Link and references:
M/s Overseas Enterprises Versus
The Union of India through the Chief Commissioner of Customs
(Preventive) , and other officers 2016 (1) TMI 726 - PATNA HIGH COURT
Court directs to pay damages to be recovered from erring officers:
In
case of M/s Overseas Enterprises (supra.) the honourable Patna High
Court has held that the Custom Department shall pay damages to
petitioner and these will be recovered from erring officers, after
making enquiry. Even during pendency of such enquiry, the damages is to
be paid by department with interest, and in case there is delay in such
payment rate of interest shall also increase.
Major references and observations of the Court about accountability:
By
now, the law is well settled that the public officers have to be also
held accountable for their acts of omission and commission.
The
concept of public accountability and performance of functions takes in
its ambit, proper and timely action in accordance with law. Public duty
and public obligation both are essentials of good administration whether
by the State or its instrumentalities.
In the case of Centre for
Public Interest Litigation & Anr. v. Union of India & Anr. [2005
(10) TMI 530 - Supreme Court Of India], this Court declared the dictum
that State actions causing loss are actionable under public law. This is
a result of innovation, a new tool with the courts which are the
protectors of civil liberties of the citizens and would ensure
protection against devastating results of State action.
The
principles of public accountability and transparency in State action are
applicable to cases of executive or statutory exercise of power,
besides requiring that such actions also not lack bona fides.
All
these principles enunciated by the Court over a passage of time clearly
mandate that public officers are answerable for both their inaction and
irresponsible actions. If what ought to have been done is not done,
responsibility should be fixed on the erring officers; then alone, the
real public purpose of an answerable administration would be satisfied.
By-now
it is well settled that a noting in the file is not a concluded order
as was held by the Apex Court in the case of Bachhittar Singh v. State
of Punjab & anr., reported in 1962 (3) TMI 84 - SUPREME COURT OF
INDIA.
In the case of State of Bihar v. Subhash Singh [1997 (2)
TMI 548 - SUPREME COURT], the Court, in exercise of the powers of
judicial review, stated that the doctrine of `full faith and credit'
applies to the acts done by the officers in the hierarchy of the State.
They have to faithfully discharge their duties to elongate public
purpose.
The doctrine of `full faith and credit' applies to the
acts done by the officers. There is a presumptive evidence of regularity
in official acts, done or performed, and there should be faithful
discharge of duties to elongate public purpose in accordance with the
procedure prescribed.
Avoidance and delay in decision making
process in Government hierarchy is a matter of growing concern.
Sometimes delayed decisions can cause prejudice to the rights of the
parties besides there being violation of the statutory rule.
The
Apex Court had occasion to express its concern in different cases from
time to time in relation to such matters. In the case of State of Andhra
Pradesh v. Food Corporation of India [(2004) 13 SCC 53], the Supreme
Court Court observed that it is a known fact that in transactions of
Government business, no one would own personal responsibility and
decisions would be leisurely taken at various levels.
Principles
of public accountability are applicable to such officers/officials with
all their rigour. Greater the power to decide, higher is the
responsibility to be just and fair.
The dimensions of
administrative law permit judicial intervention in decisions, though of
administrative nature, which are ex facie discriminatory.
The
adverse impact of lack of probity in discharge of public duties can
result in varied defects, not only in the decision making process but in
the final decision as well.
Every officer in the hierarchy of the
State, by virtue of his being `public officer' or `public servant', is
accountable for his decisions to the public as well as to the State.
This concept of dual responsibility should be applied with its rigours
in the larger public interest and for proper governance."
Summary:
we can summarise in easy language that the authority / officers
empowered to function under a statute while exercising power discharges
public duty. It has to act to sub serve general welfare and common good.
In a modem society no authority can arrogate to itself the power to act
in a manner which is arbitrary. It is unfortunate that matters which
require immediate attention linger on and the man in the street is made
to run from one end to other with no result. Where the duty is performed
capriciously or the exercise of power results in harassment and agony
then the responsibility to pay the loss determined should be whose?
The court awarded costs in favour of petitioner with direction to recover from erring officers.
Case of Overseas Enterprises (supra)
In
the case of Overseas Enterprises (supra.) honourable Patna High Court
directed to erring Customs officials to pay costs / damages of ₹ 14
lakh + interest @ 9% p.a. from personal account & to face
disciplinary action for “high-handedness”, arbitrariness” and seeking to
“hoodwink” Court.
Who should bear: The court considered that the issue is not only of award of compensation but who should bear the brunt.
Concept of authority and power and accountability:
The
Court observed that the concept of authority and power exercised by
public functionaries has many dimensions. It has undergone tremendous
change with passage of time and change in socioeconomic outlook. The
authority / officers empowered to function under a statute while
exercising power discharges public duty. It has to act to subserve
general welfare and common good. In discharging this duty honestly and
bona fide, loss may accrue to any person. And he may claim compensation
which may in circumstances be payable. But where the duty is performed
capriciously or the exercise of power results in harassment and agony
then the responsibility to pay the loss determined should be whose?
In
a modem society no authority can arrogate to itself the power to act in
a manner which is arbitrary. It is unfortunate that matters which
require immediate attention linger on and the man in the street is made
to run from one end to other with no result.
About work culture and impact on common man:
The
culture of window clearance appears to be totally dead. Even in
ordinary matters a common man who has neither the political backing nor
the financial strength to match the inaction in public oriented
departments gets frustrated and it erodes the credibility in the system.
Public administration, no doubt involves a vast amount of
administrative discretion which shields the action of administrative
authority. But where it is found that exercise of discretion was mala
fide and the complainant is entitled to compensation for mental and
physical harassment then the officer can no more claim to be under
protective cover. When a citizen seeks to recover compensation from a
public authority in respect of injuries suffered by him for capricious
exercise of power and the National Commission finds it duly proved then
it has a statutory obligation to award the same. It was never more
necessary than today when even social obligations are regulated by grant
of statutory powers. The test of permissive form of grant is over. It
is now imperative and implicit in the exercise of power that it should
be for the sake of society. When the court directs payment of damages or
compensation against the State the ultimate sufferer is the common man.
It is the tax payers’ money which is paid for inaction of those who are
entrusted under the Act to discharge their duties in accordance with
law. It is, therefore, necessary that the Commission when it is
satisfied that a complainant is entitled to compensation for harassment
or mental agony or oppression, which finding of course should be
recorded carefully on material and convincing circumstances and not
lightly, then it should further direct the department concerned to pay
the amount to the complainant from the public fund immediately but to
recover the same from those who are found responsible for such
unpardonable behaviour by dividing it proportionately where there are
more than one functionaries
Loss suffered due to delay in release of seized goods:
PRAYER BEFORCOURT:
"That the petitioners by way of the present writ petition are seeking a
writ of mandamus and/or any other appropriate writ or direction to the
Respondents to release the seized goods (split betel nuts) of the
petitioners imported vide Bill of Entry No. 01210/16/2013 dated
28.01.2013 weighing 15.470 MT which have been illegally and
unauthorizedly withheld by the Respondents despite the proceedings
initiated against the petitioners in respect of the said goods for the
charge of its illegal import has been dropped by the Adjudicating
authority and there is a specific direction for release of the seized
goods vide order dated 28.03.2013."
In this regard Court observed as follows:
“ Thus, having an overall picture this court will have no difficulty
in coming to the ultimate conclusion that the petitioners on account of
abnormal delay of almost 1½ years caused in release of its seized betel
nuts have been put to a perennial loss. Since the authorities themselves
had valued and quantified the price of the seized articles, namely,
split betel nuts weighing 15.470 M.T. to the tune of ₹ 14,69,650/- on
17.2.2013, the petitioners would become at least entitled to recover
this amount from the officials of the Custom Department. “
By
now, the law is well settled that the public officers have to be also
held accountable for their acts of omission and commission.
Thus,
when this Court has found that the petitioners have been put to a loss
of at least ₹ 14,69,650/- on account of complete deterioration of
quality of split betel nuts solely on account of deliberate laches on
the part of the officials of the Custom Department it would direct
respondent no.2 to pay a sum of ₹ 14,69,650/- along with interest at the
rate of 9% per annum for the period 28.3.2013, the date on which the
order of provisional release of the seized article was passed by the
competent authority to the order directing release of the seized
articles dated 9.8.2014 within a period of three months from today.
It
is, however, made clear that such amount, which has to be paid by way
of compensation for the loss caused to the petitioners on account of
delay of nearly 1½ years in release of the seized articles, shall be
recovered from the erring officials and for the purposes of fixing
individual responsibility on such erring officials this Court would
direct the Chairman of Central Board of Excise and Customs Department of
Revenue, New Delhi to get an enquiry conducted by an Officer not below
in the rank of Chief Commissioner of Customs who must not be posted
and/or associated in any manner with Patna Zone of the Custom
Department.
In the ultimate order, honourable Court held as follows ( with highlights added by author):
85. With the aforementioned observations and directions, this
writ application is allowed with a cost of ₹ 25,000/- quantified by this
Court for coercing and compelling the petitioners to file this writ
petition for release of their seized betel nuts to be paid by the
Respondents to the petitioners within a period of three months from
today.
86. It is, however, made clear that irrespective
of initiation and conclusion of the aforesaid proceedings against the
erring officials of Customs department of Patna zone by the Chairman of
Central Board of Excise and Customs, the payment of the amount of ₹
14,69,650/- alongwith interest at the rate of 9% per annum from
28.3.2013 to 9.8.2014 must be made to the petitioners within a period of
three months from today, failing which the amount of interest on the
amount of ₹ 14,69,650/- shall stand enhanced from 9% per annum to 18%
per annum from 28.3.2013 till the date of its actual payment.
Such orders must be welcome if corruption is to reduce:
Corruption
at ground level is due to non-accountability of officers for wrong
actions, no action and delayed actions. Passing orders contrary to
settled legal position is not un-common. Just on pretext of revenue may
file appeal or review petition even with petition for condonation of
delay, revenue officers blatant refuse to follow binding judgments,
raise demand and forcibly collect such demands.
Tax
assesses are afraid of further harassment, so they file appeal and pay
against disputed dues. The reason for this is that stay petitions are
dismissed by revenue officers arbitrarily and unjustly. Senior
authorities are also not ready to hear grievance simply for the reason
that tax collection target has to be met. In course of meeting unjust
and unreasonable targets of tax collection, tax payers are harassed to
pay advance tax, excess tax and against disputed tax demands. These are
ground realities, Unless erring officers are made accountable, such
actions will continue.
An example: In an assessment the
AO makes disallowances/ additions on ten counts. In first appeal
disallowances / additions on eight counts are fully deleted and on two
counts partially deleted. In second appeal balance of additions and
disallowances are mostly deleted but just token amount are confirmed
(about 5-10%).
The AO issues show cause notice for levy
of penalty in respect of token additions / disallowances remaining
confirmed after second appeal.
There is no action
against the Tax officer for levy of penalty or disciplinary proceedings
in respect fo major additions deleted by appellate authorities but the
assessee can be burdened by levy of token additions/ disallowances
confirmed.
If
there be a disciplinary action, and adequate punishment for arbitrary
actions of the officer, then only corruption at field level shall
reduce. In absence of such punishment attitude of ‘who cares for order
of Court ‘shall continue, as we have long experience in past.