AJMAL MIAN; J.- Since these 2 writ petitions involve common question of law, we intend to dispose of the same by this common judgment. The brief facts leading to the filing of the above Petitions are that the Eastern Federal Union Insurance Company Limited (hereinafter referred to as the Eastern Federal), petitioner in Petition No. D-947/81 and the Premier Insurance Company of Pakistan Limited (hereinafter referred to as the Premier Insurance), Petitioner in Petition No. D-517/81 were Insurance Companies dealing in life insurance as well as in general insurance till the promulgation of the Life Insurance (Nationalization) Order, 1972 (hereinafter referred to as the Order), whereby the life insu--rance business was nationalised and was taken over by the State and its management was entrusted to the Life Insurance Management Board (hereinafter referred to as the Board) till the incorporation of the State Life Corporation of Pakistan (hereinafter referred to as the corporation). Respondent No. 2 in the above first petition and respondent No. 4 in the aforesaid second petition (hereinafter referred to as Muhammad Fareed was working as an Assistant Income-Tax Officer at the time of promulga--tion of that Order. After Muhammad Fareed's services were lent to the Board and was posted as an Assistant to the Chairman of the Board. However, after the taking over of the management of the life insurance business by the Corporation Muhammad Fareed joined the Corporation and at present holds the post of the Deputy General Manager (Corporate, Claims and Taxes).
2. It may be pertinent to refer to section 22 of the Order, which reads as follows :- Section 22. Right of Corporation to seek relief in respect of certain transactions of the insurer.- Where an insurer whose life insurance business has been transferred to and vested in a Corporation under this Order has, at any time within fifteen years preceding the ap--pointed date-
(a) made any payment to any person without consideration.
(b) sold or disposed of any property of the insurer without considera--tion or for an inadequate consideration;
(c) acquired any property or rights for an excessive consideration;
(d) entered into or varied any agreement so as to require an excessive consideration to be paid or given by the insurer;
(e) entered into any other transaction of such an onerous nature as to cause a loss to, or impose a liablity on, the insurer exceeding any benefit accruing to the insurer;
(f) if a composite insurer transferred any property from his life department to his general department without consideration or for an inadequate consideration;
(g) acted, or omitted to act, in violation of any provision of the Act and has thereby caused a loss to, or, imposed a liability on the insurer; and the payment, sale, disposal, acquisition, agree--ment or variation thereof or other transaction or transfer was not reasonably necessary for the purpose of the life insurance business of the insurer or was made without reasonable care and prudence on the part of the insurer, regard being had in either case to the circumstances at the time, the Corporation may apply for relief to the Tribunal in respect of such transaction, and all parties to the transaction shall, unless the Tribunal otherwise directs, be made parties to the application.
(2) The Tribunal may make such order against any of the parties to the application as it thinks just having regard to the extent to which those parties were respectively responsible for the transac-- tion or benefit from it and all the circumstances of the case.
(3) Where an application is made to the Tribunal under clause (i) in respect of any transaction and the application is determined in favour of the Corporation, the Tribunal shall have exclusive jurisdiction to determine any claims outstanding in respect of transaction.
(4) Notwithstanding anything contained in this Article or anything contained in the Act the Corporation may bring suit under section 106 of the Act against any person to whom subsection (1) of that section is applicable.
(5) Any amount due to the Corporation in pursuance of an order of the Tribunal under clause (3)- or an order of the High Court under section 106 of the Act may be set of against any compen-- sation, debt, liability or any money-due by the Corporation to the insurer or its share-holders or directors under the provisions of this Order, including the amount of compensation payable under Article 39."
It may be noticed that under the above-quoted section of the Order, the Corpor4tion can re-open the matters referred to in clauses (a) to (g)for a period of IS years preceding the appointed date. It is the case of the Eastern Federal that Muhammad Fareed in pursuance of the above provisions has instituted as many as 20 cases against them and signed- the pleadings of the same as the Attorney of the Corporation and in fact is prosecuting the same before the Insurance Appellate Tribunal and had also appeared as the sole witness in some of the cases against the Eastern Federal, whereas in the case of Premier Insurance he has filed 3 cases against them under the above provisions.
3. It seems that the Central Board of Revenue through a notifica--tion dated 23rd April, 1981 issued in exercise of powers conferred by section 4 of the Income-Tax Ordinance, 1979 (hereinafter referred to as the Ordinance), appointed Muhammad Fareed as Special Officer. It further seems that the Commissioner of Income-Tax Central Zone `A', Karachi through his notification dated 25th April, 1981 in exercise of powers conferred by clause (c) of subsection (i) of section 5 of the Income- Tax Ordinance, 1979 (XXXI of 1979) and pursuance of the C.B.R.'s aforesaid notification dated 23rd April, 1981. Assigned jurisdiction in respect of the four insurance companies mentioned to the Schedule, namely, M/s. Premier Insurance Company Limited, M/s. 4dan Insurance Co. Ltd., M/s. Eastern Federal Union Insurance Co. Ltd., and New Jubilee Insurance Co. Ltd., to the Special Officer, Central Zone `A', Karachi.
It further seems that after the insurance bf the above notifications, Muhammad Fareed had issued notices to the petitioners for production of the accounts books for the purpose of assessing the income-tax (i.e. To Premier Insurance for the year 1978-79 and to Eastern Federal for the year 1979- 80). It also seems that the petitioners after tile receipt of the above notices made representations to the, Central Board of Revenue pointing out therein that as Muhammad Fareed had in fact instituted the cases before the Insurance Appellate Tribunal against the Companies under section 22 of the Order and as he was prosecuting he same in as much as he appeared in some of the cases as the sole witness, itwas not just and fair to appoint him as-the assessing authority. But it seems that the Central Board of Revenue turned down the above representations. Thereupon, Muhammad Fareed issued further notices petitioners for the production of accounts books of the relevant year and appearance. It also seems that after the receipt of the above notices, the petitioners have filed the present Petitions in which both the petitioners have claimed more or less identical reliefs in substance except that premier Insurance in their writ petition also prayed for setting aside the aforesaid notification dated 25th April, 1981 issued by the Commissioner of Income-tax empowering Muhammad Fareed to exercise the jurisdic--tion of the assessing authority for the purpose of the aforesaid insurance companies. It may be advantageous to refer to the reliefs prayed for in Petition No. 497/81, which are as follows : "(a) The petitioners pray that this Hon'ble Court may be pleased to declare that the appointment of the respondent No. 2 as Special Income-Tax Officer to hear and to decide the income-tax assess-- ments of the petitioners is against the principles of natural justice and otherwise void:
(b) Petitioners pray for a further order directing the respondent No. 2 to forbear from hearing the Petitioners income-tax cases or from taking any steps in connection therewith.
(c) Costs of this petition is also prayed."
4. (a) In support of the above Petitions Mr. Muhammad Ali Sayeed has vehemently urged that Muhammad Fareed is not a fit person to act as the assessing authority being a biased person against the petitioners. Mr. Mansoorul Arfeen adopted the arguments of Mr. Muhammad Ali Sayeed but has additionally submitted that since Muhammad Fareed at present is an employee of the Corporation, he cannot be appointed as special officer for acting as the assessing authority in violation of section 4 (4) of the Ordinance.
(b) On the other hand Mr. Nasrullah Awan as well as Muhammad Fareed (who has appeared in person) have submitted that the appointment of Muhammad Fareed as a Special Officer, as well as the assessing authority for the four Insurance Companies are in consonance with law and that the Petitioners have not pointed out any particular bias on the part of Muhammad Fareed. It was further contended by Mr. Awan that there is no violation of section 4 (4) of the Ordinance.
(c) In furtherance of the above submissions, the learned counsel for the petitioners have invited our attention to Muhammad Fareed's affidavit in support of the application for vacation of the stay order and his counter-affidavits to the Petitions and have submitted that from the treading of the contents of the above affidavits, it is evident that Muhammad Fareed is biased and, therefore, is not a fit person to act as the assessing authority which involves adjudication of the income-tax liability, which is a quasi-judicial work. It has also been urged by them that though there is no doubt that Muhammad Fareed is a man of integrity and there cannot be any question about his probity, gut he is obsessed with the idea to recover maximum taxes for the State. It was also pointed out by them that while filing the aforesaid 20 cases before the Insurance Appellate Tribunal Muhammad Fareed has formed very poor opinion about the working of the petitioners companies and has made serious allegations of the commission of irregularities by the petitioners companies including unauthorised divergence of funds, etc. And., there--fore, he cannot defuse the above impression from his mind while acting as the assessing authority.
(d) On the other hand, it was submitted by Mr. Nasrullah Awan and Muhammad Fareed that the cases which are pending before the Insurance Appellate Tribunal relate to life insurance business and for period during 15 years preceding 1972, whereas the assessments in question relate to the general life insurance business for subsequent period after nationaliza--tion, namely, for the years 1978-79 and 1979-80 and, therefore, the aforesaid pending cases before the Insurance Appellate Tribunal have no direct bearing on the assessments which are going to be made. It was also submitted by them that an Income-Tax Officer is entitled under law not only to assess on the basis of the documents produced by an assessee but can also rely upon the information derived by him through any private source including from his own personal knowledge provided such information is disclosed to the assessee and he is provided an opportunity to meet the same.
5. (a) Mr. Muhammad Ali Sayeed has referred to the case of From United Breweries Co. Ltd. And another v. Keepers of the Peace and Justice for County Borough of . Bath (1926 A C 586), the case of Metorpolitan Properties Co. (F.G.C.) Ltd. v. Lannon and others Regina v. London Rent Assessment Panel Committee, Ex parte, Metropolitan Properties Co. (F.G.C.) Ltd. ((1969) 1 Q .B 577), the case of Manak Lai, Advocate appellant v. Dr. Premchand Sinahvi and others (AIR 1957 SC 4255), the case of Mineral Development Ltd. v.
The State of Bihar and another (AIR 1960 SC 468), the case of R. Viswanathan and others v. Rukn- ul-Mulk Syed Abdul Wajid (AIR 1963 SC 1), the case of A. K. Kraipak and others v. Union of India and others (AIR 1970 SC 150), the case of The Andhra Pradesh State Road Transport Corporation.
Hyderabad and another v. Sri Satyanarayana Transports (Private) Ltd., Guntur and others (AIR 1965 S. C 1303), the case of Muhammad Nawaz v. Ghulam Kadir and 3 others (PLD 1973 SC 327), the case of ShaikhAkhtar Ali v. Federal of Pakistan and 4 others ((1960) 42 Taxation 47 (Lah:)), and the case of the Assessee v. Department ((197R) 37 Taxation 5 (Trib.)), Mr. Muhammad Ali Sayeed has also referred to certain passages from the well-known books namely, the Discipline of Law by Lord Deening 1979 Edition at p. 86, Garner's Admistrative Law, 4th Edition, pages 122 and 123., de-Smith's Judicial Review of Adrntaislrative Action 4th Edition at pages 252, 263 and 270 Mr. Mansoorul Arfin has referred to the book known as Principles of Administrative Law by M. P. Lain and S. N. Jain 3rd Edition at pages 206, 207, 2 14 and 215.
(b) On the other hand Mr. Nasrullah Awan and Muhammad Fareed have referted to the case of Seth Gurmukh Singh and another v. Commis--sioner of Income-tax, Punjab ((1944) 12 1 T R 393).
The case of Anraj Naraindass v. Commissioner of Income-Tax, Delhi, ((1951) 20 1 T R562) and the case of Zulfiqar Ali Bhutto and 3 others v. The State.. (13) (c) It may advantageous to quote hereinbelow the passages relied upon by M/s Muhammad Ali Sayeed and Mansoorul Arfin from the aforesaid books referred to hereinabove, which read as follows Lord Denning the Discipline of Law, 1st Edition, g. 86 .
(i) A man may be disqualified from sitting in a judicial capacity on one of two grounds, First, a "direct pecuniary interest" in the subject-matter.. Second, "bias" in favour of one side or against the other.
"So far as 'pecuniary interest' is concerned, I agree with the Divi--sional Court that there is no evidence that Mr. John Lannon had any direct pecuniary interest in the suit.
So far as bias is concerned, it was acknowledged that there was no actual bias on the part of Mr. Lannon, and not want 'of good faith. But it was said that there was, albeit unconscious, a real likelihood of bias, This is a matter on which the law is not altogether clear but I start with the oft- repeated, saying of Lord Hewart, C.J, in R v. Sussex Justice, ex parte Mc Carthy: "It is not merely of some importance, but is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done."
(i.e) An adjudicator may indeed seldom achieve "the icy impartiality of a Rhadamanthus", and the idea that "by taking the oath of office as Judge, a man ceases to be human and strips himself of all predilections, becomes a passionless thinking machine, "is doubtless a myth. The common law nevertheless disqualifies a Judge, Magistrate or independent arbitrator from adjudicating whenever circumstances point to a real likelihood that he will have a bias, by which is meant "an operative prejudice, whether conscious or unconscious, "in relation to a party or an issue before him. Members of appeal tri6unais determining tax assessments and entitlements to social security benefits fall into the same category."
"However, the, pendulum has how swung towards a test of reasonable suspicion, founded on the apprehensions of a reasonable man who had taken reasonable steps to inform himself of the material facts.
"Reasonable suspicion" tests look mainly to outward appearances; "real likelihood tests focus on the Court's own evaluation of the probabilities ; but in practice the tests have much in common with one another, and in the vast majority of cases they will lead to same result. For the Courts to retain both tests. As alternative methods of approach is unlikely to cause serious uncertainty, and there may be advantages in preserving a measure of flexibility. It would be surprising, surely, if a Court were to refuse to set aside a decision on the ground that a reasonable observe could not have discovered facts that subsequently came to light and which indicated to the Court that there was- a real likelihood of bias in the adjudicator."
Two main classes of cases may arise although they are by no means exhaustive. The first is where au adjudicator is associated with a body that institutes or defends the proceeding. The Courts have refused to hold that a person is disqualified at common law from sitting to hear a case merely on the ground that he is a member of the public authority, or a member of or subscriber to the voluntary association, that is a party to the proceedings. He is, however, disqualified if he has personally. Taken an active part in instituting the proceedings, or has voted. In favour of a resolution that the proceedings be instituted ; for he is then in substance both Judge and party."
Principles of Administrative Law 6y M.R. Join and S.M. Join, 3rd Ed., 206.207 "An essential element of judicial process is that the Judge should be impartial and neutral and be in a position to apply his mind objectively to the controversy before him. If the. Judge is biased, if there are factors which may influence him to improperly favour one party against the other, .The proceedings before him will be vitiated. Generally speaking, a similar principle applies to quasi- judicial bodies, through not wholly, because in the cases where the administration acts as the adjudicator :n disputes between itself and an individual, the administration is bound to have some official" or " policy" bias, and it cannot be expected to have that kind of cold objectivity which is characteristic of a Judge." "The question of bias is thus to be decided by the Court not on the ground whether in the mind of the Court there was a "real likelihood" of bias or not put by applying the yardstick as to what a reasonable man would think about the matter ; whether he would suspect "bias" in the circumstances. Even when the Court may feel that there was no real likelihood of bias in the circumstances of the case, the Court may still quash a decision if right-minded people would suspect bias on the part of-the adjudicator. The test as now formulated boils down to the "reasonable suspicion" "test." (d) (i) Referring to the case reported in 1926 A C 586, it may be mentioned that the facts of the above cases were that on 9th May, 1924, the Licencing Justice met and passed the following resolution "That the clerk be instructed to write Mr. A. E. Withy asking whether he will, be prepared to act for the Licencing Justices in opposing the renewals of licenses referred to the compensation authority, and in the event of his agreeing, to act to instruct him." The aforesaid solicitor agreed to respondent the Licensing justices. Before the Licencing Justices at the principal meeting of the Compensation authority; which was held on 13th June, 1924, he duly appeared for the Licencing Justices and opposed the renewal of the Licence of the 7 dials hotel, which was refused. The Justices present at the aforesaid principal meeting when the aforesaid decision was reached included 3 ;justices, who were present at the meeting of the Licencing justices on May 09 when the instructions to oppose the Licence were given, as well as the 4th Justice who had been present at their meeting of 22nd February, when the decision to refer the matter to the Compensation authority was taken. The' above refusal was challenged and on 25th July, 1924, the Queen Bench Division granted a rule nisi for a writ of certiorari to remove the proceeding of the compensation authority on the ground that the 4 justices referred to hereinabove were disqualified by interest from adjudicating upon in the matter but on hearing of the agreements, the above rule was discharged and this decision . Was affirmed by the Court of appeal upon an appeal. The matter went to the House of Lords in appeal.
And inter alia Viscount Cave L. C. While dealing with the question observed that "no doubt the statute contemplates the possibility of the licencing justice appearing before the compensation authority and taking part in the argument ; for it is provided by section 19 subsection (2) that the compensation authority shall give any person appearing to them to be interested in the question of the renewal of a licence "including licancing justice", an opportunity of being heard. But the statute nowhere says that the justices who, elect to appear as opponents of the renewal and take active steps (such as instructing as solicitor) to make their opposition effective, may neverthe-- less act as Judges in the disputes ; and in the absence of clear provision to that effect 1 think that the ordinary rule, that no one can be both party and judge in the same cause holds good. More or less same views were expressed by Lord Atkinson and Lord Summer. The appeal was allowed by the House of Lords and the case was remitted back to- the Queen Bench Division with a -direction that the rule nisi may be made absolute.
(ii) As regards the case reported in 1969 I. Q. B. 577, it may lx stated that the facts of the above case were that in respect of flats 31, 60-A and 60 Oakwood Court, London, a block of flat of which the landlords were Metropolitan Properties Company (F. G. C.) Limited, the appellants were the tenants, a rent officer on the application in February. 1966 of the tenant for determining fair rent of the flats.
On objection by the landlords to the determination, the matter was referred to the Rent Assessment Committee (Chairman John Lannon, a respondent), which heard the matter 4 days beginning in January, 1967. Oral represen--tation was made expert evidence was Balled on both sides and the Com--mittee inspected inter alia the exterior of Oakwood Court the interior of flat No. 31 and exterior of comparable relied on by both the side, namely, flat No. 48 in Melbury Court, a different block. On the basis of the above evidence the Committee recorded its finding. The landlords appealed in respect of each of the determination by the committee, inter alia it was contended that the John Lannon, the Chairman of the Commit--tee which heard the above case was not competent to hear the above case as the landlords had a dispute with the father of Mr. Lannon in respect of a flat rented out to him and the Chairman was residing with his father in the .Flat in respect of which there was dispute between the same landlord and the father. It was held by the Court of appeal reversing the Judgment of the Divisional Court that the decision of the committee headed by Mr. Lannon was vitiated on account of bias. It may be ins--tructive to quote hereinbelow a passage from the Judgment of Lord Denning M. R.
"There must be circumstances from which a reasonable man would think it likely or probable that the Justice, or Chairman, as the case may be, would. Or did, favour one side unfairly at the expense of the other. The Court will not inquire whether he did, in fact, favour one side unfairly. Suffice it that reasonable people might think he did. The reason is plain enough. Justice must be rooted in confidence: and confidence is destroyed when right-minded people go away thinking : "The judge was biased."
Applying these principles, I ask myself: Ought Mr. John Lannon to have sat? I think not. If he was himself a tenant in difference with his landlord about the rent of his flat, he clearly ought not to sit on a case against the self same landlord, also about the rent of a flat, albeit another flat. In this case he was not a tenant, but the son of a tenant. But that makes no difference. No reasonable man would drag any distinction between him and his father, see--ing he was living with him and assisting him with his case.
Test it quite simplyif Mr. John Lannon were to have asked any of his friends : -I have been asked to preside in a case about the rents charged by the Freshwater Croup of Companies at Oakwood Court. But I am already assisting my father in his case against them, about the rent of his flat in Regency Lodge, where I am living with him. Do you think I can properly sit?" The answer of any of his good friends would surely have been: "No, you should not sit. You are already acting, or as good as acting, against them. You should not, at the seine time, sit in judgment. On them.
(i.e) With reference to the case reported in A I (t 1957 SC 425, it may be stated that the facts of the above case were that the appellant was an advocate practising as Sojat. A complaint was filed against him under section 13 of the Legal. Practitioners Act by Dr: Premchand Singhvi. It was alleged by him that the appellant was guilty of professional miscon--duct and the complainant requested that the action be taken against him in that behalf as he was guilty of professional misconduct in having got a false stay order written by the Clerk through improper means and there by managed to take an illegal and undue advantage for his client. When the report was received by the High Court the matter was argued before the Court as a result of which the High Court agreed with the finding made by the tribunal. And directed that the appellant should be removed froth practice. It is against, the aforesaid order, the appeal was filed before the Supreme Court of India. It was contended before the Supreme Court that the finding recorded by the Tribunal was vitiated as its Chairman Mr. Chhangani vas not qualified to act as the Chairman as he had ap--peared on behalf of Dr. Premchand in the proceeding under. Section 145 of the Cr. P. C. On 23rd August, 1959, and in fact had argued the case on that date. It was further urged that as the Chairman of the Tribunal had appeared for the opponent, the above infirmity was fatal to the constitu--tion of the Tribunal. In that context it was. Observed by the Supreme Court of India that "it is well-settled that every member of a tribunal that is called upon to try issues in judicial or quasi-judicial proceedings must be able to act judicially; and it is of the essence of the judicial de--cision and judicial administration that judges should be able to act in partially, objectively and without any bias. In such cases the test is not whether a bias has affected the judgment; the test always is must be whether litigant could reasonably apprehend that a bias attributable to a member of the tribunal might have operated against him in the final decision of a tribunal. It is in this sense that justice not only be done but must also appear to be done as observed". The appeal was allowed on the above ground by the Supreme Court of India.'
(iv) With reference to the case reported in AIR 1960 SC 468, it may be mentioned that the facts of above case were that one Raja Bahadur Damakshya Narainsingh Proprietor of a firm executed a mining lease on 29th December, 1947 in favour of the appellant M/s. Mineral Development Ltd. For all minerals in respect of 326 villages for a period 999 years, on or about 3rd January, 1951 the Deputy Commissioner, Hazari Bach, granted the aforesaid Company a licence under section 6 of the Bihar Mica Act, 1947 which was renewed from year to year by the relevant authorities and the last renewal had expired on 31st December, 1954. The Secretary to the Government of Bihar in the Revenue Department issued a notice dated 7th March, 1953 to the said Company charging with violation of sections 11 , 12 and 14 of the afore--said Act and calling upon them to show cause within 15 days of the receipt of the said notice, why action should not tae taken to cancel the licence issued in favour of the Company. The latter through its letter dated 20th March, 1953, requested the Secretary to furnish the particulars of the alleged violations, which were furnished which were followed by exchange of correspondence between the parties. However, after the expiry of two years the respondent Government issued a notification cancelling the Company's license. The result of the said notification was that the Company was prevented from carrying on mining operation from the large tract of land which it had taken on lease from the afore--said proprietor.
The above action was challenged inter alia on the ground that the Minister concerned on account of political rivalry was prejudiced. The Supreme Court of India accepted the petition of the Company and issued a writ of certiorari against the respondent quashing the order of Government of Bihar dated 1st September, 1955, cancelling mining licence. While considering the question of bias Subba Rao, J. "quoted with approval the observation contained in the aforesaid case reported in A I II. 195) S. C. 76, namely that "the principles governing the "doctrine of bias" vis-a-vis judicial tribunals are well-settled and they are (i) no man shall be a judge in his own cause; (if) justice should not only be done but manifestly and undoubtedly seem to be done. The two maxims yield the result that if a member of a judicial body is subject to bias (whether financial car other) in favour of or against, any party to a dispute; or is in such a position that a bias must be assumed to exist, he ought not to take part in the decision or sit on the tribunal; and that any direct pecuniary , interest, however small. In the subject-- matter of inquiry will disqualify a judge, and any interest though not pecuniary will have same effect, it is sufficiently substantial to create a reasonable suspicion or bias. The said principles are equally applicableto authorities, though they are not Court of justice or judicial tribunals, who have to act judicially in deciding the rights of others, i.e. Authorities who are empowered to disc he quasi-judicial functions.
(v) As regards the case reported in AIR 1963 S. C. 1, it tray be observed that inter alia the question before the. Supreme Court was whether a Judge after having delivered final opinion in appeal was quali--fied to sit in the Full Bench constituted in such appeal even after objection by a ,party. The majority view of the Supreme .Court was that in the absence of 'a statutory provision, the fact that a judge sits in appeal or in an application against the judgment after he has decided the case would not by itself render the judgment of the Court invalid. It was further observed that the circumstances that a Judge delivered a final opinion in the appeal filed by -the plaintiff' and thereafter sat in appealBench even after objection by the plaintiff to his participation cannot be disregarded altogether from considering in deciding whether in the light of other circumstances the plaintiff had a fair trial and they were afforded an adequate opportunity of presenting their case: At the same time it was also observed that a litigant is not entitled to choose the personnel of the Court to hear his case nor he can insist uponan adjournment of 'the case because the day fixed for hearing the case is not convenient to his counsel.
(vi) Referring to the case reported in AIR 1965 S. C. 1303, it may be stated that a writ petition challenging the order of the Minister of Transport of the State of Andhra Paradesh was filed in the High Court of Andhra Paradesh inter alia on the ground that the Minister was biased on account of political rivalry. On the basis of the affidavits of men of repute and standing, the High Court allowed the petition. The state corporation filed the appeal before the Supreme Court. The Supreme Court while dismissing the appeal observed that "the result of the finding of fact is to bias affects the status of the person holding a high public office in the discharge of his duties as a quasi-judicial tribunal, the question about his bias need to be carefully examined before an adverse verdict is pronounced against his." It was further observed that, "it is of utmost importance that in appreciating evidence, the Court ought to adopt a very cautious circumspect and careful approach. In such a case the Court must always enquire on which side the probabilities lie and must scrutinise the affidavits very critically to .Determine which of them deserves to be believed.
(sit) Referring to the case reported AIR 1970 SC 150, it may be, observed that certain petitions were filed by the gazette officers serving in the Forest Department of the State of Jammu and Kashmir.
Some of them serving as Conservator of Forests, some as Divisional Forest Officer and others as Assistant Conservators of Forest, all of them felt aggrieved by. The selection made from among the officers serving in the Forest Department of the State of Jammu and Kashmir to the Indian Forest Service, a service constituted in 1966 under section 3(1) of the All India Services Act, 1951 and, therefore they moved the petitions for quash meat of the notification issued by the Government of India Home Affairs. Inter alia it was contended the selections board which was to select had a member on selection board, who was himself a candidate for the selec--tion. While considering the above question was observed by the Supreme Court of India that. "'fie must be expected to know his officers thoroughly, their weaknesses as well as their strength. His opinion as regards their suitability for selection to the All India Service is entitled to great weight. But then under the circumstances it was improper to have included Naqishbund as a member of the selection board.
He was one of the persons to be considered for selection. It is against ail cannons of justice to make a man judge in his own cause. It is true that he did not participate in the deliberations of the committee when his name was considered. But then the very fact that he was a member of the selec--tion board must be have had its own impact on the decision of the selection board. Further admittedly he participated in the deliberation of the selection board when the claims of his rivals particularly that of Basu was considered He was also party to the preparation of the list of selected candidates in order of preference. At every stage of his parti--cipation in the deliberation of the selection .Board there was conflict bet--ween his interest and duly. Under these circumstances it is difficult to believe that he could have been impartial. The real question is not whether he was biased;, it is difficult to prove the state of mind of a per--son. Therefore, what we have to see is whether there is a reasonable ground for believing that he was likely to have beets biased. We agree with the learned Attorney General that a mere suspicion of bias is not sufficient. There must be a reasonable likelihood of bias. In deciding the question of bias we have to take into considerations human probabilities land ordinary course of human conduct. It was in the interest of Naqishband to keep out his rival in order to secure his position from further challenge. Naturally he was also interested in safeguarding his position, while preparing the list of selected candidates."
(viii) Referring to the case of PLD 1973 SC 327, it may be stated that the facts of the above case were that certain Agricultural land with the bungalow thereon, belonging to Air Nsartial (Retd.)
Asghar Khan situated in Sukkur District was forcibly occupied. The manager Attorney of Mr. Asghar Kh4n filed-an application under section 145 in the Court of S. D. M. Saddar Sukkur. An application under section 526, Cr. P. C. Was filed in the Erstwhile High Court of Sind and Baluchistan for the transfer of the above case from the S. D. M. Saddar Sukkur to the file of the High Court for trial. The above application was rejected by the High Court. The matter went to the Supreme Court in appeal, which was allowed and the High Court was directed to transfer the above case to its file. It may be observed that the allegation of the applicant/appellant in the above case was that above illegal taking of possession was on account of political rivalry between Air Martial Ashgar Khan and the Pakistan People Party as he was a great opponent of the above party in power. Considering the question of transfer under section 526 Hamoodur Rahman. C. J. Observed that "the transfer of a criminal case from a Court of competent jurisdiction any justified only if there is a reasonable apprehension in the mind of the party concerned that the Court would not be able to act fairly and impartially in the matter. It is of paramount importance that practices arraigned before Courts should have confidence in their impartiality. It is one of the important duties of a High Court to create and maintain such confidence, and this can be done only by ensuring that, so far as practicable, a party will not be forced to undergo a trial by a Judge or a Magistrate whom he reasonable regards as being' prejudiced against him. What is a reasonable apprehension must be decided in each case with reference to the incidents and the surrounding circumstances; and the Court must endeavour as far as possible, to place itself in the position of the applicant seeking transfer and look at the matter from his point of view, having due regard to his state of mind and the degree of intelligence possessed by him. -Nevertheless, it is not every incident regarded as transfer of the case. The test of reasonableness of the apprehension must be satisfied, namely, that the apprehension must be such as a reasonable man might justifiably be expected to have."
(ix) Referring to the case reported in (1978) 37 Tax. 5 (Trib.) it may be observed that the facts of the above case were that an assessee in order to assail the order of assessment preferred an appeal before the Tribunal inter alia on the ground that the assessment was void ab initio as it was completed by-an income-tax Officer who was biased and pre--judiced towards the appellant and had actually participated in the investigation against his conduct by the Police authorities. The Depart--ment objected to the admission of the aforesaid additional ground for the reasons that (i) the plea was taken more than 2 years We appeal was filed, (ii) the assessee had met the Inspecting Assistant Commissioner and had agreed to co-operate with the department even after submission of the application to the Central Board of Revenue for transfer of the case to another officer. The above objections were overruled and the Income --tax Appellate Tribunal allowed the appeal and it was observed that "the assessing officer saturated with whatever knowledge of affairs of the assessee he had come by during the Police investigation could not be expected to have that liberality of hind or that dispassionate integrity so essential for performing a judicial function. The assessing officer exhibited a gloating eagerness and a palpitating anxiety for going ahead with the proceeding while the assessee was trying to have his case transferred to another Income-tax Officer." It was further observed that "if the case had been allowed to hang fire neither the "Ravi" could have been in flames nor heaven would have fallen. The wanton petulance unbecoming of a judicial authority exhibited by the assessing officer in proceeding with the case nourished and strengthened assessee's apprehension. In the circumstances mentioned above it was quite natural for the appellant to entertain suspicions about the assessing officer's motive and feel gravely apprehensive of the consequences."
(x) As regards the case reported in (1980) 42 Taxation 47, it may be stated that D. B. Of the Lahore High Court quashed the orders of the assessing authority and the appellate authority on the ground of bias. The relevant facts of the above case were that the Income-tax Officer Company Word III, Lahore was exercising jurisdiction over the case in question in relation to the assessment under the Income-tax Act, 1922. On 7th February, 1972, the C. B. R. Assigned the jurisdiction over the petitioner case of the Commissioner of Income-tax Investigation (Karachi), 'who in turn assigned the case to the Income-tax Officer (Investigation) Circle-- IV Lahore. At the time of the transfer of the above case the petitioner assessments for 1969-70, 1970-71 and - 1971-72 were pending. The petitioner was summoned by the Income-tax Officer for 22nd August, 1972, in connection with the aforesaid pending cases. The petitioner attended the office of the Income tax Officer accompanied by his accountant and manager. Respondent No. 4 the Income-tax Officer made him to wait outside his office for about 2 hours, when upon being reminded the petitioner was called in, where another Income-tax Officer one Mr. Javed Ahmed was also sitting with respondent No. 2. They abused the petitioner in the felt heist of language and hurled the income-tax file in the petitioner face and asked him to get out. The petitioner reported the matter to the Police on the same day, a copy of the report was filed with the petition but no action was taken by the Police. Therefore, he filed a private complaint for, prosecution of respondent No. 4 After recording the preliminary evidence., the learned Additional District Magistrate, Lahore passed order dated 26th May, 1972, summoning the accused to stand trial, whereupon the respondent /accused furnished bail bonds.
It seems that on 16th October, 1972 an application was filed by the respondent No. 4 the Income-tax Officer and aforesaid Javed in the Lahore High Court which was admitted but subsequently dismissed. In the above backgrounds of the facts respondent No. 4 completed the petitioner's assessm ent against which the petitioner filed an appeal, which was also dismissed. The High Court upon filing of a writ petition allowed the same on the ground that the respondent No 4 was not qualified to act as the assessing autho--rity being biased.?
(xi) Referring to t&` case of reported in 12 I T R 1944 page 393, it may be observed that it was a judgment given by a Full Bench comprising of 5 Judges of the Lahore High Court in an Income-tax Reference. The question for consideration inter alia was whether in proceeding under subsection
(3) of section ,23 of the Income-tax Act, the income-tax Officer not bound to rely on such evidence produced by the assessee as he considers to-be false. In that context, it was held that an Income- tax Officer is not debarred from relying on private sources of information which sources he may not disclose to the assessee at all, but in case he proposes to use the same against the assessee, the substance of the said information he must communicate to the assessee as that as to put the assessee in possession of full particulars of the case he is expected to meet and should further give him and opportunity to meet if possible It may be advantageous to quote hereinbelow a passage from the judgment of Muhammad Munir, J. On the above point "The right to call such evidence, documentary or oral, as the Income --tax Officer wishes is "already given to his by section 37, and I do not think that the words" such other evidence as the Income-tax Officer may requires mean that the Income-tax Officer acting under section 37 should himself call in the presence of the assessee all the evidence on which he in tends to base his assessment. Read in this way, the subsection is not exhaustive or definitive of the material on which an assessment may be based. The subsection does not more entitle the assessee to produce all evidence that he wishes to produce in support of his return and such other evidence as the Income-tax Officer may require him to produce on the points specified by the Income-tax Officer. The intentionis that if the Income-tax Officer has reasons to doubt the correctness of the return or the evidence produced by the assessee in support of the return, he should draw the attention of the assessee to that doubt in order to enable him to remove it by such evidence as he may wish to produce. If this interpretation of the section is correct, the Income-tax Officer would have the power to base the assessment on any material that is before him, provided the atten--tion of the assessee is drawn to that material and he is given sufficient opportunity to rebut it. Such material may be within the Income-tax Officer's own knowledge and might have been derived by him from hearsay or from information of a most authentic character. I do not think that this subsection was intended to mean that the "Income-tax Officer should, as if it were, try an issue or issues in suit between the assessee and himself by calling his own evidence though undoubtedly he has such power and marshalling and.
Exhibiting his documents in the presence of the assessee, and that the assessee should have the right to cross-- examine the Income-tax Officer's witnesses and the right to inspect his documents."
(xii) With reference to the case in 20 I T R 562, it will suffice to observe that a D. B. Of .The High Court of West Punjab while considering the question as to the nature of income-tax proceeding observed that the proceeding under the Indian Income-Tax Act 1922 are not judicial proceeding in the sense in which the phrase "Judicial proceeding" is ordinarily used and that the Indian Evidence Act does not apply to such proceeding, consequently it is within the competence of a tribunal to rest their decision on the question of act inter alia on the information gathered by the tribunal from the judgment of the criminal Court. The reliance was placed on the abovecited case reported in (1944)
12 I T R 393.
(xiii) Reverting to the case reported in PLD 1979 SC 53, it may be instructive to quote hereinbelow para. 913 from the majority Judgment delivered by Anwarul, Haq C. J. (as he then was) containing the discussion on the question of bias and pointing out the distinction between the law as obtaining in Pakistan and foreign countries, which read as follows:- ' "913. It has been authoritatively laid down in a number of decided cases by this Court that "mere suspicion of bias, even if it is not unreasonable, is not sufficient to render a decision void. A real likelihood of bias must be "established." A mere apprehension in the mind of a litigant that he may not get justice, such as is based on inferences from circumstances is not sufficient. This, indeed, is the true test to be applied in sifting the evidence in arriving at a conclusion in such cases: In this connection in Syed lkhalque Hussain v. Pakistan PLD 1969 SC 201 it was laid down that mere suspicion of bias even if it is not unreasonable is not sufficient to render a decision void. A real likelihood of bias must be estab--lished. But this however, is subject to the exception where bias is based on pecuniary or proprietary interest the position is different and interest however, small may be is operative as a disqualification in the Judge similarly, in the President v. Mr. Justice Shaukat Ali PLD 1971 SC 285 this Court observed that a mere assertion of a bias can never be sufficient to disqualify a Judge in hearing a cause or matter. In the absence of any pecuniary or proprietary interest in the subject matter of the proceedings it is essential that a real likelihood of bias must be shown. Also in Islamic Republic of Pakistan v. Abdul Wali Khan PLD 1976 SC 57 the Court observed that no Judge can possibly be disqualified on the basis of vague and nebulous suggestion and mere suspicion of bias even if it is not unreasonable, is not sufficient to disqualify him in the disposal of a case brought before him."
(6) From the above cited passages of the well-known books referred to hereinabove and from the case-law cited and discussed hereinabove the following principles are deducible:-
(i) That if a person/authority takes up a particular position against a party interested in the subject matter of a dispute which is to be adjudicated upon he/it cannot adjudicate upon the said dispute as the ordinary rule that no one can be both party and Judge in the same cause shall be applicable.
(ii) That if a person has pecuniary or proprietary interest however small it may be in a dispute, he cannot adjudicate upon the same and his decision will be vitiated as bias will be readily inferable.
(i.e) That an order of an Income-tax assessing authority may be de--clared vitiated on account of bias if the assessee succeeds in estab--lishing real likelihood of bias on account of his personal involve--ment of the Income-tax Officer in some personal incident.
(iv) That the proceeding under the Income-tax Act are not judi--cial proceedings in the sense in which the phrase "judicial proceeding" is ordinarily used and that the Evidence Act does not apply to such proceedings.
(v) That an Income-tax Officer is not obliged to rely solely upon the evidence produced by an assessee but he can also rely upon his own knowledge and the information received by him from private sources provided the assessee has been furnished the in--formation, which is to be relied upon and provided he is given a reasonable opportunity to meet the same.
(vi) That the Supreme Court of Pakistan in the case reported in PLD 1979 SC 53 has pointed out that there is diversity bet--ween the view found favour with it and the view enunciated in a number of authorities from foreign jurisdiction on the question of bias in as much as in Pakistan in order to disqualify a Judge-- or tribunal from acting as such on the ground of bias, it is not sufficient to establish reasonable suspicion founded on the appre--hension of a reasonable man but one will have to establish real likelihood of bias on the part of a Judge or tribunal, whereas in some of the authorities from foreign jurisdiction reasonable suspicion founded on the apprehension of a reasonable person has been held sufficient to disqualify a Judge or tribunal from acting as such.
(vii) That a person who is himself a candidate for selection of a post cannot sit on the Board for selecting other candidates for the same post, and if he sit, the decision arrived at by the Board shall be vitiated.
(viii) That a Minister's order in exercise of statutory power is vitiated as being biased against a party with whom the Minister had political rivalry and had a background of conflict.
(xi) That if an advocate appears in a case which results in filing of a complaint by his client for' professional misconduct against the advocate for adversary, the former cannot sit as a member of a tribunal inquiring into the allegation of misconduct.
(x) That while considering the transfer application under section 526, Cr. P. C. The Court is to determine, whether there is a reasonable apprehension in the mind of the party concerned that the Court would not be able to act fairly and impartially in the matter.
7. Reverting to the contention of the learned counsel for the peti--tioners that Muhammad Fareed has rendered himself disqualified on account of instituting the cases under section 22 of the order before the Insurance Appellate Tribunal inasmuch as he signed the pleading end also appeared as a sole witness in some of the cases, it may be observed that it is an admitted position that the above proceedings relate to the period 15 years prior to 1972 and not in respect of the period for which the assessm ents are being made that the said proceedings relate to life insurance business, whereas the present assessm ent relate to general insurance business, and therefore, it cannot be said that the subject matters before the Insurance Appellate Tribunal are the same, which are the subject --matters before Muhammad Fareed for making assessment for the year 1978-79, onwards however, it was urged by Mr. Muhammad Ali Sayeed that the disqualification which was canvassed before me does not relate to a particular period or the subject-matter, but it is relatable to the person of Muhammad Fareed. In other words, the precise con--tention of the learned counsel for the petitioners was that for all times to come Muhammad Fareed has rendered himself disqualified to deal with any matter pertaining to the petitioners companies which involve adjudi-- cation upon any petitioner's right/liability. In this regard, it may be pertinent to observe that the petitioners have not been able to, bring on record any material to indicate that Muhammad Fareed has any per--sonal reason to be hostile to the petitioners in the contrary, the learned counsel for the petitioners have candidly submitted that' Muhammad Fareed is among those officers, whose integrity is beyond any question of doubt. However, at the same time they have submitted as pointed out hereinabove, that Muhammad Fareed while instituting the aforesaid cases before the Insurance Appellate Tribunal has made serious allegations against the working of the petitioners companies including about the main--tenance of the accounts a and, therefore, inspite of the fact that -he is a man of integrity, he will not he able to diffuse adverse impression which he has formed while instituting and conducting the above cause.
8. It may be mentioned that there is no material before us to con--clude even tentatively that the cases instituted .By Muhammad Fareed on behalf of the Corporation before the Insurance Appellate Tribunal are frivolous or that the same could have been filed by a prejudicial or biased person. Muhammad Fareed has instituted the above cases in his official capacity and not- in his private capacity. He has no personal stake in--volved in the above cases, but as. An honest or might be conducting the above cases efficiently. We cannot also overlook the .Fact that the deci-- sions on merit of the above cases are to be given by the Insurance Appellate Tribunal and not by Muhammad Fareed. If we were to accept the above contention of Mr. Muhammad Ali Sayeed, it would mean that if an Income-tax Officer while making assessment of a particular year rejected the account book of an assessee on the ground that the same were fake and were not genuine accounts, he should not act as the assessing authority for the said assessee for all time to come. This result will lead to absur--dity. The petitioner's case is in fact on the lower pedestal than the hypothesis referred to hereinabove as it is, and admitted position that Muhammad Fareed has not expressed any opinion in respect of the account books for the year 1978-79 onwards nor he has expressed any opin--ion in respect of the general insurance business for the years in question. It may be pointed out that in the above Supreme Court case report ed in PLD 1979 SC 53, the Supreme Court while dealing with the question of bias reiterated the view taken by it in the case of Syed Akhlaque Hussain v. Pakistan (PLD 1969 SC 201), the case of President v.
Mr. Justice Shaukat Ali (PLD 1976 SC 57) and the case of Islamic Republic of Pakistan v. Abdul Wali Khan, and held that in order to disqualify a Judge from acting as . a Judge real like--lihood of bias must be established but where bias is based on pecuniary or proprietary interest the position is different and howsoever small it may be, it operates as a disqualification. The Supreme Court has also pointed out that there is diversity between the view found favour by some Courts of foreign jurisdiction and the view obtaining in Pakistan on the above point and, therefore a number of authorities from foreign jurisdiction cited before the Supreme Court were not even referred to. We may observe that in most of the cases cited by the learned counsel for the petitioners the person/authority who/which was called upon to adjudicate upon was held to be disqualified for the reason that be/it had personal in--volvement in the matters, which were adjudicated by him/it and, there--fore, the above cases are distinguishable from the instant case. Further--more, almost in all the aforesaid cases the decisions were impugned and not the proceedings. The view propounded in some of the aforesaid cited and discussed cases and the aforesaid books on administrative law referred to hereinabove in para 5 namely, a test of reasonable suspicion founded on the apprehension of a reasonable man, is not approved of by the Supreme Court of Pakistan in the aforesaid 1979 case.
9. We are inclined to hold that if real likelihood of bias is establish--ed, the person/authority concerned renders himself/itself disqualified from proceeding with the adjudication of a matter brought before him/it, and the Court may in such a case pass an order in the nature of a writ of certiorari for quashment. However, in the instant cases we are of the view that the petitioners have failed to establish a real likelihood of bias. The averment of Muhammad Fareed in his affidavit in support of the application for vacation of the stay order and the counter affidavits to the petitions to the effect that large Government revenue are involved in the instant cases is a general statement of fact. From it, it cannot be inferred that he has pre-determined mind on the question of the petitioners' income tax liabi--lity. It may also be observed that if Muhammad Fareed is a man of integrity as was conceded by the learned counsel for the petitioners, it is excepted of him that he will act fairly without any bias or prejudice in order to dispel the petitioner's apprehensions.
If he will act otherwise, the Petitioners will be entitled to invoke inter alia the provisions of the Ordinance by way of appeals before the appellate Commissioner, and the Income-tax Appellate Tribunal and also a reference to the High Court. It will be easier for the petitioners to establish bias after the passing of an order "by Muhammad Fareed if such an order is tainted with bias, It was also contended by the learned counsel for the petitioners that the keen personal interest taken by Muhammad Fareed in opposing the above petitions inasmuch as he has appeared in person manifests partisan attitude, it will suffice to observe that in the above cases Mr. Fazle Ghani Khan, Advocate at the initial stage was appearing for Muhammad Fareed, but it is not known, as to why he discontinued to appear. Be that as it may putting in personal appearance by an official simplicities in a case will not establish partisan attitude.
10. As regards Mr. Mansoor Khan's contention that Muhammad Fareed cannot act as the assessing authority while still on deputation with the State Life Insurance Corporation as it involves violation of section 4(4) of the Ordinance, it may be observed that subsection (4) of section 4 B of the Ordinance provides that all appointments under the Ordinance shall be subject to rules and orders of the Federal Government regulating the! Terms and conditions of service of persons in public service and posts, In our view there is no violation involved in the instant case as Muhammad Fareed is still in public service of Pakistan and his terms and conditions of service are regulated by the rules and orders of the Federal Government and not by the rules and regulations framed by the Cor--poration. In this view of the matter this contention also fails.
11. For the aforesaid reasons we do not see any merits in the above Petitions and, therefore, they are dismissed but in the circumstances of the case there will be no order as to costs,