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     IN THE SUPREME COURT OF INDIA      CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NO.   9082   OF   2012  (Arising out of S.L.P.[C] 27821 of 2012)

Pradip Kumar                                                              …   Appellant

VERSUS

Union of India and Ors.                                          …  Respondents

WITH

  CIVIL APPEAL NO.   9089    OF   2012 (Arising out of S.L.P.[C] No.34671 of 2012)

J U D G M E N T

SURINDER SINGH NIJJAR,J.

1. Leave granted in both the special leave petitions.

2. By this common order, we propose to dispose of the aforesaid  

two appeals  as  they are  both  directed  against  the  same judgment  

delivered by the High Court of Delhi in Writ Petition [C] No.98 of 2011  

decided on 27th July, 2012.  Appeal arising out of Special Leave Petition  

No.34671 of 2012 has been filed by the Union of India challenging the  

judgment on various legal grounds.   By the aforesaid judgment the  

High  Court  has  set  aside  the  order  passed  by  the  Central  

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Administrative Tribunal [hereinafter referred to as the “CAT’] Principal  

Bench, New Delhi, dismissing OA No.3544 of 2009 on 9th December,  

2010 whereby the respondent was discharged from service.  Appeal  

arising out of Special Leave Petition No.27821 of 2012 has been filed  

by Pradip Kumar challenging the judgment of the High Court, in so far  

as the said judgment limits the relief granted to him only to the extent  

of quashing of the order passed by the CAT and the order dated 20th  

November, 2009, whereby he was discharged from service as Member  

[Judicial]  in  the Customs Excise and Service  Tax Appellate  Tribunal  

[“the CESTAT”].  

3. We will firstly take up the Civil Appeal No………. of 2012 arising  

out of Special Leave Petition No.34671 of 2012, filed by  Union of India,  

for consideration.  

4. The respondent was a practising Advocate in the Calcutta High  

Court  as  well  as  before  the  CESTAT  for  over  twenty  years  mainly  

dealing with the customs, excise and service tax matters.   On 22nd  

April,  2006  he  appeared  for  an  interview  before  the  Selection  

Committee for the post of Member [Judicial] in CESTAT.  On being duly  

selected, he assumed charge as Member [Judicial] in the CESTAT on  

22nd November,  2006.   Service  conditions  of  the  Member  of  the  

CESTAT are governed by Customs, Excise and [Service Tax] Appellate  

Tribunal Members [Recruitment and Conditions of Service] Rules 1987  

[hereinafter referred to as the “Rules”]. The controversy in the present  

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proceedings is limited to the interpretation of Rule 8 and Rule 9 [2] of  

the aforesaid Rules.  The said Rules are as under:

“Rule  8.  Probation  –  [1]   Every  person  appointed  as  a  member  shall  be  on  probation for a period of one year.

[2] The Central Government may extend  the  period  of  probation  for  a  further  period of one year at a time so that the  period of probation in aggregate may not  exceed three years.

[3] A member may be discharged from  service at any time during the period of   probation  without  assigning  him  any  reason.

Rule  9.  Reversion  or  termination  of  the  service of  members.  –  [1]   In  case of  a   person  appointed  as  a  technical  or  a  judicial member from any post under the  Union or a State, unless such a person is   confirmed,  the  Central  Government  may  at any time revert him to his parent post  without  assigning  any  reason,  after  giving  him  one  month’s  notice  of  such  reversion  and  in  case  a  technical  or  a  judicial  member  wishes  to  revert  to  his  parent post, he shall be required to give  one  month’s  notice  to  the  Central   Government:

Provided  that  in  case  such  technical  or   judicial  member  has  already  superannuated according to the relevant  rules of his parent post, the appointment  may  be  terminated  by  the  Central   Government  at  any  time  without  assigning any reason after giving him one  month’s notice of such termination and in  case  such  technical  or  judicial  member  wishes to resign, he shall be required to  give  one  month’s  notice  to  the  Central   Government.

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[2] In case of a person appointed as a  judicial  member  directly  from  the  Bar,   unless he is confirmed, the appointment  may  be  terminated  by  the  Central   Government  at  any  time  without  assigning any reason after giving him one  month’s notice of such termination and in  case  such  judicial  member  wishes  to  resign, he shall  be required to give one  month’s  notice  to  the  Central   Government.”

5. Under  the  aforesaid  Rules,  Member  of  the  CESTAT  is  put  on  

probation for a period of one year [Rule 8(1)]. Furthermore, under Rule  

8(2), the period of probation may be extended for a further period of  

one  year  at  a  time.  However,  the  total  period  of  probation  cannot  

exceed three years.  Under Rule 8(3) a Member may be discharged  

from  service  at  any  time  during  the  period  of  probation  without  

assigning any reason.  This rule makes a general provision regulating  

the period of probation of members Technical or Judicial, irrespective of  

their source of  recruitment.  Rule 9 (1) and (2), on the other hand,  

deals with Technical or Judicial Members, recruited from two different  

sources.   Rule  9(1)  deals  with  members,  who have been appointed  

whilst already in the service of the Central Government.   In the case of  

such Members a provision is made in Rule 9(1) to enable the Central  

Government to revert  him to his  parent  post  without  assigning any  

reason,  unless  such  a  person  is  confirmed.   Such  Member  can  be  

reverted to his  parent post after  giving one month’s  notice of  such  

reversion.  If such a Member wishes to revert to his parent post, he is  

required to give one month’s notice to the Central Government.  Under  

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the proviso, services of such member can be terminated by giving one  

month’s  notice,  without  assigning  any  reason,  if  he  has  already  

superannuated  under  the  relevant  rules  of  his  parent  post.   Such  

member has a corresponding right  to resign by giving one month’s  

notice.  We are, however, concerned only with Rule 9(2) which provides  

that in the case of a person appointed as Judicial Member directly from  

the Bar, unless he is confirmed, his appointment may be terminated by  

the Central Government at any time without assigning any reason after  

giving him one month’s notice.  Similarly in case the Judicial Member  

wishes  to  resign,  he  is  required  to  give  one month’s  notice  to  the  

Central Government.  Rule 8 clearly operates within the period of the  

three years, during which a member can be continued on probation.  

Rule 9(2) would apply only in cases where the Judicial Member is still  

not  confirmed  even  after  the  maximum  period  of  three  years,  on  

probation.  Rule 9(2) would have no application within the period of  

three years.  Rule 8 provides for discharge of probationer.  Rule 9(2)  

talks of termination of service.  In such circumstances, it provides that  

notice  of  one  month  shall  be  given  before  termination.   But  this  

procedure would become applicable  only  if  the Judicial  Member has  

been in service for three years or more.  Otherwise, provision of one  

month  notice  would  have  been  made  in  Rule  8  itself.   Rationale  

underlying the provision in Rule 9(1) is to enable the member recruited  

from a Central Government post to be reverted to his parent post.  To  

put Judicial member recruited directly from the Bar at par with those  

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recruited from Central Government posts, the necessary provision of  

one month notice has been made in Rule 9(2).  No such notice would  

be required if the Judicial Member is discharged within a period of three  

years, if not confirmed.   

6. Keeping in view the aforesaid interpretation of Rules 8  and 9, let  

us now examine the facts.   It  appears that  no order  extending the  

period of probation of the respondent was passed at the end of the  

mandatory period of probation                         on 21st November, 2007  

or soon thereafter.  The respondent, therefore, continued to work as  

Member  [Judicial].   However,  he  received  an  order  dated  19th  

November,  2009  extending  his  period  of  probation;  first  upto  21st  

November, 2008 and then upto 21st November, 2009.  Receipt of the  

letter dated 19th November, 2009 resulted in the respondent tendering  

his resignation from the post of Member [Judicial] CESTAT                on   

20th November, 2009.  On that very date an order was issued whereby  

the respondent was discharged from service on the post of Member  

[Judicial] CESTAT.  The said order is reproduced below:

“F.No.26/8/2006-Ad.IC. Government of India Ministry of Finance Department of Revenue New Delhi the 20th Nov. 2009

ORDER NO.5 OF 2009

In pursuance of rule 8(3) of the Customs,   Excise and Service Tax Appellate Tribunal  Members (Recruitment and Conditions of  Service) Rules 1987, the President hereby  discharges  forthwith  Sh.  P.K.  Das,   

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Member  (Judicial)  in  Customs  Excise  &  Service  Tax  Appellate  Tribunal  from  service.

2.   By  order  and  in  the  name  of  the  President.

Sd/- ( Victor James )

Under Secretary to the Govt. of India

To,

Sh. P.K. Das, Member (Judicial)  CESTAT, West Block No.2 R.K. Puram, New Delhi

Copy to:

1. President,  Customs,  Excise  &  Service Tax Appellate Tribunal, New  Delhi.

2. Registrar, Customs Excise & Service  Tax Appellate Tribunal, New Delhi.

3. Establishment  Officer,  Department  of Personnel & Training North Block.

4. Pay  and  Accounts  Officer,   Department of Revenue

5. Notification Folder Sd/-

( Victor James ) Under Secretary to the Govt. of India”

It  appears  that  thereafter  by  letter  dated  23rd October,  2009  the  

respondent withdrew his resignation under Rule 9(2), which was well  

within the prescribed period of one month.

7. During the period of his service the respondent had served under  

three Presidents, CESTAT, namely, Justice Abichandanani, Justice S.N.  

Jha and Justice R.M. Khandparkar.  It is the case of the respondent that  

he never received any adverse comments from any of the Presidents  

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during his tenure of service as a Member [Judicial], CESTAT.  In fact, he  

was given the annual increments in the years 2007 and 2008.  Since,  

he had received no adverse reports, the respondent assumed that he  

would be confirmed on the post of Member [Judicial] CESTAT.  But to  

his utter shock and dismay, he received the order dated                  19th  

November, 2009 which extended his period of probation; first upto 21st  

November, 2008 and then further upto                    21st November,  

2009.   It  is  further the case of  the respondent,  on the basis of  the  

information  obtained under  the Right  to  Information  Act  2005,  that  

there is a note dated                           26 th November, 2007 in File  

No.27/22/2005-AD.IC in which it has been mentioned that the action  

for initiation of the process of confirmation of the respondent, which  

was due on 22nd November,  2007,  would be initiated in  a new file.  

There is further noting on 23rd January, 2008 calling for the ACRs of the  

respondent and two other Members. On 6th June, 2008        Justice S.N.  

Jha,  President,  CESTAT,  wrote  to  the  Secretary,  Department  of  

Revenue, requesting him to take steps for the confirmation of some of  

the Members of the CESTAT including the respondent.  The Vigilance  

Cell had also conveyed its clearance from its own angle, in so far as  

the respondent was concerned.

8. However,  the circumstances did  a complete about  turn when,  

like a bolt out of the blue, on 14th September, 2009, the respondent  

received a note from the President of the CESTAT annexing therewith a  

copy of the complaint from the members of the Bar about an incident  

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which was alleged to have occurred in the respondent’s Court on 9th  

September, 2009 and requesting for a report about the incident.  The  

President of  the CESTAT prepared a report on 18th November, 2009  

regarding  the  incident,  which  inter  alia,  contained  the  following  

observations regarding the conduct of the respondent:

“15. It must be noted that whenever any  act  of  misbehavior  on  the  part  of  the  parties  or  their  representatives  takes  place in the court, it is essentially for the  Presiding  Officer  to  administer  proper  control and to try to defuse the tension if   any  caused  on  that  count  and  not  to  retire  immediately  to  the  chamber.  Abstaining  from  and  abandoning  the  court  in  such  a  situation  and  leaving  it  open  and  free  for  all  court  result  is  encouraging  indiscipline  in  the  court.   Merely  because  some  of  the  representatives  of  the  parties  start  raising voice or make allegations against   the  Bench,  it  would  not  be  proper  to  abandon  the  court  functioning  and  to  retire to chamber.  Rather the Presiding  Officer has to try to control such situation  by use of administrative acumen.  In the  case in hand, there does not appear any  efforts made by the Presiding Officer in  that regard.”

The respondent claims that his services were terminated as a direct  

consequence of the complaint made by the representatives of the Bar  

and the report of the President, CESTAT.   

9. Aggrieved by the aforesaid order, the respondent challenged the  

same before the CAT by way of OA No.3544 of 2009 on 7th December,  

2009.  On 9th December, 2009, the OA was dismissed by the CAT.  The  

CAT rejected the submission that the respondent was deemed to be  

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confirmed upon completion of one year period of probation.   In any  

event it seems respondent had dropped the contention regarding the  

deemed  confirmation  after  some  arguments  initially  and  upon  

considering  the  judgment  of  the  CAT in  OA No.1895  of  2009 –  Dr.  

Vineet Sodhi Vs Union of India decided on 6th December, 2010.  CAT  

also  rejected  the  submission  of  the  respondent  that  the  order  of  

discharge from service was punitive in nature.  It was held by CAT that  

even  though  report  had  been  received from the  President,  CESTAT  

regarding the complaint made by the Members of the Bar, ultimately  

the discharge of the respondent was on the basis of his unsuitability of  

the job and unsatisfactory performance of duty.  It was also observed  

by the CAT that there was no full scale formal inquiry, but only facts  

have been brought to the notice of the competent authority about the  

unsatisfactory  performance  of  the  respondent.  With  these  

observations, the OA was dismissed.

10. The respondent being aggrieved challenged the order before the  

High Court of Delhi by way of Writ Petition [C] No.98 of 2011.  The High  

Court allowed the writ petition only on the interpretation of Rule 8(3)  

and Rule 9(2) of the Rules, although the respondent had raised four  

specific  points  for  the  consideration  of  the  High  Court.   It  was  

submitted that the order of discharge could not be sustained as it had  

been passed in arbitrary exercise of power.  It was said to be a product  

of malice in law.  Secondly it was submitted that the discharge order  

was punitive in nature inasmuch as it was stigmatic and, therefore, it  

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was essential that inquiry under Article 311(2) of the Constitution of  

India ought to have been conducted.  Thirdly, it was submitted that the  

relevant rules and in this case Rule 9(2) of the said Rules, requires  

giving  of  one  month’s  notice  prior  to  termination.  That  notice  was  

admittedly  not  given  and,  therefore,  the  termination  was  bad.  

Fourthly,  it  was submitted that by virtue of Rule 8 of  the Rules the  

respondent could be deemed to have been confirmed. The High Court  

on interpretation of Rules 8 and 9 of the Rules has held that since the  

respondent had completed more than three years service and he was a  

Judicial Member, under Rule 9(2) his services could not be terminated  

without  serving  upon  him  one  month’s  notice.   In  our  view,  the  

interpretation given by the High Court on     Rule 9(2) is not correct.  In  

the  case  of  Judicial  Member  directly  recruited  from  the  Bar,  the  

procedure prescribed under Rule 9(2) is required to be followed only if  

such member without  being confirmed continues for  three years  or  

more.  

11. Nonetheless the order of  discharge cannot  be upheld,  as it  is  

stigmatic and punitive in nature. It is a matter of record that during  

three years of  service no order was issued extending the period of  

probation of the respondent. He completed the mandatory period of  

probation on 21st November, 2007, therefore, it was expected of the  

department  to  take  a  decision  about  the  performance  of  the  

respondent within a reasonable period from the expiry of one year.  It  

is  also a matter of  record that the respondent continued in service  

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without receiving any formal or informal notice about the defects in his  

work or any deficiency in his performance.  This Court, in the case of  

Sumati P. Shere Dr. Vs.  Union of India & Ors.  1  , emphasised the  

importance  of  timely  communication  of  defects  and  deficiencies  in  

performance to a probationer, so that he could make the necessary  

efforts to improve his work.  Non-communication of his deficiencies in  

work would render any movement order of such an employee on the  

ground of unsuitability arbitrary. In Paragraph 5 of the judgment, it is  

observed:-

“5.  We  must  emphasise  that  in  the  relationship of master and servant there  is  a  moral  obligation  to  act  fairly.  An  informal, if not formal, give-and-take, on  the assessment of work of the employee  should be there. The employee should be  made aware of the defect in his work and  deficiency in his performance. Defects or  deficiencies;  indifference  or  indiscretion  may  be  with  the  employee  by  inadvertence  and  not  by  incapacity  to  work.  Timely  communication  of  the  assessment  of  work  in  such  cases  may  put  the  employee  on  the  right  track.  Without any such communication, in our  opinion,  it  would  be arbitrary  to  give  a  movement order to the employee on the  ground of unsuitability.”

In our opinion,  the aforesaid observations are fully applicable in the  

facts and circumstances of this case.  

12. It is also a matter of record that the procedure for confirmation of  

the respondent had been initiated on               26 th November, 2007. It  

1 (1989) 3 SCC 311

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is also not disputed that vigilance report for his confirmation had also  

been received.  Therefore,  it  is  difficult  to accept the submission of  

learned  counsel  for  the  Union  of  India,  that  the  discharge  of  the  

respondent  is  not  founded on  the  complaint  made  by  some of  the  

advocates.   The  report  prepared  by  the  President,  CESTAT  on  18th  

November, 2009, clearly indicated that the only reason for issuing the  

order  of  discharge  was  contained  in  the  aforesaid  report.   In  our  

opinion the order of discharge passed by the Union of India was clearly  

vitiated by the legal malice.  It was clearly founded upon the report  

submitted by the President, CESTAT.  In our opinion the controversy  

herein is squarely covered by a number of earlier judgments of this  

Court,  which  have  been  considered  and  reaffirmed  in  the  case  of  

Union of India and Ors.  Vs. Mahaveer C. Singhvi  2.  Considering  

the similar circumstances this Court observed as follows:

“25. In  the  facts  of  the  case  the  High  Court came to the conclusion that a one- sided  inquiry  had  been  conducted  at  different  levels.   Opinions  were  expressed  and  definite  conclusions  relating  to  the  respondent’s  culpability  were  reached  by  key  officials  who  had  convinced themselves in that regard.  The  impugned  decision  to  discharge  the  respondent  from service  was  not  based  on mere suspicion alone.  However, it was  all  done  behind  the  back  of  the  respondent  and  accordingly  the  alleged  misconduct for which the services of the  respondent were brought to and end was  not  merely  the  motive  for  the  said  decision but was clearly the foundation of  the same.”

2  [2010] 8 SCC 220

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13. In our opinion, there is clearly a live nexus between  

the decision to discharge the respondent vide order dated  

19th November,  2009;  the  disturbance  caused  by  the  

members of the Bar in the Court of the respondent and his  

leaving the Bench and retiring to his Chamber.  The report  

of  the  President  leaves  no  manner  of  doubt  that  the  

respondent had been condemned unheard on the basis of  

the  aforesaid  incident  and  the  report  of  the  Chairman,  

CESTAT  dated  18th November,  2009.   The  order  of  

discharge, being based upon the report of the President, is  

clearly stigmatic and could not have been passed without  

giving  an  opportunity  to  the  respondent  to  meet  the  

allegations  contained  in  the  report  of  the  President,  

CESTAT.  We may notice here the observations made by  

this court in the case of Mahaveer C. Singhvi [supra]:

“46. As  has  been  held  in  some  of  the  cases cited before us, if a finding against  a  probationer  is  arrived  at  behind  his  back  on  the  basis  of  the  enquiry  conducted  into  the  allegations  made  against him/her and if  the same formed  the foundation of the order of discharge,   the same would be bad and liable to be  set  aside.   On  the  other  hand,  if  no  enquiry  was  held  or  contemplated  and  the allegations were merely a motive for  the passing of an order of discharge of a  probationer without giving him a hearing,   the same would be valid.  However, the  

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latter view is not attracted to the facts of  this case.”

14. This apart, we are also of the opinion that the order of discharge  

has been passed in order to avoid the procedure of giving one month’s  

notice as required under Rule 9(2).  The aforesaid Rule has made a  

distinction between the members of the CESTAT who were working in  

the Central Government prior to their recruitment as Members of the  

CESTAT and the Judicial Member directly recruited from the Bar.  In the  

case of  members recruited from the various services of  the Central  

Government,  a  provision  has  been  made for  their  reversion  to  the  

parent department.  In their case a provision has also been made for  

them to be reverted to the parent department without assigning any  

reason.   However,  the  same can only  be  upon  giving  one  month’s  

notice.  In the case of Judicial Member, directly recruited, it has been  

specifically provided [Rule 9(2)] that upon completion of three years if  

the Judicial Member has not been confirmed, his services can only be  

terminated  upon  being  given  one  month’s  notice.   To  avoid  this  

provision, an order was passed on 19th November, 2009, extending the  

respondent’s  period  of  probation  from 21st November,  2007  to  21st  

November,  2008  and  further  upto  21st November,  2009.   This  was  

clearly done with an oblique motive of issuing the order of discharge on  

the very next day, i.e., 20th November, 2009.  The action of the Union  

of India is undoubtedly a colourable exercise of power.  The order of  

discharge is in utter violation of Article 14 of the Constitution of India,  

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rendering the same void.  In view of the above, we have no hesitation  

in holding that the special leave petition No. 34671 of 2012 filed by the  

Union of India is wholly devoid of merit and has to be dismissed.

15. This  now brings us to the appeal arising out  of  Special  Leave  

Petition No. 27821 of 2012 filed by Pradip Kumar claiming the relief of  

reinstatement and for the grant of consequential benefits including full  

back wages.  Although, the High Court had allowed the writ petition of  

the respondent only on the ground that there had been a violation of  

Rule 9(2), we have come to a conclusion that the order of discharge  

was vitiated being colourable exercise of power, stigmatic and punitive  

in nature and such order cannot be sustained in law.  In our opinion,  

the order of discharge is arbitrary and therefore violates Article 14 of  

the Constitution.   Consequently,  we hold that the appellant -  Pradip  

Kumar is entitled to be reinstated in service.  He shall be entitled to full  

back wages during the period he has been compelled to remain out of  

service.  Union of India is directed to release all consequential benefits  

to the said Pradip Kumar within a period of two months of the receipt of  

a certified copy of this order.  

16. With these observations, the appeal filed by Union of India being  

Civil Appeal No.  9089  of 2012 arising out of Special Leave Petition [C]  

No.  34671 of  2012 is  dismissed and Civil  Appeal  No.  9082 of  2012  

arising out of Special Leave Petition [C] No. 27821 of 2012 filed by the  

Pradip Kumar is allowed.  

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.….………………………...CJI   [ALTAMAS KABIR]

….……………………………J. [SURINDER SINGH NIJJAR]

…….…………………………J [J. CHELAMESWAR]

New Delhi; December 14, 2012.

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ITEM NO.1A               COURT NO.12             SECTION XIV (For Judgment)             S U P R E M E   C O U R T   O F   I N D I A                          RECORD OF PROCEEDINGS                      

CIVIL APPEAL NO. 9082  OF 2012      (Arising out of SLP(C) No.27821/2012)       

PRADIP KUMAR                                Appellant(s)

                VERSUS

UNION OF INDIA & ORS.                       Respondent(s) WITH

CIVIL APPEAL NO. 9089  OF 2012      (Arising out of SLP(C) No.34671/2012)       

Date: 14/12/2012  These matters were called on for    pronouncement of judgment today.

For Petitioner(s) Mr. Nikhil Jain,Adv.

For Respondent(s) Mr. B. Krishna Prasad,Adv.

Hon'ble Mr. Justice Surinder Singh Nijjar  

pronounced the Judgment of the Bench comprising of  

Hon'ble  the  Chief  Justice  of  India,  Hon'ble  Mr.  

Justice  Surinder  Singh  Nijjar  and  Hon'ble  Mr.  

Justice J. Chelameswar.

Leave granted in both the petitions.

Civil Appeal No.9089 arising out of SLP(C)  

No.34671/2012  is  dismissed  and  Civil  Appeal  

No.9082/2012 arising out of SLP(C) No.27821/2012 is  

allowed in terms of the signed judgment.

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(A.S. BISHT)                (INDU BALA KAPUR)  COURT MASTER                          COURT MASTER

(Signed reportable judgment is placed on the file)

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