JUDGMENT

K. RAMASWAMY, J. (for himself and Jeevan Reddy, J.) - Leave granted.

2. This appeal and the companion appeal filed by the Union of India arise from the order of the Administrative Tribunal in OA No. 609 of 1986 dated 14-3-1989. Appellants integrity, while he was working as Income Tax Officer, had come under a cloud. On an investigation made by the CBI, it had stated to the respondent that though the evidence collected during investigation disclosed that the appellant had assets disproportionate to his known sources of income, as the evidence was not strong enough to lay prosecution under Section 5(1)(e) of the Prevention of Corruption Act, 1947 (for short the Act), the competent authority might proceed against the appellant in a departmental enquiry.

3. In furtherance thereof on 2-3-1982, the appellant was served with the charge-sheet containing four specific charges for violating different conduct rules and misconduct of being in possession of property disproportionate to his known sources of income. After giving reasonable opportunity and conducting inquiry, the Enquiry Officer submitted his report on 28-1-1984 holding the charges to have been proved. After consultation with the Union Public Service Commission on 11-3-1985, the appellant was dismissed from service by order dated 29-10-1986. The Tribunal after appreciating the evidence, upheld all the charges as having been proved but converted the order of dismissal into one of compulsory retirement. The appeal was filed by the delinquent officer challenging the findings on merits, and the Union filed an appeal canvassing the jurisdiction of the Tribunal to interfere with the punishment imposed by it.

4. Shri Krishnamani, learned Senior Counsel for the appellant, raised a threefold contention. It is firstly urged that a public servants possession of assets disproportionate to the known sources of his income is not defined to be a misconduct under the Civil Services (Classification, Control and Appeal) Rules. There is abnormal delay in laying the charges. Despite the pendency of inquiry, the appellant was promoted as Assistant Commissioner of Income Tax. In consequence, no departmental action could be taken to dismiss him from service. It is also submitted that he was an intervener when all the cases including the appeal filed against Union of India v. Mohd. Ramzan Khan were argued before a three-Judge Bench. All of them had been given the benefit of the judgment. Misfortune of the appellant that his appeal was directed to be posted after the decision in Ramzan Khan case. Since the appellant was admittedly not supplied with the inquiry report, the order of dismissal is invalid in law. This Court in Krishnanand v. State of M.P. had held that 10% of the disproportionate assets need to be deducted in arriving at the finding that the appellant had disproportionate assets. The appellant was found to be in possession of Rs. 1,04,585 while his income from known sources was Rs. 73,270. The disproportionate assets were only to the tune of about Rs. 30,000. It would not be axiomatic that 10% would be a cut-off deduction. In an appropriate case deduction could be extended up to 15% and if so extended, the appellant must be held to be not in possession of any disproportionate assets. The gifts made to his wife at the time of their marriage and to his children at the time of their birthdays are not his assets. If these amounts are excluded, which indeed must be excluded, he is not in possession of disproportionate assets. The wife of the appellant is a teacher. The income from her salary and her gifts to the extent of Rs. 21,000 require to be excluded from his assets. Therefore, the findings of the Tribunal on merits were not valid in law.

5. While resisting the contention, the learned counsel for the Union argued that the Tribunal was not empowered to appreciate the evidence, nor to consider the evidence on merits to reach a finding whether the appellant was in possession of dis