TaxTMI 
TaxTMI 
2025 (4) TMI 1106
X X X X Extracts X X X X
X X X X Extracts X X X X
....ulal"] on 9 August 2017, which was then confirmed by Petitioner 2/ State Government of Chhattisgarh vide order dated 11 August 2017. 2. Situated at the epicentre of action initiated by various Government agencies, including that of the Department of Income Tax [IT Department], Central Bureau of Investigation [CBI], Economic Offences Wing/Anti Corruption Bureau [EOW/ACB], and the Enforcement Directorate [ED], Babulal has been alleged of numerous offences involving financial misappropriation, disproportionate assets, misuse of public office, and violation of service conduct rules. 3. Babulal was appointed as an Indian Administrative Service [IAS] officer of the 1988 batch and was initially allotted to the Madhya Pradesh cadre. Following the formation of the State of Chhattisgarh, he was transferred to the cadre of Chhattisgarh State and has rendered 29 years of service. 4. The genesis of the dispute appears to be when he was subjected to a search by the IT Department on 4 February 2010, where cash amounting to Rs. 5,04,798/- along with jewellery valued at Rs. 3.76 lakhs were seized. However, the amounts seized were returned due to it being accounted for in the books of Babul....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Money Laundering Act, 2002 [PMLA] were made against Babulal. A closure report has been filed and the matter has concluded since. iii. RC dated 31 December 2010 registered by CBI, Chhattisgarh Allegations of offences under the Indian Penal Code, 1860 [IPC], Section 120-B r/w Sections 419, 420, 467, 468, 471, 477A, and Section 13(2) r/w Section 13 (1)(d) of the PCA were made against Babulal, with a Rs. 15 lakh recovery made by the IT Department. This Court has stayed the arrest of Babulal in WPC 8052/2011, and the matter is at the pre-charge stage. The State Government of Chhattisgarh declined sanction to prosecute Babulal under Section 6 of the Delhi Special Police Establishment Act, 1946 [DSPE] on four separate occasions between 2014-2016. iv. RC dated 4 January 2010 registered by CBI, EOU VII, New Delhi Allegations of misappropriation of around Rs. 21 crore of public funds were made against Babulal. These funds were sanctioned by the Ministry of Health and Family Welfare in 2005-06 for the implementation of World Bank aided enhanced Malaria Control Programme in Chhattisgarh. The case is pending sanction to prosecute, to be provided by the State....
X X X X Extracts X X X X
X X X X Extracts X X X X
....8/2017, as recorded at para 12 of the impugned order, the DOPT listed relevant factors that prevented vigilance clearance from being issued to Babulal. These considerations detailed the various cases against him as we have recorded at para 7(supra), along with numerous other complaints, his suspension, inter alia. 10. Upon receipt of a letter dated 21 February 2017 sent by the UOI to the State of Chhattisgarh regarding Babulal's arrest in connection with CBI FIR dated 18 February 2017, he was placed under immediate suspension due the pending criminal investigation against him. His suspension spanned from 22 February 2017 until 9 August 2017. 11. Thereafter, OA 2208/2017 was filed by Babulal before the Tribunal, assailing the denial of his vigilance clearance by the DOPT, inter alia. During the pendency of this OA, a Review Committee was constituted on 13 April 2017 to assess Babulal's suitability for compulsory retirement under Rule 16 (3) in light of the CBI FIR of 2017 and his subsequent arrest. 12. It is on the findings and recommendation of this committee that an order of compulsory retirement under Rule 16 (3) dated 9 August 2017 was passed by the UOI against Babulal ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Babulal and its findings and recommendations were just, reasonable, and fair; and d) The FIRs registered against Babulal were concerning offences of grave nature that cast doubt on his integrity. 19. Mr. Biswajit Bhattacharya, learned Senior Counsel appearing for the respondent, has advanced the following lines of argumentation assailing the order of compulsory retirement passed against Babulal : a) The second review conducted was impermissible; and b) The second review failed to consider the entirety of his service records and was contrary to the object of Rule 16 (3) as well as the law laid down in the Supreme Court's judgment in Umedbhai M. Patel; and c) Mere registration of FIRs does not make an officer suitable for compulsory retirement. Analysis 20. At the outset, it would be imperative to clarify that we are confined to the determination of whether the order of compulsory retirement passed under Rule 16 (3) is capable of standing on its own legs. We deem it appropriate to reproduce the Rule in its entirety: - "16 (3) The Central Government may, in consultation with the State Government concerned, require a member of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Service which is found to be lax or corrupt, inefficient or not up to the mark or has outlived his utility has to be weeded out. Rule 16 (3) provides the methodology for achieving this object...Compulsory retirement contemplated by the aforesaid rule is designed to infuse the administration with initiative and activism so that it is made poignant and piquant, specious and subtle so as to meet the expanding needs of the nation which require exploration of "fields and pastures new". Such a retirement involves no stain or stigma nor does it entail any penalty or civil consequences. In fact, the rule merely seeks to strike a just balance between the termination of the completed career of a tired employee and maintenance of top efficiency in the diverse activities of the administration. 12. An order of compulsory retirement on one hand causes no prejudice to the government servant who is made to lead a restful life enjoying full pensionary and other benefits and on the other gives a new animation and equanimity to the Services. The employees should try to understand the true spirit behind the rule which is not to penalise them but amounts just to a fruitful incident of the Ser....
X X X X Extracts X X X X
X X X X Extracts X X X X
....c) that it is arbitrary - in the sense that no reasonable person would form the requisite opinion on the given material; in short, if it is found to be a perverse order. (iv) The Government (or the Review Committee, as the case may be) shall have to consider the entire record of service before taking a decision in the matter - of course attaching more importance to record of and performance during the later years. The record to be so considered would naturally include the entries in the confidential records/character rolls, both favourable and adverse. If a government servant is promoted to a higher post notwithstanding the adverse remarks, such remarks lose their sting, more so, if the promotion is based upon merit (selection) and not upon seniority. (v) An order of compulsory retirement is not liable to be quashed by a Court merely on the showing that while passing it uncommunicated adverse remarks were also taken into consideration. That circumstance by itself cannot be a basis for interference." (emphasis supplied) 25. Therefore, the challenge to the order of compulsory retirement must be sustainable on any one of the three grounds of mala fides, a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t Review Committee in accordance with the instructions but on the recommendation of the second Review Committee which could not have taken up his case, as it was, on the self-same materials prior to his reaching the age of 55 years." (emphasis supplied) 28. The sequitur to emerge is that, normally, a second review of an officer who has been previously reviewed in accordance with Rule 16 (3) (i) or Rule 16 (3) (ii) is not warranted where the Government decides not to take any prejudicial action against an officer despite the recommendations of the review committee. This is not the case before us, given that the 2015 committee did not recommend that Babulal be compulsorily retired. However, what is relevant, is the observation of exceptional circumstances and additional material pertaining to the officer that has come to light after the convening of his/her first review. Therefore, in case exceptional circumstances emerge thereafter, a second review may be in order, especially when the integrity of an officer is doubted. 29. The relevance of the rider contained within para 27 of Chandra Mohan Nigam to the facts before us become clear upon perusal of the minutes of meet....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ector General Health Services, Chhattisgarh entered into a criminal conspiracy with Shri Navjeet Singh Tuteja, Mrs. Shailina Parveen and Shri SalinUmrani and by abusing their official position caused a wrongful loss worth Rs. 24,86,656.00 and corresponding gain themselves". The State Government has refused to grant sanction for prosecution on-ground of want of jurisdiction of CBI. The matter is pending in CBI. 3. CBI, AC-II, New Delhi branch vide letter dated 21.02.2017 intimated to the State Government that CBI has arrested Dr. B.L. Agrawal IAS (CG:1988), Principal Secretary, Higher Education, Chhattisgarh Govt., on 21.02.2017 in a case registered by the Bureau on 18.02.2017 U/s 120-B IPC r/w Sec. 8 of Prevention of Corruption Act, 1988 against him and two others. The CBI informed in its letter that during the investigation of the case, the residential premises of Dr. B.L. Agrawal at Raipur, were searched. The officer was arrested on 21.02.2017 at 08:02 AM to be produced before the court of Spl. Judge for CBI cases, Patiala House Courts, New Delhi. On Receipt of the above information the State Government having examined the CBI's report against Dr. Agrawal invoke....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... taken into consideration before recommending his compulsory retirement is buttressed by para 4 of the 2017 committee's minutes, which have been reproduced below: - "Records of officers for retirement in public interest under Rule 16 (3) of AIS (DCRB) Rules, 1958 were reviewed keeping in mind the instructions as illustrated above. The records were reviewed to assess doubtful integrity, inefficiency and ineffectiveness of officers who were not contributing to public service. The service records, which were taken into consideration include- *ACR/PAR *Personal file *History of entire service *Status of Departmental Enquiry, if any *Confidential reports throughout the period of service *Complaints against the officers" (emphasis supplied in bold) 35. We observe here that ACR's of the officers under review have been considered. Furthermore, among the relevant records that constitute the basis for such review, complaints against officers form a necessary factor in determining whether he may be recommended for compulsory retirement. 36. Therefore, upon a holistic reading of the relevant facts, we are unimpressed by th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on the ground of deficiency in his character and integrity, as well as enquires initiated by various Government Agencies as mentioned in para 2 (supra). Collectively, considering the sheer volume of complaints against the officer, as well as the gravity of offences alleged therein, we do not deem it unreasonable that he has been found to be of doubtful integrity. 43. The very phrase - "doubtful integrity" implies the satisfaction of a threshold which is significantly lower than if the officer's conviction in connection to relevant FIRs is to be interpreted as a pre-requisite to pass an order of compulsory retirement against him. There appears to be a conflation of the threshold of doubtful integrity with that of conviction in a criminal case, the latter of which requires proving the charges against an officer beyond reasonable doubt. Therefore, this argument does not impress the Court. 44. Furthermore, considering the object and nature of orders passed under Rule 16 (3) as being non-stigmatic nor punitive, mandating the conviction of an officer in criminal cases to justify his characterisation as having "doubtful integrity" would be inappropriate. In such cases, where an offi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is paragraph is also present, verbatim, in the 2017 Review Committee's MoM, but has been ignored in its entirety. III. Denial of Vigilance Clearance a. The DOPT denied Vigilance Clearance to the respondent based on detailed reports from relevant Government agencies as well as departmental suspension, which highlighted serious concerns about his financial dealings and integrity. b. The DOPT's decision was based on a comprehensive assessment and should not have been dismissed lightly. The denial of vigilance clearance is a significant factor to consider while gauging the integrity of an officer of the services, and it should have been given due weightage by the Tribunal. IV. Public Interest a. Babulal's compulsory retirement was ordered in Public Interest, as per Rule 16 (3), due to grave doubts against his integrity. The Rule is designed to maintain high standards of efficiency and integrity in public service, and the decision to retire the respondent was made after careful consideration by the Review Committee and the Appointments Committee of Cabinet. b. The Tribunal's judgment does not sufficiently consider the importance of m....