CDR AMIT KUMAR SHARMA ETC versus UNION OF INDIA & ORS ETC on 20 October 2022

1. Leave to appeal under Section 31(1) of the Armed ForcesTribunal Act 2007 is granted.

B2. Delay condoned.

3. This batch of appeals arises from a judgment dated 3 January2022 of the Principal Bench of the Armed Forces Tribunal[1]. The AFTdismissed the applications challenging the denial of PermanentCommission[2] in the Indian Navy. The principle issue is whether the AFTCcould have adjudicated on the validity of the selection proceedings whenrelevant material was disclosed only to the AFT in a sealed cover.

The Facts

4. On 26 September 2008, the Ministry of Defence notified thatwomen Short Service Commission[3] Officers would be eligible for grantDof PC prospectively. In Union of India v. Lieutenant CommanderAnnie Nagaraj[4], the issue for consideration before this court waswhether women who were inducted in various branches of the IndianNavy prior to 2008 were entitled to the grant of PC. By its judgmentdated 17 March 2020, this Court observed, inter alia, that[5]:

E(i)As a result of the policy decision of the Union Governmentdated 25 February 1999, the terms and conditions of serviceof SSC Officers including women with regard to the grantof PC were governed by Regulation 203 of Chapter IV ofPart III of the Naval Ceremonial, Conditions of Serviceand Miscellaneous Regulations 1963[6];F

(ii) The stipulation in the policy letter dated 26 September 2008making it prospective and applicable only to specifiedbranches/cadres of the Indian Navy (Education, Law andNaval Construction) was not enforceable; G

1 “AFT”

2 “PC”

3 “SSC”

4 (2020) 13 SCC 1

5 Paragraphs 109.5, 109.6 and 109.7 of the judgment in Annie Nagaraj.

H6 “Regulations”

(iii) All SSC Officers in the Education, Law and Logisticscadres, who were “presently in service” shall be consideredfor the grant of PCs;

(iv) The officers were entitled to the grant of PC in view of thepolicy letter of the Union Government dated 25 February1999 read with Regulation 203;

(v) SSC women officers in the batch of cases before the HighCourt and the AFT who are “presently in service” shall beconsidered for the grant of PC on the basis of the vacancyposition as on the date of the judgment of the Delhi HighCourt and the AFT or as it “presently stands”, whichever ishigher;

(vi) The applications of the serving officers for the grant of PCshall be considered on the basis of the norms contained inRegulation 203, namely, (a)availability of vacancies in the stablised cadre at the relevanttime; (b)determination of suitability;

(c) recommendation of the Chief of Naval Staff; and (d)empanelment shall be based on the inter-se merit evaluatedon the ACRs of the officers under consideration, subject tothe availability of vacancies.

5. There are three points in time, which were taken intoconsideration by the authorities for the determination of vacancies, namely

(i) August 2015, when the judgment of the High Court in AnnieNagaraj (supra) was pronounced;

(ii) September 2016, when the decision of the AFT inCommander Priya Khurana v. Union of India[7] waspronounced; and

(iii) March 2020, when the decision of this Court in AnnieNagaraj (supra) case was pronounced.

6. Following the above directions, the process for implementingthe judgment was carried out. The respondents worked out a total of 88

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Avacancies. 306 officers were considered for PC against the 88 vacanciesafter which 80 of them were granted PC. The second respondent(Integrated Headquarters of Ministry of Defence (Navy)) issued a signalorder releasing many SSC officers from service on the ground that theyhad not obtained PC. The Signal order only notes the date of commission,date of release and the Unit of the officer without any reference to theBprocess of selection that was undertaken or the relative merit. Many ofthe SSC officers, both men and women, who were not granted PC filedwrit petitions before this Court challenging the rejection of their claimfor PC. In the alternative, they sought directions for the grant of pension.

7. By an order dated 24 August 2021, this Court dismissed theCwrit petitions on the ground that the Court had already laid down theprinciples for granting PC in Annie Nagaraj (supra) and Lt. Col. Nitishav. Union of India[8]. It was observed that the officers who were deniedPC would assail the decision on the basis of individual facts and thus, itwould be necessary for them to claim their reliefs before the AFT. TheDrelevant observations are extracted below:

“12 The petitioners who are considered for the grant of PC andwere denied it would have to assail the decision not to grant themPC on the basis of the individual facts in each case. Bearingthis in mind, it would be necessary for them to pursue theirEremedies before the AFT where the facts of each case can bescrutinized. If the petitioners were to succeed on their plea forthe grant of PC, the alternative claim for invoking the jurisdictionunder Article 142 would cease to have any practical significance.It is only if the denial of PC is upheld that the alternate plea canbe pressed and this can be pursued after the decision of the AFT,Fby following the remedies available under the statute. Hence, ona considered view of the matter we are inclined not to entertainthe petitions under Article 32 on merits.”

G8. The second respondent, in the written submissions before theAFT, filed in Cdr AK Sharma v. Union of India[9]submitted that thevacancy calculation is more than an exercise of simple mathematics andthat the “minute details of vacancy calculation cannot be put in the open 8 (2021) SCCOnLine SC 261H9 O.A 2167 of 2021

domain for the obvious reasons. Accordingly, this Hon’ble Tribunal willbe provided with a detailed note with respect to vacancy calculation in asealed envelope(as and when sought).” It was also submitted that thefairness of the selection process “would be amply clear from the selectionBoard Proceedings which would be provided to this Hon’ble Tribunalfor perusal in the sealed cover, if need for the same arises.” Similarly, inthe counter affidavit filed in Commander Barsha Agrawal v. Unionof India[10], it was submitted:

“Accordingly, this Hon’ble Tribunal has been provided with adetailed note with respect to vacancy calculation in a sealedenvelope”.

9. The AFT by the impugned judgment dated 3 January 2022disposed the cases transferred to the AFT pursuant to the order of thisCourt along with cases where the denial of PC was challenged beforethe AFT. The impugned judgment of the AFT in paragraph 54 indicatesthat the respondents submitted :

(i) All the files connected with the Selection Board convened inDecember 2020;

(ii) The previous Selection Boards held for the grant of PC;

(iii) The management of SSC Officers; and

(iv) The dossiers containing the confidential reports of 32 applicantsbefore the AFT.

10. In addition to the above, the AFT noted in paragraph 81 thaton a perusal of “various records and files submitted by the respondents”,the second respondent had considered the following issues:

(a) Selection Boards held prior to 2020; (b) Baseline for consideration and batches to be considered;

(c) Categorization of officers for consideration; (d) Determination of vacancies; (e) Suitability criteria; (f) Inter-se merit criteria; 10 OA 2008 of 2021

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A(g) Conduct of Board and results; and

(h) Analysis of the Selection Board Proceedings.

11. In paragraph 99 of the judgment, it is observed that the Boardconducted its proceedings on 18 December 2020 according to the criteriaBapproved in the Approach paper. Paragraph 37 of the impugned judgmentextracts the selection procedure that was adopted by Indian Navy.Paragraph 37 of the judgment is extracted below:

“37. The Counsel then took us through the criteria for selectionand said that marks were apportioned as given below to work outCinter-se merit. He added that there was no ‘Value Judgment’ markas was applicable in promotion boards. He also stated that no onehas been rejected based on medical criteria and all had beenrecommended by the CNS. He further added that the merit listwas computer generated based on the criteria mentioned below;and that out of a total of 381 officers, 80 had been granted PC (41Dwomen and 39 male officers). The counsel then elaborated onthe factors and their weightage.

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12. On perusing the records disclosed in a sealed cover, the AFTrecorded the status of the remaining applicants as follows:

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634SUPREME COURT REPORTS[2022] 18 S.C.R.ABCDEFGH

21 OA 2068/2021 Cdr Shruti Released PC 6/8 7/9 NR for PC Not eligible ADhawan in ACR for PC 31.12.2020 NR for PC in Education/GS ACR Already WP 1471/2020 granted Batch- 1999 (Tfr-Rajkumar) Rel stayed pension Service- 22 in service 22 OA 2069/2021 Cdr Bhanu Released PC/ Pension 10/15 15/20 Not eligible Pratap Singh 31.12.2020 for PC and Fresh case Low merit NR Low merit NR not grated BExec/Lgs for PC in for PC in pension ACR ACR Batch- 2007 Retired being inadmissible Service- 14 under Para 96(x) and (xi) of the judgment 23 OA 2167/2021 Cdr Amit Released PC/Pension 2/3 NR for PC 9/14 Not eligible Kumar Sharma in ACR for PC and C(Tfr-RB 31.12.2020 Low merit NR not grated Mumbai) Education/GS for PC in pension ACR Batch- 2003 being Rel stayed inadmissible WP No. Service- 18 in service under Para 1269/2020 96(x) and (Tfr-Rajkumar) (xi) of the judgment 24 OA 2168/2021 Lt Cdr Yogita Released PC/ Pension 3/3 14/14 Not eligible DRani for PC (Tfr-RB 31.12.2020 Low merit Low merit Mumbai) Old Education/GS Already matter, granted Batch- 2003 transferred pension from AFT Service- 18 (RB0 Mumbai 25 OA 2169/2021 Cdr Released PC/ Pension 13/14 19/20 Not eligible for PC and E(OA 105/2017 PS Soodan 31.12.2020 Low merit NR Low merit NR not grated RB Mumbai) for PC in for PC in Education/ GS Permit to pension ACR ACR serve till 20 being Batch- 2004 Rel stayed yrs (Ref inadmissible WP 1269/2020 Service- 17 In service BP/N case) under Para (Tfr-Rajkumar) 96(x) and (xi) of the judgment F

13. On an examination of the Board proceedings, the AFTobserved that there were no mala fides in the parameters which wereprescribed or the procedure adopted. It was also observed that theofficers were not granted PC because of their comparative merit againstlimited vacancies and, in certain cases, the officers were not foundsuitable. The relevant observations are extracted below:

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“110. Having heard all parties and examined various records, it iswell established that the IN has formulated a proper procedurewith suitable parameters, and has applied it uniformly to all eligibleSSCOs, both men and women, of all affected Branches/Cadres H

in their consideration for grant of PC. We find no mala fide in theparameters laid down or the procedure adopted. No genderdiscrimination has been observed in the Selection Board held inDec 2020 and those held prior to the decision of the Hon’bleSupreme Court in Annie Nagaraj (supra).

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121. The merit position and status of the rest of the applicants aregiven below. The inputs on recommendations for PC; Peer andWar Report entries have all been verified from the CRs. It is seenfrom the records that the applicants have not been granted PConly because their comparative merit against limited vacancy andin certain cases, not being found suitable as per the laid downcriteria.”

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14. The decision of the AFT has led to the institution of twelveCivil Appeals before this Court. Twenty-six officers of the Indian NavyDare appellants before this Court in the Civil Appeals. Of these twenty sixofficers, thirteen are still in service pursuant to interim orders. Theremaining thirteen officers are out of service since varying dates in 2020,2021 and 2022. Apart from the twenty six officers who are appellantsbefore this Court in the twelve civil appeals, eight officers have filed IAsfor intervention. Seven out of eight officers are protected by interimEorders while the tenure of the eighth officer (Commander NavneetSharma) is to end in the month of December 2022.

15. Notice was issued in this batch of Civil Appeals on 31 January2022. The grievance of the appellants is that the sealed cover procedure,which was followed by the AFT, has resulted in substantial prejudice.

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The Submissions

16. Mr Huzefa A Ahmadi and Mr C U Singh, senior counselappearing on behalf of the appellants together with the other counsel -Ms Kamini Jaiswal, Ms Haripriya Padmanabhan and Ms Puja Dharhave submitted that the AFT, in the course of its decision, has extensivelyGrelied upon material which was submitted by the Naval Authorities in asealed cover. It has been urged that this material was never disclosed tothe appellants and if the material had been disclosed to them, they wouldhave been in a position to demonstrate that much of the data which hasbeen relied upon is seriously in dispute and is not reflective of the correct H

position. Mr. R. Balasubramaniam, senior counsel appearing on behalfof the respondent, submitted that it is not as if the respondents voluntarilychose to place the data in a sealed cover and the files which were producedwere on the directions of the AFT.

17. During the course of hearing, three principal submissions havebeen urged by Mr. Huzefa A Ahmadi, senior counsel:

(i) In its decision in Annie Nagaraj (supra), this Court directedthat the highest number of vacancies were to be consideredin determining the claims of the SSC officers for the grantof PC but this has not been done;

(ii) Several batches have been clubbed together as aconsequence of which vacancies have not been consideredbatch-wise and inter se merit has been skewed; and

(iii) Consideration for the grant of PC was effected on the basisof ACRs which were written casually at a time when theofficers concerned were not eligible for the grant of PC asobserved in a subsequent decision of this Court (albeit inthe case of the Army) in Nitisha (supra).

18. While formulating the objections to the findings of the AFT onmerits, it has been submitted by the counsel for the appellants that:

(i) The respondents have made no distinction between officerswho were inducted prior to 2008 and those inducted after2008;

(ii) Data submitted by the Navy shows that vacancies at thematerial time were not properly calculated;

(iii) There is sufficient data to indicate that many more vacanciesexist in most cadres than what is depicted in the impugnedorder;

(iv) The adoption of the 60:40 ratio (PC: SSC Officers) basedon the AV Singh Committee report is flawed since variousother aspects of the report are yet to be implemented bythe Naval Authorities including the disbursal of monetarybenefits;

(v) The computation of yearly vacancies has proceeded on anarbitrary basis of 15 years’ distribution; A

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A(vi)The methodology of dividing the total number of vacanciesby 15 is arbitrary;

(vii) The chart which has been set out in paragraph 95 of AFT’sdecision shows that as many as 14 batches were consideredtogether; and B

(viii) The grievances of individual officers have not beenadjudicated. For instance, in the case of Commanders AnnieNagaraj and Amit Sharma, though they were recommendedfor the grant of PC and would fall within the existingvacancies, they have been denied PC on the ground thatCthey were not recommended.

19. On the other hand, Mr R Balasubramaniam, senior counselappearing on behalf of the respondents made the following submissions:

(i) While computing the vacancies, the Naval Authorities havecorrectly borne in mind:

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(a) The overall cadre structure of the Indian Navy; (b) The policies which have been consistently followed; and

(c) The pattern of future inductions and retirements; and the needto maintain a youthful profile in the Indian Navy and a balancedEcadre structure.

(ii) Grant of PC is governed by Regulation 203 according towhich the availability of vacancies should be in the stabilisedcadre;

(iii) While the stabilised cadre normally comprises only ofFgovernment sanctioned posts in the permanent cadre, inthe spirit of the judgment of this Court, temporary vacanciesand Training Drafting Leave Reserve (TDLR) vacancieswere also added to the stabilised cadre;

(iv) The vacancies of the stabilised cadre were worked out withGreference to August 2015, September 2016 and March 2020;

(v) The ratio of 60:40 (PC:SSC) has been approved by theGovernment of India on 3 November 2008 based on theAV Singh Committee report; H

(vi) Based on the above, the deficiencies in each stream weredivided by a 15 year cycle which is the difference betweenthe life of a PC Officer and SSC Officer in service;

(vii) The deficiencies in manning strength cannot be given toany particular batch or a few batches because of the policyof the Navy to have a balanced cadre structure, a youthfulprofile and a proper induction/retirement pattern in the longrun;

(viii) The vacancies assigned to each batch worked out in termsof the above model provided the maximum vacancies as onMarch 2020, the date of the judgment of this Court;

(ix) Pursuant to the directions given by the AFT, the Navycarried out a fresh exercise and allotted seven morevacancies to the Naval Construction Cadre and sevenofficers were approved for the grant of PC;

(x) In regard to the clubbing of batches, each SSC Officer wasgiven two ‘looks’ (the first and the second ‘look’) pursuantto consistent practice. The first look is with officers of thepreceding batch, who were not granted PC in their firstlook and the second look is with the available next freshbatch. Hence, each batch was given consideration separatelyand it would not be correct to postulate that 14 batches ofthe Logistics Cadre were clubbed together. The distributionof vacancies per batch on the basis of a 15 year cycle isjustified;

(xi) The manner of writing ACRs is not erroneous. The judgmentin Nitisha (supra) pertained to the Indian Army which isdistinguishable since :

(a) Unlike the Indian Army where male officers were beinggranted PC, in the case of the Indian Navy neither mennor women officers were granted PC; (b) The ACRs written by officers in the last five yearspreceding the conduct of the Board were taken intoconsideration which had a specific column on whetheror not a recommendation was being made for PC, since2015; and A

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(c) If an officer has not been recommended for PC in threeor more ACRs, it would be a disqualification and hencean officer would not be eligible for grant of PC, even ifhigher in merit.

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20. The second respondent in the written submissions before thisBCourt submitted that (i) it is a norm for the Board proceedings to only beprovided to the AFT in a sealed cover; (ii) the AFT on a perusal of theproceedings of the Selection Board as well as confidential dossiers ofthe individual applicants found that the Navy had considered the claimsof the officers for PC based upon the parameters laid down by thisCourt in Annie Nagaraja (supra).

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The Analysis

21. The AFT, inter alia, had to determine if (i) the Naval Authoritieshad correctly computed the vacancies against which the claims of theSSC Officers would be considered for the grant of PC; and (ii) theDSelection Board considered the applications for the grant of PC fairly.The judgment of the AFT indicates that in assessing the validity of theexercise undertaken to determine vacancies and the fairness of theselection process, it placed extensive reliance on material drawn fromthe data emerging from the files which were submitted by the UnionGovernment and the Naval Authorities in a sealed cover. The judgmentEof AFT sets out in paragraph 92, a summary of the cadre-wise strengthand vacancies to be considered for granting PC to the affected SSCofficers. In paragraphs 93 and 94, the AFT has set out, in a similarmanner, tabulated statements in regard to the utilisation of vacancies.This data did not form the subject matter of deliberations before theFAFT. In fact, the counter affidavits in Commander Barsha Agrawal(supra) and Commander AK Sharma (supra) indicate that the datawas submitted in the form of a sealed note.

22. Similarly, the Board proceedings were not disclosed to theappellants. The written submissions before this court and the submissionsGin Commander AK Sharma (supra) before the AFT indicate that theBoard proceedings were not disclosed to the officers and were submittedto the AFT in a sealed cover. The AFT on a perusal of the Boardproceedings has observed that the second respondent had adopted properprocedure and suitable parameters that it had uniformly applied. It wasalso observed on a perusal of the documents that there was no gender H

bias and that the appellants’ applications for PC were rejected onlybecause they were lower in inter se merit.

23. This Court in Annie Nagaraj (supra) had directed that theapplications of the serving officers for PC shall be considered on thebasis of norms in Regulation 203 and paragraph 4 of the implementationguidelines. The parameters that were directed to be considered were:(i) availability of vacancies in stabilized cadre at the material time; (ii)determination of suitability; and (iii) recommendation of the Chief ofNaval Staff. In terms of paragraph 4 of the implementation guidelines,the empanelment has to be based on inter-se merit evaluated on theACRs of the officers. The Tribunal in paragraph 105 of the judgmentobserved that on a perusal of record it was evident that the Indian Navyhad considered the SSC officers for PC based on the parameters laiddown in Annie Nagaraj (supra). However, the material that has beenrelied on to arrive at the finding that there was no infirmity in the processhas not been disclosed to the appellants. The AFT observed that theweightage to the individual parameters in the selection process for PC isthe same as it existed before the judgment of this Court in Annie Nagaraj(supra). Even if the parameters for selection and the weightage of theindividual parameters have been in the public domain, there is no materialon record to determine if the selection has been made in accordancewith the criteria. The AFT has recorded that there are ‘no mala fides’and ‘no gender bias’ in the selection process. However, there is nomaterial available to the appellants to challenge these findings since thematerial was disclosed to the AFT in a sealed envelope. The ordersgranting PC to other officers also did not contain any reasoning on theinter-se merit of the applicants. The AFT on a perusal of the filessubmitted in a sealed cover recorded the status of the applicants in atabular format that has been extracted in the earlier part of the judgment.However, the appellants were not privy to such information.

24. Material prejudice has been caused by the process which hasbeen followed of disclosing the information of vacancies and the boardproceedings to the AFT in a sealed cover. In Khudiram Das v. State ofWest Bengal[11], this Court held that the test for determining if materialmust be disclosed is whether in all ‘reasonable probability’, the materialwould influence the decision of the authority. Ruling in the context ofpreventive detention, a four-Judge Bench of this Court observed:

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A“15. Now, the proposition can hardly be disputed that if thereis before the District Magistrate material against the detenuwhich is of a highly damaging character and having nexusand relevancy with the object of detention, and proximitywith the time when the subjective satisfaction forming thebasis of the detention order was arrived at, it would beBlegitimate for the Court to infer that such material musthave influenced the District Magistrate in arriving at hissubjective satisfaction and in such a case the Court wouldrefuse to accept the bald statement of the DistrictMagistrate that he did not take such material into accountCand excluded it from consideration. It is elementary that thehuman mind does not function in compartments. When it receivesimpressions from different sources, it is the totality of theimpressions which goes into the making of the decision and it isnot possible to analyse and dissect the impressions and predicatewhich impressions went into the making of the decision and whichDdid not. Nor is it an easy exercise to erase the impression createdby particular circumstances so as to exclude the influence of suchimpression in the decision making process. Therefore, in a casewhere the material before the District Magistrate is of a characterwhich would in all reasonable probability be likely to influence theEdecision of any reasonable human being, the Court would be mostreluctant to accept the ipse dixit of the District Magistrate that hewas not so influenced and a fortiori, if such material is not disclosedto the detenu, the order of detention would be vitiated, both on theground that all the basic facts and materials which influenced thesubjective satisfaction of the District Magistrate were notFcommunicated to the detenu as also on the ground that the detenuwas denied an opportunity of making an effective representationagainst the order of detention.”

G25. In T. Takano v. Securities and Exchange Board of India[12],a two- Judge Bench of this Court held that the all relevant informationmust be disclosed. In this case, the issue for consideration before thisCourt was whether an investigation report under Regulation 9 of theSEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations H12 Civil Appeal Nos. 487-488 of 2022

2003 must be disclosed to the person to whom a notice to show cause isissued. SEBI had not disclosed the investigation report. It was thecontention of SEBI that it had not relied on the investigation report toissue the show cause notice. The two Judge Bench observed thatdisclosure of information to the parties to the adjudication serves threepurposes: (i) Reliability: The possession of information by both the partiescan aid the courts in determining the truth of the contentions; (ii) FairTrial: There is a legitimate expectation that parties are provided all theinformation for them to effectively participate in the proceedings; (iii)Transparency and accountability: It is necessary that the adjudication isnot opaque but transparent. Transparency aids in establishingaccountability. The observations on disclosure of information and itsimpact on transparency are extracted below:

“22. […] Keeping a party bereft of the information that influencedthe decision of an authority undertaking an adjudicatory functionalso undermines the transparency of the judicial process. It deniesthe concerned party and the public at large the ability to effectivelyscruitinise the decisions of the authority since it creates aninformation asymmetry.”

23. The purpose of disclosure of information is not merelyindividualistic, that is to prevent errors in the verdict but is alsotowards fulfilling the larger institutional purpose of fair trial andtransparency. Since the purpose of disclosure of information targetsboth the outcome (reliability) and the process (fair trial andtransparency), it would be insufficient if only the material reliedon is disclosed. Such a rule of disclosure, only holds nexus to theoutcome and not the process. Therefore, as a default rule, allrelevant material must be disclosed.

26. This court observed that the right to disclosure is not absolute.Portions that involve information on third-parties or confidential informationon the securities market may be withheld by SEBI. The court directedthat the Board is duty bound to disclose parts of the investigative reportthat concern the specific allegations that have been levelled in the showcause notice. However, the court also observed that it does not entitle aperson to whom the notice is issued to receive unrelated sensitiveinformation. The court held that it must first be prima facie establishedby SEBI that the disclosure of the information would affect third partyrights. Once a prima facie case of sensitivity is established, the onus A

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Awould then shift to the appellant to prove that the information is necessaryto defend his case appropriately. The conclusions are extracted below:

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(v) The right to disclosure is not absolute. The disclosure ofinformation may affect other third-party interests and the stabilityand orderly functioning of the securities market. The respondentshould prima facie establish that the disclosure of the report wouldaffect third-party rights and the stability and orderly functioningof the securities market. The onus then shifts to the appellant toprove that the information is necessary to defend his caseappropriately; and B

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(vi) Where some portions of the enquiry report involveinformation on third parties or confidential information on thesecurities market, the respondent cannot for that reason assert aprivilege against disclosing any part of the report. The respondentscan withhold disclosure of those sections of the report which dealwith third-party personal information and strategic informationbearing upon the stable and orderly functioning of the securitiesmarket.

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52 The Board shall be duty-bound to provide copies of such partsof the report which concern the specific allegations which havebeen levelled against the appellant in the notice to show cause.However, this does not entitle the appellant to receive sensitiveinformation regarding third parties and unrelated transactions thatmay form part of the investigation report.”

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F27. The elementary principle of law is that all material which isrelied upon by either party in the course of a judicial proceeding must bedisclosed. Even if the adjudicating authority does not rely on the materialwhile arriving at a finding, information that is relevant to the dispute,which would with ‘reasonable probability’ influence the decision of theauthority must be disclosed. A one-sided submission of material whichGforms the subject matter of adjudication to the exclusion of the otherparty causes a serious violation of natural justice. In the present case,this has resulted in grave prejudice to officers whose careers are directlyaffected as a consequence.

28. The non-disclosure of relevant material to the affected partyHand its disclosure in a sealed-cover to the adjudicating authority (in this

case the AFT) sets a dangerous precedent. The disclosure of relevantmaterial to the adjudicating authority in a sealed cover makes the processof adjudication vague and opaque. The disclosure in a sealed coverperpetuates two problems. Firstly, it denies the aggrieved party theirlegal right to effectively challenge an order since the adjudication ofissues has proceeded on the basis of unshared material provided in asealed cover. The adjudicating authority while relying on materialfurnished in the sealed cover arrives at a finding which is then effectivelyplaced beyond the reach of challenge. Secondly, it perpetuates a cultureof opaqueness and secrecy. It bestows absolute power in the hands ofthe adjudicating authority. It also tilts the balance of power in a litigationin favour of a dominant party which has control over information. Mostoften than not this is the state. A judicial order accompanied by reasonsis the hallmark of the justice system. It espouses the rule of law. However,the sealed cover practice places the process by which the decision isarrived beyond scrutiny. The sealed cover procedure affects thefunctioning of the justice delivery system both at an individual case- tocase level and at an institutional level. However, this is not to say that allinformation must be disclosed in the public. Illustratively, sensitiveinformation affecting the privacy of individuals such as the identity of asexual harassment victim cannot be disclosed. The measure of non-disclosure of sensitive information in exceptional circumstances must beproportionate to the purpose that the non-disclosure seeks to serve. Theexceptions should not, however, become the norm.

29. During the course of the hearing, it has clearly emerged beforethis Court that material which was relied upon by the AFT for determiningthe vacancies which were available and for assessing as to whetherthey were utilised correctly has not been disclosed to the appellants.Similarly, the Board proceedings that were relied upon by AFT todetermine if the selection for PC was fair have not been disclosed to theappellants. We are cognizant of the wide range of sensitive informationin the records of board proceedings. The respondents are not requiredto disclose the deliberations on the selection for PC within the closedBoard setting. While the AFT on a perusal of the records concluded thatthere was no gender bias or mala fides in the grant of PC, it must beborne in mind that the officers do not possess the material to challengethis observation. The respondents while protecting the confidentiality ofthe proceedings of the Board must disclose the position in merit of the ABC

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Aappellants vis-à-vis the parameters and their weightage devised by therespondents.

30. We permitted counsel to address the Court briefly on the natureof objections which arise on the basis of the data as disclosed. Counselfor the appellants submitted that instead of a remand to AFT, this CourtBmay carry out the exercise. We are not inclined to do so for two reasons.Firstly, a primary fact-finding role is entrusted to the AFT under theArmed Forces Tribunal Act 2007. While exercising its appellatejurisdiction, it would be appropriate if this Court has the benefit of aconsidered view of the AFT. To decide the issues for the first time inappeal, as a matter of first impression, would not be appropriate.CSecondly, the issues which arise before the AFT primarily turn upon thedetermination of vacancies, the manner of utilising them and the fairnessof the selection process. This is an exercise which had to be carried outby the Naval Authorities while implementing the judgment of this Court.The correctness of that determination fell for consideration before theDAFT. In arriving at its conclusion upholding the determination, the AFThas not had the benefit of considering the objections of the appellants tothe manner in which the exercise was carried out by the authorities. Theobjections of the appellants noted above would have been set out beforethe AFT if the material was disclosed to the appellants. The failure todisclose relevant material has caused substantial prejudice to theEappellants. This case exposes the danger of following a sealed coverprocedure.

31. For the above reasons we are of the view that a remand tothe AFT would be necessitated. We are conscious of the fact that theAFT carried out a painstaking exercise while disposing of the OAs butFthere has been a clear breach of the principles of natural justice. We areof the considered opinion that the AFT should be directed to reconsiderthe entire matter afresh.

32. We accordingly allow the appeals and set aside the impugnedjudgment of the AFT. The OAs corresponding to the appeals which areGfiled before this Court are restored for fresh adjudication by the AFT.During the pendency of these proceedings, as already noted, some ofthe officers in this batch of appeals including some interveners havecontinued in service as a result of the protective orders operating in theirfavour while the tenure of one officer is to end in December 2022. WeHdirect that the officers who are protected by interim orders of this Court shall continue to have the benefit of those orders pending the disposal ofthe proceedings before the AFT and thereafter for a period of eightweeks from the date of the decision of the AFT should it becomenecessary for them to assail the judgment before this Court in appeal.The officer whose tenure is to end in December 2022 shall also beentitled to the benefit of the same protection.

33. We request the AFT to dispose of the OAs which have beenrestored to the file of the AFT expeditiously and preferably by the end ofFebruary 2023.

34. Pending applications, if any, including applications forimpleadment/intervention, stand disposed of.

Divya Pandey

Appeals allowed.

(Assisted by : Rahul Kumar, LCRA)

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