1998 Supreme(SC) 1151

1998(8) Supreme 441
Supreme Court of India
(Under Articles 145 and 139A(2) of the Constitution of India)
Mrs. Sujata V. Manohar and G.B. Pattanaik, JJ.
Income Tax Appellate Tribunal through its President -Applicant
versus
V.K. Agarwal & Anr. -Respondents
Contempt Petition No. 287 of 1998
In
Transferred Case No. 6 of 1997
Decided on 17-11-1998
Counsel for the Parties :
For the Applicant : Dinesh Vyas, Sr. Advocate, P.H. Parekh, Sameer Parekh and Ms. Bina Madhavan, Advocates.
For the Respondents : Altaf Ahmad, Additional Solicitor General, K.K. Venu­gopal, Sr. Advocate, Uma Dutta, (T.C. Sharma) Advocate for P. Parmeswaran, Advocate.

Important Points
1. Under Article 129 of Constitution of India the Supreme Court has power to punish, not merely for contempt of itself, but also for contempt of all Courts and Tribunals subordinate to it; Supreme Court has jurisdiction to punish Contempt of the Income Tax Appellate Tribu­nal.
2. Where the Law Secretary of Department of Legal Affairs wrote letter to the President of the Income-tax Appellate Tribunal questioning a decision given in a particular case by a Bench of Income-tax Appellate Tribunal, and the conduct of a Member of the Tribunal in deciding a case the acts of the Law Secretary amounted to interfering with independent functioning of Tribunal amounting to gross Contempt of Court.
3. Supervisory control of the Department of Legal Affairs over the Income-tax Appellate Tribunal is administrative supervision and con­trol; it does not extend to controlling or questioning judicial deci­sions of the Appellate Tribunal.
4. Unless an order of a Bench of Income Tax Appellate Tribunal is signed by all Members constituting it and is dated, it is not an order of the Appellate Tribunal.

Headnote:(i) Constitution of India-Article 129-Supreme Court-Power to punish for Contempt of Court-Supreme Court has power to punish, not merely for contempt of itself, but also for contempt of all Courts and Tribunals subordinate to it-Has jurisdiction to punish for contempt of Income-tax Appellate Tribunal.

       Held : Article 129 of the Constitution provides that the Supreme Court shall be a Court of Record and shall have all the powers of such a court including the power to punish for contempt of itself. This Article has come up for consi­deration on numerous occasions. This Court has consistently held that the Sup­reme Court has power under this Article to punish, not merely for contempt of itself, but also for contempt of all Courts and Tribunals subordinate to it. Since this Court has the power of judicial superintendence and control over all the Courts and Tribunals func­tioning in the country, it has a corresponding duty to protect and safeguard the interests of inferior courts to ensure that the flow of the stream of justice in the courts remains unsullied by any interference or attack from any quarter. The amplitude of the power of this Court cannot be curtailed by a law made by the Central or a State Legislature. This Court’s jurisdiction and power to take action for contempt of subordinate courts is its inherent jurisdiction, and is protected under Article 129. There can, therefore, be no doubt that this Court has jurisdiction to punish for contempt of the Income Tax Appellate Tribunal. (Paras 11 & 12)

       The argument that although the Sup­reme Court may have jurisdiction to punish for contempt, that jurisdiction should not be exercised to punish for contempt of Court of Income-tax Appellate Tribunal cannot be exercised on the ground the appropriate authority to take action would be the High Court cannot be accepted. The Income Tax Appellate Tribunal, although it may have Benches in different parts of the country, is a national Tribunal and its functioning affects the entire country and all its Benches. Appeals also lie ultimately to this Court from the decisions and References made by the Tribunal. The mere fact that by this Court taking suo motu cognizance of the contempt, the first res­pondent would not be able to appeal to any other court, cannot be a ground for not exercising the power to punish for contempt of a National Tribunal. (Para 13)

       In the present case the President of the Tribunal has sought directions and orders from this Court and has placed all relevant information concerning the conduct of the first respondent before us, on the basis of which this Court has, suo motu, issued notice. Section 15 of the Contempt of Courts Act which deals with cognizance of crimi­nal contempt, also prescribes that the Supreme Court or the High Court may take action on its own motion. Rule 3(a) of the Supreme Court Rules regulating proceedings for contempt of the Supreme Court, similarly provides for the court taking action suo motu. In the case of Supreme Court Bar Association v. Union of India & Anr. 1998(4) SCC 409, after reiterat­ing the position that Article 129 vests the Supreme Court with power to punish not only for contempt for itself but also contains the inherent jurisdiction of the court to punish for contempt of subordi­nate courts and Tribunals in order to prevent interference in the due administration of justice, this Court also clarified the position of a party which brings the contumacious conduct of the contemner to the notice of the court. It said (page 429) that the party which brings such conduct to the notice of the court, whether a private person or the subordinate court, is only an informant and does not have the status of a litigant in the contempt of court case. The case of con­tempt is not stricto sensu a cause or a matter between the parties, inter se. It is a matter between the court and the contemner. Whenever an Act adversely affects the administration of justice or tends to impede its course, or shake public confidence in a judicial institution, the power can be exercised to uphold the dignity of the court of law and protect its proper functioning. (Paras 14 & 15)

       (ii) Contempt Courts of Act, 1971-Section 2(c) read with Article 129 of Constitution of India-Criminal Contempt of Court-Income tax Appel­late Tribunal-Judicial member wrote draft order in a case in favour of assessee-Accountant member wrote separate order in favour of reve­nue and Judicial member ultimately concurred with that order and that order signed and pronounced and issued-Law Secretary writing letter to President of ITAT seeking explanation pointing out that two contradictory orders got dictated-Another letter demanding report from President of ITAT threatening to take appropriate action that Government might deem fit-Conduct of Law Secretary who is expected to maintain independence of ITAT and not interfere with judicial func­tioning amount to gross Contempt of Court-It is a threat to independ­ent functioning of Tribunal-Law Secretary punish­ed with fine of Rs. 2000.

       Held : The definition of criminal contempt under Section 2(c), therefore, refers not merely to publication by words, signs etc. but includes the doing of any act whatsoever which scandalises or tends to scandalise or lowers or tends to lower the authority of any court [Section 2(c)(i)] or interferes or tends to interfere with, or obstructs or tends to obstruct, the administration of justice in any manner [Section 2(c)(iii)]. Therefore, any act which tends to interfere with the admin­istration of justice or tends to lower the authority of any court can be punished with contempt. (Para 15)

       In the present case the President of the Income Tax Appellate Tribunal has considered the letters of 30th of December, 1997 and 3rd of February, 1998 of the first respondent as interference with the judicial decision-making process of the Tribunal. The concerned Mem­bers of the Tribunal from whom the President invited comments, also looked upon the letter of 30th December, 1997 as gross interference in the judicial discharge of their duties; and they were justified in so viewing the letter. The first respondent had jumped to the conclusion that the judicial Member had issued two contradictory orders or the Tribunal had issued two contradictory orders, and had demanded action against erring members. Coming as it did from a senior officer holding the rank of Law Secretary, the applicant was justified in taking a serious view of the first respondent’s conduct. It is quite clear that by writing the two letters the first respondent was questioning the judicial decision arrived at by the Tribunal. The first respondent had commented upon the two so-called “orders” and had said that the so-called contradictory orders disclosed judicial impropriety of the highest degree. He had demanded action against the Members of the Tribunal. Questioning of a decision given in a particular case, or the conduct of a Member of the Tribunal in deciding a case by the Law Secretary who has the power to write confi­dential reports of the Tribunal Members, is bound to be perceived by the Members as an attempt to affect their decision making. It is a clear threat to their independent functioning. The letter also tends to undermine confidence in the judicial functioning of the Tribunal. (Paras 16 & 17)

       Section 3 has no appli­cation in the present case. The letters of the first respondent insin­uate a dishonest conduct on the part of the two members, presumably because the view expressed by the Judicial Member in the first alleged order is changed by him in favour of the revenue when he concurs with the order which was actually pronounced. This kind of an attack based on access to a confidential draft exchanged between the Members of the Bench is bound to affect free exchange of ideas between the two Mem­bers who have to judicially decide a case. It is a clear obstruction to proper decision-making and to proper administration of justice. (Para 19)

       The first respondent has tried to justify his conduct by saying that the letters were written by him bona fide in the exercise of his right to control the functioning of the Tribunal. He has pointed out that the Tribunal functions under the Department of Law and Justice. The Rules of Recruitment provide that the Law Secretary should be a member of the Selection Board which selects the Members of the Tribunal. The confidential reports of the Tribunal’s Members are writ­ten by the Law Secretary. The Ministry of Law and Justice, Department of Legal Affairs, exercises disciplinary powers over the Members of the Tribunal. The Allocation of Business Rules of the Government of India place the Income Tax Appellate Tribunal under the Department of Legal Affairs, Ministry of Law and Justice. He contends that the two letters were written by him in a legitimate exercise of his power of supervision and control, and these could not be construed as contempt. In the present case, however, the Rules of Allocation of Business as also the supervisory control of the Department of Legal Affairs over the Income Tax Appellate Tribunal, is administrative supervision and control. It does not extend to controlling or questioning judicial decisions of the Appellate Tribu­nal. (Para 21)

       Unless the order of a Bench is signed by all Members con­stituting it and is dated, it is not an order of the Appellate Tribu­nal. Secondly, this signed and dated order has to be communicated both to the assessee and to the Commissioner. The first respondent has noted in the letter of 30th December 1997, that the first so-called “order” only bears the signature one Member. It is not signed by the second Member, nor does it bear any date. He ought to have verified whether this so called first “order” had been communicated to the assessee or to the Commissioner. Had he done so, so he would have found that such an “order” does not exist and no such order has been communicated either to the assessee or to the Commissioner. Had he been aware of Rule 34, he would have realised that if the copies which were sent to him were authentic, then the only order which could be construed as an order of the Tribunal was the second order which was signed by both the Members and bore a date. Had he ascertained from the Commissioner of Income Tax or the assessee which order had been communicated to them, he would have found that the only order which had been communicated was the order signed by both the Members and bearing the date 23rd of October, 1997. Therefore, he should have realised that there could not possibly have been any misunderstanding about the order passed. What appears from the letter is that the first respondent seems have taken umbrage at the fact that the Judicial Member, whose initial draft order was in favour of the assessee, was changed and the Judicial Member, after discussion with the Accountant Member, ultimately agreed with the view taken by the Accountant Member and decided the appeal in favour of the Revenue. Certainly, the language of the letter of 30th of December, 1997 is wholly unwarrant­ed. Curiously, the statement in the letter that the aforesaid circumstances disclose judicial impro­priety of highest degree is reminiscent of the language used in the pseudonymous complaint. In­stead of even waiting for an explanation, he has straightway asked the President to enquire into the matter and send a report to the Govern­ment, and that too peremptorily within ten days. All this is wholly unbecoming of a person holding the rank of the Law Secretary. Moreover, without waiting for some time for a response from the Presi­dent, immediately on the lapse of a month, he wrote a second letter of 3rd of February, 1998 in an equally peremptory fashion pointing out that although the President was requested to reply within ten days, he had not received any report even after a month! He admo­nished the President, pointing out that the President had the responsibility to ensure that the judicial functions are discharged properly, he re­ferred to the so called irregularity, and even went to the extent of saying that silence on the part of the President may invite adverse inferences in the matter! He demanded a report from the President not later than 6th of February, 1998, when this letter was dated 3rd of February, 1998. The entire tone of the letter is highly unwarranted, offensive and tends to undermine the dignity of the post of the Presi­dent of the Appellate Tribunal. It is unbecoming of the Law Secretary to issue such “commands” to the President of the Income Tax Appellate Tribunal ordering him to send reports within a few days and threaten­ing that adverse inferences would be drawn if the report is not so sent-and all this without even bothering to check whether the com­plaint received by him was a genuine complaint or not! (Para 22)

       This kind of conduct and that too on the part of the Law Secretary, who is expected to maintain the independence of the Income Tax Appellate Tribunal and not interfere with its judicial functioning, amounts to gross contempt of court. It is a deliberate attempt on his part to question the judicial functioning of the Tribu­nal coming as it does from a person of his rank. It is rightly per­ceived by the President as well as the two concerned Members of the Tribunal as a threat to their independent functioning in the course of deciding appeals coming up before him. (Para 24)

       The first respondent has offered his apology to us. However, looking to all the circumstances of the present case we cannot accept the analogy offered. He has travelled far beyond exercising adminis­trative control over the Tribunal. He has tried to influence or ques­tion the decision-making process of the Tribunal. An apology, in these circumstances, cannot be accepted. We, therefore, hold the first respondent guilty of contempt of court. Looking, however, to the fact that he has since retired as the Law Secretary and is not in a posi­tion to inflict further damage, the ends of justice will be met if he is fined a sum of Rs. 2,000/- as punishment for contempt. (Para 25)

       (iii) Income-tax Act, 1961-Section 254-Appellate Tribunal-Orders of-Unless order of a Bench is signed all members constituting it and is dated it is not an order of Appellate Tribunal. (Para 21)

       (iv) Income-tax Act, 1961-Sections 252 and 255-Appellate Tribunal-Minis­try of Law’s control over Tribunal-Scope of-Control of Department of Legal Affairs over Appellate Tribunal is administrative-It does not extend to controlling or questioning judicial decisions of the Appel­late Tribunal. (Para 21)