a fake encounter = for issuing directions to respondents 1 to 4 for registration of FIR under Sections 302 and 201 of the Indian Penal Code (“the IPC”) against respondents 5 to 9, who were policemen attached to Police Station Bawal, District Rewari (Haryana), at the relevant time, for committing the murder of Sunil, son of the appellant in a fake encounter in the night intervening 12/10/2008 and 13/10/2008 at Rewari Road, Narnaul and for further direction to the Central Bureau of Investigation (“CBI”) to investigate the said FIR. = Ignoring the mandate of Section 154 of the Code and the law laid down by this Court, the police have merely conducted inquiries which appear to be an eyewash. It is distressing to note that till date, no FIR has been registered on the complaint made by the appellant. The only FIR which was registered is against Umesh under Sections 332, 353, 307 read with Section 34 of the IPC at the instance of ASI Ram Sarup. As already noted, in that case, Umesh has been acquitted. 13. Once we come to a conclusion that Sunil is killed in an encounter, which appears to be fake, it is necessary to direct an independent investigating agency to conduct the investigation so that those who are found to be involved in the commission of crime can be tried and convicted. -We share the pain and anguish of the appellant, who has lost his son in what appears to be a fake encounter. He has conveyed to us that he is not interested in money but he wants a fresh investigation to be conducted. While we respect the feelings of the appellant, we are unable to direct fresh investigation for the reasons which we have already noted. In such situation, we turn to Nilabati Behera, wherein the appellant’s son had died in custody of the police. While noting that custodial death is a clear violation 19Page 20 of prisoner’s rights under Article 21 of the Constitution of India, this Court moulded the relief by granting compensation to the appellant. In the circumstances of the case we set aside the impugned judgment and order dated 13/9/2010 and in light of Nilabati Behera, we direct respondent 1 – State of Haryana to pay a sum of Rs.20 lakhs to the appellant as compensation for the pain and suffering undergone by him on account of loss of his son - Sunil. The payment be made by demand draft drawn in favour of the appellant “Rohtash Kumar” within a period of one month from the date of the receipt of this order.

Page 1
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 306 OF 2013
[Arising out of Special Leave Petition (Crl.) No.9359 of 2010]
ROHTASH KUMAR … APPELLANT
Versus
STATE OF HARYANA
Through the Home Secretary,
Government of Haryana,
Civil Secretariat,
Chandigarh & Ors. … RESPONDENTS
JUDGMENT
(SMT.) RANJANA PRAKASH DESAI, J.
1. Leave granted.
2. In this appeal, by special leave, judgment and order
dated  13/9/2010  of  the  Punjab  and  Haryana  High  CourtPage 2
dismissing  Criminal  Misc.  No.M-2063  of  2009  filed  under
Section 482 of the Criminal Procedure Code (“the Code”) is
challenged.    In  the  petition  before  the  High  Court,  the
prayer was for issuing directions to respondents 1 to 4 for
registration of FIR under Sections 302 and 201 of the Indian
Penal Code (“the  IPC”) against respondents 5 to 9, who
were policemen  attached to Police Station Bawal, District
Rewari (Haryana), at the relevant time, for committing the
murder of Sunil, son of the appellant in a fake encounter in
the night intervening 12/10/2008 and 13/10/2008 at Rewari
Road, Narnaul and for further direction to the Central Bureau
of Investigation (“CBI”) to investigate the said FIR. 
3. Brief facts of the case need to be stated:
According  to  the  appellant,  in  the  night  intervening
12/10/2008 and 13/10/2008, his son - Sunil was killed in a
fake  encounter  by  the  officials  of  Police  Station  Bawal,
District Rewari.  It is alleged that on 13/10/2008, the SHO of
Police Station City Narnaul came to the appellant and asked
him  to  accompany  him  to  identify  an  injured  person
2Page 3
suspecting him to be his son at Civil Hospital, Narnaul.  The
appellant found his son lying dead in the mortuary and on
hearing the news from SHO that his son has been killed in an
encounter by a team of Bawal police headed by respondent
5,  he  became  unconscious.   The  post-mortem  of  the
deceased had already been conducted.   On persuasion of
SHO Sadhu Singh, the dead body of Sunil was consigned to
flames.  According to the appellant, he observed 13 days
mourning for the death of his son.  During this period, he
collected copies of post-mortem report and FIR No.351 dated
13/10/2008 registered at Police Station City Narnaul.   He
came to know that respondents 5 to 9 had murdered his son
with ulterior motive and had given  shape of encounter to
the  murder.   The encounter  never  took place.   It is  the
appellant’s case that FIR No.351 and the post-mortem notes
themselves prove that the story of encounter is a concocted
story, rather it is a clear case of murder by respondents 5 to
9.   According to the appellant, the truth will come out only if
this court directs registration of FIR under Section 302 and
3Page 4
201 of the IPC against respondents 5 to 9 and directs its
investigation by CBI.
4. The  other  version  which  also  needs  to  be  stated  is
disclosed from FIR No.351 dated 13/10/2008 lodged at Police
Station City Narnaul by ASI Ram Sarup.  It is stated in the FIR
that ASI Ram Sarup of Police Station Bawal along with others
was sent for the search of accused Parveen @ Sunil s/o.
Rohtash, r/o. Mohalla Jamalpur, Narnaul, named in FIR No.52
dated 19/4/2008.  When they were at Narnaul Bus Stand,
they  received  a  secret  information  at  12:15  a.m.  in  the
midnight that the said Praveen @ Sunil, who is the most
wanted criminal in the districts of Rewari and Mahindergarh
will be crossing Narnaul.  The officials of Bawal Police Station
started checking the motor cycles passing through Narnaul.
At about 12:25 a.m., a pulsor motor cycle driven by Umesh
was seen approaching.  Sunil was the pillion rider.  Constable
Gulab Singh knew Sunil personally.  He identified Sunil in
street light.  The motor cycle rider was signaled to stop but
he did not stop and, instead increased its speed and hit one
4Page 5
constable.   The  constable  fell  down.   Sunil  brandished
firearms  with  both  hands.   The  motor  cycle  was  turned
towards Rewari Road.  The police vehicle chased the motor
cycle.  In the chase, the police vehicle hit the motor cycle.
Due to imbalance, firearm held by Sunil in his left hand fell
down.  The motor cycle, Sunil and his companion also fell
down.   Sunil  stood  up  and  fired  at  the  police  with  the
intention  to  kill  them.   The  police  managed  to  save
themselves.  Sunil took out another cartridge from his pant
pocket and tried to load it in his firearm to kill the policemen.
ASI Ram Sarup ordered the policemen to fire in self defence.
Constable Keshav Kumar opened burst fire on Sunil in self
defence.  Bullets hit on the chest and stomach of Sunil.  Sunil
died on the spot.  If the police had not opened fire, Sunil
would have killed policemen.  ASI Ram Sarup informed about
this incident to Police Station City Narnaul through wireless
set.  Umesh, the driver of the motor cycle, taking advantage
of darkness, fled away towards Rewari Road by leaving the
motor cycle behind.  Umesh was chased and arrested.  On
receiving  information  from  ASI  Ram  Sarup,  Police Station
5Page 6
Bawal, FIR No.351 dated 13/10/2008 was registered under
Sections 332, 353, 307, 34 of the IPC at Police Station City
Narnaul.  
5. Mr.  Gagan  Gupta,  learned  counsel  for  the  appellant
submitted that the High Court misdirected itself in holding
that  there  was  nothing  on  record  to  establish  that  the
appellant’s  son  Sunil  died  in  a fake  encounter.   Counsel
submitted  that  the  police  version  that  in  the  night
intervening 12/10/2008 and 13/10/2008, on receipt of secret
information that Sunil, who was wanted in several cases was
to pass by the bus stand of Narnaul, the officials of Police
Station Bawal reached Narnaul bus stand; that they saw a
motor cycle approaching the bus stand; that they recognized
Sunil who was sitting on the pillion seat; that they asked him
to stop the motor cycle, but instead of stopping, Sunil fired
at the police and in self defence, the police had to fire back
and in that firing Sunil died, is a concocted story.  Counsel
submitted that this story is belied by the fact that in the
post-mortem  notes,  it  is  stated  that  the  bullet  injuries
6Page 7
received by Sunil were caused from a distance of 3 to 8 feet
and there was blackening around the edges of the entry
wounds.   This  proves  that  Sunil  was  shot  at  from  close
quarters.   Sunil had received injuries on  his chest which
indicates that this is a case of murder.  If the police wanted
to arrest Sunil, they could have fired on non-vital parts of his
body.  The post-mortem notes also show that there is one
wound of entry on the back of Sunil.  This demolishes the
police version that Sunil was the aggressor.  Besides, not a
single policeman was injured in this incident.  If there was
really cross-firing as alleged, at least one of the policemen
would  have  received  some  firearm  injuries.   Counsel
submitted that the inquiry conducted by the Tahsildar is an
eyewash. Same is the case with the inquiry conducted by
Additional  Deputy  Commissioner.   Counsel  drew  our
attention to the advertisement issued in the newspapers and
submitted  that  the  photographs  of  Sunil  shown  in  the
advertisements are dissimilar.  Counsel submitted that in an
encounter death, a separate FIR has to be registered with
respect to the encounter, which has not been done in this
7Page 8
case.  Counsel submitted that the Magisterial enquiry under
Sections 174 to 176 of the Code cannot be a substitute for
the  obligation  of  the  police  to  register  FIR  and  conduct
investigation into the facts and circumstances under which
the person died.  Counsel submitted that in such a case, the
High  Court  ought  to  have  directed  the  CBI  to  conduct
investigation  and submit report  to  this  court so  that the
offenders  could  be  prosecuted.   In  support  of  his
submissions, counsel relied on  Rubabbuddin  Shaikh   v.
State of Gujarat & Ors.
1
 and Narmada Bai  v.  State of
Gujarat  & Ors.
2
  Counsel urged that this court may issue
necessary instructions to the respondents.
6. Mr.  P.N.  Misra,  learned  senior  counsel  for  the
respondents  drew  our  attention  to  the  affidavits  filed  on
behalf of the respondents. He submitted that Sunil was a
dreaded criminal.  He was charge-sheeted in several cases.
He was declared a proclaimed offender.  Counsel drew our
attention to the radiogram dated 10/7/2007 and pamphlets
1
 (2010) 2 SCC 200
2
 (2011) 5 SCC 79
8Page 9
issued by the police declaring that any person who gives
information  about  Sunil  would  be  rewarded.    Counsel
pointed out that on 13/10/2008, the FIR was registered.  The
District  Magistrate  directed  the  Tahsildar  to  conduct  an
inquiry.  The Tahsildar conducted inquiry and submitted a
report  that  Sunil  died  in  a  genuine  encounter.   Counsel
pointed  out  that  after  notice  was  issued  in  the  present
appeal, even the Additional Deputy Commissioner conducted
an  independent  inquiry  and  submitted  a  report  that  the
encounter was genuine.  Counsel submitted that this is a
clear case of a genuine encounter and, hence, the appeal
deserves to be dismissed.
7. Mr.  Raju  Ramachandran,  learned  amicus  curiae,  has
filed a detailed note.  Counsel submitted that the Tahsildar’s
inquiry is not satisfactory and no credence could be given to
his  report  because  the  Tahsildar  appears  to  have  been
carried away by the fact that Sunil was a dreaded criminal
against whom six FIRs were registered.  Counsel submitted
that though the report notices that there was blackening and
9Page 10
tattooing around the entry wounds, it does not take note of
the fact that the blackening and tattooing around the entry
wounds are indication of the fact that the shots were fired
from  a  short  distance.   The  police  have  produced  two
photographs of two different persons stating that they are of
Sunil.  Therefore, their case that they identified Sunil using a
torch  at  midnight  on  the  basis  of  photographs  becomes
doubtful.  No firearms were recovered from the body of the
deceased  and  the  police  officers  have  not  received  any
injuries.  These facts are not consistent with the theory of
encounter.   Counsel  submitted  that  the  police  have  not
followed the guidelines issued by the National Human Rights
Commission, which is violative of the mandate contained in
Article  21  of  the  Constitution  of  India.  No  FIR  has  been
registered in this case till date on the complaint filed by the
appellant.  In law, an FIR is to be mandatorily registered
whenever a complaint of a cognizable offence is filed. In
support of this submission, counsel relied on  Babubhai  v.
State of Gujarat
3
, and State of Haryana v.  Bhajan Lal
4
.
3
 (2010) 12 SCC 254
4
 1992 Supp. (1) SCC 335
10Page 11
Counsel submitted that the appellant has been effectively
denied access to justice and legal remedy, which is violative
of Article 21 of the Constitution of India.   Counsel submitted
that it is true that in such cases, this Court can direct fresh
investigation by an independent agency.  But, directing an
investigation at this distant time would be an exercise in
futility.  No ocular evidence would be available now.  Records
of the two police stations involved in this case would also not
be available.  Counsel submitted that in such a case, where
directing a fresh investigation at this stage is not going to be
of any use, it would be appropriate to direct the State to pay
heavy compensation to the appellant.  In this connection,
counsel  relied  on  Nilabati  Behera  (Smt.)  Alias  Lalita
Behera  (through  the  Supreme  Court  Legal  Aid
Committee)  v.  State of Orissa & Ors.
5
8. After  carefully  perusing  the  inquiry  report  dated
17/11/2008 submitted by Tahsildar, Narnaul  and the inquiry
report dated 7/1/2011 submitted by the Additional Deputy
Commissioner and other relevant record, we are inclined to
5
 (1993) 2 SCC 746
11Page 12
agree with learned counsel for the appellant and learned
amicus curiae that Sunil appears to  have died in  a fake
encounter.  Post-mortem notes of Sunil state that the bullets
were fired from a distance of about 3-8 ft. from the body.
They  further  state  that  blackening  and  tattooing  were
present around the entry wounds caused by the bullets. This
indicates  that  the  shots  were  fired  from  a  very  short
distance.   There  was  entry  wound  on  the  back.   Entry
wounds are also seen on the chest. The location and nature
of wounds are not consistent with the theory of genuine
encounter.  If the police party wanted to merely prevent
Sunil from running away, they could have fired on the nonvital parts of his body.  If the police version that Sunil was
aggressive, that he and his companion wanted to kill the
policemen  to  deter  them  from  doing  their  duty  and,
therefore, Sunil fired at the police party was true, at least
one member  of the police party would have got injured.
Significantly, no one from the police party was injured. There
is also no formal record of any recovery of firearms from the
body of Sunil.  It is significant to note that Umesh who was
12Page 13
riding the motorcycle at the time of encounter, was arrested
and tried for offences under Sections 332, 353, 307 read
with Section 34 of the IPC inter alia for using criminal force
to deter public servants from discharge of their duty.  The
Sessions Court acquitted Umesh.  Acquittal of Umesh makes
a dent in the prosecution case that Sunil fired at the police
when the police asked him and Umesh to stop.  The police
claim to have identified Sunil at the time of encounter on the
basis of photographs in their possession.  Our attention has
been  drawn  to  two  photographs  of  Sunil,  shown  on  the
pamphlets  announcing  reward  to  anyone  who  gives  any
information to the police about him.  These two photographs
appear to be of two different persons.   This is tried to be
explained by Head Constable Gulab Singh in his affidavit that
one of the two photographs was taken from Haryana School
Education Board and the other was given to him by a police
informer.  It is stated that one photograph shows Sunil as a
teenager  and  the  other  shows  him  as  a  young  man.
Assuming this to be true, it is not understood how the police
could have identified Sunil in the midnight in torch light.  It is
13Page 14
also not understood as to on the basis of which of the two
photographs,  at  dead  of  night,  they  identified  him.   The
assertion  that  Head  Constable  -  Gulab  Singh  knew  Sunil
personally  and  he  identified  him  in  street  light  does  not
inspire confidence.  Pertinently, there is reference to use of
torch in the FIR filed by ASI Ram Sarup.
9. It is the case of the police that Sunil was a dreaded
criminal and six FIRs were registered against him.  In none of
the FIRs, however, the name of Sunil appears.  It is true that
it is not necessary that the FIR must contain the name of an
accused.  The involvement of an accused can come to light
after the police record statements of witnesses and collect
relevant materials. It is possible that Sunil may be really
involved in all these six cases. It also appears that he was
declared  absconder.  But  merely  because  a  person  is  a
dreaded criminal or a proclaimed offender, he cannot be
killed in cold blood. The police must make an effort to arrest
such accused.  In a given case if a dreaded criminal launches
a  murderous  attack  on  the  police  to  prevent  them  from
14Page 15
doing their duty, the police may have to retaliate and, in that
retaliation, such a criminal may get killed.  That could be a
case of genuine encounter.  But in the facts of this case, we
are unable to draw such a conclusion.
10. We find that while inquiring whether the encounter is
genuine or not, the Tahsildar, Narnoul is carried away by the
fact that six FIRs are registered against Sunil and that he is a
proclaimed offender. The inquiring authority must first focus
its attention on the circumstances that led to the death of a
person in an encounter. If it comes to a conclusion that it
was the deceased who had attacked the police to prevent
them from arresting him or to prevent them from performing
their public duty and, therefore, the police had to retaliate,
then the antecedents of the deceased could be taken into
consideration as additional material at that stage to support
the police version that it was a genuine encounter. But the
inquiring authority cannot start the inquiry keeping in mind
the antecedents of the deceased.  The Tahsildar was in error
in  doing  so.   The  Tahsildar  has  placed  reliance  on  the
15Page 16
statements  of  two  chance  witnesses,  both  named  Amar
Singh, who were allegedly present at the time of encounter.
We  have  already  referred  to  the  sessions  case  in  which
Umesh, who was said to be driving the motorcycle on which
Sunil was sitting, was tried.  It is significant to note that in
that case, PW-8 Amar Singh s/o. Khem Chand was given up
by the prosecution since he turned hostile.  So far as PW-7
Amar Singh s/o. Amit Lal is concerned, he appears to have
merely referred to some incident.  The Sessions Judge has,
therefore, merely reproduced his evidence and has not given
any weightage to it.  Reliance placed by the Tahsildar on the
statements  of  these  two  chance  witnesses  weakens  his
report further.
11. After notice was issued by this Court, the Additional
Deputy Commissioner conducted an inquiry and submitted
his report dated 7/1/2011.  This report places reliance on the
earlier report of the Tahsildar which we have found to be not
satisfactory.  This report places the burden of proof on the
appellant.  We find it difficult to accept the report of the
16Page 17
Additional  Deputy  Commissioner  which  concurs  with  the
Tahsildar’s finding that the encounter was genuine.   The
High Court has erroneously observed that the appellant has
failed to bring on record anything to establish his case of
false  encounter.   All  the  relevant  circumstances  were
completely overlooked by it.  In the circumstances, the High
Court’s order impugned in this appeal will have to be set
aside.
12. What disturbs us is the fact that the police have refused
to  follow  the  guidelines  dated  2/12/2003  issued  by  the
National  Human  Rights  Commission.   The  two  crucial
guidelines which have been completely ignored by the police
are that the investigation into the encounter death must be
done  by  an  independent  investigation  agency  and  that
whenever a complaint is made against the police making out
a case of culpable homicide, an FIR must be registered.  In
the instant case, the police have refused to even register the
FIR on the complaint made by the appellant alleging that his
son Sunil was killed by the police.  Section 154 of the Code
17Page 18
mandates that whenever a complaint discloses a cognizable
offence, an FIR must be registered.  This Court has, in a
catena of judgments, laid down that the police must register
an FIR if a cognizable offence is disclosed in the complaint.
[See:  State  of  Haryana  v.  Bhajan  Lal
6
]. Ignoring  the
mandate of Section 154 of the Code and the law laid down
by this Court, the police have merely conducted inquiries
which appear to be an eyewash.  It is distressing to note that
till date, no FIR has been registered on the complaint made
by  the  appellant.   The  only  FIR  which  was  registered  is
against  Umesh  under  Sections  332,  353,  307  read  with
Section 34 of the IPC at the instance of ASI Ram Sarup.  As
already noted, in that case, Umesh has been acquitted. 
13. Once we come to a conclusion that Sunil is killed in an
encounter, which appears to be fake, it is necessary to direct
an  independent  investigating  agency  to  conduct  the
investigation so that those who are found to be involved in
the commission of crime can be tried and convicted. But, as
6
 1992(supp)1 SCC 335
18Page 19
rightly pointed out by learned amicus curiae directing an
investigation, at this distant point of time, will be an exercise
in futility.  We are informed that witnesses would not be
available.  It would be difficult to trace the record of the case
from the two police stations. Handing over investigation to
an independent agency and starting a fresh investigation
would be of no use at this stage. Reliance placed by  learned
counsel  for  the  appellant  on  Rubabbuddin  Shaikh and
Narmada  Bai  is  misplaced.
Those  cases  arose  out  of
different fact situations. No parallel can be drawn from them.
14. We share the pain and anguish of the appellant, who
has lost his son in what appears to be a fake encounter.  He
has conveyed to us that he is not interested in money but he
wants  a  fresh  investigation  to  be  conducted.   While  we
respect the feelings of the appellant, we are unable to direct
fresh investigation for the reasons which we have already
noted. 
 In  such  situation,  we  turn  to  Nilabati  Behera,
wherein  the  appellant’s  son  had  died  in  custody  of  the
police.  
While noting that custodial death is a clear violation
19Page 20
of prisoner’s rights under Article 21 of the Constitution of
India,  this  Court  moulded  the  relief  by  granting
compensation to the appellant.  
15. In  the  circumstances  of  the  case  we  set  aside  the
impugned judgment and order dated 13/9/2010 and in light
of  Nilabati  Behera,  we  direct  respondent  1  –  State  of
Haryana to pay a sum of Rs.20 lakhs to the appellant as
compensation for the pain and suffering undergone by him
on account of loss of his son - Sunil. The payment be made
by demand draft drawn in favour of the appellant “Rohtash
Kumar” within a period of one month from the date of the
receipt of this order. 
16. The appeal is disposed of accordingly.
17. Before  parting,  we  record  our  appreciation  of  the
valuable  assistance  rendered  to  us  by  Mr.  Raju
Ramachandran, learned amicus curiae.
20Page 21
……………………………………………..J.
     (AFTAB ALAM)
……………………………………………..J.
(RANJANA PRAKASH DESAI)
NEW DELHI,
FEBRUARY 14, 2013.
21

FERA =the High Court has partly allowed FERA Appeal Nos.8 to 11 of 2008 that assailed the common order dated 28 th November, 2007 passed by the Appellate Tribunal for Foreign Exchange, New Delhi and reduced the penalty imposed upon the appellants for contravention of Sections 14 and 8(1) of the Foreign Exchange Regulation Act, 1973 by 50%. The factual matrix in which the adjudication order came to be passed by the DeputyPage 2 Director, Directorate of Enforcement, Mumbai and the appellate order passed by the Tribunal for Foreign Exchange, New Delhi has been set out in the order passed by the Tribunal and the order passed by the High Court of Bombay mentioned earlier. Bountiful Ltd. was a paper company that held Swiss bank account which was in turn operated by a person named Mr. Shirish Shah, a Chartered Accountant, operating from London on the instructions of Mr. Rajesh Desai, appellant in SLP (C) No.15549 of 2008 who was none other than the son of Mr. Arun Desai, Managing Director of Telestar Travels Pvt. Ltd. appellant in SLP (C) No.15547 of 2008. The further case of the Directorate was that documentary evidence seized from the office of M/s Telestar and the residence premises of the Managing Director in the course of investigation conducted under Section 37 of FERA unerringly revealed that Bountiful Ltd. was entirely a holding of the appellant-Telestar Pvt. Ltd.Page 4 and entirely controlled in its operation and financial management by Mr. Arun N. Desai and his two sons Mr. Sujeet A. Desai and Mr. Rajesh A. Desai, appellants in these appeals. It was on the basis of the investigations conducted by the Directorate, the statements of the promoters of Telestar Pvt. Ltd. recorded during the course of such investigation and other material collected by the Directorate, a notice was issued by the Directorate calling upon them to show cause why the adjudication proceedings as contemplated under Section 51 of the FERA should not be filed against them for the contravention pointed out in the show cause notice. In the result, these appeals fail and are, hereby, dismissed with costs assessed at Rs.50,000/- in each appeal. Cost to be deposited within two months with the SCBA Lawyers’ Welfare Fund.

Page 1
 
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.   1306-1309 OF 2013
(Arising out of S.L.P. (C) Nos.15546-15549 of 2008)
M/s Telestar Travels Pvt. Ltd. & Ors. …Appellants
Versus
Special Director of Enforcement …Respondent
J U D G M E N T
T.S. THAKUR, J.
1. Leave granted.
2. These  appeals  arise  out  of  a  common  judgment  and  order
dated 14
th
 March, 2008 passed by a Division Bench of the High Court
of Judicature at Bombay whereby the High Court has partly allowed
FERA  Appeal  Nos.8  to  11  of  2008  that  assailed  the  common  order
dated  28
th
 November,  2007  passed  by  the  Appellate  Tribunal  for
Foreign Exchange, New Delhi and reduced the penalty imposed upon
the  appellants  for  contravention  of  Sections  14  and  8(1)  of  the
Foreign Exchange Regulation Act, 1973 by 50%. The factual matrix in
which  the  adjudication  order  came  to  be  passed  by  the  DeputyPage 2
Director, Directorate of Enforcement, Mumbai and the appellate order
passed by the Tribunal for Foreign Exchange, New Delhi has been set
out in the order passed by the Tribunal  and the order passed by the
High  Court  of  Bombay  mentioned  earlier.   
It  is,  therefore,
unnecessary to recount the facts over again except to the extent it is
absolutely necessary for disposal of these appeals.
3. Appellant-Telestar  Travels  Private  Ltd.  carries  on  a  travel
agency  and  specialises  in  booking  of  tickets  for  crew  members
working on ships. 
Most of the shipping companies are based abroad
with  their  representatives  located  in  Mumbai  who  would  issue
instructions to the appellant-company to arrange air passage for the
crew  from  Bombay  and  other  places  in  India  to  particular  ports
abroad.
The company would then take steps to have tickets issued on
the  basis  of  such  instructions  for  different  destinations.
 The
appellant’s case is that the travel agents in U.K. had of late started
offering cheap fares for seaman/crew travelling to join the ships.
In
order to benefit from such low fare tickets the shipping companies are
said  to  have  desired  that  the  benefit  of  such  low  fare  tickets  be
organized for them by the appellant. 
In order to make that possible
the appellant-company claims to have approached M/s Clyde Travels
Ltd. (CTL) in Glasgow (U.K.) for getting such cheap seaman tickets.
According to this arrangement, the CTL would send a Pre-paid Ticket
Page 3
Advice (PTA) to the appellant in India based on which the appellant
would secure a ticket from the airline concerned. 
The money for the
tickets  would  then  be  credited  into  the  Swiss  bank  account  of
Bountiful  Ltd.,  a  company  registered  in  British  Virgin  Islands.
Bountiful Ltd. would out of money so received transfer funds to CTL
towards the price of the tickets apart from realising 3% of the ticket
price  towards  commission  payable  to  the  appellant-company.
 The
appellant-company claims that the process of purchase of tickets as
aforementioned  was  a  commercial  arrangement  that  was  legally
permissible and did not involve any violation of FERA.
The Directorate
of Enforcement,  Mumbai, did not, however,  think so.
According to
the Directorate, Bountiful Ltd. was a paper company that held Swiss
bank  account  which  was  in  turn  operated  by  a  person  named  Mr.
Shirish Shah, a Chartered Accountant, operating from London on the
instructions  of  Mr.  Rajesh  Desai,  appellant  in  SLP  (C)  No.15549  of
2008 who was none other than the son of Mr. Arun Desai, Managing
Director of Telestar Travels Pvt. Ltd. appellant in SLP (C) No.15547 of
2008.  
The  further  case  of  the  Directorate  was  that  documentary
evidence  seized  from  the  office  of  M/s  Telestar  and  the  residence
premises  of  the  Managing  Director  in  the  course  of  investigation
conducted  under  Section  37  of  FERA  unerringly  revealed  that
Bountiful Ltd. was entirely a holding of the appellant-Telestar Pvt. Ltd.Page 4
and entirely controlled in its operation and financial management by
Mr.  Arun  N.  Desai  and  his  two  sons  Mr.  Sujeet  A.  Desai  and  Mr.
Rajesh A. Desai, appellants in these appeals.  
It was on the basis of
the  investigations  conducted  by  the  Directorate,  the  statements  of
the promoters of Telestar Pvt. Ltd. recorded during the course of such
investigation and other material collected by the Directorate, a notice
was issued by the Directorate calling upon them to show cause why
the adjudication proceedings as contemplated under Section 51 of the
FERA should not be filed against them for the contravention pointed
out in the show cause notice. 
The show cause notice was followed by
an addendum by which the Directorate sought to place reliance upon
a report dated 15th January, 1997 received from the High Commission
of India, at London and the revised list of documents enclosed and
communicated to the appellants.
The appellants filed their replies in
which  they  denied  the  allegations  that  Bountiful  Ltd.  was  a  paper
company  or  that  the  same  was  being  controlled  from  India  by  the
appellants. By their letter dated 23rd September, 1997 the appellants
sought to cross-examine Mr. Livingstone of CLD and the Indian High
Commission officials in London who had met him. He also sought to
cross-examine Miss Anita Chotrani and Mr. Deepak Raut upon whose
depositions  Directorate  of  Enforcement  sought  to  place  reliance  in
support of its case. The Adjudicating Authority eventually passed anPage 5
order on 29
th
 March, 2001 holding the appellants guilty of violation of
provisions of Sections 8 and 14 of FERA inasmuch the appellants had
received payments from various persons on account of tickets booked
by them for US $ 846116.14 and GB Pounds 156943.16 which were
credited to the account No.10975 at Geneva and which they failed to
surrender to an authorised dealer in foreign exchange in India within
three  months of becoming the  owner or holder thereof without the
general permission of the RBI as required under Section 14 of FERA.
The  Adjudicating Authority has  further  held the  appellants  guilty of
transferring  foreign  exchange  of  GB  Pounds  138671.40  and  US  $
672131.85 from the said Geneva Account No.10975 of M/s Bountiful
Ltd. to various persons during the period of November, 1994 to July,
1995 without the previous general or special permission of the RBI,
thereby contravening Section 8(1) of FERA, 1973. The  Adjudicating
Authority  on  that  basis  levied  a  penalty  of  Rs.90,00,000/-  for
contravening  Section  14  and  Rs.85,00,000/-  for  contravention  of
Section  8(1)  upon  M/s  Telestar  Pvt.  Ltd.,  Mumbai.  The  Authority
further levied a consolidated penalty of Rs.20,00,000/- each upon the
remaining  appellants  Mr.  Arun  N.  Desai,  Managing  Director,  Mr.
Rajesh Desai and Mr. Sujeet Desai, his sons.
4. Aggrieved by the order passed by the Adjudicating Authority,
the  appellants  appealed  to  the  Appellate  Tribunal  for  ForeignPage 6
Exchange,  New  Delhi.  The  Tribunal,  as  already  mentioned,  allowed
the said appeals but only in part and to the limited extent of reducing
the  penalty  imposed  by  the  Adjudicating  Authority  by  50%.  The
Tribunal, upon reappraisal of the entire material on record, affirmed
the  findings  recorded  by  the  Adjudicating  Authority  that  the
appellants had indeed committed violation of Sections 8 and 14 of the
FERA 1973 as noticed earlier.  The further appeals before the High
Court of Judicature at Bombay by the appellants also failed and were
dismissed  in  limine by  the  High  Court  by  order  dated  14
th
 March,
2008. Hence the present appeal.
5. Appearing for the appellants, Mr. Shyam Diwan, learned senior
counsel,  made  a  three-fold  submission  in  support  of  the  appeals.
Firstly,  he  contended  that  the  judgment  and  order  passed  by  the
Adjudicating  Authority  was  ex  parte hence  liable  to  be  set  aside.
Elaborating  that  submission  Mr.  Diwan  argued  that  since  the
adjudication  order  had  been  passed  by  the  authority  concerned
nearly  3½  years  after  the  matter  was  finally argued  before  it,  the
requirement  of  affording  an  opportunity  of  being  heard  to  the
appellants arising under  Section 51 of FERA was not satisfied. It is
submitted  that  the  appellants  had  been  prejudiced  on  account  of
delayed pronouncement of the adjudication order as the documents
available  with  them  could  not  be  placed  before  the  said  authority
Page 7
after the hearing of the matter. He further contended that Rule 3 of
the Adjudication Rules provided for a personal hearing which was no
doubt provided on the date the matter was finally argued before the
Adjudicating  Authority  but  which  hearing  ought  to  have  been
repeated  as  the  pronouncement  of  the  order  by  the  Authority  had
been  delayed.  Reliance  in support of the  submission was placed by
Mr.  Diwan  upon  the  decisions  of  this  Court  in Bhagwandas
Fatechand  Daswani  and  Ors.  v.  HPA  International  and  Ors.
(2000) 2 SCC 13, Kanhaiyalal and Ors. v. Anupkumar and Ors.
(2003) 1 SCC 430 and Anil Rai v. State of Bihar (2001) 7 SCC
318.
6. On behalf of respondent, it was per contra argued by Mr. P.P.
Malhotra, learned Additional Solicitor General, that the order passed
by the Adjudicating Authority was fully compliant with the provisions
of Section 51 read with Section 30 of the Rules under FERA and could
not be treated as an ex parte order by any stretch of reasoning.  He
also contended that mere delay in the pronouncement of adjudication
order was not enough to justify setting aside of the order if the same
was  otherwise  found  to  be  legally  valid  and  unacceptable.  No
prejudice  was,  at  any  rate,  caused  to  the  appellants  by  the  delay,
according to Mr. Malhotra, who placed reliance on the decision of this
Court in  Ram Bali v. State of U.P. (2004) 10 SCC 598 to arguePage 8
that delay in the  pronouncement was not itself sufficient to declare
the order to be bad in law. This Court has, according to Mr. Diwan,
deprecated  the  practice  of  Courts  and  Authorities  delaying  the
pronouncement  of  orders  and  matters  that  have  been  heard  and
reserved for such pronouncements. There is no gainsaying that any
Court or Authority hearing the matter must within a reasonable time
frame pronounce the orders especially when any misgiving arising out
of inordinate delay which gave rise to unnecessary apprehensions in
the minds of litigants especially in the minds of a party that has lost
the matter at the hand of such long delay. We can only express our
respectful agreement with the observations made by this Court in the
decisions relied upon by Mr. Diwan that have issued guidelines and
set out time frame considered reasonable for pronouncement of order
by  Courts  and  Authorities.  Even  so,  the  question  remains  whether
delay by itself should constitute a ground for setting aside the order
that may otherwise be found legally valid and justified.  Our answer
to that question is in the negative.  The decision of this Court in Ram
Bali v. State of U.P. (2004) 10 SCC 598  is one such case where
the  Court  repelled a  similar argument  and  declared  that  delay was
not a ground by itself that otherwise specifically dealt with the matter
in  issue.   The  Court  at  best  put  to  caution  requiring a  careful and
closer scrutiny of the order that was pronounced after undue delayPage 9
but if upon such scrutiny also the order is not found to be wrong in
any way it may decline to set aside the same.
7. We have in the instant case heard the matter at considerable
length for a careful examination of the adjudication by the Authority
and  that  of  the  Appellate  Tribunal  and  the  High  Court  to  examine
whether it suffers from any illegality or material irregularity causing
prejudice to the appellants. We are of the view that no such illegality
or  irregularity  has  been  demonstrated.   That  apart  delayed
pronouncement  of the  order  by  the  Adjudicating  Authority was not
urged as a ground of challenge before the Tribunal or the High Court
both  of  whom  have  remained  silent  on  this  aspect.   Even  on  the
question of prejudice we find the contention of Mr. Diwan to be more
imaginary than real.  The argument regarding prejudice is founded on
the plea that the appellants could not place some of the documents
which they have now placed before this Court for consideration.  It is
further admitted that no application for permission to produce these
documents  was  filed  by  them  before  the  Adjudicating  Authority  no
matter they could have done so if they really indeed needed to place
reliance on such documents.  Mr. Malhotra was, in our view, justified
in  contending  that  the  hearing  had  been  concluded  by  the
Adjudicating Authority in keeping with the requirement of Section 51
and Rule 3 of the Adjudication Rules under FERA. The first limb of thePage 10
contention  urged  by  Mr.  Diwan,  therefore,  fails  and  is  hereby
rejected.
8. It  was  next  argued  by  Mr.  Diwan,  that  the  Adjudicating
Authority had  placed reliance upon  the  retracted  statements  of the
appellants while holding that Bountiful Ltd. was a paper company and
that  its  financial  control  lay  in  their  hands,  so  that  receipt  and
appropriation  of  the  foreign  exchange  by  that  device  was  a  clear
violation of the provisions of FERA.  
9. A  reading of the  order  passed  by the  Adjudicating Authority
would show that the  appellants had in their responses to the  show
cause  notice  and  the  addendum  to  the  same  specifically  raised  a
contention that the statements made by them were not voluntary and
could not, therefore, be relied upon.  That contention was not only
noticed by the Adjudicating Authority but specifically dealt with and
rejected holding that the statement was voluntary in nature and that
the  subsequent  retraction  is  a  mere  after  thought  with  a  view  to
escaping the consequences of the violations committed by them. The
Adjudicating Authority, we are more than satisfied, was aware of the
requirement  of  examining  the  voluntary  nature  of  the  statements
being relied upon by it.  It has accordingly examined that aspect and
given  cogent  reasons  for  holding  that  the  statements  were  indeed
voluntary  and  incriminating  both.   The  Adjudicating  Authority  hasPage 11
observed:
“On  going  through  the  records  of  the  case,  I  find  that  the
statements dated 24.8.95, 25.8.95 and 6.2.96 of Shri Arun N.
Desai, the Noticee No.1 and the statements dated 24/25.8.95
of Rajesh N. Desai and Sujeet Desai, the Noticee Nos. 2 & 3
were  all  given  by  the  respective  notices  in  their  own
handwriting  and in  the language known to them.  Shri Arun
Desai,  in  his  statements,  had  explained  in  detail  the
functioning of M/s Telestar Travels, the Travel Agency, mainly
engaged  in  booking  of  domestic  and  international  air  tickets
for crew members joining foreign ships; the need for entering
into an agreement with agents abroad; the mode of payments
received  ant  eh  commission/profit  earned  on  the  tickets
booked by them through the overseas shipping companies and
also how their commission was being remitted either by draft
or telegraphic transfer into their account No.82886 in Bank of
Baroda, Churchgate Branch etc.  I thus find that the statemtns
of the  notice I contain  such inner  and  minute  details, which
could  have  been  given  out  of  his  personal  knowledge  and
could not have been invented by the officers who recorded the
said statements.  Moreover, the statement of the notice No.1
have  been  confirmed  by  the  statements  of  the  other  two
notices  S/Shri  Rajesh  and  Sujeet  Desai,  in  their  respective
statements  given  before  the  Enforcement  Officers.  Even
otherwise  there  is  nothing  on  record  that  might  cast  the
slightest  doubt  on  the  voluntariness  of  the  statements  in
question.   I am, therefore, of the view that the statements in
question  were  given  by  the  respective  three  notices
voluntarily in explanation of the plethora of documents seized
from  the  business/residential  premises  of  the  notices  and
contain  those  details  which  they  wished  to  state.  The
retraction  subsequently  filed  by  the  notices  S/Shri  Rajesh
Desai and Sujeet Desai are merely an afterthought to escape
from the clutches of law and I reject them in toto.”
10. In the appeal filed by the appellants before the FERA Appellate
Tribunal  also  a  contention  as  to  the  voluntary  nature  of  the
statements  made  by  the  appellants  was  urged  on  their  behalf  but
rejected by the Tribunal in the following words:
“It  is  argued  that  the  statements  given  by  Shri  Arun  Desai,
Rajesh  Desai  and  Sujeet  Desai  were  not  the  voluntary  ones
which  were  dictated  by  the  Enforcement  Officers  and  were
obtained under threats and coercion which were subsequently
retracted  and  that  there  was  no  corroborative  material  toPage 12
support  them.    But  we  find  no  force  in  these  arguments
because the appellants, in their statements, had explained in
detail  the  functioning  of  M/s.  Telstar  Travels,  which  was
engaged  in  booking  of  domestic  and  international  air  tickets
for crew members joining foreign ships, the need for entering
into an agreement with agents abroad, the mode of payments
received and the commission earned on the tickets booked by
them  through  the  Over  Shipping  Companies  and  how  their
commission  was  remitted  through  Banking  channel.
Moreover, they  were written  in their own handwriting and in
the language known to them.  The statements contained such
inner and minute details which could have been given out of
their personal knowledge and could not have been invented by
the officers of the Department.”  
11. The  Tribunal  has  relying  upon  the  decision  of  this  Court  in
K.T.M.S.  Mohd.  v.  Union  of  India  (1992)  3  SCC  178, K.I.
Pavunny  v.  Assistant  Collector  (HQ),  Central  Excise
Collectorate,  Cochin  (1997)  3  SCC  721 held  that  retracted
statements could furnish a sound basis for recording a finding against
the party making the statement. There is, in that view, no gainsaying
that the Adjudicating Authority and the Appellate Tribunal have both
correctly appreciated the legal position and applied the same to the
case at hand, while holding that the statements were voluntary and,
therefore,  binding  upon  the  appellants.   Decision  of  this  Court  in
Vinod  Solanki  v.  Union  of  India  &  Anr.   (2008)  16  SCC  537
relied upon by Mr. Diwan does not lend any help to the appellants.
The decision is an authority for the proposition that a person accused
of commission of an offence is not expected to prove to the hilt that
confession had been obtained from him by an inducement, threat orPage 13
promise  by  a  person  in  authority.  The  burden  is  on  the
authority/prosecution to show that the statement sought to be relied
upon  was  voluntary  and  that  the  Court  while  examining  the
voluntariness of the statement is required to consider the attending
circumstances and all other relevant facts. The decision does not hold
that  even  when  a  statement  is  founded  upon  consideration  of  the
relevant facts and circumstances and also found to be voluntary, it
cannot  be  relied  upon  because  the  same  was  retracted.  We  may
usefully refer to the legal position stated in the following paragraph
by this Court in K.T.M.S. Mohd. & Anr. (supra):
“34.  We think it is not necessary to recapitulate and recite all
the decisions on this legal aspect. But suffice to say that  the
core of all the decisions of this Court is to the effect that the
voluntary  nature  of  any  statement  made  either  before  the
Custom  Authorities  or  the  officers  of  Enforcement  under  the
relevant provisions of the respective Acts is a sine quo non to
act on it for any purpose and if the statement appears to have
been obtained by any inducement, threat, coercion or by any
improper means that statement must be rejected brevi manu.
At  the  same  time,  it  is  to  be  noted  that  merely  because  a
statement is retracted, it cannot be recorded as involuntary or
unlawfully obtained. It is only for the maker of the statement
who alleges inducement, threat, promise etc. to establish that
such improper means has been adopted. However, even if the
maker  of  the  statement  fails  to  establish  his  allegations  of
inducement,  threat  etc.  against  the  officer  who  recorded  the
statement,  the  authority  while  acting  on  the  inculpatory
statement  of  the  maker  is  not  completely  relieved  of  his
obligations  in  at  least  subjectively  applying  its  mind  to  the
subsequent  retraction  to  hold  that  the  inculpatory  statement
was not extorted. It thus boils down that the authority or any
Court  intending  to  act  upon  the  inculpatory  statement  as  a
voluntary one should apply its mind to the retraction and reject
the  same  in  writing. It  is  only  on  this  principle  of  law,  this
Court  in  several  decisions  has  ruled  that  even  in  passing  a
detention order on the basis of an inculpatory statement of a
detenu  who  has  violated  the  provisions  of  the  FERA  or  thePage 14
Customs  Act  etc.  the  detaining  authority  should  consider  the
subsequent  retraction  and record its opinion  before accepting
the inculpatory statement lest the order will be vitiated...”
(emphasis supplied)
12. That  brings  us  to  the  submission  of  Mr.  Diwan  that  the
arrangement arrived at between the Appellant Company, on the one
hand, and  Clyde Travels Ltd.  and  Bountiful Ltd., on  the  other, was
commercial  in  nature  which  the  Adjudicating  Authority  and  the
Tribunal had failed to appreciate in its true and correct perspective.
There was, according to Mr. Diwan, no real basis for the Adjudicating
Authority  and  the  Tribunal  to  hold  that  Bountiful  was  a  paper
company and that it was being controlled by the Desais from India.
Mr. Diwan made a strenuous attempt to persuade us to reverse the
findings  of  fact  recorded  by  the  Adjudicating  Authority  and  the
Tribunal on this aspect. We regret our inability to do so.  Whether or
not  Bountiful  Ltd.  is  a  paper  Company  and  whether  or  not  it  was
controlled and operated by the appellants is essentially a question of
fact  to  be  determined  on  the  basis of the  material collected  in  the
course of the investigation.  The Adjudicating Authority and Tribunal
have  answered  that  question  in  the  affirmative  taking  into
consideration  the  statements  made  by  the  appellants  as  also  the
documents  that  were  recovered  from  their  premises.  All  these
documents and  incriminatory circumstances  have  been  discussed  inPage 15
the following passage by the Adjudicating Authority:
“...A perusal of the records indicate that various incriminating
documents  together  with  the  Indian  currencies  were  seized
from the office premises of M/s Telstar Travels and also from
the residence of Shri Arun Desai, the Managing Director of the
said company. All the three noticees S/Shri Arun Desai and his
two  sons  Rajesh  and  Sujeet  Desai,  have  given  their
statements before the Enforcement  Officer, in explanation  of
the said seized documents.  It is also noticed that the seizure
of  documents  and  currencies  had  not  been  disputed  by  the
notices  at  any  point  of  time.   Shri  Rajesh  Desai, son of  the
said  Shri  Arun  N.  Desai  and  one  of  the  noticees  in  the
impugned SCN, while explaining page No.18 of the bunch  of
documents  marked  ‘G’,  had  clearly  admitted  that  it  was  the
message from Shri Sirish Shah from London informing that US
$  33884  has  been  credited  on  14.11.94  to  the  account  of
Bountiful.   Similarly  page  Nos.30  &  34  of  file  marked  ‘I’,
contain instructions to transfer certain amounts to the account
of Clyde Travels Ltd. Glasgow.  When Shri Rajesh Desai was
questioned as to how could issue such instructions in respect
of  the  account  of  Bountiful  Ltd.,  he  clearly  explained  in  his
statement  dated  24.8.95  that  the  account  No.10975  of
Bountiful at Geneva was an account of a paper company held
by him for the sole purpose of receiving and making payments
in respect of seamen airline tickets which were obtained at the
very cheap rates from M/s Clyde Travels, Glasgow, with whom
M/s Telstar had a tie up since August  1994;  that  Shri Sirish
Shah was a Chartered Accountant in London, who was known
to  both  M/s.  Clyde  Travels  and  Telstar;  that  the  said  Shri
Sirish  Shah  was  used  by  him  for  giving  instructions  to  the
bank for operating the account of Bountiful Ltd. At Switzerland
that the last balance for the said account of Bountiful was US$
98761.70.  Shri Rajesh Desai further explained the page Nos.
at 111 to 125 of file marked ‘E’ seized from the office of M/s.
Telstar  Travels.  P.  Ltd.,  in  his  statement  dated  24.8.95,
admitting  the  same  to  be  the  statement  of  account  of
Bountiful  Ltd.  with  Banque  De  Financement,  Geneva,  which
showed  credits  of  amounts  remitted  by  various  overseas
shipping  companies  against  PTA  tickets  purchased  for  their
crew;  that  the  said  credits  represented  amounts  transferred
from the bank accounts of their overseas shipping companies;
that  the  debits  represented  the  amounts  transferred  to  the
Bank of Scotland Glasgow which is the account of M/s. Clyde
Travels  Ltd.  in  Glasgow;  that  he  was  the  person  giving
instructions  to  Shri  Sirish  Shah,  Chartered  Accountant  of
P.S.J.  Alexandar  &  Co,  London  to  transfer  funds  from  the
account  in  Geneva  of M/s.  Bountiful  to various places  which
included transfer of funds to M/s Clyde Travels Ltd, Glasgow
which forms a major portion of transfer for PTA tickets.”Page 16
13. Dealing  with  the  invoices  issued  by  Bountiful  Ltd.  to  M/s.
Ocean Air Ltd. and M/s Scot Travel Ltd., Hong Kong, the Adjudicating
Authority held that appellant Telestar Pvt. Ltd. had issued directions
that the amount payable be deposited to the credit of M/s Bountiful
Ltd. The Adjudicating Authority observed:
“…  I also find  from the records, certain  invoices  of Bountiful
ltd. Drawn on M/s. Ocean Air Ltd. and on M/s. Scot Travel Ltd,
Hong  Kong,  which  were  produced  by  Miss  Anita  Chotrani
Travel Co-ordinator of M/s. Denklau Marine Services, Mumbai,
which contain directions of M/s Telstar to credit the amount of
the bill to the A/c No.10975 of M/s Bountiful Ltd, at Geneva.
A  scrutiny  of  the  bills  produced  by  the  said  Miss  Anita
Chotrani, given by Telstar, it was found that several air tickets
of  Air  India  booked  by  Telstar  were  also  billed  in  these
Bountiful invoices and payment of these Air India tickets have
been directed to the Geneva  Account.  Moreover the bills do
not  bear  any  signatures  nor  the  identity  of  the  person
allegedly managing the billing on behalf of Bountiful Ltd.”
14. The  Adjudicating  Authority  has  also  noticed  and  relied  upon
incriminating  circumstances  like  instructions  issued  by  appellant
Telestar  to  Bountiful  to  remit  an  amount  of  Rs.4,74,033/-  to  M/s
Aarnav  Shipping  Company  towards  repairs  of  MV  Rizcun  Trader,  a
ship owned by one of their principals M/s United Ship Management,
Hongkong.  Similarly a payment of US$ 12500/- made from Bountiful
Account to Mustaq Ali Najumden is also evidenced and was made on
the  instructions  of  appellant-Shri  Rajesh  Desai,  which  the  latter
explained  to  be  kickbacks  paid  to  overseas  shipping  company  for
giving ticketing business to Telestar.Page 17
15. Suffice  it  to  say  that  there  may  be  sufficient  evidence  on
record for the Adjudicating Authority and the Tribunal to hold that the
appellants were indeed guilty of violating the provisions of FERA that
called for imposition of suitable penalty against them.  It was not the
case  of  the  appellants  that  the  findings  were  unsupported  by  any
evidence  nor  was  it  their  case  that  the  statements  made  by  the
appellants  were  un-corroborated  by  any  independent  evidence
documentary or otherwise.  In the circumstances, therefore, we see
no  reason  to  interfere  with  the  concurrent  findings  of  fact  on  the
question  whether  Bountiful  was  or  was  not  a  paper  company
controlled by the appellants from India.
16. That  brings  us  to  the  third  limb  of  attack  mounted  by  the
appellants against the impugned orders.  It was argued by Mr. Diwan
that while holding that Bountiful Ltd. was a paper Company and was
being controlled and operated from India by the appellants through
Shri  Sirish  Shah,  the  Adjudicating  Authority  had  relied  upon  the
statements  of  Miss  Anita  Chotrani  and  Mr.  Deepak  Raut,  and  a
communication received from the Indian High Commission in London.
These  statements  and  the  report  were,  according  to  Mr.  Diwan,
inadmissible in evidence as the appellant’s request for an opportunity
to cross examine these witness had been  unfairly declined, thereby
violating the principles of natural justice that must be complied withPage 18
no matter the strict rules of Evidence Act had been excluded from its
application.  Inasmuch as evidence  that was inadmissible had been
relied upon, the order passed by the Adjudicating Authority and the
Tribunal were vitiated. Reliance in support was placed by Mr. Diwan
upon the decisions of this Court in New India Assurance Company
Ltd.  v.  Nusli  Neville  Wadia  and  Anr.  (2008) 3  SCC  279,  S.C.
Girotra v. United 1995 Supp. (3) SCC 212, Lakshman Exports
Ltd. v. Collector of Central Excise (2005) 10 SCC 634, and M/s
Bareilly Electricity Supply Co.  Ltd. v.  The  Workmen and  Ors.
(1971) 2 SCC 617.    
17. Mr.  Malhotra,  on  the  other  hand,  argued  that  the  right  of
cross-examination  was  available  to  a  party  under  the  Evidence  Act
which had no application to adjudication proceedings under FERA. He
relied upon the provisions of Section 51 of the Act and Adjudication
Rules framed thereunder in this regard.  He also placed reliance upon
a  decision  of  this  Court  in  Surjeet  Singh  Chhabra  v.  Union  of
India and Ors. (1997) 1 SCC 508  to argue that cross-examination
was unnecessary in certain circumstances  such as the  one  at  hand
where  all  material  facts  were  admitted  by  appellants  in  their
statements before the concerned authority.      
18. There is, in our opinion, no merit even in that submission of
the  learned  counsel.  It  is  evident  from  Rule  3  of  the  AdjudicationPage 19
Rules  framed  under  Section  79  of  the  FERA  that  the  rules  of
procedure do not apply to adjudicating proceedings.  That does not,
however, mean that in a given situation, cross examination may not
be permitted to test the veracity of a deposition sought to be issued
against  a  party against whom action  is proposed to  be  taken.  It is
only  when  a  deposition  goes  through  the  fire  of  cross-examination
that  a  Court  or  Statutory  Authority  may be  able  to  determine  and
assess its probative value. Using a deposition that is not so tested,
may therefore amount to using evidence, which the party concerned
has had no opportunity to question.  Such refusal may in turn amount
to violation of the rule of a fair hearing and opportunity implicit in any
adjudicatory process, affecting the right of the citizen.  The question,
however, is whether failure to permit the party to cross examine has
resulted in any prejudice so as to call for reversal of the orders and a
de novo enquiry into the matter. The answer to that question would
depend upon the facts and circumstances of each case. For instance,
a similar plea raised in  Surjeet Singh Chhabra v. Union of India
and Ors. (1997) 1 SCC 508 before this Court did not cut much ice,
as this Court felt that cross examination of the witness would make
no  material  difference  in  the  facts  and  circumstances  of  that  case.
The Court observed:Page 20
“3. It  is  true  that  the  petitioner  had  confessed  that  he
purchased the gold and had brought it. He admitted  that  he
purchased  the  gold  and  converted  it  as  a  kara. In  this
situation, bringing the gold without permission of the authority
is  in  contravention  of  the  Customs  Duty  Act  and  also  FERA.
When  the  petitioner  seeks  for  cross-examination  of  the
witnesses who have said that the recovery was made from the
petitioner, necessarily an opportunity requires to be given for
the cross-examination of the witnesses as regards the place at
which  recovery  was  made.  Since  the  dispute  concerns  the
confiscation  of the  jewellery,  whether  at  conveyor  belt  or at
the green channel, perhaps the witnesses were required to be
called.  But  in  view  of  confession  made  by  him,  it  binds him
and, therefore, in the facts and circumstances of this case the
failure  to  give  him  the  opportunity  to  cross-examine  the
witnesses  is not  violative  of principle of  natural  justice.  It is
contended  that  the  petitioner  had  retracted  within  six  days
from  the  confession.  Therefore,  he  is  entitled  to  crossexamine  the  panch  witnesses  before  the  authority  takes  a
decision  on  proof  of  the  offence.  We  find  no  force  in  this
contention.  The  customs  officials  are not  police  officers.  The
confession,  though  retracted,  is  an  admission  and  binds  the
petitioner.  So  there  is  no  need  to  call  panch  witnesses  for
examination and cross-examination by the petitioner.”
19. We  may  also  refer  to  the  decision  of  this  Court  in  M/s
Kanungo & Company v. Collector of Customs and Ors. (1973)
2 SCC 438.  The appellant in that case was carrying on business as a
dealer, importer and repairer of watches in Calcutta. In the course of
a  search  conducted  by  Customs  Authorities  on  the  appellant's
premises, 280 wrist watches of foreign make were confiscated. When
asked to show cause against the seizure of these wrist watches, the
appellants  produced  vouchers  to  prove  that  the  watches  had  been
lawfully purchased by them between 1956 and 1957. However, upon
certain  enquiries,  the  Customs  Authorities  found  the  vouchersPage 21
produced  to  be  false  and  fictitious.  The  results  of  these  enquiries
were  made  known to  the  appellant,  after  which  they  were  given  a
personal  hearing  before  the  adjudicating  officer,  the  Additional
Collector of Customs. Citing that  the  appellant made no attempt in
the personal hearing to substantiate their claim of lawful importation,
the  Additional  Collector  passed  an  order  confiscating  the  watches
under Section 167(8), Sea Customs Act, read with Section 3(2) of the
Imports and Exports (Control) Act, 1947. The writ petition filed by the
appellant to set aside the said order was allowed by a Single Judge of
the  High  Court  on  the  ground  that  the  burden  of  proof  on  the
Customs Authorities had not been discharged by them. The Division
Bench  of the  High  Court reversed this order on appeal stating that
the  burden  of proving lawful importation  had  shifted  upon  the  firm
after  the  Customs  Authorities  had  informed  them  of  the  results  of
their  enquiries.  In  appeal  before  this  Court,  one  of  the  four
arguments  advanced  on  behalf  of  the  appellant  was  that  the
adjudicating officer had breached the principles of natural justice by
denying  them  the  opportunity  to  cross-examine  the  persons  from
whom enquiries were made by the Customs Authorities. The Supreme
Court rejected this argument stating as follows:
“12. We may first deal with the question of breach of natural
justice. On the  material  on record, in  our opinion, there hasPage 22
been  no  such  breach.  In  the  show-cause  notice  issued  on
August  21,  1961,  all  the  material  on  which  the  Customs
Authorities  have  relied  was  set  out  and  it  was  then  for  the
appellant to give a suitable explanation. The complaint of the
appellant  now  is  that  all  the  persons  from  whom  enquiries
were  alleged  to  have  been  made  by  the  authorities  should
have  been  produced  to  enable  it  to  cross-examine  them.  In
our-opinion,  the  principles  of  natural  justice  do  not  require
that  in  matters  like  this  the  persons  who  have  given
information  should  be  examined  in  the  presence  of  the
appellant or should be allowed to be cross-examined by them
on  the  statements  made  before  the  Customs  Authorities.
Accordingly  we  hold  that  there  is  no  force  in  the  third
contention of the appellant.”
   
20. Coming to  the  case  at  hand,  the  Adjudicating  Authority  has
mainly  relied  upon  the  statements  of  the  appellants  and  the
documents seized in the course of the search of their premises.  But,
there is no dispute that apart from what was seized from the business
premises  of  the  appellants  the  Adjudicating  Authority  also  placed
reliance  upon  documents  produced  by  Miss  Anita  Chotrani  and  Mr.
Raut.  These  documents  were,  it  is  admitted  disclosed  to  the
appellants who were permitted to inspect the same. The production of
the documents duly confronted to the appellants was in the nature of
production  in terms of Section  139  of the  Evidence  Act,  where  the
witness  producing  the  documents  is  not  subjected  to  cross
examination.  Such  being  the  case,  the  refusal  of  the  Adjudicating
Authority to permit cross examination of the witnesses producing the
documents  cannot  even  on  the  principles of Evidence  Act  be  found
fault  with.   At  any  rate,  the  disclosure  of  the  documents  to  thePage 23
appellants and the opportunity given to them to rebut and explain the
same  was  a  substantial  compliance  with  the  principles  of  natural
justice.  That  being so, there  was and  could be  no prejudice  to the
appellants nor was any demonstrated by the appellants before us or
before the Courts below.  The third limb of the case of the appellants
also in that view fails and is rejected.
21. Mr.  Diwan  lastly  argued  that  the  penalty  imposed  was
disproportionate  to  the  nature  of  the  violation  and  that  this  Court
could at least, interfere  to that extent.  We do not see  any reason
much less a compelling one to interfere with the quantum of penalty
imposed  upon  the  appellants  by  the  Tribunal.   The  Adjudicating
Authority  had,  as  noticed  earlier,  imposed  a  higher  penalty.  The
Tribunal  has  already  given  relief  by  reducing  the  same  by  50%.
Keeping in view the nature of the violations and the means adopted
by  the  respondent  to  do  that,  we  see  no  room  for  any  further
leniency.
22. In  the  result,  these  appeals  fail  and  are,  hereby,  dismissed
with  costs  assessed  at  Rs.50,000/-  in  each  appeal.  Cost  to  be
deposited within two months with the SCBA Lawyers’ Welfare Fund.
                
               ……..………….……….
…..…J.
         (T.S. Thakur)Page 24
      …………………………..…..…J.
             (M.Y. Eqbal)
New Delhi,
February 13, 2013

vacant post of Headmaster at Howrah Siksha Niketan, “… A person whose name appears in the select list does not acquire any indefeasible right of appointment. Empanelment at the best is a condition of eligibility for purpose of appointment and by itself does not amount to selection or create a vested right to be appointed. The vacancies have to be filled up as per the statutory rules and in conformity with the constitutional mandate….” In the facts and circumstances of the case, the Division Bench of the High Court, in our view, committed an error in upsetting that direction We were informed by the parties that the respondent No.1 has been appointed as Headmaster during the pendency of the litigation at the pain of contempt proceedings against the parties. That appointment has come sometime in September 2010. Since, the order passed which appears to have culminated in the making of the appointment is being set aside, the question is whether we should direct immediate removal of the respondent or continuance of the arrangement till such time fresh selection process is initiated and completed in accordance with law. In our opinion, not only because the respondent has been holding the post for two years, but also because his removal would not immediately result in any benefit either to the institution or to the appellant before us, we, therefore, permit him to continue holding the post but only till such time a fresh selection is made against the vacancy. 19. In the result, we allow this appeal, set aside the order passed by the Division Bench and affirm that passed by Dipankar Datta, J. dated 27 th July, 2009 with the above direction. We make it clear that the respondent No.1 shall be entitled to all the monetary benefits for the period during which he actually works as the Headmaster of the school. The fact that he so works would not, however, create any equity in his favour nor constitute an additional weightage in the new selection process.

Page 1
 
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.   1310  OF 2013
(Arising out of S.L.P. (C) No.28824 of 2011)
Vijoy Kumar Pandey …Appellant
Versus
Arvind Kumar Rai & Ors. …Respondents
J U D G M E N T
T.S. THAKUR, J.
1. Leave granted.
2. This appeal by special leave is directed against the judgement
and order dated 29th January, 2010 passed by the Division Bench of
the  High  Court  of  Judicature  at  Calcutta  whereby  in  FMA
No.1415/2009  filed  by  the  respondent  No.1  has  been  allowed,  the
order  passed  by  the  Single  Judge  of  that  Court  set  aside  and  the
respondent-School Service Commission directed to act in terms of an
earlier  order  dated  12th March  2009  passed  by  that  Court  in  Writ
Petition No. 6117(W) of 2004. The controversy arises in the following
backdrop. 
3. Against  the  vacant  post  of  Headmaster  at  Howrah  Siksha
Niketan, as many as five candidates applied for appointment to thePage 2
School Service Commission, West Bengal. The Commission found two
of  those  applying  for  the  post  to  be  ineligible  but  short  listed  the
remaining three for consideration. Kavindra Narayan Roy, one of the
candidates found ineligible questioned the rejection of his candidature
in Writ Petition No.6117 (W) of 2004 filed before the High Court of
Calcutta  and  obtained  an  interim  order  staying  publication  of  the
panel.  That order continued to remain operative for nearly five years
till 2009 when the writ petitioner-Kavindra Narayan Roy withdrew the
said  petition  as  he  had  by  that  time  attained  the  age  of
superannuation.  The Single Judge of the High Court of Calcutta while
dismissing the  writ petition as withdrawn vacated all interim orders
but  directed  that  the  period  during  which  the  panel  could  not  be
operated due to the interim order passed in the writ petition should
be excluded for computing the life of the panel.  
4. The  School  Service  Commission,  it  appears,  took  no  further
steps in the matter nor was the panel published.  This led to the filing
of the two writ petitions one of which happened to be Writ Petition
No.5866 (W) of 2009 filed by respondent No.1-Shri Arvind Kumar Rai
in which the said petitioner sought a mandamus directing the School
Service Commission to recommend his name for appointment against
the  available  vacancy.   His  case  was  that  since  the  Rajaram
Choudhary who was placed at serial no.1 in the merit list had retiredPage 3
from  service,  he  alone  could  be  considered  for  appointment  as  he
figured at serial No.2 of the list.
5. The above petition came up before Dipankar Datta, J. and was
dismissed by an order dated 27th July, 2009 holding that since more
than  five  years  had  elapsed  ever  since  the  selection  process  was
initiated and since no panel had been published by the School Service
Commission it was not possible to direct the Commission to appoint
the  petitioner-Shri  Arvind  Kumar  Rai  as  Headmaster  of  the  school.
The Court further held that during the intervening period of five years
several  other  candidates  would  have  acquired  eligibility  for
consideration/appointment against the post of Headmaster of school
and that in fairness to all of them they ought to be given a chance to
offer their candidature. The Court further held that as the panel had
not  been  published  the  writ  petitioner  could  not  claim  a
recommendation  as  of  right  and  that  discretionary  remedy  under
Article 226 of the Constitution could be exercised only when the Court
was satisfied that it was equitable to do so.
6. The  appellant-Vijoy Pandey, too, in  the  meantime, filed Writ
Petition No.7310 (W) of 2009 in which he prayed for a direction to the
respondents to rescind, cancel and withdraw the panel for the post of
Headmaster of the school prepared on the basis of the interview held
on  6
th
 January,  2004.  A  Single  Bench  of  the  Calcutta  High  CourtPage 4
entertained the said petition and by an order dated 4
th
 August, 2009
directed  status quo to be  maintained regarding appointment  to the
post of Headmaster.   Three  appeals came  to  be  filed in  the  above
background before the Division Bench of the High Court. One of these
appeals filed by Arvind Kumar Rai was directed against order dated
27
th
 July, 2009 passed by Dipankar Datta, J in Writ Petition No.5866
of  2009.   The  second  appeal,  too,  was  filed  by  Arvind  Kumar  Rai
assailing order dated 4
th
 August, 2009 passed by Soumitra Pal J. in
Writ Petition No.7310 of 2009 directing status quo to be maintained.
The third appeal was filed by appellant-Vijoy Kumar Pandey against
order  dated  12
th
 March,  2009  passed  by Dipankar  Datta,  J. in Writ
Petition  No.6117  (W)  of  2004  whereby  the  School  Service
Commission  had  been  directed  to  exclude  the  period  during  which
there was an interim order, while computing the life of the panel.
7. The first of the abovementioned three appeal was allowed by
the Division Bench by an order dated 29
th
 January, 2010 setting aside
order  dated  27
th
 July,  2009  passed  by  Dipankar  Datta,  J.  with  a
direction  to  the  School  Service  Commission  to  act  in  terms  of  the
earlier order dated 12
th
 March, 2009 passed by the very same Hon’ble
Judge. Taking note of the said order of the Division Bench the second
mentioned  appeal  preferred  against  the  interim  order  dated  4
th
August, 2009 passed by Soumitra Pal J.  was held to be infructuousPage 5
and  was disposed  of by the  Division Bench  by an  order  dated  23
rd
August,  2010.  The  Court  was  of  the  view  that  in  the  light  of  the
direction issued by a coordinate Bench  directing the  School Service
Commission to give effect to the order dated 12
th
 March, 2009 passed
by  the  Dipankar  Dutta,  J.  it  was  not  possible  to  give  any  contrary
direction to the Commission and that the interim order passed by the
Single Judge to that effect had lost its force on that count.
8. As  regards  the  appeal  filed  by  the  appellant-Vijoy  Kumar
Pandey the Division Bench in its order dated 23
rd
 August, 2010 held
that in the light of the order dated 29
th
 January, 2010 passed by a
coordinate Bench there was no scope of challenging order dated 12
th
March, 2009 passed by Dipankar Datta, J. The  Court made it clear
that the appellant will be free to seek appropriate remedy before the
appropriate  forum in  accordance  with  law.  A  special leave  petition
filed  against  the  aforementioned  order  dated  23
rd
 August,  2010
passed by the Division Bench was withdrawn and was dismissed by
this Court by order dated 21
st
 January, 2011.
9. The  present  appeal  assails  the  correctness  of  the  judgment
and order  dated  29
th
 January, 2010  whereby the  Division Bench  of
the  High  Court  has  allowed  F.M.A.  No.1415  of  2009  and  set  aside
order  dated  27
th
 July,  2009  passed  by  Dipankar  Datta  J.  in  Writ
Petition  No.5866  (W)  of  2009  with  W.P.  6117  (W)  of  2004  andPage 6
directed that the Commission shall act in accordance with order dated
12
th
 March, 2009 passed by the same Hon’ble Judge in Writ Petition
No.6117(W) of 2004.
10. We have heard learned counsel for the parties at considerable
length.  Even though we have retraced in detail the chequered history
of  the  litigation  between  the  parties  the  question  that  falls  for
determination  actually  lies  in  a  narrow  compass.  The  question
precisely is whether  any panel of candidates has been  prepared  by
the Commission in accordance with the provisions of the West Bengal
School  Service  Commission  (Procedure  for  selection  of  persons  for
appointment  to  the  post  of  teachers  including  Head  Masters/Head
Mistresses  Superintendent  of  Senior  Madarasa  in  recognized  nonGovernment Aided Schools and procedure for conduct of business of
the  Commission),  Regulations,  1988;  and  if  so,  whether  the  same
continued to be valid and subsisting to entitle the selected candidates
or any one of them to a mandamus directing the competent authority
to make  an  appointment  on  the  basis thereof.  We  must regretfully
say  that  although  repeated  rounds  of  litigation  have  engaged  the
attention of the High Court, the High Court has not adverted to the
question whether  a panel was indeed prepared  and published. It is
only  in  its  order  dated  27
th
 July,  2009  passed  in  W.P.  No.5866  of
2009  that  Dipankar  Datta,  J.  has  noticed  the  non-preparation  andPage 7
publication of such a panel and clearly held that since the panel has
not  been  published,  no  recommendation  or  appointment  could  be
claimed by any one  of the  candidates  competing for the  same.  We
need  hardly emphasise  that  preparation  and  publication  of  a  panel
was the least which any candidate seeking appointment on the basis
thereof  was  required  to  establish.  We  repeatedly  asked  Mr.  Dhruv
Mehta,  learned  senior counsel appearing  for Mr.  Arvind Kumar  Rai,
the contesting respondent whether any such panel was ever prepared
and published as it ought to be, having regard to the very nature of
the procedure prescribed under the Regulations mentioned above. To
the credit of Mr. Mehta, we must say that he fairly conceded that no
such  panel  was  ever  published.   Not  only  that,  Mr.  Mehta  did  not
dispute the proposition, and in our opinion rightly so, that publication
of such a panel was absolutely essential not only because the entire
process was regulated by statutory regulations but also because the
publication was essential in the interest of transparency and probity
in matters concerning appointments to offices under the State and in
matters affecting rights of the citizens in discharge of governmental
functions.
11. We may at this stage refer to a decision of this Court in State
of Andhra Pradesh & Ors. v. D. Dastagiri & Ors., (2003) 5 SCC
373.  In  that  case  although  the  State  Government  had  notified thePage 8
vacancies  and  the  process  of  recruitment  had  been  initiated,  the
results of  the  interviews thus  conducted  were  not  declared  and  no
select list was published. The recruitment process was subsequently
cancelled. The  respondent  candidates  filed writ petitions before  the
High Court seeking a mandamus directing the appellants to appoint
them, which were allowed. However, this Court allowed the appeals
against the High Court’s order, observing:
“4. In the counter-affidavit filed on behalf of the respondents
… it is stated that the process of selection was cancelled at the
last stage i.e. before publishing the list of selected candidates
on  the  sole  ground  that  the  State  Government  wasted  to
introduce prohibition and obviously the Government  felt  that
there was no need  of Excise Constables during imposition of
prohibition  in  the  State.  There  is  serious  dispute  as  to  the
completion  of  the  selection  process.  According  to  the
appellants, the selection process was not complete. No record
has been placed before us to show that the selection process
was complete, but, it is not disputed that  the select list was
not  published.  In  para  16  of  the  counter  affidavit,  referred
above,  the  respondents  themselves  had  admitted  that  the
selection  process  was  cancelled  at  the  last  stage.  In  the
absence of publication  of select  list, we are inclined  to think
that  the  selection  process  was  not  complete.  Be  that  as  it
may,  even  if  the  selection  process  was  complete  and
assuming that only select list remained to be published, that
does not advance the case of the respondents for the simple
reason that even the candidates who are selected and whose
names find place in the select list, do not get vested right to
claim appointment based on the select list…”
(emphasis supplied)
12. We  too  have  at  hand  a  situation  where  no  panel,  as  is
envisaged  under  the  provisions  of  the  regulations,  ever  came  into
existence. That being so, the question of determining the life of thePage 9
panel by excluding the period during which there was an interim stay
in accordance with the order of Dipankar Datta, J. in its order dated
12
th
 March,  2009  did  not  arise.  It  follows  that  the  claim  made  by
respondent-Arvind Kumar Rai for appointment on the basis of such a
non-existent panel was untenable as the  panel itself was still born.
We  need  not  burden  this judgment  by referring to  the  decisions of
this  Court  in  which  this  Court  has  repeatedly  held  that  the
preparation  of a  select  list or a  panel  does not  by itself entitle  the
candidate  whose  name  figures  in  such  a  list/panel  to  seek  an
appointment or claim a mandamus. No vested right is created by the
inclusion of the name of a candidate in any such panel which can for
good  and  valid  reasons  be  scrapped  by  the  competent  authority
alongwith the  entire  process that culminated in  the  preparation of
such a panel.
13. In Shankarsan Dash v.  Union of India, (1991) 3 SCC 47
a Constitution Bench of this Court was examining whether candidates
declared successful in a selection process acquire an indefeasible right
to get appointed against available vacancies. The contention that they
do acquire such a right was repelled in the following words:
“7.  It is not correct to say that if a number of vacancies are
notified for appointment  and adequate number of candidates
are found fit, the successful candidates acquire an indefeasible
right  to  be  appointed  which  cannot  be  legitimately  denied.
Ordinarily the notification merely amounts to an invitation to
qualified  candidates  to  apply  for  recruitment  and  on  their
selection they do not acquire any right to the post. Unless thePage 10
relevant  recruitment  rules so indicate,  the State  is under  no
legal  duty  to  fill  up  all  or any  of  the  vacancies. However,  it
does not mean that the State has the licence of acting in an
arbitrary manner. The decision not to fill up the vacancies has
to  be  taken  bona  fide  for  appropriate  reasons.  And  if  the
vacancies or any of them are filled up, the State is bound to
respect the comparative merit of the candidates, as reflected
at  the  recruitment  test,  and  no  discrimination  can  be
permitted.”
(emphasis supplied)
14. Above decision has been followed in a long line of subsequent
decisions  of  this  Court  including  those  rendered  in  Punjab  State
Electricity Board v. Malkiat Singh, (2005) 9 SCC 22; State of
Bihar  &  Ors.  v.  Secretariat  Assistant  Successful  Examinees
Union & Ors., (1994) 1 SCC 126; Director, SCTI for Medicine
Science and Technology v. M. Pushkaran, (2007) 12 SCC 465;
Union of India v. Kali Dass Batish, (2006) 1 SCC 779 [which is a
three Judge Bench decision].
15. In  Rakhi Ray & Ors. v. The High Court of Delhi, (2010) 2
SCC 637, a three-Judge Bench of this Court held:
“…  A person whose name appears in  the select list does not
acquire  any  indefeasible  right  of  appointment.  Empanelment
at  the  best  is  a  condition  of  eligibility  for  purpose  of
appointment  and  by  itself  does  not  amount  to  selection  or
create a vested right to be appointed. The vacancies have to
be filled up as per the statutory rules and in conformity with
the constitutional mandate….”
16. Following  the  decision  in  Shankarsan  Dass case (supra),  this
Court in State of Orissa & Anr. v. Rajkishore Nanda & Ors.,  2010
(6) SCALE 126 held:Page 11
“A  person  whose  name  appears  in  the  select  list  does  not
acquire  any  indefeasible right of  appointment.  Empanelment
at  the  best  is  a  condition  of  eligibility  for  purpose  of
appointment  and  by  itself  does  not  amount  to  selection  or
create a vested right to be appointed. The vacancies have to
be filled up as per the statutory rules and in conformity with
the constitutional mandate.”
17. Even  assuming  the  preparation  of  a  panel  gave  rise  to  any
such  right,  since  no  panel  had  actually  ever  been  prepared  and
published nor has the same been produced before the High Court or
before us, we have no hesitation in holding that the direction issued
to  the  Commission  to  act  on  the  basis  of  the  panel  was  wholly
unjustified and unsustainable. The view taken by Dipankar Datta, J.
in his order dated 27th July, 2009 that considerable time had expired
since  the  selection  process  was  initiated  and  that  other  candidates
who  may have  in  the  meantime  become  qualified  for  consideration
may be deprived of the right to compete was a reason enough for the
High Court to decline a mandamus. In the facts and circumstances of
the  case,  the  Division  Bench  of  the  High  Court,  in  our  view,
committed an error in upsetting that direction.  We also see no real
conflict  between  the  orders  passed  by  Dipankar  Datta,  J.  on  12th
March,  2009  and  that  passed  on  27th July  2009,  inasmuch  as  the
question of the adding to the life of the panel the period during which
there was a stay would arise only if there was a panel drawn in terms
of the Regulations.
18. We were informed by the parties that the respondent No.1 has
Page 12
been appointed as Headmaster during the pendency of the litigation
at  the  pain  of  contempt  proceedings  against  the  parties.  That
appointment  has  come  sometime  in  September  2010.  Since,  the
order passed which appears to have culminated in the making of the
appointment  is being  set  aside,  the  question  is whether  we  should
direct  immediate  removal  of  the  respondent  or  continuance  of  the
arrangement  till  such  time  fresh  selection  process  is  initiated  and
completed in accordance with law.  In our opinion, not only because
the  respondent  has  been  holding  the  post  for  two  years,  but  also
because  his  removal  would  not  immediately  result  in  any  benefit
either to the institution or to the appellant before us, we, therefore,
permit him to continue holding the post but only till such time a fresh
selection is made against the vacancy.
19. In the result, we allow this appeal, set aside the order passed
by the Division Bench and affirm that passed by Dipankar Datta, J.
dated 27
th
 July, 2009 with the above direction.  We make it clear that
the respondent No.1 shall be entitled to all the monetary benefits for
the period during which he actually works as the Headmaster of the
school. The  fact  that  he  so  works  would  not,  however,  create  any
equity in his favour nor constitute an additional weightage in the new
selection process. 
20. Parties are directed to bear their own costs.Page 13
                                                             
               ……..………….……….
…..…J.
         (T.S. Thakur)
      …………………………..…..…J.
             (M.Y. Eqbal)
New Delhi,
February 13, 2013