TaxTMI 
TaxTMI 
2018 (3) TMI 715
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....thority 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 examine validity of impugned Rules, for challenge....
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....om 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 Disciplinary Committee to the Authority, if so authorised by the Council, within ninety days: Provided further ....
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....ate 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 to hear a particular appeal by one member of the Appellate Authority does not mean, and it has not been contended, amounts to resignation. Upon resignati....
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....le 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 heard matter. Revenue's argument was that the Appellate Tribunal as constituted being a composite body of three members, appeals could have been heard during absenc....
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....ontinue 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. The learned counsel appearing on behalf of the petitioners contended that once the majority of the members of the Selection Committee were present in the interviews held for s....
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....ouncil 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 Court, after considering the various facts and circumstances of the case, came to the following conclusion:- "If for one reason or the other one of them could not attend, that d....
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....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 Committee. This is based on the fact that one of the members who was then the leader of the Opposition in the Council of the States did not respond to the intimation sent to him in regard to the selection of the members since....
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....lection 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 stipulation to the contrary, quorum in such cases is in order and complete when majority of the members are present and participate. Therefore, if one of the members of the Appellate Authority for valid and good reason has rec....
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....essment 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 participated, he may have taken a contrary view and may have converted the other two members to his view was rejected as an assumption based upon surmises and conjectures. This contingency, it was observed, was basic and inherent in e....
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....d. 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 Bench of this Court in Bharat Bijlee Ltd. Versus Commissioner of Trade and Taxes, ST. APPL. 74/2014, decided on 18th February, 2016 on the ground that the statutory provisions of Sections 7 and 8 of the Industrial Disputes Act, 1947 interpret....
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....escribed 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 to a Tribunal of any person not qualified under part (a) shall be made in consultation with the High Court of the Province in which the Tribunal has, or is intended to have, its usual place of sitting." 8. (1) If the services of the chairman of a Board or the chairman or other ....
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....d 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 Mr. Sunil Goyal has not ceased to be member of the Appellate Authority but has recused himself from the proceedings of the present case. 25. Secondly, in United Commercial Bank Ltd. (supra) the majority opinion on interpreting Section 7 had held that when services of third member had ceas....
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....as 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 therefore entirely distinguishable as the statutory provisions were different and the context in which the findings were arrived at were dissimilar. It would be appropriate at this stage to refer to the observations of Khehar, CJ in his judgment of the Constitution Bench, Supreme Court Advocates-O....
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....ne 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 doctrine of necessity comes into play. If the choice is between allowing a biased person to act or to stifle the action altogether, the choice must fall in favour of the former as it is the only way to promote decision-making. In the present case also if the two Election Commissioners are able to rea....