COMMON CAUSE (A REGD. SOCIETY) & ORS. versus UNION OF INDIA & ORS. on 2 July 2018

COMMON CAUSE (A REGD. SOCIETY) & ORS.

v.

UNION OF INDIA & ORS.

(Writ Petition (Civil) No. 505 of 2015)

JULY 02, 2018[ARUN MISHRA ANDMOHAN M. SHANTANAGOUDAR, JJ.]

Judicial Review:

Writ petition u/Art. 32 of Constitution – Challengingappointment of respondent No. 2 as Central Vigilance Commissioner(CVC) and of respondent No. 3 as Vigilance Commissioner (VC)– Seeking quashing of the appointments on the ground that it wereillegal and void being violative of the principles of ‘impeccableintegrity’ and ‘institutional integrity’ – Held: Judicial determinationis confined to the integrity of the decision making process – If thedecision is influenced by extraneous considerations or selection ismade in breach of the statute or rules, it can be set aside – It is notfor the Court to decide on the choice – Government is notaccountable to the courts for the choice made – Government isaccountable to the Courts in respect of lawfulness/legality of itsdecision – In the present case, the decision to appoint respondentNo. 2 cannot be said to be influenced by extraneous considerations,and choice of respondent No. 2 cannot be said to be such which isamenable for interference by the Court in judicial review – Also nocase is made out with respect to appointment of respondent No. 3 tomake interference in judicial review – Constitution of India – Art. 32.

Disposing of the Writ Petitions, the Court HELD: 1.1 It is alleged against respondent No.2 that hehad met Mr. Ranjit Sinha, CBI Director on 29.12.2013 and20.4.2014 for 15 minutes on earlier occasions and 8 minutes on alater date. When the meetings were held, respondent No.2 wasprobing the interception dealings of Hawala dealer Mr. MoinQureshi. Mr. Ranjit Sinha, Director, CBI, was investigating StockGuru scam where senior income tax officers were involved inwhich Mr. Sinha was investigating the role of respondent No.2.It was usual to meet for Heads of various investigating agencies

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Ain connection with official work. There being no other material tosubstantiate aforesaid aspersions it is simpliciter an assumptionthat the meetings took place with an evil design. The highestofficers might have discussed the other issues. There is no othersupporting material to substantiate the aforesaid aspersions. Howthe help was extended, in what manner and in Stock Guru scamBthere was no allegation against respondent No.2 in any mannerwhatsoever. Thus, it is far-fetched to urge that the aforesaidmeetings were to extend help to each other. [Paras 66, 69][939-G-H; 941-D-E]

1.2 With respect to Stock Guru, the investigation was madeCnot by respondent No.2 but by Deputy Director of Income-tax(Investigation) and under Additional Director of Investigation,reporting to Director of Investigation, Investigation-II, Delhi,who in turn reported to the respondent, the then Additional D.G.(IG) Investigation, Delhi. Such conduct on 6.2.2012 led to a Dseizure of Rs.34.96 crores in cash. Initially, there was a complaintby Mr. Anil Kumar Agrawal (who had nothing to do with this case)that the cash belonged to various depositors and it should nothave been seized. On a case filed, the amount was deposited incourt as per the order passed by the court. Appraisal report wasprepared by the I.O. and sent to assessing officer who initiatedEassessment proceedings. However, on 3.6.2013 the CBI startedan investigation into the conduct of the then I.O. of Stock Guru.The name of respondent No.2 did not figure in the FirstInformation Report filed by the CBI. No wrongdoing, noshortcoming was found by any authority in the action of respondentFNo.2 when 13 allegations were made by Mr. Anil Kumar Agarwalagainst respondent No.2. The CVC, Department of Revenue andDepartment of CBDT got the issues enquired and allegationswere found to be baseless. [Para 70][941-F-H; 942-A-B]

1.3 With respect to the allegations made by Mr. Anil Kumar

1.3 With respect to the allegations made by Mr. Anil Kumar GAgrawal, it was clear that since he was criminally prosecuted undersection 182 IPC and disciplinary proceedings, had been initiatedagainst him by the Institute of Chartered Accountants of India atthe instance of respondent No.2 and respondent No.2 had deposedagainst him in the criminal case in the court and once upon timeMr. Anil Kumar Agrawal had appreciated the gesture ofHrespondent No.2 it was clearly an afterthought for him to level ABC

the allegations which were without any supporting material andhad never been substantiated by any material. In the newspaperreport dated 15.4.2014 name of respondent No.2 was notmentioned, no supervisory failure was attributed. RespondentNo.2 was not subjected to an investigation by the CBI. Thus, theaforesaid cast of aspersions upon respondent No.2 by thepetitioners has no basis. Same is not substantiated by any material.[Para 71][942-C-E]

1.4 File No.245/32/2015-AVD.II has been produced whichcontains the answers of CBI with respect to various queries madewhich were on the basis of the complaint. It has been mentionedthat the CBI has investigated the relevant case during the tenureof Mr. Ranjit Sinha in the Stock Guru scam on the basis of acomplaint received from E.O.W., Delhi Police, relating to demandand acceptance of illegal gratification from Mr. Ulhas Prabhakarof M/s. Stock Guru by Mr. Yogender Mittal (IRS-2006), ADIT tohelp him in the income-tax case. The investigation did not revealthe involvement of respondent No.2. It was also noted that nothingcame to the notice of CBI against respondent No.2. [Para 72][942-F-G]

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1.5 Another aspersion on the integrity cast is relating to asearch conducted by criminal investigation division of income-Etax on Ponty Chadha group M/s. Flora and Fauna HousingDevelopment Pvt. Ltd. on 1.2.2012. It was alleged thatrespondent No.2 abused his position to under-assess the incomeof the said company by an amount of Rs.234 crores. It was allegedthat he issued a direction to the assessing officer to dispose ofFthe case in a particular manner which could not have been donein view of section 119 of the Income Tax Act and judgment of thisCourt. Respondent No.2 agreed with the conclusion of theaforesaid officers. In that matter, respondent No.2 had not takenany decision. The decision was taken by the Assessing Officerand the Additional Commissioner in whom the power vested. AsGthe matter was to be decided as per law the assessing officercame to the conclusion that there was no case for addition andpassed an order under the Income Tax Act with the approval ofthe Additional Commissioner. In a meeting held on 22.3.2014,DCIT (Assessing Officer), the Additional Commissioner and ChiefCommissioner apprised respondent No.2, MemberH

A(Investigation) that they were of the view that no addition ofRs.234 crores was warranted as there was no evidence to suggestmuch less to prove that an accounted sale to that extent tookplace in the span of 21 days from 1.9.2011 to 22.9.2011. Thus thefacts make it clear that no impropriety has been committed byrespondent No.2 and he has not directed the assessing officer toBproceed in a particular manner but rather various higherauthorities had agreed with the assessing officer and thereafterhad put up the matter for discussion with the respondent whohad also agreed with them. In the facts of the case, it is clear thatthe allegation raised with respect to favour being meted out toCM/s. Flora and Fauna Housing & Land Development (P) Ltd. atthe instance of respondent No.2 has been considered by HSBCand not at all substantiated from the material on record. As amatter of fact, full facts have not been placed on record either byMr. Anil Agrawal or otherwise to make the position clear. It is apparent that Mr. Anil Agrawal was making reckless allegationsDand was guilty of suppresio veri and suggestio falsi. [Paras 73, 75and 77][942-H; 943-A, E-H; 944-H; 945-A-C]

1.6 Another allegation against respondent No.2 was withrespect to the failure of respondent No.2 to take appropriateaction against the foreign bank account holders in HSBC Bank,EGeneva for almost 3 years. It was urged that no prompt actionwas taken by respondent No.2. Since the formation of SIT theincome tax department had not filed even a single prosecutionagainst HSBC account holders. The allegation is not at allsubstantiated. Rather his functioning has been appreciated byFthe SIT and his assistance has been sought even by the ChiefVigilance Commissioner. [Paras 78, 80][945-D-E; 947-A]

1.7 Another allegation against respondent No.2 is withrespect to the failure to make any headway, as he failed to takeaction in the income-tax cases, in the 2G scam, unlike the CBI orGEnforcement Directorate filed several charge-sheets. Theaverment in this regard in the petition is in the passing form andis vague. Apart from that, no specific instance has been given inwhich case there was a failure on the part of respondent No.2.That apart respondent No.2 had made it clear that during thetenure from 1.11.2010 to August 2012 he had taken up the caseH

of Unitech Ltd. whose associates and their sister concern hadbeen granted licences and few other cases of telecom companywere investigated and few connected cases of telecom companieswere also under investigation for other charges. All necessaryinvestigation was carried out and aforesaid findings werecommunicated in due time to the Assessing Officer who tookappropriate action. Cases of other telecom companies under thejurisdiction of DGIT, Bombay, Chennai, Bengaluru etc.Respondent No.2 as a nodal agency coordinated and made severalrepresentations as to the action taken by the income-taxdepartment before a Joint Parliamentary Committee. It could notbe pointed out in which particular matter respondent No.2 wasfound lacking. It was never pointed out to this Court that therewas laxity on the part of respondent No.2 when the aforesaidmatter C.A. No.10660/2010 was listed in this Court. [Para81][947-B-F]

1.8 The allegation with respect to Radia Tapes, is thatrespondent No.2 not taking action against the concernedincumbents. Details of action which were required and could havebeen taken have not been given in the petition, thus no specificaverment has been made in this regard by the petitioners. It isapparent from the reply that respondent No.2 was DGITInvestigation and he joined on 1.11.2010 by which timesurveillance of Ms. Nira Radia was over and some interceptsrelating to such surveillance were in public domain due to leakageprobably in May-June, 2010. When he had taken over as DGIT(Investigation) in November 2010 actionable issues wereidentified and necessary action was taken either by the DelhiDirectorate or was communicated to the Directorates for furtheraction. The information was duly shared with the AssessingOfficers and other law enforcing agencies such as CBI, ED etc.The matter was before this Court in Public Interest Litigation(PIL). None of the authorities ever found any shortcoming orinaction on the part of respondent No.2 on this count. It was alsonot urged before the Court by aforesaid PIL of 2010 whenever itwas listed. [Para 82][947-G-H; 948-A-B]

1.9 It has also been pointed out by respondent No.2 that inthe petition with respect to APAR of respondent No.2, false AB

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Aaverments have been made, that adverse remarks were made bythree senior officers of CBDT. The allegation has been termedto be baseless and unfounded and misleading. In the 36 years ofservice, not even a single remark has been made in the APAR.All the remarks had been based on record as in the form ofcompendium R-2/1. There is no adverse remark in them. ThusBthe petition suffers from wrong averments also. Thus, it isapparent that against respondent No.2 unsubstantiated allegationshave been made. [Para 83][948-C-D]

1.10 Three representations/complaints were receivedagainst respondent No. 2. The PMO had asked for details of theCallegations so as to ascertain the facts contained in therepresentations filed against respondent No.2. Complaints ofrespondent No.2 were placed before the Committee. Factualinputs on opinion were received with respect to the variousaspects in representation from various agencies like CBI,DInformation Bureau, Department of Revenue, Ministry of Financeand were placed before the HPC which considered all theallegations against all shortlisted candidates. No complaint wasreceived against respondent No. 3. Requisite clearances weregiven by the IB with respect to respondent Nos. 2 and 3. Withrespect to the allegations, separate inputs were obtained andEplaced before the Committee. There was nothing adverse found.[Para 87][951-C-E]

1.11 Each and every aspect and information had been placedbefore the High Power Committee when the decision was taken.Thus, the integrity of the decision-making process has notFimpinged in this case in any manner whatsoever. Nor the decisiontaken to appoint respondent No.2 as CVC, can be said to besuffering from any illegality. The decision cannot be said to beinfluenced by extraneous considerations and the choice made ofrespondent No.2 cannot be said to be such which is amenable forGinterference by the court in judicial review. [Para 104][955-B-C]

2.1 With respect to the appointment of respondent No.3,that since it was alleged that on the administrative side, he wasseverely indicted for fabricating/forging the APAR of Mr. MalayMukherjee, General Manager and was cautioned. However, hisHcriminal prosecution ultimately was not fructified. Thus, in view of the order passed in the serious background, it could not besaid that person who was accused of fabricating/forging APARwas a person of impeccable integrity fit to hold the office ofVigilance Commissioner of an integrity institution of this country.Respondent No. 3 in his written explanation pointed out that inthe past there were 14 such cases when succeeding CMDs, hadsubmitted APAR when reviewing APAR when officers have notworked under him. Thus no action against him was warranted.He had not violated any guidelines. [Paras 105, 109][955-D-E;956-F-G]

2.2 So far as fabrication and forgery are concerned, nofinding has been recorded against respondent No.3 with respectto the APAR for 2009-2010 by any formal order on theadministrative side. Thus, his integrity is not going to be affectedin the aforesaid factual matrix. [Para 111][958-B]

2.3 There is no finding recorded against respondent No.3either by the Chief Vigilance Commissioner or the DFS in anymanner whatsoever so as to impinge adversely upon his integrity,necessary for such an institution of Vigilance Commission. Apartfrom that, no representation was filed against respondent No.3.However, this aspect was dealt with and was mentioned in thereport which was submitted before the HPC. Thus, there wasnothing against the integrity of respondent No.3 so as to holdthat the recommendation with respect to him was illegal and voidand entire material was placed before the HPC. Thus, no case ismade out with respect to the appointment of respondent No.3 asVigilance Commissioner to make interference in judicialparameters. [Paras 111, 112][958-C-D, F]

3. Judicial determination is confined to the integrity of thedecision making process by the HPC. The difference betweenjudicial and merit review, the legality of decision-making processcan also be looked into. If the decision is influenced by extraneousconsiderations or selection is made in breach of the statute orrules, it can be set aside. The Government is not accountable tothe courts for the choice made but the Government is accountableto the courts in respect of the lawfulness/legality of its decisions.[Para 85][950-F, G]

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A4. It is not for this Court to decide on the choice. Nowadaysthe scenario is that such complaints cannot be taken on face value.Even against very honest persons, allegations can be made. Thosedays have gone when filing of the complaints was taken as seriousaspersions on integrity. Ideally, there should not be any seriouscomplaint as the filing of same raises eyebrows. As in the instantBmatter, complaints have been looked into and the Court declinesto interfere. [Para 113][958-G-H]

Vineet Narain & Ors. v. Union of India & Anr. (1998) 1SCC 226 : [1997] 6 Suppl. SCR 595; Centre for PIL& Anr. v. Union of India & Anr. (2011) 4 SCC 1 : [2011]C4 SCR 445; K. Karunakaran v. State of Kerala (2000)3 SCC 761 : [2000] 2 SCR 735 – referred to.

Case Law Reference

CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No. 505of 2015.

EUnder Article 32 of the Constitution of India.

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W.P. (C) No. 683 of 2014.

Pramod Dayal, Prashant Bhushan, Pranav Sachdeva, Ms. NehaFRathi, Ms. Cheryl D’ Souza, Advs. for the Petitioners.

K. K. Venugopal, AG, Tushar Mehta, ASG, Mrs. V. Mohana,C. A. Sundaram, P. S. Patwalia, Sr. Advs., Ms. Madhavi Divan,Ms. Aishwarya Bhati, Ms. Binu Tamta, B. V. Balramdas, Ms. Anil Katiyar,Shekhar Kumar, Braj Kishore Mishra, Rajat Nair, Ms. ShradhaGDeshmukh, Mukesh Kumar Maroria, G. Ramakrishna Prasad, SuyodhanByrapaneni, Mohd. Wasay Khan, Ms. Filza Moonis, K. V. GirishChoudhary, Ms. Rohini Musa, Zafar Inayat, Abhishek Gupta, ApporvTripthi, Jagat Arora, Rajat Arora, Ms. Ritu Arora, Anuvrat Sharma,Ms. Sushma Suri, Advs. for the Respondents.

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The Judgment of the Court was delivered by ARUN MISHRA, J. 1. The petition has been filed by theCommon Cause (a registered Society) and others purportedly in publicinterest, a prayer has been made to issue an appropriate writ quashingthe appointment of Mr. K.V. Chowdary, Central Vigilance Commissioner(in short ‘CVC’) and Mr. T.M. Bhasin, Vigilance Commissioner (in short,‘VC’). The Union of India had appointed Mr. K.V. Chowdary as CVCon 6.6.2015 and Mr. T.M. Bhasin as VC on 11.6.2015 for a period offour years. The main ground urged to quash the appointment is that it isillegal and void as there is violation of principles of impeccable integrityand institutional integrity laid down in the judgments of this Court inVineet Narain & Ors. v. Union of India & Anr. (1998) 1 SCC 226 andCentre for PIL & Anr. v. Union of India & Anr. (2011) 4 SCC 1.

2. In the writ petition filed by the Centre for Integrity, Governance,and Training in Vigilance Administration and another, a prayer has beenmade to direct the Union of India and/or its instrumentalities to providefor minimum number of years of knowledge and experience in the fieldof vigilance for being appointed as CVC or VC. During the pendency ofthe writ application, with the permission of the court, this Court hadpermitted respondent No.1 to proceed with the appointment of CVCand VC under section 4(1) of the Central Vigilance Commission Act,2003 (for short, “the Act”) subject to the decision of the petition. Theappointments have been made and the challenge is confined to theappointments of CVC and VC.

3. It is urged by the Common Cause Society that Central VigilanceCommission is, in the absence of a Lokpal, India’s top anti-corruptionbody. The Commission is considered the apex integrity and watchdoginstitution of the country. Apart from overseeing the vigilanceadministration, it has also the power of superintendence over the CBI incorruption cases and is also the designated agency for protection of thewhistle-blowers to examine their complaints. It oversees functioning ofthe Central Government and its instrumentalities.

4. This Court in Vineet Narain (supra) has observed that CentralVigilance Commission shall be given statutory status. The SelectionCommittee has to select a person of impeccable integrity and theappointment shall be made by the President. Pursuant thereto, Parliamenthas enacted Central Vigilance Commission Act, 2003 and Selection A

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ACommittee comprises of the Prime Minister, the Home Minister, and theLeader of the Opposition.

5. In Centre for PIL (supra) this Court had quashed theappointment of the then CVC by declaring decision of SelectionCommittee to the President for appointment as non-est. It was observedBby this Court that the activity of decision making process has to ensurethat the powers are exercised for the purpose and in the manner inwhich the said Act provides otherwise the recommendation has noexistence in the eyes of law. This Court directed that the legality of theexercise of selection is subject to judicial review. All civil servants andother persons empaneled shall be outstanding civil servants or personsCof impeccable integrity, made on rational criteria reflected by recordingvigilance and/or notings akin to reasons. Complete information withmaterial and data whether favourable or adverse has to be forwarded.Nothing material or relevant should be withheld. Contemporaneous servicerecord, even adverse remarks, are specifically to be brought to the noticeDof Selection Committee. Process of selection by the Committee has tobe fair and transparent.

6. It is averred in the petition that the absolute requirement is thatCentral Vigilance Officer should have unblemished record of service.The appointment of Mr. K.V. Chowdary, respondent No.2 as CVC hasEbeen assailed on the basis of facts mentioned in the complaint. Prior tothat, he was the Chairperson of CBDT and Advisor to the SIT on blackmoney. Before his appointment, several representations were made tothe Prime Minister of India, who heads the selection panel as providedin section 4 of the Act. As it transpired that the Government had madeup its mind to appoint respondent No.2, representations were made givingFspecific reasons as to why he was not eligible and suitable for headingthe Commission. Despite representations, his appointment had been made.Firstly, it is submitted that Mr. K.V. Chowdary had been meeting withthe then CBI Director Mr. Ranjit Sinha and had been regularly meetingthe accused in the cases investigated by the CBI in the 2G scam cases.GThis Court had directed on 20.11.2015 in Civil Appeal No.10660 of 2010,the CBI Director not to interfere in the investigation process carried outby the CBI in the 2G scam case and to recuse himself from 2G scamcase. This Court had also observed in the judgment dated 14.5.2015 inWrit Petition [C] No.463 of 2012 that Mr. Ranjit Sinha’s meetings withaccused in coal scam were completely inappropriate, and his role in H

allegedly scuttling investigations in coal scam case needs to beinvestigated.

7. It is further averred in the petition that Mr. Ranjit Sinha, Directorof CBI met Mr. K.V. Chowdary when he was probing the dealings ofand intercepted conversation of hawala dealer Mr. Moin Qureshi whowas known to Mr. Ranjit Sinha and who had met him approximately 90times at his residence. These meetings also took place when Mr. RanjitSinha/CBI was investigating “Stock Guru Scam” where senior incometax officers were involved and the CBI was investigating the role ofrespondent No.2. The CBI inquiry had found that senior income taxofficer had taken bribes for showing favours to scamsters and had alsomisappropriated over Rs.40 crores. The officers who were involvedwere working directly under Mr. K.V. Chowdary, respondent No.2.

8. The Income Tax Department in its report on Mr. Moin Qureshigave a clean chit to Mr. Sinha and CBI gave a clean chit to respondentNo.2 in Stock Guru scam. Thus, respondent No.2 Mr. K.V. Chowdaryand CBI Director, Mr. Ranjit Sinha helped each other in the investigationbeing carried out by the agencies under them.

9. One Mr. Anil Kumar Agarwal had made a complaint to theFinance Ministry on 10.6.2014 pointing out the manner in whichrespondent No.2 was being shielded in Stock Guru scam. Earlierrespondent No.2 had taken credit for taking action against Stock Gurubefore the scam involving income tax officers came to light. He couldnot distance himself from the scam as the entire episode happened underhis watch.

10. Respondent No.2 had abused his position as Member(Investigation), CBDT to under-assess the income of the company M/s.Flora and Fauna Housing & Land Development Pvt. Ltd. which isassociated with infamous Mr. Ponty Chadha. The under-assessmentwas to the extent of Rs.234/- crores. Mr. K.V. Chowdary followed aprocedure allegedly unknown to law by giving direction to the assessingofficer to dispose of the case in a particular manner whereas no suchdirection could have been issued.

11. It is further averred in the petition that one of the members ofthe Common Cause Society made the following allegations in therepresentation :

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(i) that Mr. Chowdary was in charge of the investigation of illegalaccount holders in foreign countries in HSBC Bank, for almostthree years and until this Court appointed the SIT on black money,there was almost no progress in income tax investigation, and theincome tax department had not filed even a single prosecutioncase against HSBC account holders.

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(ii) that Mr. Chowdary was investigating the Radia tapes and didnot take any action on evidence available with him.

(iii) that he was also investigating the income tax cases in the 2Gscam and failed to take any action unlike the CBI or the EDCwhich filed several charge-sheets.

12. As against respondent No.3, Mr. T.M. Bhasin appointed asVC the case set up by the petitioner is that he had been serving as theCMD in the public sector Indian Bank from 1.4.2010 with its headquartersin Chennai, who was indicted in a detailed inquiry by the CVC in 2013Dfor forging and tampering with the appraisal report of the then GeneralManager of Indian Bank which is a criminal offence. One Mr. MalayMukherjee in this connection had complained on 11.7.2011 that his AnnualPerformance Appraisal Report (APAR) has been tampered. It was foundby the Commission that APAR was mala fidely tampered and forgedand grading of ‘excellent’ was substituted by ‘average’ with a view toEdestroy the career of Mr. Malay Mukherjee. It was a criminal offencefor which investigation was suggested to establish the facts. However,another VC had stated that departmental action be taken. The then CVCapproved departmental action. On that office memorandum dated11.12.2012 was issued to Department of Financial Services (DFS),FGovernment of India to take departmental action against Mr. Bhasin.

13. In response to the aforesaid, the Department of FinancialServices wrote to the Commission that departmental action may notstand scrutiny of law. The opinion was reiterated by the then VC whichwas approved by the CVC, however, Department of Financial ServicesGsaid that the matter ought to be closed and Mr. Bhasin was cautioned.The same was approved by the Commission and was carried out by theGovernment of India. It is averred that yet another important politicalfunctionary wrote a letter to the Prime Minister on 11.6.2015 stating thatcharge against Mr. Bhasin was very serious and the recommendation ofSelection Committee to appoint him must be withdrawn. Thus, Mr. Bhasin

by no stretch of imagination can be said to have impeccable integrity orunblemished record as per the requirement of law. Thus, the appointmentsare illegal, arbitrary, in negation of rule of law and therefore in violationof Articles 14 and 16 of the Constitution of India. It is averred thattransparency was not followed and there was no scope for public inputs.Complaints made against respondent Nos. 2 and 3 were not dulyconsidered. Thus, transparency was not observed. Non-production ofserious adverse material and representations against respondent Nos. 2and 3 would vitiate the appointment process and in case material wasproduced, and despite that appointments were made, then theappointments would be mala fide, arbitrary and illegal.

14. In the counter affidavit filed by respondent No.1 in case ofCommon Cause, as per section 3(3) of the Act, for appointment to thepost of CVC as well as VC, the person must have knowledge andexperience in the matters relating to (a) vigilance, (b) policy making and(c) administration including police administration. Therefore, fixingminimum years of experience exclusively in any of the above fields wouldbe contrary to the expressed legislative intent which requires that suchperson must have knowledge and experience in all the three fields. Thedecision of this Court in Centre for PIL (supra) has been relied upon.The guidelines laid down therein have been duly complied with. Theguidelines framed provided the criteria as well as the procedure to befollowed, inviting nominations, shortlisting of eligible candidates, finalselection, to be made by the Committee. The vacancies invitingapplications for the posts of CVC and VC were issued by respondentNo.1 vide O.M. dated 13.10.2014. It was uploaded on the website ofDepartment of Personnel & Training (DoPT) and the advertisementpublished in newspapers also referred to the vacancy circular. Theprocess adopted by respondent No.1 included inviting applications throughadvertisement from all eligible persons, thereafter scrutiny and sortingof the applications under a welldefined criterion was done by a Committeeof Secretaries and, thereafter, the list was furnished to the Committeeas provided in section 4 of the Act. A fully transparent process had beenadopted. Office Memorandum dated 13.10.2014 has prescribed eligibilityand other requirements as under:

“Section 3(3) of the Central Vigilance Commission Act, 2003,provides that the Central Vigilance Commissioner and the VigilanceCommissioners shall be appointed from amongst persons - ABCD

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SUPREME COURT REPORTS

(a) who have been or are in an All-India Service or in any civilservice of the Union or in a civil post under the Union havingknowledge and experience in the matters relating to vigilance,policy making and administration including police administration;or (b) who have held office or are holding office in a corporationestablished by or under any Central Act or a Government companyowned or controlled by the Central Government and persons whohave expertise and experience in finance including insurance andbanking, law, vigilance, and investigations :

Provided that, from amongst the Central VigilanceCommissioner and the Vigilance Commissioners, not more thantwo persons shall belong to the category of persons referredto either in clause (a) or clause (b).

In case of persons falling under section 3(3)(a) of the Act asabove, such persons, preferably, have held or is holding thepost of a Secretary to the Government of India or any equivalentpost thereto under the Central Government.

In case of persons falling under the first part of section 3(3)(b) of the Act as above, the person must have held or is holdingthe position of Chairman/Managing Director/Chief ExecutiveOfficer of a Schedule. “A” Central Public Sector Enterpriseand has served as a whole time Director on the Board for aperiod of at least 3 years.

In respect of persons who have expertise and experience infinance, including insurance and banking, law, vigilance andinvestigation and falling under the second part of section 3(3)(b) of the Act as above, such persons must have acquiredeminence and have outstanding achievement in the said fields(s)provided that such persons who are in employment in a privatecompany must have held or is holding the position of ManagingDirector/CEO, as a Whole-Time Director on the Board of theCompany for a period of at least three years.

All the applicants should be of outstanding merit and impeccableintegrity and should have knowledge and at least 25 years ofexperience in the relevant field(s).

The applicants should not be more than 62 years of age as on1[st] January 2015 so that the persons to be considered forselection will get at least 3 years tenure as a Central VigilanceCommissioner or the Vigilance Commissioner.”

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15. Experience of 25 years has been prescribed in the relevantfield(s). Advertisements were published in three leading newspapers,i.e., Times of India, The Hindu, and Dainik Bhaskar (Hindi Daily) in alltheir editions in India on 14.10.2014 inviting applications for the aforesaidposts. The last date of receiving the applications was 5.11.2014. It wasalso uploaded on the website ‘www.persmin.nic.in’ by DoPT. Thepublication has been certified as per the communication received fromthe Directorate of Advertising and Visual Publicity (DAVP), Ministry ofInformation & Broadcasting, it has been placed on record. Multiplechannels of communication were utilised to give wide publicity to theadvertisement.

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16. Pursuant to the advertisement, total 132 applications wereDreceived for the said posts, out of which 120 were received by the cut-off date. Following is the data of the applications received :

S.No.Under Category of No. of No. of No. of the CVC Act, 2003 applications applications applications received for received for received after CVC post VC post 5.11.2014 1. 3(3)(a) 48 43 08 2. 3(3) (b) category - I 05 19 02 3.3(3) (b) category - II03020256 64 02 Total132

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The shortlisting was done by a Committee comprising of the CabinetSecretary, the Secretary (Department of Financial Services) and theSecretary (Personnel). In the meeting dated 9.4.2015, the Committeewent through the relevant record, scrutinized all the applications andexamined the experience of each candidate and shortlisted a panel of 12names for the post of CVC and 10 names for the post of VC for placingbefore Selection Committee for consideration.

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A17.It is further contended by respondent No.1 that the first meetingof the Committee headed by the Prime Minister was held on 23.5.2015which was attended by the Home Minister and the leader of CongressLegislative Party. The Committee went through agenda containing thedetails, notwithstanding the shortlisting of details of all the 132 applicantsand decided to obtain further information of certain candidates.B

18. On 23.5.2015, a communication was received from the PMOcontaining extracts of all allegations from a representation made by oneof the members of the Common Cause vide his letter dated 20.5.2015and requesting for inputs on the said allegations against Mr. K.V.Chowdary. The same was sent on 25.5.2015 to CBI and the DepartmentCof Revenue for their inputs. The PMO also requested the IB on 23.5.2015to provide their inputs. The following replies were received :

“(i) The reply of CBI was received on 29.05.2015 and is part ofthe record that was placed before the Committee.

D(ii) Two replies were received from the Department of Revenueon 27.05.2015 and is part of the record that was placed beforethe Committee.

(iii) Inputs from IB were received in PMO on 26.05.2015 and inDoPT on 28.05.2015 and is part of the record that was placedbefore the Committee.E(iv) A reply on ACR was received on 29.05.2015 and is part ofthe record that was placed before the Committee.”

19. The Agenda note for the second meeting to be held on 1.6.2015was circulated on 27.5.2015 which included the details of all complaintsFagainst various candidates including the closed complaints. With respectto Mr. K.V. Chowdary, it was mentioned in the agenda note that otherinputs will be placed before the Committee during the meeting as someinputs were awaited. Accordingly, additional inputs with the gist of thecomplaints regarding Mr. K.V. Chowdary were placed before theCommittee in the second meeting held on 1.6.2015. The gist withGannexures at correspondence containing plethora of documents of FileNo.399/15/2014-AVD-III was made available. Not only the complaints/documents but a brief summary of the complaints and the inputs obtainedfrom various agencies including the gist of the note for Mr. K.V.Chowdary were also placed before the Committee. The gist included H

the details and the inputs received from various agencies like CBI, IB,and Department of Revenue. On 1.6.2015 a letter from the Departmentof Revenue was received stating that no adverse remarks have beenfound in the Appraisal Performance Report of available ACRs. of Mr.K.V. Chowdary for the period from 1978 to 2013-14. Letter dated26.5.2015 of another public functionary regarding Mr. K.V. Chowdarywas also placed before the Committee.

20. It is further contended that the details of the complaintsincluding the closed complaints against Mr. T.M. Bhasin along with inputsin relation to the same were also part of the agenda at para 3.7 andAnnexure E which was placed before the Committee. The Committeeafter taking into consideration all the material placed before it recordedthus:

“The representations received from Shri Prashant Bhushan, AnilKumar Agrawal and Shri Ram Jethmalani relating to Shri K.V.Chowdary had been sent earlier to Department of Revenue,Ministry of Finance, Intelligence Bureau, and the CBI for theircomments. The above letters and comments of the agenciesconcerned were placed before the Committee. Another complaintreceived by the CBI relates to the case of M/s. Flora and FaunaHousing and Land Development Pvt. Ltd. about an unaccountedincome of Rs.234 crores. This was also a part of the complaintmade by Shri Prashant Bhushan and based on the investigationinputs received, the matter was found to be unsubstantiated.Having considered the contents of the letters and the commentsthereon, the Committee was of the view that the allegations werenot substantiated.”

21. The file was sent to the Hon. President of India throughMOS(PP) and then by the PMO on 5.6.2015 containing the agenda aswell as the gist of the complaints which was received from the President’sSecretariat on 8.6.2015 along with the Warrants of Appointment andorder of oath. After obtaining their consent, the Warrants of Appointmentwere handed over personally to both Mr. K.V.Chowdary and Mr.T.M.Bhasin and the order on oath was also sent to CVC on 8.6.2015.The decision taken by the Committee to appoint them was unanimous.Respondent Nos.2 and 3 were found to be eligible. Allegations were notfound substantiated. The Committee had taken note of inputs receivedfrom various investigation and intelligence agencies and after satisfying A

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Athemselves the allegations were found untenable and that they were thepersons of impeccable integrity and satisfied the requirement of law,had recommended the appointments. There was no procedural irregularityor illegality. The present petition is in no manner public interest litigation.Complaints were baseless. There was no illegality or arbitrariness intheir appointments.B

22. In the counter affidavit filed by respondent No.2, Mr. K.V.Chowdary, it is contended that petition is based upon hearsay and letterswritten by third parties. The decision in P.J. Thomas case does not apply.In the case of P.J. Thomas incriminating material against him was notplaced before the High Power Committee (HPC) and as such this CourtChad made interference. Mr. P.J. Thomas was accused of an offenceunder section 13(2) read with section 13(1)(d) of the Prevention ofCorruption Act (for short, “PC Act”) and section 120B of Indian PenalCode, 1860 (for short, “IPC”). The Charge-sheet was filed before theSpecial Judge, Thiruvananthapuram. The definite role was attributed toDhim and there were several allegations made against him. A note wasput up for holding a departmental inquiry for imposing a major penalty.The Central Vigilance Commission had sent the opinion to initiate majorpenalty proceedings against Mr. P.J. Thomas and another. The HighCourt of Kerala in its judgment had also alleged the role of Mr. P.J.Thomas in Palmolein case. The action of the State Government forEinitiating criminal case or pendency of the case or penalty before SpecialJudge, Thiruvananthapuram was never questioned or challenged by Mr.Thomas before any court of competent jurisdiction. Later, CVC hadchanged the opinion without any reason while giving vigilance clearanceon 6.10.2008. Besides this, Court has made observations in one of its Fearlier judgments in K. Karunakaran v. State of Kerala (2000) 3SCC 761 about the role of accused in pending case before Special Judge,Thiruvananthapuram in Palmolein case.

23. It is contended that in the instant case against respondentNo.2, there is no such incriminating material borne out from officialGrecords. The allegations are unfounded, made by busy-bodies with sinistermotives. The High Power Committee along with reports of variousauthorities, Department of Revenue, CBI and Intelligence Bureau hadexamined the allegations which belie the correctness of the unfoundedallegations. Mr. Anil Kumar Agrawal has annexed the ground againstrespondent No.2. The answering respondent in his capacity as DirectorH

General of Income tax (Inv) Delhi (DGIT) had granted approval in theyear 2011 for initiating criminal prosecution under section 182 IPC againstMr. Agrawal. Further, the proceedings were instituted by the Institute ofChartered Accountants of India based on a complaint filed by an officerworking under the answering respondent. Since then, Mr. Agrawal hadstarted personally attacking, writing a volley of frivolous and vexatiouscomplaints to many authorities in the Government etc. Complaints byother public institutions smack of venom against several political persons.The petition has not been filed with due diligence. Facts have not beenverified by filing applications under the RTI Act or some other legalmeans. They have relied upon motivated complaint by Mr. Anil Agrawalwho was seeking pound of flesh from answering respondent for aforesaidreasons. The allegations are not supported by any evidence whatsoever.Petitioners have not explained the basis. Mr. Anil Agrawal had writtenhundreds of letters against answering respondent No.2 when he wasbeing considered for the post of Member, CBDT, Chairman, CBDT andfinally while being considered for the post of CVC. Mr. Agrawal hadsupplied false and motivated information to one of the members of theCommon Cause and other political functionaries to initiate frivolous andvexatious proceedings. It amounts to a proxy war by Mr. Anil Agrawalthrough the petitioners and other public functionaries. One of the membersof Common Cause had unleashed a slander campaign in the social mediaand press during the selection process with a view to prejudice theSelection Committee. Communications were released to media evenwhile the selection process was in progress, it apparently intended todamage the prospects of selection of answering respondent No.2. Thus,it was made an issue private and personal to them. The allegations madefall short of the minimum standard of credibility. An effort has beenmade to somehow indict the answering respondent by placing relianceon a letter Annexure P3 in which false statements were made about theanswering respondent’s service record that three senior officers ofCBDT made serious adverse remarks in his performance appraisalreports. Thus, the petitioners are guilty of malice in law by stating incorrectfacts. For perjury, petitioners be prosecuted.

24. It is further contended by respondent No.2 in reply that whilehe was posted as Director General of Income tax (Investigation), Delhifrom 1.11.2010 to 28.8.2012 and further from 29.8.2012 to 29.7.2014 hewas posted as Member, CBDT. Thus, he was a Member (Inv) CBDT

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Afrom 12.10.2012 to 31.10.2014. His duties included overall supervisionof investigations under the direct tax laws and formulation of policiesrelating to direct taxes. He was appointed as Chairman, CBDT,Department of Revenue from 1.8.2014 to 31.10.2014. After hissuperannuation, he was appointed as Advisor to Department of Revenueon black money and functioned as such from 1.11.2014 to 4.6.2015.B

25. It is further contended by respondent that he had investigated,supervised and monitored several cases of large business houses,politically sensitive persons, and bureaucrats holding very high offices,scams including 2G, commonwealth games and persons who wereallocated coal blocks, chit fund scams, undisclosed foreign bank accountsCincluding in HSBC, Geneva etc. Many cases investigated under hissupervision finally led to detection and assessment of substantialundisclosed income and criminal prosecutions. During his tenure asMember (Inv) the number of cases in which prosecution proceedingswere launched, went up from 149 to 669 and further offencesDcompounded increased from 83 to 900. Respondent No.2 was adjudgedone of the best Probationers during training and was awarded silvermedal, was promoted out of turn from Deputy Commissioner of Incometax to Joint CIT on being graded as “outstanding” by UPSC. Very fewmay be 15 to 20 officers hold such record in the IRS at all times puttogether. His work, conduct, and integrity had always been rated at theEhighest level, ACRs. recorded by a wide range of officers over a periodof years bear sufficient testimony. A verbatim extract of the remarks ofthe reporting and reviewing officers has been annexed as R2/1 to thecounter affidavit.

26. It is further contended that his application dated 7.8.2014 wasFduly forwarded by the Department of Revenue along with his ACRs.,integrity certificate and vigilance clearance including a certificate thatno disciplinary or criminal proceedings were either pending orcontemplated against him. The DoPT has again called the applicationsvide communication dated 13.10.2014 for CVC. This advertisement/Gnotification appeared in the newspapers and on the Government website.Application dated 21.10.2014 was again duly forwarded. The petition isbased mainly on the representations made by Mr. Anil Kumar Agrawalwho represented the grievances of one of his client M/s. DharampalSatyapal Ltd., searched by the Investigation Wing (Unit II) on 21.1.2011when he was serving as DGIT (Inv), Delhi. He had made allegations onH

5.2.2011 and 18.2.2011 that his client was being harassed in his capacityas DGIT (Investigation). Answering respondent had quickly respondedand brought harmony between the investigating officers and the taxpayerto facilitate further investigation. Ultimately I.O. made a reference tothe CBI and other agencies. This did not suit the interest of Mr. AnilAgarwal. He had represented himself as whole-time Director of M/s.Dharamal Satyapal Ltd. It was found to be in violation of the provisionsof Institute of Chartered Accountants of India Act and a complaint wasfiled by the I.O. Mr. Gaurav Dudeja, DDIT (Investigation) before theInstitute of Chartered Accountants. The institute found Mr. Agrawalprima facie guilty of professional misconduct and initiated disciplinaryproceedings as per Rule 9(1) of the Chartered Accountants (Procedureof Investigations of Professional and other Misconduct and Conduct ofCases) Rules, 2007 and decided to proceed under Chapter V of theRules. The consequential judicial proceedings were still pending.Consequently, Mr. Agrawal in order to arm-twist the officers of theincome-tax department and by way of intimidation had been consistentlywriting unfounded and baseless complaints against certain targetedofficials of the department levelling serious allegations. In the case ofM/s. Sanjay Parwal and other connected cases complaints were foundto be baseless and unfounded and the outcome of arm-twisting tactics.

27. It is further contended that answering respondent No.2 hadauthorized the filing of a complaint under section 182 IPC against Mr.Anil Agarwal in his capacity as DGIT (Investigation) with the approvalof CBDT. It was filed by the Deputy Director of Income Tax(Investigation), Headquarters, New Delhi, before ACMM, Tis HazariCourt, Delhi. Copy of complaint has been placed on record. It wasmentioned in the complaint that false complaint had been filed againstthe officers to damage the reputation against the highly placed authorities.The court has taken cognizance of the complaint. Bailable warrantswere issued on 6.2.2012 as service of summons was intentionally evadedby Mr. Anil Agarwal. Various witnesses have been examined in the saidcase including answering respondent No.2. The case was still pending.Due to aforesaid reasons, Mr. Anil Kumar Agarwal had been levellingwild allegations against the answering respondent. Under Secretary hassought the comments of answering respondent as per O.M. dated19.9.2014. The answering respondent has offered comments to theaforesaid effect. Same has been placed on record. Regarding the visitsto Mr. Ranjit Sinha, Director, CBI, it is contended that respondent No.2

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Awas heading the Investigation Division of CBDT and in that capacity, hehad met the heads of other investigating agencies including the thenDirector, CBI. The answering respondent met the Director at his residenceon a couple of occasions for some official work. He had also met himand his predecessor in their respective offices in North Block and inCBI Headquarters several times on official work. This can be verifiedBfrom the registers of said offices. It is contended that he had neverdiscussed the cases of Mr. Moin Qureshi or stock guru with the thenDirector of CBI or during any such meeting. Petitioners have notsubstantiated by any record their allegations that some cases have beenmutually and improperly settled. The allegations are based on conjecturesCand surmises.

28. That in the averments made and the facts mentioned in theletter {P-3} written by the member of Common Cause dated 20.5.2015it was nowhere observed by this Court that the impact of the meetingshas to be investigated by the CBI. The aforesaid averment is wrong andDfalse and afterthought.

29. With respect to the allegations regarding Mr. Moin Qureshi, itis contended in the counter affidavit filed by respondent No.2 that hewas a taxpayer in Delhi whose cases were investigated by the DelhiDirectorate by conducting search on 15.2.2014. Respondent No.2 wasEa Member (Investigation), CBDT at that point of time. In that capacity,he monitored the cases across the country. The facts of the case andthe findings have been submitted to the Government from time to time.All necessary actions including reference to foreign tax authorities,references under Mutual Legal Assistance to Hong Kong, sharing theinformation with the Enforcement Directorate, DRI, other relevantFdepartments/agencies, Department of Financial Services and RBIregarding illegal activities of certain foreign banks, banks were taken indue time and with good results. The investigation apart from leading todetection of undisclosed incomes and assets had led to the filing ofprosecution proceedings against certain persons. This Court in connectionGwith coal mines allotment case i.e. W.P. (Civil) No.463 of 2012 directedfiling of investigation report relating to involvement of certain personsand report was filed on 16.10.2014 in a sealed cover before this Courton 17.10.2014. This Court had passed an order on 8.12.2014 in whichthis Court has not expressed any dissatisfaction regarding the nature ofwork of the Investigation Division much less in respect of the work ofH

the answering respondent. No such allegation was ever made in theCourt. Thus, the allegations made in the petition are baseless.

30. With respect to allegations regarding stock guru it is contendedin the counter affidavit of respondent No.2 that stock guru and the personsinvolved who were running a Ponzi scheme was investigated by theDeputy Director of Income Tax (Investigation) under an AdditionalDirector of Investigation reporting to Director of Investigation(Investigation-II, Delhi) who in turn reported to the answering respondentas the then DGIT (Investigation) Delhi. A search conducted on 6.1.2011led to the seizure of Rs.34.69 crores in cash. Mr. Anil Agarwalcomplained that the cash belonged to various depositors and it shouldnot have been seized. Some depositors filed a separate case in a court inDelhi. The seized money was deposited in court as per the order thatwas passed. Certain allegations were made against the IO of stock gurunamely Yogender Mittal, DDIT (Investigation). Name of the answeringrespondent did not figure anywhere in the FIR filed by the CBI nor therewas any allegation of any wrong doing against him. No shortcomingwas found in his actions. The CVC, Department of Revenue and CBDThad also got this issue enquired and apparently dismissed the allegationsmade against respondent No.2 as baseless. In “Let us Share” annualpublication of CBDT many cases with which answering respondent wasassociated were reported year after year. During the relevant year alsotwo cases were reported.

31. With respect to allegations of M/s. Flora and Fauna HousingDevelopment Pvt. Ltd., it is contended in the counter affidavit filed byrespondent No.2 that a search was conducted by the CriminalInvestigation Division of the Income Tax Department on the PontyChadda Group on 1.2.2012. The said Division was being headed by SmtM. Sailoo, DGIT (I & CI) Delhi at that time. They prepared an AppraisalReport and sent it to the Assessing Officer in the Central Charge. Whilecompleting the assessment for the Assessment Year 2012-13 in March2014, the Assessing Officer found a suggestion in the Appraisal Reportthat an addition of an amount of Rs.234 crores be made as unaccountedsales for the period from 01.09.2011 to 22.09.2011 as not acceptable.After a close scrutiny of this Appraisal Report, the Assessing Officerfound that there is a discrepancy in treating this amount of Rs.234 croresas unaccounted sales in the said Appraisal Report. It was identified thatit was a mistake that has been committed by the accountant in posting ABC

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Acumulative sales of various depots in the month of September 2011,instead of actual sale in the tally account maintained at head office,which had prima facie resulted in the said discrepancy. As per procedure,the Assessing Officer and Additional Commissioner in the Central Chargewho were not convinced of the correctness of the suggestion of bringingthe sum of Rs.234 crores to tax as unaccounted sales consulted theBI&CI Division, who stated that the matter may be decided as per Lawafter taking into consideration the seized material, Appraisal Report, andSubmissions of the assessee. On a consideration of the facts, theAssessing Officer came to a conclusion that there is no case for anaddition and passed the Assessment Order under IT Act with the approvalCof the Additional Commissioner. In a meeting held on 28.03.2014, theDCIT (the Assessing Officer), the Additional Commissioner,Commissioner and the Chief Commissioner apprised the Member-investigation that they were of the view that no addition of Rs.234 croreswas warranted as there was no evidence to suggest, much less to prove that unaccounted sales to that extent took place in the span of 21 daysDfrom 1.9.2011 to 22.9.2011.

The answering respondent No.2 also agreed with the conclusionand signed the minutes of the meeting. There was no case for makingan addition. He had not taken any such decision. The decision was takenby the Assessing Officer and the Additional Commissioner in whom theEpower is vested. They had brought it to the notice of the Commissioner,the Chief Commissioner and even the then Member probably due to thehuge amount involved and to avoid complaints of this kind. Mr. AnilKumar Agarwal has no connection with the said case. It is not broughton record that the background note submitted jointly by the DCIT,FAdditional CIT, CIT and CCIT and the record of the discussion in themeeting which clearly mentioned that the answering respondent hadonly concurred with the prior decision of the officers concerned of notmaking the addition on that issue. The record of the discussion in themeeting had also been placed on record and was signed by all present.In this Court false averment has been made in the petition. The allegationsGwere probed by the competent authority and no irregularity whatsoeverwas found.

32. With respect to the allegations regarding the handling ofaccounts in the HSBC Bank it is pointed out in the counter affidavit byrespondent No.2 that information regarding certain bank accounts heldH

by persons of Indian origin in HSBC, Geneva was obtained by theGovernment (CBDT) from French Government relating to about 628persons around June 2011. The CBDT passed-on the said informationto the respective DGsIT (13 in numbers) situated across the country.About 148 names relating to Delhi were passed on to DGIT (investigation)Delhi, which post was held by answering respondent at that time.Answering respondent got 66 searches conducted relating to these cases(as against a total 140 searchers, in such cases across the country)(each case may relate to more than one name). Remaining cases wereinvestigated either through Surveys u/s 133 A and/or Open Enquiries u/s 131 of the IT Act etc. The best results were achieved in the Delhiregion. As per the procedure that is laid down, the Investigation Divisionprepared Appraisal Reports and sent them to the Assessing Officersconcerned for further action such as assessment of income, recovery oftax, levy of penalty, initiation of prosecution proceedings in appropriatecases, etc.

33. It is further contended that the answering respondent No.2was the only DGIT (investigation) who submitted proposals for theapproval/ consideration of the CBDT for action (prosecution under theIT Act, and action under the Banking Companies Regulation Act, etc.)against the concerned foreign bank, its Indian affiliates and the personsconcerned.

34. The answering respondent No.2 also held several videoconferences periodically, that is to say, on 15.11.2012, 01.05.2013,20.01.2014, 20.06.2014, etc. The answering respondent submitted thathe was also instrumental in issuing several instructions and guidancenotes for dealing with this category of cases which was a new andhitherto not-conceived kind of a work for the Investigating Officers andAssessing Officers. The answering respondent further submitted thathundreds of references were made through the Commissionersconcerned, through the Foreign Tax Authorities under the provisions ofDouble Tax Avoidance Agreements (DTAA)/Tax Information ExchangeTreaties as the information received through the French Governmentwas incomplete in most cases. Only when it became clear that therewas no possibility of getting further documents/information from the SwissTax Authorities due to certain limitations in the Tax Treaties, the AssessingOfficers could go ahead with making assessments and further actions,including prosecution.

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A35. Efforts made by the answering respondent No.2 that amethodology called “Consent Waiver Mechanism” was devised due towhich, with the consent of tax-payers, the copies of the Foreign BankAccounts could be obtained from the foreign bank directly without goingthrough the Swiss Tax authorities under the DTAA in about 80 cases,though they could not be obtained under DTAA. This is an innovativeBand successful action that has been evolved on account of the contributionof answering respondent.

36. The answering respondent No.2 further submitted that havingregard to the seriousness of the matter, he had devised a diligent procedurefor analyzing the database. He also actively collaborated with FrenchCTax Authorities and obtained information in respect of 575 cases whichwere hitherto not available to the Indian Authorities. This analysis thathe had adopted has resulted in the detection of these new accounts andthis method of analysis was new even to the French Authorities, whoinitially shared the information with Indian Authorities.D

37. The answering respondent No.2 submitted that the assessmentproceedings were conducted by Assessing Officers situated across thecountry and it involved making references to foreign jurisdictions, localinquiries which took considerable time and ultimately all the assessmentshave been completed by the Assessing Officers concerned within theEstatutory time allowed under the Income Tax Act. After that, the AssessingOfficers started initiating prosecution proceedings in appropriate cases.Prosecution proceedings are to be initiated by Assessing Officersconcerned across the country with necessary sanction from theCommissioners of Income Tax concerned (Sec. 279 of the Income TaxAct). The answering respondent further submitted that these are quasi-Fjudicial functions to be exercised by the empowered officers and theCBDT only provides necessary guidance and monitors the progress. Hesubmitted that he has exercised these functions diligently due to whichas on 31-03-2015, about 121 prosecutions were launched in this categoryof cases and some more were in process. He further submitted that heGhad further followed up the proposals earlier submitted by him as DGIT(Investigation) Delhi and certain actions were initiated, wherever it waspossible. Under these circumstances and the various efforts put in byhim, including evolving of innovative methods of analysis; it is incorrectand absolutely inappropriate to allege that he had not initiated prosecutionin these cases.H

38. This Court constituted the Special Investigation Team (SIT)headed by Hon’ble Mr. Justice M.B. Shah (Retd.) and Hon’ble Mr.Justice Arijit Pasayat (Retd.). In this context he only begged to submitand bring to the notice of this Court the following observations of SIT inits 3[rd] Report:

“Shri K.V. Chowdary Advisor to CBDT and former Chairman,CBDT carried out detailed investigation and visited Paris inDecember 2014. During the said visit, he met the French authoritiesdealing with HSBC foreign accounts matters and new lines/modesof investigation have been pursued. As a part of such investigation,fresh references under Double Taxation Avoidance Convention(DTAC) were made by the CBDT to France in 605 cases,requesting for additional information.

As a result of persistent follow-up, further information has beenreceived in 575 cases in the last week of February 2015. Basedupon new inputs (mostly in existing 624 cases), further investigationis in progress. It has been observed that some of the cases whichwere hitherto not actionable may become actionable as a resultof such further investigations.”

39. The answering respondent No.2 is assisting SIT even after hehad been appointed CVC. The Chairman of SIT on Black Money hasissued a direction to the following effect :

“Shri K.V. Choudary, Ex-Chairman, CBDT and presently CVCshall assist the SIT as and when required and in such matters asthe SIT would direct to provide necessary inputs.”

Proceedings dated 24.7.2015 has been placed on record.

40. With respect to the allegation of failure to make any headwayin 2G scam investigation, it was submitted that answering respondentNo.2 worked as DGIT (Investigation) Delhi from 1.11.2010 to August2012. During this period the case of Unitech Ltd., whose associate/sister concern was granted telecom licence and few connected cases ofother telecom companies being investigation in other charges wereinvestigated in the Delhi Directorate by DIT (Inv)-I who functionedunder him. All necessary investigations were carried out and findingswere communicated to the Assessing Officers who took appropriateactions. However other cases of telecom companies were within the A

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Ajurisdictions of DGsIT (Inv), Mumbai, Chennai, Bengaluru etc. for thepurpose of making presentations and meetings on behalf of the Income-Tax Department, DGIT (Investigation), Delhi was appointed as the Nodalauthority. They had coordinated with other DGsIT and other investigatingagencies including CBI, ED etc. and had also made several presentationson the action taken by the Income Tax Department before the JointBParliamentary Committee.41. This Court has never expressed dissatisfaction or inadequacyregarding the functioning.

42. With respect to the allegation regarding Radia Tapes whenCanswering respondent No.2 had joined as DGIT (Investigations) on1.11.2010, the surveillance of Ms. Nira Radia was over. Actionable issueswere identified and necessary action was taken either by the DelhiDirectorate or was communicated to other Directorates for further action.The information was duly shared with the assessing officers, and otherlaw enforcement authorities such as CBI, ED etc. The matter was beforeDthis Court. The representations were submitted from time to time. Noneof the authorities found any shortcomings or inaction on his part on thiscount. No such allegation was made before this Court against him bythe counsel appearing in 2G scam case.

43. In the counter affidavit filed by Mr. T.M. Bhasin, respondentENo.3, in the reply contends that the petition is based upon suppressionand false averments have been made. As such petition suffers fromsuppressio veri, suggestio falsi. Respondent No.3 has an excellentacademic record and vast experience and expertise in the field of banking.He is (i) an M.Sc. Gold Medalist, (ii) LLB, MBA Finance from DelhiFUniversity, (iii) Topper in the Delhi University in the flagship one-yearprogramme viz. ‘Criminology and Forensic Science’; and (iv) CAIIB.In addition to the above qualifications, he had a wide and varied experiencein Banking where he joined as a Probationary Officer in 1978 and incourse of time got due promotions and reached the level of GeneralManager in 2003. He has got about 8 years of experience as a WholeGTime Director in two Public Sector Banks, comprising of ExecutiveDirector (ED) from November 2007 to March 2010 in UBI and asChairman and Managing Director of the Indian Bank for the period2010-2015. It is pointed out that at the time of his present selection hewas the longest serving Senior-most Chairman & Managing Director inPublic Sector Banks. He had also headed the Indian Banks’ AssociationH

as a Chairman and was also Chairman of the Indian Institute of BankingPersonnel Selection and was also President of the Indian Institute ofBanking Finance (IIBF) since 2014. He had also experience in theInsurance Sector having worked for nearly five years as a Director onthe Board of United India Insurance Company. That during his 37 yearslong Banking career he has an impeccable record of integrity, sincerity,honesty, and dedication towards duty. Under his stewardship as CMDof Indian Bank, the Bank had won various National Awards like thefollowing:

• National Award for excellence in Lending to Micro Enterprisesfor FY 2012 on 4[th] April 2013 from Hon’ble President of India.

• National Award to Banks FY 2013 – First Prize for Excellencein lending to Micro Enterprises on 01.03.2014 from Hon’blePrime Minister of India.

• Indira Gandhi Rajbhasha Puraskar for 2012-2013 for South ZoneTOLIC from Hon’ble President of India.

• First price and Best Bank Award for extending credit to SHGson 24.02.2014 from Hon’ble Chief Minister of Tamil Naduconsecutively for five years.

44. It was further stated that initially he was given five yearstenure as Chairman & Managing Director of the Indian Bank from1.4.2010 to 31.3.2015. Being satisfied with the performance of the Bankduring the said period, his tenure was further extended by AppointmentCommittee of the Cabinet vide Government notification dated 27.3.2015from 1.4.2015 up to the date of his superannuation i.e. 31.5.2016. Ateach stage of new appointment/assignment above, all necessaryclearances had been obtained by DFS from the CVC, CBI, DoPT andother concerned departments and agencies. Respondent No.3 had appliedfor the post of Vigilance Commissioner pursuant to a notification dated13.10.2014.

45. With respect to the allegation of tampering with APAR of Mr.Malay Mukherjee, respondent No.3 received a letter from Ms. SumitaDawara, Director of Financial Services dated 4.11.2010 to send detailsof Annual Performance Appraisal Reports (APAR) of eligible GMs forselection as Executive Director by 15.11.2010 on an urgent basis. Therespondent states that the relevant APAR of Mr. Malay Mukherjee, the A

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Athen GM, Indian Bank for the period 2009-10, duly appraised by Mr.V.Ram Gopal (Executive Director) was received on November 15, 2010,and he, as reviewing authority, concurred with Average Rating Appraisaldone by Mr. V. Ram Gopal and it was sent to the DFS in compliancewith the letter dated 4.11.2010. The respondent states that Mr. MalayMukherjee claimed to have submitted his APAR for the year 2009-2010Bon 29.07.2010 and by which time Mr. Sundarrajan, the former CMDhad demitted office on 31.3.2010. As per Rule 5(7) of All India Services(Performance Appraisal Reports) Rules 2007, a retired official can reviewthe performance of the appraisee only within one month of the date ofhis retirement. As previous CMD had demitted office as early asC31.03.2010, the respondent who was the incumbent CMD had rightlyexercised his Reviewing Authority powers, which was the extant practicetoo. There is nothing on record of the Bank to substantiate the version ofMr. Malay Mukherjee, about the submission of the APAR for 2009-2010 on 29.07.2010. Even going by averments of Mr. Malay Mukherjee, the APAR was dated 07.07.2010, whereas Mr. Sundarrajan the earlierDCMD had demitted office over three months earlier. The VigilanceDepartment of the Indian Bank had during its internal inquiry found outthat the statement of Mr. Malay Mukherjee claiming to have sent theAPAR by courier and the proof produced thereof was unsubstantiated.

46. Nothing on record was found to substantiate the version ofEMr. Malay Mukherjee about the submission of APAR for the period2009-2010 on 29.7.2010. According to Mr. Mukherjee APAR was dated7.7.2010 whereas Mr. Sundarrajan had demitted the office more thanthree months before. The Vigilance Department of Indian Bank hadduring its internal inquiry found that the claim of Mr. Mukherjee thatFAPAR was sent by courier on 29.7.2010 was not substantiated. Saidcourier was sent from Zonal Office to Bhopal. The petitioners haverelied upon the notings of Shri R. Srikumar, Vigilance Commissioner,(VC(S)) whereas majority opinion was not for criminal investigation.Majority opined that the CVC did not ask the CBI to investigate thematter, that the CVC may ask for certain documents from the CVO/GDFS so as to ascertain as to the APAR and then to reach a finalconclusion. The CVC had agreed with the VC(G) in this regard. Thatthere was disagreement with VC(G) on two occasions i.e. on 15.10.2012and 30.11.2012 and it is the majority view that prevails.

47. Pursuant to the majority opinion steps of follow up were takenwhereafter the CVO and DFS have opined that there is no conclusiveevidence for initiating even departmental inquiry as that may not standthe scrutiny of law as is apparent from OMs. dated 27.8.2012 and24.12.2012.

48. Respondent No.3 had received OM dated 6.9.2013. For thefirst time, he was provided an opportunity to submit his version on thevarious allegations made by Mr. Malay Mukherjee. Answering respondentsubmitted the detailed 32 pages reply with 130 pages Annexures and itwas the normal practice to write APAR once the previous CMD hadretired. Thus, he had not committed any illegality or irregularity in doingso.

49. Considering the reply submitted by answering respondent No.3on 26.9.2013, the Department of Financial Services sent a Memorandumdated 10.3.2014 as R-III to CVC, clarifying the whole matter andappraisal of Mr. Mukherjee’s APAR and holding that the deponent hadnot violated any guideline and no disciplinary action was warranted.

50. A detailed version of Department of Financial Servicessummarised in the file notings of CVC dated 31.3.2014, 28.4.2014 and6.5.2014, thus, gave finality/closure to the whole issue, has been acceptedby the respondents in the counter affidavit. Same is extracted hereunder :

“The Extract of the official file notings dated 28.04.2014, on theobservations of the Advisor by Vigilance Commissioner, Shri Rajivand that of Central Vigilance Commissioner is given hereunder :

VC (R) noted “matter may be closed. It is more of anadministrative nature and not exactly a vigilance issue”

51. The CVC had also concurred with the VC and made thefollowing noting:

“I am in agreement with VC (R) that writing of APAR and itsreview is essentially an administrative matter. However, in thiscase, it had acquired vigilance overtones due to allegations oftampering of APAR. DFS, after the inquiry, has come to theconclusion that the evidence is not sufficient to prove the mostcrucial charge of tampering with the APAR of Shri MalayMukherjee. I am inclined to agree with DFS in this respect. DFShas however pointed out that Shri Bhasin wrote the APAR of A

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A2009-10, without having overseen the work of Mr. Malay Mukerjee.Shri Bhasin, in his defense, has cited past precedents. DFS hasalso conceded the need to have uniform guidelines in Banks toavoid such confusions and inconsistencies. However, DFS hasconsidered it unethical on the part of Shri Bhasin to have written‘Average’ at two places. For this Shri Bhasin may be cautionedBand the case closed as proposed by VC (R)”

52. No punishment was imposed. Only an observation was madeto be cautious. The same was advisory in nature and not a penalty. Thusafter receipt of reply matter stood concluded. The allegations of tamperingand forging were found baseless and closed. The factum of closure hasCbeen suppressed by the petitioner. The clearance of respondent No.3had been made by the CVC also and CVC has given the clearance inwhich it was opined that there was nothing adverse against the answeringrespondent.

53. Mr. Prashant Bhushan, learned counsel appearing for theDpetitioner submitted that the appointment of respondent Nos.2 and 3 asper mandate of this Court in Centre for PIL (supra), respondent Nos.2and 3 could not be termed as persons of impeccable integrity, consequentlythey could not be said to be fit to hold the office of CVC and VC in theabsence of Lokpal is required to discharge important functions and toEensure that functionaries versed with integrity in the interest of the nationconsidering the higher responsibilities. Respondent Nos. 2 and 3 couldnot be said to be suitable for the posts in question. The appointment ofMr. K.V. Chowdary, CVC, respondent No.2 has been assailed. It wasurged by learned counsel that respondent No.2 had connections withMr. Ranjit Sinha, former CBI Director. There was quid pro quo betweenFthem since respondent No.2 was given clean chit in stock guru scamand in turn income tax department in its appraisal report of Mr. Qureshigave clean chit to Mr. Ranjit Sinha. Since respondent No.2 was involvedin stock guru scam and gave favourable report to Mr. M.Qureshi thecredentials of respondent No.2 could not be said to be proper andGtrustworthy. Respondent No.2 was also involved in M/s. Flora and FaunaHousing Development Pvt. Ltd. and in waiving off Rs.234 crores andhad influenced the decision making by the assessing officer in illegalmanner. It was also urged that respondent No.2 did not actively investigatethe foreign accounts in HSBC Bank, Geneva. There was failure ofrespondent No.2 to make any headway into the scam investigation as noH

action was taken with respect to Radia Tapes. All these facts have notbeen examined by the Union of India before making appointment ofCVC as such same is liable to be quashed.

54. With respect to the appointment of VC, Mr. T.M.Bhasin learnedcounsel has urged that he was indicted in a detailed inquiry by the CVCin 2013 for forging and tampering with the appraisal report of Mr. MalayMukherjee, General Manager, Indian Bank. Even his criminal prosecutionwas suggested by one of the Vigilance Commissioners since he hadfabricated the APAR of Mr. Malay Mukherjee, the appointment ofrespondent No. 3 as Vigilance Commissioner was null and void sincethere was finding of moral turpitude by the CVC against Mr. T.M.Bhasinwhich made him unfit to hold the office of Vigilance Commissioner.

55. It was also urged by learned counsel that in order to ensure atransparent procedure for an appointment it is necessary the personswho have been empanelled should be disclosed to the public so that itcan send information in respect of such persons to the Government.

56. Mr. K.K. Venugopal, learned Attorney General for India,contended that there was absolutely nothing against Mr. K.V.Chowdary.He has produced the record which this Court had directed and contendedthat on the basis of representations filed by Mr. Anil Kumar Agrawaland others, were looked into, reports were called from concerneddepartments, viz., Department of Revenue/MoF/IB/CBI etc. Clearanceswere obtained and it was found that there was no merit in the aforesaidobjections which were raised in the representations and the Committeehas taken a unanimous decision, with respect to suitability vigilanceclearance has been obtained. It is not open within parameters of judicialreview as laid down in Centre for PIL (supra) to make interference inthe appointments made unanimously by the High Power Committee ondue consideration of entire material. It was pointed out that the dueprocedure has been adopted for appointments of CVC and VC and hasproduced the various files for perusal of this Court. He has taken theCourt in extensive details with respect to the procedure adopted withthe help of record. Various other files as to matter in question as prayedby the Common Cause Society have also been produced.

57. Per contra, Mr. C.S. Vaidyanathan learned senior counselcontended on behalf of respondent No.2 that the allegations made in thepetition are based upon the incorrect statement and on an imaginary A

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Abasis and are not supported by any material, they are based uponassumptions made by the petitioners with respect to the integrity ofrespondent No.2. There was absolutely nothing against respondent No.2.The requisite clearances had been obtained from various departmentsand there was nothing against in the entire service record of Mr. K.V.Chowdary. His record was excellent with rich experience and has beenBfound fit by the High Power Committee in an objective manner afterduly considering the various aforesaid objections which were raised inthe representations filed by Mr. Anil Kumar Agarwal. He had the personalaxe to grind against respondent No.2. As he was prosecuted as per theapproval granted by respondent No.2 and disciplinary proceedings hadCalso been initiated by the Institute of Chartered Accountants, on thatbasis respondent No.2 had deposed against him in a criminal case pendingin the court at Delhi. Thus, baseless and reckless allegations wererepeatedly made by him at every juncture whenever respondent No.2was selected for any high office. These allegations were never found tobe proved and were mischievously raised with the objective to malignDhim due to personal vengeance. The aspersions cast have been refutedand it was asserted that no case for interference in the judicial reviewwas made out.

58. Mr. P.S. Patwalia, learned senior counsel on behalf ofMr.T.M.Bhasin, VC, contended that firstly no representation was filedEagainst Mr.T.M.Bhasin by any of the incumbents still the High PoweredCommittee was apprised of the said aspect relating to APAR of Mr.Malay Mukherjee and it was found that the allegation of fabrication ofAPAR was not substantiated. The conclusion was reached that it wasnot a case even to hold a departmental inquiry and it was held and simplyFa caution was issued. It was also urged that there was no fabrication ofthe APAR of Mr.Malay Mukherjee and he is said to have sent an APARfor 2009-2010 which was signed by the retired CMD Mr. Sundarrajanon 7.7.2010. He claimed that it was dispatched by him on 29.7.2010.Said courier with the said number was dispatched to Bhopal and not to

the concerned office. No such APAR was received by the office. EvenGotherwise erstwhile CMD had demitted the office on 31.3.2010 and asper Rule 5(7) of the Rules of 2007, a retired official can review theperformance of the appraisee only within one month from the date of hisretirement. Since the CMD had demitted the office on 31.3.2010 thepower could not have been exercised by him on 7.7.2010. No such APARH

had been received. Such power was rightly exercised by respondentNo.3 to write APAR in the capacity of reviewing officer to make aremark in the APAR. For perjury, the petitioners be prosecuted. Furthercommunication dated 4.11.2010 was required to be sent. It was not acase of fabrication or forging the APAR at all as suggested by thepetitioners. When the various departments have not found anythingagainst answering respondent and after respondent No. 3 had filed arepresentation matter was dropped. It could not be said that there wasanything to blame the outstanding record and high integrity of respondentNo.3.

59. It need not be re-emphasized that the Central VigilanceCommission is one of the integrity institutions. It was set up in 1964.After the decision rendered by this Court in Vineet Narain (supra), the2003 Act has been enacted and its function is to improve the vigilanceadministration of the country and to have anti-corruption measures.Pursuant to recommendations made by the Reviewing Committee, thereport made by it in December 1997 statutory status was suggested.This Court in Vineet Narain (supra) had observed that the given statusas recommended by the independent Reviewing Committee, in the year1999 an Ordinance was issued which was replaced by the 2003 Act.Section 4 lays down constitution of the Committee. The Prime Ministeras Chairperson, the Home Minister as a member and Leader of Oppositionin the House of People is also a member of the said Committee. In casethere is no Leader of Opposition, the leader of opposition to include theleader of the single largest group in opposition and no appointment madeshall be invalid, may be by reason of any vacancy in the Committee. Theappointment has to be made by the President as provided in section 5.The oath has to be administered. Section 6 deals with removal ofCommissioner and Vigilance Commissioner, contains safeguards. On areference being made by the President on the ground of provedmisbehavior or incapacity to this Court. On inquiry, it was reported thatCVC or VC be removed on said grounds. The other exigencies withrespect to removal contained in sub-section (3) to section 6 on beingdeclared insolvent or convicted of an offence, engages during his termof office in any paid employment outside the duties of his office or in theopinion of President is unfit by reason of infirmity of mind or body, hasacquired such financial or other interest as is likely to affect his functioningas the CVC or VC.

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A60. Just to exercise superintendence over the functioning of theDelhi Special Police Establishment with respect to offences under theP.C. Act, 1988 or an offence with which a public servant specified insub-section (2) under the Cr.P.C. may be charged with at the trial, andmay issue directions to the CBI, review the progress of investigationsconducted by CBI, review the progress of applications pending with theBcompetent authority for sanction of prosecution under the P.C. Act,exercise superintendence over vigilance of various Ministries etc. It canenquire into an investigation to be made as the member of All IndiaServices etc. as provided in section 8. The Vigilance Commission is aninstitution. Thus, the institution’s competency is to be ensured by theCGovernment as well as its integrity. Consequently, the personal integrityof an individual also becomes relevant as it has correlation with theinstitution’s integrity.

IN RE: APPOINTMENT OF CVC :

IN RE: APPOINTMENT OF CVC :

61. In the backdrop of aforesaid first, we consider the case ofDMr.K.V.Chowdary appointed as CVC. The process of appointment thathas been followed reflects that the procedure followed was by issuingadvertisement in newspapers. Wide publicity was given, variousadvertisements throughout India were issued. 132 applications werereceived. The Committee headed by Cabinet Secretary shortlisted 12Enames of CVC and 10 names for V.C. However, details of all 131applicants which included work experience, ACR grading whereverapplicable, vigilance clearance, age criteria, experience in the matterrelating to vigilance, policy making and administration were placed beforethe Committee – HPC. The HPC in its meeting dated 23.5.2015 shortlistedsix candidates for the post of CVC and 2 candidates for the post ofFVigilance Commissioner and called for inputs on the representations.The second meeting of the Committee took place on 1.6.2015. The agendaplaced before the Committee contained all the details including vigilancedetails of shortlisted applicants. The details of Mr. K.V.Chowdary wereplaced in the file and the details of Mr. T.M.Bhasin were placed.

G62. There were three representations/complaints against Mr.K.V.Chowdary. The Prime Minister’s Office had asked for inputs onthe allegations so made as to ascertain the correctness of facts containedin the representations.

63. So far as Mr. T.M.Bhasin is concerned no such complaintwas received. However, during vigilance inquiry which was conductedby respondent No.1, mentioned as to the complaint with regard to Mr.Malay Mukherjee and said fact was mentioned under the heading ofvigilance clearance. It was mentioned that there was nothing adverseagainst Mr. Bhasin on that account. The Department of Financial Serviceshad while giving its report went into the entire allegations with regard toMr. Malay Mukherjee as against Mr. T.M.Bhasin and cleared him. TheCVC also has given clearance to Mr. T.M.Bhasin on 2.2.2015.

64. With respect to Mr. K.V.Chowdary complaints were placedbefore the Committee along with the facts and true position regardingthe allegations. Note that was placed before the Committee, mentionedall the allegations made in three complaints and imputation of the factualposition received with regard to the same from various agencies like IB,CBI, Department of Revenue, Ministry of Finance which was summonedby the PMO so as to place the same before the HPC. The Committeeconsidered all the allegations against all shortlisted candidates includingMr. K.V.Chowdary and Mr. T.M.Bhasin and unanimously decided toappoint them as Chief Vigilance Commissioner and VigilanceCommissioner respectively.

65. The Union of India has submitted following files for our perusal:

(A) Minutes of the meeting of the Selection Committee held on23.5.2015 and 1.6.2015; (B) Meeting notice and agenda for the first meeting of HPC heldon 23.5.2015;

(C) Meeting notice and agenda for the Selection Committeemeeting held on 1.6.2015; (D) Folder G containing IB reports; (E) Folder (I) vigilance clearance from the Department of FinancialServices and CVC; (F) Representations and letters submitted against the appointmentof respondent Nos.2 and 3; (G) Complaints and inputs on the same placed before theCommittee; A

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A(H) Annexure E containing the record of CVC, DoPT, DFS in thecase of respondent No.3 regarding his role in APAR of Mr. MalayMukherjee;

(I) Income tax record regarding assessment proceedings of M/s.Flora and Fauna Housing and Land Development Pvt. Ltd. whichBwas associated with Mr. Ponty Chadha; (J) CBI report in Stock Guru scam involving income tax officers.

(K) Record pertaining to income tax assessment of M/s. Floraand Fauna Housing and Land Development for the assessmentyear 2012-13 containing following folders/details of which areCfurnished in the tabular form :

Sl. No. RecordPageBrief Description of the record submitted1 Folder – 1 1-11 Copy of the Income tax return filed by M/S Flora and Fauna Housing & Land Development (P) Ltd Dfor Assessment Year 2012-13 2 Folder – 2 1-124 [Correspondence of the AO with his superiors as ]also Directorate of I&CI mainly on the alleged issue of Rs.234 crore [sales figures as entered in the tally seized accounts and the sales figures as per the Esales ledgers of the various depos]Background note for the meeting of the officers of 3 Folder – 3 1-39 the central charge, New Delhi with the Member(Investigation) on 28.3.2014 to apprise him of the decision taken by the A0 for not making an addition on the alleged issue of Rs. 234 crore. It Falso contains minutes of the said meeting.4 Folder – 4 1-786 [Notices issued by the AO to the assessee, replies ]filed by the assessee, Notices/Summons issued to other persons, statement of persons recorded during assessment proceedings, draft assessment order Gsubmitted by the AO to his Additional Commissioner for statutory approval, approval given by the Additional Commissioner, the Assessment Order passed by the AO, demand notice issued etc.

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edM/S Flora nt (P) Ltd

periors as e alleged ered in the as per the officers of with the pprise him making an 4 crore. It ee, replies issued to ded during ent order Additional approval oner, the , demand 5Folder – 51-43Correspondence of AO with officers of the C&AG regarding audit and special audit of the assessment of M/S Flora and Fauna Housing & Land Development (P) Ltd for Assessment Year 2012-13. 6 Folder – 6 1-5 Copies of assessment order and office note (original in Folder-4 above)7 Folder – 7 1-12 Explanatory brief of the records given by CBDT: Contained in the secret communication of CBDT to Department of Personnel & Training vide F.No.286/73/2015-IT (Inv.II) dated 13.9.2017

IN RE: APPOINTMENT OF RESPONDENT NO.2

66. Even before the appointment of respondent No.2 somerepresentations were filed not to appoint him as CVC. The main thrustof the arguments raised by the petitioners’ counsel was that theappointment violated the institutional integrity and respondent No.2 couldnot be said to be a person of impeccable integrity. For this various reasonshave been assigned without meaning to give clean-chit. We examinethem whether the prima facie case is made out by the petitioners tomake interference. We propose to discuss them in seriatim:

Respondent No.2 met Mr. Ranjit Sinha the then Director, CBIwho was directed by this Court vide order dated 21.11.2015 in C.A.No.1060 of 2010. This Court had directed Mr. Ranjit Sinha not to interferein investigation prosecutions carried out by CBI in 2G scam case and torecuse himself from 2G scam case. This Court had also observed againstMr. Sinha that the meetings with accused in coal scam were inappropriate.These allegations are against Mr. Ranjit Sinha. However, what issubmitted against respondent No.2 is that respondent No.2 had met Mr.Ranjit Sinha, CBI Director on 29.12.2013 and 20.4.2014 for 15 minuteson earlier occasions and 8 minutes on a later date. When the meetingswere held, respondent No.2 was probing the interception dealings ofHawala dealer Mr. Moin Qureshi. Mr. Ranjit Sinha, Director, CBI, wasinvestigating Stock Guru scam where senior income tax officers wereinvolved in which Mr. Sinha was investigating the role of respondentNo.2. Certain senior income tax officers had taken a bribe to favour twoscamsters of Stock Guru and had misappropriated about Rs.40 crores.

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ASaid officers were working under respondent No.2. Thus, it was notappropriate for respondent No.2 to meet Mr. Ranjit Sinha. Income taxdepartment gave a clean chit to Mr. Ranjit Sinha in respect of Mr. MoinQureshi and CBI gave a clean chit to respondent No.2. Thus, respondentNo.2 and Mr. Ranjit Sinha helped each other.

B67. In the counter affidavit filed by respondent No.2 it has beenstated that since he was heading the Investigation Division of CBDTand in that capacity, he had met the heads of other investigating agencieson several occasions including the Joint Director, CBI, Mr.Ranjit Sinha.Answering respondent met the Director on a couple of occasions at theresidence and in the office of several officers. At no point of time, theCcases of Mr. Moin Qureshi or Stock Guru were ever discussed with thethen Director of CBI Mr. Ranjit Sinha.

68. With respect to the arguments this Court on 14.5.2015 hasobserved as under :

“36. As mentioned above, it is not necessary for us to examineDwhether the investigation into the case of the Dardas was in anymanner influenced by Mr. Sinha at any point of time. What is ofimportance is that as justice must not only be done but it must alsoappear to have been done, similarly, investigations must not onlybe fair but must appear to have been conducted in a fair manner.EThe fact that Mr. Sinha met some of the accused persons withoutthe investigating officer or the investigating team being presentdisturbs us with regard to the fairness of the investigations. Thisis all the more so if we keep in mind the fact that in the 2G scaminvestigations, this Court had concluded in its order dated 20[th]November, 20141 that Mr. Ranjit Sinha should not interfere in theFinvestigation and prosecution of the case relating to the 2Gspectrum allocation and to rescue himself from the case. That aSIT was not ordered in the 2G spectrum case is not relevant. Aview was taken that Mr. Sinha should be directed to not interferein the investigations in that case and that, coupled with his meetingGaccused persons in the Coal Block Allocation case without theinvestigating officer being present, is enough to persuade us thatsome further inquiry is necessary to ensure that the investigationshave been fair in the coal block allocation cases where Mr. Sinhahas had one or more meetings with one or more accused persons......

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46. With regard to IA No.13 of 2014, since we have held that itwas completely inappropriate for Mr. Ranjit Sinha to have metpersons accused in the Coal Block Allocation case without theinvestigating officer being present or without the investigating teambeing present, it is necessary to look into the question whetherany one or more such meetings of Mr. Sinha with accused personswithout the investigating officer have had any impact on theinvestigations and subsequent charge sheets or closure reportsfiled by the CBI. We require assistance in this matter, particularlyfor determining the methodology for conducting such an inquiry.For rendering assistance to us in this regard, notice be issued tothe Central Vigilance Commission returnable on 6[th] July 2015.”

69. No observations were made by this Court against respondentNo.2 Mr. K.V. Chowdary and there was no allegation made against Mr.K.V. Chowdary in this Court by any person including the same counselfor the petitioner. The petitioners have come up with the case that therewas meeting on two occasions, whereas respondent No.2 has disclosedthat in the office there were several meetings. It was usual to meet forHeads of various investigating agencies in connection with official work.There being no other material to substantiate aforesaid aspersions it issimpliciter an assumption that the meetings took place with an evil design.The highest officers might have discussed the other issues. There is noother supporting material to substantiate the aforesaid aspersions. Howthe help was extended, in what manner and in Stock Guru scam therewas no allegation against respondent No.2 in any manner whatsoever.Thus, it is far-fetched to urge that the aforesaid meetings were to extendhelp to each other.

70. With respect to Stock Guru, the investigation was made notby respondent No.2 but by Deputy Director of Income-tax (Investigation)and under Additional Director of Investigation, reporting to Director ofInvestigation, Investigation-II, Delhi, who in turn reported to therespondent, the then Additional D.G. (IG) Investigation, Delhi. Suchconduct on 6.2.2012 led to a seizure of Rs.34.96 crores in cash. Initially,there was a complaint by Mr. Anil Kumar Agrawal who had nothing todo with this case that the cash belonged to various depositors and itshould not have been seized. On a case filed the amount was depositedin court as per the order passed by the court. Appraisal report wasprepared by the I.O. and sent to assessing officer who initiated AB

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Aassessment proceedings. However, on 3.6.2013 the CBI started aninvestigation into the conduct of the then I.O. of Stock Guru, that is Mr.Yogender Mittal, who was DIG – Investigation. The name of respondentNo.2 did not figure in the First Information Report filed by the CBI. Nowrongdoing, no shortcoming was found by any authority in the action ofrespondent No.2 when 13 allegations were made by Mr. Anil KumarBAgarwal against respondent No.2. The CVC, Department of Revenueand Department of CBDT got the issues enquired and allegations werefound to be baseless.

71. With respect to the allegations made by Mr. Anil KumarAgrawal, it was clear that since he was criminally prosecuted underCsection 182 IPC and disciplinary proceedings, had been initiated againsthim by the Institute of Chartered Accountants of India at the instance ofrespondent No.2 and respondent No.2 had deposed against him in thecriminal case in the court and once upon time Mr. Anil Kumar Agrawalhad appreciated the gesture of respondent No.2 it was clearly anDafterthought for him to level the allegations which were without anysupporting material and had never been substantiated by any material.In the newspaper report dated 15.4.2014 name of respondent No.2 wasnot mentioned, no supervisory failure was attributed. Respondent No.2was not subjected to an investigation by the CBI. Thus, the aforesaidcast of aspersions upon respondent No.2 by the petitioners has no basis.ESame is not substantiated by any material and is simply stated to berejected.

72. File No.245/32/2015-AVD.II has been produced which containsthe answers of CBI with respect to various queries made which wereon the basis of the complaint. It has been mentioned that the CBI hasFinvestigated the relevant case during the tenure of Mr. Ranjit Sinha inthe Stock Guru scam on the basis of a complaint received from E.O.W.,Delhi Police, relating to demand and acceptance of illegal gratificationfrom Mr. Ulhas Prabhakar of M/s. Stock Guru by Mr. Yogender Mittal(IRS-2006), ADIT to help him in the income-tax case. The investigationGdid not reveal the involvement of Mr. K.V. Chowdary. It was also notedthat nothing came to the notice of CBI against Mr. K.V. Chowdary.

73. Another aspersion on the integrity cast is relating to a searchconducted by criminal investigation division of income-tax on PontyChadha group M/s. Flora and Fauna Housing Development Pvt. Ltd.Hon 1.2.2012. It was urged by learned counsel for the petitioners that respondent No.2 abused his position to under-assess the income of thesaid company by an amount of Rs.234 crores. He issued a direction tothe assessing officer to dispose of the case in a particular manner whichcould not have been done in view of section 119 of the Income Tax Actand judgment of this Court. The CBDT had no jurisdiction to instruct theassessing officer to dispose of a case in a particular manner.

74. On behalf of respondent No.2, it was contended that searchwas conducted by criminal investigation division headed by Smt. M.Saillo, DGIT, Delhi. It was not conducted by respondent No.2. Theyprepared an appraisal report and sent it to the assessing officer in theCentral charge. While completing the assessment for the relevantassessment year. The assessing officer on a suggestion in the appraisalreport that addition of an amount of Rs.234 crores be made as theaccounted sale from 1.9.2011 to 22.9.2011 as not acceptable sinceappraisal report was prepared by a team of aforesaid DGsIT. Sincediscrepancy was found in the appraisal report it was identified that itwas a mistake committed by the accountant in posting cumulative salesof various depots in the month of September 2011 in actual sales.

75. As the matter was to be decided as per law the assessingofficer came to the conclusion that there was no case for addition andpassed an order under the Income Tax Act with the approval of theAdditional Commissioner. In a meeting held on 22.3.2014, DCIT(Assessing Officer), the Additional Commissioner and ChiefCommissioner apprised respondent No.2, Member (Investigation) thatthey were of the view that no addition of Rs.234 crores was warrantedas there was no evidence to suggest much less to prove that an accountedsale to that extent took place in the span of 21 days from 1.9.2011 to22.9.2011. Respondent No.2 agreed with the conclusion of the aforesaidofficers. Respondent No.2 had not taken any decision. The decisionwas taken by the Assessing Officer and the Additional Commissioner inwhom the power vested. They thought it fit to bring it to the notice of theCommissioner, the Chief Commissioner and even the member involvedand to avoid/protect themselves from the mischievous complaints andsince the appraisal report was sent by DGIT. Mr. Anil Agarwal hadcirculated this note for the purpose of making false allegations againstrespondent No.2 and the note that was submitted by DCIT, AdditionalCIT, CIT and CCIT and the record of the discussion in the meeting hadbeen suppressed which indicated that respondent No.2 had concurred A

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Awith the aforesaid officials. The Record of Discussion in Minutes of themeeting with Member (Inv) on 28.3.2014 by officers of CCIT, CentralRegion, New Delhi, contained the following :

“4. The Hon’ble Member considered the material placed alongwith background note and printout of accounts found in seizedBmaterial and agreed with the view taken by field officers. Heagreed with the decision of not making addition on the issuementioned in Appraisal Report.

5. The Hon’ble Member also permitted that the discussion anddeliberations in the meeting may be recorded for reference purpose.CHence this Record of discussion in the meeting is prepared whichis signed by all present.”

76. The background note R2/20 and the detailed minutes of themeeting R2/21 have been placed on record. Besides we have seen therecord pertaining to income-tax assessment of M/s. Flora and FaunaDHousing and Land Development Pvt. Ltd. contained in 7 folders. Folder2 contains the correspondence of the officer with the superiors alsoDirectorate of I & CI, mainly on the alleged issue of Rs.234 crores.Folder 3 contains background note for the meeting of the officers on28.3.2014 and to apprise him of the decision taken by Assessing Officerfor not making the addition of alleged issue of Rs.234 crores. Folder 4Econtains notices issued by the Assessing Officer to the assessee, repliesetc. Approved assessment order submitted by A.O. to AdditionalCommissioner for his approval. Approval was given by the AdditionalCommissioner. Copies of the assessment orders and explanatory briefsof record given by CBDT. In Folder 7 the aforesaid stand is fullyFsubstantiated by the document that has been placed on record.

77. It is apparent that the assessing officer has taken a decisionfor not making addition and he wanted confirmation and the senior officersconsidered the matter in detail and then background note was preparedand record of discussion has been placed on record and that was agreedGto by respondent No.2. He has not issued a direction as suggested onbehalf of the petitioners rather approval was sought by the assessingofficer as the stake was high and appraisal report was prepared by theearlier DGIT level and she had considered it appropriate to seek theapproval so as to allay the apprehension of compliance in future. Thusthe facts make it clear that no impropriety has been committed by H

respondent No.2 in the aforesaid factual background and the backgroundon record and he has not directed the assessing officer to proceed in aparticular manner but rather various higher authorities had agreed withthe assessing officer and thereafter had put up the matter for discussionwith the respondent who had also agreed with them. In the facts of thecase, we find that allegation raised with respect to favour being metedout to M/s. Flora and Fauna Housing & Land Development (P) Ltd. atthe instance of respondent No.2 has been considered by HSBC and notat all substantiated from the material on record. As a matter of fact, fullfacts have not been placed on record either by Mr. Anil Agrawal orotherwise to make the position clear. It is apparent that Mr. Anil Agrawalwas making reckless allegations and was guilty of suppresio veri andsuggestio falsi. It is apparent that no direction had been issued byrespondent No.2 for not making the addition. The said allegation levelledby Mr. Anil Agrawal had been looked into by the concerned authoritiesand no irregularity whatsoever was found.

78. The next aspersion cast upon respondent No.2 is with respectto the failure of respondent No.2 to take appropriate action against theforeign bank account holders in HSBC Bank, Geneva for almost 3 years.It was urged that no prompt action was taken by respondent No.2. Sincethe formation of SIT the income tax department had not filed even asingle prosecution against HSBC account holders. It was contended bylearned counsel on behalf of respondent No.2 that the informationregarding bank accounts held by the persons of Indian origin in HSBC,Geneva was obtained by the Government (CBDT) from FrenchGovernment relating to approximately 628 persons around June 2011.Out of them, 148 names relating to Delhi were passed on to DGIT,Investigation, Delhi, the post held by respondent No.2. 66 searches wereconducted in Delhi under respondent No.2 whereas total 140 searcheswere undertaken across the country. The best results were achieved bythe Delhi Region. The Investigation Division prepared appraisal reportsand sent them to their assessing officers for further action such asassessment of income, recovery of tax, levy of penalty, initiation ofprosecution proceedings in appropriate cases. It was also pointed outthat respondent No.2 was the only DGIT (Investigation) who submittedthe proposal for the prosecution against the concerned foreign banksand its Indian affiliates, and persons concerned. It was also contendedthat yet respondent No.2 had closely monitored the investigation and AB

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Afunctions of other ITOs., followed up the cases by holding weeklymeetings, guidance, suggestions, interaction. Video conferencing werealso held. The information received from the French Government wasincomplete in most of the cases. When it became clear that there wasno possibility of getting further information the assessing officer couldgo ahead with making assessment including the prosecution. ConsentBwaiver mechanism was devised by the respondent which was aninnovative action. He had obtained information in respect of 575 caseswhich were hitherto not available to Indian authorities. The judicialfunctions were to be exercised by the entire officers and the CBDTonly provides the necessary guidance and monitors the progress. AboutC121 prosecutions were launched by 31.3.2015 and some more were inprogress when the answering respondent left. The SIT had made thefollowing observations with respect to the action taken by respondentNo.2:

“This court through the Special Investigation Team (SIT) headedDby Hon’ble Justice Shri M.B. Shah (Retd.) and Hon’ble JusticeShri Arijit Prasayat (Retd.). In this context, I only beg to submitand bring to the notice of this Honourable Court the followingobservations of the Hon’ble SIT in its 3[rd] Report :

“Shri K.V. Choudary Advisor to CBDT and Former Chairman,ECBDT carried out detailed investigation and visited Paris inDecember 2014. During the said visit, he met the Frenchauthorities dealing with HSBC foreign accounts matters andnew lines/modes of investigation have been pursued. As a partof such investigation, fresh references under Double TaxationAvoidance Convention (DTAC) were made by bthe CBDT toFFrance in 605 cases, requesting for additional information.

As a result of persistent follow-up, further information hasbeen received in 575 cases in the last week of February 2015.Based upon new inputs (mostly in existing 624 cases), furtherinvestigation is in progress. It has been observed that some ofGthe cases which were hitherto not actionable may becomeactionable as a result of such further investigations.”

79. It was also pointed out that vide letter dated 24.7.2015 R-2/22, he was requested to assist the SIT even after taking charge of thepost of CVC.H

80. Considering the aforesaid submissions raised on behalf of thepetitioner that during the tenure of Mr. K.V.Chowdary nothing wassubstantially done with respect to HSBC Bank is not at all substantiated.Rather his functioning has been appreciated by the SIT as mentionedabove and his assistance has been sought even by the Chief VigilanceCommissioner.

81. Next submission raised by learned counsel appearing for thepetitioner is with respect to the failure to make any headway, as hefailed to take action in the income-tax cases, in the 2G scam, unlike theCBI or Enforcement Directorate filed several charge-sheets. Theaverment in this regard in the petition is in the passing form and is vague.Apart from that, no specific instance has been given in which case therewas a failure on the part of respondent No.2. That apart respondentNo.2 had made it clear that during the tenure from 1.11.2010 to August2012 he had taken up the case of Unitech Ltd. whose associates andtheir sister concern had been granted licences and few other cases oftelecom company were investigated and few connected cases of telecomcompanies were also under investigation for other charges. All necessaryinvestigation was carried out and aforesaid findings were communicatedin due time to the Assessing Officer who took appropriate action. Casesof other telecom companies under the jurisdiction of DGIT, Bombay,Chennai, Bengaluru etc. Respondent No.2 as a nodal agency coordinatedand made several representations as to the action taken by the income-tax department before a Joint Parliamentary Committee. It could not bepointed out in which particular matter respondent No.2 was found lacking.Thus the submission raised on behalf of the petitioners is too tenuous tobe accepted. It was never pointed out to this Court that there was laxityon the part of respondent No.2 when the aforesaid matter C.A. No.10660/2010 was listed in this Court.

82. The last aspersion cast is with respect to Radia Tapes, theinaction of respondent No.2 of not taking action against the concernedincumbents. Details of action which were required and could have beentaken have not been given in the petition thus no specific averment hasbeen made in this regard by the petitioners. When we consider the replyit is apparent that respondent No.2 was DGIT Investigation and he joinedon 1.11.2010 by which time surveillance of Ms. Nira Radia was overand some intercepts relating to such surveillance were in public domaindue to leakage probably in May-June, 2010. When he had taken over as ABC

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ADGIT (Investigation) in November 2010 actionable issues were identifiedand necessary action was taken either by the Delhi Directorate or wascommunicated to the Directorates for further action. The informationwas duly shared with the Assessing Officers and other law enforcingagencies such as CBI, ED etc. The matter was before this Court inPublic Interest Litigation (PIL). None of the authorities ever found anyBshortcoming or inaction on the part of respondent No.2 on this count. Itwas also not urged before the Court by aforesaid PIL of 2010 wheneverit was listed.

83. Apart from that, it has also been pointed out by respondentNo.2 that in the petition with respect to APAR of respondent No.2 falseCaverments have been made, that adverse remarks were made by threesenior officers of CBDT. The allegation has been termed to be baselessand unfounded and misleading. In the 36 years of service, not even asingle remark has been made in the APAR. All the remarks had beenbased on record as in the form of compendium R-2/1. There is no adverseDremark in them. Thus the petition suffers from wrong averments also.Thus, it is apparent that against respondent No.2 unsubstantiatedallegations have been made.

84. This Court in Centre for PIL (supra) held while examiningthe appointment of Mr. P.J. Thomas. The CVC had observed with respectEto the parameters of judicial review in such matters of appointment thus:

“59. It was held by this Court in R.K. Jain case (1993) 4 SCC119 that judicial review is concerned with whether the incumbentpossessed requisite qualification for appointment and the mannerin which the appointment came to be made or the procedureFadopted was fair, just and reasonable. When a candidate wasfound qualified and eligible and is accordingly appointed by theexecutive to hold an office as a Member or Vice President orPresident of a Tribunal, in judicial review the Court cannot sitover the choice of the selection. It is for the executive to selectthe personnel as per law or procedure. Shri Harish Chandra wasGthe Senior Vice President at the relevant time. The question ofcomparative merit which was the key contention of the Petitionercould not be gone into in a PIL; that the writ petition was not awrit of quo warranto and in the circumstances, the writ petitioncame to be dismissed.

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60. It was held in R.K. Jain case (supra) that even assuming forthe sake of arguments that the allegations made by the Petitionerwere factually accurate, still, this Court cannot sit in judgmentover the choice of the person made by the Central Governmentfor appointment as a President of CEGAT so long as the personchosen possesses the prescribed qualification and is otherwiseeligible for appointment. It was held that this Court cannot interferewith the appointment of Shri Harish Chandra as the President ofCEGAT on the ground that his track record was poor or becauseof adverse reports on which account his appointment as a HighCourt Judge had not materialized.

61. In Hari Bansh Lal v. Sahodar Prasad Mahto (2010) 9 SCC655 the appointment of Shri Hari Bansh Lal as Chairman,Jharkhand State Electricity Board stood challenged on the groundthat the board had been constituted in an arbitrary manner; thatShri Hari Bansh Lal was a person of doubtful integrity; that hewas appointed as a Chairman without following the rules andprocedure and in the circumstances the appointment stoodchallenged. On the question of maintainability, the Division Benchof this Court held that a writ of quo warranto lies only when theappointment is contrary to a statutory provision.

62. It was further held in Hari Bansh Lal case that “suitability”of a candidate for appointment to a post is to be judged by theappointing authority and not by the court unless the appointmentis contrary to the statutory rules/provisions. It is important to notethat this Court went into the merits of the case and came to theconclusion that there was no adequate material to doubt theintegrity of Shri Hari Bansh Lal who was appointed as theChairperson of Jharkhand State Electricity Board. This Courtfurther observed that in the writ petition there was no avermentsaying that the appointment was contrary to statutory provisions.

63. As stated above, we need to keep in mind the differencebetween judicial review and merit review. As stated above, in thiscase, the judicial determination is confined to the integrity of thedecision-making process undertaken by the HPC in terms of theproviso to Section 4(1) of the 2003 Act. If one carefully examinesthe judgment of this Court in Ashok Kumar Yadav’s case (supra)the facts indicate that the High Court had sat in appeal over the AB

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personal integrity of the Chairman and Members of the HaryanaPublic Service Commission in support of the collateral attack onthe selections made by the State Public Service Commission. Inthat case, the High Court had failed to keep in mind the differencebetween judicial and merit review. Further, this Court found thatthe appointments of the Chairperson and Members of HaryanaPublic Service Commission was in accordance with the provisionsof the Constitution. In that case, there was no issue as to thelegality of the decision-making process. On the contrary the lastsentence of para 9 supports our above reasoning when it saysthat it is always open to the Court to set aside the decision(selection) of the Haryana Public Service Commission if suchdecision is vitiated by the influence of extraneousconsiderations or if such selection is made in breach of the statuteor the rules.

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64. Even in R.K. Jain’s case (supra), this Court observed videDpara 73 that judicial review is concerned with whether theincumbent possessed qualifications for the appointment and themanner in which the appointment came to be made or whetherprocedure adopted was fair, just and reasonable. We reiteratethat Government is not accountable to the courts for the choicemade but Government is accountable to the courts in respect ofEthe lawfulness/legality of its decisions when impugned under thejudicial review jurisdiction. We do not wish to multiply theauthorities on this point.”

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85. That judicial determination is confined to the integrity of thedecision making process by the HPC. That the difference between judicialFand merit review, the legality of decision-making process can also belooked into. If the decision is influenced by extraneous considerations orselection is made in breach of the statute or rules, it can be set aside.The Government is not accountable to the courts for the choice madebut the Government is accountable to the courts in respect of theGlawfulness/legality of its decisions.

86. In the case of Mr. P.J.Thomas, CVC, it was a binding criminalproceeding under the P.C. Act and between the period of 2001 and 2004the DoPT had recommended the disciplinary proceeding against Mr.P.J.Thomas in respect of Palmolein case. The pendency of the caseHbefore the Special Judge under the P.C. act was not taken into consideration as well as the observations made by this Court inK.Karunakaran v. State of Kerala & Anr. (2000) 3 SCC 761 in whichan FIR against Mr. Karunakaran and others including that of Mr. Thomaswas held not to be the result of mala fides or actuated by extraneousconsiderations. This Court observed that the menace of corruption couldnot be permitted to be hidden under the carpet of legal technicalities andthe probe conducted has to be determined in accordance with law. Inthe aforesaid background, the recommendation made by the HPC washeld to be non-est in law.

87. Three representations/complaints were received against Mr.K.V.Chowdary. The PMO had asked for details of the allegations so asto ascertain the facts contained in the representations filed againstMr.Chowdary. Complaints of Mr.Chowdary were placed before theCommittee. Factual inputs on opinion were received with respect to thevarious aspects in representation from various agencies like CBI,Information Bureau, Department of Revenue, Ministry of Finance andwere placed before the HPC which considered all the allegations againstall shortlisted candidates. No complaint was received against Mr.T.M.Bhasin. Requisite clearances were given by the IB with respect toMr. K.V.Chowdary and Mr. T.M.Bhasin. With respect to the allegations,separate inputs were obtained and placed before the Committee. Therewas nothing adverse found.

On following issues the comments were called :

POINT NO.(I)

88. Mr. Chowdary’s name figured in the list of visitors who visitedhis official residence. The inputs on the aforesaid aspects were calledfrom the IB and CBI. No adverse comment was made. Apart from that,it was pointed out that the matter was sub judice in this Court regardingMr. Ranjit Sinha. However as already discussed, no insinuation could becast upon Mr. Chowdary due to aforesaid visits.

POINT NO. (II)

89. With respect to Stock Guru scam, the CBI reported thatinvestigation did not reveal the involvement of Mr. Chowdary.

POINT NO. (III)

90. With regard to issue No.(iii), investigation of hawala dealerMr. Moin Qureshi, the comments of Department of Revenue, Ministry A

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Aof Finance were obtained as well as inputs from IB and CBI. The IBhas given input that Mr. Moin Qureshi’s link with Mr. Chowdary couldnot be confirmed. The Department of Revenue, Ministry of Financeopined that the allegations made against Mr. Chowdary were foundabsolutely misplaced. The petition of Mr. Qureshi filed before theSettlement Commission was opposed by the Income Tax Department.BAs a result, the same was dismissed. Even before completion of theassessment, the prosecution under section 277 of IT Act and sections181, 177, 193, 196, 120B read with section 23 were launched againstMr. Qureshi.

POINT NO. (IV)C

91. With respect to Radia tapes, the Department of Revenue,Ministry of Finance opined that the opinion of the authorities has foundno fault with Mr. Chowdary. Allegations against him were factuallyincorrect and baseless. IB has opined that the allegations could not beestablished in the course of the discreet inquiry. The CBI also foundDnothing adverse against Mr. Chowdary in 2G scam cases or Radia tapesconsequent upon the order dated 21.2.2013 of this Court.

POINT NO.(V)

92. The allegation that the In-charge of the 2G scam investigationEMr. Chowdary failed to make any headway in the case, it was opined bythe Department of Revenue, Ministry of Finance that none of theauthorities i.e. Supreme Court, Central Vigilance Commission, JointParliamentary Committee, Public Accounts Committee before whomthe DGIT presented periodical reports, found any shortcoming ordeficiencies. Mr. Chowdary, who was working as DGIT (Inv.), tookFnecessary steps to have 2G cases falling under his jurisdiction investigatedexpeditiously and properly. The charges levelled in the complaint werefound baseless and incorrect. IB input was that black money cases cameto a fast track after the constitution of SIT. The CBI did not reportanything against Mr. Chowdary.

GPOINT NO. (VI)

93. As to the allegation of HSBC account holders investigation, itwas pointed out that Mr. Chowdary had monitored investigation in 445cases of HSBC foreign accounts and the best results were achieved inDelhi cases as compared to other Directorates. Mr. Chowdary pointed H

out illegal banking activities in HSBC, Geneva, and proposed prosecutionof HSBC Geneva. He closely monitored and followed up these cases.The allegation that no progress was made was found wrong. When SITwas formed in May-June, 2014 by that time investigation in most of thecases was already at the advanced stage. IB had given the input in thisregard that though much progress was not made earlier but after theconstitution of SIT, it was on fast track.

POINT NO. (VII)

94. With respect to adverse remarks in the performance appraisalreports by three senior officers of CBDT, the Department of Revenuehas forwarded a summary of annual CRs. from November 1978 toFebruary 2014 which was placed on record and that nothing adversewas found. IB also made the input that the allegation could not becorroborated in the course of discreet inquiries.

POINT NO. (VIII)

95. Mr. Chowdary wrongfully reduced the undeclared wealth ofM/s. Flora and Fauna Housing Development Pvt. Ltd., a company ofMr. Ponty Chadha by over Rs.200 crores. The allegations were foundto be absolutely baseless by the Department of Revenue, Ministry ofFinance. IB had also placed its inputs regarding the allegation and adoptionof the procedure. It was, however, opined that he enjoyed good personaland professional image. Nothing adverse against his character or integrityhas come to notice. The allegation about M/s. Flora and Fauna HousingDevelopment Pvt. Ltd., was mentioned but no adverse comment wasmade.

POINT NO. (IX)

96. As per the complaint received from Anil Kumar Agrawal offorming a nexus between the income tax officers and trying to concealthe undisclosed income of relative of a Minister, Department of Revenueopined that it was a motivated complaint and the complainant did notsubstantiate it despite three reminders hence it was closed.

POINT NO.X

97. As to the complaint by Anil Kumar Agrawal regardingcorruption charges in connection with income tax raids on M/s. Raj MahalJewellers and protection to Mr. Gaurav Dudeja, DDIT (Inv.), the complaintwas closed and it was not found substantiated.

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APOINT NO.XI

98. Regarding complaint by Mr. H.R.V. Rao forwarded by one ofthe Members of Parliament against Mr. Chowdary, parked crores inamassing properties in his families/relatives names, the Department ofRevenue, Ministry of Finance opined that several verification letters wereBsent to the complainant and concerned Member of Parliament noresponse was received from them. Thus, the complaint was ultimatelyclosed as it was not substantiated.

POINT NO.XII

99. The complaint was received from CVC with respect toCinterception of Rs.12.30 crores during U.P. elections and the differencesbetween Member (Investigation) and Member (L&C). The Departmentof Revenue, Ministry of Finance opined that the allegations were examinedthoroughly. The allegations made were baseless. There was no merit orsubstance in the complaint. The matter was referred to CVC for closureDwith the approval of Finance Minister. CVC had advised closure of thecomplaint on 14.7.2014.

POINT NO. XIII

100. As to the complaint from Advocate, R.K. Bansal to CVCvide office memorandum dated 7.10.2013 inter alia referring to StockEGuru scam and senior officers of ITO, Investigation Wing, regardingmisappropriation of Rs.42-44 crores and that Mr. Chowdary did not sharethe information with the investigating agencies.

101. The comments by Department of Revenue Ministry ofFinance disclosed that the CBI had lodged the FIR in the matter, theFname of Mr. Chowdary did not appear in the FIR nor any communicationreceived from the CBI. The findings were referred to the CVC with therecommendation to close the complaint against Mr. Chowdary with theapproval of Finance Minister. CVC advised closure of the complaint. IBalso opined there was no formal investigation against Mr. Chowdary.

102. In reference to complaint about Mr. Anil Kumar Agrawalregarding administrative misuse and involving income tax raids conductedat M/s. Iryan Coal during April 2012, the Department of Revenue pointedout that there was no infirmity in the search and seizure operations.

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103. The allegation of nexus with the office of Investigation Wingwas found baseless. The matter was referred to CVC. CVC had advisedclosure of the complaint.

104. Thus, each and every aspect and information had been placedbefore the High Power Committee when the decision was taken. Thus,the integrity of the decision-making process has not impinged in thiscase in any manner whatsoever. Neither the decision taken to appointrespondent No.2 as CVC can be said to be suffering from any illegality.The decision cannot be said to be influenced by extraneous considerationsand the choice made of Mr. Chowdary cannot be said to be such whichis amenable for interference by the court in judicial review.

IN RE: APPOINTMENT OF RESPONDENT NO.3 :

105. With respect to the appointment of respondent No.3, Mr.T.M.Bhasin as Vigilance Commissioner, learned counsel appearing forthe petitioner has urged that since his criminal prosecution was ordered,ultimately it was not fructified. However, on the administrative side, hewas severely indicted for fabricating/forging the APAR of Mr. MalayMukherjee, General Manager and was cautioned. Thus, in view of theorder passed in the serious background, it could not be said that personwho was accused of fabricating/forging APAR was a person ofimpeccable integrity fit to hold the office of Vigilance Commissioner ofan integrity institution of this country.

106. The backdrop facts of the aforesaid order of caution unfoldthat Mr. Malay Mukherjee was General Manager of Indian Bank. HisAPAR for 2009-2010 was required to be written. He had not servedunder respondent No.3 Mr.T.M.Bhasin. Mr.T.M.Bhasin was not reportingofficer but was reviewing authority in the capacity of CMD of IndianBank. The predecessor CMD had admittedly retired on 31.3.2010 andas provided in Rule 7 of All India Services Performance and AppraisalReport, Rules, 2007, retired official could review the performance ofappraisee within one month from the date of his retirement. Mr.Sundarrajan, former CMD is said to have signed APAR on 7.7.2010after more than three months which he could not have done. Be that asit may. Even if he did it unauthorizedly or irregularly such APAR wasnot found on an inquiry conducted by the Vigilance Department of theoffice. The courier sent by Mr. Malay Mukherjee from zonal office wassent to Bhopal related to some other matter and was not received by the AB

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AHead Office. Even if we ignore the aforesaid aspect question ariseswhether Mr. T.M.Bhasin has fabricated or forged the APAR of Mr.Malay Mukharjee from excellent to average. Whether it was mentionedto be outstanding by Mr.Sundarrajan.

107. Letter dated 4.11.2010 was issued by the Department ofBFinancial Services to send the APAR of eligible General Managers forselection as Executive Director by 15.11.2010 on urgent basis. It wasreceived on 10.11.2010 by respondent No.3. The relevant APAR of Mr.Malay Mukherji duly apprised by Mr. Ram Gopal, Executive Directorwas received on 15.11.2010. Respondent No.3 as reviewing authorityconcurred with the average grading done by Mr. V.Ram Gopal, ExecutiveCDirector. It was sent to the F.S. in compliance.

108. Since Mr. Malay Mukherjee claimed that he had sent APARdated 7.7.2010 for the period 2009-10 signed by Mr. Sundarrajan, formerCMD on 29.7.2010 and the matter travelled to the Central VigilanceCommission. One of the members out of the three opined that the CBIDmay be asked for a criminal investigation into the matter. However, themajority view was not to investigate the matter on criminal side but onlythe Chief Vigilance Commissioner may call for certain documents/information from the Chief Vigilance Officer/DFS to ascertain and cometo the final conclusion. The view of CVC and VC prevailed being theEmajority view as per section 9(4) of the Act of 2003. Thus, nothing couldbe made out by the petitioners on the basis of the observations of VC(S).Later on, follow up was taken in view of the majority view. The ChiefVigilance Commissioner and the Department of Financial Services statedthat there was no conclusive evidence against Mr. Ram Gopal andrespondent No. 3 even to hold a regular departmental inquiry.F

109. Later on, memorandum dated 6.9.2013 was received fromthe DFS seeking his clarification on the subject matter. Respondent No.3submitted a written explanation with annexures running in 162 pagesand pointed out that in the past there were 14 such cases when succeedingCMDs. had submitted APAR when reviewing APAR when officersGhave not worked under him. Thus no action against him was warranted.He had not violated any guidelines. The notings of Chief VigilanceCommissioner dated 31.3.2014, 28.4.2014 and 6.5.2014 are extractedhereunder :

“The Extract of the official file notings dated 28.04.2014, on theHobservations of the Advisor by Vigilance Commissioner, Shri Rajiv and that of Central Vigilance Commissioner is given hereunder :VC (R) noted “matter may be closed. It is more of anadministrative nature and not exactly a vigilance issue”

110. The CVC had also concurred with the VC and made thefollowing notings :

“I am in agreement with VC (R) that writing of APAR and itsreview is essentially an administrative matter. However, in thiscase, it had acquired vigilance overtones due to allegations oftampering of APAR. DFS, after the inquiry, has come to theconclusion that the evidence is not sufficient to prove the mostcrucial charge of tampering with the APAR of Shri MalayMukherjee. I am inclined to agree with DFS in this respect. DFShas however pointed out that Shri Bhasin wrote the APAR of2009-10, without having overseen the work of Mr. Malay Mukerjee.Shri Bhasin, in his defense, has cited past precedents. DFS hasalso conceded the need to have uniform guidelines in Banks toavoid such confusions and inconsistencies. However, DFS hasconsidered it unethical on the part of Shri Bhasin to have written‘Average’ at two places. For this Shri Bhasin may be cautionedand the case closed as proposed by VC (R).”

111. After receipt of the reply, no case was found against him oftampering or forging. The matter was taken up at the highest level. Hewas cautioned which did not amount to any penalty. No inquiry was heldafter the reply was sent by respondent No.3. It was opined by the DFSin its letter dated 10.3.2014, Annexure R-3 that average is not sufficient.In para 9 it was mentioned that average is not sufficient to prove thecharge of tampering. At the most, it may be unethical to write average inview of the average grading. However, the marks received 53 out of100 correspond to average grading. However, Mr. Bhasin has notoverseen the work of Mr. Malay Mukherjee. However, Mr. Ram Gopalhad overseen the work of Mr. Malay Mukherjee. So having written theAPAR by Respondent No.3, he has not violated any guidelines. TheDepartment has taken up the issue and the same was issued in duecourse. As such the departmental action against respondent No.3 oragainst Mr. Ram Gopal was not warranted. Same has been accepted. Itis clear that the Chief Vigilance Commissioner had closed the matter on8.5.2014 and advised DFS to issue caution letter to respondent No.3. In A

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Athe aforesaid circumstances, it cannot be said that there was anypunishment, major or minor, inflicted upon respondent No.3. He tried tojustify his action that though he did not oversee the functioning, he wasjustified in writing APAR but so far as fabrication and forgery areconcerned, no finding has been recorded against respondent No.3 withrespect to the APAR for 2009-2010 by any formal order on theBadministrative side. Thus, his integrity is not going to be affected in theaforesaid factual matrix. When the APAR purportedly written by Mr.Sundarrajan was not available and its claimed dispatch on 29.7.2010was not relating to the APAR. Be that as it may. There is no findingrecorded against respondent No.3 either by the Chief VigilanceCCommissioner or the DFS in any manner whatsoever so as to impingeadversely upon his integrity, necessary for such an institution of VigilanceCommission. Apart from that, no representation was filed againstrespondent No.3. However, this aspect was dealt with and wasmentioned in the report which was submitted before the HPC. Thus,there was nothing against the integrity of respondent No.3 so as to holdDthat the recommendation with respect to him was illegal and void andentire material was placed before the HPC.

112. Thus, in our considered opinion the recommendation madeof Mr. Bhasin cannot be said to be suffering from procedural infirmity indecision making. The integrity of the procedure has been maintained.EThough there was no complaint the aforesaid aspect which has beenurged on behalf of the petitioners was looked into by the High PowerCommittee on the basis of inputs made. Thus, nothing adverse was foundin the final conclusion in the matter of writing of APAR of Mr. MalayMukherjee. Thus, we find that no case is made out with respect to the Fappointment of respondent No.3 as Vigilance Commissioner to makeinterference in judicial parameters.

113. We have not interfered with the appointments. The complaintsagainst Mr. Chowdary were made and they were looked into. It is notfor this Court to decide on the choice. We are nowadays in the scenarioGthat such complaints cannot be taken on face value. Even against veryhonest persons, allegations can be made. Those days have gone whenfiling of the complaints was taken as serious aspersions on integrity.Ideally, there should not be any serious complaint as the filing of sameraises eyebrows. As in the instant matter, complaints have been lookedinto and we decline to interfere.H

COMMON CAUSE (A REGD. SOCIETY) v. UNION OF INDIA[ARUN MISHRA, J.]

114. Resultantly, we find no grounds to quash the appointment ofRespondent No.2 as CVC and respondent No.3 as VC. Writ Petitionsare disposed of accordingly.

Kalpana K. Tripathy

Writ Petitions disposed of.

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