RAJESH GUPTAversusSTATE OF JAMMU AND KASHMIR AND OTHERS

                    [2013] 1 S.C.R. 557


                      RAJESH GUPTA                                A
                              v.
    STATE OF JAMMU AND KASHMIR AND OTHERS
            (Civil Appeal No. 952 of 2013)

                    ·JANUARY 23, 2013
                                                                  B
 [SURINDER SINGH NIJJAR AND ANIL R. DAVE, JJ.)

      Service Law - Retirement - Premature retirement -
Jammu and Kashmir Public Service Commission -
Appellant, an Executive Engineer in the Rural Engineering         c
Wing ('REW') - Allegation that he possessed assets
disproportionate to his known sources of income and that he
had issued back dated technical sanctions to some
departmental works and passed bills and estimates in respect
thereof - High Powered Review Committee constituted by            0
State Government to consider cases of officers/officials for
premature retirement in terms of Articles 226(2) and 226(3)
of the Jammu and Kashmir Civil Services Regulations -
Based upon the recommendations made by the .said
Committee, order passed by respondent-State Government            E
prematurely retiring the appellant from service - Writ petition
filed by appellant - Dismissed by Single Judge of High Court
- Division Bench affirmed the order - On appeal, held:
Recommendation made by the High Powered Review
Committee was indubitably arbitrary - There was no material       F
before the Committee to conclude that appellant possessed
assets beyond his known source of income - In regard to
a/legation with regard to issuance of back dated technical
sanctions, at best the appellant acted in a casual and
haphazard manner in the maintenance of records - Such
negligence on the part of appellant cannot per se lead to the     G
conclusion that the appellant was acting in such a manner with
an ulterior motive - Conclusions reached by High Powered
Committee also did not co-relate to the assessment of work
                             557                                  H
    558    SUPREME COURT REPORTS                [2013] 1 S.C.R.


A and integrity of the appellant in the annual performance report
  - In all annual performance reports, the appellant was rated
  'very good', 'excellent' and even 'outstanding' - Order passed
  by the State Government suffered from vice of arbitrariness
  - Impugned order of premature retirement of the appellant
8 quashed and set aside - Since appellant still not reached the
  age of superannuation, direction given for his reinstatement
  - However, as appellant had not challenged the order of
  premature retirement on the ground that the action taken by
  the Government was malafide, it would not be appropriate in
C this case, to follow the normal rule of grant of full backwages
  on reinstatement - Direction given that the appellant shall be
  paid 30% of the backwages from the date of order of
  premature retirement till reinstatement - He shall not be
  entitled to any interest on the backwages - Upon
  reinstatement, it shall be open to the Government to post the
D appellant on a non- sensitive post in view of the background
  of the case - Jammu and Kashmir Civil Services
  Regulations, 1956 - Article 226(2) and 226(3).

       Baikuntha Nath Das & Anr. vs. Chief District Medical
E Officer, Baripada & Anr. (1992) 2 SCC 299: 1992 (1) SCR
  836; Nand Kumar Verma v. State of Jharkhand and others
  2012 (3) SCC 580; State of Gujarat v. Umedbhai M. Patel
  2001 (3) SCC 314: 2001 (2) SCR 170 and Jugal Chandra
  Saikia vs. State of Assam & Anr. (2003) 4 SCC 59: 2003 (2)
F SCR 615 and Allahabad Bank Officers' Association & Anr. vs.
  Allahabad Bank & Ors. (1996) 4 SCC 504: 1996 (2) Suppl.
  SCR 172- referred to.

                        Case Law Reference:
G    2012 (3) sec 580            referred to       Paras 15, 20
     2001 (2) SCR 170            referred to       Paras 15, 21

     2003 (2) SCR 615            referred to       Paras 17, 22
     1996 (2) Suppl. SCR 172 referred to           Paras 18, 24
H
      RAJESH GUPTA v. STATE OF JAMMU AND                     559
                   KASHMIR

  1992 (1) SCR 836             referred to         Paras 18, 20     A
     CIVIL APPELLATE JURISDICTION : Civil Appeal No. 952
of 2013.

     From the Judgment & Order dated 28.02.2011 of the High
Court of Jammu and Kashmir at Jammu in LPA (SW) No. 20              B
of 2008.

    Dinesh Kumar Garg, B.S. Billowaria, Dr. Bheem Pratap
Singh, Jyoty for the Appellant.

    Sunil Fernandes, Vernika Tomar, Rahul Sharma, Astha
                                                                    c
Sharma, lnsha Mir for the Respondent.

     The following order of the Court was delivered

                          ORDER                                     D
     1. Leave granted.

     2. We have heard learned counsel for the parties.

     3. This appeal is directed against the judgment and order      E
of the Division Bench dated 28th February, 2011 passed by
the High Court of Jammu and Kashmir at Jammu in L.P.A.(SW)
No. 20 of 2008 whereby ttie Division Bench confirmed the
judgment and order passed by the learned Single Judge
dismissing the Writ Petition(S) No. 622 of 2005 by judgment         F
and order dated 29th January, 2008, wherein the appellant had
challenged the order passed by the respondent-State dated
26th April, 2005 prematurely retiring the appellant from service.

      4. We may briefly notice the relevant facts leading to the
filing of the writ petition in the High Court.                      G

    5. Upon being selected by the Jammu and Kashmir Public
Service Commission, the appellant was appointed as Soil
Conservation Assistant in the Department of Agriculture
Production in March, 1981. On 20th April, 1985 he was posted        HJ
    560      SUPREME COURT REPORTS                    [2013] 1 S.C.R.


A   as Assistant Engineer in Rural Engineering Wing (hereinafter
     referred to as 'REW'), Ramban, District Doda, Jammu and
     Kashmir. He was promoted on the post of Assistant Executive
     Engineer in REW in September, 1988. While he was posted
    as such, three separate criminal cases were registered against
B   him on the basis of (i) F.l.R. No. 49 of 1991, (ii) F.l.R. No. 63 of
    1994 and (iii) F.l.R. No. 11 of 1995. It is not disputed before us
    that upon investigation in all the matters, the allegations made
    in all the three Fl Rs were found to be 'Not Proved'. In F.l.R. No.
    11 of 1995, there was, however, a recommendation to initiate
c   departmental action against the appellant and some other
    officers. It is also not disputed before us, that no departmental
    action was ever taken against the appellant. Record also does
    not show that any departmental action was taken against him.
    After completion of the investigation in F.l.R. No. 11 of 1995,
D   the appellant was, in fact, promoted to the post of Executive
    Engineer on 15.12.1996. In spite of having been promoted, the
    order of promotion was not given effect to. Therefore, the
    appellant challenged the action of the Deputy Commissioner,
    Udhampur who had refused to give effect to the order of
E   promotion by filing a writ petition in the High Court. The writ
    petition was allowed and thereafter the appellant was permitted
    to join as Executive Engineer on 6th February, 2003. He
    worked as Executive Engineer af Jammu till 8th May, 2003.
    During this period, in the performance of his official duty, the
    appellant was required to recommend the sanctioning of
F   technical approval to the construction works of various projects.

       6. On 5th March, 2003, the Government of Jammu and
  Kashmir, General Administration Department by Government
  Order No. 306-GAD of 2003 dated 5th March, 2003 constituted
G a Committee to consider the cases of officers/officials for
  premature retirement in terms of Article 226(2) and 226(3) of
  the Jammu and Kashmir Civil Services Regulations, 1956. On
  1st April, 2003, further directions were issued by the
  Government indicating the circumstances which would be
H relevant for making a recommendation for premature retirement
     RAJESH GUPTA V. STATE OF JAMMU AND                     561 I I
                  KASHMIR

of a public servant. On 9th May, 2003 the appellant was               A
directed to be attached to the office of the Director, Rural
Development, Jammu pending an enquiry into some
allegations on the appellant. On 22nd July, 2003, an enquiry
report was submitted into the suspected irregularities in the
execution of "Rural Development Works" in the eleven Blocks           B
of Jammu and Kashmir. Clause 1 of the terms of reference of
the enquiry related to the execution of works during 2002-2003
particularly during the month of March, 2003: It was as under:-

          "Whether any irregularity has been committed in any         C
    blocks of District Jammu in the execution of works during
    the year 2002-2003 particularly during the month of March,
    2003 in the matter of observing the coral formalities viz.
    issuing of technical sanction, approval of estimates and
    allotment of works to mates, test checks etc."
                                                                      D
     7. As noticed earlier, the appellant was working as the
Executive Engineer at Jammu at the relevant time. Therefore,
during the Performance of his official duty, he was required to
issue technical sanctions, approve estimates and allot work to
mates as well as conducting test checks of the works allotted         E
by the Block Development Officer. The conclusion recorded by
the inquiry officer is as under:-

          "The Executive Engineer, Rural Engineering Wing,
    Jammu has also confessed having accorded such
                                                                      F
    sanctions on spot. All this clearly indicates that no proper
    records have been maintained by that office and some
    sanctions have been issued out of record. No record/
    register of bills/test checks has been maintained.

    Regarding accord of back dated technical sanctions and            G
    delays, it could not be established with evidence that their
    existed some back dated technical sanctions or there
    were delays in accord of technical sanctions and clearance
    of bills. However, the ,casual and haphazard manner of
                     '
                                                                      H
    562     SUPREME COURT REPORTS                 [2013] 1 S.C.R.


A         maintenance of records could be a probable pointer
          towards the direction."

       8. The Inquiry Officer further records that Block
  Development Officers have taken up number of works without
  technical sanctions which was contrary to the standing rules
8
  governing execution of work. The Inquiry Officer further
  observed that the Executive Engineer, REW, Jammu, i.e. the
  appellant, has not maintained the proper record of technical
  sanctions and test checks. Non-maintenance of the important
  records has resulted in mismanagement owing to the issue of
C technical sanctions not adopting a proper procedure for the
  execution of works and test checks etc. It is a matter of record
  that even though this report was submitted on 22nd July, 2003,
  no action was taken on the basis thereof.

D      9. We may also notice at this stage that the appellant had
  a spotless service record throughout 24 years of service. In the
  annual performance report for the period 1.4.1997 till
  31.3.1998, his work has been assessed as 'Good'. The
  reviewing authority has graded the appellant as a 'Very Good
E Officer'. Against the column of integrity, the remark is
  'Excellent'. Similarly, for the year 1998-1999, he was assessed
  as 'Good officer' and having 'excellent' integrity. In the annual
  performance report for the year 1999-2000 again his integrity
  is said to be 'Excellent'. He has been assessed as a very
F capable and efficient officer. The overall assessment given by
  the reviewing authority is 'A very good officer'. For the year
  2000-2001, the annual performance report again records that
  the appellant is 'A good officer' with good integrity. A separate
  assessment was given on 12th March, 2005 for the period 27th
G October, 2001 to 29th July, 2002 and thereafter from 23rd
  October, 2002 till 23rd December, 2002. This annual
  performance report was recorded by the Deputy
  Commissioner, Jammu for the period of 11 months. In the
  aforesaid two tenures, the work and conduct of the appellant
  was found to be good. It is also recorded that no complaint was
H
     RAJESH GUPTA v. STATE OF JAMMU AND                     563
                  KASHMIR
brought to the notice of the reporting officer. For the year 2003- A
2004 against the column integrity, it is mentioned that 'nothing .
against came in notice'. The reporting officer has said 'he is a
very good field officer'. The reviewing officer assessed-the
appellant as 'An outstanding officer'.
                                                                   B
      10. In spite of having a blemish-free record of service as
noticed above, the appellant was directed to be prematurely
retired by order dated 26th April, 2005 on the basis of the
recommendations made by the High Powered Review
Committee. The conclusion on the basis of which the                C
recommendations for retirement of the appellant has been
made are as under:-

            "5. As per inputs provided by the Additional DG CID
     the officer has amassed property disproportionate to his
     known sources of income which include a palatial house        D
   · at Krishna Colony Kathua built over about3 kanals of land;
    .two shops in Kathua market; six kanals of land in Kathua
     town, one kanal of land at Trikuta Nagar Jammu (Sector
     No.3), two kanals of land at Trikuta Nagar extension, three
     kanals of land at Greater Kailash Colony, Jammu; 10 maria     E
     plot at Bhatiandi and bank account and lockers in United
     Commercial Bank, R.N. Bazar and Vijay Bank, Purani,
     Mandi, Jammu."

     11. As per information provided by the Rural Development · F
Department, the officer was attached vide Government Order
No. 112-RD of 2004 dated 9.5.2003 for issuing back dated
sanctions relating to the execution of departmental works,
passing of bills and estimates in Jammu District and other
matters related thereto. A departmental enquiry has·been
ordered vide Government Order No. 125-RD of 2004 dated G
22.5.2003. The Officer is a professional litigant who has
created problems for the department. Besides, the reputation
of the officer is very bad."

    12. On the basis of these recommendations the                  H
    564     SUPREME COURT REPORTS                 [2013) 1 S.C.R.


A Government issued the order of retirement which was
  impugned by the appellant in the writ petition.

        13. The learned Single Judge dismissed the writ petition
  with the observations that "there is sufficient material on the
8 record which clearly speaks of the doubtful integrity of the
  petitioner." The Division Bench also concluded that the decision
  of the High Powered Committee to recommend the appellant's
  premature retirement was based on the inputs received from
  the Additional DG, CID regarding assets of appellant which
C were disproportionate to his known sources of income and the
  information received from the Rural Development Department
  that the appellant had issued back dated sanctions to some
  departmental works and passed bills and estimates in respect
  thereof.

D      14. The Division Bench concluded that the Vigilance
  Organization has found part of the assets allegedly
  disproportionate to the known source of income of the appellant
  though not purchased in the appellant's own name. The Division
  Bench notices that the assets at S. Nos. 6 and 7 were shown
E to have been purchased in the name of the father-in-law of the
  appellant. The Vigilance Organization had also indicated that
  there was unaccounted money in the sum of Rs.6,66, 103/- in
  the bank account. It was also stated that in other bank accounts
  of the appellant, there were transactions of Rs.24 lacs since
F 23rd February, 2008. Therefore, the Division Bench concluded
  that there was sufficient material before the Committee
  constituted to consider the case of the appellant to recommend
  his premature retirement.
       15. Mr. D.K. Garg, learned counsel appearing for the
G appellant submitted that the conclusion recorded by the High
  Powered Committee are based on no material and therefore,
  the recommendations for premature retirement of the appellant
  was without any basis. He submits that the decision taken by
  the State Government on the basis of the recommendations of
H the High Powered Committee is unreasonable and arbitrary
     RAJESH GUPTA v. STATE OF JAMMU AND                    565
                  KASHMIR
and therefore, liable to be quashed. He relies on the              A
unblemished record of the appellant for the past 24 years in
support of the submissions that the impugned order has been
passed without application of mind and therefore, deserves to
be quashed and set aside. He further submitted that even
subjective satisfaction of the Government had to be formulated     8
on the basis of relevant material which was wholly missing.
Learned counsel further submitted that on the basis of the
service record of the appellant it was not possible for the
Government to come to the conclusion that the appellant had
become deadwood. Furthermore, according to Mr. Garg, there         C
is no justification for the conclusion reached by the learned
Single Judge as well as by the Division Bench that the
Committee had recorded a finding of doubtful integrity with
regard to the appellant. He submitted that on the basis of some
allegations an enquiry was conducted and the conclusion could      D
at best indicate that the appellant had been negligent in
performance of his duties. In support of his submissions,
learned counsel has relied on judgments of this Court titled
Nand Kumar Verma versus State of Jharkhand and others
reported in 2012 (3) sec 580 and State of Gujarat versus
Umedbhai M. Patel reported in 2001 (3) SCC 314.                    E

      16. On the other hand, Mr. Sunil Fernandes, learned
counsel appearing for the respondent-State relying particularly,
on the conclusions recorded by the Additional DG, CID submits
that the material provided by the Additional DG, CJD in his        F
report dated 19th October, 2004 clearly indicate that the
properties mentioned therein belong to the appellant as also
there was no denial that the l.iank accounts mentioned at S.No.
9 also belong to the appellant. Learned counsel submit~ed that
since the order of premature retirement is not by way of           G
punishment nor is it stigmatic, it was not open to challenge any
of the grounds taken by the appellant. He submitted th·at the
plea put forth by the appellant that the properties at S.Nos. 6
and 7 have been gifted to his wife by the 'father-in-law are
without any basis. The appellant has failed to place on record     H
    566      SUPREME COURT REPORTS                  [2013] 1 S.C.R.

A any material to show that the properties were in fact, gifted by
  the father-in-law.

       17. Learned counsel was at pains to emphasise that the
  order of compulsory retirement is based on the
  recommendation of the Screening Committee. It was open to
B the court to interfere, unless such order is based on no evidence
  or is totally perverse. In the present case, the High Powered
  Committee had made the recommendation on the basis of
  relevant material. Therefore, according to the learned counsel,
  the High Court had rightly declined to interfere with the order.
C In support of his submission, learned counsel relied on Juga/
  Chandra Saikia vs. State of Assam & Anr. (2003) 4 SCC 59.
       18. Mr.Fernandes also submitted that the object of
  compulsory retirement is to weed out the dead wood and also
o to dispense with the services of those whose integrity is
  doubtful. The order of compulsory retirement does not per se
  cast any stigma on the government servant. Therefore, the
  scope for interfereni;e by the court is minimal. In support of this,
  he relied on Allanabad Bank Officers' Association & Anr. vs.
E Allahabad Bank & Ors. (1996) 4 SCC 504. In support of this
  submission, he relied on Baikuntha Nath Das & Anr. vs. Chief
  District Medical Officer, Baripada & Anr. (1992) 2 SCC 299.
         19. We have considered the submissions made by the
    learned counsel for the parties.
F
         20. The principles on which a government servant can be
    ordered to be compulsorily retired were authoritatively laid down
    by this Court in the case of Baikuntha Nath Das (supra). In
    Paragraph 34, the principles have been summed up as follows:
G
         "34. The following principles emerge from the above
    discussion:

          (1) An order of compulsory retirement is not a punishment.
H
 RAJESH GUPTA v. STATE OF JAMMU AND                        567'
              KASHMIR

It implies no stigma nor any suggestion of misbehaviour.           A

(ii) The order has to be passed by the government on
forming the opinion that it is in the public interest to retire
a government servant compulsorily. The order is passed
on the subjective satisfaction of the government.                  8
(iii) Principles of natural justice have no place in the context
 of an order of compulsory retirement. This does not mean
 that judicial scrutiny is excluded altogether. While the High
·Court or this Court would not examine the matter as an
 appellate court, they may interfere if they are satisfied that    C
 the order is passed (a) mala fide or (b} that it is based on
 no evidence or (c) that it is arbitrary - in the sense that
 no reasonable person would form the requisite opinion on
 the given material; in short, ff it is found to be a perverse
 order.                                                            D

(iv} The government (or the Review Committee, as the
case may be) shall have to consider the entire record of
service before taking a decision in the matter - of course
attaching more importance to record of and performance             E
during the later years. The record to be so considered
would naturally include the entries in the confidential
records/character rolls, both favourable and adverse. If a
government servant is promoted to a higher post
notwithstanding the adverse remarks, such remarks lose             F
their sting, more so, if the promotion is based upon merit
(selection) and not upon seniority.

(v} An order of compulsory retirement is not liable to be
quashed by a Court merely on the showing that while
passing it uncommunicated adverse remarks were also                G
taken into consideration. That circumstance by itself cannot
be a basis for interference.

Interference is permissible only on the grounds mentioned
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    568       SUPREME COURT REPORTS                   [2013] 1 S.C.R.


A         in (iii) above. This aspect has been discussed in paras 30
          to 32 above.

       The aforesaid principles have been re-examined and
  reiterated by this Court in the case of Nand Kumar Verma
B (supra). The principles have been restated as follows :-

          34. It is also well settled that the formation of opinion for
          compulsory retirement is based on the subjective
          satisfaction of the authority concerned but such satisfaction
          must be based on a valid material. It is permissible for the
c         courts to ascertain whether a valid material exists or
          otherwise, on which the subjective satisfaction of the
          administrative authority is based. In the present matter,
          what we see is that the High Court, while holding that the
          track record and service record of the appellant was
D         unsatisfactory, has selectively taken into consideration the
          service record for certain years only while making extracts
          of those contents of the AC Rs. There appears to be some
          discrepancy. We say so for the reason that the appellant
          has produced the copies of the ACRs which were obtained
E         by him from the High Court under the Right to Information
          Act, 2005 and a comparison of these two would positively
          indicate that the High Court has not fa!thfully extracted the
          contents of the ACRs.

F               36. The material on which the decision of the
          compulsory retirement was based, as extracted by the
          High Court in the impugned judgment, and material
          furnished by the appellant would reflect that totality of
          relevant materials were not considered or completely
          ignored by the High Court. This leads to only one
G         conclusion that the subjective satisfaction of the High Court
          was not based on the sufficient or relevant material. In this
          view of the matter, we cannot say that the service record
          of the appellant was unsatisfactory which would warrant
          premature ret,irement from service. Therefore, there was
H
     RAJESH GUPTA v. STATE OF JAMMU AND                      569
                  KASHMIR
    no justification to retire the appellant compulsorily from       A
    service.
    21. In the case of State of Gujarat vs. Umedbhai M.Pate/
(supra), the same principles were reiterated in the following
words :-
                                                                     B
         "11. The law relating to compulsory retirement has
    now crystallised into definite principles, which could be
    broadly summarised thus:

          (1) Whenever the services of a public servant are no       c
    longer useful to the general administration, the officer can
    be compulsorily retired for the sake of public interest.

          (ii) Ordinarily, the order of compulsory retirement is
    not to be treated as a punishrnent coming under Article
    311 of the Constitution.                                         D

          (iii) For better administration, it is necessary to chop
    off dead word, but the order of compulsory retirement can
    be passed after having due regard to the entire service
    record of the officer.                                           E
          (iv) Any adverse entries made in the confidential
    record shall be taken note of and be given due weightage
    in passing such order.
          (v) Even uncommunicated entries in the confidential        F·
    record can also be tRk'3n into consideration.
          (v1) The order of compulsory retirement shall not be
    passed as a short cut to avoid departmental enquiry when
    such course is more desirable.                                   G
           (vii} .If the officer was given a promotion despite
    adverse entries made in the confidential record, that is a
    fact in favour of the officer.
                                                                     H
    570       SUPREME COURT REPORTS                            [2013) 1 S.C.R.

A              (viii) Compulsory retirement shall not be imposed as
          a punitive measure."

          22. The judgments cited by Mr.Fernandes have only
    reiterated the principles earlier enunciated. In Juga/ Chandra
    Saikia (supra), this Court reiterated the principles in the
8
    following words:-

          "6 .............................................................. It cannot
          be disputed that the passing of an order of compulsory
          retirement depends on the subjective satisfaction of the
C         competent authority, of course on objective consideration.
          Unless it is shown that the order of compulsory retirement
          was passed arbitrarily and without application of mind or
          that such formation of opinion to retire compulsorily was
          based on no evidence or that the order of compulsory
D         retirement was totally perverse, the court cannot interfere."

      23. Examining the record of the appellant therein and the
  material that was placed before the Screening Committee, the
  High Court as well as this Court came to the conclusion that
E on an objective consideration of the material on the record it
  was not possible to accept the argument that the Screening
  Committee had acted only on the basis of the report of the Rao
  Committee. It was found that the recommendations of the
  Screening Committee were based on relevant material.

F       24. In Allahabad Bank Officers' Association case (supra),
  this Court examined whether the order of compulsory
  retirement, passed in that case.. cast a stigma on appellant
  No.2. The impugned order therein had recited that there was
  "want of application to Bank's work and lack of potential" and
G "he has also been found not dependable". It was the case of
  the appellant N0.2 that the aforesaid expressions were
  stigmatic as they cast aspersions on his conduct, character and
  integrity. The High Court rejected the plea of appellant No.2 on
  the ground that the recitals do not cast any stigma but only
H
     RAJESH GUPTA v. STATE OF JAMMU AND                      571
                  KASHMIR

assesses the work of appellant No.2 for determining the issue        A
of his compulsory retirement. In these circumstances, it was
observed that the object of compulsory retirement is to weed
out the dead wood in order to maintain efficiency in the service
and also to dispense with the services of those whose integrity
is doubtful, so as to preserve purity in the administration. The     B
order of compulsory retirement was distinguished from the order
of dismissal and removal, as it does not inflict any punishment
on the government servant. It only deprives the government
servant of the opportunity to remain in service till the age of
superannuation. Therefore, the order of compulsory retirement        C
differs from an order of dismissal or removal both in its nature
and consequence. However, in case it is found that the order
is stigmatic it would be treated as an order of punishment,
which cannot be passed without complying with the provisions
of Article 311 (2) and the rules of natural justice. Upon            D
examination of a large body of case law, it was observed that
the order of compulsory retirement does not cast a stigma on
the Government servant. But if the order contains a statement
casting aspersion on his conduct or character, then the court
will treat the order as an order of punishment, attracting the       E
provisions of Article 311 (2) of the Constitution. In the facts of
that case, it was concluded that the two recitals contained in
the order of premature retirement had been made in relation
to the work of appellant No.2 and not for any other purpose.
Therefore, the court declined to interfere with the order of the
                                                                     F
High Court.

    25. Examining the fact situation in this case on the basis
of the aforesaid principles, it becomes evident that
recommendation made by the High Powered Committee was
indubitably arbitrary.                                               G

     26. The report submitted by the Additional DGP CID is as
follows:

         "Sub: Disproportionate assets of Shri Rajesh Gupta,
    Executive Engineer, Rural Engineering Wing, Kathua.              H
    572       SUPREME COURT REPORTS                  [2013] 1 S.C.R.


A                The officer originally hails from Kathua and has
          amassed property and assets worth crores of rupees. He
          has accumulated unaccounted wealth in the shape of
          movable/immovable properties both at Kathua and Jammu
          by misusing his official position for pecuniary gains. As per
B         reliable sources he is in possession of the following assets
          which are in no way commensurate with all known sources
          of his income:-

          (i) He owns a palatial house at Krishna Colony, Kathua built
          over at least 3 kanals of land with all modern fittings,
c         fixtures, electronics gadgets and costly household articles.
          In the same building he has set up a shoe making unit and
          goods are being sold by his brother in the market on shops
          owned by him. The estimated cost of this building
          alongwith other infrastructure is not less than Rs.30 lacs.
D
          (ii) He owns a shop below State Bank of India Branch at
          Kathua which is a busy market. The minimum value
          assessed is Rs.1 O lacs.
          (iii) Another shop situated opposite DC Office Kathua
E
          which is also a prime location valued at more than Rs.10
          lacs.

          (iv) He is also in possession of about 6 kanals of land near
          DPL Kathua which is also a costly chunk of land valued at
F         not less than Rs.30 lacs.

          (v) Recently the said officer has purchased plot No.158
          measuring one kanal at Trikuta Nagar, Jammu in Sector
          3 behind Gurdwara Saheb for Rs.24 lacs. On this piece
G         of land, the officer has spent more than RS.30 lacs for the
          construction of a house. Previously, he was putting up in
          a rented house at 48/4 Nanak Nagar, Jammu.
          (vi) He is also in possession of 2 kanals of land at Trikuta
          Nagar Ext. Khoo Wali Gali which is also a valuable site
H
     RAJESH GUPTA v. STATE OF JAMMU AND                    573
                  KASHMIR

    and values about Rs.15 lacs.                                  A

    (vii) 3 kanals of land at Greater Kailash Colony, Jammu
    whose market value is about Rs.25 lacs.

    (viii) 10 Marla plot at Bathindi valuing Rs.3 lacs.
                                                                  B
    (ix) He has bank accounts and lockers in United
    Commercial Bank, R.N.Ba .... and Vijay Bank, Purani
    Mandi Jammu.

    2. Besides, he may be in possession of other assets in        c
    the shape o jewellery/valuables/securities etc. which can
    be unearthed only after iJroper probe. He also having
    lockers/bank accounts in the name of his wife namely Smt.
    Poonam Gupta, Rahil (son), Balkrishen (father) and
    Rakesh (brother) at Jammu as well as Kathua. It is            D
    worthwhile to mention here that he comes from a family of
    model means. His father is a retired Sr. Assistant. He has
    developed connections manipulate lucrative postings to
    mint money.

                                                          Sd/-    E
                                         Addi. DGP CID J & K

    Chief Secretary, J&K

     No.NGO/EMP©/2698-99                                          F
   . Dated Oct.19, 2004"

     27. During the course of the submissions before us,
learned counsel for the State of Jammu & Kashmir accepted
that there was no material with regard to properties at Sl.No.1   G
to 5. Therefore, we shall say no more about the same. With
regard to the properties at Sl.No.6 and 7, Mr.Garg learned
counsel for the appellant pointed out that during the pendency
of the Letters Patent Appeal in the High Court, the respondents
were directed to place on record the findings recorded by the
                                                                  H
    574      SUPREME COURT REPORTS                  [2013] 1 S.C.R.


A Special Investigation Team which was constituted for carrying
  detailed investigation into the question as to whether the
  petitioner was in possession of the assets mentioned in the
  report of the Additional DGP dated 19th October, 2004. The
  report dated 1. 7 .2010 submitted by the Joint Director
B (Prosecution} was placed on record of the High Court alongwith
  an affidavit. The report with regard to the aforesaid two
  properties is as under:-

           "03. Two kanals of land at Trikuta Nagar Extn. Jammu :-
c               The land/plots were found purchased by Shri Devi
          Dutt Mal Gupta, (Father-in-law of the subject officer}, who
          subsequently gifted it to his grandson Rahul Gupta, who
          happens to be the son of Rajesh Gupta (subject offi'cer} in
          the year 2003.
D
            04. Three kanals of land at Greater Kailash. Jammu:-

                 This piece of land alongwith 1 kanal and 6 Marlas
          have been purchased by one Shri Vijay Kumar from actual
E         owners and stand mutated since in the name of purchaser.
          This asset as per revenue records was found not
          attributable to the subject officer."

        28. The report also does not indicate that there is any
F irregularity in the bank accounts maintained by the appellant.
  The affidavit filed on behalf of the State of Jammu and Kashmir
  clearly shows that according to the Vigilance Organization, three
  First Information Reports bearing Nos. 49/91, 11/95 and 63/
  94 were registered by the State Vigilance Organization against
  the appellant when he was posted as Executive Engineer
G (REW, Kathua}. Upon investigation, all the Fl Rs were found to
  be "Not Proved". However, recommendation was made to
  initiate departmental action against the officer. lnspite of the
  aforesaid recommendation, it has not been disputed before us,
  that no departmental action was ever initiated against the
H
       RAJESH GUPTA v. STATE OF JAMMU AND                        575
                    KASHMIR

 appellant. In fact, after the completion of the investigation into      A
 the Fl Rs, the appellant was promoted to the post of Executive
 Engineer on 15.12.1-996. Therefore, it can be safely concluded
·that there were no material before the High Powered
 Committee to conclude that the officer possessed assets
 beyond his known source of income.                                      B

        29. This now takes us to the other material on the basis
  of which the recommendation has been made by the High
  Powered Committee. It has been noticed by us earlier that the
  appellant was required, in the performance of his official duties,     C
  to recommend the sanctioning of technical approval to the
  construction of works of various projects. The allegation with
  regard to issuing back dated technical sanctions was duly
  inquired into. The conclusion ultimately reached by inquiry
  officer noticed in the earlier part of the order indicates ·that at
  best the appellant acted in a casual and haphazard manner in           D
  the maintenance of records. Such negligence on the part of the
  appellant cannot per se lead to the conclusion that the appellant
  was acting in such a manner with an ulterior motive. The
. conclusions reached by the High Powered Committee also do
  not co-relate to the assessment of work and integrity of the           E
  appellant in the annual performance report. As noticed earlier,
  in all the annual performance reports, the officer has been rated
  'very good', 'excellent' and even 'outstanding'.·

      30. In view of the aforesaid, the conclusion is inescapable,       F
 that the order passed by the State Government suffers from
 vice of arbitrariness. The High Court erred in arriving at
 conclusions which )Nere not borne out by the record produced
 before the High court. In view of the settled law, it is not possible
 for us to uphold the judgments of the Single Judge as also of           G
 the Division Bench.

        31. Consequently, the appeal is allowed, the impugned
  order of the premature retirement of the appellant dated 26th
. April, 2005 is quashed and set aside. It is brought to our notice
  that the appellant has still, not reached the age of                   H
    576       SUPREME COURT REPORTS                  [2013] 1 S.C.R.


A superannuation. He is, therefore, directed to be reinstated in
  service. In view of the fact that the appellant has not challenged
  the order of premature retirement on the ground that the action
  taken by the Government was malafide, it would not be
  appropriate in this case, to follow the normal rule of grant of
B Jull backwages on reinstatement. We, however, direct that the
  appellant shall be paid 30% of the backwages from the date
  of order of premature retirement till reinstatement. He shall not
  be entitled to any interest on the backwages.

C       32. We may further observe that upon reinstatement, it shall
    be open to the Government to post the appellant on a non
    sensitive post in view of the background of the case.

       33. Let the order be implemented within a period of four
    weeks.
D
          34. There shall be no order as to costs.
    B.B.B.                                           Appeal allowed.