CENTRE FOR PIL & Anr. v. UNION OF INDIA & Anr.

In the instant writ petitions filed under Article 32 of the Constitution of India, the legality of the appointment of respondent no.2 (Shri P.J. Thomas) as the Central D Vigilance Commissioner under Section 4(1) of the Central Vigilance Commission Act, 2003 was challenged. F Respondent no.2 was appointed to IAS (Kerala Cadre), 1973 batch where he served in different E capacities with the State Government. During that period, 15000 MT of palmolein oil was imported. There was allegation of irregularities committed in the said import. An FIR was registered against the then Chief Minister and six others including respondent no.2 under Section 13(2) r.w. Section 13(1)(d) of the Prevention of Corruption Act, 1988 and Section 1208, IPC. The State Government accorded sanction for prosecution. In the charge sheet before the trial court, definite role was attributed to respondent no.2. On 18th January, 2001, a note was put that departmental enquiry should be held against G respondent no.2 and another. On 3rd June, 2003, the eve conveyed its opinion to the DOPT that DOPT should initiate major penalty proceedings against respondent no.2. The matter was still kept pending despite receipt of opinion of the eve. In the meanwhile, the State of Kerala H • CENTRE FOR PIL & ANR. v. UNION OF INDIA & ANR. 451 by letter dated 24th January, 2005, wrote to the DOPT its A desire to withdraw the request for according sanction for prosecution of the officers including respondent no.2. However, on 10th October, 2006, State Government again wrote a letter to Government of India informing them about its decision to continue the prosecution launched 8 by it and it sought to withdraw letter dated 24th January, 2005. By order dated 18th September, 2007, respondent no.2 was appointed as the Chief Secretary. There were at least six notings of DoPT between 26th June, 2000 and 2nd November, 2004 which recommended initiation of C penalty proceedings against respondent no.2 and yet clearance was given by CVC on 6th October, 2008 and in the Brief prepared by DoPT dated 1st September, 2010 and placed before HPC, there was no reference to the earlier notings of the then DoPT nor any reason was given as to why eve had changed its views while granting vigilance clearance on 6th October, 2008. On 23rd January, 2009, respondent no.2 was appointed as Secretary, Parliamentary Affairs to the Government of India. The DoPT empanelled three officers on 1st September, 2010 for the post of Central Vigilance E Commissioner. The meeting of the HPC consisting of the Prime Minister, the Home Minister and the Leader of the Opposition was held on 3rd September, 2010 and disagreement was recorded by the Leader of the Opposition. Despite the disagreement, the name of F respondent no.2 was recommended for appointment to the post of Central Vigilance Commissioner by majority. A note was thereafter put up with the recommendation of the HPC and placed before the Prime Minister which was approved on the same day. On 4th September, 2010, G the same note was submitted to the President who also approved it on the same day. Consequently, respondent no.2 was appointed as Central Vigilance Commissioner. The instant writ petitions were filed challenging the legality of the appointment of respondent no.2. H 0 452 SUPREME COURT REPORTS [2011] 4 S.C.R. • A Allowing the writ petitions, the Court HELD: 1. The recommendation dated 3rd September, 2010 of the High Powered Committee recommending the name of respondent no.2 as Central Vigilance Commissioner under the proviso to Section 4(1) of the 8 Central Vigilance Commission Act, 2003 is non est in law and, consequently, the impugned appointment of respondent no.2 as Central Vigilance Commissioner is quashed. [Para 56] (507-H; 508-A] C

#2. Setting-up of CVC: Vigilance is an integral part of all government institutions. Anti-corruption measures are the responsibility of the Central Government. Towards this end, the Government set up the following departments : (i) CBI (ii) Administrative Vigilance Division in DoPT (iii) o Domestic Vigilance Units in the Ministries/ Departments, Government companies, Government Corporations, nationalized banks and PSUs (iv) CVC.Thus, eve as an integrity institution was set up by the Government of India in 1964 vide Government Resolution pursuant to the E recommendations of Santhanam Committee. However, it was not a statutory body at that time. According to the recommendations of the Santhanam Committee, CVC, in its functions, was supposed to be independent of the executive. The sole purpose behind setting up of the F eve was to improve the vigilance administration of the country. In September, 1997, the Government of India established the Independent Review Committee to monitor the functioning of CVC and to examine the working of CBI and the Enforcement Directorate. Independent Review Committee vide its report of G December, 1997 suggested that CVC be given a statutory status. It also recommended that the selection of Central Vigilance Commissioner shall be made by a High Powered Committee comprising of the Prime Minister, the Home Minister and the Leader of Opposition in Lok H • CENTRE FOR PIL & ANR. v. UNION OF INDIA & ANR. 453 Sabha. It also recommended that the appointment shall A be made by the President of India on the specific recommendations made by the HPC. That, the eve shall be responsible for the efficient functioning of CBI; CBI shall report to eve about cases taken up for investigations; the appointment of CBI Director shall be B by a Committee headed by the Central Vigilance Commissioner; the Central Vigilance Commissioner shall have a minimum fixed tenure and that a Committee headed by the Central Vigilance Commissioner shall prepare a panel for appointment of Director of c Enforcement. On 18th December, 1997, the judgment in the case of *Vineet Narain was delivered. Exercising authority under Article 32 read with Article 142, this Court in order to implement an important Constitutional principle of the rule of law ordered that CVC shall be 0 given a statutory status as recommended by Independent Review Committee. The judgment in *Vineet Narain's case was followed by the 1999 Ordinance under which CVC became a multi-member Commission headed by Central Vigilance Commissioner. The 1999 Ordinance E conferred statutory status on CVC. The said Ordinance incorporated the directions given by this Court in *Vineet Narain's case. The 1999 Ordinance stood promulgated to improve the vigilance administration and to create a culture of integrity as far as government administration is concerned. The said 1999 Ordinance was ultimately F replaced by the enactment of the 2003 Act which came into force with effect from 11th September, 2003.[ [Para 20-25) [476-C-H; 477-A-H; 478-A] *Vineet Narain v. Union of India (1998) 1 SCC 226 - G relied on.

3.1. Analysis of the 2003 Act: The 2003 Act was enacted to provide for the constitution of a Central Vigilance Commission as an institution to inquire or H 454 SUPREME COURT REPORTS [2011] 4 S.C.R. • A cause inquiries to be conducted into offences alleged to have been committed under the Prevention of Corruption Act, 1988 by certain categories of public servants of the Central Government, corporations established by or under any Central Act, Government companies, societies s and local authorities owned or controlled by the Central Government and for matters ..connected therewith or incidental thereto. In Australia, US, UK and Canada, there exists a concept of integrity institutions. Hongkong has an Independent Commission against corruption. In c Western Australia, there exists a statutory Corruption Commission. Queensland has Misconduct Commission. is Police Integrity In New South Wales, Commission. All these come within the category of · integrity institutions. CVC is an integrity institution. The D 2003 Act gives a statutory status to CVC. It stands established as an Institution. eve stands established to inquire into offences alleged to have been committed under the Prevention of Corruption Act, 1988 by certain categories of public servants. Under Section 3(3)(a), the E Central Vigilance Commissioner and the Vigilance Commissioners are to be appointed from amongst persons who have been or are in All India Service or in any civil service of the Union or who are in a civil post under the Union having knowledge and experience in the matters relating to vigilance, policy making and F administration including police administration. The underlined words "who have been or who are" in Section 3(3)(a) refer to the person holding office of a civil servant or who has held such office. The said words 'who have been or who are' indicate the eligibility criteria and further G they indicate that such past or present eligible persons should be without any blemish whatsoever and that they should not be appointed merely because they are eligible to be considered for the post. One more aspect which is highlighted is that the constitution of eve as a statutory H • CENTRE FOR PIL & ANR. v. UNION OF INDIA & ANR. 455 body under Section 3 shows that CVC is an Institution. A The key word is "Institution". The emphasis on the key word is for the simple reason that in the instant case, the recommending authority (High Powered Committee) had gone by personal integrity of the officers empanelled and not by institutional integrity. [Paras 26, 28] [478-B-E; 484- B E-H; 485-A-B] N. Kannadasan v. Ajoy Khose and Others (2009) 7 SCC 1 - relied on.

3.2. Section 4 refers to appointment of Central C '.O Vigilance Commissioner and Vigilance Commissioners. Under Section 4(1 ), they are to be appointed by the President by warrant under her hand and seal. Sectio11 4(1) indicates the importance of the post. Section 4(1) has a proviso. Every appointment under Section 4(1) is to be made after obtaining the recommendation of a committee consisting of the Prime Minister as Chairperson; the Minister of Home Affairs as Member and the Leader of the Opposition in the House of the People as Member. The key word in the proviso is the word "recommendation". E While making the recommendation, the HPC performs a statutory duty. The impugned recommendation dated 3rd September, 2010 is in exercise of the statutory power vested in the HPC under the proviso to Section 4(1 ). The post of Central Vigilance Commissioner is a statutory F post. The Commissioner performs statutory functions as enumerated in Section 8. The word 'recommendation' in the proviso stands for an informed decision to be taken by the HPC on the basis of a consideration of relevant material keeping in mind the purpose, object and policy G of the 2003 Act. The object and purpose of the 2003 Act is to have an integrity Institution like CVC which is in charge of vigilance administration and which constitutes an anti-corruption mechanism. In its functions, the CVC is similar to Election Commission, Comptroller and H 456 SUPREME COURT REPORTS • [2011] 4 S.C.R. A Auditor General, Parliamentary Committees etc. Thus, while making the recommendations, the service conditions of the candidate being a public servant or civil servant in the past is not the sole criteria. The HPC must also take into consideration the question of institutional B competency into account. If the selection adversely affects institutional competency and functioning then it shall be the duty of the HPC to not recommend such a candidate. Thus, the institutional integrity is the primary consideration which the HPC is required to consider c while making recommendation under Section 4 for appointment of Central Vigilance Commissioner. In the instant case, this vital aspect was not taken into account by the HPC while recommending the name of respondent no.2 for appointment as Central Vigilance Commissioner. The HPC has also to keep in mind the object and the policy behind enactment of the 2003 Act. The 2003 Act indicates that the office of the Central Vigilance Commissioner is not only given independence and insulation from external influences, it also indicates that such protections are given in order to enable the Institution of eve to work in a free and fair environment. The prescribed form of oath under Section 5(3) requires Central Vigilance Commissioner to uphold sovereignty and integrity of the country and to perform his duties without fear or favour. The HPC has, therefore, to take into consideration the values, independence, impartiality of the Institution and the institutional competence. [Paras 29, 30] [485-C-H; 486-A-H; 487-A-C] E F 0

3.3. Chapter Ill refers to functions and powers of the G Central Vigilance Commission. eve exercises superintendence over the functioning of the Delhi Special Police Establishment insofar as it relates to investigation of offences alleged to have been committed under the Prevention of Corruption Act, 1988, or an offence with H which a public servant specified in sub-section (2) may, • CENTRE FOR PIL & ANR. v. UNION GF INDIA & ANR. 457 under the Code of Criminal Procedure, 1973 be charged A with at the trial. Thus, eve is empowered to exercise superintendence over the functioning of CBI. It is also empowered to give directions to CBI. It is also empowered to review the progress of investigations conducted by CBI into offences alleged to have been B committed under the Prevention of Corruption Act, 1988 or under the Code of Criminal Procedure by a public servant. eve is also empowered to exercise superintendence over the vigilance administration of various ministries of the Central· Government, PSUs, c Governn~ent companies etc. The powers and functions discharged. by eve is the sole reason for giving the institution the a~ministrative autonomy, independence and insulation from external influences. [Para 31] (487·0· H] D

4.1. Validity of the recommendation dated 3rd September, 2010: Judicial review seeks to ensure that the statutory duty of the HPC to recommend under the proviso to Section 4(1) is performed keeping .in mind the policy and the purpose of the 2003 Act. Appointment to E the post of the Central Vigilance Commissioner must satisfy not only the eligibility criteria of the candidate but the decision making process· . of · the recommendation. The decision to recommend has got to be an informed decision keeping in mind th~ fact that eve F as an institution has to perform an im'portant function of vigilance administration. If a statutory body like HPC, for any reason whatsoever, fails to look into the relevant material having nexus to the object and purpose of the 2003 Act or takes into account irrelevant circumstances G then its decision would stand vitiated on the ground of official arbitrariness. Under the proviso to Section 4(1 ), the HPC had to take into consideration what is good for the institution and not what is good for the candidate. When institutional integrity is in question, the touchstone should H 458 SUPREME COURT REPORTS [2011) 4 S.C.R. • A be "public interest" which has got to be taken into consideration by the HPe and in such cases the HPe may not insist upon proof. However, it is not that the personal integrity is not relevant. It certainly has a co relationship with institutional integrity. In the instant case, s the entire emphasis was placed by the eve, the DoPT and the HPe only on the bio-data of the empanelled candidates. None of these authorities looked at the matter from the larger perspective of institutional integrity including institutional competence and functioning of c eve. Moreover, between 2000 and 2004, the notings of DoPT dated 26th June, 2000, 18th January, 2001, 20th June, 2003, 24th February, 2004, 18th October, 2004 and 2nd November, 2004 have all observed that penalty proceedings may be initiated against respondent no.2. 0 Whether State should initiate such proceedings or the Centre should initiate such proceedings was not relevant. What was relevant was that such notings were not considered in juxtaposition with the clearance of eve granted on 6th October, 2()_08. Even in the brief submitted to the HPe !>Y ·DoPT, ther,e"was no reference to the said E notings.' betWeen the years 2000 and 2004. Even in the C.V. of re~pondent no.2, there was no reference to the earlier riotings of DoPT recommending initiation of penalty proceedings against him. Therefore, even on personal integrity, the HPC did not consider the relevant F material. The system governance established by the Constitution is based on distribution of powers and functions amongst the three organs of the State, one of them being the Executive whose duty is to enforce the laws made by the Parliament and administer the country G through various statutory bodies like eve which is empowered to perform the function of vigilance administration. It is the independence and impartiality of the institution like eve which has to be maintained and preserved in larger interest of the rule of law. [Para 33] H [488-A-H; 489-A-H; 490-A-C] • CENTRE FOR PIL & ANR. v. UNION OF INDIA & 459 ANR. State of Andhra Pradesh v. Na/la Raja Reddy (1967) 3 A SCR 28, relied on. 8

4.2. If the institutional competency would be adversely affected by pending proceedings and if by that touchstone the candidate stands disqualified then it shall be the duty of the HPC not to recommend such a candidate. In the instant case, apart from the pending criminal proceedings, between the period 2000 and 2004 various notings of DoPT recommended disciplinary proceedings against respondent no.2 in respect of Palmolein case. Those notings were not considered by C the HPC. The 2003 Act confers autonomy and independence to the institution of CVC. Autonomy has been conferred so that the Central Vigilance Commissioner could act without fear or favour. The institution is more important than an individual. This was the D test laid down in N. Kannadasan's case. In the instant case, the HPC failed to take this test into consideration. The recommendation dated 3rd September, 2010 of HPC was entirely premised on the blanket clearance given by eve on 6th October, 2008 and on the fact of respondent No. E 2 being"~'ppointed as Chief Secretary of Kerala on 18th September, 2007; his appointment as Secr~.tary of Parliamentary Affairs and his subsequent appointment as Secretary, Telecom. In the process, the HPC, for whatever reasons, has failed· to take into consideration the F pendency of Palmolein case'--before the Special Judge; the sanction accorded by the Government of Kerala on 30th November, 1999 under Section 197 Cr.P.C. for prosecuting inter alia respondent no.2 for having committed alleged offence under Section 120-B IPC read G with Section 13(1)(d) of the Prevention of Corruption Act; the judgment of the Supreme Court dated 29th March, 2000 in the case of ** K Karunakaran v. State of Kera/a in which this Court observed that, "the registration of the FIR against Shri Karunakaran and others cannot be held H 460 SUPREME COURT REPORTS [2011) 4 S.C.R. • A to be the result of malafides or actuated by extraneous considerations. The menace of corruption cannot be permitted to be hidden under the carpet of legal technicalities and in such cases probes conducted are required to be determined on facts and in accordance B with law". The clearance of CVC dated 6th October, 2008 was not binding on the HPC. However, the judgment of the Supreme Court in the case of **K. Karunakaran vs. State of Kera/a was certainly binding on the HPC and, in· any event, required due weightage to be given while c making recommendation, particularly when the said judgment had emphasized the importance of probity in high offices. Thl!refore, the recommendation made by the HPC on 3rd September, 2010 is non-est in law. [Para 33] [490-D-H; 491-A-G] D **K. Karunakaran vs. State of Kera/a and Another 2000(2) SCR 735 - referred to. F

5.1. Is Writ of Quo Warranto invocable? The procedure of quo warranto confers jurisdiction and E authority on the judiciary to control executive action in the matter of making appointments to public offices against the relevant statutory provisions. Before a citizen can claim a writ of quo warranto, he must satisfy the court inter-alia that the office in question is a public office and it is held by a person without legal authority and that leads to the inquiry as to whether the appointment of the said person has been in accordance with law or not. A writ of quo warranto is issued to prevent a continued . exercise of unlawful authority. In the instant petition, a G declaratory relief is also sought besides seeking a writ of quo warranto. In the main writ petition, the petitioner has prayed for issuance of any other writ, direction or order which this Court may deem fit and proper in the facts and circumstances of this Case. Thus, nothing H prevented this Court, if so satisfied, from issuing a writ • CENTRE FOR PIL & ANR. v. UNION OF INDIA & ANR. 461 of declaration. If public duties are to be enforced and A rights and interests are to be protected, then the court may, in furtherance of public interest, consider it necessary to inquire into the state of affairs of the subject matter of litigation in the interest of justice. [Paras 35-37] [491-G; 492-F-H; 493-A] B .