whether the students who were given admission by the institution that had taken recourse to unholy and uncalled for practice should be allowed to suffer. We think not. Students are to be compensated. They had paid the fees. Hopes were kindled in their hearts and aspirations in their mind. Their young minds were polluted by the institution and, therefore, we direct the respondent-institution to pay Rs.10,00,000/- to each of the students who had taken admission apart from refunding their fees. Additionally, as the conduct of the 1st respondent, namely, G.C.R.G. Memorial Trust, is absolutely blameworthy, we impose costs of Rs.25 lacs to be deposited before this Court within eight weeks hence. = We say so as an unscrupulous litigant who conceived the idea of paving the path of his own desire, moving according to his design, proceeding as per his whim and marching ahead with brazenness abandoning any sense of prudence cannot be leniently dealt with. It is the duty of the Court to take stringent action, for he has polluted the purity attached to the justice dispensation system and sullied the majesty of law.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.19662 OF 2017
[Arising out of S.L.P. (C)No. 23410 of 2017]
Medical Council of India ....Appellant
Versus
G.C.R.G. Memorial Trust & Ors. ....Respondents
J U D G M E N T
DIPAK MISRA, CJI.
Leave granted.
2. The present appeal frescoes the scenario where one is
tempted to quote a few lines from what has been stated in
Quillen v. Board of Education1
. It reads thus:-
“The distinction between the gourmet and the
gourmand is as neat and decisive in the prosaic
realm of negotiation as in the festive sphere of
gastronomic enjoyment — attempting to satisfy an
unrestrained or exaggerated appetite in either field
may prove discomforting if not disastrous.”
The purpose of referring to the same is to highlight the
unrestrained and exaggerated appetite. When the factual
1 115 NYS 2d 122, 126 (1952)
2
matrix would be unrolled, the greed in all its colours shall
come to the forefront.
3. The present appeal by special leave calls in question
the legal acceptability of the order dated 01st September
2017 passed by a Division Bench of the High Court of
Allahabad, Lucknow Bench in Misc. Bench No.13530 of
2017 whereby the High Court has quashed the order dated
19th August 2017 as well as order dated 31st May 2017
passed by the Central Government and eventually granted
permission to the 1st respondent to admit students for the
Academic Session 2017-2018.
4. When the matter was listed on 06th September 2017,
this Court had passed the following order :
“Issue notice fixing a returnable date within
four weeks.
As Mr. Maninder Singh, learned Additional
Solicitor General for respondent No.3-Union of
India and Mr. Mukul Rohatgi, learned senior
counsel has entered appearance on behalf of
respondent No.1 and 2, no further notice need be
issued.
As far as respondent No.5 and 6 are
concerned, let notice be issued.
Dasti in addition is permitted.
As an interim order, it is directed that there
shall be stay of the operation of order dated 1st
3
September, 2017 further corrected on 4th
September 2017.
If the Institution has admitted students they
are debarred from continuing in the course. We
have passed this order as we while disposing of the
writ petition preferred under Article 32 of the
Constitution had passed the following order :-
'Learned counsel for the petitioners
seeks leave of this Court to withdraw
the writ petition to approach the High
Court under Article 226 of the
Constitution of India.
The writ petition is permitted to be
withdrawn. However, it is made clear
that the High Court, while entertaining
the writ petition, shall not pass any
interim order pertaining to the
academic year 2017-2018.'
We really fail to fathom the manner in which
the High Court has misconstrued our order and
passed the final order for 2017-2018. We are
issuing notice only to test the propriety of the
order and also if the Institution is eligible to get
the renewal of letter of permission for 2018-2019.”
The aforesaid order eloquently reflects the shock
expressed by this Court. As is reflectible from the aforesaid,
notice was issued only to test the propriety of the order and
also if the institution is eligible to get the renewal for
2018-2019.
5. We shall initially address the first issue. To adjudge
4
the issue of propriety of the order passed by the High Court,
we are compelled to travel in a time machine. The
respondent-institution had filed a writ petition, i.e., Writ
Petition (Civil) No.13530 of 2017 before the High Court and
was dealt with by the Division Bench of the High Court on
08th August 2017. On that day, the following order came to
be passed:
“In reference to order dated 4.8.2017, the Central
Government, as per the instructions received by
Mr. Asit Kumar Chaturvedi, learned Senior
Counsel appearing for the respondent no.1, has
agreed to entertain the petitioners' matter along
with other similar matters and consider it to
revaluate the recommendations/views of the MCI,
Hearing Committee, DGHS and the Oversight
Committee as available on record for grant of
approval to the petitioner-institution to admit the
students in MBBS Course, after affording an
opportunity of hearing to the petitioner-institution
to the extent necessary. To facilitate the Central
Government, the whole paragraph 25 of the
judgment in which directive has been issued by
the Supreme Court is reproduced below:
'25. In the above persuasive premise, the
Central Government is hereby ordered to
consider afresh the materials on record
pertaining to the issue of confirmation or
otherwise of the letter of permission granted
to the petitioner colleges/institutions. We
make it clear that in undertaking this
exercise, the Central Government would
revaluate the recommendations/views of the
MCI, Hearing Committee, DGHS and the
Oversight Committee, as available on
5
records. It would also afford an opportunity
of hearing to the petitioner
colleges /institutions to the extent
necessary. The process of hearing and final
reasoned decision thereon, as ordered, would
be completed peremptorily within a period of
10 days from today. The parties would
unfailing co-operate in compliance of this
direction to meet the time frame fixed.'
Therefore, we also direct the Central
Government to consider the petitioners'
matter accordingly within seven days as
framed by Hon'ble the Supreme Court.
The matter is listed before Hon'ble the
Supreme Court on 24.8.2017.
We, therefore, also direct the registry to list
this matter on 28.8.2017.”
6. In pursuance of the aforesaid order, taking note of the
deficiencies, the Central Government passed the following
order on 19.8.2017 :
“17. Now, in compliance with the above direction
of Court, the Ministry granted hearing to the
college on 16.08.2017. The Hearing Committee
after considering the records and oral & written
submission of the college submitted its report to
the Ministry. The findings of the Hearing
Committee are as underThe
Committee notes that there was no
deficiency of faculty and residents as per MCI
assessment report. The findings of the assessor
indicate some deficiency of clinical material and
the observance of hospital protocols.
6
During the course of hearing, the college
produced certain documents contesting the
findings of the assessors. The Committee perused
the case sheet of single normal delivery on the day
of inspection as shown by the college. The delivery
of Ms. Sameerun was performed without blood
transfusion and the mother was discharged
without treatment of anaemeia when she was
severely anaemic at the time of admission with a
haemoglobin level of 6.5 gm%. This is gross
negligence. Further, the college could not produce
any Government issued birth certificates in
support of their claim of average number of
deliveries.
The inept handling of patients in the hospital
is further confirmed during the perusal of cases
pertaining to casualty and ICUs. The college could
not satisfy regarding the patients in casualty
wards. None of the 3 patients in ICCU seemed to
have cardiac history. The pulse rate of one of the
patient who was a PSVT (tachycardia) case was
noted as 72/min at the time of admission. NO
investigation was done. Other two patients with
diagnosis of Kyphoscoliosis (spinal deformity) and
vestibular neuritis (ear problem) were also
admitted in the cardiac ICU. This confirms the
finding of assessors and the college had no
explanation. It is understood that as per MSR, the
requirement is for requisite number of beds in
ICUs, however, the college seem to be employing
doubtful measures to show patients.
It was also noted that the college was neither
aware nor following the provisions of biomedical
waste (BMW) rules.
The explanation offered by the college in
obtaining 14 cadavers from `Dera Saccha Sauda'
Sirsa, Haryana without requisite permission and
death certificates is a serious issue to be looked
into by the concerned authorities.
7
In view of the above, despite the fact that no
deficiency of faculty and residents is noted, the
functioning of the hospital as per norms is in
serious doubt and the Committee agrees with the
decision of the Ministry vide letter dated
31.05.2017 to debar the college for two years and
also permit MCI to encash bank guarantee.
18. Accepting the recommendations of the
Hearing Committee, the Ministry reiterates its
earlier decision dated 31.05.2017 to debar the
college from admitting students for a period of two
years i.e. 2017-18 and 2018-19 and also to
authorize NCI to encash the Bank Guarantee of
Rs.2 Crore.”
7. As the facts would further uncurtain, the institution
filed a petition under Article 32 of the Constitution before
this Court and chose to withdraw the same to approach the
High Court under Article 226 of the Constitution. The said
order has already been quoted while reproducing the order
dated 06.09.2017.
8. The content of the order dated 28.08.2017 is
graphically clear. The High Court was not allowed to pass
any interim order pertaining to the Academic Session
2017-2018 but the Division Bench of the High Court, for
some unfathomable and inscrutable reason, referred to
certain judgments of this Court and allowed the prayer. It is
8
beyond our comprehension as to how the High Court could
have even remotely thought of passing an order granting the
Letter of Permission for the Academic Session 2016-2017
and renewal for 2017-2018. It is worthy to mention here
that before the High Court, time was sought on behalf of the
Central Government and the MCI to file counter affidavits.
The same was denied and the contesting parties were
deprived of the opportunity to contest. Be it noted, the writ
petition that was filed before this Court was withdrawn on
28th August, 2017 and a fresh writ was filed before the High
Court on 29th August 2017 and the judgment was delivered
without waiting for the reply from the Central Government
or MCI on 01st September 2017. It is clear as the cloudless
sky that the judgment of the High Court shows unnecessary
and uncalled for hurry, unjustified haste and an
unreasonable sense of promptitude possibly being oblivious
of the fact that the stand of the Medical Council of India and
the Central Government could not be given indecent burial
when they were parties on record. Such a procedure cannot
be countenanced in law.
9. The controversy cannot be allowed to end with our
9
aforesaid finding. The judicial propriety requires judicial
discipline. In the absence of a reply filed by the Medical
Council of India and the Central Government, it could not
have been possible to answer the factual matrix of the case.
What is not possible, is not possible. We may hasten to add
that in respect of the cases where renewal was granted, Mr.
Vikas Singh would submit that the deficiency was within
the permissible limit but in the present case, it was not so
and in any case, granting renewal for 2017-2018 and
confirmation of letter of permission for 2016-2017 was
totally unwarranted. In most of the cases, this Court has
directed for re-inspection by the MCI which would then take
a final decision for the academic year 2018-2019. It is a
most unfortunate situation that the Division Bench has
paved such a path. One cannot but say that the
adjudication by the Division Bench tantamounts to a state
as if they dragged themselves to the realm of “willing
suspension of disbelief”. Possibly, they assumed that they
could do what they intended to do. A Judge cannot think in
terms of “what pleases the Prince has the force of law”.
Frankly speaking, the law does not allow so, for law has to
10
be observed by requisite respect for law.
10. In this context, we may note the eloquent statement of
Benjamin Cardozo who said:
“The judge is not a knight errant, roaming at will
in pursuit of his own ideal of beauty and goodness.”
11. In this regard, the profound statement of Felix
Frankfurter2
is apposite to reproduce:
“For the highest exercise of judicial duty is to
subordinate one's personal pulls and one's private
views to the law of which we are all guardians -
those impersonal convictions that make a society a
civilized community, and not the victims of
personal rule.”
The learned Judge has further stated3
:
“What becomes decisive to a Justice's functioning
on the Court in the large area within which his
individuality moves is his general attitude toward
law, the habits of the mind that he has formed or
is capable of unforming, his capacity for
detachment, his temperament or training for
putting his passion behind his judgment instead
of in front of it. The attitudes and qualities which I
am groping to characterize are ingredients of what
compendiously might be called dominating
humility.”
12. In Shiv Mohan Singh v. The State (Delhi
Administration)4
, the Court has observed:
2 Clark, Tom C., “Mr. Justice Frankfurter :’A Heritage for all Who Love the Law”, 51
A.B.A.J. 330, 332 (1965)
3 Foreword, to Memorial issue for Robert H. Jackson, 55 Columbia Law Review
(April, 1955) p. 436
4
(1977) 2 SCC 238
11
“... a Judge even when he is free, is still not wholly
free; he is not to innovate at pleasure; he is not a
knight-errant roaming at will in pursuit of his own
ideal of beauty or of goodness; he is to draw inspiration
from consecrated principles’...”
13. In this context, we may refer with profit the authority
in Om Prakash Chautala v. Kanwar Bhan5 wherein it has
been stated:
“19. It needs no special emphasis to state that a
Judge is not to be guided by any kind of notion.
The decision-making process expects a Judge or
an adjudicator to apply restraint, ostracise perceptual
subjectivity, make one’s emotions subservient
to one’s reasoning and think dispassionately. He is
expected to be guided by the established norms of
judicial process and decorum.”
And again:
“20. A Judge should abandon his passion. He
must constantly remind himself that he has a singular
master “duty to truth” and such truth is to
be arrived at within the legal parameters. No heroism,
no rhetorics.”
14. In Dwarikesh Sugar Industries Ltd. v. Prem Heavy
Engineering Works (P) Ltd. and another6
, the
three–Judge Bench observed:
“32. When a position in law is well settled as a result
of judicial pronouncement of this Court, it
would amount to judicial impropriety to say the
least, for the subordinate courts including the
5
(2014) 5 SCC 417
6
(1997) 6 SCC 450
12
High Courts to ignore the settled decisions and
then to pass a judicial order which is clearly contrary
to the settled legal position. Such judicial adventurism
cannot be permitted and we strongly
deprecate the tendency of the subordinate courts
in not applying the settled principles and in passing
whimsical orders which necessarily has the effect
of granting wrongful and unwarranted relief to
one of the parties. It is time that this tendency
stops.”
15. The aforestated thoughts are not only meaningfully
pregnant but also expressively penetrating. They clearly
expound the role of a Judge, especially the effort of
understanding and attitude of judging. A Judge is expected
to abandon his personal notion or impression gathered from
subjective experience. The process of adjudication lays
emphasis on the wise scrutiny of materials sans emotions.
A studied analysis of facts and evidence is a categorical
imperative. Deviation from them is likely to increase the
individual gravitational pull which has the potentiality to
take justice to her coffin.
16. As is perceptible, we had stayed the operation of the
order at the interim stage and further directed that if the
Institution had admitted students they were debarred from
continuing in the course. The same stands confirmed.
17. Further, the question that remains to be adjudicated is
13
whether the students who were given admission by the
institution that had taken recourse to unholy and uncalled
for practice should be allowed to suffer. We think not.
Students are to be compensated. They had paid the fees.
Hopes were kindled in their hearts and aspirations in their
mind. Their young minds were polluted by the institution
and, therefore, we direct the respondent-institution to pay
Rs.10,00,000/- to each of the students who had taken
admission apart from refunding their fees. Additionally, as
the conduct of the 1st respondent, namely, G.C.R.G.
Memorial Trust, is absolutely blameworthy, we impose costs
of Rs.25 lacs to be deposited before this Court within eight
weeks hence.
18. Before parting, it is necessary to add and repeat that
the Division Bench had no reason to abandon the concept of
judicial propriety and transgress the rules and further
proceed on a path where it was not required to. Such things
create institutional problems and we are sure that the
learned Judges shall be guided by it. As far as the prayer of
the institution as regards the Academic Session 2018-2019
is concerned, it does not deserve consideration and,
14
accordingly, stands rejected. We say so as an unscrupulous
litigant who conceived the idea of paving the path of his own
desire, moving according to his design, proceeding as per
his whim and marching ahead with brazenness abandoning
any sense of prudence cannot be leniently dealt with. It is
the duty of the Court to take stringent action, for he has
polluted the purity attached to the justice dispensation
system and sullied the majesty of law.
19. In view of the aforesaid analysis, the appeal stands
allowed. Costs as already assessed.
….……........................CJI.
[DIPAK MISRA]
….………........................J.
[A.M. KHANWILKAR]
…….……..........................J.
[Dr. D.Y. CHANDRACHUD]
New Delhi.
November 23, 2017.

National Litigation Policy = “Efficient litigant” means ensuring that good cases are won and bad cases are not needlessly persevered with. The litigation should not be resorted to for the sake of litigating. The Government must cease to be a compulsive litigant. The philosophy, “that matters should be left to the courts for ultimate decision”, has to be discarded. The easy approach, “Let the court decide,” - “difference between the tax on total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed without impact of interest.” - The line of reasoning adopted is that as the value of money went down and the cases of the Revenue increased, the choking docket required such an endeavour and there is no reason why the same policy should not be applied to old matters to achieve the objective of the policy laid down by the Central Board of Direct Taxes (‘CBDT’).

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos. 19650 of 2017
(Arising out of SLP(C) No.24055 of 2017)
DIRECTOR OF INCOME TAX, CIRCLE 26(1)
NEW DELHI ….Appellant
versus
S.R.M.B. DAIRY FARMING (P) LTD. ….Respondent
And
CIVIL APPEAL No. 19651 of 2017
(Arising out of SLP(C) No.24056 of 2017)
J U D G M E N T
SANJAY KISHAN KAUL, J.
1. Leave granted.
2. The propensity of Government Departments and public authorities to keep
litigating through different tiers of judicial scrutiny is one of the reasons for
docket explosion. The Income Tax Department of the Government of India is one
of the major litigants. There are two departmental scrutinies at the level of the
Assessing Officer and the Commissioner of Income Tax (Appeals) and thereafter
an independent judicial scrutiny at the Income Tax Appellate Tribunal (hereinafter
referred to as the ‘ITAT’) level followed by the legal issue which can be inquired
into by the High Courts. The last tier is, of course, the jurisdiction under Article
136 of the Constitution of India before the Supreme Court.
3. Mindful of the phenomenon of the docket explosion and the rising litigation in the
country, the Union of India in order to ensure the conduct of responsible litigation
framed what is today known as the National Litigation Policy, to bring down the
pendency of cases and get meaningful issues decided from the judicial forums
rather than multiple tiers of scrutiny just for the sake of it. The Government,
being a litigant in well over 50 per cent of the cases, has to take a lead in not
being a compulsive litigant.
4. It is towards the aforesaid avowed object that the Income Tax Department, from
time to time, has come out with administrative circulars/notifications for the
Department not to litigate where the revenue impact is low.
5. In the present proceedings, we are concerned with the implementation of
Instruction No.3 of 2011 dated 9.2.2011, providing for appeals not to be filed
before the High Court(s) where the tax impact was less than Rs.10 lakh. It also
contains certain other conditions which will be reverted to later, but suffice to say
that this Instruction was in supersession of the earlier Instruction No.1979 of 2000
dated 27.3.2000 where the limit of the tax effect was Rs.4 lakh. The
Instruction/Circular in question is stated to have a prospective effect as per the
Revenue and, thus, cases which were pending in the High Court(s) and had been
filed prior to the Instruction in question (Instruction No.3) but had tax effect of
less than Rs.10 lakh were, thus, required to be determined on their merits and not
be dismissed by applying the circular/instruction.
6. There has been a divergence of legal opinion on this aspect amongst the High
Courts.
7. There have also been certain orders passed by this Court which appear to have a
divergence of view and we consider it necessary to examine this issue in detail so
that conflicting orders do not arise and the High Courts are also guided
appropriately. This is also necessary, as in the mean time, a large number of cases
have been disposed of on the application of the Instruction/Circular in question
though the appeals were preferred by the Revenue prior to the Instruction/Circular
being issued as a large number of High Courts took that view.
High Courts of the View that the Circular in question would apply to pending
appeals as well:
A. Karnataka High Court:
Commissioner of Income Tax, Bangalore v. Ranka & Ranka1
. The issue was squarely
addressed by the Division Bench of the Karnataka High Court recognizing that the
concept of providing the monetary limit was not new and has been invoked from 1992.
The limit was raised from time to time. The clause in the circular has explained the
meaning of ‘Tax Effect’ as the “difference between the tax on total income assessed and
the tax that would have been chargeable had such total income been reduced by the
amount of income in respect of the issues against which appeal is intended to be filed
without impact of interest.” The different clauses protected the interest of the Revenue
so as not to have any precedentiary impact. There were, however, certain exclusions
from this, i.e., challenge to constitutional validity of an Act or Rule, declaration of any
Board Order, Notification, Instruction or Circular being held to be illegal or ultra vires,
audit objections of the Revenue Department being accepted by the Department. These
Circulars have been given statutory recognition having been issued under Section 268A
of the Income Tax Act, 1961 (hereinafter referred to as the ‘IT Act’).
1
8. The judgment took note of the fact that the Madras High Court, Kerala High
Court, Chhattisgarh High Court and the Punjab and Haryana High Court had
taken a contra view, opining that the existing Circular/Instruction prevailing at the
relevant time when the appeal/reference was made would apply and there would
be no retrospective application of the circular. On the other hand, the Bombay
High Court, Madhya Pradesh High Court, Delhi High Court had taken the view,
which was sought to be taken by the Karnataka High Court.
9. The line of reasoning adopted is that as the value of money went down and the
cases of the Revenue increased, the choking docket required such an endeavour
and there is no reason why the same policy should not be applied to old matters to
achieve the objective of the policy laid down by the Central Board of Direct Taxes
(‘CBDT’). An earlier Circular dated 5.6.2007 issued by the CBDT was also taken
note of, which required all appeals pending before the Court to be examined, with
direction to withdraw the cases wherein criteria for monetary limit as per
prevailing instructions was not satisfied unless the question of law involved or
raised in the appeal referred to High Court was of recurring nature, and therefore,
required to be settled by a higher court.
10. The Bench considered the issuance of the Circular in the conspectus of the
National Litigation Policy Document Released. The said Policy Document which
has been extracted in the judgment for its reliance has been reproduced
hereinunder:
“Introduction
Whereas at the National consultation for strengthening the judiciary toward reducing
pendency and delays held on October 24/25, 2009, the Union Minister for Law and
Justice, presented resolutions which were adopted by the entire conference
unanimously.
And wherein the said resolution acknowledged the initiative undertaken by the
Government of India to frame the National Litigation Policy with a view to ensure
conduct of responsible litigation by the Central Government and urges every State
Government to evolve similar policies.
The National Litigation Policy is as follows:
The Vision/Mission
1. The National Litigation Policy is based on the recognition that the Government
and its various agencies are the pre-dominant litigants in courts and Tribunals in the
country. Its aim is to transform the Government into an efficient and responsible
litigant. This policy is also based on the recognition that it is the responsibility of the
Government to protect the rights of citizens, to respect fundamental rights and those
in charge of the conduct of the Government litigation should never forget this basic
principle.
“Efficient litigant” means
- Focusing on the core issues involved in the litigation and addressing them
squarely.
- Managing and conducting litigation in a cohesive, co-ordinated and time-bound
manner.
- Ensuring that good cases are won and bad cases are not needlessly persevered
with.
- A litigant who is represented by competent and sensitive legal persons: competent
in their skills and sensitive to the facts that the Government is not, an ordinary
litigant and that a litigation does not have to be won at any cost.
“Responsible litigant” means
- That litigation will not be resorted to for the sake of litigating.
- That false pleas and technical points will not be taken and shall be discouraged.
- Ensuring that the correct facts and all relevant documents will be placed before
the court.
- That nothing will be suppressed from the court and there will be no attempt to
mislead any court or tribunal.
2. The Government must cease to be a compulsive litigant. The philosophy that
matters should be left to the courts for ultimate decision has to be discarded. The
easy approach, “Let the court decide” must be eschewed and condemned—
3. The purpose underlying this policy is also to reduce the Government litigation in
courts so that valuable court time would be spent in resolving other pending cases so
as to achieve the goal in the principles incorporated in the National mission for
judicial reforms which includes identifying bottlenecks which the Government and
its agencies may be concerned with and also removing unnecessary Government
cases. Prioritisation in litigation has to be achieved with particular emphasis on
welfare legislation, social reform, weaker sections and senior citizens and other
categories requiring assistance must be given utmost priority.
In respect of filing of appeals in revenue matters it is stated as under:
“(G) Appeals in revenue matters will not be filed:
(a) if the stakes are not high and are less than that amount to be fixed by the Revenue
authorities:
(b) if the matter is covered by a series of judgments of the Tribunal or of the High
Court which have held the field and which have not been challenged in the Supreme
Court:
(c) where the assessee has acted in accordance with long standing industry practice:
(d) merely because of change of opinion on the part of the jurisdictional officers.
Review of pending cases
(A) All pending cases involving the Government will be reviewed. This due
diligence process shall involve drawing upon statistics of all pending matters which
shall be provided for by all Government departments (including public sector
undertakings). The Office of the Attorney General and the Solicitor General shall
also be responsible for reviewing all pending cases and filtering frivolous and
vexatious matters from the meritorious ones.
(B) Cases will be grouped and categorized. The practice of grouping should be
introduced whereby cases should be assigned a particular number of identity
according to the subject and statute involved. In fact, further sub-grouping will also
be attempted. To facilitate this process, standard forms must be devised which
lawyers have to fill up at the time of filing of cases. Panels will be set up to
implement categorization, review such cases to identify cases which can be
withdrawn. These include cases which are covered by decisions of courts and cases
which are found without merit withdrawn. This must be done in a time bound
fashion.”
11. We consider it appropriate to refer to some of the observations in the judgment of
the Karnataka High Court, which have our imprimatur, as under:
“22. The Government has formulated the National Litigation Policy with a view to
ensure conduct of responsible litigation by the Central Government and urges every
State Government to evolve similar policies. Its aim is to transform Government into
an efficient and responsible litigant. “Efficient litigant” means ensuring that good
cases are won and bad cases are not needlessly persevered with. The litigation should
not be resorted to for the sake of litigating. The Government must cease to be a
compulsive litigant. The philosophy, “that matters should be left to the courts for
ultimate decision”, has to be discarded. The easy approach, “Let the court decide,”
must be eschewed and condemned. The purpose underlying this policy is also to
reduce the Government litigation in courts so that valuable court time would be spent
in resolving other pending cases, so as to achieve the goal in the National Legal
Mission to reduce average pendency time from 15 years to 3 years. All pending cases
involving the Government has to be reviewed with the intention of filtering frivolous
and vexatious matters from the meritorious one. Panels have to be set up to
implement categorization, review such cases, to identify cases, which can be
withdrawn. These include cases which are covered by decisions of courts and the
cases which are found without merit. Such cases have to be withdrawn. This must be
done in a time bound fashion.
23. Instruction No. 3 of 2011 is issued subsequent to the aforesaid National Litigation
Policy. A perusal of the aforesaid policy makes it clear that though the said
instruction was issued as a measure for reducing litigation, it was issued in
supersession of the earlier instruction enhancing the monetary limits and prescribing
certain conditions. The very fact that clause 11 provides that this instruction will
apply to appeals filed on or after February 9, 2011, and where appeals have been
filed before that date, the same will be governed by the instructions on this subject,
operative at the time when the said appeal was filed, makes it clear that the said
instruction is not applicable to the pending proceedings. The National Litigation
Policy provides that appeals in revenue matters should not be filed if the stakes are
not high and are less than that amount to be fixed by the Revenue authorities, it
equally provided that cases which are found without merit should be withdrawn.
Similarly, cases which are covered by the decision of the courts also have to be
withdrawn. For that purpose, a nodal officer has to be appointed and all pending
cases have to be reviewed and frivolous and vexatious matters have to be filtered
from the meritorious cases and the same are withdrawn. In other words, the National
Litigation Policy dealt with the pending cases and wanted the pending cases to be
reduced by way of withdrawal, so that valuable time of the courts would be spent in
resolving other pending cases so as to achieve the goal in the National Legal Mission
to reduce the average pendency from time from 15 years to 3 years.
24. The National Litigation Policy expressly stated that the Government must cease
to be a compulsive litigant. The philosophy, that the matters should be left to the
courts for ultimate decision is to be discarded and the easy approach that “let the
court decide”, must be eschewed and condemned. The Revenue has not applied its
mind in this direction. No attempt is made to reduce the pendency of the litigation by
filtering frivolous and vexatious matters from meritorious ones and the said cases are
withdrawn. The only measure taken for reducing the litigation is, by raising the
monetary limit. However, as the same is made prospective, it had no application to
the pending cases. Therefore, the said Instruction No. 3 of 2011 do not fulfil the
requirement prescribed by the National Litigation Policy. It only partially satisfies the
requirement in respect of future litigation. Under the aforesaid instruction, the crucial
date is the date of filing of the appeal. It is that date when the tax effect is less than
the monetary limit prescribed, the Revenue is precluded from filing such appeals.
Though the date of filing of the appeal may be the criteria, that by itself would not
provide a rationale sufficient to distinguish between pending cases and cases to be
filed in future. The earlier monetary limit was fixed in the year 2005. So it is after six
years, the monetary limit is enhanced. If only Instruction No. 3 of 2011 had been
made applicable to the pending cases also, as laid down in the National Litigation
Policy, the object of the policy would have been fulfilled. One of the ways of giving
effect to the said policy is to make that instruction applicable retrospectively to all
pending appeals as on the date of the circular. It would substantially serve the object
of the policy.\
25. It is in this context, the question arises, when the instruction expressly states that
the benefit of the said policy is prospective, still can the courts place a construction
on such instruction so as to make it retrospective. In this context, the apex court in
the case of CCE v. Mysore Electricals Industries Ltd. reported in [2006] 204 ELT
517 (SC) : [2007] 8 RC 1, dealing with the question how a beneficial circular is to be
construed, has approached this question in the following manner. At paragraph 13 of
the judgment, it is stated that the learned counsel further submitted that the circular
being oppressive and against the respondent, has to apply only prospectively and
cannot be applied retrospectively. In other words, a beneficial circular has to be
applied prospectively. Thus, when the circular is against the assessee they have a
right to claim the enforcement of the same prospectively. It is further submitted that
for the period in question, trade notices had been issued classifying the circuit
breakers under heading No. 85.35 or 85.36. When the approved classification was
proposed to be revised to reclassify the single panel circuit breakers under heading
No.85.37 of the tariff, such re-classification can take effect only prospectively from
the date of communication of the show-cause notice proposing reclassification.
26. Following this judgment, the apex court in the case of Suchitra Components Ltd.
v. CCE reported in [2007] 208 ELT 321 (SC) held as under:
“The point raised by the learned counsel for the appellant is covered by the recent
judgment of this court in Civil Appeal No. 4488 of 2005. CCE v. Mysore Electricals
Industries Ltd. reported in [2006] (204) ELT 517 (SC). In the said judgment, this
court held that a beneficial circular has to be applied retrospectively while oppressive
circular has to he applied prospectively. Thus, when the circular is against the
assessee, they have the right to claim the enforcement of the same prospectively.”
27. In the instant case, Instruction No. 3 of 2011 is more beneficial than Instruction
No. 2 of 2005. If Instruction No. 3 of 2011 is also made applicable to the pending
appeals before this court, it would grant relief to the assessee. Apart from granting
relief to the assessee, if a number of appeals pending before this court are disposed of
on the basis of the said circular, the precious time which would be saved by this court
could be better utilized for deciding disputes where the tax effect is enormous. That
apart, the duration, an appeal takes in this court would be reduced as desired by the
National Litigation Policy.
28. It is also not out of context to mention that periodically, the Revenue introduces
what is called as the Kar Vivadh Samadhan Scheme and the Voluntary Disclosure of
Income Scheme to annul black money and to give benefit to persons who are not
prompt in filing returns and paying tax. But unfortunately, persons who are paying
tax regularly but have succeeded before the Tribunal in showing that there is no tax
liability, are made to face these litigations, instead of concentrating their time and
energy in productive work. Under these circumstances, we are of the view that it is
settled law that any notification issued under this fiscal legislation granting
exemption from payment of tax has to be construed strictly. Any
circulars/instructions issued conferring the benefit on the assessees who are still to
come to the court and who already inside the court, at any rate, if such a benefit is
given to the pending matters, it would be only in the nature of one-time settlement,
which most of the financial institutions throughout the country extend to defaulters
who have borrowed money and who refuse to pay the same.
29. It is also not out of place to mention herein that Parliament wanted to grant
statutory recognition to these orders/instructions/circulars, issued by the Department
from time to time retrospectively to take care to protect the interests of the Revenue
by introducing sub-sections (2) and (3) in section 268A of the Act. This benefit
conferred on these assessees would be only in the nature of one-time settlement
because if the same issue arises for consideration in the subsequent years and the tax
effect is more than Rs. 10 lakhs, it is not open to them to plead that either the
Department is estopped from claiming such amount or that the order passed by this
court dismissing the appeals on the ground that the tax effect being within the
monetary limit would come in the way of the Department proceeding against the
assessee. The circular also makes it clear that in the pending appeals, where the
constitutional validity of the provisions of the Act or Rule are under challenge, or
where the Board's order, notification, instruction or circular has been held to be
illegal or ultra vires or whether the Revenue audit objection in the case has been
accepted by the Department, notwithstanding the fact that the tax effect is less than
the monetary limit fixed under the aforesaid circular, still it is open to the Department
to request the court to permit them to prosecute such appeals. Thus, the Department
has to apply its mind in all the pending appeals and point out to the court, which are
those appeals in which they intend to prosecute. Therefore, sufficient safeguards have
been made to protect the interests of the public revenue. By this approach we would
be saving the time of the court, the time of the Department and public time in general
and giving effect to the Nation Litigation Policy, 2011, so that it can be used for
better and productive purpose.”
12. The Division Bench also pointed out the anomaly in the working of the Circular,
were it to apply only prospectively, in the following words:
“31. Yet another anomaly which requires to be noticed is, if a Tribunal where the
number of cases which are pending are more, decides the appeal, subsequent to these
latest circulars and the amount involved is less than Rs. 10 lakhs, the assessee in such
cases get the benefit of the latest circular. However, if the Tribunal has decided a case
expeditiously or in Tribunals where the pendency is less and if the subject-matter of
the appeal preferred by the Revenue in such cases is more than Rs. 4 lakhs and less
than Rs. 10 lakhs, the assessees in those appeals are denied the benefit of the latest
circular. In other words, where there is huge pendency of cases in the Tribunal or
court, an appeal filed earlier is disposed of after the circular, the benefit accrues to
the assessee. However, in Tribunals and the courts where the pendency of cases is
less, an appeal filed recently is decided before the circular or where the assessee
co-operates with the court in speed disposal of the appeal and the appeal is disposed
of before the date of circular, he is denied the benefit of the circular. Therefore, the
benefit to which the assessee is entitled to should not be dependant on the date of the
decision, over which neither the assessee nor the Revenue has no control. In this
context, the circular would be discriminatory, if it is held to be prospective only. It
could be saved from such vice of discrimination by holding it as retrospective.
32. Though Circular/Instruction 3 of 2011 is issued by the Department in pursuance
of the power conferred under the statutory provisions while issuing such
circular/instruction, the Department has not kept in mind the object with which such
circulars/instructions are issued from time to time. The object sought to be achieved
by such circulars/instructions and also the law declared by the apex court, the
National Litigation Policy, 2011, as well as the various schemes introduced by the
Department granting relief to persons who have not even filed returns and paid taxes,
are kept in mind, to bring the circular/instruction in harmony with the National
Litigation Policy, it would be appropriate to hold that the benefit of such
circular/instruction also applies to the pending cases in appeal in various courts and
Tribunals on the date of the circular/instruction.”
B. Bombay High Court:
13. Commissioner of Income Tax v. Pithwa Engg. Works2
: This judgment of the
Division Bench pertains to the Circular dated 27.3.2000 enhancing the previous
limit but the ratio is the same.
14. In Commissioner of Income Tax v. Madhukar K. Inamdar (HUF)3
the Circular
dated 15.5.2008 was examined, opining that it was in public interest if the
Revenue concentrates on the cases wherein tax effect is substantially high rather
than running after the assessees wherein the tax impact is less than Rs.4 lakhs,
considering the cost of litigation and other administrative cost which may be
much more than the tax recovery, especially in the context of the Circular dated
5.6.2007 requiring the current matters also to be examined.
C & D. Madhya Pradesh High Court & Delhi High Court:
15. In Commissioner of Income Tax v. Ashok Kumar Manibhai Patel & Co.4
and
Commissioner of Income Tax v. P.S. Jain & Co.5
: In both the above cases, the
Circular in question was dated 27.3.2000, but the ratio is the same.
High Courts of the View that the Circular in question would apply only prospectively:
2
3
4
5
A. Punjab & Haryana High Court:
16. In Commissioner of Income Tax v. Varindera Construction Co.6
Instruction
No.5/2008 dated 15.5.2008 was held to apply only prospectively. The Court
disagreed with the view taken by other High Courts to the contra.
B, C & D. Chhattisgarh High Court; Madras High Court & Kerala High Court:
17. In Commissioner of Income Tax v. Navbharat Explosives Co. P. Ltd.7
;
Commissioner of Income Tax v. Kodanand Tea Estates Co8
. and CWT v. John
L. Chackola9
, the opinion is to the same effect as aforesaid applying the circular
prospectively as they state so.
The view of the Supreme Court:
18. The view adopted by the Delhi High Court making the Circular applicable to
pending matters came up before a three Judge Bench of this Court in SLP(C)
No.CC 13694/2011 titled CIT Central-III v. Surya Herbal Ltd. when the
following order was passed on 29.8.2011:
“Delay condoned.
Liberty is given to the Department to move the High Court pointing out that the
Circular dated 9th February, 2011, should not be applied ipso facto, particularly, when
the matter has a cascading effect. There are cases under the Income Tax Act, 1961,
in which a common principle may be involved in subsequent group of matters or
large number of matters. In our view, in such cases if attention of the High Court is
drawn, the High Court will not apply the circular ipso facto. For that purpose, liberty
6
7
8
9
is granted to the Department to move the High Court in two weeks.
The Special Leave Petition is, accordingly, disposed of.”
19. The aforesaid order, in our view, actually should have laid the controversy to rest.
The retrospective applicability of the Circular dated 9.2.2011 was not interfered
with, but with two caveats – (i) Circular should not be applied by the High Courts
ipso facto when the matter had a cascading effect; (ii) where common principles
may be involved in subsequent group of matters or a large number of matters. It
was opined that in such cases, the attention of the High Court would be drawn and
the Department was even given liberty to move the High Court in two weeks. In
our view this order holds the field and should continue to hold the field.
20. Unfortunately, this order was not brought to the notice of the subsequent two
Judges Bench of this Court in Commissioner of Income Tax-VII, New Delhi v.
Suman Dhamija10 again arising from a Delhi High Court order, wherein it was
simply stated that since the appeals were preferred before 2011 and the
Instructions were dated 9.2.2011, the earlier cases would not be covered by the
Instruction. This order in turn had been followed by another two Judges Bench in
Civil Appeal No.16815/2017 titled The Commissioner of Income Tax Bangalore
I & Anr. v. M/s. Gemini Distilleries dated 12.10.2017.
21. Once again, in another matter Commissioner of Income Tax &Anr. V. Century
10
Park11, the line adopted by the three Judges Bench in Surya Herbal Ltd. case
(supra) has been followed.
22. We have already given our imprimatur to the observations made by the Karnataka
High Court in a detailed analysis in Ranka & Ranka case (supra), which has dealt
with the litigation policy philosophy behind applying the Circular and the benefit
being extended in view thereof to all Assessees where appeals have been pending,
but below the financial limit, as otherwise an anomalous situation would arise.
23. We may also take note of the judgment of this Court in Suchitra Components
Ltd. v. Commissioner of Central Excise, Guntur12 on the general principle of
application of Circulars. Reliance was placed on the view expressed in
Commissioner of Central Excise, Bangalore v. Mysore Electricals Industries
Ltd.13 opining that a beneficial circular has to be applied retrospectively while an
oppressive circular has to be applied prospectively.
24. We are of the view that the matter needs to be put to rest and a clarity be obtained
in view of the impact of this issue on pending cases before the High Courts as
well as the cases which have been disposed of by various High Courts by
applying the Circular of 2011 to pending litigations. In our view the matter has
been squarely put to rest taking further care of the interest of the Revenue by the
order passed by the three Judges Bench of this Court in Surya Herbal Ltd. case
(supra), which had put two caveats even to the retrospective application of the
11
12
13
Circular. The subsequent orders have been passed by the two Judges Bench
without those orders being brought to the notice of the Court, a duty which was
cast on the Department to have done so to avoid the ambiguity which has arisen.
Thus, the said view of the three Judges Bench would hold water and the Circular
would apply even to pending matters but subject to the two caveats provided in
Surya Herbal Ltd. case (supra).
25. The appeals of the Revenue are, thus, dismissed in the aforesaid terms.
..….….…………………….J.
(Rohinton Fali Nariman)
...……………………………J.
(Sanjay Kishan Kaul)
New Delhi.
November 23, 2017.
ITEM NO.1501 COURT NO.8 SECTION XIV
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
C.A. NO. 19650/2017 @ Petition(s) for Special Leave to Appeal (C)
No(s). 24055/2013
DIRECTOR OF INCOME TAX NEW DELHI Petitioner(s)
VERSUS
M/S S.R.M.B.DIARY FARMING (P) LTD. Respondent(s)
WITH
C.A. NO. 19651/2017 @ SLP(C) No. 24056/2013
Date : 23-11-2017 These matters were called on for
pronouncement of JUDGMENT today.
For Petitioner(s) Mr. Arijit Prasad, Adv.
Mrs. Anil Katiyar, AOR
For Respondent(s) Ms. Sharmila Upadhyay, AOR
Mr. Kamal Mohan Gupta, AOR

* * * * * * * * * * * * *
Hon'ble Mr. Justice Sanjay Kishan Kaul pronounced the Reportable
Judgment of the Bench comprising Hon'ble Mr. Justice Rohinton Fali
Nariman and His Lordship.
Leave granted.
The Civil Appeals are dismissed in terms of signed reportable
judgment.
(SONALI SAUND) (CHANDER BALA)
SENIOR PERSONAL ASSISTANT COURT MASTER
(signed reportable Judgment is placed on the file)

Shri Rakesh Asthana – questioned the appointment to the post of Special Director, CBI= in Mahesh Chandra Gupta vs. Union of India and Others (2009) 8 SCC 273 has highlighted the fact that there is vital difference between judicial review and merit review. Once there is consultation, the content of that consultation is beyond the scope of judicial review though lack of effective consultation could fall within the scope of judicial review.= Further, even in the FIR filed by the CBI, the name of Shri Rakesh Asthana has not been mentioned at all. Thus, lodging of FIR will not come in the way of considering Shri Rakesh Asthana for the post of Special Director, after taking into consideration his service record and work and experience. From the Minutes of the Meeting (MoM) of the Selection Committee, we find that the news items reported in the print and electronic media that no decision was taken with respect to the appointment on the post of Special Director, CBI in the 12 meeting of the Selection Committee held on 21.10.2017 are factually incorrect.- the appointment of Shri Rakesh Asthana – Respondent No. 2 herein to the post of Special Director, CBI does not suffer from any illegality. The writ petition fails and is dismissed.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
WRIT PETITION (CIVIL) NO. 1088 OF 2017
Common Cause .... Petitioner(s)
Versus
Union of India and Others .... Respondent(s)
O R D E R
R.K. Agrawal, J.
1) By means of the present public interest litigation (PIL),
the petitioner, Common Cause, a Registered Society, through
its President Shri Kamal Kant Jaswal, questions the validity of
the order dated 22.10.2017 issued by Secretariat of the
Appointments Committee of the Cabinet, Department of
Personnel and Training (DoPT) appointing Shri Rakesh
Asthana – Respondent No. 2 herein as the Special Director,
Central Bureau of Investigation (CBI) on the ground that the
appointment has been made illegally, arbitrarily, mala fide and
in violation of the principles of impeccable and institutional
integrity.
1
2) We have heard learned Shri Prashant Bhushan, learned
counsel for the petitioner and Mr. K.K. Venugopal, learned
Attorney General appearing for the Union of India.
3) Shri Prashant Bhushan, learned counsel contended that
this Court in Vineet Narain and Others vs. Union of India
and Another (1998) 1 SCC 226 has laid down the procedure
for appointment of Director, CBI which is as under:-
“58.6. Recommendations for appointment of the Director,
CBI shall be made by a Committee headed by the Central
Vigilance Commissioner with the Home Secretary and
Secretary (Personnel) as members. The views of the
incumbent Director shall be considered by the Committee for
making the best choice. The Committee shall draw up a
panel of IPS officers on the basis of their seniority, integrity,
experience in investigation and anti-corruption work. The
final selection shall be made by the Appointments
Committee of the Cabinet (ACC) from the panel
recommended by the Selection Committee. If none among
the panel is found suitable, the reasons thereof shall be
recorded and the Committee asked to draw up a fresh
panel.”
4) Learned counsel further contended that the CBI has been
established under the Delhi Special Police Establishment Act,
1946 (in short ‘the DSPE Act’) and to give statutory effects to
the directions given in Vineet Narain (supra), the DSPE Act
was amended in 2003 vide Central Vigilance Commission Act,
2
2003 to provide that the Director, CBI and officers above the
post of Superintendent of Police shall be appointed by the
Central Government on the recommendations of the Central
Vigilance Commissioner, the Vigilance Commissioners and two
Secretaries to the Government of India.
5) The DSPE Act was further amended by the Lokpal and
Lokayuktas Act, 2013 to provide for a mechanism for the
appointment of Director, CBI as well as for the appointment of
officers to the post above the Superintendent of Police. As in
the present petition, the selection and appointment of the
Special Director, CBI is under challenge and not the selection
and appointment of the Director, CBI, only Section 4C, as
substituted by the Act of 2013, has to be considered. Section
4C of the DSPE Act provides for the procedure for appointment
of Superintendent of Police and above reads as under:-
“4C. Appointment for posts of Superintendent of Police
and above extension and curtailment of their tenure, etc.
—
(1)The Central Government shall appoint officers to the
posts of the level of Superintendent of Police and above
except Director, and also recommend the extension or
curtailment of the tenure of such officers in the Delhi
Special Police Establishment, on the recommendation of a
Committee consisting of:-
3
a) The Central Vigilance Commissioner –
Chairperson
b) Vigilance Commissioners - Members
c) Secretary to the Government of India in charge of the
Ministry of Home - Member, and
d) Secretary to the Government of India in charge of the
Department of Personnel - Member
Provided that the Committee shall consult the Director
before submitting its recommendation to the Central
Government.
(2) On receipt of the recommendation under sub-Section
(1), the Central Government shall pass such orders as it
thinks fit to give effect to the said recommendation.”
6) Thus, the appointment on the post of Superintendent of
Police and above has to be made by the Selection Committee
in consultation with the Director, CBI. Shri Prashant
Bhushan, relying upon the news reports dated 22.10.2017 in
the India Today and reported on 23.10.2017 in ‘The Pioneer’
and the ‘The Hindu’ as also the newspaper report dated
24.10.2017 published in ‘The Pioneer’ submitted that no
decision was taken by the Selection Committee in its meeting
held on 21.10.2017 regarding the appointment of Shri Rakesh
Asthana – Respondent No. 2 on the post of Special Director,
CBI, and therefore, the order dated 22.10.2017 issued by the
4
Appointments Committee of the Cabinet (ACC) is wholly illegal
and contrary to law.
7) Learned counsel for the petitioner, relying upon the
diaries and other papers seized in the raid conducted in the
premises of Sterling Biotech and Sandesara Group of
Companies where on some pages of the diary, the name of
Shri Rakesh Asthana – Respondent No. 2 herein finds place as
also in the FIR dated 30.08.2017 filed by the CBI, in the
column of details of known/suspected/unknown accused with
full particulars, a mention has been made for “other unknown
public servant and private persons”, contended that in any
event Respondent No. 2 could not have been recommended for
appointment as Special Director, CBI as the matter is under
investigation.
8) He relied upon a 9-Judges Bench decision of this Court
in Supreme Court Advocates-on-Record Association and
Others vs. Union of India (1993) 4 SCC 441 to submit that
consultation is to be effective and primacy has to be given to
the views of the persons consulted.
5
9) Learned counsel for the petitioner further relied upon a
decision of this Court in Centre for PIL and Another vs.
Union of India and Another (2011) 4 SCC 1 in support of his
submission that institution is more important than an
individual and the decision to recommend has got to be an
informed decision keeping in mind that the institution has to
perform an important function.
10) Learned counsel further contended that the son of
Respondent No. 2, viz., Ankush Asthana has worked for 2
years, 11 months with M/s Sterling Biotech as Assistant
Manager (papers and diaries of which Company had been
seized) and the cocktail party of the wedding of the daughter of
Respondent No. 2 was held in the farm house of M/s
Sandesaran Group of Companies. He also relied upon a news
reported in the Indian Express dated 21.11.2017 wherein a
Professor of the University of London had expressed doubt and
concern about the working of the Vigilance Commission
concerning CBI’s Additional Director’s recent effort to win
promotion to bring home the point that the appointment of
6
Shri Rakesh Asthana – Respondent No. 2 as Special Director
could not have been made at all.
11) Learned Attorney General for India placed before us the
Minutes of the Selection Committee Meeting held on
21.10.2017 in the Office of the Central Vigilance
Commissioner and submitted that the Selection Committee
had considered the confidential letter dated 21.10.2017
submitted by the Director, CBI and had discussed the same in
the meeting. The Selection Committee had given good reasons
for not accepting the contents of the letter submitted by the
Director, CBI and recommended Shri Rakesh Asthana for
appointment as Special Director, CBI. He further submitted
that the CBI itself had moved the proposal on 06.07.2017 for
appointment of Shri Rakesh Asthana as a suitable candidate
to hold the post of Special Director, CBI. According to him,
Shri Rakesh Asthana was holding the post of Additional
Director, CBI before being appointed as Special Director, CBI
and had been supervising functions of 11 Zones, viz., STF
Zone, MDMA Zone, Delhi Zone, Lucknow Zone, Patna Zone,
EoZ-II Zone, Mumbai, EoZ-III Zone, Kolkata Zone, North East
7
Zone, Chennai Zone & Chandigarh Zone. In the above
capacity, he is supervising the investigation/trial of a number
of scam cases including Augusta Westland Case, Ambulance
Scam Case, Kingfisher Cases, Hassan Ali Khan Case, Moin
Qureshi Case, J.P. Singh Bribery Case, Paramount Airways
Case, Coal Scam Cases, AHD and Bitumen Scam Cases of
Bihar and Jharkhand. He is also supervising a number of
Special Crime cases which were registered on the orders of
Courts or on the request of State Governments besides cases
against Ministers/officials of Delhi Government. He thus
submitted that no fault can be found in the recommendations
made by the Selection Committee. Respondent No. 1 had
rightly accepted the recommendation for appointment of Shri
Rakesh Asthana as Special Director, CBI.
12) We have given our thoughtful consideration to the
various pleas raised by learned counsel for the parties.
13) There cannot be any doubt that if the Statute provides for
consultation with any person before making recommendation
for appointment to any post, consultation with that person has
to be made. The question of giving primacy to the opinion
8
expressed by the person with whom the consultation has to be
made depends upon various factors. If there is no Selection
Committee and the appointing authority is required to consult
with some other Constitutional/Statutory authority then the
question of giving primacy to the opinion expressed by the
person with whom the consultation is to be made exists.
14) However, in cases, where a Selection Committee has been
constituted which consists of high officials and consultation
has to be made with another person of the Department for
which recommendation for appointment is to be made, in that
event, the consultation is only a process of discussion which
has to be taken into consideration while making
recommendation by the Selection Committee. It cannot be
said to have a primacy.
15) In the Minutes of the Meeting of the Selection Committee
held on 21.10.2017, the Selection Committee had discussed
the note submitted by the Director, CBI and also discussed
the same with him as would be clear from the Minutes
reproduced hereinbelow:-
9
“Item No. II: Induction of IPS officers as Special
Director, CBI.
The Agenda papers have been considered. The Director
CBI has furnished a Secret/Confidential letter ID No.
30/2017/VC(CVC) 152/1552 dated 21.10.2017 in the
meeting, enclosing an unsigned note on Sterling Biotech
Ltd. and related entities. It is mentioned by the
Director, CBI that the entries in the note refer, inter
alia, to one Shri Rakesh Asthana. The Committee
considered the note and the matter was also discussed
with the Director, CBI. Keeping in view that there is no
finding in these papers that the person mentioned
therein is the same person under consideration for
appointment and there is nothing about the veracity of
the contents of the document and the further fact that
the CBI itself moved the present proposal on 06.07.2017
wherein it has been categorically mentioned that Shri
Rakesh Asthana IPS (GJ:1984) is suitable to hold the
post of Special Director, CBI and no further verified
material has been brought on record, the Committee
decided to recommend him for appointment as Special
Director, CBI. The Committee has also kept in view the
fact that the Vigilance Commission does not take
cognizance of complaints received just on the verge of
appointments or promotions unless they are proved
misconducts. The Committee has also noted the
decisions of the Courts in respect of such documents.”
16) From a perusal of the aforesaid Minutes, we find as
under:-
(i) The Director, CBI had furnished a secret/confidential
letter dated 21.10.2017 enclosing an unsigned note on M/s
Sterling Biotech Ltd. and related entities and that the entries
in the note referred, inter alia, to one Shri Rakesh Asthana.
10
(ii) The Committee had considered the note and the matter
was also discussed with the Director, CBI.
(iii) The Committee found that there are no findings in the
papers that the person mentioned therein is the same person
under consideration for appointment and there is nothing
about the veracity of the contents of the document.
(iv) The Committee further found the fact that the CBI itself
moved the present proposal on 06.07.2017 categorically
mentioning that Shri Rakesh Asthana IPS (GJ:1984) is
suitable to hold the post of Special Director, CBI.
(v) The Committee also held that no further verified material
has been brought on record and the Committee decided to
recommend the name of Shri Rakesh Asthana for appointment
as Special Director, CBI.
(vi) The Committee has also kept in view the fact that the
Vigilance Commission does not take cognizance of complaints
received just on the verge of appointments or promotions
unless they are proven misconducts.
(vii) The decision taken by the Selection Committee was
unanimous.
11
17) Further, this Court, in Mahesh Chandra Gupta vs.
Union of India and Others (2009) 8 SCC 273 has highlighted
the fact that there is vital difference between judicial review
and merit review. Once there is consultation, the content of
that consultation is beyond the scope of judicial review though
lack of effective consultation could fall within the scope of
judicial review.
18) We cannot question the decision taken by the Selection
Committee which is unanimous and before taking the
decision, the Director, CBI, had participated in the discussions
and it is based on relevant materials and considerations.
Further, even in the FIR filed by the CBI, the name of Shri
Rakesh Asthana has not been mentioned at all. Thus, lodging
of FIR will not come in the way of considering Shri Rakesh
Asthana for the post of Special Director, after taking into
consideration his service record and work and experience.
From the Minutes of the Meeting (MoM) of the Selection
Committee, we find that the news items reported in the print
and electronic media that no decision was taken with respect
to the appointment on the post of Special Director, CBI in the
12
meeting of the Selection Committee held on 21.10.2017 are
factually incorrect. Likewise, the statement of the Professor of
the University of London reported in the Indian Express
appears to be based on the newspaper reports which have
been found to be factually incorrect, and therefore, it has no
substance.
19) In view of the foregoing discussion, we are of the
considered opinion that the appointment of Shri Rakesh
Asthana – Respondent No. 2 herein to the post of Special
Director, CBI does not suffer from any illegality. The writ
petition fails and is dismissed.
...…………………………………J.
(R.K. AGRAWAL)
…………….………………………J.
(ABHAY MANOHAR SAPRE)
NEW DELHI;
NOVEMBER 28, 2017.
13

Daily wages labour -There may also be a situation that persons junior to him were regularised under some policy but the workman concerned terminated. In such circumstances, the terminated worker should not be denied reinstatement unless there are some other weighty reasons for adopting the course of grant of compensation instead of reinstatement. - Labour Court has also found that the termination is bad due to violation of Section 25-G of the Act.- it would be just, proper and reasonable to award lump sum monetary compensation to the respondent in full and final satisfaction of his claim of re-instatement and other consequential benefits by taking recourse to the powers under Section 11-A of the Act and the law laid down by this Court in Bharat Sanchar Nigam Limited case (supra). we consider it just and reasonable to award a total sum of Rs.2,50,000/- (Rs.Two Lakhs Fifty Thousand) to the respondent in lieu of his right 10 to claim re-instatement and back wages in full and final satisfaction of this dispute. Let the payment of Rs.2,50,000/- be made by the appellant(State) to the respondent within three months from the date of receipt of this judgment failing which the amount will carry interest at the rate of 9% per annum payable from the date of this judgment till payment to respondent.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos. 19857-19858 OF 2017
(ARISING OUT OF SLP (C) Nos.11956-11957 of 2015)
District Development Officer
& Anr. ...Appellant(s)
VERSUS
Satish Kantilal Amrelia ….Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1) Leave granted.
2) These appeals are filed against the final
judgment and order dated 01.12.2014 passed by
the High Court of Gujarat at Ahmedabad in Civil
Application No.10519 of 2014 in Letters Patent
Appeal No.1878 of 2006, wherein the High Court
dismissed the Letters Patent Appeal filed by the
appellant herein in default and further declined to
1
restore the appeal when prayed by the appellant.
The Letters Patent Appeal arose out of judgment
and final order of the Single Judge dated
21.04.2006 in Special Civil Application No.8390
whereby the learned Single Judge dismissed the
writ petition filed by the appellant and affirmed the
Award dated 01.02.2006 passed by Labour Court,
Bhavnagar in Reference Case No.166 of 1992.
3) The controversy involved in the appeals is
confined to short facts, which, however, need
mention hereinbelow to appreciate the same.
4) The appellant is the Panchayat Department of
State of Gujarat having its office at Bhavnagar. The
respondent - Satish Kantilal Amrelia worked in the
appellant's Revenue Department at Bhavnagar as a
Peon-cum-Driver on daily wages from 18.12.1989 to
31.05.1990 (5 months 15 days) and then started
giving his services again as daily wager in
appellant's another branch (Small Saving) from
01.06.1990 to 12.02.1992 (1 year 9 months) on
2
daily payment of Rs.27.55 (Rs.Twenty Seven and
Fifty Five Paisa). The respondent's tenure was then
discontinued with effect from 12.02.1992 vide order
dated 23.03.1992 (Annexure P-4).
5) The respondent felt aggrieved of his
termination and initiated two actions against the
appellant. In the first instance, challenging his
termination order dated 23.03.1992 from the
services, the respondent filed Civil Suit No.141 of
1992 in the Civil Court at Bhavnagar. During the
pendency of the civil suit, he also approached to the
State (Labour Commissioner) and prayed for making
Industrial Reference to the concerned Labour Court
under Section 10 of Industrial Disputes Act, 1947
(hereinafter referred to as “the Act”) for deciding the
legality and propriety of his termination order.
6) The Labour Commissioner made an Industrial
Reference No.166 of 1992 to the Labour Court No. 2
at Bhavnagar for deciding the legality and
correctness of the termination order and for
3
regularization of respondent's services.
7) The 2nd Joint Civil Judge (SD), Bhavnagar, vide
judgment/decree dated 03.05.1994 decreed the
respondent’s suit, set aside the termination order
and directed the appellant (State) to re-instate the
respondent in service with all consequential
benefits.
8) Against the judgment/decree of the Trial
Court, the appellant filed first appeal being Civil
Appeal No.45/1994 before the Assistant Judge,
Bhavnagar. The Appellate Court, by order dated
30.09.2003, allowed the appellant's appeal, set
aside the judgment/decree of the Trial Court and
dismissed the respondent's civil suit. In substance,
the Appellate Court upheld the respondent's
termination order.
9) The Labour Court, however, by Award dated
01.02.2006 (Annexure P-9) answered the Reference
in respondent's favour. Applying the provisions of
the Act, the Labour Court held that since the
4
respondent was able to prove that he has worked for
240 days continuously in one previous calendar
year, he was entitled to get the protection of the Act.
It was held that it was a case of illegal retrenchment
because the respondent was not paid any prior
retrenchment compensation before termination of
his services. The Labour Court also held that there
was violation of Section 25-G of the Act in passing
the termination order. The Labour Court
accordingly directed the appellant(State) to
re-instate the respondent in service along with
payment of 40% back wages.
10) The appellant (State) felt aggrieved, filed writ
petition (Special Civil Application No.8390/2006)
before the High Court of Gujarat. By order dated
21.04.2006, the Single Judge dismissed the
appellant's writ petition and affirmed the Award of
the Labour Court. The appellant then filed Letters
Patent Appeal before the Division Bench of the High
Court but it was dismissed in default. The
5
appellant applied for restoration of the Letters
Patent Appeal but it was dismissed and hence this
appeal by special leave was filed by the State before
this Court against the order of the Division Bench
as also against the order of the Single Judge.
11) Heard Ms. Jesal Wahi, learned counsel for the
appellants and Mr. Purvish Jitendra Malkan,
learned counsel for the respondent.
12) Having heard the learned counsel for the
parties and on perusal of the record of the case, we
are inclined to allow the appeals in part and while
setting aside the impugned orders (Single Judge and
Division Bench), modify the Award of the Labour
Court as indicated below.
13) Having gone through the entire record of the
case and further keeping in view the nature of
factual controversy, findings of the Labour Court,
the manner in which the respondent fought this
litigation on two fronts simultaneously, namely, one
in Civil Court and the other in Labour Court in
6
challenging his termination order and seeking
regularization in service, which resulted in passing
the two conflicting orders - one in respondent's
favour (Labour Court) and the other against him
(Civil Court) and lastly, it being an admitted fact
that the respondent was a daily wager during his
short tenure, which lasted hardly two and half years
approximately and coupled with the fact that 25
years has since been passed from the date of his
alleged termination, we are of the considered
opinion that the law laid down by this Court in the
case of Bharat Sanchar Nigam Limited vs.
Bhurumal [(2014) 7 SCC 177] would aptly apply to
the facts of this case and we prefer to apply the
same for disposal of these appeals.
14) It is apposite to reproduce what this Court has
held in the case of Bharat Sanchar Nigam Limited
(supra):
“33. It is clear from the reading of the
aforesaid judgments that the ordinary
principle of grant of reinstatement with full
7
back wages, when the termination is found to
be illegal is not applied mechanically in all
cases. While that may be a position where
services of a regular/permanent workman are
terminated illegally and/or mala fide and/or
by way of victimisation, unfair labour
practice, etc. However, when it comes to the
case of termination of a daily-wage worker
and where the termination is found illegal
because of a procedural defect, namely, in
violation of Section 25-F of the Industrial
Disputes Act, this Court is consistent in
taking the view that in such cases
reinstatement with back wages is not
automatic and instead the workman should
be given monetary compensation which will
meet the ends of justice. Rationale for
shifting in this direction is obvious.
34. The reasons for denying the relief of
reinstatement in such cases are obvious. It is
trite law that when the termination is found
to be illegal because of non-payment of
retrenchment compensation and notice pay
as mandatorily required under Section 25-F
of the Industrial Disputes Act, even after
reinstatement, it is always open to the
management to terminate the services of
that employee by paying him the
retrenchment compensation. Since such a
workman was working on daily-wage basis
and even after he is reinstated, he has no
right to seek regularisation [see State of
Karnataka v. Umadevi (3)17]. Thus when he
cannot claim regularisation and he has no
right to continue even as a daily-wage
worker, no useful purpose is going to be
served in reinstating such a workman and he
can be given monetary compensation by the
Court itself inasmuch as if he is terminated
again after reinstatement, he would receive
monetary compensation only in the form of
retrenchment compensation and notice pay.
In such a situation, giving the relief of
reinstatement, that too after a long gap,
would not serve any purpose.
8
“35. We would, however, like to add a caveat
here. There may be cases where termination
of a daily-wage worker is found to be illegal
on the ground that it was resorted to as
unfair labour practice or in violation of the
principle of last come first go viz. while
retrenching such a worker daily wage juniors
to him were retained. There may also be a
situation that persons junior to him were
regularised under some policy but the
workman concerned terminated. In such
circumstances, the terminated worker should
not be denied reinstatement unless there are
some other weighty reasons for adopting the
course of grant of compensation instead of
reinstatement. In such cases, reinstatement
should be the rule and only in exceptional
cases for the reasons stated to be in writing,
such a relief can be denied.”
15) We have taken note of one fact here that the
Labour Court has also found that the termination is
bad due to violation of Section 25-G of the Act. In
our opinion, taking note of overall factual scenario
emerging from the record of the case and having
regard to the nature of the findings rendered and
further the averments made in the SLP justifying
the need to pass the termination order, this case
does not fall in exceptional cases as observed by
this Court in Para 35 of Bharat Sanchar Nigam
9
Limited case (supra) due to finding of Section 25-G
of the Act recorded against the appellant. In other
words, there are reasons to take out the case from
exceptional cases contained in Para 35 because we
find that the appellant did not resort to any kind of
unfair practice while terminating the services of the
respondent.
16) In view of forgoing discussion, we are of the
considered view that it would be just, proper and
reasonable to award lump sum monetary
compensation to the respondent in full and final
satisfaction of his claim of re-instatement and other
consequential benefits by taking recourse to the
powers under Section 11-A of the Act and the law
laid down by this Court in Bharat Sanchar Nigam
Limited case (supra).
17) Having regard to the totality of the facts taken
note of supra, we consider it just and reasonable to
award a total sum of Rs.2,50,000/- (Rs.Two Lakhs
Fifty Thousand) to the respondent in lieu of his right
10
to claim re-instatement and back wages in full and
final satisfaction of this dispute.
18) Let the payment of Rs.2,50,000/- be made by
the appellant(State) to the respondent within three
months from the date of receipt of this judgment
failing which the amount will carry interest at the
rate of 9% per annum payable from the date of this
judgment till payment to respondent.
19) In view of foregoing discussion, the appeals
succeed and are allowed in part. The impugned
order of the Division Bench and that of the Single
Judge are set aside. The Award of the Labour Court
dated 01.02.2006 is accordingly modified to the
extent indicated above.
………...................................J.
[R.K. AGRAWAL]
…...……..................................J.
[ABHAY MANOHAR SAPRE]
New Delhi;
November 28, 2017
11

service matter - This Circular only says that if any temporary persons are appointed for a particular project and if they are found to be of some utility, their services can be regularized as per Rules. when the period fixed in the appointment orders expired in the year 1991 then there was no scope for the appellants to have claimed continuity in service for want of any extension order in that behalf.- One of the reasons for rejection of the representation was that the services of the appellants had already come to an end in 1991 and, therefore, no orders to regularize their services could now be passed after such a long lapse of time. - As rightly observed by the Division Bench in the impugned judgment, the earlier order of the Division Bench in which a vigilance inquiry was ordered to find out as to how an order of regularization could be passed in favour of some Muharrirs was not brought to the notice of the Single Judge which led him to allow the appellants’ writ petition. - In our opinion, the Division Bench was right in setting aside of the order of the Single Judge

1
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.19846 OF 2017
(ARISING OUT OF SLP (C) No.31638 of 2016)
Raj Balam Prasad & Ors. ...Appellant(s)
VERSUS
State of Bihar & Ors. ….Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1) Leave granted.
2) The appeal is filed against the final judgment
and order dated 29.02.2016 passed by the High
Court of Judicature at Patna in Letters Patent
Appeal No.1760 of 2012 whereby the Division Bench
of the High Court allowed the appeal filed by the
respondents herein by setting aside the order dated
2
08.05.2012 of the Single Judge in C.W.J.C. No.4247
of 2012 which allowed the appellants’ writ petition
and issued a writ of mandamus directing the State
to regularize the services of the appellants on the
post of “Muharrirs” .
3) The controversy involved in the appeal is
confined to short facts, which, however, need
mention hereinbelow to appreciate the same.
4) The short question, which arises for
consideration in this appeal, is whether the Division
Bench of the High Court was justified in dismissing
the appellants’ writ petition by allowing the intra
court appeal filed by the respondents herein and
reversing the order of the Single Judge which had
allowed the appellants’ writ petition by issuing a
mandamus directing the State(respondents) to
regularize the appellants on the post of “Muharrir”.
5) Eight (8) persons were appointed on the post of
“Muharrir” in the Office of Collector, Saran Chpara
(Bihar) in the year 1987-88 by the State (Collector).
3
These eight persons included present four (4)
appellants herein. The appointment of these eight
persons was made as temporary appointment for a
period of three months. These appointments were
made by the authority concerned by taking recourse
to the powers under Rule 57-A of the Bihar
Certificate Manual, the instructions issued under
the Bihar and Orissa Public Demand Recovery Act
(hereinafter referred to as “the Act”).
6) These temporary appointments were made for
disposal of several pending certificate cases, which
could not be disposed of for want of adequate hands
available in the office. However, the services of the
eight persons were extended for sometime by
issuing extension orders. It was up to the year
1991.
7) These eight Muharrirs filed a writ petition
(C.W.J.C. No. 5142 of 1991) in the High Court at
Patna claiming therein a relief for their
regularization in services as Muharrir. By order
4
dated 03.04.2001, the Single Judge disposed of the
writ petition by granting liberty to the writ
petitioners to submit their representation to the
Competent Authority to enable them to examine
their grievances on the question of regularization in
service.
8) The writ petitioners (8) felt aggrieved and filed
intra court appeal. The Division Bench dismissed
the appeal (L.P.A. No.434 of 2001) by order dated
28.07.2007 but further made pertinent observations
and, in consequence, also issued directions.
9) In the opinion of the Division Bench, when the
services of the writ petitioners had come to an end
on 03.06.1991 and 19.06.1991 and when these two
orders were not stayed by the Writ Court (Single
Judge) in the writ petition filed by the writ
petitioners then how the writ petitioners could
continue in services even as daily wagers thereafter
and how some of the writ petitioners were able to
get their services regularized from 10.10.2006. The
5
Division Bench, therefore, while expressing their
concern directed the State Vigilance Department to
look into the matter and take appropriate steps in
accordance with law.
10) As mentioned above, in the meantime, out of
eight Muharrirs, the services of five Muharrirs
including one more person by name Mr. Sugriev
Singh were regularized by order dated 10.10.2006.
11) The writ petitioners, whose services could not
be regularized, felt aggrieved and filed SLP in this
Court. This Court dismissed the SLP and granted
liberty to the petitioners to file representations to
the concerned authority for ventilating of their
grievance.
12) It is not in dispute that the Competent
Authority, by order dated 15.01.2012, rejected the
representation made by the appellants stating
therein that since their services had already come to
an end in 1991, no orders for their regularization
could now be passed.
6
13) These persons then filed another round of writ
petition (C.W.J.C. No.4247 of 2012) and claimed the
same relief of regularization in the services by
basing their case on one Circular dated 16.04.2008.
The Single Judge allowed the writ petition by order
29.08.2011 and issued a mandamus against the
State and the concerned department to regularize
the services of the appellants on the post of
Muharrirs.
14) The respondents herein (State and the
concerned departments) felt aggrieved and filed
intra Court appeal before the Division Bench. By
impugned judgment, the Division Bench allowed the
State's appeal and dismissed the appellants’ writ
petition. It is against this judgment, the writ
petitioners have felt aggrieved and filed this appeal
by way of special leave before this Court.
15) Heard Mr. Praneet Ranjan, learned counsel for
the appellants and Mr. Manish Kumar, learned
counsel for the respondents.
7
16) Having heard the learned counsel for the
parties and on perusal of the record of the case, we
find no merit in this appeal. In our opinion, the
view taken by the Division Bench appears to be just,
legal and proper and hence does not call for any
interference.
17) This is what the Division Bench held for
allowing the appeal and dismissing the appellants’
writ petition:
“We have heard learned counsel for the
parties and find that the order passed by the
learned Single Judge is not sustainable in
law. The order passed in LPA No.434 of 2001
dated 28th of July, 2008 was not brought to
the notice of the learned Single Judge. It is
further contended that even if the order
dated 10.10.2006 was not have set aside, the
fact remains that such order of regularization
could not have been passed since the services
of the Muharrir have come to an end in 1991
itself. The permanent status could be
conferred to those who were in service and
not to those whose service had come to an
end many years ago. Such an order could not
be made basis of permanent status through
the writ court. Such order dated 10.10.2006
is not enforceable in law. The representation
having been declined in the light of the
circular dated 16.04.2008, we do not find
that the writ petitioners were entitled to any
direction to treat them as regular
employees.”
8
18) We agree with the reasoning of the Division
Bench quoted supra.
19) In our opinion also, when the appointment of
the appellants (writ petitioners) was made for a fixed
period in exercise of the powers under Rule 57-A
and the said appointment period having come to an
end in the year 1991 after granting some extension,
we fail to appreciate as to how the appellants could
claim to remain in service after 1991.
20) One cannot dispute that the State has the
power to appoint persons for a temporary period
under the Act and Rules framed thereunder and
once such power was exercised by the State, the
status of such appointee continued to be that of
temporary employee notwithstanding grant of some
extensions to them for some more period.
21) In other words, the grant of extension to work
for some more period to the writ petitioners could
never result in conferring on them the status of a
permanent employee or/and nor could enable them
9
to seek regularization in the services unless some
Rule had recognized any such right in their favour.
22) That apart, when the period fixed in the
appointment orders expired in the year 1991 then
there was no scope for the appellants to have
claimed continuity in service for want of any
extension order in that behalf.
23) We have perused the Circular dated
16.04.2008 (Annexure P-7) issued by the State.
This Circular only says that if any temporary
persons are appointed for a particular project and if
they are found to be of some utility, their services
can be regularized as per Rules.
24) As mentioned above, so far as the cases of
these appellants are concerned, their
representations were examined by the State but
were rejected finding no merit therein. One of the
reasons for rejection of the representation was that
the services of the appellants had already come to
an end in 1991 and, therefore, no orders to
10
regularize their services could now be passed after
such a long lapse of time.
25) As rightly observed by the Division Bench in
the impugned judgment, the earlier order of the
Division Bench in which a vigilance inquiry was
ordered to find out as to how an order of
regularization could be passed in favour of some
Muharrirs was not brought to the notice of the
Single Judge which led him to allow the appellants’
writ petition.
26) Learned counsel for the appellants, however,
argued vehemently that the order of the Single
Judge deserves to be restored by setting aside the
impugned judgment of the Division Bench as the
same is based on proper reasoning but in the light
of what we have held supra, we cannot accept his
submission. In our opinion, the Division Bench was
right in setting aside of the order of the Single Judge
and we concur with the reasoning and the
11
conclusion of the Division Bench. In addition, we
have also given our reasoning in support thereof.
27) In the light of foregoing discussion, we find no
merit in the appeal, which thus fails and is
accordingly dismissed.
………...................................J.
[R.K. AGRAWAL]
…...……..................................J.
[ABHAY MANOHAR SAPRE]
New Delhi;
November 27, 2017

SARFAESI Act = No writ is maintainable due to alternative remedy= justified in dismissing the appellant's writ petition on the ground of availability of alternative statutory remedy of filing an application under Section 17(1) of SARFAESI Act before the concerned Tribunal to challenge the action of the PNB in forfeiting the appellant's deposit under Rule 9(5). -The appellant is, accordingly, granted liberty to file an application before the concerned Tribunal (DRT) under Section 17(1) of the SARFAESI Act, which has jurisdiction to entertain such application within 45 days from the date of this order.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 19847 OF 2017
(ARISING OUT OF SLP (C) No. 33514/2016)
Agarwal Tracom Pvt. Ltd. ...Appellant(s)
VERSUS
Punjab National Bank & Ors. …Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1. Leave granted.
2. This appeal is directed against the final
judgment and order dated 11.05.2016 passed by
the High Court of Delhi at New Delhi in LPA No.699
of 2015 whereby the Division Bench of the High
Court dismissed the appeal filed by the appellant
herein for quashing the order dated 01.09.2015
2
passed by the Single Judge, which dismissed the
appellant’s W.P.(c) No.8314 of 2015.
3. The controversy involved in the appeal centers
around the short facts and is essentially a legal one.
However, few relevant facts need mention, in brief,
to appreciate the controversy.
4. Respondents-Punjab National Bank(hereinafter
referred to as "PNB") is a Nationalised Bank. The
PNB had given loan facility to a Company called
"M/s India Iron & Steel Corporation Limited" (in
short, "Borrower”) for their business, which they
were carrying at a place called Noorpur Khirki,
Village Farid Nagar, Tehsil Dhampur, District Bijnor
(U.P.).
5. To secure the loan amount, the Borrower had
secured their assets, which consisted of the land,
factory building, plant and machinery situated at
Dhampur. The Borrower, however, failed to clear
their loan amount and became a defaulter in its
3
repayment. The PNB, therefore, invoked their
powers under Section 13(4) of the Securitization and
Reconstruction of Financial Assets and Enforcement
of Security Interest Act, 2002 (hereinafter referred to
as “SARFAESI Act”) and issued a public sale notice
in leading English newspapers for sale of the
mortgaged assets of the Borrower in the public
auction fixed for 17.06.2014 (Annexure-P-1). The
appellant herein was one of the bidders, whose bid
was declared the highest.
6. The appellant's bid was accordingly accepted
by the PNB followed by execution of memorandum
of understanding between the appellant and the
PNB (Annexure P-4). The PNB also sent a letter to
the appellant stating that the entire plant,
machinery, land and the building is auctioned in
favour of the appellant. The letter also authorized
the appellant to dismantle and sell the scrap plant
and the machinery which was lying at the
4
Borrower’s factory's premises after depositing the
necessary installment of sale amount, as agreed
upon between the parties in the memorandum of
understanding.
7. The appellant, however, failed to pay the
regular installments towards sale money in terms of
memorandum of understanding to PNB and sought
extension of time to pay and remove the scrap
material from the site.
8. This gave rise to the disputes between the
parties, namely, PNB, appellant (auction purchaser)
and the Borrower before the Debt Recovery Tribunal
(DRT), Lucknow being S.A. No 310 of 2014 wherein
an order was passed on 03.07.2014
(Annexure-P-11) directing the appellant not to
remove any material from the factory premises. The
appellant then wrote a letter to PNB requesting
them to refund their money with interest. This led to
another dispute between the parties which was filed
5
in the DRT and then before the appellate authorityDRAT
and finally, in the High Court at Allahabad in
Writ Petition(c) No. 22246/2015 by the Borrower.
This writ petition was disposed of finally on
29.05.2015 observing therein that since the
appellant had failed to comply with the term of
memorandum of understanding inasmuch as the
appellant having failed to deposit the requisite
installment of sale money, the PNB cannot proceed
with the auction sale held on 17.06.2014 and nor
can the appellant be permitted to remove the scrap
material lying in the factory premises.
9. This led the PNB to forfeit the appellant's
deposit by their letter dated 26.06.2015
(Annexure-P25). The appellant objected to the action
of PNB by letters and then filed the writ petition in
the High Court of Delhi challenging therein the
action of PNB in forfeiting the appellant's deposit of
money.
6
10. The Single Judge of the High Court, by order
dated 01.09.2015, dismissed the appellant's writ
petition on the ground of availability of alternative
statutory remedy to the appellant of filing the
application under Section 17 of the SARFAESI Act
before the DRT to challenge the action of PNB in
forfeiting the deposit money of the appellant. The
Single Judge, therefore, declined to go into the
merits of the case.
11. The appellant, felt aggrieved of the order of the
Single Judge, filed intra Court appeal (LPA 699 of
2015) before the Division Bench. By impugned
judgment, the Division Bench dismissed the appeal
and confirmed the order of the Single Judge. The
Division Bench was also of the view that the writ
petition filed by the appellant was rightly not
entertained by the Single Judge (writ Court) on the
ground that the proper remedy of the appellant was
to file an application before the DRT under Section
7
17 of the SARFAESI Act to question the action of
forfeiture made by PNB and not in filing the writ
petition under Article 226 of the Constitution. Felt
aggrieved, the auction purchaser has filed the
present appeal by way of special leave in this Court.
12. Heard Mr. Jaideep Gupta, learned senior
counsel for the appellant and Mr. M.T. George,
learned counsel for the respondents.
13. Mr. Jaideep Gupta, learned senior counsel
appearing for the appellant (auction purchaser)
while questioning the legality and correctness of the
view taken by the two Courts below contended that
the reasoning and the conclusion arrived at by the
writ Court and the Appellate Court is not correct
and hence deserves to be set aside. His main
submission was that the action impugned by the
appellant in their writ petition, namely, "forfeiture
of the deposit of money by PNB" is not one of the
measures specified under Section 13(4) of the
8
SARFAESI Act and, therefore, provisions of Section
17 of SARFAESI Act are not attracted so far as the
appellant's right to challenge such action under
Section 17 before the DRT is concerned.
14. In other words, the submission was that in
order to attract the rigor of Section 17 of the
SARFAESI Act, it is necessary that the action
complained of by the party concerned must satisfy
the conditions set out in Section 13 (4). It was urged
that the “forfeiture of deposit" impugned in the writ
petition is not and nor it could be considered as one
of the measures falling in Section 13 (4) so as to
attract the rigor of Section 17 of the SARFAESI Act.
It was urged that the dispute in question was
essentially between the PNB (secured creditor) and
the auction purchaser (appellant) and arose after
the measures under Section 13(4) had been taken
by the secured creditor (PNB) against the borrower
and, therefore, the dispute in question fell outside
9
the purview of Section 13(4) and, in consequence,
fell out of purview of Section 17. In short, the
dispute in question had nothing to do with any of
the measures specified in Section 13(4).
15. It was further urged that reading of Section 17
would go to show that the application under Section
17 can be made to DRT by “any person” including
borrower to challenge any of the measures referred
to in Section 13(4) once taken by the secured
creditor. However, since forfeiture of the amount
made by the secured creditor against the auction
purchaser is not one of the measures under Section
13(4) and hence, the action of forfeiture made by the
secured creditor cannot be challenged by the
auction purchaser under Section 17 of the
SARFAESI Act by filing an application. It was
urged that under these circumstances the appellant
had rightly filed the writ petition under Article
226/227 of the Constitution to challenge the action
10
of forfeiture of deposit money in the High Court,
that being the only remedy available to them and,
therefore, the writ petition should have been
entertained for its hearing on merits by the writ
court. It is these submissions, which were
elaborated by the learned counsel for the appellant
by pointing out relevant provisions of the SARFAESI
Act.
16. In reply, learned counsel for the respondents
(PNB) supported the impugned judgment and
contended that the action impugned in the writ
petition does attract Section 13(4) read with the
Rules framed thereunder and hence the remedy of
the appellant lies in approaching DRT by filing an
application under Section 17 of the SARFAESI Act
as was rightly held by the two Courts below.
17. Having heard the learned counsel for the
parties and on perusal of the record of the case, we
find no merit in the appeal. In other words, the view
11
taken by the High Court appears to be just and
reasonable and hence does not call for any
interference.
18. The short question that arise for consideration
in this appeal is whether the High Court was
justified in holding that the remedy of the appellant
(auction purchaser) lies in challenging the action of
the secured creditor (PNB) in forfeiting the deposit
by filing an application under Section 17 of the
SARFEASI Act before the DRT or the remedy of
auction purchaser is in filing the writ petition under
Article 226/227 of the Constitution of India to
examine the legality of such action.
19. Section 13(4) and Section 17 of the SARFAESI
Act, Rules 8 and 9 of the Security
Interest(Enforcement) Rules,2002(hereinafter
referred to as “the Rules”) to the extent they are
relevant for deciding the question involved in the
appeal are quoted below:
12
Section 13(4)
13. Enforcement of security interest-
(1) to (3A)……………………………………………….
(4) In case the borrower fails to discharge his
liability in full within the period specified in
sub-section (2), the secured creditor may take
recourse to one or more of the following
measures to recover his secured debt,
namely:-
(a) take possession of the
secured assets of the
borrower including the right
to transfer by way of lease,
assignment or sale for
realizing the secured asset;
(b) take over the management
of the business of the
borrower including the right
to transfer by way of lease,
assignment or sale for
realizing the secured asset:
Provided that the right
to transfer by way of lease,
assignment or sale shall be
exercised only where the
substantial part of the
business of the borrower is
held as security for the
debt:
Provided further that
where the management of
whole, of the business or
part of the business is
severable, the secured
creditor shall take over the
management of such
business of the borrower
which is relatable to the
security or the debt;
13
(c) appoint any person
(hereafter referred to as the
manager), to manage the
secured assets the
possession of which has
been taken over by the
secured creditor;
(d) require at any time by
notice in writing, any
person who has acquired
any of the secured assets
from the borrower and from
whom any money is due or
may become due to the
borrower, to pay the secured
creditor, so much of the
money as is sufficient to
pay the secured debt.”
Section 17
“17. Application against measures to recover
secured debts-(1) Any person (including
borrower), aggrieved by any of the measures
referred to in sub-section (4) of section 13
taken by the secured creditor or his
authorized officer under this Chapter, may
make an application along with such fee, as
may be prescribed to the Debts Recovery
Tribunal having jurisdiction in the matter
within forty-five days from the date on which
such measures had been taken:
(2) The Debts Recovery Tribunal shall
consider whether any of the measures
referred to in sub-section (4) of section 13
taken by the secured creditor for
enforcement of security are in accordance
with the provisions of this Act and the rules
made thereunder.
14
(3) If, the Debts Recovery Tribunal, after
examining the facts and circumstances of the
case and evidence produced by the parties,
comes to the conclusion that any of the
measures referred to in sub-section (4) of
section 13, taken by the secured creditor are
not in accordance with the provisions of this
Act and the rules made thereunder, and
require restoration of the management or
restoration of possession, of the secured
assets to the borrower or other aggrieved
person, it may, by order,-
(a) to (c)……………………
(4) If, the Debts Recovery Tribunal declares
the recourse taken by a secured creditor
under sub-section (4) of section 13, is in
accordance with the provisions of this Act
and the rules made thereunder, then,
notwithstanding anything contained in any
other law for the time being in force, the
secured creditor shall be entitled to take
recourse to one or more of the measures
specified under sub-section (4) of section 13
to recover his secured debt.
(4A)……………………………………………………..
(5)………………………………………………………..
(6)………………………………………………………..
(7) Save as otherwise provided in this Act,
the Debts Recovery Tribunal shall, as far as
may be, dispose of application in accordance
with the provisions of the Recovery of Debts
Due to Banks and Financial Institutions Act,
1993(51 of 1993) and the rules made
thereunder.
Rule 8
8. Sale of immovable secured assets-
(1) to (8)………………………………………………….
15
Rule 9
9. Time of sale, issue of sale certificate and
delivery of possession, etc.-
(1) to (4)…………………………………………………
(5) In default of payment within the period
mentioned in sub-rule (4), the deposit shall be
forfeited to the secured creditor and the
property shall be resold and the defaulting
purchaser shall forfeit all claim to the
property or to any part of the sum for which
it may be subsequently sold.
(6) On confirmation of sale by the secured
creditor and if the terms of payment have
been complied with, the authorized officer
exercising the power of sale shall issue a
certificate of sale of the immovable property
in favour of the purchaser in the form given
in Appendix V to these rules.”
(Emphasis supplied)
20. Section 13(4) is invoked by the secured
creditor against their borrower when the borrower
fails to discharge his liability in full within the
specified time. The secured creditor then can take
possession of the assets of the borrower, transfer
the assets by lease or by assignment or sell the
assets to recover the outstanding dues under clause
(a).
16
21. The secured creditor under clause (b) can also
take over the management of the business of the
borrower or transfer by way of lease, assignment or
sale. However such power can be invoked only when
the creditor holds substantial part of the borrower’s
business as security and further it satisfies the
condition set out in second proviso.
22. The secured creditor under clause (c) can also
appoint any manager to manage the borrower’s
business and lastly under clause (d), the secured
creditor can ask any person to whom the money is
due or become due to pay to the secured creditor
instead of paying to borrower which is sufficient to
satisfy the debt.
23. So far as Section 17 is concerned, it provides a
remedy to a person who is aggrieved by the
measures taken by the secured creditor or his
authorized officer under Section 13(4) in relation to
secured assets of the borrower. It says that "any
17
person (including borrower)" may make an
application to the DRT within 45 days from the date
of measures taken under Section 13(4). Sub-section
(2) of Section 17 was added by way of amendment
w.e.f. 11.11.2004. It provides that the Tribunal, on
such application being made under Section 17(1),
shall consider whether the measures referred to and
taken under Section 13(4) by the secured creditor
are in accordance with the "provisions of this Act
and the Rules made thereunder". Similarly, subsections
(3), (4) and (7) of Section 17 which deal
with the power of the DRT also use the expression
“in accordance with provisions of the Act and the
Rules made thereunder”.
24. Rule 8, which has 8 sub-rules, deals with the
manner of sale of immovable secured assets and
provides detail procedure as to how and in what
manner the sale of secured assets, is to be held.
18
Rule 9 deals with time of sale, issue of sale
certificate and delivery of possession
25. Rule 9(6) empowers the authorized officer to
issue sale certificate in favour of the purchaser.
Rule 9(9) then empowers the authorized officer to
deliver the properties to the purchaser whereas Rule
9(10) empowers the authorized officer to mention in
sale certificate that the property is free from
encumbrances.
26. So far as this case is concerned, sub-rule (5) of
Rule 9 is relevant. It provides that, if the auction
purchaser commits any default in payment of sale
consideration within the time specified, the deposit
made by auction purchaser shall be “forfeited” to
the secured creditor and the auctioned property
shall be resold and the defaulting purchaser shall
“forfeit” all claims to the property or its part of the
sum for which it may be sold subsequently.
19
27. Reading of the aforementioned Sections and
the Rules and, in particular, Section 17(2) and Rule
9(5) would clearly go to show that an action of
secured creditor in forfeiting the deposit made by
the auction purchaser is a part of the measures
taken by the secured creditor under Section 13(4).
28. The reason is that Section 17(2) empowers the
Tribunal to examine all the issues arising out of the
measures taken under Section 13(4) including the
measures taken by the secured creditor under Rules
8 and 9 for disposal of the secured assets of the
borrower. The expression "provisions of this Act
and the Rules made thereunder" occurring in
sub-sections (2), (3), (4) and (7) of Section 17 clearly
suggests that it includes the action taken under
Section 13(4) as also includes therein the action
taken under Rules 8 and 9 which deal with the
completion of sale of the secured assets. In other
words, the measures taken under Section 13 (4)
20
would not be completed unless the entire procedure
laid down in Rules 8 and 9 for sale of secured assets
is fully complied with by the secured creditor. It is
for this reason, the Tribunal has been empowered
by Section 17(2),(3) and (4) to examine all the steps
taken by the secured creditor with a view to find out
as to whether the sale of secured assets was made
in conformity with the requirements contained in
Section 13(4) read with the Rules or not?
29. We also notice that Rule 9(5) confers express
power on the secured creditor to forfeit the deposit
made by the auction purchaser in case the auction
purchaser commits any default in paying
installment of sale money to the secured creditor.
Such action taken by the secured creditor is, in our
opinion, a part of the measures specified in Section
13(4) and, therefore, it is regarded as a measure
taken under Section 13(4) read with Rule 9(5). In
our view, the measures taken under Section 13(4)
21
commence with any of the action taken in clauses
(a) to (d) and end with measures specified in Rule 9.
30. In our view, therefore, the expression “any of
the measures referred to in Section 13(4) taken by
secured creditor or his authorized officer” in Section
17(1) would include all actions taken by the secured
creditor under the Rules which relate to the
measures specified in Section13(4).
31. The auction purchaser (appellant herein) is
one such person, who is aggrieved by the action of
the secured creditor in forfeiting their money. The
appellant, therefore, falls within the expression “any
person” as specified under Section 17(1) and hence
is entitled to challenge the action of the secured
creditor (PNB) before the DRT by filing an
application under Section 17(1) of the SARFAESI
Act.
32. Learned counsel for the appellant placed
reliance on the decision of the Division Bench of
22
High Court of Bombay in Umang Sugars Pvt. Ltd.
vs. State of Maharashtra & Anr., 2014(4) Mh.L.J.
113 which, according to him, supports his
submission. We have gone through the decision
and unable to agree with the view taken therein.
Their Lordships, while holding that Section 17(1)
does not apply to auction purchaser and, therefore,
writ petition filed by him can be entertained in such
cases, did not notice the Rules, which deal with the
measures taken under Section 13(4) and nor
considered its effect on the measures.
33. In United Bank of India vs. Satyawati
Tondon & Ors., (2010) 8 SCC 110, this Court had
the occasion to examine in detail the provisions of
the SARFAESI Act and the question regarding
invocation of the extraordinary power under Article
226/227 in challenging the actions taken under the
SARFAESI Act. Their Lordships gave a note of
caution while dealing with the writ filed to challenge
23
the actions taken under the SARFAESI Act and
made following pertinent observations which, in our
view, squarely apply to the case on hand:
“42. There is another reason why the
impugned order should be set aside. If
Respondent 1 had any tangible grievance
against the notice issued under Section 13(4)
or action taken under Section 14, then she
could have availed remedy by filing an
application under Section 17(1). The
expression “any person” used in Section
17(1) is of wide import. It takes within its
fold, not only the borrower but also the
guarantor or any other person who may be
affected by the action taken under Section
13(4) or Section 14. Both, the Tribunal and
the Appellate Tribunal are empowered to pass
interim orders under Sections 17 and 18 and
are required to decide the matters within a
fixed time schedule. It is thus evident that
the remedies available to an aggrieved person
under the SARFAESI Act are both expeditious
and effective.
43. Unfortunately, the High Court overlooked
the settled law that the High Court will
ordinarily not entertain a petition under
Article 226 of the Constitution if an effective
remedy is available to the aggrieved person
and that this rule applies with greater rigour
in matters involving recovery of taxes, cess,
fees, other types of public money and the
dues of banks and other financial
institutions. In our view, while dealing with
the petitions involving challenge to the
action taken for recovery of the public dues,
etc. the High Court must keep in mind that
the legislations enacted by Parliament and
24
State Legislatures for recovery of such dues
are a code unto themselves inasmuch as they
not only contain comprehensive procedure
for recovery of the dues but also envisage
constitution of quasi-judicial bodies for
redressal of the grievance of any aggrieved
person. Therefore, in all such cases, the High
Court must insist that before availing remedy
under Article 226 of the Constitution, a
person must exhaust the remedies available
under the relevant statute.
44. While expressing the aforesaid view, we
are conscious that the powers conferred upon
the High Court under Article 226 of the
Constitution to issue to any person or
authority, including in appropriate cases, any
Government, directions, orders or writs
including the five prerogative writs for the
enforcement of any of the rights conferred by
Part III or for any other purpose are very wide
and there is no express limitation on exercise
of that power but, at the same time, we
cannot be oblivious of the rules of
self-imposed restraint evolved by this Court,
which every High Court is bound to keep in
view while exercising power under Article
226 of the Constitution.
45. It is true that the rule of exhaustion of
alternative remedy is a rule of discretion and
not one of compulsion, but it is difficult to
fathom any reason why the High Court
should entertain a petition filed under Article
226 of the Constitution and pass interim
order ignoring the fact that the petitioner
can avail effective alternative remedy by
filing application, appeal, revision, etc. and
the particular legislation contains a detailed
mechanism for redressal of his grievance.”
25
34. In the light of foregoing discussion, we are of
the considered opinion that the Writ Court as also
the Appellate Court were justified in dismissing the
appellant's writ petition on the ground of availability
of alternative statutory remedy of filing an
application under Section 17(1) of SARFAESI Act
before the concerned Tribunal to challenge the
action of the PNB in forfeiting the appellant's
deposit under Rule 9(5). We find no ground to
interfere with the impugned judgment of the High
Court.
35. The appellant is, accordingly, granted liberty to
file an application before the concerned Tribunal
(DRT) under Section 17(1) of the SARFAESI Act,
which has jurisdiction to entertain such application
within 45 days from the date of this order. In case,
if the appellant files any such application, the
Tribunal shall decide the same on its merits in
accordance with law uninfluenced by any of the
26
observations made by this Court and the High
Court in the impugned judgment.
36. With these observations and liberty granted to
the appellant, the appeal fails and is accordingly
dismissed.
………...................................J.
[R.K. AGRAWAL]
…...……..................................J.
[ABHAY MANOHAR SAPRE]
New Delhi;
November 27, 2017