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P.R. Nayak Vs. Union of India and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 464 of 1972
Judge
Reported inILR1973Delhi747
ActsCommission of Inquiry Act, 1952 - Sections 3
AppellantP.R. Nayak
RespondentUnion of India and ors.
Advocates: G.B. Rai,; Bishambar Lal,; S.C. Patel,;
Cases ReferredSwadeshi Cotton Mills Co. Ltd. v. State Industrial Tribunal
Excerpt:
.....to the validity of the appointment of the commission, subject to other conditions of section 3 being satisfied whether the opinion of the appropriate government has been expressed in the form of a resolution or of a notification or whether these are published in any particular part of the official gazette......rules.'(4) the commission was appointed by a resolution dated august 22, 1970 (published in the gazette of india, part i, section 1) of the government of india, ministry of petroleum and chemicals and mines and metals (department of petroleum). the resolution states that the government of india 'have decided to set up a one-man commission under the commissions of inquiry act, 1952 headed by shri (justice) j. n. takru, retired judge of allahabad high court.' the commission was required to submit its report within a period of six months. it was to devise its own procedures and to call for such information and take such evidence as it may consider necessary. the terms of reference were as follows:- '(a)(i) to determine whether any payment to bechtels (as design engineers and overall.....
Judgment:

S.N. Andley, J.

(1) The constitution and continuance of the one-man Commission presided over by Justice J. N. Takru, hereinafter referred to as 'the Commission', has been challenged by the petitioner P. R. Nayak on various grounds. Respondent No. 1 to this petition is the Union of India through the Secretary to the Government of India, Ministry of Petroleum and Chemicals and respondent No. 2 is Justice J. N. Takru himself. The petitioner, a Government servant, was, at the relevant time, the Managing Director of the Indian Refineries Limited, a public sector undertaking, now merged with the Indian Oil Corporation, another public sector undertaking.

(2) Shortly stated, the Commission was appointed to inquire into alleged irregularities in the grant of contracts and in the actual construction of the Gauhati-Siliguri and Haldia-Barauni-Kanpur Pipelines and in the payments made to two contractors, namely, (1) Bechtels as Design Engineers and over-all Supervisors in Gauhati-Siliguri Pipeline and as Design Monitors and Project Managers in Haldia-Barauni-Kanpur Pipeline and (2) Snam-Saipem for contructing Gauhati- Siliguri and Haldia-Barauni-Kanpur Pipelines.

(3) It is not disputed that the appointment of the Commission was preceded by the report dated April 29, 1970, of the Parliamentary Committee on Public Undertakings which had, infer aha, recommended to Government,-

'TOtake immediate steps to bring to book the guilty officers on the basis of the evidence that is already available. The least that would be done is to proceed departmentally without delay against the officers concerned under the relevant Government Servants Conduct Rules.'

(4) The Commission was appointed by a resolution dated August 22, 1970 (published in the Gazette of India, Part I, Section 1) of the Government of India, Ministry of Petroleum and Chemicals and Mines and Metals (Department of Petroleum). The resolution states that the Government of India 'have decided to set up a one-man Commission under the Commissions of Inquiry Act, 1952 headed by Shri (Justice) J. N. Takru, retired Judge of Allahabad High Court.' The Commission was required to submit its report within a period of six months. It was to devise its own procedures and to call for such information and take such evidence as it may consider necessary. The terms of reference were as follows:-

'(A)(i) to determine whether any payment to Bechtels (as Design Engineers and overall Supervisors in Gauhati-Siligurr Pipeline and as Design Monitors and Project Managers in Haldia-Barauni-Kanpur Pipeline) was made in excess of the amount sanctioned by Government and if so, was such payment justified? (ii) was the induction of Bechtels into the aforesaid projects malct fidea-nd were they shown any undue favor by officials of the IRL/Government. (b) to determine whether there have been omissions in regard to scrutinising, editing, compiling and maintaining contractual documents relating to the investigations, designs, construction and supervison of the Haldia-Barauni-Kanpur pipeline and whether the negotiations leading to the contracts were carried out diligently and whether adequate records of the negotiations were kept. (c) whether the then Managing Director, Irl, acted on his own by-passing the Board of Directors in his dealings with Snam and Bechtels in vital matters concerning the capacity of the Haldia-Barauni-Kanpur Pipeline, and whether the amendment of the contract adversely affected the capacity of the pipeline. and whether negligence or improper motive is substantiated against the Managing Director, Irl, for not bringing these to the notice of the Board/Government, and, in particular. whether the General Manager and Managing Director were perfunctory and casual in dealing with an important communication of the 26th September, 1963 from Bechtels to Irl mentioning the design capacity of Haldia-Barauni-Pipeline as 1 .9 million Tonnes per year. (d) to investigate the circumstances in which the sanction for the total project cost of Hbk pipeline was not issued by Government and whether there was loss to the public interest as a result. (c) in view of the objection raised by West Bengal Government and Indian Mining experts over the laying of the pipeline over coal bearing area, to advise whether there was any carelessness and negligence in discharge of responsibilities by Governmcnt/IRL/IOC officials. (f) to determine the circumstances in which the IRL/IOC spent money in excess of the sanctioned estimates in the case of the Gspl Project; (g) to investigate the circumstances under which IRL/Government awarded the construction contracts for Gauhati-Siliguri and Haldia-Barauni-Kanpur pipelines to Snam-Saipem on negotiated basis without calling for global tenders; (h) to advise on whether there has been any negligence or carelessness or mala-fide motive on the part of any of the officers of Government/IRL/IOC and their staff in the discharge of their duties on any of the. foregoing or other related issues, which, in the opinion of the Commission, are relevant: : (i) arising out of (h); to recommend further action, if any, that must be taken against particular officials whose conduct is assessed as meriting this; and (i) generally, to report on any other matter that is relevant, in the opinion of the Commission.'

(5) Since the work of the Commission was not expected to be completed within the time appointed by the aforesaid resolution, its tenure was extended by another six months up to August 31, 1971 by a further resolution dated February 20, 1971. Then, a notification dated March 20, 1971 (published in the Gazette of India, Part Ii, Section 3(ii) on April 24, 1971) was issued by the Government of India in exercise of power conferred by section 11 of the Commission of Inquiry Act, 1952, hereinafter referred to as 'the Act', directing that all the provisions of the Act shall apply to the Commission. Since further time appeared to be necessary for the report of the Commission to be ready, time was again extended up to February 29, 1972 by resolutions of the Government of India dated August 26, 1971 and September 6; 1971. Then on October 25, 1971 the Government issued another notification [published in the Gazette of India, Part Ii Section 3(ii)]. referring the following further matters to the Commission :-

'(H)whether the Snam-Saipem was shown any undue favor by officials of Indian Refineries Limited or Indian Oil Corporation or the Government, in connection with the award of the aforesaid contracts and in connection with the execution of the Gauhati-Siliguri and Haldia-Barauni-Kanpur pipeline projects under the aforesaid contracts. (i) to investigate the circumstances that caused considerable delay in the completion of Haldia-Barauni-Kanpur pipeline project; (j) to investigate the circumstances which led to the continuance of Shri Nittoor Sreenivasa Rau after his retirement as Central Vigilance Commissioner to enquire into the laying of a section of the Haldia-Barauni pipeline over the coal-bearing areas.'

(6) Thereafter, by notification dated March 3, 1972, the date of submission of the report of the Commission was extended to August 31, 1972 .and by notification dated August 30, 1972 to August 31, 1973. In the meantime, on June 20, 1972 and August 7, 1972 the Commission framed issues which required determination after statements had been filed by various persons concerned with the proceedings of the Commission including the Government of India: the Indian Oil Corporation; the petitioner: the aforesaid two contractors and one Arun Roy Choudhary. hereinafter referred to as 'Choudhury', who represented himself as well as a National Committee so-called for assisting the Commission and to whom, it is alleged by the petitioner the Commission has abdicated its functions. It may also be stated here that it is alleged by the petitioner that at the instance of Choudhury, the Commission 'seized' numerous files and documents from the Ministry of the Government of India and the Indian Oil Corporation. Choudhury has been permitted to appear in the proceedings before us as an intervener.

(7) The first point that has been raised is that the Commission, not having been duly appointed under section 3 of the Act by a proper notification, is not a Commission within the meaning of the Act. The appointment of a Commission under the Act is provided by section 3. Sub-section (1) of section 3 without its proviso which is not material says:-

'THEappropriate Government may, if it is of opinion that it is necessary so to do, and shall if a resolution in this behalf is passed by the House of the People or, as the case may be, the Legislative Assembly of the State, by notification in the Official Gazette, appoint a Commission of Inquiry for the purpose of making an inquiry into any definite matter of public importance and performing such functions and within such time as may be specified in the notification, and the Commission so appointed shall make the inquiry and perform the functions accordingly.'

(8) This sub-section requires (1) the formation of an opinion by the appropriate Government that it is necessary to appoint a Commission of inquiry, (2) for making an inquiry into any definite matter of public importance. Upon the formation of such opinion, the appropriate Government may appoint a Commission of Inquiry by notification in the official Gazette to perform its functions within such time as may be specified in the notification. It is an enabling section except in cases where a resolution in that behalf has been passed by the House of the People or by the Legislative Assembly of a State. If such a resolution has been passed, the appropriate Government has to appoint a Commission of Inquiry in the manner stated but that is not the case here. It is contended that initially the Commission was not a Commission of Inquiry under the Act as it had been appointed not by a notification but by the aforesaid resolution of the Government dated August 22, 1970 and being so, the Commission was appointed by an executive act of the Government and not in exercise of power under the Act. It is asserted that even the Government was not clear as to whether the Commission had been appointed under the Act. It is alleged that the counsel for the Ministry stated before the Commission in February and March, 1972 that the appointment of the Commission had not been made under the Act but was by way of an executive act and as such section 3 of the Act was not applicable but this statement was not adhered to as on March 30, 1972 it was stated that the Government had formed an opinion that it was necessary to appoint a Commission of Inquiry under the Act and this decision was published by way of a resolution dated August 22, 1970. The petitioner also places reliance on the Central Secretariat Manual of Office Procedure (Diglot Edition 1969). Chapter Vi of this Manual contains forms and rules of correspondence. Para 76 in this Chapter provides that the form of notification ' is used for notifying by publication in the Gazette of India the promulgation of rules and orders, delegation of powers, appointments, promotions, etc., of gazetted officers etc.' Para 77 provides that the form of resolution 'is used for public announcements of decisions of Government on important matters of policy, appointment of committees or commissions of enquiry and of the results of the review of important reports of such bodies.' It is pointed out that notifications are to be published in the Gazette of India, Part Ii, Section 3(ii) and resolutions are to be published in the Gazette of India, Part I, Section 1. In the present case, as stated earlier, the first resolution dated August 22, 1970 and the subsequent resolutions were published in the Gazette of India, Part I, Section 1 while the; notification dated March 20, 1971 issued in exercise of power under section 11 of the Act was published in the Gazette of India, Part Ii, Section 3(ii).

(9) Reliance by the petitioner upon the aforesaid Manual of Office Procedure for the contention that the Commission was not constituted under the Act is misconceived. The rules in this Manual are not statutory and are merely rules of office procedure. They have,, thereforee, no statutory force to entitle the petitioner to say that their noncompliance renders the constitution of the Commission illegal. Section 3 does not in terms require a notification in its technical sense. The only requirement of the section is that the opinion of the appropriate Government that it is necessary to appoint a Commission of Inquiry should be published in the official gazette. It is immaterial to the validity of the appointment of the Commission, subject to other conditions of section 3 being satisfied whether the opinion of the appropriate Government has been expressed in the form of a resolution or of a notification or whether these are published in any particular part of the official gazette. Assuming, thereforee, that the appointment of the Commission in this case was by an 'order' as contemplated by para 76 of the aforesaid Manual, it would not matter whether this order is styled as a notification or as a resolution so long as it is notified or published in the official gazette.

(10) There is, however, substance in the contention that even the Government was proceeding on the basis that the Commission was not constituted under the Act by the aforesaid resolution dated August 22, 1970. Firstly, this resolution does not state that the Commission is being appointed in exercise of powers under section 3 of the Act. Secondly, it does not contain the expression of an opinion of the Government that it is necessary to appoint a Commission. It is true that it is not necessary to recite the formation of opinion in the resolution or notification itself as the formation of such opinion can be proved by evidence aliunde and even by affidavits filed in Court as has been held by the Supreme Court in Swadeshi Cotton Mills Co. Ltd. v. State Industrial Tribunal, U.P. and others : (1961)IILLJ419SC ; The State of Jammu and Kashmir and others v. Bakshi Gulam Mohammad and another : AIR1967SC122 ; Ganga Bishnu Swaika and another v. Calcutta Pinjrapole Society and others : [1968]2SCR117 and Gullapalli Nageswara Rao and others v. Andhra Pradesh State Road Transport Corporation and another 1959 Supp. SCR 319, . It is also true that in its affidavits filed in this Court, the Government has taken the stand that such an opinion was formed before the issue of this resolution and even the resolution says that the Commission has been appointed under the Act. But the fact remains that the Government issued a notification dated March 20, 1971 published in the official gazette on April 24, 1971 in exercise of powers conferred by section 11 of the Act. Section 11 of the Act is in these terms:-

'WHEREany authority (by whatever name called), other than a Commission appointed under section, 3 has been or is set up under any resolution or order of the appropriate Government for the purpose of making an inquiry into any definite matter of public importance and that Government is of opinion that all or any of the provisions of this Act should be made applicable to that authority, that Government may, subject to the prohibition contained in the proviso to sub-section (1) of section 3, by notification in the Official Gazette, direct that the said provisions of this Act shall apply to that authority, and on the issue of such a notification, that authority shall be deemed to be a Commission appointed under section 3 for the purposes of this Act.'

(11) It applies the Act to an authority, other than a Commission appointed under section 3, set up under any resolution or order of the appropriate Government. If the Commission had been appointed under the Act by this resolution, it would not have been necessary to issue any notification under section 11 of the Act. The issue of this notification can be justified only on the basis that the Commission as originally appointed by the resolution dated August 22, 1970 was not a Commission appointed in exercise of powers under section 3 of the Act notwithstanding the reference therein to the Act. thereforee, it appears to us that the resolution dated August 22, 1970 cannot be said to be a resolution issued in exercise of power conferred by section 3 of the Act.

(12) The argument then advanced is that the notification issued under section 11 of the Act cannot save the resolution dated August 22, 1970 which is had and must be quashed leading to the result that no body survives to which all or any of the provisions of the Act can be applied in terms of section 11 of the Act. The argument is misconceived. It cannot be disputed that a Commission of Inquiry can be constituted dehors the Act in which case it will be an authority appointed in exercise of the executive powers of the Government and if such an authority has been or is set up under a resolution or order of the appropriate Government for the purpose of making inquiry into any definite HCD/72-2. matter of public importance, then upon the issue of a notification under section 11 of the Act this authority is to be deemed to be a Commission appointed under section 3 for the purposes of the Act. There is no question of such a resolution being had for lack of authority which is liable to be quashed. The resolution is the expression given to the exercise of executive power by the Government in setting up such an authority which, by a fiction of law, is converted into a Commission appointed under section 3 for the purposes of the Act. The issue of the notification under section 11 of the Act would, thereforee, result in the Commission appointed initially by the resolution dated August 22, 1970 becoming a Commission under the Act.


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