-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (LODGING) NO. 1636 OF 2005 The State of Maharashtra, ) through the Additional Chief Secretary (Services) ) General Administration Department, Mantralaya, ) Mumbai-400 032. )..Petitioner Versus 1. Vinay Mohan Lal, ) 31, Yashodhan, Dinshaw Vacha Road, ) Mumbai-400 032. ) 2. Union of India, through the Secretary, ) Department of Personnel and Training, ) North Block, New Delhi-11. ) 3. Principal Secretary (Services), ) General Administration Department, ) Mantralaya, Mumbai-400 032. ) 4. Mr. Vilasrao Deshmukh, ) Chief Minister, Maharashtra State, ) Mantralaya, Mumbai-32. ) 5. Mr. Satish Tripathi, I.A.S. Secretary, ) Food and Civil Supplies, Govt. of Mahasrashtra, ) Mumbai-400 032. ) 6. Principal Secretary, ) Urban Development Department, ) Mantralaya, Mumbai-32. ).. Respondents. -2- Mr.Ravi Kadam, Advocate General, with Mr. R.M. Sawant, Government Pleader, and Mr. Vijay Masurkar for the petitioner. Mr. J.P. Cama, Senior Advocate, Mr. R. Shetty and Mr. S.V. Marne for respondent No.1. None for respondent No.2. Mr. I.M. Chagla, Senior Advocate, with Mr. Nitin P. Deshpande, Assistant Government Pleader, for respondent No.4. CORAM: DALVEER BHANDARI, C.J. & DR. D.Y. CHANDRACHUD, J. DATE: JULY 04, 2005. ORAL JUDGMENT (Per Dalveer Bhandari, C.J. ) 1. On the oral request of the learned Advocate General, (i) respondent Nos. 3 and 6 are transposed as petitioner Nos. 2 and 3, and (ii) respondent No.5 is deleted from the array of parties. 2. Rule . Rule is made returnable forthwith. With the consent of parties, the writ petition is taken up for hearing and final disposal forthwith. 3. This petition has been preferred by the State of Maharashtra against the orders dated 1st June, 2005 and 17th June, 2005 passed by the -3- Central Administrative Tribunal, Bombay Branch (“the Tribunal” for short), in Original Application No. 293 of 2005. 4. Respondent No.1, who was holding the post of Chairman, Third Maharashtra Finance Commission, has been transferred as Managing Director of MAFCO. The grievance of the petitioner is that the transfer is an incident and essential condition of service and the order of transfer could not be interfered with by the Tribunal, except in extremely exceptional circumstances. The grievance of the petitioner- State is that the order dated 1st June, 2005 staying the transfer of respondent No. 1 was an ex-parte order. The petitioner-State submitted that the order of transfer is passed on 24th May, 2005 and respondent No.1 filed an application before the Tribunal for quashing the transfer order on 30th May, 2005, which came up for hearing on 1st June, 2005, and on that day itself, the Tribunal stayed the transfer order. The Tribunal did not deem it necessary even to give one day's notice before staying the transfer order, particularly when the respondent-State is in Mumbai itself. The ad-interim ex-parte order granted by the Tribunal was confirmed by the Tribunal by its order dated 17th June, 2005. 5. The petitioner-State before the Tribunal filed reply affidavits on behalf -4- of respondent Nos. 3 and 6, in which it is clearly stated that transfer is an incident of service and is made according to administrative exigencies. It is also incorporated in the affidavit that there is no mala fide intention in the transfer of respondent No.1 nor is there any breach of the prescribed rules. The transfer order has been passed in accordance with law. In the affidavit it was also mentioned that posting of respondent No.1 as Managing Director, MAFCO, does not in any manner affect the service conditions of respondent No.1, that is, year of allotment, promotion, status, pay or otherwise. It is also incorporated that respondent No.1 does not have any right to insist on being posted to any particular post. It is also denied that the transfer order is actuated by any malice. It is also indicated in the affidavit that the Government could have transferred respondent No.1 from the post of Vice-Chairman/Managing Director, City & Industrial Development Corporation of Maharashtra Ltd. (for short “CIDCO”), to some other insignificant post instead of very important post of Chairman, Third Maharashtra Finance Commission, had there been any mala fide against him. It is also stated that allegations of mala fide against the Government as well as against respondent No.4 are far-fetched and imaginary and the same were specifically denied. 6. It is mentioned in the affidavit that respondent No.1 was posted as -5- Chairman of the Third Maharashtra Finance Commission. In the meantime, a discreet preliminary enquiry was ordered to investigate the allotment of land/plots in violation of rules and policies during the tenure of respondent No.1. Dr. D.K. Sankaran, ACS, Planning Department, was directed to conduct the preliminary inquiry by the Chief Secretary. He submitted his detailed report in three volumes on 31st March, 2005 to the Government in which he found that there is huge financial loss to CIDCO to the tune of Rs. 347 crores on account of irregularity in allotment of plots/land during respondent No.1's tenure as Chairman of CIDCO. The report clearly indicates the role of respondent No.1 in allotment of plots as Chairperson of CIDCO:- (i) Arbitrariness and undue haste, (ii) Misleading the CIDCO Board of Directors by concealment of facts, (iii) High handedness, i.e., ignoring the advice given by subordinate officers on departure from procedures and laid down rules and caution expressed about loss being accrued to CIDCO, (iv) Criminal intention to put CIDCO to financial loss by allotting lands at highly concessional prices after forming -6- nexus with builders and private persons. 7. After considering the report of Dr. D.K.Sankaran, the Government decided to initiate disciplinary proceedings against respondent No.1 under the provisions of AIS (D &A) Rules, 1969, and accordingly a charge-sheet has been issued to him on 2nd June, 2005. 8. Mr. Ravi Kadam, the learned Advocate General appearing for the State, submitted that after receiving the report of Dr. Sankaran, the Government did not think it appropriate that with such serious allegations of irregularities, respondent No.1 should be allowed to continue in a very sensitive and important post as Chairman of the Third Maharashtra Finance Commission. That was the main reason why the transfer order was passed. 9. The learned Advocate General submitted that the Tribunal gravely erred in passing the ex parte stay order in a matter of this nature. He submitted that the grant of interim order by the Tribunal is governed by Section 24 of the Administrative Tribunals Act, 1985 (hereinafter referred to as “the Act”). Section 24 of the Act is reproduced as under:- -7- “24. Conditions as to making of interim orders.- Notwithstanding anything contained in any other provisions of this Act or in any other law for the time being in force, no interim order (whether by way of injunction or stay or in any other manner) shall be made on, or in any proceedings relating to, an application unless - (a) copies of such application and of all documents in support of the plea for such interim order are furnished to the party against whom such application is made or proposed to be made; and (b) opportunity is given to such party to be heard in the matter. Provided that a Tribunal may dispense with the requirements of clauses (a) and (b) and make an interim order as an exceptional measure if it is satisfied, for reasons to be recorded in writing, that it is necessary so to do for preventing any loss being caused to the applicant which cannot be adequately compensated in money but any such interim order shall, if it is not sooner vacated, cease to have effect on the expiry of a period of fourteen days from the date on which it is made unless the said requirements have been complied with before the expiry of that period and the Tribunal has continued the operation of the interim order.” 10.It is the mandate of the statute that no interim order shall be made on, or in any proceedings relating to, an application unless copies of such application and of all documents in support of the plea for such interim order are furnished to the party against whom such application is made or proposed to be made; and opportunity is given to such party to be heard in the matter. Admittedly, the order staying the -8- transfer of respondent No. 1 is an ex parte order. The Tribunal, of course, in exceptional circumstances, may dispense with the requirement of clauses (a) and (b) and make an interim order as an exceptional measure if it is satisfied, for reasons to be recorded in writing, that it is necessary so to do for preventing any loss being caused to the applicant which cannot be adequately compensated in money. The Tribunal has not recorded any reasons in its order, as required by Section 24 of the Act. The learned Advocate General submitted that orders of the Tribunal dated 1st June, 2005 and 17th June, 2005 are contrary to the statutory provision and the settled position of law, as has been crystallised in number of judgments of the Apex Court and this Court. We would like to recapitulate the ratio of some of the judgments of the Apex Court and then determine whether the impugned order staying the transfer order is in consonance with the settled position of law. 11.The learned Advocate General placed reliance on the leading case of the Apex Court, Public Services Tribunal Bar Association vs. State of U.P. and another [(2003) 4 SCC 104] and has particularly drawn our attention to paragraphs 37 and 38 of the judgment in which Their Lordships of the Supreme Court have observed that “transfer is an -9- incident of service and is made according to the administrative exigencies. Normally it is not to be interfered with by the Court. This Court consistently has been taking a view that orders of transfer should not be interfered with except in rare cases where the transfer has been made in a vindictive manner”. The Court further held in paragraph 38 that the Apex Court has “consistently been of the view that by way of an interim order, the order of suspension, termination, dismissal and transfer etc. should not be stayed during the pendency of the proceedings in the Court.” 12.Mr. Chagla, learned Senior Counsel appearing on behalf of respondent No.4, while supporting the petitioner also placed reliance on this judgment. He invited our attention to the observation of the Court regarding illegal usurpation of the office. It was submitted that if the order of dismissal, removal, termination and compulsory retirement is set aside, then an employee can be compensated by moulding the relief appropriately in terms of arrears of salary, promotions which may have become due or otherwise compensating him in some other way. But in case the order of dismissal, removal, termination and compulsory retirement is found to be justified then holding of the office during the operation of the interim order would -10- amount to usurpation of an office which the employee was not entitled to hold. The action becomes irreversible as the salary paid to the employee cannot be taken away as he has worked during that period and the order passed by him during the period he holds office cannot also be put at naught. 13.The learned Advocate General also placed reliance on Union of India and others vs. Janardhan Debanath and another [(2004) 4 SCC 245]. In this case also, the Apex Court held that whether an employee could be transferred to a different division is a matter for the employer to consider depending upon the administrative necessities and the extent of solution for the problems faced by the administration. It was held even by the Supreme Court that in such matters, it is not for the Supreme Court to direct one way or the other. 14.The learned Advocate General has also placed reliance on State of U.P. and others vs. Gobardhan Lal [(2004) 11 SCC 402]. The Apex Court in this case has observed that the order of transfer made even in transgression of administrative guidelines cannot also be interfered with, as they do not confer any legally enforceable rights, unless, as noticed above, shown to be vitiated by mala fides or is made in -11- violation of any statutory provision. A challenge to an order of transfer should normally be eschewed and should not be countenanced by the courts or tribunals as though they are Appellate Authorities over such orders, which could assess the niceties of the administrative needs and requirements of the situation concerned. It is for this reason that the Courts or the Tribunals cannot substitute their own decisions in the matter of transfer for that of competent authorities of the State and even allegations of mala fides when made must be such as to inspire confidence in the court or be based on concrete materials and ought not to be entertained on the mere making of it or on consideration borne out of conjectures or surmises and except for strong and convincing reasons, no interference could ordinarily be made with an order of transfer. 15.The Supreme Court in another case of Kendriya Vidyala Sangathan vs. Damodar Prasad Pandey and Ors. [2004 (8) SCALE 188] has reiterated the position that transfer which is an incidence of service is not to be interfered with by the Courts unless it is shown to be clearly arbitrary or visited by mala fide or infraction of any prescribed norms of principles governing the transfer. -12- 16.Reliance has also been placed on State of U.P. and another vs. V.N. Prasad (Dr.) [ 1995 Supp (2) SCC 151]. In this case the Supreme Court observed that at the stage at which the matter was brought to engage the attention of the High Court, there was no prima facie material to establish any mala fides which required strong and convincing evidence. The presumption is in favour of bona fides of the order unless contradicted by acceptable material. 17. In another leading case of N.K. Singh vs. Union of India and Ors. [(1994) 6 SCC 98], the appellant, an IPS Officer of the State cadre of Orissa was transferred from the post of Joint Director, Central Bureau of Investigation, to the Border Security Force, both of which are Central Police organisations. Apart from mala fides, the appellant submitted that transfer was not in public interest. The main grievance of the appellant was that the appellant has been eased out of the sensitive post in CBI as in-charge of the Special Investigation Group investigating into the St. Kitt's affair wherein there were allegations of forgery of some documents and of involvement in that forgery of some persons having political patronage, because of his impeccable reputation as an officer beyond approach. On this basis the transfer of the appellant from CBI to BSF was challenged on the ground of -13- mala fides attributed mainly to the then Prime Minister of India, Respondent No.2, Shri Chandrashekhar. It was further alleged that the appellant's transfer from the CBI is prejudicial to public interest since it is with a view to scuttle the sensitive investigation. The Apex Court came to the conclusion that mere suspicion or likelihood of some prejudice to public interest is not enough and there must be strong unimpeachable evidence to prove definite substantial prejudice to public interest to make it a vitiating factor in an appropriate case unless it is justified on the ground of larger public interest and exigencies of administration. 18. In the case of Union of India and Ors. vs. H.N. Kirtania [(1989) 3 SCC 445], the Apex Court had taken the view that the transfer of a public servant made on administrative grounds or in public interest should not be interfered with unless there are strong and pressing grounds rendering the transfer order illegal on the ground of violation of statutory rules or on ground of mala fides. 19. We have made reference to the aforementioned cases in order to crystallise the legal position and the limited scope which the Tribunals and Courts have in matters of transfer. According to the learned -14- Advocate General, in the light of aforesaid decisions, the Tribunal was not justified in passing the orders dated 1st June, 2005 and 17th June, 2005. 20.Reverting to the facts of this case, the learned Advocate General submitted that the Maharashtra Finance Commission Act does not specify any tenure. The Government has the discretion. In the instant case, respondent No.1 was granted tenure up to 31st December, 2005. According to the learned Advocate General, the Governor who has the power to appoint respondent No.1 has also power to curtail his tenure and appoint someone else. In the instant case, Mr. Satish Tripathi has been appointed in place of respondent No.1. 21.The learned Advocate General referred to the allegation of respondent No.1 regarding mala fides. It is mentioned by respondent No.1 that respondent No.4 was the Chief Minister from October, 1999 to January, 2003 and he was again elected to the said office on 1st November, 2004. During that period, respondent No.1 had incurred his displeasure while working as Principal Secretary, Housing, by raising certain questions on a proposal of slum re-development -15- scheme. No details whatsoever have been mentioned by respondent No.1 in support of this allegation. This allegation is vague and general in nature. 22. Respondent No.1 also mentioned that when he was working as Vice-Chairman and Managing Director, CIDCO, a proposal for allotment of a plot of land for setting up a newspaper printing press to the son of respondent No.4 could not be approved or got approved by him or by the Board of Directors of CIDCO as it was neither regular nor within their powers to do so. Because of this reason, respondent No. 4 felt offended. This has been specifically denied by the State. Respondent No.4 has also filed separate affidavit before the Tribunal in which it is mentioned that the allegation made is entirely false and baseless. CIDCO had alloted a plot of land for setting up of a printing press to M/s. Amit Publications Pvt. Ltd. in Navi Mumbai area. At the time of allotment, certain conditions were imposed which were not complied with by the said M/s.Amit Publication Pvt. Ltd. as a result of which the allotment stood terminated. Thereafter, the Board of Directors of CIDCO reconsidered the case of allotment of plot to said M/s. Amit Publication Pvt. Ltd. It appears that a proposal was sent to the -16- Government for considering allotment of land to Amit Publications at a time when respondent No.1 was the Vice-Chairman and Managing Director of CIDCO. However, before the Government could consider the proposal, this Court by its order dated 29th April, 2004 in Writ Petition (Lodging) No. 115 of 2004, ruled out the said allotment along with four other allotments. Thus, respondent No.4 was in no manner responsible for either the cancellation of allotment to Amit Publications or the failure to reallot. 23.Respondent No.1 also levelled allegations regarding imposition of penalty on Manjra Charitable Educational Trust. According to respondent No.1, respondent No.4 had close connection with the said trust. In the reply submitted by respondent No.4, the allegation regarding Manjra Charitable Educational Trust is without any basis or foundation. It is mentioned that the Trust is an independent legal entity and the issue as regards imposition of penalty on the said trust cannot be any basis for alleging mala fides against respondent No.4. 24.Mr. Chagla, learned Senior Counsel appearing for respondent No.4, reiterated that the burden of establishing mala fides is very heavy on -17- the person who alleges it and unless he is able to discharge that burden, the Court would not be justified in staying the transfer. Respondent No.1 has not discharged that burden. The allegations levelled by respondent No.1 are totally baseless and without foundation. Respondent No.1 has not been able to establish how respondent No.4 was in any manner responsible for all the allegations levelled by respondent No.1 against respondent No.4. He submitted that the legal position is clear and consistent that in order to place any reliance on such mala fide, there has to be a very high degree of proof. In the instant case, respondent No.1 has made reckless allegations without any proof, and the Tribunal was not justified in placing any reliance on those allegations. 25.In support of his submission, Mr. Chagla has placed reliance on a Constitution Bench judgement of the Supreme Court in the case of E.P. Royappa vs. State of Tamil Nadu and another [(1974) 4 SCC 3]. The basic principles have been crystallised by the Apex Court in the matter of transfers. In the concurring judgement, Bhagwati, J., observed that the petitioner who was Chief Secretary to the Government, State of Tamil Nadu, was on account of various incidents which occurred in the course of administration transferred from the said post. The incidents referred to by the petitioner -18- constituted gross acts of maladministration and the charge levelled against the second respondent therein was that because the petitioner in the course of his duties obstructed and thwarted the second respondent in the acts of maladministration, that the second respondent was annoyed with him and it was with a view to putting him out of the way and at the same time deflating him that the petitioner was transferred from the post of Chief Secretary. The transfer of the petitioner was, therefore, in mala fide exercise of power and accordingly invalid. 26.The Constitution Bench of the Apex Court laid down that the Court must not overlook that the burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demands proof of a high order of credibility. Here the petitioner, who was himself once the Chief Secretary, has flung a series of charges of oblique conduct against the Chief Minister. The Supreme Court held that that is in itself a rather extraordinary and unusual occurrence and if these charges are true, they are bound to shake the confidence of the people in the political custodians of power in the State and, therefore, the anxiety of the Court should be all the -19- greater to insist on a high degree of proof. In this context, it was held that it may be noted that top administrators are often required to do acts which affect others adversely but which are necessary in the execution of their duties. These acts may lend themselves to misconstruction and suspicion as to the bona fides of their author when the full facts and surrounding circumstances are not known. The Court, therefore, be slow to draw dubious inferences from incomplete facts placed before it by a party, particularly when the imputations are grave and they are made against the holder of an office which has a high responsibility in the administration. Such is the judicial perspective in evaluating charges of unworthy conduct against ministers and other high authorities, not because of any special status which they are supposed to enjoy, nor because they are highly placed in social life or administrative set up. These considerations are wholly irrelevant in judicial approach but because otherwise, functioning effectively would become difficult in our democracy. It is from this stand point that we must assess the merits of the allegations of mala fides made by the petitioner against the second respondent. 27.The facts of the instant case are akin to the facts of the -20- aforementioned case because in the instant case, allegations have been levelled by respondent No.1, who was the Chairman of Third Maharashtra Finance Commission against the Chief Minister. Mr. Chagla has supported the learned Advocate General and reiterated that transfer is an incident of service and unless it is against the statutory rules or grave mala fides, it should not be interfered. He submitted that the Tribunal has gravely