Union Of India & Anr vs Pradip Kumar Kedia Etc

Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 6567-6569 OF 2010

Union of India & Anr. ... Appellants

Versus

Pradip Kumar Kedia Etc. ...

Respondents

J U D G M E N T

A. K. PATNAIK, J.

These are the appeals against the common judgment

dated 20.03.2009 of the Delhi High Court in Writ Petition

(Civil) Nos. 7526 of 2008, 7521 of 2008 and 7523 of 2008 (for

short `the impugned judgment').

2. The facts very briefly are that the Government of India,

Ministry of Law and Justice, Department of Legal Affairs, by

advertisement dated 22.01.2005 invited applications for 9

vacancies in the post of Judicial Member and 13 vacancies in

the post of Accountant Member in the Income Tax Appellate

Tribunal. The advertisement, however, stated that the number

of vacancies indicated in the advertisement was only

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approximate and was liable to increase or decrease due to

unexpected circumstances that may occur upto 31.12.2005.

On 07.09.2005, one more vacancy arose in the post of

Accountant Member of the Income Tax Appellate Tribunal and

this took the total number of vacancies in the post of

Accountant Member to 14. Against the 9 vacancies in the post

of Judicial Member and 14 vacancies in the post of Accountant

Member, the Selection Board in its recommendations placed

18 candidates in the main select list, 7 candidates for the post

of Judicial Member and 11 candidates for the post of

Accountant Member. The Selection Board in its

recommendations also placed 2 candidates, namely, Nandan

Kumar Jha and B. Krishna Mohan in the wait list for the post

of Judicial Member and 2 candidates, namely, P.K. Kedia and

Inturi Rama Rao in the wait list for the post of Accountant

Member. Out of the 18 selected candidates, 2 candidates

selected for the post of Accountant Member were not cleared

by the Vigilance Department and the list of 16 remaining

candidates was placed before the Appointments Committee of

the Union Cabinet on 26.04.2006. The Appointments

Committee approved the appointment of all the 16 candidates

but directed the Law Ministry to amend the recruitment rules

so as to provide for appointment of the members of the Income

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Tax Appellate Tribunal for a period of two years.

3. In 2007, the Revenue Bar Association filed Writ

Petition No. 8288 of 2007 in the Madras High Court for a

mandamus to give effect to the selection list with regard to the

posts of Judicial and Accountant Members in the Income Tax

Appellate Tribunal pursuant to the advertisement dated

22.01.2005 and by order dated 24.04.2007 the Madras High

Court disposed of the Writ Petition with a direction to the

appellants to place the matter before the Appointments

Committee and with a further direction to give effect to the

Selection List as approved by the Selection Board in the light

of the decisions in R.S. Mittal v. Union of India [1995 Supp. (2)

SCC 230] and A.P. Aggarwal v. Govt. of NCT of Delhi and

Another, [(2000) 1 SCC 600]. The order of the Madras High

Court was challenged by the Union of India before this Court

in a Special Leave Petition, but on 17.08.2007 this Court

dismissed the Special Leave Petition and directed the Union of

India to complete the formalities and to give effect to the

Selection List. The Appointments Committee thereafter

approved the names of all the 16 selected candidates and

appointed them till the date of retirement on attaining the age

of 62 years or until further orders in its decision taken on

31.08.2007. In the decision taken on 31.08.2007, the

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Appointments Committee also decided that the appointment of

members of the Income Tax Appellate Tribunal in future will

be taken up only after the recruitment rules of Income Tax

Appellate Tribunal are amended. In accordance with the

decision of the Appointments Committee, the Law Ministry of

the Union of India, issued orders for appointment to all the 16

candidates approved by the Appointments Committee.

4. In 2008, B. Krishna Mohan, who was placed in the

wait list of candidates for the post of Judicial Member and

Inturi Rama Rao, who was placed in the wait list of candidates

for the post of Accountant Member, filed two separate Original

Applications in the Hyderabad Bench of the Central

Administrative Tribunal and P.K. Kedia, who was placed in the

wait list of candidates for the post of Accountant Member, filed

Original Application in the Mumbai Bench of the Central

Administrative Tribunal and in all the three Original

Applications, the applicants prayed for directions for their

appointment. The Union of India filed its reply affidavit before

the Central Administrative Tribunal saying that the

Appointments Committee has decided that no further

appointment of members in the Income Tax Appellate Tribunal

will be made until the Income-tax Appellate Tribunal

(Recruitment and Conditions of Service) Rules 1963 ( for short

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`the Rules') are amended. The three Original Applications were

transferred to the Principal Bench of the Central

Administrative Tribunal and on 31.07.2008, the Principal

Bench passed a common order allowing the three Original

Applications and directing the Union of India to consider the

three wait-listed candidates for filling up the advertised

vacancies existing in the posts of Judicial Member and

Accountant Member in the unreserved category within eight

weeks.

5. The Union of India challenged the common order of

the Principal Bench of the Central Administrative Tribunal

before the Delhi High Court contending that the vacancies in

the post of Judicial Member and Accountant Member can be

filled up only after the recruitment rules of the Income Tax

Appellate Tribunal are amended as decided by the

Appointments Committee. In the impugned judgment, the

High Court held that the recruitment rules of the Income Tax

Appellate Tribunal had already been amended and an

amendment had been inserted in Rule 4(a) of the recruitment

rules, but there was nothing in the amendment which

disqualifies any of the three wait-listed candidates from being

appointed as members of the Income Tax Appellate Tribunal.

In the impugned judgment, the Delhi High Court further held 6

that the selection had been conducted by a high-power

Selection Board presided over by a sitting Judge of the

Supreme Court and no one can doubt the recommendation of

the Selection Board which deserved to be given due weightage

and consideration. In the impugned judgment, the High Court

further held that the only way of reducing the backlog is to fill

up the vacancies at the earliest and by not doing so, the Union

of India was merely prolonging the agony of a large number of

assesses apart from depriving itself of its legitimate dues which

depends upon the verdict of the Income Tax Appellate Tribunal

in appeals pending before it. The High Court, therefore, did

not accept the explanation given by the Union of India in not

making appointments and dismissed the writ petition and

further directed the Union of India to process the case for the

appointment of the 3 wait-listed candidates against the

respective vacancies and thereafter place the matter before the

Appointments Committee of the Cabinet for further directions

within the period of eight weeks.

6. Mr. A.S. Chandhiok, learned counsel for the appellants

submitted that it is settled law that the person whose name

appears in the select list much less a person who is placed in

the wait list, does not acquire any indefeasible right of

appointment. In support of this submission, he relied on the

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decisions of this Court in Shankarsan Dash v. Union of India

[(1991) 3 SCC 47], Asha Kaul (Mrs.) and Another v. State of

Jammu and Kashmir and Others [(1993) 2 SCC 573] and

Sanjoy Bhattacharjee v. Union of India and Others [(1997) 4

SCC 283]. He submitted that in the present case, the

Selection Board selected 18 candidates out of whom 2 did not

get the vigilance clearance and all the remaining 16 selected

candidates were approved for appointment by the

Appointments Committee of the Union Cabinet but the

Appointments Committee decided not to make any further

appointment till the amendment of the Rules. He submitted

that out of these 16 selected candidates, one candidate

selected for the post of Judicial Member declined to accept the

offer of appointment and another candidate though appointed

as Judicial Member resigned and as a result there were some

unexpected vacancies and in these unexpected vacancies B.

Krishna Mohan who was placed in the wait list of the

candidates recommended for appointment as Judicial Member

could not be appointed because of the decision of the

Appointments Committee not to make any further

appointment until the amendment of the Rules. He submitted

that similarly there were 5 vacancies of Accountant Members

in the general quota and 5 candidates were selected but one

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selected candidate declined and another selected candidate did

not get vigilance clearance and Inturi Rama Rao and P.K.

Kedia, who were placed in the wait list could not be appointed

as the Appointments Committee had taken a view that there

will be no further appointments till the rules are amended.

7. Mr. Chandhiok submitted that the High Court has

held that there was nothing in the amendment inserting Rule

4(a) in the Rules which disqualifies any of the aforesaid 3 wait-

listed candidates, namely, B. Krishna Mohan, Inturi Rama Rao

and P.K. Kedia from being appointed as the members of the

Income Tax Appellate Tribunal and hence the amendment of

the Rules was not relevant for denying appointment to the 3

wait-listed candidates as members of the Income Tax Appellate

Tribunal. He submitted that Rule 4(a) was already in existence

when the Selection Board made its recommendations in 2005

and the Appointments Committee in its decisions was

therefore did not have in mind Rule 4(a) of the Rules when it

decided on 31.08.2007 that all further appointments will be

made only after amendment of the rules. In this context, he

referred to Para 6 of the reply filed by the Union of India before

the Central Administrative Tribunal, Principal Bench, New

Delhi in O.A. No. 1024 of 2008 filed by P.K. Kedia. He

submitted that the High Court, therefore, wrongly considered

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the amendment inserting Rule 4(a) of the Rules and rejected

the explanation given by the Appointments Committee in not

making appointment.

8. Mr. Vijay Hansaria, appearing for B. Krishna Mohan,

submitted that the recommendations of the Selection Board

would show that the wait-listed candidates who were to be

considered for appointment in case any of the candidates

included in the main list of selected candidates were not

available or found unsuitable for appointment after

antecedents verification and therefore if some of the

candidates placed in the main list of selected candidates were

either not available or not found suitable for appointment after

antecedents verification, the wait-listed candidates have the

right to be considered for appointment. He submitted that the

advertisement was for filling up not only existing vacancies but

also vacancies that may occur upto 31.12.2005 as has been

stated in Para 2 of the advertisement. He submitted that well

before 31.12.2005, 2 vacancies in the post of Judicial

Members occurred and B. Krishna Mohan was entitled to be

considered for appointment to the post of Judicial Member of

the Income Tax Appellate Tribunal. He submitted that the

Madras High Court issued mandamus in Writ Petition No.

8288 of 2007 to the appellants to place the matter before the

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Appointments Committee of the Union Cabinet and also

directed to give effect to the selection list as approved by the

selection board. He submitted that the selection list approved

by the selection board would include not only the candidates

placed in the main selection list, but also the candidates in the

wait list.

9. Mr. Hansaria submitted that in R.S. Mittal v. Union of

India (supra) this Court while interpreting Rule 4 of the Rules

has held that when a person has been selected by the

Selection Board and there is a vacancy which could be offered

to him, keeping in view his merit position, then, ordinarily

there is no justification to ignore him for appointment. He also

relied on the decision in A.P. Aggarwal v. Govt. of NCT of Delhi

and Another (supra) in which this Court has reiterated that it

is not open to the Government to ignore the panel which has

already been approved and accepted by it and resort to a fresh

selection process without giving any proper reason for

resorting to the same. He cited Director, SCTI for Medical

Science & Technology and Another v. M. Pushkaran [(2008) 1

SCC 448] in which this Court has held that the selectee has no

such legal right and the superior court in exercise of its power

of judicial review would not ordinarily direct issuance of any

writ, but each case must be considered on its own merits and

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where the Court does not find any reason for the authorities

not to offer any appointment to candidate placed in the

selection panel, the Court can direct appointment. He

submitted that in the present case, since no good reason had

been shown by the appellants for not making appointment to

the vacancies for the post of Judicial Members in the Income

Tax Appellant Tribunal, the High Court rightly directed the

appellants to make the appointment of B. Krishna Mohan as a

Judicial Member.

10. Mr. A.K. Behera, appearing for P.K. Kedia submitted

that as two of the selected candidates recommended for

Accountant Member by the selection board were not appointed

to the vacancies in the unreserved quota already advertised,

P.K. Kedia, who was placed in the wait list of candidates

selected for appointment to the post of Accountant Member

has a vested right to be considered for appointment as has

been held by this Court in R.S. Mittal v. Union of India (supra). He also relied on A.P. Aggarwal v. Govt. of NCT of Delhi and

Another and Director, SCTI for Medical Science & Technology

and Another v. M. Pushkaran (supra).

11. Mr. Behera next submitted that the Madras High

Court in its order dated 24.04.2007 directed the appellants to

give effect to the selection list as approved by the Selection

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Board and against this order of the Madras High Court the

appellants filed Special Leave Petition (Civil) No. 13681 of

2007, but on 17.08.2007 this Court dismissed the Special

Leave Petition and directed the appellants to give effect to the

selection list as approved by the Selection Board within eight

weeks. He submitted that the grounds which were urged in

Special Leave Petition No. 13681 of 2007 have been reiterated

in the present Special Leave Petition and this was not

permissible in law. He argued that this is therefore a fit case

in which this Court should dismiss the Civil Appeal.

12. Mr. V. Kanakraj, learned counsel appearing for Inturi

Rama Rao, submitted that the rules do not prohibit

preparation of a wait list. He submitted that the

recommendation of the Selection Board would show that some

of the candidates were placed in the wait list because the

Selection Board did not want to recommend candidates in the

main select list in excess of the notified vacancies. He

submitted that the candidates placed in the wait list therefore

also had merit and deserve to be appointed. He finally

submitted that the candidates placed in the wait list had a

legitimate expectation of being considered for appointment to

the vacancies as and when they arose.

13. Selection and recruitment of members of the Income

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Tax Appellate Tribunal, both Judicial and Accountant, is made

under Rule 4 of the Rules which is quoted hereinbelow:

"4. Method of Recruitment:-

(1) There shall be a Selection Board consisting of -

(i) a nominee of the Minister of Law;

(ii) The Secretary to the Government of India

Ministry of Law (Department of Legal Affairs);

(iii) The President of the Tribunal; and

(iv) Such other persons, if any, not exceeding two, as

the Minister of Law may appoint.

(2) The nominee of the Minister of Law shall be the

Chairman of the Selection Board.

(3) The Selection Board shall recommend persons

for appointment as members from amongst the

persons on the list of candidates prepared by the

Ministry of Law after inviting applications therefore

by advertisement or on the recommendations of the

appropriate authorities.

(4) The Central Government shall after taking into

consideration the recommendations of the Selection

Board make a list of persons selected for

appointment as members. "

14. Rule 4 of the Rules quoted above was considered by

this Court in R.S. Mittal v. Union of India (supra) and this

Court held that a person on the select panel has no vested

right to be appointed to the post for which he has been

selected, but he has a right to be considered for appointment.

This Court also held in the aforesaid decision that the

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appointing authority cannot ignore the select-panel or decline

to make the appointment on its whims and when there is a

vacancy which can be offered to him, keeping in view his merit

position, then, ordinarily, there is no justification to ignore

him for appointment. In the aforesaid decision, this Court has

held that there has to be a justifiable reason to decline to

appoint a person who is on the select-panel. The question of

filling up the post of Member in Sales Tax Appellate Tribunal

constituted under the Delhi Sales Tax Act, 1975 arose for

consideration in A.P. Aggarwal v. Govt. of NCT of Delhi and

Another (supra) and this Court observed that it was not open

to the Government to ignore the panel which has already been

approved and accepted by it and resort to a fresh election

process without giving any proper reason for resorting to the

same.

15. The Madras High Court has disposed of writ petition

No. 8288 of 2007 on 24.04.2007 with a direction to the

appellants to place the matter before the Appointments

Committee and further directed to give effect to the selection

list as approved by the Selection Board in the light of the

decision in R.S. Mittal v. Union of India (supra) and A.P.

Aggarwal v. Govt. of NCT of Delhi and Another (supra). Against

these directions of the Madras High Court, though the

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appellants carried a special leave petition, this Court

dismissed the special leave petition on 17.08.2007 and

directed the Union of India to complete the formalities and give

effect to the selection list. Hence, we are required to consider

whether the selection list has been given effect to by the

appellants in the light of the decisions of this Court in R.S.

Mittal v. Union of India (supra) and A.P. Aggarwal v. Govt. of

NCT of Delhi and Another (supra).

16. So far as the candidates placed in the main select list,

there is no dispute that out of the 18 candidates placed in the

main select list, 2 were found unsuitable and the remaining 16

were found suitable and all the 16 candidates found suitable

were approved for appointment by the Appointments

Committee of the Union Cabinet in its decisions dated

26.04.2006 and 31.08.2007. The difference between the

decisions of the Appointments Committee of the Union Cabinet

taken on 26.04.2006 and 31.08.2007 was that on 26.04.2006

the Appointments Committee approved the appointment of 16

candidates found suitable for a period of 2 years and further

decided that the rules be amended for making such

appointment for a period of 2 years, whereas on 31.08.2007

after the Supreme Court dismissed the Special Leave Petition

against the order of the Madras High Court, the Appointments

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Committee approved the appointment of the 16 candidates for

a full tenure upto 62 years as provided under Rule 11 of the

Rules. Hence, the main list of the selected candidates

recommended by the Selection Board has been given effect to

in accordance with the directions of the Madras High Court as

upheld by this Court.

17. The wait list of candidates recommended by the

Selection Board, however, has not been given effect to. Under

sub-rule (3) of Rule 4 of the Rules quoted above, the Central

Government after taking into consideration the

recommendations of the Selection Board make a list of persons

selected for appointment as members. Thus, until the

Appointments Committee approved the list of wait-listed

candidates, such wait-listed candidates are not persons

selected for appointment. Appointments Committee in its

meetings held on 26.04.2006 and 31.08.2007 had taken a

view that any further appointment after the 16 selected

candidates can be made after the amendment of the Rules.

The Central Government is both the rule making authority as

well as the appointing authority of any member of the Income

Tax Appellate Tribunal under the Income Tax Act, 1961.

Hence, if the Central Government has taken a decision

through the Appointments Committee of the Union Cabinet to

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undertake appointments in future after amendment of the

rules, it is difficult for the Court to hold that the reason given

by the Central Government in not making any further

appointments because of the proposed amendments to the

rules was not a justifiable or proper reason and that the

decision of the Central Government in not approving the wait

list of candidates recommended by the Selection Board is not

in accordance of this Court's decisions in R.S. Mittal v. Union

of India (supra) and A.P. Aggarwal v. Govt. of NCT of Delhi and

Another (supra).

18. The High Court, however, has held that the

amendment inserting Rule 4(a) of the Rules did not in any way

disqualify the three candidates placed in the wait list to be

appointed as Members of the Income Tax Appellate Tribunal.

The High Court lost sight of the fact that Rule 4(a) had already

been inserted in the Rules by notification dated 26.04.2004

and therefore this could not be the amendment which was in

the mind of the Appointments Committee when it took the

decisions on 26.04.2006 and 31.08.2007 to make further

appointments only after the Rules were amended. Para 6 of

the short reply on behalf of the Union of India filed before the

Central Administrative Tribunal, Principal Bench, New Delhi in

O.A. No. 1024 of 2008 has made a reference to the proposed

18

amendment discussed in the meeting of the Appointments

Committee and is quoted hereinbelow:

"Para 6 - The ACC approved appointment of 16

candidates for a period of not exceeding 02 years

from the date of assumption of charge of the post or

until further orders and also it directed the

respondent No.1 for amendment of the Recruitment

rules. Since the existing recruitment rules do not

have provision of appointment of members for a

period of two years except in the case of

appointment to the temporary benches, the matter

was under correspondence between the respondent

and the ACC."

19. As has been held by this Court in Director, SCTI for

Medical Science & Technology and Another v. M. Pushkaran

(supra) each case must be considered on its own merits and

where the Court does not find any reason for the authorities

not to offer any appointment to the candidate placed in the

selection panel the Court can direct appointment. In the facts

of the present case, the Madras High Court did not see any

justification on the part of the Central Government in not

giving effect to the select panel when there was a very large

pendency of cases in the Income Tax Appellate Tribunal

resulting in hardship to the litigant public as well as loss to

the exchequer, but after the Appointments Committee

approved appointments of 16 selected candidates found

suitable for appointment as members of the Income Tax

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Appellate Tribunal, the immediate need for filling up the

vacancies was met and if the Appointments Committee has

taken a view that any further appointments will be considered

only after the rules are amended, the Court should not compel

the Central Government to make the appointments from the

wait-listed candidates recommended by the Selection Board by

a writ of mandamus. In our considered opinion, the

circumstances in which this Court dismissed the Special

Leave Petition against the order of the Madras High Court no

longer subsisted after the Appointments Committee approved

the appointment of the 16 selected candidates so as to warrant

a direction by the Delhi High Court to the Central Government

to appoint the 3 wait-listed candidates as members of the

Income Tax Appellate Tribunal.

20. We accordingly set aside the impugned judgment of

the Delhi High Court and the common judgment of the Central

Administrative Tribunal, Principal Bench, in O.A. Nos. 1024 of

2008, 1036 of 2008 and 1037 of 2008 and dismiss the

Original Applications. The appeals are allowed, but there shall

be no order as to costs.

.............................J.

(P. Sathasivam)

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.............................J.

(A. K. Patnaik)

New Delhi,

November 17, 2011.