CYRIAC JOSEPH ( 1 ) THE subject matter of this writ petition is the alleged massive financial fraud perpetrated by the Director of the G. B. Pant Hospital involving more than Rs. 39 crores and the loss thereby caused to the public exchequer. The writ petition is filed in public interest to enforce accountability of the second respondent Dr. M. Khalilullah, Director, G. B. Pant Hospital for the said alleged financial fraud and loss to the public exchequer. ( 2 ) THE petitioners in the writ petition are: (I) People s Union of Civil Liberties (Delhi) through its General Secretary Shri Satyendra Rajan; and (II) The Delhi Medicos and Scientists Front through its Convenor Dr. Pratap Sharan. ( 3 ) ORIGINALLY there were only two respondents, namely, (i) the State of Delhi through the Chief Secretary, and (ii) Dr. M. Khalilullah, Director, G. B. Pant Hospital. Later the Union of India through the Secretary, Ministry of Health also was impleaded as Respondent No. 3. ( 4 ) THE petitioners have made the following prayers in the writ petition:- (A) Direct the respondents to suspend respondent No. 2. (B) Direct the respondent No. 1 to register a regular criminal case against the respondent No. 2 under the Prevention of Corruption Act for his culpability in the matter relating to the controversial purchases. (C) Direct the authorities to recover from respondent No. 2 public money wasted on account of the culpable acts of respondent no. 2 from him, and (D) Pass any other order which this Court may deem fit and proper in the circumstances of the case. ( 5 ) THE first petitioner is the Delhi branch of the People s Union for Civil Liberties which, according to the petitoiners, is an organisation formed for the promotion of civil liberties and democratic rights of ordinary citizens of this country. The second petitioner claims to be an organisation of Doctors. Medical students and Scientists of Delhi formed in 1990 for various purposes including health care. According to the petitioners, they have filed the writ petition in public interest. ( 6 ) IT may be useful to mention first a summary of the facts leading to the presentation of the writ petition, as stated by the petitioners. ( 7 ) G. B. Pant Hospital is presently a 365 bedded hospital in Delhi funded and run by the Delhi Administration. ( 6 ) IT may be useful to mention first a summary of the facts leading to the presentation of the writ petition, as stated by the petitioners. ( 7 ) G. B. Pant Hospital is presently a 365 bedded hospital in Delhi funded and run by the Delhi Administration. Till 1987-88, the annual expenditure of this hospital was less than Rs. 15 crores. From 1988-89, the annual expenditure increased by almost 50% to reach Rs. 21. 33 crores. In 1989-90, the annual expenditure further increased by 90% to reach Rs. 40. 38 crores. In 1990-91, the annual expenditure again went up by another 11% to reach Rs. 44. 94 crores. The reason for this unusual increase in the expenditure in the years 1989-90 and 1990-91 started becoming clear when in September 1990, on complaints received by the Department of Revenue Intelligence, various searches were conducted in the premises of several suppliers of hospital equipments to G. B. Pant Hospital. In these searches, huge equipments worth several crores of Rupees said to have been imported several months earlier for G. B. Pant Hospital were seized. A large number of incriminating documents were also seized. The show cause notices charged the suppliers and officials of G. B. Pant Hospital including their Director and Medical Superintendent of importing crores of Rupees worth un-needed equipments which were imported free of custom duty and thereaftet allowed to remain with the suppliers for being sold off to other private purchasers and other private hospitals. ( 8 ) THE Delhi Administration appointed a high power committee to investigate the matter. This high power committee consisted of Ms. Archana Arora of the Indian Administrative Service, along with Dr. S. C. Mahajan, IAS Officer on Special Duty and Shri S. N. Shukla, Under Secretary Finance. This Committee submitted its report some time in 1991 and REFERRED TO that: (I) Sophisticated machinery and equipments worth crores of rupees were imported through Indian suppliers at very exhorbitant rates. (II) Many imported machine and equipments have never been brought in use in G. B. Pant Hospital and are still lying in the cellars duly packed from years together. The guarantee period given by the supplior manufacturer of these machinery has already expired and they have been absolved from their responsibilities for any defects etc. (III) Some of the machines namely C. T. Scan and Monitors etc. The guarantee period given by the supplior manufacturer of these machinery has already expired and they have been absolved from their responsibilities for any defects etc. (III) Some of the machines namely C. T. Scan and Monitors etc. , which were purchased for G. B. Pant Hospital fromGovernment Funds were found installed in a private hospital that is, Batra Hospital. The said private hospital has earned a lot of money by utilising the sophisticated machines which are rarely available in other hospitals. ( 9 ) DESPITE the fact that all these purchases had been made at the behest of and with the approval of respondent No. 2, Dr. Khalilullah, Director. G. B. Pant Hospital, no action was taken against him. Respondent No. 2 was the Chairman of the Purchase Committee at least since 1988. The bulk of the controversial purchases were made with his approval. In a circular issued by the second respondent on 8th July 1989. assigning the responsibilities of Faculty members, the responsibility with regard to purchase had been assigned to second respondent. Still the second respondent was allowed to continue as Director of the G. B. Pant Hospital. ( 10 ) IN an order passed on 21st January 1993 by the Collector of Customs (Judicial) Delhi, it was found that the suppliers as well as the staff of the G. B. Pant Hospital and the Medical Superintendent were guilty of a conspiracy to import equipments beyond the requirements of the hospital which were never meant for the use in the hospital and were sold off later. The Collector imposed a penalty of Rs. 10 lakhs on the suppliers IBPL. Rs. 2 lakhs on another supplier Shri S. K. Ghosh. Rs. 20. 000. 00 on Dr. O. P. Jain. the Medical Superintendent of the hospital and Rs. 5000. 00 on G. B. Pant Hospital. ( 11 ) IN June 1993 the Comptroller and Auditor General of India submitted his report to the Union of India with regard to the accounts of the Delhi Administration for the year 1991-92. A large part of the report was devoted to the gross financial malpractices in the G. B. Pant Hospital. Immediately after the tabling of the C. A. G. Report in Parliament, the Delhi. Administration appointed a Committee with Dr. A large part of the report was devoted to the gross financial malpractices in the G. B. Pant Hospital. Immediately after the tabling of the C. A. G. Report in Parliament, the Delhi. Administration appointed a Committee with Dr. A. K. Gupta Dean of Maulana Azad Medical College as Chairman to:- (A) verify the equipments lying in the hospital with that of the Stock Register; (B) find out whether there are any gross malpractices taking place: and (C) suggest steps to prevent such malpractices in future and possibly any recommendations regarding punishment to the guilty persons. ( 12 ) THE Dr. A:k. Gupta Committee submitted its report in October 1993. The Committee found among other things that: (A) equipments worth Rs. 17 crores were unaccounted: and (B) 228 files relating to purchase of equipments were missing from the official records. ( 13 ) BASED on the findings of the C. A. G, and the Dr. Gupta Committee, the Health Secretary and the Chief Secretary of the Delhi Administration recommended suspension of the second respondent. But no action was taken against second respondent and he still continues to remain the Director of G. B. Pant Hospital After the scandal surfaced. second respondent, utilising his position in the G. B. Pant Hospital, destroyed most of the* original files relating to the purchase of the equipments in question and got them reconstructed by some of the subordinates by deleting entries and fabricating new ones ( 14 ) IN these circumstances the first thing that should have been done was to suspend respondent No. 2 as recommended by the Health Secretary and the Chief Secretary. But, all these years Respondent No. 2 was allowed to continue as Director and was allowed to tamper, destroy, forge, fabricate and reconstruct various files for the relevant period. ( 15 ) IT is further stated in the petition that since the authorities are not discharging their duties the petitioners have approached this court on behalf of the people of the state ( 16 ) RESPONDENT Nos. 1, 2 and 3 have filed separate counter affidavits. All of them have in effect opposed the prayers in the writ petition. Respondent No. 2 has denied the allegations against him and has contended that he had no role in the irregularities and that he is innocent. 1, 2 and 3 have filed separate counter affidavits. All of them have in effect opposed the prayers in the writ petition. Respondent No. 2 has denied the allegations against him and has contended that he had no role in the irregularities and that he is innocent. According to him, the fraud was committed by some officers below him without his knowledge or consent. Respondent No. 2 has also questioned the locus standi of the petitioners and has alleged that the writ petition, though described as a public interest litigation, was actually filed for an oblique purpose at the instance of one Dr. Anoop Saraya, one of the Secretaries of petitioner No. 1, who has an axe to grind against respondent No. 2. Respondent No. 2 has also contended that the writ petition is not maintainable in view of the nature of the prayers made in the writ petition. ( 17 ) IT has to be mentioned here that in the Rejoinder Affidavit filed by the petitioners in reply to the Counter Affidavit of respondent no. 1, it is alleged that in spite of the adverse findings against him in the reports of the various Committees, respondent No. 2 Dr. Khalilullah was not removed from the post of Director on account of the totally uncalled for and illegal intercession on his behalf by the Prime Minister s Office (PMO ). To show that the Principal Secretary to the Prime Minister had requested not to take precipitate action against Dr. Khalilullah, the petitioners have quoted from a letter dated 22nd November 1993 from the Union Home Secretary to the Chief Secretary, Delhi Administration. It is also alleged in the said Rejoinder Affidavit that the relevant file contains a note by the Lt. Governor on 1st December 1993 advising against removal of Dr. Khalilullah from the post of Director, G. B. Pant Hospital and indicating that he had discussed the matter with the Principal Secretary to the Prime Minister. In an application dated 23rd August 1994 (C. M. No. 6583/1994) filed by the petitioners praying for an interim direction that respondent No. 2 be stripped of ail administrative and financial powers, the petitioners have alleged that the Principal Secretary to the Prime Minister is a close friend and personal patient of Dr. Khalul-ul-Lah. They have also extracted the letter dated 22nd November 1993 from the Special Secretary Ministry of Home Affairs. Khalul-ul-Lah. They have also extracted the letter dated 22nd November 1993 from the Special Secretary Ministry of Home Affairs. Government of India to the Chief Secretary, Delhi Administration, referring to the intervention of the Principal Secretary to the Prime Minister and his advice not to take any precipitate action against Dr. Khalilullah. None of the respondents has disputed the contents of the said letter dated 22nd November 1993. We could also see the original of the said letter in the Government file placed before us. Respondent No. 2 has filed reply to C. M. No. 6583/94 and has denied the statement of the petitioners that the Principal Secretary to the Prime Minister is a close friend and personal patient of Dr. Khalilullah, However, it is stated in the counter affidavit of the respondent No. 3 that the insinuation that no action is being taken against respondent No. 2 because he is a close friend and personal physician of the Principal Secretary to the Prime Minister is a distortion of the facts and grossly misleading. In other words, there is no denial of the statement that the Principal Secretary to the Prime Minister is a closefriend and personal patient of Dr. Khalilullah. There is also no denial of the intervention of the Principal Secretary to the Prime Minister. What is denied is only the insinuation that the reason for not taking action against Respondent No. 2 is the invtervention of the Principal Secretary to the Prime Minister. ( 18 ) THE parties in this case have also filed additional affidavits and supplementary affidavits in their effort and enthusiasm to make further pleadings and place more particulars and materials in support of their respective stands. The learned counsel for the petitioners and the respondents have also addressed long and detailed arguments with reference to the statements in those affidavits, the documents produced and the entries in the relevant files. But we are not here referring to all such details in view of the limited scope of enquiry permissible in a case like this while exercising the powers under Article 226 of the Constitution of India. We are neither expected nor inclined to undertake a thorough and exhaustive probe into the irregularities connected with the purchase and use of equipments in the G. B. Pant Hospital. We are neither expected nor inclined to undertake a thorough and exhaustive probe into the irregularities connected with the purchase and use of equipments in the G. B. Pant Hospital. In these proceedings we have no intention to fix responsibility for the irregularities or to determine whether Dr. Khalilullah was or was not directly involved in the irregularities and fraud. That is the job of the investigating agencies of the Government or of the enquiry officer in any departmental proceedings. The scope of judicial review of the impugned decisions/actions is limited. The nature of the jurisdiction under Article 226 also does not permit such a probe and fixing of responsibility by this court. In this context it is also worth mentioning that the CBI has already taken over the investigation into the irregularities in question. We refuse to be dragged into a parallel investigation by this Court. ( 19 ) BEFORE we proceed further, it needs to be stated that according to the additional affidavit dated 7th April 1995 filed on behalf of respondent No. 3, the post of Director, G. B. Pant Hospital is one of the Supertime Grade Posts (Rs, 5900-6700) included in the Central Health Service which is one of the Central Civil Services Grade-A included in Part I of the Schedule to Central Civil Services (Classification, Control and Appeal) Rules. There are a number of participating units/orgnaisations like Government of National Capital Territory of Delhi, Assam Rifles, Labour Welfare Organisation under Ministry of Welfare etc. which have posts included in the Central Health Service. The Ministry of Health and Family Welfare is the Cadre Controlling Authority for the Central Health Service. It is also stated in the said additional affidavit with reference to the relevant provisions of the C. C. S. (C. C. and A.) Rules that only the President of India can suspend or take disciplinary action against a member of the Central Health Service. Neither the counsel for the petitioners nor the counsel for respondents 1 and 2 disputed the above statements contained in the additional affidavit. Thus as far as respondent No. 2 is concerned, the Cadre Controlling Authority and the Disciplinary Aauthority is the Central Government in the Ministry of Health i. e. respondent No. 3. Hence any decision relating to transfer or suspension of Respondent No. 2 was to be taken by Respondent No. 3. Thus as far as respondent No. 2 is concerned, the Cadre Controlling Authority and the Disciplinary Aauthority is the Central Government in the Ministry of Health i. e. respondent No. 3. Hence any decision relating to transfer or suspension of Respondent No. 2 was to be taken by Respondent No. 3. ( 20 ) OUT of the prayers in the writ petition, prayer (b) for a direction to respondent no. 1 to register a regular criminal case against the respondent No. 2 under the Prevention of Corruption Act cannot be considered at this stage. The question of registering such a criminal case has to be considered not by this court but by the investigating agency in the light of the investigation. The C. B. I, has only taken over the investigation and they have hardly commenced the investigation. Hence prayer (b) is premature and is only to be rejected. Prayer (c) for a direction to the authorities to recover from Respondent No. 2 the public money wasted on account his culpable acts is misconceived. The question of recovery can arise only after fixing the responsibility and liability in accordance with law. Responsibility and liability can be fixed only in the investigation by C. B. I, or in appropriate departmental proceedings and not in this writ petition. Therefore prayer (c) also is liable to be rejected. Thus we are left with only prayer (a) for a direction to the respondents to suspend respondent no. 2 and prayer (d) for any other order which this court may deem fit and proper in the circumstances of the case. ( 21 ) CONSTITUTION of prayer (a) mentioned above will call for judicial review of; (I) the failure of the Central Government (respondent No. 3) to exercise its power to suspend respondent No. 2; (II) the refusal of respondent no. 1 to exercise its power to recommend suspension; and (III) the decision of the Lt. Governor rejecting the Health Secretary s suggestion to suspend respondent No. 2 and the Chief Secretary s suggestion to transfer respondent No. 2 from the post of Director, G. B. Pant Hospital. 1 to exercise its power to recommend suspension; and (III) the decision of the Lt. Governor rejecting the Health Secretary s suggestion to suspend respondent No. 2 and the Chief Secretary s suggestion to transfer respondent No. 2 from the post of Director, G. B. Pant Hospital. ( 22 ) IF prayer (a) or (d) is to be granted, this court should be satisfied that: (A) the impugned action or inaction of respondents 1 and 3 is one which can be subjected to judicial revisw; and in case judicial review is permissible, then, that the impugned action or inaction is liable to be reviewed by court in the facts and circumstacnces of this case; or (B) Respondents 1 and 3 had a duty to suspend respondent No. 2 but they failed or refused to discharge such duty; or (C) assuming that there was no such duty, the circumstances of the case warrant some order or direction by this Court under Article 226 of the Constitution to Respondents 1 and 3 in the interest of justice or in order to protect public interest and common good. ( 23 ) IT is settled law that even executive/ administrative decisions or orders can be subjected to judicial review. Hence, there cannot be any doubt that this Court has power and jurisdiction to review the decision of respondent Nos. 1 and 3 on the question of suspension of respondent No. 2. But it is necessary to examine whether the circumstances of the case call for such a judicial review and even if a judicial review is called for, to what extent such review is possible and permissible and what relief can be granted by the Court. This examination has necessarily to be made only with reference to judicially accepted principles and parameters. ( 24 ) IN Commissioner of Income-tax and others vs. Mahindra and Mahindra and others, 1983 (4) SCC 392 (paragraph 11) the Supreme Court has pointed out that it is a settled position that if the action or decision is perverse or is such that no reasonable body of persons, properly informed, could come to or has been arrived at by the authority misdirecting itself by adopting a wrong approach or has been influenced by irrelevant or extraneous matters, the Court would be justified in interfering with the same. In the above judgment the Supreme Court also referred to its earlider decision in Shalini Soni vs. Union of India, 1980 (4) SCC 544 , where it was observed by the Court thus: "it is an unwritten rule of the law, constitutional and administrative, that whenever a decision making function is entrusted to the subjective satisfaction of a statutoryfunctionary, there is an implicit obligation to apply his mind to pertinent and proximate matters only. eschewing the irrelevant and the remote. " ( 25 ) IN Jaya Raghupati and others vs. State of A. P. and others, 1988 (4) SCC 364 (paragraphs 21 and 30) the Supreme Court observed that in recent years the concept of the rule of law in England has been undergoing a rather radical change. The Supreme Court also pointed out that the present trend of judicial opinion is to restrict the doctrine of immunity from judicial review to those classes of cases which relate to deployment of troops, entering into international treaties etc. The Supreme Court further noted the willingness of the English Courts to assert their power to scrutinise the factual bases upon which discretionary powers have been exercised. After referring to the various decisions of the English Courts the Supreme court pointed out that the jurisdiction of the High court to grant a proper writ, direction or order under Article 226 of the Constitution is not subject to the archaic constraints on which the prerogative writs were issued in England. It means that the jurisdiction of the High Court under Article 226 of the Constitution of India for judicial review is wider than the jurisdiction of the English Courts in relation to prerogative writs. As noted by the Supreme Court, even the English Courts have shown their willingness to assert their power to scrutinise the factual bases upon which discretionary powers have been exercised. ( 26 ) IN Sita Ram Sugar Company Ltd. and another, vs. Union of India and others, 1990 (3) SCC 2,23 (paragraph 48 to 52), the Supreme Court held that the doctrine of judicial review implies that the repository of power acts within the bounds of the power delegated and he does not abuse his power. He must act reasonablly and in good faith. Where a question of law is at issue, the Court may determine the rightness of the impugned decision on its own independent judgment. He must act reasonablly and in good faith. Where a question of law is at issue, the Court may determine the rightness of the impugned decision on its own independent judgment. If the decision ofthe authority does not agree with that which the court considers to be the right one, the finding of law by the authority is liable to be upset. Where it is a finding of fact, the Court examines only the reasonableness of the finding. When that finding is found to be rational and reasonablly based on evidence, in the sense that all relevant material has been taken into account and no irrelevant material has influenced the decision and the decision is one which any reasonably minded person, acting on such evidence would have come to, then judicial review is exhausted even though the finding may not necessarily what the Court would have come to as a trier of fact. Whether an order is characterised as legislative or administrative or quasi judicial, or, whether it is a determination of law or fact, the judgment of the expert body, entrusted with power, is generally treated as final and the judicial function is exhausted when it is found to have "warrant in the record" and a rational basis in law. The function ofthe Court is to see that lawful authority is not abused by unfair treatment and not to attempt itself the task entrusted to that authority by the law. The purpose of judicial review is to ensure that the individual receives fair treatment and not to ensure that the authority , after according fair treatment, reaches on a matter which it is authorised by law to decide for itself a conclusion which is correct in the eyes ofthe Court. Judicial review as the words imply is not an appeal from a decision but a review of the manner in which the decision was made. A repository of power acts ultra vires either when he acts in excess of his powers in the narrow sense or when he absuses his power by acting in bad faith or for an inadmissible purpose or on irrelevant grounds or without regard to relevant considerations or with gross unreasonableness. Finally the Supreme court concluded by stating that the true position is that any act of the repository of power. Finally the Supreme court concluded by stating that the true position is that any act of the repository of power. whether legislative or administrative or quasi judicial, is open to challenge if it is in conflict with the Constitution or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it. ( 27 ) IN Km. Shrilekha Vidyarthi etc. Vs. State of U. P. and others, REFERRED TO in AIR 1991 SC 537 (paragraphs 25. 31, 36 and 38), the Supreme Court held that the scope of judicial review may vary with reference to the type of matter involved, but the fact that the action is reviewable, irrespective ofthe sphere in which it is exercised, cannot be doubted. In the above judgment the Supreme Court also quoted the following passage from Wade s Administrative Law 6th Ed. at pages 400-401 : ". . . . THE whole conception of unfettered discretion is inappropriate to a public authority, which possesses powers solely in order that it may use them for the public good. THERE is nothing paradoxical in the impcsition of such legal limits. It would indeed be paradoxical if they were not imposed. Nor is this principle an oddity of British or American law: it is equally prominent in French law. Nor is it a special restriction which fetters only local authorities: it applies no less to ministers ofthe Crown. Nor is it confined to the sphere of administration: it operates wherever discretion is given for some public purpose, for example, where a judge has a discretion to order jury trial. It is only where powers are given for the personal benefit of the person empowered that the discretion is absolute. Plainly this can have no application in public law. FOR the same reasons there should in principle be no such thing as unreviewable administrative discretion, which should be just as much a contradiction in terms as unfettered discretion. The question which has to be asked is what is the scope of judicial review, and in a few special cases the scope for the review of discretionary decisions may be minimal. It remains axiomatic that all discretion is capable of abuse, and that legal limits to every power are to be found somewhere. The question which has to be asked is what is the scope of judicial review, and in a few special cases the scope for the review of discretionary decisions may be minimal. It remains axiomatic that all discretion is capable of abuse, and that legal limits to every power are to be found somewhere. "the Supreme Court also referred to the judgment in Dwarkadas Marfatia and Sons Vs. Board of Trustees ofthe Port of Bombay REFERRED TO in 1989 (3) SCC 293 wherein it was held that every State action has to be for a public purpose and must promote public benefit and that all State actions "whatever their mien" are amenable to constitutional limitations, the alternative being to permit them "to flourish as an imperium in imperio". The following passage was also quoted from the judgment in Marfatia s case: "where there is arbitrariness in State action. Article 14 springs in and judicial review strikes such an action down. Every action of the executive authority must be subject to rule of law and must be informed by reason. So whatever be the activity of the public authority, it should meet the test of Article 14. " Regarding the meaning and true import of arbitrariness the Supreme Court stated thus: "the meaning and true import of arbitrariness is more easily visualized than precisely stated or defined. The question, whether an impugned act is arbitrary or not, is ultimately to be answered on the facts and in the circumstances of a given case. An obvious test to apply is to see whether there is any discernible principle emerging from the impugned act and if so, does it satisfy the test of reasonableness. Where a mode is prescribed for doing an act and there is no impediment in following that procedure, performance of the act otherwise and in a manner which does not disclose any discernible principle which is reasonable, may itself attract the vice of arbitrariness. Every State action must be informed by reason and it follows that an act uninformed by reason, is arbitrary. Rule of law contemplates governance by laws and not by humour, whims and caprices of the men to whom the governance is entrusted for the time being. It is trite that be you everso high, the laws are above you . This is what men in power must remember, always. Rule of law contemplates governance by laws and not by humour, whims and caprices of the men to whom the governance is entrusted for the time being. It is trite that be you everso high, the laws are above you . This is what men in power must remember, always. " The Supreme Court also pointed out that arbitrariness is anathema to State action in every sphere and wherever the vice percolates, the court would not be impeded by technicalities to trace it and strike it down. This is the surest way to ensure the majesty of rule of law guaranteed by the Constitution of India. ( 28 ) IN Vetcha Sreeramamurthy Vs. I. T. O and another (AIR 1957 AP 114) a Division Bench of the Andhra Pradesh High Court held that the discretionary statutory power conferred upon an authority for the public good is coupled with a duty to perform it under relevant circumstances. The fact that the exercise of the power is left to the discretion of the authorised person does not exonerate him from discharging his duty. If the discretionary power so conferred is exercised arbitrarily, capriciously or unreasonably or by taking into consideration extraneous and irrelevant considerations, in the eye of law, the authority concerned must be deemed not to have exercised the discretion at all, that is, he has not discharged his duty. If the court on the facts placed before it comes to a definite conclusion that a particular authority has not exercised his duty for one or other of the aforesaid reasons, it will compel the authority to discharge his duty, or, to put it differently, to exercise his discretion honestly and objectively. If the authority concerned exercises his discretion honestly and in the spirit of the statute, no mandamus will be issued directing him to exercise his discretion in a particular way. It was further held in the above mentioned judgment that if the authority fails to discharge his duty by refusing to exercise his discretion when facts calling for its exercise exist, or if he exercise discretion under the circumstances mentioned above, which is not an exercise of discretion in law, the court will compel him to do so. ( 29 ) IN Dwarkadas Nath Vs. ( 29 ) IN Dwarkadas Nath Vs. ITO ( 1975 (2) SCC 649 ) the Supreme Court pointed out that Article 226 is designedly couched in a wide language in order not to confine the power conferred by it only to the power to issue prerogative writs as understood in England, such wide language being used to enable the High Courts to reach injustice whereever it is found and to mould the reliefs to meet the peculiar and complicated requirements of this country. ( 30 ) IN Comptroller and Auditor-General of India, Gian Prakash, New Delhi and another Vs. K. S. Jagannathan and another ( 1986 (2) SCC 679 ) the Supreme Court held that the High Courts in India exercise their jurisdiction under Article 226 have the power to issue a writ of mandamus or a writ in the nature of mandamus or to pass orders and give necessary directions where the Government or a public authority has failed to exercise or has wrongly exercised the discretion conferred upon it by a statute or a rule or a policy decision of the Government or has exercised such discretion malafide or on irrelevant considerations or by ignoring relevant considerations and materials or in suph a manner as to frustrate the object of conferring such discretion or the policy for implementing which such discretion has been conferred. In all such cases and in any other fit and proper case a High Court can, in the exercise of its jurisdiction under Article 226, issue a writ of mandamus or a writ in the nature of mandamus or pass orders and give directions to compel the performance in a proper and lawful manner of the discretion conferred upon the government or a public authority, and in a proper case, in order to prevent injustice resulting to the concerned parties, the court may itself pass an order or give directions which the government or the public authority should have passed or given had it properly and lawfully exercised its discretion. ( 31 ) IN the case of public authorities the notion of absolute or unfettered discretion has been rejected by the courts. The doctrine that powers must be exercised reasonably has been accepted also. ( 31 ) IN the case of public authorities the notion of absolute or unfettered discretion has been rejected by the courts. The doctrine that powers must be exercised reasonably has been accepted also. The following tests of unreasonableness expounded by Lord Greene MR in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [ (1948) 1 KB 223] still hold good : "it is true that discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology used in relation to exercise of statutory discretions often use the word unreasonable in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting unreasonably . Similarly, there may be something so absurd that no sennsible person could ever dream that it lay within the powers of the authority. " TO quote the words of Coke in Rooke s case. (1598) S. Co. Rep. 99. b. discretion is a science or understanding to discern between falsity and truth, between wrong and right, between shadows and substance, between equity and colourable glosses and pretences, and not to do according to their wills and private affections:" ( 32 ) IN Sharp v. Wakefield [1891] AC 173, Lord Halsbury observed thus:- ". . . . discretion means when it is said that something is to be done within the discretion of the authorities that that something is to be done according to the rules of reason and justice, not according to private opinion: Rooke s case: according to law and not humour. It is to be, not arbitrary, vague, and fanciful, but legal and regular. And it must be exercised within the limit, to which an honest man competent to the discharge of his office ought to confine himself. It is to be, not arbitrary, vague, and fanciful, but legal and regular. And it must be exercised within the limit, to which an honest man competent to the discharge of his office ought to confine himself. " ( 33 ) IN "administrative Law" by H. W. R. Wade (Seventh Edition-page 358 to 360) it has been pointed out that the effect of surrender or abdication of power by the proper authority or exercise of power on the dictation of some one else is that the discretion is exercised, at least in part, by the wrong authority and the resulting decision is ultravires and void. However it is also stated that the rules against surrender, abdication and dictation ought not to be carried to the length of one government department from consulting another. It is further clarified that there must always be a difference between. seeking advice and then genuinely exercising one s own discretion, on the one hand. and, on the other hand, acting obediently or automatically under someone else s advice or dictations. ( 34 ) AT page 380 of the same book H. W. R. Wade has also observed: "although it has been laid down in the House of Lords, and repeated by other judges, that judicial review means review of the manner in which the decision was made, the context of this statement shows that it was not intended to affect the established grounds of review which, as the whole of this chapter illustrates, extend to the substance as well as the manner of making of administrative decisions and acts. " ( 35 ) FROM the authorities cited above the following principles and parameters emerge (I) Any action or decision of the State or a public authority is judicially reviewable, irrespective of the sphere in which the discretion was exercised by the State or the said authority. The scope of judicial review may vary with reference to the type of matter involved. But there is no such thing as unreviewable administrative discretion. (II) Any act of the repository of power, whether legislative or administrative or quasi-judicial, is open to challenge if it is in conflict with the Constitution of India or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it. (II) Any act of the repository of power, whether legislative or administrative or quasi-judicial, is open to challenge if it is in conflict with the Constitution of India or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it. (III) Whenever a decision making function is entrusted to the subjective satisfaction of a statutory functionary, there is an implicit obligation to apply his mind to pertinent and proximate matters only. eschewing the irrelevant and the remote. (IV) If the action or decision is perverse or is such that no reasonable body of persons, properly informed, could come to or has been arrived at by the authority misdirecting itself by adopting a wrong approach or has been influenced by irrelevant or extraneous matters, the Court would be justified in interfering with the same. (V) The repository of power should act within the bounds of the power delegated and should not abuse his power. He must act reasonably and in good faith. (VI) A repository of power acts ultra vires either when he acts in excess of his powers in the narrow sense or when he abuses his power by acting in bad faith or for an inadmissible purpose or on irrelevant grounds or without regard to relevant considerations or with gross unreasonableness. (VII) Where there is arbitrariness in State action Article 14 of the Constitution springs in and judicial review strikes such an action down. Every action of the executive authority must be subject to rule of law and must be informed by reason. Rule of law contemplates governance by laws and not by humour, whims and caprices of the men to whom the governance is entrusted for the time being. An act uninformed by reason is arbitrary. (VIII) Arbitrariness is anathema to State action in every sphere and wherever the vice percolates, the Court would not be impeded by technicalities to trace it and would strike it down. (IX) Judicial review as the words imply is not an appeal from a decision but a review of the manner in which the decision was made. The Court is concerned not with the decision but with the decision making process. (IX) Judicial review as the words imply is not an appeal from a decision but a review of the manner in which the decision was made. The Court is concerned not with the decision but with the decision making process. But it does not mean that the court cannot consider the established grounds of review which extend to the substance as well as the manner of the making of administrative decisions and acts. (X) Every State action has to be for a public purpose and must promote public benefit. (XI) The discretionary power conferred upon an authority for the public good is coupled with a duty to perform it under relevant circumstances. The fact that the exercise of the power is left to the discretion of the authority does not exonerate him from discharging his duty. (XII) If the authority fails to discharge his duty by refusing to exercise his discretion when facts calling for its exercise exist, the court will compel him to do so. (XIII) If the discretionary power is exercised arbitrarily, capriciously or unreasonably or by taking into consideration extraneous and irrelevant considerations, in the eye of law. the authority concerned must be deemed not to have exercised the discretion at all. that is. he has not discharged his duty. In such a situation also the Court will compel the authority to discharge the duty of exercising the discretion honestly and in the spirit of the statute. (XIV) If the authority exercises his discretion honestly and in the spirit of the statute no mandamus will be issued directing "him to exercise his discretion in a particular way. (XV) A decision resulting from the exercise of power or discretion on the dictation of some one else is ultravires and void. There is a difference between seeking advice and then genuinely exercising one s own discretion, on the one hand, and, on the other hand. acting obediently or automatically under someone else s advice or directions. In the latter case, there is no proper exercise of discretion and the Court will be justified in intervening to compel proper exercise of discretion by the authority concerned. (XVI) The jurisdiction of the High Court under Article 226 of the Constitution of India is wider than the jurisdiction of the English Courts in relation to prerogative writs. In the latter case, there is no proper exercise of discretion and the Court will be justified in intervening to compel proper exercise of discretion by the authority concerned. (XVI) The jurisdiction of the High Court under Article 226 of the Constitution of India is wider than the jurisdiction of the English Courts in relation to prerogative writs. Article 226 is designedly couched in a wide language in order not to confine the power conferred by it only to the power to issue prerogative writs as understood in England. Such wide language is issued to enable the High Courts to reach injustice where ever it is found and to mould the reliefs to meet the peculiar and complicated requirements of this country. (XVII) Though the High Court acting under Article 226 of the Constitution is not bound by the technical rules applying to the issuance of prerogative writs like certiorari. prohibition and mandamus in the United Kingdom, yet the basic principles and norms applying to the said writs must be kept in view. (XVIII) While exercising its jurisdiction under Article 226, the High Court cannot sit as an appellate authority over administrative authorities. The court cannot substitute its judgment for that of the administrative authorities. Only when the action of the administrative authority is so unfair or unreasonable that no reasonable person would have taken that action, can the court interfere. (XIX) In order that mandamus may issue to compel the authorities to do something, it must be shown that the statute imposes a legal duty and the aggrieved party has a right under the statute to enforce its performance. (XX) In exercise of its power under Article 226, the High Court is competent to pass orders and give necessary directions where the Government or a public authority has failed to exercise or has wrongly exercised the discretion conferred on it by a statute or a rule or a policy decision of the Government or has exercised such discretion malafide or on irrelevant considerations and materials or in such a manner as to frustrate the object of conferring such discretion or the policy for implementing which such discretion has been conferred. In all such cases, the High Court can compel the Government or the public authority concerned to exercise the discretion in a proper and lawful manner. (XXI) In a proper case. In all such cases, the High Court can compel the Government or the public authority concerned to exercise the discretion in a proper and lawful manner. (XXI) In a proper case. in order to prevent injustice, the Court may itself pass an order or give diretions which the Government or the public authority should have passed or given had it properly and lawfully exercised its discretion. ( 36 ) PRAYERS (a) and (d) in the writ petition are to be considered in the light of the principles and parameters mentioned above. Hence this Court has to examine how Respondents 1 and 3 approached the question of taking action against Respondent No. 2 and the manner in which they decided not to place him under suspension and not to transfer him. For this, it is necessary to see the events and developments in the case chronologically and how the authorities responded to them at various stages. ( 37 ) IT is not disputed by any of the respondents that large scale irregularties took place in connection with the import, purchase and supply of equipments and machinery in the G. B. Pant Hospital resulting in the loss of crores of rupees to the Government. The said irregularities related to the years 1988-89,1989-90 and 1990-91. Respondent No,2 was the Director of G. B. Pant Hospital during the relevant period and he continues to be the Director. Apart from being the head of the institution and exercising the administrative and financial powers of Director, Respondent No. 2 was also the Chairman of the Purchase Committee in the hospital. ( 38 ) DURING September 1990 the Directorate of Revenue Intelligence received information that certain hospital equipments imported on behalf of G. B. Pant Hospital and cleared duty free in terms of provisions of Notification No. 63/88-CUS dated 1st March 1988, were being clandestinely diverted for use elsewhere and that a large quantity of such hospital equipments were still lying in the premises of various indenting agents of the foreign suppliers for over a year. As a follow up of the aforesaid information the premises of M/s Consolidated Products Corporation atf-1/8, Okhla Industrial Area, Phase- 1,new Delhi, M/s Akanksha Enterprises, 16, Palika Place, Panchkuian Road, New Delhi. M/s Medidyne Medicals (Pvt.) Ltd. Room No. 22, 2nd Floor, 28-29, Feroz Gandhi Road, New Delhi, M/s MMPL, B-254, Okhla Industrial Area, Phase-l. New Delhi. As a follow up of the aforesaid information the premises of M/s Consolidated Products Corporation atf-1/8, Okhla Industrial Area, Phase- 1,new Delhi, M/s Akanksha Enterprises, 16, Palika Place, Panchkuian Road, New Delhi. M/s Medidyne Medicals (Pvt.) Ltd. Room No. 22, 2nd Floor, 28-29, Feroz Gandhi Road, New Delhi, M/s MMPL, B-254, Okhla Industrial Area, Phase-l. New Delhi. M/s Durgey Cargo Service E-147, Lajpat Nagar-l, New Delhi and M/s Batra Hospital and Medical Research Centre, New Delhi, were searched by the DRI Officers. During such search important and incriminating documents were recovered. One Cardiac Monitor imported on behalf of G. B. Pant Hospital was found installed in the Batra Hospital and the same was seized. The statement of various persons including Mr. P. K. Banerjee, Store Keeper of G. B. Pant Hospital, Mr. Hari Om Gupta, Store Keeper of G. B. Pant Hospiti and Mr. O. P. Jain Medical Supdt. G. B. pant Hospital were recorded under Section 108 of the Customs Act, 1962. Certain records found relevant for the purpose of the case were also seized by the DRI Officers from the G. B. Pant Hospital and Director General of Supplies and Dispossal. From the statements ecorded and the records and documents recovered during the searches conducted as aforesaid, it prima facie appeared that certain gross irregularities had been committed in the matter of import of hospital equipments and its duty free clearance under Notification No. 63/88-CUS dated 1st March 1988 in as much as large quantities of such equipments meant for G. B. Pant Hospital had not reached the Hospital but were lying in the premises of the indenting agents. The said equipment found lying outside the Hospital was liable to confiscation and the persons responsible for the irregularities were liable to penal action. It also appeared that the goods were highly over invoiced. Therefore show cause notices were issued on 16th March 1991 to M/s G. B Pant Hospital and other 27 noticees. After considering the explanations of the noticees and after conducting personal hearings, the Collector of Customs (J) New Delhi passed final order on 27th July 1994 directing the final release of all the seized goods to G. B. Pant Hospital, and imposing a personal penalty of Rs. 25,000. 00each on Dr. O. P. Jain and Shri P. K. Banerjee and a personal penalty of Rs. 5,000. 25,000. 00each on Dr. O. P. Jain and Shri P. K. Banerjee and a personal penalty of Rs. 5,000. 00 on Shri Hari Om Gupta under Section 112 of the Customs Act. 1962. The said O. P. Jain was the Medical Supdt. of the G. B. Pant Hospital and Mr. Hari Om Gupta and Mr. P. K. Banerjee were the Store Keepers. Personal penalty of Rs. 1 lac each was imposed on indenting agents/ suppliers who were found guilty. ( 39 ) SIMILARLY the officers of Customs Air Cargo Complex, I. G. I. Air Port, New Delhi searched the premises of M/s Indus Bio Medical Private Ltd. (IBPL) located at L-5, Samrat Bhavan, Ranjit Nagar Commercial Complex. New Delhi on 12th October 1990 and detained 22 units of Electrolyte Easylyte (with a market value of Rs. 14,30,000. 00)andone unit of Cell Analyzer CA-580 (with a market value of Rs. 2. 64. 600. 00) as the Managing Director of IBPL was unable to produce the valid documents showing the valid import/ acquisition of the said foreign origin equipment. At the conclusion of the proceedings the Collector of Customs (J) New Delhi passed final order on 21st January 1993 confiscating the seized goods and imposing personal penalty under Section 112 of the Customs Act on the following persons as indicated against each: ( 40 ) THE irregularities in connection with the import, purchase and supply of equipments and machinery in the G. B. Pant Hospital received the attention of media and reports on such irregularities appeared in the media. The matter was raised in the Parliament also and the Deputy Minister in the Ministry of Health and Family Welfare informed the Lok Sabha on 27th February 1991 that a High Powered Committee had been appointed by the Delhi Administration on 23rd November 1990 to investigate the matter. It was also informed that on the basis of preliminary report/initial inquiry the Store Officer and the Store Clerk of G. B. Pant Hospital had been suspended and the Medical Supdt. of G. B. Pant Hospital had been transferred out of the Hospital. It was further stated by the Minister that Anti-Corruption Department of Delhi Administration had already registered FIR against the erring officials. ( 41 ) THE High Powered Committee mentioned by the Minister was the Committee appointed by the Delhi Administration with Ms. Archna Arora IAS, Joint Secretary (LSG) as Chairman and Dr. It was further stated by the Minister that Anti-Corruption Department of Delhi Administration had already registered FIR against the erring officials. ( 41 ) THE High Powered Committee mentioned by the Minister was the Committee appointed by the Delhi Administration with Ms. Archna Arora IAS, Joint Secretary (LSG) as Chairman and Dr. S. C. Mahajan. Officer on Special Duty (Medical) and Shri S. N. Shukia " Under Secretary in the Finance Department as members. The Archna Arora Committee submitted its report on in May 1991. ( 42 ) ON 19th November 1991 Ms. Shailaja Chandra. Secretary (Health) Delhi Administration (now Government of National Capital Territory of Delhi) sent a letter to the Secretary to Government of India in the Ministry of Health and Family Welfare forwarding the Archna Arora Committee report and pointing out the following points which emerged from that report:- 1. The total budget allocation during the 2-1/2 year inquiry period was Rs. 86. 93 crores. 95% of this i. e. , approximately Rs. 65. 58 crores, was on account of material and supplies and machinery and equipment. Out of this Rs. 13. 13 crores only could be accounted for purchases ordered and expenditure incurred through DGSandd. and another Rs. 3. 4 crores was due to DGSandd purchases made prior to the inquiry period but paid between 1988 and 1990. In other words Rs. 49. 05 crores worth of expenditure took place due to local purchases. 2. Despite a duly constituted technical approval committee (TAC) under the chairmanship of Secretary (Medical), which was in existence since 1982, equipment has been purchased without TAC approval for Rs. 10. 39 crores. All items of equipment costing more than Rs. 50,000/ -each have to come before the TAC. Further Rs. 11. 18 crore worth of equipment has been purchased by deviating from the specifications, value and number of equipment as approved in the TAC and without seeking approval for such variance. The equipment purchased with TAC approval accounts for a paltry Rs. 1. 01 crores only. 3. The following glaring irregularities are worth mentioning :- (a) Repeated purchase orders of items not approved by TAC. (b) Splitting up of orders to ensure that the appropriate channel of DGSandd may not be adopted, and direct local purchase can be done. The equipment purchased with TAC approval accounts for a paltry Rs. 1. 01 crores only. 3. The following glaring irregularities are worth mentioning :- (a) Repeated purchase orders of items not approved by TAC. (b) Splitting up of orders to ensure that the appropriate channel of DGSandd may not be adopted, and direct local purchase can be done. (c) Ordering quantity five times in excess of stipulated amount in complete disregard of the storage facility, immediacy of use, or norms and procedures. (d) Where approval is given in TAC for non proprietory items which means open tenders should be called, the actual purchasing was done as a propriety item from a single manufacturer and thereby purchasing directly from him. (e) Equipments of specialities like orthopaedic surgery were purchased although such facility does not exist in the hospital at all; even though an emergency VVIP coverage involves keeping a limited number of such items, the extent of purchases is not justified in such huge numbers. (f) The heads of deptt. , have corroborated that the purchases of equipment were not need based and on a number of occasions specifications indicated by the heads of deptt. were altered with the result that the material supplied could not be used. (g) It has been REFERRED TO that a large quantity of equipments and consumables that were ordered and purchased were lying unused in the hospital for more than one year. Approximately Rs. 4. 3 crores worth of equipment was lying similarly unused in private godowns of suppliers/agents which were subsequently sealed by the DRI. 4. Customs duty exemption certificate is an important document which the head of institution has been empowered to give for importing equipment without custom duty. CDECs have been issued by the hospital without maintaining records and as a result it is difficult to know if CDECs have been used only for the hospital or the certificate has been misused and passed into private hands. 5. A serious matter is the connivance of the accounts department in the whole process. An indent to DGSandd needs financial sanction for the amount of purchase from the competent authority plus a certificate of the availability of the requisite amount of funds under the appropriate budget head. 5. A serious matter is the connivance of the accounts department in the whole process. An indent to DGSandd needs financial sanction for the amount of purchase from the competent authority plus a certificate of the availability of the requisite amount of funds under the appropriate budget head. Purchases were being done without any attempt to check what the budget allotment for the hospital was, how much has already been spent, what the committed liabilities were. This is indicative of laxity in pointing out faulty planning and improper budgeting by the hospital authorities. GB Pant Hospital exceeded its original budget allotment by Rs. 7 crores in 87-88,13 crores in 1988-89, 29 crores in 1989-90 and another 24 crores in 1990-91. More than 100% over invoicing has also been done. This has been verified by DRI for some of the equipment thereby indicating a huge loss to the Govt. exchequer. The DGSandd s plea that the excess price is due to longer warranty period does not appear tenable since there is 75% to 100% increase on this account which is not justified. 6. Files relating to purchase through DGSandd, local purchase, customs duty exemption, store register, list of equipment in use, consumables ordered, spares and accessories indented, are not available in the office. There are only 4 conclusions possible :- (a) That all orders were given orally and not files were maintained in which case the head of the institution would have to shoulder this responsibility. (b) if the files exist and have not been shown, it means they were hidden from the inquiring authority which raises serious doubts about intentions of the hospital authorities. (c) if the files have been destroyed the charge is even more serious since it amounts to maintaining a facade of ignorance about financial matters. (d) Piles are available and can be produced to negate the above. 7. The manipulation of the system extends to the authority who was to examine and audit the accounts of the hospital. Despite clear orders that purchases beyond 500 rupees can be done only with the sanction of the Director no irregularity has been pointed out by audit reports in previous years despite crores of rupees purchases made on day to day basis. Even elementary facts like non association of the Deputy Controller of Accounts in the purchase committee has never been mentioned by audit. 8. Even elementary facts like non association of the Deputy Controller of Accounts in the purchase committee has never been mentioned by audit. 8. A perusal of the report indicates that Dr. O. P. Jain the then Medical Superintendent of GB Pant Hospital who only had powers of Head of Offie signed customs duty exemption certificates, over- indented orders, over-invoiced orders in a series of events. It is a case of either criminal negligence or misconduct. Major penalty proceedings appear to be called for. Dr. Jain is a Grade I officer of CHS. 9. As far as the role of Shri P. K. Banerjee, Store Officer and Shri Hari Om Gupta, Store Keeper are concerned, there appear to be a case of negligence and collusion with suppliers causing loss to Government which can perhaps be linked to abetment in misappropriation also. Major penalty proceedings appears to be called for. Shri P. K. Banerjee is a Group B Gazetted Officer. Shri Hari Om Gupta is non-gazetted. 10. The Head of the Institution, Dr. M. Khalilullah did not reply questions posed to him by the Enquiry Committee. Verbally he has taken the stand that he was unaware of the repeated misconduct and transactions. In GB Pant Hospital powers of Head of Department did not vest in the Medical Superintendent and he was obliged to clear all financial matters as Head of Deptt. personally. 11. The matter has been referred to the CVC for opinion and is also being sent to the Ministry of Health and Family Welfare for such action as considered necessary at this stage. Action to curb the scale of of expenditure and set right the systems and procedures has already been activated. It is felt that a change in the incumbency of the Director might be necessary if the Hospital has to set right its systems without further delay. "it may be noted that Ms. Shailaja Chandra in her letter indicated that Dr. O. P. Jain was guilty of either criminal negligence or misconduct and that Shri P. K. Banerjee and Shri Hari Om Gupta were guilty of negligence and collusion with suppliers causing loss to Government. She also. recommended major penalty proceedings against them. In the said letter dated 19th November 1991 Ms. Shailaja Chandra in her letter indicated that Dr. O. P. Jain was guilty of either criminal negligence or misconduct and that Shri P. K. Banerjee and Shri Hari Om Gupta were guilty of negligence and collusion with suppliers causing loss to Government. She also. recommended major penalty proceedings against them. In the said letter dated 19th November 1991 Ms. Shailaja Chandra, Secretary (Health), Delhi Administration specifically recommended a change in the incumbency of the Director of G. B. Pant Hospital, According to her, such a change in the incumbency of Director was necessary if the hospital had to set right its systems without further delay. ( 43 ) EVEN before receiving the letter dated 19th November 1991 of Ms. Shailaja Chandra the third respondent Health Ministry of Central Government was aware of the fraud committed in the import of medical equipments in G. B. Pant Hospital from a letter dated 2nd November 1990 addressed by Mr. Naveen Chawla. Secretary. (Medical) Delhi Administration to the Chief Secretary. Delhi Administration, copy of which was marked to the 3rd respondent also. The third respondent had also received an anonymous complaint alleging irregularities and scandalous purchase in the Hospital by Dr. Khalilullah and Mr. Banerjee and a fraud of Rs. 70 crores in foreign exchange unearthed by DRI authorities. The third respondent Ministry had also received a complaint from the President G. B. Pant Hospital Employees Union complaining about the irregularities committed by Dr. Khalilullah in the purchase of hospital equipments. It is seen from the note dated 29th May 1991 in File No. Z-28015/2/91-H of the third respondent that the Deputy Minister for Health had recorded the following observations on File No. C-13011/ 10/90-CHS. III:- "i have gone through the file relating to import of equipment for G. B. Pant Hospital. Prima facie, there appears to be case for not only over- invoicing but also of diversion of Hospital equipment. Seizure of equipments and stores in the premises of private persons/agents clearly indicates the negligence of the Director of the Institute. In the circumstances, the Department should examine whether it is proper to keep Dr. Khalilullah as Head of Institute and whether the case should be handled over to CBI for further investigation. Seizure of equipments and stores in the premises of private persons/agents clearly indicates the negligence of the Director of the Institute. In the circumstances, the Department should examine whether it is proper to keep Dr. Khalilullah as Head of Institute and whether the case should be handled over to CBI for further investigation. " However, no action was taken in the matter by the 3rd respondent on the ground that the Delhi Administration had already constituted a High Powered Committee (Archna Arora Committee) to investigate the whole issue. ( 44 ) ON receipt of the letter dated 19th November, 1991 from Ms. Shailaja Chandra along with Ms. Archna Arora Committee report, the Additional Secretary Health in the third respondent Ministry, after referring to the conclusions mentioned in the letter of Ms. Shailaja Chandra recorded in the file on 3rd December 1995 that complicity of Dr. O. P. Jain, Medical Superintendent. Mr. Banerjee Store Officer and Mr. H. O. Gupta, Store Keeper, and the accounts department who were clearing the bills for payment, was virtually established and that major penalty proceedings were warranted against the aforesaid officers. It was observed that full proof to ascertain conduct and role of the persons in the accounts department was also needed. However, regarding Dr. Khalilullah, the Additional Secretary opined that at best, Dr. Khalilullah could only be constructively liable as he was the head of the institution. Regarding the suggestion of the Secretary (Medical ). Delhi Administration for a change in the incumbency of the Director G. B. Pant Hospital to set right the system without delay, the Additonal Secretary observed that the change of Director was an administrative matter and could be done by the Government in their discretion and that changing Dr. Khalilullah on the ground of irregularities and lapses in purchase procedure in G. B. Pant Hospital would be an undeserved indictment. When the said note dated 3rd December. 1991 of the Additional Secretary was sent to the Secretary Health in the Ministry of Health, he recorded that not only the Hospital authorities but also the Delhi Administration was to be blamed. As regards Dr. Khalilullah the Secretary supported the view of the Additional Secretary as. according to him. it was a failure of the system and not of an individual. As regards Dr. Khalilullah the Secretary supported the view of the Additional Secretary as. according to him. it was a failure of the system and not of an individual. The note of the Secretary was in effect approved by the Minister for Health and Family Welfare though he said that the Director could not absolve himself of his constructive responsibility. The Minister, however, recorded: "we may take a liberal view in his case at present as he is REFERRED TO to be a good medical scientist. But he needs to be cautioned by Secretary (H) to pay more attention to the running of the institution efficiently. He should be more patient oriented than VIP oriented". This note of the Minister was dated 9th January. 1992. The views of the third respondent were communicated to the Delhi Administration through a letter dated 5th February. 1992 from Shri B. S. Lambha. Joint Secretary in the Ministry of Health and Family Welfare to Shri R. K. Thakkar. Chief Secretary. Delhi Administration. With this, the file appears to have been closed on this aspect. Thus the suggestion of Ms. Shailaja Chandra. Secretary Health. Delhi Administration for a change in the incumbency of the Director G. B. Pant Hospital stood turned down. ( 45 ) IN the meanwhile as a sequel to the recommendations of Ms Archana Arora Committee, the Delhi Administration vide order No. F. 29/36/9d-MPH dated 29th November. 1991 constituted a stock taking committee under the Chairmanship of Dr. G. G. Mansharamani Head of the Department of Lok Nayak Jai Prakash Narain Hospital and nine other doctors. Dr. Mansharamani in his report submitted in 1993 pointed out many Short comings and deficiencies and also made certainsuggestions. The Committee identified three kinds of lapses, namely, financial, administrative and lack of proper inventory management. According to the said report the shortage as worked out came to about 6% and the hospital had 94% of the supplies physically verified in the stores. The report also stated that the purchases had been made in excess of the approvals given by the Technical Approval Committee and that some purchases had been made without approval of the Technical Approval Committee and indents from the department. ( 46 ) THE Comptroller and Auditor General of India in his report on G. B. Pant Hospital severely criticised the conduct of the hospital in the purchases of equipment and maintenance of records. ( 46 ) THE Comptroller and Auditor General of India in his report on G. B. Pant Hospital severely criticised the conduct of the hospital in the purchases of equipment and maintenance of records. Highlights of the report have been summarised in para 3. 5. 3 and it is stated that purchase files relating to acquisition of equipment worth Rs. 37. 19 crores were not made available to audit and that the hospital had unauthorisedly weeded out Some of the records relating to these purchases. Though Rs. 1 crore were paid for certain items of equipment, these had not been received till July 1992 and equipments worth Rs. 8. 51 crores were lying in store for long periods of time awaiting installation. Itwasalso pointed out that records relating to purchase of medicines for the period prior to 1991-92 were not made available to audit. Then in para 3. 5. 7 there is a reportrelating to purchases and as regards 'equipment' the audit has to say as under:- " Between July 1, 1988 and March 31. 1990. 228 indents were placed by the Hospital with the DGSandd. out of which 4 were returned and 7 were cancelled. The total value of the remaining indents was Rs. 3719. 37 lakhs (foreign exchange component Rs. 3406. 64 lakhs ). The purchase files of none of these indents/supply orders were made available to Audit. It was stated (July 1992) by the Hospital that no complete files containing requisition by DGSandd, specialist's recommendation, copy of the order placed, copies of invoices, etc. , were available for the years 1987-90. Only some loose papers (like indents, accepted tenders etc.) were being linked together. This was indicative of the inadequate attention given by the Hospital to this important area. "then the report also points out irregularities noted when test check was made of available papers which revealed various irregularities. ( 47 ) IT appears that G. B. Pant Hospital based on some internal verification conducted by one Khanna Committee appointed by Dr. Khalilullah informed the Delhi Administration that the missing files had been reconstructed and that 95% of the equipments for which money had been paid were in physical possession of the Hospital. Hence the Government of National Capital Territory of Delhi on 7th September, 1993 constituted a committee for physical verification of the 228 reconstructed files and stores/equipment. The Committee consisted of Dr. Hence the Government of National Capital Territory of Delhi on 7th September, 1993 constituted a committee for physical verification of the 228 reconstructed files and stores/equipment. The Committee consisted of Dr. A. K. Gupta, Dean, Maulana Azad Medical College, New Delhi, (Chairman), Shri M. B. Tyagi, Director (PFA) Government of NCT Delhi, Shri Ved Prakash, Joint Secretary Medical and Shri D. S. Sharma Accounts Offier LNJPNH New Delhi. The terms of reference for this Committee were verification of the following two claims, (i) that 228 files which were earlier missing have now been reconstructed and (ii) that 95% of the equipment for which money has already been paid is physically in possession. The Gupta Committee submitted its report on 23rd October, 1993. According to the said report during the inspection of the files it was observed that they merely contained Just collection of loose papers and were not maintained in the prescribed office procedure. The Director G. B. Pant Hospital was advised to get papers in these files serially numbered, indexed and also to certify as true copy of the papers since they were mere photocopies. After inspection of these files the Committee made the following observations:- '1. The files appeared to be reconstructed files. 2. Except one file the remaining files do not contain the note sheet and other correspondence originated from hospital or received from other connected agencies. 3. Some of the papers kept in the fies are ink signed whereas the others are photocopies. 4. Out of the 228 indents 104 indents of the DGSandd have been signed by the Stores/purchase Officer who is not competent authority to do it. " It is also seen from the report that the Committee then made random check of some of the files and came to the startling conclusion that in some of the files there were no invoices: while Technical Approval Committee had approved the purchase of certain number of equipment the indent was placed for higher numbers: indent was placed for various items when there was no approval from TAC; indent forms were signed by the purchase/store officer which was unauthorised; approval of TAC was not obtained where the equipment value was more than Rs. 50,000/ -: other certificates required for import of equipment were signed by persons not authorised to do so. 28. The Committee has referred to a letter dated 13 October 1993 of Dr. 50,000/ -: other certificates required for import of equipment were signed by persons not authorised to do so. 28. The Committee has referred to a letter dated 13 October 1993 of Dr. Khalilullah where he said as under :- "i would like to clarify that these papers of purchase files were in hospital in four bundles which were sorted out by the officials of the purchase department and placed them in the relevant file, now called 'reconstructed files'. Almost all the papers are original bearing diary number and issue numbers duly signed in ink, it is only a few papers which were not avialable from these bundles, have been photocopied and placed in these files for the sake of completion. Therefore, I would say that majority of the papers in these files are original sorted out from the bundles of papers available in our hospital and have not been collected from outside. A few papers photocopies of which have been obtained from the DGSandd will be authenticated by the Director. " The Committee observed that the Director did not clarify the position regarding the absence of noting portion of the said files in spite of the letter written to him specifically requesting him to give his views on the subject. The Committee alsonoted different versions given by the hospital with reference to these 228 files at different times :- " (a) Reply to review for 'health care in GB Pant Hospital' dated 13. 12. 1992 to Principal Director, Audit and copy to Secretary (Medical), Finance, Chief Secretary and Ministry of Health and Family Welfare. Relevant portion page No. 6 (165) of the file. "the files up to the period July, 1990 appears to have been weeded out by the then officer unauthorisedly and without the knowledge of the hospital authorities. Necessary action as provided under conduct rules and criminal proceedings are being taken. " (b) Papge 13 Draft reply to PAC 13 (111) "it was only an assumption but the records pertaining to these purchases are available. " (c) Para 9 (203) Draft reply to CAG. "however it is further clarified that the hospital is in possession of entire records/files except files relating to theprocurement of machinery and equipmentthrough DGSandd from 1987-90. " (b) Papge 13 Draft reply to PAC 13 (111) "it was only an assumption but the records pertaining to these purchases are available. " (c) Para 9 (203) Draft reply to CAG. "however it is further clarified that the hospital is in possession of entire records/files except files relating to theprocurement of machinery and equipmentthrough DGSandd from 1987-90. Even in this case it has already been submitted that the files can be reconstructed from the basic documents like copies of indents raised by consuming department, approval of the Technical Approval Committee of Delhi Administration, copies of indents of DGSandd. accepted tenders by the DGSandd and stock verification of the equipment etc. etc. " Then the Committee referred to physical verification of equipment/ stores of both consumable items and non-consumable items. With reference to consumable items it was stated that physical verification could not be possible as bulk of it had already been REFERRED TO to have been consumed. However, the Committee had to make the following observations:- "however, a statement showing consumption of different consumable stores as supplied by the hospital for the period 1988 to 1993 till date. is enclosed. In the absence of noting sheets justification for indenting such huge quantities of consumable stores including operative instruments is not available. It is also not indicated in the fiels by competent authority whether indigenous substitutes were not available. Some of the items in this regard which need to be mentioned are the import of disposable syringes, IV sets, Drapes, urine bags. ECG electrodes, suction catheter, endotracheal catheter. Folley's catheter. surgical blades. Bye'd tube, gloves, leukoplast etc. 12. During the last six years the hospital has consumed approx. 15 lakh syringes (imported) when indigenous syringes are available in plenty and only on 1/5th price of imported ones approx. Over 1. 20 crores in excess have been spent on such avoidable import. Besides there is possibility of import of more such syringes during this period. " ( 48 ) AS regards non-consumable items, the Committee was not satisfied and it gave the following findings:- "14. FINDINGS:- Based on the physical verification of 228 files in question and also the physical verification of machinery/equipments supplied under the ATS in question the Committee comes to the follwing findings:- 1. " ( 48 ) AS regards non-consumable items, the Committee was not satisfied and it gave the following findings:- "14. FINDINGS:- Based on the physical verification of 228 files in question and also the physical verification of machinery/equipments supplied under the ATS in question the Committee comes to the follwing findings:- 1. The office procedure, codal formalities required to be followed in purchase of such costly equipments/machinery have been compromised and there is complete break down of administrative system2 There appears to be a deep rooted conspiracy amongst the hospital staff/officers connected with the order/purchase of the machinery/equipments. DGSandd and the company/supplier with a view to cheat/defraud the Delhi Administration/govt of National Capital Territory of Delhi. The complete absence/missing of note sheets on the concerned files connected with various decisions relating to the purchase of machinery/equipment, absence of other related correspondence originated from the hospital and received by the hospital from different agencies, absence of serial number of the machines/equipments in the original supply documents such as invoices/packing list etc. etc. sent by suppliers, absence of serial numbers on the body of certain machines/equipments though indicated in the documents, absence of serial numbers of machines/equipments in the original documents but promptly supplied by foreign suppliers within two three days through FAX messages etc. corroborate to the above observation. 3. The hospital authorities have failed to get verified all the machinery/equipments (non-consumable) purchased through the 228 files/ats in question. There was attitude of non-cooperation on the part of hospital authorities in the matter of physical verification of stores/ equipments which has resulted in non-verification of major portion of stocks supplied through different ATS. Even hospital authorities were not aware of the exact physical location of certain machinery/equipment. 4. The Committee is of the opinion that the 228 files as presented in so called 'reconstructed" form do not serve much purpose because of the following reasons - i) Out of the 228 fuiles, in 164 files the indents have been signed by the Stores/purchase Officer who is not the competent authority to sign the indent. This is a gross irregularity for which no satisfactory explanation is available on the record,ii) Many of the files do not mention the serial numbers of the equipment/machinery received against specific ATS. The physical verification of these stores received against these ATS is not possible. This is a gross irregularity for which no satisfactory explanation is available on the record,ii) Many of the files do not mention the serial numbers of the equipment/machinery received against specific ATS. The physical verification of these stores received against these ATS is not possible. iii) In respect of certain ATS, though the serial numbers have been indicated in the documents relating to the supply however same number have not been found on the machine/equipment physically in position in the hospital. iv) Most essential part of the file i. e. noting is missing. 5. Quite good number of machine/equipment were lying in the godowns/stores which were covered with which layer of dust. This includes sensitive electronic machines/gadgets. These machines/ equipments have so far not been installed or distributed to the concerned department for its proper utilisation. 6. There is an equipment received from 'china' without proper requisition from the concerned department which is lying in Gasteroenterology Department of the hospital. The same has not been used for any worthwhile purpose so far. The price of the equipment is over Rs. 40 lakhs and in absence of any utilisation it is a dead loss to the Public Exchequer. Similarly another equipment which had been acquired for Psychiatry Department, was diverted to Neurology Department where the same is not being put to proper use. The patients for whom it was procured, are being deprived of its benefits which could otherwise would have been available to them if same was installed in the concerned department. 7. The stand taken by the hospital authorities for "reconstructed files" has been inconsistant (para 3 and 4 refers ). It is not clear whether 228 files were ever opened at all or were unauthorisedly weeded out, a stand which has been reversed by department itself. It is surprising how the hospital could take shelter under the statement of unauthorised weeding out of the files. Such files are of permanent nature and are not to be weeded out/destroyed before a specific period. This appears an attempt to cover up intentional destruction of important evidence. 8. The acceptance of indents, signed by incompetent authority officer, by DGSandd itself indicates towards the conspiracy as brought out in earlier paragraphs. This would need detailed investigation by an appropriate agency to arrive at the bottom of factual position. This appears an attempt to cover up intentional destruction of important evidence. 8. The acceptance of indents, signed by incompetent authority officer, by DGSandd itself indicates towards the conspiracy as brought out in earlier paragraphs. This would need detailed investigation by an appropriate agency to arrive at the bottom of factual position. " ( 49 ) THEN the Committee concluded as under :- "conclusions : 1 In the light of the above facts 228 files which were earlier missing and subsequently have been reconstructed, are of no help in assessing the propriety of the purchase of machinery/equipment in question or in assigning the responsibility. 2. The purchases effected through 164 indents signed by the incompetent authority are unauthorised. 3. The consumable stores worth crores of rupees have been purchased without justification and proper application of mind. 4. According to letter No. PS/dir/gbp/93/380 dated the September 30. 1993 from Director. GB Pant Hospital total amount involved for non- consumable stores worth Rs. 1,71,95,671. 00 verified through this Committee which is only 7. 5% approximately. Even the value of consumable stores worth Rs. 16. 53. 33. 613. 00ifconsideredverified and added to the above verified amount, it works out to be Rs. 18. 24 crores. Thus the percentage of the total verified stores (consumable stores presumed verified and non-consumable stores actually verified) works out to be 46% approximately. Thus the claim of the hospital that 95% of the machinery/equipment for which money has already been paid is physically in position, is not proved, 5. In view of the Committees observations about the missing note sheets and other related correspondence in the files under question. the possibility of destruction of evidence, import of equipment against unauthorised documents, and only 7. 5% of non-consumable stores verified, there is need for detailed investigations through an appropriate specialised agency to reach the bottom of the apprehended deep rooted conspiracy to cheat/defraud the Public Exchequer. " ( 50 ) THUS, in effect the Committee rejected the claims of the G. B. Pant Hospital authorities regarding the reconstructed files as well as physical possession of the items for which money had been paid and recommended detailed investigations through an appropriate specialised agency to bring out the conspiracy to cheat/defraud the Public Exchequer. . ( 51 ) DR. A. K. Gupta Committee report was processed in the Health Ministry of the Government of the National Capital Territory of Delhi. . ( 51 ) DR. A. K. Gupta Committee report was processed in the Health Ministry of the Government of the National Capital Territory of Delhi. Since the petitioners have placed much reliance on the recommendation of Mr. R. S. Sethi, Secretary (Medical) for suspension of Dr. Khalilullah, it is better to extract the note recorded by Mr. R. S. Sethi. Secretary (Medical) in the file on 16 November 1993. The said note is extracted below'8. Reference notings from 1/n onwards and summary of the reports of various Committees placed at 45-47/c. Particular attention is invited to the latest report of the Committee headed by Dr. A. K. Gupta. Dean, MAMC, which is placed at 44/c. 9. The entire exercise relating to purchases affected by G. B. Pant Hospital over the last few years appears to be steeped in controversies and dubious transactions. In fact, all earlier reports including the present one submitted by the Committee headed by Dr. A. K. Gupta, Dean, MAMC, presents a very grim scenario of financial and administrative impropriety and possible pocketing of huge commissions by various functionaries of the Hospital. 10. In a nutshell, the following issues have clearly emerged as a result of detailed scrutiny carried out by various committees: (a) It is now apparent that as many as 228 files pertaining to purchases were wilfully destroyed by the GB Pant Hospital Authorities. All these files related to purchases worth around Rs. 40 crores. The so called 'reconstruction' is essentially an eye-wash as the said "re- constructed" files are merely a collection of few odd documents. Even these documents do not bearthe signatures of the competent authorities. Interestingly, there is not a single noting sheet in respect of all these 228 files as evidently they have been deliberately destroyed. In other words, an attempt has been made to destroy evidence which could have indicated the level at which most of the purchases were approved and whether proper procedures were followed. However, photocopies of five notings have been attached by Shri Banerjee. Stores Officer (who had been suspended) in his petition before CAT. Copies of these notings are placed at 47-53/c. Scrutiny of these papers reveals that Dr. M. Khalilullah, Director. GB Pant Hospital, had given his approval to the purchase proposals. This belies the off-repeated claims of the Director that purchases were made wihtout his knowledge. Stores Officer (who had been suspended) in his petition before CAT. Copies of these notings are placed at 47-53/c. Scrutiny of these papers reveals that Dr. M. Khalilullah, Director. GB Pant Hospital, had given his approval to the purchase proposals. This belies the off-repeated claims of the Director that purchases were made wihtout his knowledge. In fact, in GB Pant Hospital, powers of Head of Department do not vest in the Medical Superintendent and that the' Director was obliged to clear all financial matters as Head of Department personally. (b) In so far as equipment is concerned, it is now patently clear that only 7. 5% of the non-consumable stores amounting to Rs. 1. 72 crores out of a total purchase of Rs. 23. 16 crores could be verified by the Dr. A. K. Gupta Committee. Verification was severely hampered by the fact that serial numbers are either not available on the body of the equipment and/or on the vouchers. It was difficult to match the equipment with the delivery vouchers as also with the entries in the stock register. Interestingly, proper entries have not been made in the stock register as per requirement. Majority of the vouchers do not carry the serial numbers of the machine (s) which leads us to suspect that these vouchers had been fabricated. Belated attempts made by the present Director to cover up earlier lapses by sending fax messages to the so called proprietors/suppliers also appears to be suspect. He claims to have received replies from certain overseas suppliers within two days which does not appear to be plausible because no supplier can verify the delivery of equipment in the absence of the serial number of the said equipment (s) in the delivery vouchers. It is felt that even all these fax messages are fabricated but this aspect would need to be investigated in detail by the Crime Branch of Delhi Police to whom the case has already been sent. (c) In so far as the consumable items are concerned, even if the consumable stores amounting to Rs. 16. 53 crores are taken as verified, the final figure comes to 46% for both consumables and non-consumables as against 95% claimed by the hospital authorities. Even the figure of 46% is a very charitable estimation. (d) Reports of the earlier Committees also make interesting reading. 16. 53 crores are taken as verified, the final figure comes to 46% for both consumables and non-consumables as against 95% claimed by the hospital authorities. Even the figure of 46% is a very charitable estimation. (d) Reports of the earlier Committees also make interesting reading. Summaries are placed at 47/c. Archana Arora Committee which submitted its report in May 1991 had observed that the purchase files wre not made available to the Committee and furthr noted that the Hospital did not have any proper records in the purchase branch. Director, GB Pant Hospital was asked to furnish answers to a questionnaire submitted to him. Instead, the Committee observed that his response was definitely evasive on various important points. Dr. G. G. Mansharamani Committee, which submitted its report in 1993, also came to the conclusion that equipment worth crores of rupees were purchased and lying unutilised for 1-1/4 years resulting in blockage of public money. The Committee identified three kinds of lapses, namely, financial, administrative and lack of proper inventory management. (e) It is also on record that the Department of Revenue Intelligence had raided various firms and the Hospital as well. Certain cases are under investigation by the Collector of Customs on the basis of the findings of DRI. The Collector of Customs vide his order dated 21. 1. 93 imposed a penalty of Rs. 5000. 00 on the GB Pant Hospital. Rs. 20,000/ -on Dr. O. P. Jain. the then M. S. . Rs. 10 lakhs on Indus Bio Medica Pvt. Ltd. and Rs. 2 lakhs on Shri S. K. Ghosh. Director of the M/s. Indus Bio Medico (P) Ltd. . New Delhi. All this essentially relates to purchases made by the hospital far in excess of what had been approved/required. (f) We had earlier referred the case to CBI. Unfortunately, CBI returned the same to us stating that their resources were already over stretched. In this connection, kindly refer to the correspondence at 30/ C and 42/c of the link file (B ). Thereafter, with the approval of the CS vide noting at 10/n of the same file. the case has now referred to the Crime Branch (57/c ). CVC is also seized of the matter as also the Anti- Corruption Branch of the Government of National Capital Territory of Delhi. Thereafter, with the approval of the CS vide noting at 10/n of the same file. the case has now referred to the Crime Branch (57/c ). CVC is also seized of the matter as also the Anti- Corruption Branch of the Government of National Capital Territory of Delhi. (g) In so far as fixation of responsibility is concerned, to my mind, the prime suspect undoubtedly appears to be Dr. Khalilullah. Director. G B Pant Hospital. Unfortunately, axe seems to have fallen on lesser functionaries. Mr. P. K. Banerjee. Stores Officer is under suspension but has filed a case before CAT. Dr. O. P. Jain, the then M. S. appears to have got away scot free so far and has also superannuated. Shri K. L. Kapoor. the then Accounts Officer has also retired. However. Dr. Khalilullah seems to have led a charmed life, till date. 11. The entire purchase drama has also received considerable adverse publicity in the press as would be evident from a host of press cuttings placed in a link file (C ). 12. After careful consideration and after going through the entire record. I would propose the following course of action for approval of CS/lg. (i) We may accept the report of the Committee headed by Dr. A. K. Gupta. Dean. MAMC. Our reply to the Public Accounts Committee would need to be amended in the light of the findings of this Committee. The draft reply prepared by GB Pant Hospital is placed at 371/c. Communication from PAC Branch of Lok Sabha Secretariat is placed at 307/c. The relevant para relating to purchases may kindly be seen at299/c. (Filea ). (ii) The case has already been referred to the Crime Branch of Delhi Police. This would need to be pursued to its logical conclusion. (iii) We may initiate disciplinary proceedings for imposition of major penalty against Dr. O. P. Jain. the then M. S. GB Pant Hospital and also against all'those who have escaped the noose so far. (iv) I have already passed an order to stop further purchases by G. B. Pant Hospital pending furnishing of details relating to uninstalled equipment and equipment in need of repairs. We have received a reply from GB Pant Hospital and the same is under scrutiny. Till such time we verify the correctness of the reply, the present ban on new purchases would have to continue. We have received a reply from GB Pant Hospital and the same is under scrutiny. Till such time we verify the correctness of the reply, the present ban on new purchases would have to continue. However, I would like to state that the entire issue of purchases made by different hospitals needs a thorough review and overhaul. This is being stated because purchases are being routinely recommended from foreign suppliers by issuing of so called proprietory certificates without due verification and possibly on account of ulterior motives. A case in point relates to equipment received from China which is now lying in the Gastroenterology Department of G B Pant Hospital. The same has not been used for any worthwhile purpose so far. The price of the equipment is over Rs. 40 lakhs and in the absence of any utilisation it is a dead loss to the Public Exchequer. Similarly, the Committee has pointed out the case of another equipment which was originally required by Psychiatry Department but was diverted to Neurology Department. The same has not yet been put to any use. I am told that this may just be the tip of the iceberg. (v) I would strongly recommend that Dr. Khalilullah should be placed under suspension or immediately shifted from G. B. Pant Hospital as available evidence shows that he has played a major role in defrauding the Government. This step would also facilitate a fair and impartial enquiry/investigation by the Crime Branch. Also, we may initiate disciplinary proceedings for imposition of major penalty against him. I am told that a large number of doctors and professors are reluctant to speak out so long as Dr. Khalilullah continues in GB Pant Hospital. In fact. we have to act firmly now after what has been revealed otherwise we would be sending wrong signals to other Hospitals/ Institutions. 13. Before recording this note. I gave a personal hearing to Dr. Khalilullah when I had asked him to respond to the various findings of the Committees. Personal hearing was given in the larger interest of equity and fair play although Dr. Khalilullah had been given adequate opportunity to speak out by various Committees including the one headed by Dr. A. K. Gupta. However, nothing tangible emerged as a result of the personal hearing which would warrant amending the course of action stated in the preceding paras. 14. Khalilullah had been given adequate opportunity to speak out by various Committees including the one headed by Dr. A. K. Gupta. However, nothing tangible emerged as a result of the personal hearing which would warrant amending the course of action stated in the preceding paras. 14. The case was also discussed with L. G. who had called me a few days ago. " ( 52 ) THEREAFTER, the file went to the Chief Secretary Mr. R. K. Takkar who recorded his note on 30 November 1993 as under :-"15. I agree with the Secretary (Medical) that it is necessary to remove Dr. Khalilullah from his present position in the interest of holding a fair and proper enquiry into the scandal. We may not suspend him at this stage. Instead we may transfer him alongwith his post to the Health Department. The senior most Doctor in G. B. Pant Hospital will be asked to look after the work of the Director of GB Pant Hospital pending the appointment of a regular person by the Ministry of Health, Government of India. " ( 53 ) THEN the file went to the Lt. Governor who recorded his note on 1 December 1993 which is as under :-" I have considered all the aspects mentioned in Secy (M)'s note and C. S's observations carefully. There is no doubt that the defaults that have come to notice are very serious but I am not at the moment prepared to accept that Dr. Khalilullah can be straightaway accused of malfeasance. I am particularly regardful of the fact that we are dealing with the case of a nationally recognised specialist who has been honoured with the Padma Shri and Padma Bhushan. One does not deal with such people abruptly causing them public humilitation. For this reason we may not shift him from his present post. We shall wait till the C. B. I, makes any such suggestion vide para below. 2. It will be best if the case is transferred to the C. B. I, for investigation. A request to this effect may be made to the Govt. of India at Home Secy. level explaining the implications, and the need for an expeditious impartial enquiry. 3. 2. It will be best if the case is transferred to the C. B. I, for investigation. A request to this effect may be made to the Govt. of India at Home Secy. level explaining the implications, and the need for an expeditious impartial enquiry. 3. I have explained the facts of the case and my decision to Principal Secy to P. M. and requested him to assist us in convincing the C. B. I, to take up the case with due expedition. 4. Orders immediately please. " ( 54 ) THEREAFTER the file was sent down to the Secretary (Medical) through the Chief Secretary. On 8 December 1993 Mr. R. S. Sethi, Secretary (Medical), as desired by the Chief Secretary, put up a draft D. O. letter to be addressed to the Union Home Secretary conveying the decision of the Lt. Governor. He proposed that a copy of the letter along with enclosures be sent to the Union Health Secretary also. He also recorded that after the letter had been issued he would be submitting the file to the Minister for Health and the Chief Minister of the Government of National Capital Territory of Delhi for information and further directions, if any. Accordingly, a letter was addressed to the Union Home Secretary on 9 December 1993 and a copy with the enclosures was sent to the Union Health Secretary. From the office copy of the letter it is seen that the purpose of the lettr was to bring to the notice of the Central Government, the irregularities revealed by the various committee reports and the decision taken by the Lt. Governor in the matter. The enclosures to the said letter included : (i) a comprehensive note giving background of the case. (ii) a copy of the Dr. Gupta Committee report, and (iii) a brief summary of the findings of earlier enquiry committees. The file was then put up to the Health Minister of the Government of National Capital Territory of Delhi on 18 February 1994. The Health Minister recorded that the matter should be taken up vigorously with the C. B. I, so that it could be taken to logical conclusions. The file was also seen by the Chief Minister. The file was then put up to the Health Minister of the Government of National Capital Territory of Delhi on 18 February 1994. The Health Minister recorded that the matter should be taken up vigorously with the C. B. I, so that it could be taken to logical conclusions. The file was also seen by the Chief Minister. ( 55 ) THOUGH we wanted to know what action was taken by the Union Health Ministry on receipt of the abovementioned letter dated 9 December 1993, the learned counsel for res-spondent No. 3 could not give any answer. According to him no information is available as no file is seen to have been opened. The counter affidavit of respondent N0. 3 also is silent on this aspect as in the case of many other relevant aspects. It was submitted by counsel that counter affidavit was filed on the basis of the files of the Home Ministry ( 56 ) THE petitioners alleged that between 16 November 1993, when Mr. R. S. Sethi, Secretary (Medical), recorded his note recommending suspension of Dr. Khalilullah, and 1 December 1993, when the Lt. Governor decided not to take any action against Dr. Khalilullah, there was a significant development. According to the petitioners, immediately after Mr. R. S. Sethi recorded on the file that Dr. Khalilullah should be placed under suspension and put up the file to the Chief Secretary, Mr. A. N. Varma, Principal Secretary to the Prime Minister, a close friend and a personal patient of Dr. Khalilullah, unauthorisedly intervened to prevent any action against Dr. Khalilullah. Since learned counsel for the petitioners made pointed reference to the entries in the relevant Government file we perused the file. It is seen that in file No. U14036/16/93-Delhi of the Ministry of Home Affairs Mr. S. Sathyam, Special Secretary (CS), recorded a note on 22 November 1993 as under :-1. Shri Amar Nath Varma, Principal Secretary to P. M. had talked me over the telephone on 19 November about alleged action against Dr. Khaleelullah of the Govind Vallabh Pant Hospital. He said, there was information to the effect that the Delhi Administration proposed to suspend Dr. Khaleelullah with reference to some on going enquiry about alleged irregularities in purchase of equipment. The Principal Secretary said, no precipitate action should be taken by the Delhi Administration before the PMO could be apprised of all the relevant details. He said, there was information to the effect that the Delhi Administration proposed to suspend Dr. Khaleelullah with reference to some on going enquiry about alleged irregularities in purchase of equipment. The Principal Secretary said, no precipitate action should be taken by the Delhi Administration before the PMO could be apprised of all the relevant details. 2. Accordingly, I talked with Shri R. S. Sethi, Secretary (Medical) of the Delhi Administration, who told me that the case had been submitted to the Chief Secretary with reference to a PAC. 3. I talked with Shri R. K. Takkar, Chief Secretary, and apprised him of these developments. According to him, enquiries have been in progress into various serious allegations; however, the case was nowhere near initiation of any particular action against any specific officers. Nevertheless, he assured, no precipitate action would be taken before apprising the PMO of all the relevant facts. Thereafter, I informed the Principal Secretary of the assurance. 4. Subsequently, on 20 November the Principal Secretary called me over the telephone again to say that the Prime Minister himself had expressed concern about precipitate action in the case contemplated by the Delhi Administration. In this backdrop, he wanted the Delhi Administration to be advised in writing that no precipitate action should be taken in the case and that a detailed report submitted for the information of the Prime Minister. I have telephonically apprised the LG of all this. I have sent a d. o. letter to the Chief Secretary O/c. of which is attached. 5. Please take these papers on the file concerned for reference and record. " ( 57 ) THE above note shows that the allegation regarding the interference by Mr. A. N. Varma. Principal Secretary to the Prime Minister, is factually correct. The note shows that in the light of the instructions given by Mr. A. N. Varma the Special Secretary (CS) Mr. Sathyam not only telephoned to the Lt. Governor, the Chief Secretary and the Secretary (Health), but also sent a D. O. letter to the Chief Secretary about the instructions given by Mr. A. N. Varma. The said D. O. letter dated 22 November 1993 reads thus:" Dear Shri Thakkar. Please recall our telecom on 19 November about enquiries into alleged irregularities in purchase of equipment. Governor, the Chief Secretary and the Secretary (Health), but also sent a D. O. letter to the Chief Secretary about the instructions given by Mr. A. N. Varma. The said D. O. letter dated 22 November 1993 reads thus:" Dear Shri Thakkar. Please recall our telecom on 19 November about enquiries into alleged irregularities in purchase of equipment. It has been brought to the notice of the Prime Minister that the Delhi Administration is contemplating precipitate action in the matter including suspension of senior doctors like Dr. Khaleelullah. The allegation is that any such action will be precipitate because all relevant records have not been scrutinised and all the relevant facts have been verified. The Principal Secretary to the Prime Minister has asked for a detailed report on the facts of the case for PM's information; and, he has also advised that no such precipitate action as apprehended/alleged may be taken until all aspects of the case have been appropriately attended to. 2. We will be grateful if you can please arrange for appropriate action accordingly immediately. 3. I have telephonically apprised the L. G. of these developments. With regards. Yours sincerely, sd/- (S. Sathyam) " ( 58 ) DURING the course of arguments we were told by the learned counsel for respondent No. 2 that the very same Mr. R. S. Sethi who had recommended the suspension of Dr. Khalilullah wrote a letter dated 26 July 1994 to Shri R. R. Shah, Joint , Secretary (U. T.), Ministry of Home Affairs, Govt. of India, stating that the aspersions cast on Dr. Khalilullah in the various committee reports were without foundation. On our request learned counsel for respondent No. 1 verified and informed us that office copy of any such letter was not available in the files of the Delhi Administration. Later Delhi Administration obtained a copy of the letter from the Home Ministry, Union of India, and placed before us. The said letter dated 26 July 1994 from Mr. R. S. Sethi. Health Secretary, Delhi Administration to Mr. R. R. Shah. Joint Secretary (UT), Govt. of India, Ministry of Home Affairs, reads thus :-"dear Shri Shah, This is in continuation of our earlier letter relating to purchases made by G. B. Pant Hospital. 2. We have examined the various reports of Committees which had gone into these cases as also the documents/books of the Institutions. R. R. Shah. Joint Secretary (UT), Govt. of India, Ministry of Home Affairs, reads thus :-"dear Shri Shah, This is in continuation of our earlier letter relating to purchases made by G. B. Pant Hospital. 2. We have examined the various reports of Committees which had gone into these cases as also the documents/books of the Institutions. On the basis of this examination, we have concluded that no allegation whatsoever can be raised against Dr. Khalilullah and whatever aspersions have been cast on him in any of these reports are without foundation. 3. A copy of the affidavit filed by us in the High Court as well as a copy of the reply sent to the Public Accounts Committee is attached. Yours sincerely, sd/- (R. S. Sethi)" ( 59 ) WE fail to understand the provocation to write the above letter, the contents of which are clearly contrary to the detailed and well reasoned note recorded by Mr. R. S. Sethi on 16 November 1993. No explanation is forthcoming for the sudden reversal of his stand after the filing of this writ petition. It is significant that the letter is dated 26 July 1994, that is, one week after Mr. R. S. Sethi filed his counter affidavit in this case on 18 July 1994. It is strange that no copy of the letter was placed in the file of the Delhi Administration. Learned counsel for the petitioners alleged that such a letter was procured from Mr. Sethi with a view to support the case of respondent No. 2 in this case. He also alleged that for writing such a letter Mr. Sethi was rewarded by giving him a posting in the Union Ministry of Home Affairs. It is admitted that Mr. Sethi has since been posted in the Union Home Ministry as Joint Secretary. ( 60 ) THE resultant position is that the suggestion to take disciplinary action against Dr. Khalilullah and to place him under suspension or at least to shift him from the post of Director, G. B. Pant Hospital, has been effectively put in cold storage. The investigation based on the F. I. R. filed by the Delhi Police (Crime Branch) and the Vigilance Department did not proceed at all. Khalilullah and to place him under suspension or at least to shift him from the post of Director, G. B. Pant Hospital, has been effectively put in cold storage. The investigation based on the F. I. R. filed by the Delhi Police (Crime Branch) and the Vigilance Department did not proceed at all. After much dilly-dallying it was during the pendency of this writ petition that the Central Bureau of Investigation was persuaded to take over the investigation into the irregularities in the import, purchase and supply of equipments and machinery in the G. B. Pant Hospital. It was stated by the learned counsel for the Union of India that even though investigation has been taken over by the C. B. I, it is yet to take off. The second respondent Dr. Khalilullah is due to retire from service on superannuation on 30 June 1995. According to the learned counsel for the petitioners, the entire effort has been to forestall any action against Dr. Khalilullah. . ( 61 ) IT is in the light of the events and developments in the case and also in the light of the manner in which different authorities dealt with the issue, as narrated above, that this Court has to review the decisions of respondents 1 and 3 regarding action against respondent No. 2 and to consider the prayers (a) and (d) in the writ petition. ( 62 ) LEARNED counsel for the petitioners Mr. Prashant Bhushan repeatedly drew our attention to the observation in Mr. R. S. Sethi's note dated 16th November 1993 that available evidence showed that Dr. Khalilullah played a major role in defrauding the Government and hence he should be placed under suspension or immediately shifted from G. B. Pant Hospital. Mr. Bhushan also referred to reports of the various committees, the orders passed by the Collector of Customs and the report of the CAG to demonstrate that the above observation of Mr. R. S. Sethi was well founded. He contended that even after the Chief Secretary agreed with Mr. R. S. Sethi's view the decision of the Lt. Governor not even to shift Dr. Khalilullah from G. B. Pant Hospital was wrong and that it amounted to protecting a corrupt and guilty official. According to the learned counsel, there are sufficient materials before the court to come to the conclusion that Dr. R. S. Sethi's view the decision of the Lt. Governor not even to shift Dr. Khalilullah from G. B. Pant Hospital was wrong and that it amounted to protecting a corrupt and guilty official. According to the learned counsel, there are sufficient materials before the court to come to the conclusion that Dr. Khalilullah played a major role in defrauding the Government and that disciplinary action should have been taken against him keeping him under suspension. On the other hand, learned counsel for respondent no. 2 Mr. Thakur contended that the report of the Committees or the report of the CAG or the orders of the Collector of Customs did not hold Dr. Khalilullah guilty or indict him and hence the above mentioned observation of Mr. R. S. Sethi was unwarranted and without any foundation. He further contended that there was no material before this court to arrive at a conclusion that Dr. Khalilullah played any active role in defrauding the Government even if there may be inefficiency or supervisory lapses on his part. Mr. Thakur as well as Mr. Chandrashekharan, learned Additional Solicitor General appearing for Government of India and Mr. Adarsh Goel learned standing counsel for respondent no. 1 submitted that this court should not judge the correctness of the decision taken by the authorities in exercise of their discretion as if this court is sitting in appeal over such decision. As already indicated by us, we do not propose to sit in appeal against the decision of respondents 1 and 3 in the matter or to investigate and find whether respondent no. 2 is guilty of defrauding the Government. We prefer to confine ourselves to the question whether the authorities approached the issue of taking action against respondent no. 2 in a proper, honest and fair manner with due regard to the spirit of the statute and whether the decision is arbitrary or perverse or so unreasonable that no reasonable and fair minded person could have taken such a decision. Hence we are not going into the minute details of the contents of various reports, the alleged conflicts or discrepancies in the report and the allegations regarding forgery and interpolation of documents. Let it be considered by the investigating agencies or in a departmental enquiry if and when ordered. ( 63 ) THE proposal to shift Dr. Hence we are not going into the minute details of the contents of various reports, the alleged conflicts or discrepancies in the report and the allegations regarding forgery and interpolation of documents. Let it be considered by the investigating agencies or in a departmental enquiry if and when ordered. ( 63 ) THE proposal to shift Dr. Khalilullah from the post of Director of G. B. Pant Hospital was made for the first time in the letter dated 19th November 1991 of Ms. Shailaja Chandra, Secretary (Health) forwarding the report of the Archana Arora Committee report to the Central Government. However the proposal was turned down by respondent no. 3 as they felt that it was a case of failure of the system rather than that of an individual and since they preferred to take a liberal view in the matter then. We find it unnecessary to subject that decision to judicial review at this point of time because in the meantime much water has flown under the bridge. Mr. Prashant Bhushan also did not press for such a review, probably in view of the fact that when Ms. Shailaja Chandra made the proposal on 19th November 1991 the only material available was the Archana Arora Committee Report. The C. A. G. report, the orders of the Collector of Customs and the Gupta Committee Report became available only subsequently. However he requested us to note that respondent no. 3, Ministry of Health was anxious to protect Dr. Khalilullah on the ground that he is an eminent medical scientist, despite the finding that he was at least constructively liable for the irregularities and fraud. ( 64 ) THE suggestion to take action against Dr. Khalil-ul-lah was again made after Dr. A. K. Gupta Committee submitted its report. The suggestion was contained in a note recorded on 16th November. 1993 by Mr. R. S. Sethi, Secretary (Medical), Delhi Administration in the file relating to follow up action on the Dr. Gupta Committee Report. We have already extracted the said note in its entirety. It shows that the note was prepared with reference to the reports of various committees and with particular reference to the latest report of Dr. A. K. Gupta Committee. It is seen from the file that apart from Dr. A. K. Gupta Comittee report, the other reports referred are:- (i) Ms. Archana Arora Committee report. (ii) Dr. It shows that the note was prepared with reference to the reports of various committees and with particular reference to the latest report of Dr. A. K. Gupta Committee. It is seen from the file that apart from Dr. A. K. Gupta Comittee report, the other reports referred are:- (i) Ms. Archana Arora Committee report. (ii) Dr. G. G. Mansharamani Committee report. (iii) Report of the Deputy Commissioner's Committee which looked into the veracity of the issuance of the CDEC and MMIC by the Hospital. The note further shows that Mr. R. S. Sethi had also considered the action taken by the Department of Revenue Intelligence and the cases investigated by the Collector of Customs and the orders passed by the Collector of Customs. The note also makes reference to the attempts made to refer the case to CBI and the reference of the case to the Crime Branch. The note also shows that Mr. Sethi was aware of the fact that the Central Vigilance Commission as also the Anti-Corruption Branch of the Govenment of NCT of Delhi were seized of the matter. Thus. it is seen that all relevant materials were before him when Mr. Sethi prepared the note and that he had adverted to all relevant aspects before recording the note. The note reflects a thorough, meticulous and in depth study of the issue with a view to ensure a fair and proper investigation into the serious irregularities and a firm determination to punish the guilty. For the purpose of the present case, it is relevant to note that according to Mr. Sethi, all earlier reports as well as Dr. Gupta Committee report presented a very grim scenario of financial and administrative impropriety and possible pocketing of huge commissions by various functionaries of the Hospital. To his mind, the prime suspect undoubtedly appeared to be Dr. Khalil-ul-lah, Director G. B. Pant Hospital but axe fell only on lesser functionaries. According to Mr. Sethi, available evidence showed that Dr. Khalil-ul-lah played a major role in defrauding the Government. Hence, while recommending acceptance of the report of Dr. A. K. Gupta Committee and proposing the follow up action for approval of Chief Secretary and Lt. Governor. Mr. Sethi suggested that Dr. Khalil-ul-lah should be placed under suspension or immediately shifted from G. B. Pant Hospital. Khalil-ul-lah played a major role in defrauding the Government. Hence, while recommending acceptance of the report of Dr. A. K. Gupta Committee and proposing the follow up action for approval of Chief Secretary and Lt. Governor. Mr. Sethi suggested that Dr. Khalil-ul-lah should be placed under suspension or immediately shifted from G. B. Pant Hospital. He has given the following specific reasons for such a suggestion:- (i) Available evidence showed that Dr. Khalil-ul-lah played a major role in defrauding the Government. (ii) Such a step (suspension or shifting) would facilitate a fair and impartial enquiry/investigation by the Crime Branch. (iii) Initiation of disciplinary proceedings for imposition of major penalty against Dr. Khalil-ul-lah was being recommended. (iv) Mr. Sethi was told that a large number of doctors and professors were reluctant to speak out so long as Dr. Khalil-ul-lah continued in G. B. Pant Hospital. (v) After what has been revealed. Government should act firmly otherwise Government would be sending wrong signals to other Hospitals/institutions. It is significant that Mr. Sethi had given a personal hearing to Dr. Khalil-ul-lah before recording the note. Personal hearing was given in the interest of equity and fair play although Dr. Khalil-ul-lah had been given adequate oportunity to speak out by various committees including the one headed by Dr. A. K. Gupta. Mr. Sethi has indicated that during the personal hearings he asked Dr. Khalil-ul-lah to respond to the various findings of the Committees but nothing tangible emerged which would warrant amending the course of action suggested by Mr. Sethi. Mr. Sethi has also recorded that he had discussed the case with the Lt. Governor who had called him a few days earlier. Having carefully perused the entire materials based on which Mr. Sethi recorded his note and having critically analysed the various points mentioned in the note. we fail to notice any infirmity in the note recorded by Mr. Sethi on 16th November, 1993. He has applied his mind to all the relevant aspects and has arrived at conclusions which appear to be well- founded. The recommendations also appear to be sound and reasonable. ( 65 ) THE only attack of the learned counsel for Dr. Khalil-il-lah against Mr. Sethi's note is that the materials before Mr. Sethi did not call for the observation that the prime suspect appeared to be Dr. Khalil-ul-lah and that Dr. The recommendations also appear to be sound and reasonable. ( 65 ) THE only attack of the learned counsel for Dr. Khalil-il-lah against Mr. Sethi's note is that the materials before Mr. Sethi did not call for the observation that the prime suspect appeared to be Dr. Khalil-ul-lah and that Dr. Khalil-ul-lah played a major role in defrauding the Government and consequently the recommendation for suspension or shifting also was uncalled for. But it is a matter of understanding, inference and opinion. In the light of the materials available and the reasons stated by Mr. Sethi we cannot find fault with the inferences drawn by him or the opinion expressed by him. We are not sitting in appeal over the issue and we cannot substitute our view, even if it is different, so long as the view expressed by Mr. Sethi is honest, fair, reasonable and based on relevant materials. ( 66 ) IT is significant that the Chief Secretary agreed with the view of Mr. Sethi and he recorded his agreement in the file on 30th November, 1993. Of the two options of suspension and shifting, the Chief Secretary chose the latter and recommended the transfer of Dr. Khalil-ul-lah. The effect of the Chief Secretary's note dated 30th November, 1993 (which has been extracted in full earlier) is that all the recommendations of Mr. Sethi were accepted by him except that the two options of suspension and transfer were restricted to the only option of transfer. The Chief Secretary did not record any dissent or reservation on any other aspect. It means that the Chief Secretary agreed with the inference drawn by Mr. Sethi regarding the role of Dr. Khalil-ul-lah in defrauding the Government and the recommendation of Mr. Sethi to initiate disciplinary action against Dr. Khalil-ul-lah and also the reasons cited by Mr. Sethi for removing Dr. Khalil-ul-lah from the post of the Director, G. B. Pant Hospital. ( 67 ) HOWEVER, when the file went to the Lt. Governor, he chose to overrule the Secretary (Medical) and Chief Secretary. We think that he is entitled to do so in appropriate cases after proper application of mind and after stating sufficient and valid reaons. Hence, the question is whether the Lt. Governor properly applied his mind to all the relevant aspects, eschewing the irrelevant ones and whether the decision was honest, fair and uninfluenced by extraneous considerations. We think that he is entitled to do so in appropriate cases after proper application of mind and after stating sufficient and valid reaons. Hence, the question is whether the Lt. Governor properly applied his mind to all the relevant aspects, eschewing the irrelevant ones and whether the decision was honest, fair and uninfluenced by extraneous considerations. ( 68 ) THE Lt. Governor's note dated 1st December, 1993 has been extracted fully earlier in this judgment. The Lt. Governor categorically stated that there was no doubt that the defaults that had come to notice were serious. But he was not prepared to accept i that Dr. Khalilullah could be straightaway accused of malfeasance. According to the New Lexicon Webster's Dictionary 'malfeasance' means 'the committing of illegal act by a public official. ' Hence it is to be understood that the Lt. Governor did not agree with the view of the Secretary (Medical) and the Chief Secretary that Dr. Khalilullah played a major role in defrauding the Government. The Lt. Governor has recorded that he had carefully considered all the aspects mentioned in the Secretary's note and the Chief Secretary's observations. However, he has not stated any valid reason to differ with the Secretary and the Chief Secretary on the question of Dr. Khalilullah's role. He has not pointed out any infirmity in the understanding, assessment or inference of the Secretary or the Chief Secretary. The role of the Secretary was detailed, exhaustive, specific and reasoned. The Lt. Governor could not have simply overruled the Secretary and the Chief Secretary in such a summary and arbitrary manner. Even though the Secretary had recorded that he recorded his note after discussing the case with the Lt. Governor, the Lt. Governor in * his note has not reacted to it. We may also observe that the Secretary was drawing an inference from the available materials and further evidence has to be collected during the investigation. The Lt. Governor, in our view, exhibited over anxiety to protect Dr. Khalilullah from any immediate action against him. It is to be noted that Dr. Khalilullah has not attributed any motives against the Secretary and the Chief Secretary. There is no allegation that they had any ill-will towards him. ( 69 ) THOUGH the Secretary had specifically recommended disciplinary action against Dr. Khalilullah, the Lt. Khalilullah from any immediate action against him. It is to be noted that Dr. Khalilullah has not attributed any motives against the Secretary and the Chief Secretary. There is no allegation that they had any ill-will towards him. ( 69 ) THOUGH the Secretary had specifically recommended disciplinary action against Dr. Khalilullah, the Lt. Governor has not said anything on that aspect, although, the effect of his note was to prevent any action against Dr. Khalilullah. The Lt. Governor has agreed that the defaults are very serious. His reservation was only about Dr. Khalilullah being straightaway accused of malfeasance. Even assuming that there was no positive and conclusive evidence to hold Dr. Khalilullah guilty of malfeasance, there were sufficient materials which in the normal course would have prompted any responsible authority to initiate disciplinary action. But this relevant aspect was not even considered by the Lt. Governor and he kept an evasive silence on the question of disciplinary action. ( 70 ) ANOTHER very relevant aspect which was not considered by the Lt. Governor is that even if there was no malfeasance on the part of Dr. Khalilulla, there was undisputable, and in fact undisputed, dereliction of duty on his part and that such dereliction of duty is sufficient ground for taking disciplinary action. The unsatisfactory state of affairs that prevailed in the purchase section and store section of the G. B. Pant Hospital and irregularities in the purchases were brought out in the various committee reports and the C. A. G. report. All the controversial purchases took place during the period when Dr. Khalilulla was the Director. Apart from being the Director, he was also Chairman of the Purchase Committee. It has come out that there was gross violation of General Financial Rules and that Dr. Khalilullah did not at all observe standard of financial propriety. His incompetence and inefficiency, if not involvement in the fraud, caused loss of around Rs. 40 crores to the Public Exchequer. Even if the claim of Dr. Khalilullah that he was fooled by the officers under him is to be believed, still the serious irregularities that have come to light are nothing but clinching evidence for his incompetence, inefficiency and lack of supervision and control as Director of the Hospital. When a person holding a post wielding administrative control and supervision fails to exercise supervision and control. Khalilullah that he was fooled by the officers under him is to be believed, still the serious irregularities that have come to light are nothing but clinching evidence for his incompetence, inefficiency and lack of supervision and control as Director of the Hospital. When a person holding a post wielding administrative control and supervision fails to exercise supervision and control. he is guilty of dereliction of duty. When such lack of control and supervision results in irregularities causing loss of crores of rupees to the Public Exchequer, the dereliction of duty is very grave and serious and necessarily warrants disciplinary action. In such circumstances, the disciplinary authority has no discretion to decide against initiation of disciplinary action. In fact, in the circumstances stated above, it would be the statutory duty of the disciplinary authority to initiate disciplinary action. If the authority fails or refuses to initiate disciplinary action in such circumstances, it would amount to failure or refusal to discharge the statutory duty. If the statute contemplates initiation of disciplinary action in given circumstances, and when such circumstances exist, the authorities are bound to initiate disciplinary action in tune with the spirit of the statute. Admittedly the petitioner is governed by the C. C. S. (C. C. and A.) Rules which contemplate disciplinary action on the ground of serious dereliction of duty or causing loss to Government. Even according to the facts admitted by the respondents, no reasonable person can say that ' respondent no. 2 is not guilty of serious dereliction of duty. There could not be two views on this aspect. Hence by stalling the initiation of disciplinary action against Dr. Khalilullah, the Lt. Goverrnor not only failed to consider a very relevant aspect but also violated the spirit of the C. C. S. (C. C. and A.) Rules and failed to discharge the statutory duty. Of course, the disciplinary authority is respondent no. 3. But in the given circumstances the Lt. Governor had a duty to forward to respondent no. 3, the recommendations of the Secretary (Medical) and the Chief Secretary along with his own views. By not doing so. the Lt. Governor deprived an opportunity for the competent authority to take a decision on the question of taking disciplinary action against Dr. Khalilullah. ( 71 ) THE Lt. Governor appears to have rejected the suggestion to transfer Dr. Khalilullah from the post of Director. By not doing so. the Lt. Governor deprived an opportunity for the competent authority to take a decision on the question of taking disciplinary action against Dr. Khalilullah. ( 71 ) THE Lt. Governor appears to have rejected the suggestion to transfer Dr. Khalilullah from the post of Director. G. B. Pant Hospital mainly on two grounds:- (a) Dr. Khalilullah cannot be straightaway accused of malfeasance. (b) Government was dealing with a nationally recognized specialist who has been honoured with Padma Shri and Padma Bhushan and one does not deal with such people abruptly causing them public humiliation. ( 72 ) WE feel that the Lt. Governor totally missed the point and misdirected himself in approaching the issue of transfer. The malfeasance on the part of Dr. Khalilullah was not the sole reason stated by the Secretary (Medical) in his note dated 16th November 1993 for the shifting of Dr. Khalilullah from the G. B. Pant Hospital. One main reason stated was that the shirting of Dr. Khalilullah from the post of Director was necessary to facilitate a fair and impartial enquiry/ investigation by the Crime Branch. Admittedly the Crime Branch was seized of the matter. Lt. Governor wanted to entrust the investigation with C. B. I. At any rate, investigation would be there and the investigation would also naturally cover the possible involvement of Dr. Khalilullah in defrauding the government. Hence whether the investigation is conducted by the Crime Branch or the C. B. I. . the reason mentioned by the Secretary (Medical) holds good. But the Lt. Governor did not apply his mind to this relevant aspect. Another reason mentioned in the note of the Secretary (M) was the reluctance of a large number of doctors and professors to speak out so long as Dr. Khalilullah continued in the G. B. Pant Hospital. The Lt. Governor did not apply his mind at all to this relevant aspect. Yet another reason given by the Secretary is the recommended disciplinary action. But the Lt. Governor did not consider the need and desirability of taking disciplinary action against Dr. Khalilullah at least on the ground of serious dereliction of duty and in the event of such disciplinary action, the necessity and ^ desirability to keep Dr. Khalilullah away from the Hospital. The Secretary had also pointed out that after what has been revealed by the various committee reports, Govt. Khalilullah at least on the ground of serious dereliction of duty and in the event of such disciplinary action, the necessity and ^ desirability to keep Dr. Khalilullah away from the Hospital. The Secretary had also pointed out that after what has been revealed by the various committee reports, Govt. should act firmly so that wrong signals were not sent to other Hospitals and Institutions. There is nothing to show that the Lt. Governor at least considered this aspect. Thus Lt. Governor failed to consider relevant and important aspects which he was bound to consider whle taking decision on the question of suspension or transfer of Dr. Khalilullah. Further whatever the Lt. Governor considered was totally irrelevant also. The Lt, Governor appears to have been unduly impressed and overtaken by the fact that Dr. Khalilullah is a nationally recognised specialist who received Padma Shree and Padma Bhushan. The honours like Padma Shree and Padma Bhushan do not give immunity against disciplinary action or suspension or transfer, if it is otherwise required. The basic consideration for keeping a person in a post should be his suitability and also the desirability of having him in the post. It had become evident from his functioning in the post of Director, G. B. Pant Hospital, during the relevant period that Dr. Khalilullah is not suitable for an administrative post like the Director of G. B. Pant Hospital. He may be a good medical scientist and an eminent specialist. But he proved to be a thorough failure as an administrator. His incompetence and inefficiency were amply demonstrated by his work so far. Further in view of the irregularities that came to light and in view of the pending investigation it was also not desirable to allow Dr. Khalilullah to continue in the post of Director, Instead of considering such relevant and important aspects, the Lt. Governor took the decision on the basis of irrelevant aspects like the credentials of Dr. Khalilullah as a medical scientist and recipient of Padma Shree and Padma Bhushan. The Lt. Governor also was not reasonable in assuming that mere transfer will cause public humiliation to Dr. Khalilullah. It is not a relevant consideration in the circumstances of this case. Governor took the decision on the basis of irrelevant aspects like the credentials of Dr. Khalilullah as a medical scientist and recipient of Padma Shree and Padma Bhushan. The Lt. Governor also was not reasonable in assuming that mere transfer will cause public humiliation to Dr. Khalilullah. It is not a relevant consideration in the circumstances of this case. Even assuming that there is such a possibility of humiliation, any reasonable and responsible person in authority would have only preferred the public interest to the prestige of one individual, whoever he may be. It should be observed that there was no occasion to abruptly deal with Dr. Khalilullah as assumed by the Lt. Governor. The suggestion to shift him from the post was pending from 1991. Various committees had enquired into the irregularities. Dr. Khalilullah himself was given a personal hearing by the Secretary Mr. Sethi before he recommended suspension or transfer of Dr. Khalilullah. Hence the assumption of the Lt. Governor that Dr. Khalilullah was being abruptly dealt with was not correct. ( 73 ) FOR the reasons stated above we are of the view that while overruling the suggestion of the Secretary (Medical) and the Chief Secretary to transfer Dr. Khalilullah from the post of Director of G. B. Pant Hospital and while deciding not to shift him from the present post the Lt. Governor not only failed to consider all the relevant aspects but also considered irrelevant aspects. The Lt. Governor gave more importance to the prestige of Dr. Khalilullah rather than to the public interest and the common good. The Lt. Governor did not exercise his power in tune with the spirit of the statute. It would also appear that the Lt. Governor did not have in his mind the General Financial Rules and the C. C. S. (CCanda) Rules, in the given circumstances no reasonable and responsible person could have taken a decision not to transfer Dr. Khalilullah from the post of Director G. B. Pant Hospital. There could not have been two views on this issue. Thelt. Governor overruled and rejected the suggestion of the Secretary and the Chief Secretary in an arbitrary and unreasonable manner. No fair minded authority could have rejected the suggestion in the given circumstances. The Lt. Governor had an obligation to apply his mind to pertinent and proximate matters only, eschewing the irrelevant and the remote but the Lt. Thelt. Governor overruled and rejected the suggestion of the Secretary and the Chief Secretary in an arbitrary and unreasonable manner. No fair minded authority could have rejected the suggestion in the given circumstances. The Lt. Governor had an obligation to apply his mind to pertinent and proximate matters only, eschewing the irrelevant and the remote but the Lt. Governor failed to discharge this obligation. In approaching the need and desirability of transferring Dr. Khalilullah from the post of Director of G. B. Pant Hospital the Lt. Governor misdirected himself. In the process of taking the decision he was influenced by irrelevant and extraneous matters. In fact by rejecting the suggestion of the Secretary and the Chief Secretary to transfer Dr. Khalilullah the Lt. Governor acted in an arbitrary and unreasonable manner and abused his power. The decision of the Lt. Governor was not informed by reason and was influenced by extraneous considerations. ( 74 ) WE have already referred to the intervention of the Principal Secretary to the Prime Minister to prevent any action being taken against the second respondent. We have already extracted the note recorded on 22nd November. 1993 by Mr. S. Sathyam. Special Secretary (CS) in the file No. U14036/16/93-Delhi of the Ministry of Home Affairs. No further material is required to establish the intercession of Shri A. N. Verma, Principal Secretary to the Prime Minister to prevent any action being taken against Dr. Khalilullah. As already mentioned the Secretary (Medical) Mr. Sethi had discussed the case with the Lt. Governor before recording his note containing the recommendation for suspensin or transfer of Dr. Khalilullah from the post of Director of G. B. Pant Hospital. Though the Chief Secretary also endorsed the view that Dr. Khalilullah should be shifted from the post, the Lt. Governor reversed the entire process and prevented the suggestion of the Secretary from going to the third respondent which is the authority competent to take action in the case of respondent No 2. The only intervening factor was the instructions given by Shri A. N. Varma not to take any action against Dr. Khalilullah. It has to be noted that in the scheme of transaction of business in the Government Shri A. N. Varma has no role in the matter unless the Prime Minister wanted to call for the file from the Union Health Ministry for any reason. Khalilullah. It has to be noted that in the scheme of transaction of business in the Government Shri A. N. Varma has no role in the matter unless the Prime Minister wanted to call for the file from the Union Health Ministry for any reason. It is strange that Shri A. N. Varma bypassed the Union Health Ministry and operated through the Union Home Ministry. It is also strange that no file has been maintained in the Prime Minister's office regarding these instructions given by Shri A. N. Varma as stated by the counsel for respondent No. 3. In paragaph 3 of the note of the Lt. Governor recorded on 1st December. 1993 he has stated that he had explained the facts of the case and his decision to the Principal Secretary to the Prime Minister. The repeated telephone calls given by Mr. A. N. Varma to Mr. Sathyam. Special Secretary in the Union Home Ministry and his insistence that Mr. Sathyam should advise the Delhi Administration in writing that no precipitate action should be taken against Dr. Khalilullah demonstrate the undue interest taken by Mr. A. N. Varma to protect Dr. Khalilullah. In these circumstacnes the learned counsel for the petitioners is justified in alleging that the decision not to take disciplinary action against Dr. Khalilullah and not to shift him from the post of Director of G. B. Pant Hospital was not taken by the Lt. Governor on his own and that it was dictated by someone else. that is. Shri A. N. Varma who is stated to be a close friend and personal patient of Dr. Khalilullah. Having regard to the entire circumstances and ail the relevant aspects we are of the view that the decision of the Lt. Governor not to take discipanary action against Dr. Khalilullah and not to shift him from the post of Director, G. B. Pant Hospital, was influenced by the unauthorised intervention of Mr. A. N. Varma and the pressure exerted by him, ( 75 ) HENCE we hold that the matter relating to the initiation of disciplinary proceedings against Dr. Khalilullah and shifting him from the post of Director, G. B. Pant Hospital, did not receive a fair and proper consideration at the hands of respondents 1 and 3. We also hold that the decision of the Lt. Khalilullah and shifting him from the post of Director, G. B. Pant Hospital, did not receive a fair and proper consideration at the hands of respondents 1 and 3. We also hold that the decision of the Lt. Governor, Delhi, not to initiate disciplinary action against respondent No. 2 and not to shift him from the post of Director, G. B. Pant Hospital, is vitiated by illegality, irrationality, arbitrariness and mala fides and hence it has no legal sanction. It is declared accordingly. ( 76 ) LEARNED counsel for Respondent No. 2 contended that this Court should not entertain this petition or grant any relief because, though described as a public interest litigation this, in fact, is a petition to serve an oblique purpose. The allegation is that one Dr. Anoop Saraya is actively associated with the two organisations cited as the petitioners: that the said Dr. Anoop Saraya has some axe to grind against Dr. Khalilullah and that the said organisations have filed the petition at the instance of Dr. Anoop Saraya. The petitioners have by filing affidavit denied the allegation that Dr. Anoop Saraya has illwill towards Dr. Khalilullah and that the petition was filed at the instance of Dr. Anoop Saraya. According to the petitioners they are responsible and public spirited voluntary organisation motivated only by the public interest and the common good. We could not find any material to establish any illwill on the part of Dr. Anoop Saraya towards Dr. Khalilullah. There is also no material to show that the petition was filed at the instance of Dr. Anoop Saraya. Merely becasue, Dr. Anoop Saraya is actively associated with the petitioner organisation, the petitioners would not lose their locus standi or credibility even if Dr. Saraya may have any illwill towards Dr. Khalilullah. A public interest petition cannot be thrown out on the basis of such hyper-technical contentions and far-fetched allegations. In view of the magnitude and seriousness of the irregularities and fraud brought to the notice of the court and in view of the conduct of the respondents revealed in the case, we are not inclined to accept the above mentioned argument of learned counsel for respondent No. 2. The facts brought out in the case cast a duty on the Court to exercise its jurisdiction under Article 226 in public interest and for common good and to uphold the rule of law. The facts brought out in the case cast a duty on the Court to exercise its jurisdiction under Article 226 in public interest and for common good and to uphold the rule of law. ( 77 ) IT was also contended by the learned counsel for Respondents that a writ of mandamus should not issue unless these petitioners have a legal right and the respondents have legal duty which they failed or refused to perform. Legal right of the petitioners cannot be insisted on in public interest cases. As far as legal duty is concerned, we have already found that Respondents 1 and 3 have either failed or refused to perform their duty properly. An improper exercise of power is as bad as non-exercise of the power and that also happened in this case. Under Article 226 of the Constitution of India, this Court has jurisdiction to pass such orders or directions as are necessary to uphold rule of law or to protect public interest or to promote justice or to prevent injustice. This position is clear from the principles and parameters set out earlier in this judgment in the light of judicial decisions. It may also be mentioned that in the writ petition there is no prayer for mandamus. In the circumstances of the case the Court can mould the relief to meet the ends of justice. Hence the objection raised by the respondents is rejected. ( 78 ) IN view of our finding that the matter relating to initiation of disciplinary action against Dr. Khalilulla did not receive a proper and fair consideration at the hands of respondents 1 and 3. we direct respondent No. 3. the authority competent, to take a decision in the matter, to consider and decide in accordance with law whether it is necessary at this stage to initiate disciplinary action against Respondent No. 2 as recommended by the Secretary (Medical ). Government of N. C. T. of Delhi in his note dated 16th November. 1993. Respondent No. 1 will immediately forward to respondent No. 3 all the relevant materials and files to enable respondent No. 3 to take a decision in accordance with law. If respondent No. 3 decides to initiate disciplinary action against respondent No. 2. it will be open to respondent No. 3 to consider whether it is necessary or desirable to place respondent No. 2 under suspension. If respondent No. 3 decides to initiate disciplinary action against respondent No. 2. it will be open to respondent No. 3 to consider whether it is necessary or desirable to place respondent No. 2 under suspension. ( 79 ) HOWEVER, we are not inclined to leave the question of shifting Respondent No. 2 to be decided by Respondent No. 3. Had Respondent Nos. 1 and 3 exercised their power and discretion in proper and lawful manner, they would have and should have shifted Respondent No. 2 from the post of Director G. B. Pant Hospital. Since they failed and refused to exercise the power and discretion in a proper and lawful manner and thereby did not shift Respondent No. 2 from the post of Director, G. B. Pant Hspital this is a proper case in which the Court itself should pass an order which Respondent No. 3 should have passed. In the circumstacnes of this case we are satisfied that such a course of action is necessary in the interest of justice. This Court is competent to pass such an order in view of the decision of the Supreme Court in C. A. G. of India vs. K. S. Jaganathan, (1986) 2 SCC 679 We are of the view that, for the reasons we have indicated earlier, Dr. Khalilullah should have been shifted from the present post much earlier. Sufficient damage has already been done by his continuance in the post. Still it is better late than never. Since the matter has come to the Court and since we are convinced of the need and desirability of immediately shifting Dr. Khalilullah from the post, we are of the view that the shifting should be effected forthwith. We are particularly concerned about the allegations about the missing of the files, the destruction of evidence, the attempts to cover up the fraud, the possible involvement of Dr. Khalilullah himself in the fraud, the pending investigation into the irregularities, the continued damage that could be done to a fair and proper investigation and the need for maintaining public confidence in matters like this. In the normal course we would have left the decison on the question of shifting Dr. Khalilullah from the post of Director, G. B. Pant Hospital to Respondent No. 3 to whom the right ordinarily belongs. In the normal course we would have left the decison on the question of shifting Dr. Khalilullah from the post of Director, G. B. Pant Hospital to Respondent No. 3 to whom the right ordinarily belongs. But in view of their callous, indifferent and irresponsible attitude and inaction for such a long period, Respondent No. 3 has forfeited the above right. It is borne out by records that copy of the letter dated 9th December, 1993 from the Secretary (Medical), Government of N. C. T. of Delhi to the Union Home Secretary was sent to the Union Health, Secretary also and that it contained copy of the Dr. Gupta Committee report and a summary of the findings of the earlier enquiry committees. But no action was taken by Respondent No. 3 on the basis of the information available. Even a file was not opened or maintained by Respondent No. 3. as submitted by their counsel when we directed him to produce the file. It is evident from the facts revealed in this case that there was a determined attempt to delay, if not to prevent, the action against Respondent No. 2. After filing a counter affidavit in this case. in effect justifying the inaction of Respondent No. 3, Mr. R. S. Sethi. also obliged to write a letter on 26th July. 1994 to the Union Home Ministry giving a clean chit to Dr. Khalilullah, contrary to all what he had said in his note dated 16th November. 1993. This will show the extent to which the authorities are prepared to go in order to protect Dr. Khalilullah. This Court cannot throw up its hands in helplessness in such a situation. While exercising jurisdiction under Article 226 of the Constitution of India, the paramount consideration is rule of law and public interest. Hence in the light of the principles and parameters laid down by judicial decisions and set out earlier inthis judgment and with a view to uphold the rule of law and to protect public interest, we hereby interdict Respondent No. 2, Dr. Khalilullah from functioning as Director of G. B. Pant Hospital, New Delhi. He shall forthwith relinquish his office as Director of the Hospital and shall hand over charge to the Seniormost Head of the Department in the Hospital. Khalilullah from functioning as Director of G. B. Pant Hospital, New Delhi. He shall forthwith relinquish his office as Director of the Hospital and shall hand over charge to the Seniormost Head of the Department in the Hospital. If there are patients who are admitted in the Hospital and are in his personal care, Respondent No. 2 may extend professional services to them for a week and the Hospital authorities will extend necessary facilities to him for the purpose. Respondent No. 3 may give another suitable posting to Respondent Nd. 2. ( 80 ) THE writ petition is disposed of in the above terms. The petitioners will be entitled to costs of Rs. 2500. 00.