. In case we uphold the order with reference to legal position and on interpretation of 22A of the CA Act, we need not exam....
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....nt to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of term of office, whichever is earlier. (2) The Chairperson or a member shall not be removed from his office except by an order of the Central Government on the ground of proved misbehaviour or incapacity after an inquiry made by such person as the Central Government may appoint for this purpose in which the Chairperson or a member concerned has been informed of the charges against him and given a reasonable opportunity of being heard in respect of such charges. 22G. Appeal to Authority.-- (1) Any member of the Institute aggrieved by any order of the Board of Discipline or the Disciplinary Committee imposing on him any of the penalties referred to in sub-section (3) of section 21A and subsection (3) of section 21B, may within ninety days from the date on which the order is communicated to him, prefer an appeal to the Authority: Provided that the Director (Discipline) may also appeal against the decision of the Board of Discipline or the Discipl....
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.... and is not questioned or disputed. As noticed above, the petitioner submits that in view of the recusal of Mr. Sunil Goyal, the quorum of the Appellate Authority is incomplete for want of quorum of five members and therefore the appeal cannot be heard and decided. 8. Section 22A of the CA Act constitutes the Appellate Authority as a five-member body empowered to hear appeals under Section 22G filed by any member of the Institute aggrieved by any order of the Board of Discipline or the Disciplinary Committee imposing penalties. Appellate Authority is empowered to call for records of the case, revise any order made by the Board of Discipline or the Disciplinary Committee and confirm, modify or set aside the order, enhance or reduce any penalty, pass order of remit etc. The proviso to Section 22G of the CA Act states that the Authority shall give an opportunity of being heard to the parties concerned before passing any order. 9. Section 22F of the CA Act deals with resignation and removal of Chairperson and members. The Chairperson or members by notice in writing under his hand to the Central Government can resign from office. This has not happened in the present case. Recusal ....
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....rity. There is no vacant post either on resignation or removal that can be filled up by appointment notification by the Central Government. This is impermissible and would be contrary to the CA Act. 13. In the context of the statutory position, we will now examine case law on the subject of valid quorum in view of recusal and absence of a member of a multi member tribunal. 14. Similar situations have arisen earlier. In Kwality Restaurant & IceCream Co. Vs. The Commissioner of VAT, Trade and Tax Department and Ors., (2012) 194 DLT 195, functioning of Appellate Tribunal, Value Added Tax, was challenged and questioned. Appellate Tribunal as constituted was a three member body of Chairman, Administrative Member and Judicial Member. However, in respect of certain appeals on six dates one of the members was absent and was not a part of the Bench, which had heard the appeals. Later on the third member joined the Bench after leave of absence. Objection to the presence of this member was raised. Procedure to be followed in such cases and questions relating to proper quorum were raised and answered. The assessee had argued and objected to the third member joining mid-stream in a part h....
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.... to the case law relevant for deciding the issue under consideration, it was directed that two members of the Appellate Tribunal who had partly heard the appeal, shall continue with the hearing and the third member shall not participate. Third member was entitled to sit and hear all other cases in which she was a participant, either before her leave or absence, or after her rejoining the Tribunal, except the part heard matters, which had been heard by two members of the Appellate Tribunal. 15. In W.P. (C) No. 2674/2012, Kavita Meena & Ors. Vs. Government of National Capital Territory of Delhi & Ors. and other connected matters decided on 22nd May, 2012, challenge was regarding composition of Selection Committee, which as per column 13 of the Recruitment Rules, was to consist of Chairman, SCERT, Director, SCERT, Director of Education and representative of SC/ST to be nominated by Chairman, SCERT. It had transpired that the Chairman, SCERT and Director Education, Department of Education had not participated in some of the meetings when interviews were held. Issue was whether the Selection Committee was duly constituted in view of the Rule position. It was held as under:- "5. Th....
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....tuted under Section 13(2) of the University of Saugar Act, 1946. The Committee to be constituted was to consist of three persons; two of whom were to be elected by the Executive Council by single transferable vote from amongst persons not connected with the University or a College and the third was to be nominated by the Chancellor who was also empowered to appoint one of them as Chairman of the Committee. The two persons elected by the Executive Council of the University were Mr. G.K. Shinde, a former Chief Justice of a High Court and Justice T.P. Naik of the Madhya Pradesh High Court while the third member, Shri C.B. Agarwal, a former Judge of the Allahabad High Court, was nominated by the Chancellor. Justice Naik was, however, unable to attend the meeting which was slated to be held on 04.04.1970 and in his absence the other two persons, namely, Shri Shinde and Shri Agrawal met as a Committee and submitted a panel of names from which the Chancellor appointed the appellant before the Supreme Court as Vice-Chancellor. The question that arose was whether only two members of the Committee, who were present, could have validly selected the appellant as a Vice-Chancellor. The Supreme ....
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....are present at it." 10. The second decision relied upon by the learned counsel for the petitioner was that of People‟s Union for Civil Liberties (supra). In that case, the appointment of a member of the National Human Rights Commission was in question. Section 4 of the Protection of Human Rights Act, 1993, stipulated that the appointment of Chairperson and other Members of the National Human Rights Commission has to be made, after obtaining recommendations of a Committee comprising:- The Prime Minister * The Speaker of the House of People * The Minister Incharge of the Ministry of Home Affairs in the Government of India * Leader of Opposition in the House of People * Leader of Opposition in the Council of States * Deputy Chairman of the Council of States It so happened that the selection in the case before the Supreme Court took place by a Committee in which the Leader of Opposition in the House of People was absent. Therefore, the selection was under challenge. The Supreme Court held as under:- "15. It is nextly argued by the learned counsel for the petitioner that there was no proper consultation amongst the members of the Selection Committe....
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.... Rights Commission as per and under the Protection of Human Rights Act, 1993. As per the statute selection was mandated to be by a Committee in which the Leader of Opposition in the House of People was a member. In the selection under question, leader of the opposition was absent and had not responded to the intimation sent to him, for he was hospitalized. The Supreme Court held that the Act in question had not fixed a minimum quorum for selection nor did it provide for a particular procedure to be followed. Therefore in the absence of one member out of six members would not vitiate the opinion of the other five members. 18. Three of the aforesaid decisions, which relate to Selection Committee, albeit would be relevant and germane for the purpose of deciding the present writ petition, for the ratio and precept would be equally applicable to the statutory position in the present case. The CA Act does prescribe that the Appellate Authority will be a body constitute of five persons, but does not prescribe and does not fix a minimum quorum. The statute is silent on the procedure to be followed and adopted when one or more members cannot participate. In absence of a provision and sti....
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....members of the Committee debarred from functioning or deciding the cases by themselves. If such were to be the situation, each member can stall the function of the Assessment Sub-Committee to the state of total paralysis. The Assessment Sub-Committee would be eventually rendered nugatory during the period of absence of any of its members. Identical situation would arise in the case of illness, or failure to attend even one of the many meetings for one or the other reasons for each one of its members. An interpretation which would lead to such anomalous, if not mischievous, results has, therefore, to be avoided even on the larger canons of construction." Observations and reasoning above is cogent and we respectfully agree. In an earlier paragraph, the Full Bench had rejected the contention that the question of quorum of the Sub-Committee must be decided on the same parameters as quorum of a Court, i.e. the quorum of a Division Bench or quorum fixed for the Larger Bench. It was held that the said analogy should not and cannot be drawn for determining the question of quorum of statutory bodies performing quasi-judicial functions. The contention that in case the third member had par....
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....utory quorum, all five members of the Appellate Authority must sit to constitute a valid quorum, otherwise the proceedings before the Appellate Authority will be illegal and invalid, has to be rejected and refused as fallible and flawed. This contention has been repeatedly examined and answered in negative. 22. Observations of the Supreme Court in Vijay Singh Lamba (supra) are not relevant and do not assist and help us answer the question raised. For Court hearings quorum may be one, two, three or more Judges. Obviously hearing cannot be by a bench of different strength. It would not be difficult to reject the contention, if we pose the right question, whether recusal by a Judge when reference is made to the entire court, would be invalid for want of quorum. Recusal of one or even more Judges would not render the decision as illegal or invalid for want of quorum. Similarly, recusal would not affect the quorum and validity of the decision of the Appellate Authority. 23. Petitioner has relied on decision of the Constitution Bench of seven Judges in The United Commercial Bank Ltd. vs. Their Workmen, AIR 1951 SC 230. The said decision was cited and distinguished by a Division Ben....
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....urt may consist of one independent person or of such number of independent persons as the appropriate Government may think fit and where a Court consists of two or more members, one of them shall be appointed as the chairman. (3) A Court, having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its members or any vacancy in its number. Provided that, if the appropriate Government notifies the Court that the services of the chairman have ceased to be available, the Court shall not act until a new chair- man has been appointed. 7. (1) The appropriate Government may constitute one or more Industrial Tribunals for the adjudication of industrial disputes in accordance with the provisions of this Act. (2) A Tribunal shall consist of such number of members as the appropriate Government thinks fit. Where the Tribunal consists of two or more members, one of them shall be appointed as the chairman. (3) Every member of the Tribunal shall be an independent person, (a) who is or has been a Judge of a High Court or a District Judge, or (b) is qualified for appointment as a Judge of a High Court: Provided that the appointment ....
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....edings shall continue before the Conciliation Board, Court of Inquiry or Industrial Tribunal so constituted. 24. In United Commercial Bank Ltd.(supra), the Government had constituted a three-member Industrial Tribunal by a notification dated 24.08.1949. However, one of the members could not participate in the meetings and deliberations of the Industrial Tribunal between 23.11.1949 and 20.02.1950 as his services had been placed at the disposal of Ministry of External Affairs as a member of the Indo-Pakistan Boundary Disputes Tribunal. During the period of his absence, several aspects were dealt with by two members of the Industrial Tribunal. The third member rejoined and had participated in the meetings held after 20.02.1950. Three members had thereafter signed and pronounced the final award. Apart from noticing the distinction between Section 7 read with Section 8 and Sections 5 and 6 of the Industrial Disputes Act, 1947, the majority opinion held that the third member, on becoming a member of the Indo-Pakistan Boundary Disputes Tribunal, had ceased to be a member of the Industrial Tribunal. The vacancy therefore had arisen. This is not so in the present case. The fifth member M....
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....ue before the remaining members till the Industrial Tribunal was reconstituted by the Government under Section 7. In case of member of the Court of Inquiry or Industrial Tribunal, it was discretionary for the appropriate Government to fill or not to fill up the vacancy. In case a new member was appointed in place of the old, the reconstituted Conciliation Board, Court of Inquiry or Industrial Tribunal would continue. Change in constitution of Industrial Tribunal could only be made as per the provisions of sub-section (2) to Section 7 and not by a mere inaction on the part of the Government under Section 8 to make an alternate appointment. Mukherjea, J. however held that on the third member resuming duties on 20.02.1950, the Industrial Tribunal was duly constituted. He rejected the argument that once the vacancy had occurred, the Industrial Tribunal had become imperfectly constituted and a fresh constitution was necessary. In case the vacancy was not filled up and allowed to remain, it would automatically come to an end as soon as the member whose absence caused the vacancy had re-joined. 27. Ratio of the majority judgment in the case of United Commercial Bank Ltd. (supra) is the....
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....d not participate and would not constitute by law a necessary quorum. Majority could constitute a valid quorum. Reference was made to the doctrine of necessity and it was observed: "16. We must have a clear conception of the doctrine. It is well settled that the law permits certain things to be done as a matter of necessity which it would otherwise not countenance on the touchstone of judicial propriety. Stated differently, the doctrine of necessity makes it imperative for the authority to decide and considerations of judicial propriety must yield. It is often invoked in cases of bias where there is no other authority or Judge to decide the issue. If the doctrine of necessity is not allowed full play in certain unavoidable situations, it would impede the course of justice itself and the defaulting party would benefit therefrom. Take the case of a certain taxing statute which taxes certain perquisites allowed to Judges. If the validity of such a provision is challenged who but the members of the judiciary must decide it. If all the Judges are disqualified on the plea that striking down of such a legislation would benefit them, a stalemate situation may develop. In such cases the ....