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Petitioner: INCOME TAX APPELLATE TRIBUNAL VS Respondent: V. K. AGARWAL and another
Court Name: Supreme Court of India Judge(s): G. B. Pattanaik, Mrs. Sujata V. Manohar Title: INCOME TAX APPELLATE TRIBUNAL vs V. K. AGARWAL and another Case No.: Petition No,287 of 1998 Case No,6 of 1997 Date of Judgment:1998-11-17 Reported As: 1999 PTD 2218 Result: Order accordingly
JUDGMENT
JUDGMENT ' MRS. SUJATA V. MANOHAR, J.---A public interest Writ Petition No,2350 of 1996 was filed in the Bombay High Court by the Income-tax Appellate Tribunal Bar Association through its Secretary challenging the validity of a letter dated November 5, 1996, purporting to modify the powers of the President of the Income-tax Appellate Tribunal regarding posting and transfer of members of the Income-tax Appellate Tribunal. The petitioners contended that they were interested in fair and impartial administration of the income-tax law and in upholding the independent working of the Income-tax Appellate Tribunal, the rule of law and independence of the Income-tax judiciary. By an interim order, the High Court restrained the Under Secretary, Ministry of Law, Government of India, and the Union of India who were respondents Nos.1 and 2 therein from interfering with the powers of the President of the Income-tax Appellate Tribunal to assign work to any member, to constitute Benches and to require a member to sit on any Bench wherever situate, and for such duration, as he may deem necessary. This petition was transferred to this Court. This Court by its order, dated March 31, 1997, confirmed the interim order passed by the High Court. Another similar petition filed before the High Court of Andhra Pradesh was also transferred to this Court. Both these petitions are pending. ' In the pending petitions, the present application is being made by the Income-tax Appellate Tribunal through its President. The occasion for making this application has arisen on account of an order dated October 23, 1997, passed by a Bench of the Income-tax Appellate Tribunal consisting of two members, one judicial and one accountant. The said order was passed in the case of Smt. Neerja Birla v. Asst. CIT for the assessment year 1992-93. As a result of the said order,
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the assessee who claimed a benefit amounting to Rs,1,50,00,000 was denied that benefit by the Tribunal which decided the appeal in favour of the Revenue. ' Thereafter the President of the Tribunal received a letter dated December 30, 1997, from Shri V.K. Agarwal, who was then the Law Secretary, Ministry of Law and Justice, Government of India. In the letter, the then Law Secretary, who is the first respondent before us, referred to the decision of the Tribunal in the case of Neerja Birla v. Asst. CIT heard and decided by Shri R.V. Easwar, Judicial Member, and Shri M. V. R. Prasad, Accountant Member, sitting together. He observed that the Judicial Member dictated this judgment in this matter sometime in August, 1997, and duly corrected and signed it. However, a contrary order, dated October 23, 1997, was pronounced by the Accountant Member which was signed by both the members. Copies of both the "orders" were enclosed. The first respondent then went on to say, " Thus the two orders have taken a contradicting stand. The aforesaid circumstances disclose judicial impropriety of the highest degree. It is intriguing as to how two contradicting orders got dictated in the same matter by the two members, while one order is by the Judicial Member, the other is by the Accountant Member and signed by both. You may like to enquire into the matter and send a report to the Government with 10 days from the date of the receipt of this letter. You may also like to suggest the action that may be taken in the matter and the members against whom it may be taken. Further, while submitting the report, a copy of the 'file order sheet' indicating the name of the member to whom the case was allotted for writing the judgment may also please be sent to the Government." ' On receipt of this letter, the applicant addressed a letter dated January 7, 1998, to both the members of the said Bench enclosing a copy of the letter he had received from the first respondent, and requesting them to send their comments. Both the members have separately sent their replies to the applicant pointing out that the only order which was passed in the said case is the order dated October 23, 1997, which has been signed by both the members constituting the Bench on October 23, 1997. The Judicial Member has pointed out that after hearing the above case, he had prepared a draft order which was in favour of the assessee. When he sent the draft to the Accountant Member, the Accountant Member expressed his reservations of the views expressed in the draft order. Thereafter, both the members met and discussed the issues involved. At the end of the discussion, the Judicial Member agreed with the view taken by the Accountant Member and requested the Accountant Member to prepare an order on those lines. The Accountant Member thereafter sent a draft order signed by him to the Judicial Member. The Judicial Member fully agreed with the draft order sent by the Accountant Member, put his signature on the draft order and the final order dated October 23, 1997, was issued with both the signatures. Both have stated that there are no two orders. The so-called first order was only a draft prepared by the Judicial Member which was not agreed to by the Accountant Member and ultimately after discussion a new draft order was prepared by the Accountant Member which is signed by both the members on October 23, 1997. This was the only order which was issued and copies were sent to the assessee as well as to the Department. Both the members also expressed surprise and distress at a confidential document like a draft judicial order reaching the first respondent. ' Before the applicant could send any reply to the first respondent after ascertaining the views of the concerned members, on February 3, 1998, the first respondent wrote another letter to the applicant which is as follows: "Please refer to my D.O. Letter of even No, dated December 30, 1997, regarding the case of Smt. Neerja Birla v. Asst. CIT, Bombay, disposed of by a Bench consisting of Shri R. V. Easwar, Judicial Member and Shri M. V. R. Prasad. Accountant Member. ' The matter involved two contradicting orders being dictated in the same matter by the same Members constituting the Bench. You were requested to reply within 10 days of the receipt of the letter. In spite of this, I have not received any report from you in the matter even after a month.
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' You would appreciate that as President of the Tribunal you have the responsibility to ensure that the judicial functions of the Tribunal are discharged by its Members properly and in a manner conducive to instilling confidence in the minds of the taxpayers. The irregularity pointed of t in in) letter relates to a Bench which is functioning at Mumbai, where you, as tit( head of the Tribunal, have your regular headquarters. Under tilt circumstances, silence on your part may invite adverse inferences in the matter. ' It is, therefore, requested that your report in the matter may be sent to the Government without further delay and in any case not later than February 6, 1998. In case no report is received from you by that date, it will be presumed that you have nothing to say in the matter and Government will be constrained to take such action in the matter as may be deemed fit according to law. ' This may please be accorded top priority. With kind regards, ' Yours faithfully, ' (Sd.) Dr. V. K. Agarwal. ' Shri T. V. Rajagopala Rao, ' President, ITAT ' 101, Old DGO Bldg., M. K. Marg, ' Mumbai-400 020." ' The applicant replied to this letter by his letter of February 6, 1998, in which he pointed out that there was no impropriety in the passing of the order by the Members of the Income-tax Appellate Tribunal in the matter of Smt. Neerja Birla v. Asst. CIT. He went on to state that the applicant's (sic) letter amounted to gross interference in the judicial functioning of the Tribunal, and he had no authority to do so. The applicant also stated that the contents of the first respondent's letter pertaining to himself smacked of vindictiveness. The applicant has viewed the letters as serious interference with the administration of justice particularly in the context of the pending petitions. Thereafter, the present application has been filed. ' A. K. Sonik, Deputy Secretary in the Department of Legal Affairs, Ministry of Law and Justice, has also been made a party-respondent in this application because of the letter dated December 29, 1997, received from the Deputy Secretary just before the letter from the first respondent dated December 30, 1997. In the letter of December 29, 1997, the applicant was told that on a perusal of the summary statement showing institution, disposal and pendency of appeals before the Tribunal during the month of October, 1997, it appears that disposal has considerably gone down during the month of October, 1997, and the applicant should look into the matter and send a report on the reasons for this. According to the applicant, the disposals were within the norms, but were less than the previous month. And the letter was merely to intimidate him. The second respondent has, in his affidavit, stated that this letter was issued on the instructions of the first respondent and the letter was handled by the first respondent directly. In view of the statements made in his affidavit by the second' respondent, the applicant has not pressed the application against the second respondent. ' In the application, the applicant has requested this Court to issue a show-cause notice to the first respondent why action should not be taken against him in contempt, inter alia, for interfering with judicial functioning of the Tribunal. He has also prayed for a direction to the first respondent not to interfere in any manner with the independent judicial functioning of the Income-tax Appellate Tribunal. On the basis of this application, this Court issued a suo motu contempt notice to both the respondents. Since the application is not being pressed against the second respondent in view of his explanation for the letter of December 29, 1997, we have to examine the conduct of the first respondent who was, at the material time, the Law Secretary in the Ministry of Law and Justice. Undoubtedly, in the application before us it was also contended that the two letters can be looked upon as interference with the interim orders of this Court, dated March 31, 1997, and May 9, 1997, in the pending petitions. This would then amount to civil contempt. But the basic charge is
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interference with the judicial functioning of the Tribunal: The prayer in this petition was amended after it was filed to make it clear that the grievance related to interference with administration of jttstice. The respondents at their request were given sufficient time to reply to the charge of criminal contempt. There can, therefore, be no grievance on this score. ' Before examining the conduct of the first respondent, we would like to deal with the technical objections which were raised before us on behalf of the first respondent. The first respondent had initially contended that the Income-tax Appellate Tribunal was not a Court, and was also not a Court subordinate to the Supreme Court. Hence, the Supreme Court had no jurisdiction to issue a suo motu notice of contempt in respect of a matter pertaining to the Income-tax Appellate Tribunal. However, subsequently, learned senior counsel for the first respondent conceded that the Income-tax Appellate Tribunal did perform judicial functions and was a Court subordinate to the High Court. Hence, there is no need to examine any further, the contention that the said Tribunal is not a Court. ' Article 129 of the Constitution provides that the Supreme Court shall be a Court of record and shall have all the powers of such a Court including the power to punish for contempt of itself. This Article has come up for consideration on numerous occasions. This Court has consistently held that the Supreme Court has power under this Article to punish, not merely for contempt of itself, but also for contempt of all Courts and Tribunals subordinate to it. In the case of Delhi Judicial Service Association, Tis Hazari Court, Delhi v. State of Gujarat AIR 1991 SC 2176; (1991) 3 SCR 936, this Court examined at length the power of this Court under Article 129 to punish for contempt. This Court first examined the jurisdiction of the Supreme Court and held (at page 970 and page 2194 of AIR 1991 SC): "There is therefore no room for any doubt that this Court has wide power to interfere and correct the judgment and orders passed by any Court or Tribunal in the country. In addition to the appellate power, the Court has special residuary power to entertain appeal against any order of any Court in the country. The plenary jurisdiction of this Court to grant leave and hear appeals against any order of a Court or Tribunal confers power of judicial superintendence over all the Courts and Tribunals in the territory of India including subordinate Courts of Magistrate and District Judge. This Court has, therefore, supervisory jurisdiction over all Courts in India." Examining the powers of a Court of record, it came to the conclusion that a Court of record has inherent power to punish for contempt of all Courts and Tribunals subordinate to it in order to protect these subordinate Courts and Tribunals. This power to protect is founded on the inherent power of a Court of record to correct the judicial orders of subordinate Courts. This Court further observed, (pages 976-977-979 and pages 2197 and 2199 of AIR 1991 SC): "The Supreme Court being a Court of record under Article 129 and having wide power of judicial supervision over all the Courts in the country must possess and exercise similar jurisdiction and power as the High Courts had prior to contempt Legislation in 1926. Inherent powers of a superior Court of record have remained unaffected even after codification of contempt of law. . . . Article 129 declares the Supreme Court a Court of record and it further provides that the Supreme Court shall have all the powers of such a Court including the power to punish for contempt of itself. The expression used in Article 129 is not restrictive, instead it is extensive in nature. If the framers of the Constitution intended that the Supreme Court shall have power to punish for contempt of itself only, there was no necessity for inserting the expression 'including the power to punish for contempt of itself'. The Article confers power on the Supreme Court to punish for contempt of itself and in addition, it confers some additional power relating to contempt as would appear from the expression 'including'. The expression 'including' has been interpreted by Courts to extend and widen the scope of power. The plain language of the Article clearly indicates that this Court as a Court of record has power to punish for contempt of itself and also something else which could fall within the inherent jurisdiction of a Court of record. In interpreting the Constitution, it is not permissible to adopt a
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construction which would render any expression superfluous or redundant. The Courts ought not to accept any such construction. While construing Article 129, it is not permissible to ignore the significance and impact of the inclusive power conferred on the Supreme Court. Since the Supreme Court is designed by the Constitution as a Court of record and as the founding Fathers were aware that a superior Court of record had inherent power to indict a person for the contempt of itself as well as of Courts inferior to it, the expression 'including' was deliberately inserted in the Article. Article 129 recognised the existing inherent power of a Court of record in its full plenitude including the power. To punish for the contempt of inferior Courts." ' This view was reiterated and reaffirmed in the case of In re: Vinay Chandra Mishra, In re: AIR 1995 SC 2348 and (1995) 2 SCR 584, where this Court affirmed the decision in Delhi Judicial Service Association Tis Hazari Court, Delhi v. State of Gujarat AIR 1991 SC 2176. After quoting extensively from the said judgment, this Court held that since this Court has the power of judicial superintendence and control over all the Courts and Tribunals functioning in the country, it has a corresponding duty to protect and safeguard the interests of inferior Courts to ensure that the flow of the stream of justice in the Courts remains unsullied by any interference or attack from any quarter. The amplitude of the power of this Court cannot be curtailed by a law made by the Central or a State Legislature. This Court's jurisdiction and power to take action for contempt of subordinate Courts is its inherent jurisdiction, and is protected under Article 129. Although the judgment in In re: Vinay Chandra Mishra AIR 1995 SC 2348 has been partially set aside in Supreme Court Bar Association v. Union of India AIR 1998 SC 1895; (1998) 4 SCC 409 on the question of power to suspend an Advocate's licence under contempt jurisdiction, this part of its basic reasoning is unaffected. In fact it is reaffirmed. There can, therefore, be no doubt that this Court has jurisdiction to punish for contempt of the Income-tax Appellate Tribunal. ' It was also submitted before us by learned senior counsel for the first respondent that although this Court may have 'jurisdiction to punish for contempt, that jurisdiction should not be exercised in the present case. The appropriate authority to take action would be the High Court. We do not see much force in this submission. The Income-tax Appellate Tribunal, although it may have Benches in different parts of the country, is a national Tribunal and its functioning affects the entire country and all its Benches. Appeals also lie ultimately to this Court from the decisions and references made by the Tribunal. The mere fact that by this Court taking suo motu cognizance of the contempt, the first respondent would not be able to appeal to any other Court cannot be a ground for not exercising the power to punish for contempt of a national Tribunal. ' In the present case, the President of the Tribunal has sought directions and orders from this Court and has placed all relevant information concerning the conduct of the first respondent before us, on the basis of which this Court has, suo motu, issued notice. Section 15 of the Contempt of Courts Act which deals with cognizance of criminal contempt, also prescribes that the Supreme Court or the High Court may take action on its own motion. Rule 3(a) of the Supreme Court Rules regulating proceedings for contempt of the Supreme Court, similarly provides for the Court taking action suo motu. In the case of Supreme Court Bar Association v. Union of India AIR 1995 SC 1895; (1998) 4 SCC 409, after reiterating the position that Article 129 vests the Supreme Court with power to punish not only for contempt for itself but also contains the inherent jurisdiction of the Court to punish for contempt of subordinate Courts and Tribunals in order to prevent interference in the due administration of justice, this Court also clarified the position of a party which brings the contumacious conduct of the contemnor to the notice of the Court. It said (page 429); that the party which brings such conduct to the notice of the Court, whether a private person or the subordinate Court, is only an informant and does not have the status of a litigant in the contempt of Court case. The case of contempt is not stricto sensu a cause or a matter between the parties, inter se. It is a matter between the Court and the contemnor.
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' Whenever an act adversely affects the administration of justice or tends to impede its course, or shake public confidence in a judicial institution, the power can be exercised to uphold the dignity of the Court of law and protect its proper functioning. It is in the light of these principles that one has to examine section 2(c) of the Contempt of Courts Act, 1971, Section 2(c) is as follows:--- "Section 2(c). 'Criminal contempt' means the publication (whether by words, spoken or written, or by signs, or by visible representations, or otherwise) of any matter or the doing of any other act whatsoever which--- (i) scandalises or tends to scandalise, or lowers or tends to lower the authority of any Court; or (ii) prejudices, or interferes or tends to interfere with, the due course of any judicial proceeding; or (iii) interferes or tends to .Interfere with, or obstructs or tends to obstruct, the administration of justice in any other manner." ' The definition of criminal contempt under section 2(c), therefore, refers not merely to publication by words, signs, etc., but includes the doing of any act whatsoever which scandalises or tends to scandalise or lowers or tends to lower the authority of any Court (section 2(c)(i)) or interferes or tends to interfere with, or obstructs or tends to obstruct, the administration of justice in any manner (section 2(c)(iii)). Therefore, any act which tends to interfere with the administration of justice or tends to lower the authority of any Court can be punished with contempt. ' In the present case, the President of the Income-tax Appellate Tribunal has considered the letters of December 30, 1997, and February 3, 1998, of the first respondent as interference with the judicial decision-making process of the Tribunal. The concerned members of the Tribunal from whom the President invited comments, also looked upon the letter of December 30, 1997, as gross interference in the judicial discharge of their duties; and they were justified in so viewing the letter. The first respondent had jumped to the conclusion that the Judicial Member had issued two contradictory orders or the Tribunal had issued two contradictory orders, and had demanded action against erring members. Coming as it did from a senior officer holding the rank of Law Secretary, the applicant was justified in taking a serious view of the first respondent's conduct. ' Learned senior counsel for the first respondent then contended that the two letters were written after the judgment was delivered by the Tribunal and, therefore, they should not be construed as interference with judicial decision-making. This contention is without any merit. It is quite clear that by writing the two letters the first respondent was questioning the judicial decision arrived at by the Tribunal. The first respondent had commented upon the two so-called "orders" and had said that the so-called contradictory orders disclosed judicial impropriety of the highest degree. He had demanded action against the Members of the Tribunal. Questioning of a decision given in a particular case, or the conduct of a Member of the Tribunal in deciding a case by the Law Secretary who has the power to write confidential reports of the Tribunal Members, is bound to be perceived by the Members as an attempt to affect their decision-making. It is a clear threat to their independent functioning. The letter also tends to undermine confidence in the judicial functioning of the Tribunal. ' In re: Hira Lal Dixit, AIR 1954 SC 743; (1955) 1 SCR 677, this Court observed that it was not necessary that there should be an actual interference with the course of administration of justice. It is enough if the offending act or publication tends in any way to so interfere. If there are insinuations made which are derogatory to the dignity of the Court and are calculated to undermine the confidence of the people in the integrity of the Judges, the conduct would amount to contempt. In the case of C. K. Daphtary v. Gupta (0.P.) AIR 1971 SC 1132; (1971) (Supp.) SCR 76, this Court negatived the contention that once the case is decided, even if the judgment is severely and even unfairly criticised, it should not be treated as contempt. The Court said, "we are unable to agree . . . That a scurrilous attack on a Judge in respect of a judgment or past conduct has no adverse effect on the due administration of justice. This sort of attack in a country like ours has the inevitable effect of
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undermining the confidence of the public in the judiciary. If confidence in the judiciary goes, the due administration of justice definitely suffers" (page 97 and page 1144 of AIR 1971 SC). ' Our attention was drawn to section 3 of the Contempt of Courts Act, 1971, which excludes innocent publications as specified in that section, published when the civil or criminal proceeding concerned is not pending, from the realm of contempt. The present case, however, deals with acts which lower the authority of a Court and tend to interfere with the administration…
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