M.A. RAHMAN Versus FEDERATION OF PAKISTAN

ZAFFAR HUSSAIN MIRZA, J. ‑‑This appeal by leave arises out of the judgment of the Federal Service Tribunal, Islamabad, dated 12th July, 1986, whereby an appeal filed by the appellant herein, under section 4 of the Service Tribunals Act, 1973, against the order of his dismissal from service was partly allowed qua the penalty imposed on the appellant, i.e. the Tribunal while confirming the finding of guilty recorded against the appellant in respect of one allegation, set aside the order of dismissal from service and instead the penalty of compulsorily retirement from service was substituted.

2. Briefly the facts leading to this appeal are that in the year 1978, information was received that one Haji Muhammad H. Karim of M/s. Karim Silk Mills, Karachi, had been importing art silk yarn in violation of the import policy under bogus and fictitious documents. As a result of an inquiry conducted by the customs officials, 78 cases were detected in which the said Haji Muhammad H. Karim was found involved. Accordingly he was proceeded against under the Customs Act, 1969, and the Deputy Collector (Appraisement) (Judicial), Customs House, held him guilty of various illegalities and fraud in respect of import of goods on fictitious and bogus documents violating the provisions of the Import and Export (Control Act), 1950, Foreign Exchange Regulation Act and the Customs Act, 1969. Consequently the learned Deputy Collector imposed upon Haji Muhammad H. Karim a total penalty of Rs.35.41 crores by his order dated 7th January, 1979. Haji Karim challenged the orders of the Deputy Collector, before the appellant Mr. M.A. Rahman, who was then Collector of Customs (Appeals), Karachi. The appellant accepted the appeals and set aside the 78 orders of penalty. He, however, left it open to the competent authority to take fresh proceedings against Haji Karim according to law. As the case involved huge amount of penalty, it came to the notice of the Central Board of Revenue who on examining the record was of the tentative opinion that the order passed in favour of Haji Karim was in gross violation of the law and that the appellant had committed serious irregularities, abusing his powers as Collector Customs, with the result that there was huge loss to Government revenue.

3. In the circumstances the appellant was charge‑sheeted and inquiry committee was appointed for holding an inquiry into the truth of the allegations. For present purposes it would suffice to mention that the inquiry committee in its detailed report, inter alia, came to the conclusion that although the Deputy Collector's orders which were the subject‑matter of appeal before the appellant suffered from legal and factual lacunae showing that no attention was devoted by the said officer to the crucial points for consideration, yet they found the appellant guilty of allegation (v) contained in the charge‑sheet which reads as follows:‑

"(v) That the appellate authority has full powers and indeed obligation to conduct further enquiries before deciding the appeals and as such he should have called witnesses for cross examination if in his judgment, it was necessary to do so before arriving at a conclusion or alternatively remanded the case back to the adjudicating officer."

In view of the findings of the inquiry committee major penalty was proposed against the appellant and finally the appellant was dismissed from service by order of the President dated 20th November, 1983. The appellant filed a review petition against the said order, but as the same remained undecided until the expiry of the statutory period he filed an appeal before the Federal Service Tribunal, which was partly allowed, as stated earlier by the impugned judgment.

4. Being aggrieved by the judgment of the Service Tribunal the appellant came up before this Court and leave was granted to consider the following two contentions: ‑

"(i) Whether any error made in exercise of judicial or quasi‑judicial power, without being tainted with dishonesty, can expose the functionary to disciplinary proceedings as to the manner in which the said power has been exercised?

(ii) Whether even on, the assumption that the order suffers from errors which shows inefficiency on the part of the appellant, such solitary instance of inefficiency can be deemed to be sufficient proof of ground of inefficiency as contemplated by clause (a) of rule 3 of the Government Servants (Efficiency and Discipline) Rules, 1973. Reliance is placed on A.U.Musarrat v. Government of West Pakistan P L D 1977 S C 24."

5. As the decision of the points urged in support of this appeal turns on the interpretation of section 193 of the Customs Act, 1969, it will be convenient at this stage to set out the same which is reproduced below: ‑

"Section 193.‑‑Any person aggrieved by any decision or order passed by an officer of customs under this Act may, (within thirty days of the date of receipt of such decision or order) appeal therefrom to the Board, or in such cases as the (Federal Government) directs, to any officer of customs not lower in rank than a Deputy Collector of Customs, and the appellate authority may thereupon make such further inquiry as it may consider necessary, and, after giving him an opportunity of being heard if he so desires, pass such order as it thinks fit, confirming, altering or annulling the decision or order appealed against:

Provided that ..

It is submitted by the learned counsel for the appellant that section 193 confers appellate power on an officer of the Customs and by virtue of the Notification NO.SR0.120(1)/83, dated 12th February, 1983, the Government has designated the Collector of Customs (Appeals), Appraisement, to hear and decide appeals from the orders of adjudication passed by Deputy Collector of Customs. The contention is that the appellate powers thus exercised by the appellant in his capacity as an appellate authority under section 193 being quasi‑judicial in nature and there being no taint of dishonesty affecting the exercise of power the order passed by him was not liable to expose him to disciplinary proceedings on the basis of the manner in which the said power was exercised.

6. Now the revised charge‑sheet on which the disciplinary proceedings against the appellant were initiated and remitted to the Enquiry Committee for enquiry stated as under:‑

"And whereas your conduct in so deciding the appeals in favour of the party was grossly irregular improper and constituted an abuse of the high office held by you for the reasons and detailed particulars shown in the attached statement of allegations which has resulted in the loss to the Government of an amount of Rs.35.41 crore lawfully imposed as fine and penalty on the said Haji Muhammad Karim.

You are, accordingly, hereby charged with misconduct under the Government Servants,,(Effigiency and Discipline) Rules, 1973."

The statement of allegations incorporated the grounds (i) to (vii) on which it was asserted that the orders passed by the accused officer in appeal were not "proper". One of these grounds has already been reproduced in para. (3) herein above, and the rest of the grounds purported to show that the question of examination by witnesses in this case did not arise, that no violation of the requirements of rule of natural justice in regard to tribunals of limited jurisdiction was committed, that the documentary evidence in this case established a conspiracy master minded by Haji Karim to import the Art Silk Yarn, that no orders were passed by the accused officer waiving the requirement to deposit the penalties imposed by the adjudicating officer and finally that the accused officer had "favoured the accused (Haji Karim) for consideration known to yourself and thus abused your high office as a quasi‑judicial officer entailing a loss to the exchequer of Rs.35.41 crores." It will thus appear that besides charging the appellant with lapses and impropriety in the exercise of his jurisdiction, he was also attributed dishonest intention in passing the order in favour of the appellant before him.

7. As stated earlier except one ground reproduced in para. 3 above, in respect of the rest of the grounds charging improper exercise of jurisdiction by the appellant the Enquiry Committee exonerated him arid gave a finding that the Deputy Collector who passed the order in original had committed a clear violation of the principles of natural justice during the proceedings held by him, that there was no lapse on the part of the appellant in not passing an order waiving the requirement for deposit of penalty and finally that there was no evidence produced in support of the allegations that the appellant had passed the orders in appeal for ulterior motives in abuse of his high office in order to favour of Haji Karim. It will be interesting to reproduce the observations of the Enquiry Committee in this context:‑

"The passing of an irregular, improper or an illegal order could also be attributed to a host of other reasons such as negligence, ignorance, incompetence, error of judgment and misinterpretation of relevant laws and rules rather than for some consideration alone.

There is enough evidence on record as discussed in the preceding paras to show that the impugned order of the Deputy Collector had serious lacunae it violated the principles of Natural Justice and in this situation, to attribute motives to the Appellate Authority for which no evidence has been produced, would be extremely unfair."

The Enquiry Committee also critically examined the order‑in original passed by the Deputy Collector, Customs, which was set aside in appeal by the appellant before us and expressed opinion that the same "suffered from serious short comings and lacunae on technical and factual grounds." On this basis of decision of the appellant annulling the finding of Deputy Collector was approved and it was observed that the latter could not be absolved of his conduct in adjudicating the case in a "most haphazard, erratic and summary manner" .

8. As regards ground (v) of the charge‑sheet of which the appellant was found guilty, the Enquiry Committee took into consideration the provisions of section 193 of the Customs Act. In this connection it proceeded on the basis of the proposition that "the relevant law stipulated that the Appellate Authority may make such further inquiry as it may consider necessary." In the light of this proposition the Enquiry Committee proceeded to determine whether in the circumstances of the case, it was necessary for the accused officer to conduct further enquiry in the matter before deciding the appeal of the offender. On this question. the accused officer was confronted with passages from the order passed in appeal by him and was questioned by the Enquiry Committee why he did not consider necessary to hold a further inquiry before deciding the appeal. To these questions the accused officer offered his explanation for not having found it necessary to hold a further enquiry himself. The explanation was not found satisfactory by the Enquiry Committee and the finding was given that it was incumbent upon the appellant to have invoked his powers and held further inquiry before deciding the appeal. It would be beyond the scope of the present discussion to go into the question whether the appellant's view that in this case it was not appropriate or necessary to hold further enquiry but it would suffice to state that this case presents a very unusual situation for which proposition there is no precedent, where a statutory functionary who has exercised his quasi‑judicial powers would be called upon to personally defend the manner of the exercise of his jurisdiction or the decision arrived at, even though it may be erroneous. However, to continue the narration of the circumstances culminating in the adverse report against the appellant, it may be stated that the conclusion of the Enquiry Committee on the question of failure on the part of the appellant to hold further enquiry was worded as under:‑

"On the basis of the position brought out in the aforesaid narration, the Enquiry Committee is of the opinion that the conduct of the accused officer was not in accordance with the provisions of section 193 of Customs Act, 1969, providing for further enquiry which was necessary in the circumstances of the case."

9. The next question considered by the Enquiry Committee was whether in the circumstances of the case the appellant was required by law to remand the case to the adjudicating authority. In this connection the legal position was stated as under:‑

"The power of remand is inherent in the appellate jurisdiction. As the accused officer was of the view that flagrant violation of the principles of natural justice had taken place, the regular course for him to satisfy the legal formalities of examination/ cross‑examination of witnesses in order to satisfy the principles of natural justice would have been either to call the witnesses himself for which no issuance of show‑cause notices to witnesses was necessary or to remand the proceedings to the Deputy Collector with necessary direction in the matter."

The plea taken by the appellant was that by leaving it open for the authorities to initiate fresh proceedings against the offender, he had virtually remanded the case. According to the appellant he did not expressly remand the case to the adjudicating authority in view of the Board of Revenue's orders on the basis of Law Ministry advice that under section 35 of the Central Excise and Salt Act, 1944, an appellate authority had no power of remand. As section 193 of the Customs Act is couched in identical terms, the appellant considered that under the latter provisions also no remand could be ordered. This position taken by the appellant was accepted by the Enquiry Committee which observed:‑

"As the provisions of section 35 of the Central Excise and Salt Act, 1944 and section 193 of the Customs Act, 1969, are materially the same, the plea of the accused officer that on 10‑5‑1979 when he passed the order in appeal, he was under the impression that he had no powers to remand the case appears to be valid."

However, in the view taken by the Enquiry Committee since the appellate order passed under section 193 is final unless set aside in revision by the Board of Revenue, the appellant having exonerated the offender of all charges on the merits as revealed by the record, merely leaving it open to take fresh proceedings did not amount substantially to remanding the case. The final conclusion was expressed as follows:‑

"In the light of the above discussions relating to allegations (v) and (vi), the Committee has come to the logical conclusion that under the peculiar circumstances appearing in this appeal case, the accused officer should have invoked the provisions of section 193 of the Customs Act, 1969 and by exercising the powers vested therein, he should have either made inquiries himself or should have remanded the case to the adjudicating officer for de novo consideration ''

10. The Service Tribunal upheld the report of the Enquiry Committee that the order of the Deputy Collector was illegal, and that it could not be upheld by the appellant as the Appellate Authority. But it also agreed with the finding of the Enquiry Committee that the appellant should have invoked his powers under section 193 to hold further inquiry because "the amount involved was substantially high". It was observed:‑

"The order of the Collector smacks of irresponsible action and carelessness coupled with shirking from duty......

In fact, the act of the appellant amounts to gross inefficiency and carelessness, which was not expected from the officer of his rank and status."

The Service Tribunal finally expressed the view that the appellant was not guilty of misconduct but of gross inefficiency and carelessness and therefore the penalty of dismissal was reduced to compulsory retirement from service.

11. The question raised before us is whether on the grounds of failure to exercise power vesting in a statutory functionary in a given situation in which such power ought to have been exercised would constitute culpable conduct so as to be punishable as "misconduct" under the Government Servants (Efficiency and Discipline) Rules, 1973, (hereinafter referred to as the Rules). It was not disputed before us that the power vesting in the Appellate Authority under section 193 is quasi‑judicial in nature. Now misconduct is defined in rule 2(4) as follows:‑

"'Misconduct' means conduct prejudicial to good order or service discipline or contrary to Government Servants (Conduct) Rules, 1964 or unbecoming of an officer and a gentleman and includes any act on the part of a Government servant to bring or attempt to bring political or other outside influence directly to bear on the Government or any Government officer in respect of any matter relating to the appointment, promotion, transfer, punishment, retirement or other conditions of service of a Government servant."

Rule 3 of the Rules lays down the grounds for penalty and reads:‑

"Grounds for penalty.‑‑Where a Government servant in, the opinion of the authority‑

(a) is inefficient or has ceased to be efficient; or

(b) is guilty of misconduct; or

(c) is corrupt, or may reasonably be considered corrupt because

(i) he is, or any of his dependents or any other person through him or on his behalf is, in possession (for which he cannot reasonably account) of pecuniary resources or of property disproportionate to his known sources of income; or

(ii) he has assumed a style of living beyond his ostensible means; or

(iii) he has a persistent reputation of being corrupt; or

(d) is engaged, or is reasonably suspected of being engaged, in subversive activities, or is reasonably suspected of being associated with others engaged in subversive activities or is guilty of disclosure of official secrets to any unauthorized person, and his retention in service, is therefore, prejudicial to national security, the authority may impose on him one or more penalties."

It will to observed that inefficiency and misconduct are two separate and independent grounds for penalty to be imposed in disciplinary proceedings on an accused officer. In the present case the charge against the appellant was of misconduct. The exhaustive part of the definition defines "misconduct" .to mean (i) conduct prejudicial to good order or service discipline, or (ii) contrary to the Government Servants (Conduct) Rules, 1964, or (iii) unbecoming of an officer and a gentleman. The extended meaning of the term includes the bringing of influence on the Government etc. in regard to specified matters in relation to a Government servant. The question is whether an erroneous decision honestly arrived at in the exercise of statutory powers of quasi‑judicial nature would constitute misconduct as defined.

12. Our attention was invited to section 223 of the Customs Act which lays down as under: ‑

"Section 223.‑‑All officers of customs and other persons 't' t "~ employed in the execution of this Act shall observe and follow `‑=~'''" the orders, instructions and directions of the Boards

Provided that no such orders, instructions or directions shall be given so as to interfere with the discretion of the appropriate officers of Customs in a ex i of their quasi . judicial functions." '

The Scheme underlying this provision of law clearly contemplates a division of functions ordinarily to be discharged by officers of the Customs in execution of duties cast upon them by the various provisions of the Act. The division comprises of quasi‑judicial functions; and other functions and duties. The enacting part of the provisions of section 223 makes it obligatory upon the officers of Customs to observe and follow the orders, instructions and directions issued by the Board of Revenue. However, the proviso restricts the powers of Board of Revenue so that no such orders, instructions or directions can be given which in any way interfere with the discretion of the appropriate officers of Customs in the exercise of their quasi‑judicial functions. Undoubtedly adjudication proceedings under the Customs Act empowering the appropriate Customs Officers to impose penalties or orders of confiscation of goods, the exercise of appellate power and revisional jurisdiction against orders of adjudicating officers are quasi- judicial functions involving the exercise of discretion. Clearly, therefore, while exercising these functions the appropriate officers of Customs are not subject to the administrative control of the Board of Revenue by means of orders, instructions or directions. Such officers while so acting are controlled by the statute under which the relevant power or function is exercised and this function is further subject to control of the same quasi‑judicial nature under Chapter XIX by means of appeal and revision. In this Chapter sections 193, 195 and 196 establish a hierarchy of authorities for correction of errors, illegalities, irregularities or improprieties occurring in the orders passed by the subordinate officers or authorities.

13. We have given anxious consideration to the question whether in the context of the provisions of law as pointed out above, an officer of the Customs, whose decisions in exercise of his jurisdiction in adjudicating the matter in quasi‑judicial capacity which is not under the administrative control of his superior authorities, cannot be taken to task in the garb of disciplinary proceedings under the. Rules for a mistake committed by him in the course of such proceedings when his actions are free from any taint of dishonesty or corruption. On examination of the Rules we feel that in such circumstances his act will not fall within the ambit of any category of "misconduct" as defined in rule 2(4) as analysed above. Surely an honest mistake committed by an officer in such exercise of jurisdiction will not attract the ground of conduct prejudicial to good order or service discipline. Similarly it will not violate any rule of Government Servants (Conduct) Rules, 1964, because honest errors will not constitute wilful abuse of office. Nor does such act fall within the category of conduct unbecoming of an officer and a gentleman. We are, therefore, of the view that the charge of misconduct was wholly misconceived as was indeed found by the Service Tribunal which held the appellant guilty of incompetence instead, to which aspect we will advert a little later. If in such a case the Board of Revenue is allowed to punish an officer of the customs it will amount to doing something indirectly what the law prohibits by express terms. It follows from the proviso to section 223 that the Board of Revenue cannot interfere in the quasi‑judicial functions of the officers of Customs under the Act and they are left free to decide the matters coming before them in accordance with their judgment on issues requiring adjudication without any let or hindrance from an outside authority, subject however, to correction of errors in their decisions by appeal or revision. The fear of personal accountability in case they are subjected to disciplinary proceedings in circumstances like those obtaining in the present case, would result in their acting virtually under the dictation of the higher administrative authorities in total negation of the spirit underlying the proviso to section 223 of the Customs Act. de Smith in his work on 'Judicial Review of Administrative Action; while dealing with the question of liability of members of Tribunals for excess of jurisdiction observes:

"Individuals are though normally to be adequately protected from the consequences of an unauthorised decision by the availability of remedies to set it aside: the further imposition of personal liability may deter judges from the proper performance of their tasks to the detriment of the public interest."

14. Even on general principles the statutory Tribunals are governed by the same legal principles in the exercise of their jurisdiction. These principles are stated by de Smith in the book already mentioned in the following passage:‑‑

"The relevant principles formulated by the Courts may be broadly summarised as follows. The authority in which a discretion is vested can be compelled to exercise that discretion, but not to exercise it in any particular manner. In general, a discretion must be exercised only by the authority to which it is committed. That authority must genuinely address itself to the matter before it: it must not act under the dictation of another body or disable itself from exercising a discretion in each individual case. In the purported exercise of its discretion it must not do what it has been forbidden to do, nor must it do what it has not been authorised to do. It must act in good faith, must have regard to all relevant considerations and must not be swayed by irrelevant considerations, must not seek to promote purposes alien to the letter or to the spirit of the legislation that gives it power to act, and must not act arbitrarily or capriciously."

Again it is observed:‑‑

"An authority entrusted with a discretion must not, in the purported exercise of its discretion, act under the dictation of another body or person. In at least two modern Commonwealth cases licensing bodies were found to have taken decisions on the instructions of the heads of Government who were prompted by extraneous motives. But, as less colourful cases illustrate, it is enough to show that a decision which ought to have been based on the exercise of independent judgment was dictated by those not entrusted with the power to decide, although it remains a question of fact whether the repository of discretion abdicated it in the face of external pressure. And it is immaterial that the external authority has not sought to impose its policy."

These principles have been stated in regard to judicial review of discretionary powers vesting in the statutory authorities but are being quoted in order to emphasise the importance that the law attaches to preserving the independent exercise of power by such authorities in judging the issue coming up for adjudication before them. So that it is well‑settled that as long as the power is exercised in good faith and without ulterior motives the functionary in whom the power is invested cannot render himself liable to action for mistakes committed in the course of decisions taken by him. As already pointed out the machinery for correction of mistakes has been provided by the Act on the judicial side. Indeed we were informed that the Board of Revenue has in exercise of its suo motu revisional jurisdiction called for the record and is considering the legality of the orders passed by the appellant on the basis of which action was taken against him. Even this fact alone demonstrates the impropriety of disciplinary action taken against the appellant for the Board of Revenue may itself come to the conclusion on that the orders did not warrant interference. In the light of this discussion we have come to the conclusion that the charge of which the appellant was found guilty and on the foundation of which the order of his dismissal was passed did not fall within the purview of "misconduct" as defined by the Rules.

15. As already observed the learned Service Tribunal converted the finding of the Enquiry Committee from "misconduct" to "gross inefficiency and carelessness". In doing so the learned Service Tribunal acted clearly illegally. In the first place the appellant had no notice of the charge of inefficiency or carelessness which are separate grounds of penalty under the Rules and therefore the rule of natural justice was clearly violated. Be that as it may the learned Service Tribunal was not justified on the basis of the present case alone to reach a finding that the appellant was guilty of inefficiency. There is nothing on the record to indicate that the past service record of the appellant revealed instances of inefficient handling of cases even if the present case is examined on the basis of such assumption. This Court in A.U. Mussarrat v. Government of West Pakistan (P L D 1977 S C 24), in which a civil servant was charged with inefficiency in delaying the disposal of a case observed:‑‑---

"Although there may be some rare cases of gross negligence which if found to be established would leave one in no manner of doubt as to the inefficiency of the official concerned yet a single slip or lapse, if any on the part of a Government servant with a consistently good record would not invariably justify such an inference. Inefficiency has not been defined as a term of art and in its ordinary dictionary meaning would connote inability or want of adequate fitness to attend to one's work. Inefficient has been explained in the Oxford English Dictionary (Volume I) as 'incapable of producing the desired! effect; not having the ability or industry required for what one has to do'. There is, however, yet another and more important aspect of the matter. Rule 3 of the West Pakistan Government Servants (Efficiency and Discipline) Rules, 1960, ; categories grounds for penalty of which Ground 'A' deals with inefficiency. It reads as follows:‑‑

"3. Grounds of penalty .‑‑Where a Government servant, in the opinion c the a authority‑‑

(a) is inefficient, or has ceased to be efficient, whether by reason of infirmity of mind or body, or otherwise, and is not likely to recover his efficiency."

On a proper analysis of the Rule, it appears that in order to attract the penalty, a Government servant should be either:

(1) (a) inefficient and found to be so at the outset; or

(b) though efficient to start with has ceased to be so by reason of infirmity of mind or body or otherwise; and

(2) is not be likely to recover his efficiency.

In other words before he is visited with the penalty prescribed under the law a finding has also to be given that the inefficiency or the loss of it as the case may be is more or less of a lasting character and is not likely to be got rid of."

In the present case the Service Tribunal did not have material before it to come to the conclusion that the appellant had become inefficient as postulated in the abovementioned passage. On the contrary the Enquiry Report, passages from which have been reproduced above, quite clearly indicates that the appellant was under a genuine and justifiable impression that he had no power of remand. So far as the question of his undertaking a further inquiry, this is matter of judicial discretion and without deciding the question whether the case before the appellant was a fit one for exercise of such discretion, (as the same may be a material question pending decision by the Board of Revenue in the revision proceedings), it is sufficient to state that the failure to invoke this power did not in the circumstances of this case, constitute misconduct or inefficiency liable to penalty in the disciplinary proceedings. In any case the appellant did make a provision in his order for fresh proceedings to be commenced against the offender which clearly makes out that he did not close the case for further proceedings by his order passed in appeal.

15. For all the aforesaid reasons this appeal is allowed with the result that the order of the Service Tribunal dated 16th July, 1985, and that of the Government of Pakistan dated 20th November, 1983 are set aside. In the circumstances of this case there will, however, be no order as to costs.

M.B.A./M‑371/S Appeal allowed.