REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL ORIGINAL JURISDICTION

WRIT PETITION (CIVIL) NO. 505 OF 2015

COMMON CAUSE (A Regd. Society) & ORS. ....PETITIONER(S)

VERSUS

UNION OF INDIA & ORS. ....RESPONDENT(S) WITH

WRIT PETITION (CIVIL) NO. 683 OF 2014

CENTER FOR INTEGRITY GOVERNANCE & TRAINING IN VIGILANCE  ADMINISTRATION & ANR. ....PETITIONER(S)

VERSUS

UNION OF INDIA & ORS. ....RESPONDENT(S)

J  U  D  G  M  E  N  T

ARUN MISHRA,  J.

1. The petition has been filed by the Common Cause (a registered

Society) and others purportedly in public interest, a prayer has been

made to issue an appropriate writ quashing the 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 CVC on 6.6.2015 and

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Mr. T.M. Bhasin as VC on 11.6.2015 for a period of four years. The

main ground urged to quash the appointment is that it is illegal and

void  as there is  violation of  principles  of impeccable integrity  and

institutional integrity laid  down in  the  judgments of this  Court in

Vineet Narain & Ors. v. Union of India & Anr.  (1998) 1 SCC 226 and

Centre 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

been made to direct the Union of India and/or its instrumentalities to

provide for minimum number of years of knowledge and experience in

the field of vigilance for being appointed as CVC or VC. During the

pendency of the writ application, with the permission of the court,

this Court had permitted respondent No.1 to proceed with the

appointment of CVC and VC under section 4(1) of the Central

Vigilance Commission Act, 2003 (for short, “the Act”) subject to the

decision of the petition. The appointments have been made and the

challenge is confined to the appointments of CVC and VC.   

      3. It is urged by the Common Cause Society that Central Vigilance

Commission is, in the absence of a Lokpal, India’s top anti­corruption

body. The Commission is considered the apex integrity and watchdog

institution of the country. Apart from overseeing the vigilance

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administration, it has also the power of superintendence over the CBI

in corruption cases and is also the designated agency for protection of

the whistle­blowers to examine their complaints. It oversees

functioning of the Central Government and its instrumentalities.

4. This Court in  Vineet Narain  (supra) has observed that Central

Vigilance Commission shall be given statutory status. The Selection

Committee  has to  select  a  person  of impeccable integrity  and  the

appointment shall be made by the President. Pursuant thereto,

Parliament has enacted Central Vigilance Commission Act, 2003 and

Selection Committee comprises of the Prime  Minister, the Home

Minister, and the Leader of the Opposition.    

 5. In  Centre for PIL  (supra) this Court had quashed the

appointment of the then CVC by declaring decision of Selection

Committee to the President for appointment as non­est. It was

observed by this Court that the activity of decision making process

has to ensure that the powers are exercised for the purpose and in

the manner in which the said Act provides otherwise the

recommendation  has  no existence in the eyes of law.  This  Court

directed that the legality  of the exercise  of selection is subject to

judicial review. All civil servants and other persons empaneled shall

be outstanding civil servants or persons of impeccable integrity, made

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on rational  criteria reflected by  recording vigilance and/or notings

akin to reasons. Complete information with material and data

whether favourable or adverse has to be forwarded. Nothing material

or relevant should be  withheld. Contemporaneous service record,

even adverse remarks, are specifically to be brought to the notice of

Selection Committee. Process of selection by the Committee has to be

fair and transparent.

6. It is averred in the petition that the absolute requirement is that

Central Vigilance Officer should have unblemished record of service.

The appointment of Mr. K.V. Chowdary, respondent No.2 as CVC has

been assailed on the basis of facts mentioned in the complaint. Prior

to that, he was the Chairperson of CBDT and Advisor to the SIT on

black money. Before his appointment, several representations were

made to the Prime Minister of India, who heads the selection panel as

provided in section 4 of the Act. As it transpired that the Government

had made up its mind to appoint respondent No.2, representations

were made giving specific reasons as to why he was not eligible and

suitable for  heading the  Commission.  Despite representations,  his

appointment had been made.   Firstly, it is submitted that Mr. K.V.

Chowdary had been meeting with the then CBI Director Mr. Ranjit

Sinha and  had been regularly  meeting the accused in the cases

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investigated by the CBI in the 2G scam cases. This 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 out by the

CBI in the 2G scam case and to recuse himself from 2G scam case.

This Court had also observed  in the  judgment dated 14.5.2015  in

Writ Petition [C] No.463 of 2012 that Mr. Ranjit Sinha’s meetings with

accused in coal scam were completely inappropriate, and his role in

allegedly scuttling investigations in coal scam case needs to be

investigated.

7. It is further averred in the petition that  Mr. Ranjit Sinha,

Director  of  CBI met Mr.  K.V.  Chowdary when he was probing the

dealings of and intercepted conversation of hawala dealer Mr. Moin

Qureshi who was known to Mr. Ranjit Sinha and who had met him

approximately 90 times at his residence. These meetings also took

place  when  Mr. Ranjit Sinha/CBI  was investigating “Stock  Guru

Scam” where senior income tax officers were involved and the CBI

was investigating the role of respondent No.2. The CBI inquiry had

found that senior  income tax officer  had taken bribes  for showing

favours to scamsters and had also misappropriated over Rs.40 crores.

The officers who were involved were working directly under Mr. K.V.

Chowdary, respondent No.2.

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8. The Income Tax Department in its report on Mr. Moin Qureshi

gave a clean chit to Mr. Sinha and CBI gave a clean chit to

respondent  No.2  in  Stock Guru scam.  Thus, respondent  No.2 Mr.

K.V. Chowdary and CBI Director, Mr. Ranjit Sinha helped each other

in the investigation being carried out by the agencies under them.

9. One  Mr.  Anil  Kumar  Agarwal  had  made  a complaint to the

Finance  Ministry  on  10.6.2014  pointing  out the  manner in  which

respondent  No.2  was  being shielded in  Stock  Guru scam.  Earlier

respondent  No.2  had taken  credit for taking  action  against  Stock

Guru before the scam involving income tax officers came to light. He

could not distance himself from the scam as the entire episode

happened under his watch.

10. Respondent No.2 had abused his position as Member

(Investigation),  CBDT  to  under­assess the income  of the company

M/s. Flora and Fauna Housing & Land Development Pvt. Ltd. which

is associated with infamous Mr. Ponty Chadha. The under­

assessment was to the extent of Rs.234/­ crores. Mr. K.V. Chowdary

followed a procedure allegedly unknown to law by giving direction to

the assessing officer to dispose of the case in a particular manner

whereas no such direction could have been issued.

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11. It is further averred in the petition that one of the members of

the  Common Cause  Society  made the following allegations in the

representation :  

(i) that Mr. Chowdary was in charge of the investigation of illegal

account holders in foreign countries in HSBC Bank, for almost

three  years  and until this  Court  appointed  the  SIT on black

money, there was almost no progress in income tax

investigation, and the income tax department had not filed even

a single prosecution case against HSBC account holders.

(ii) that Mr. Chowdary was investigating the Radia tapes and did

not take any action on evidence available with him.  

(iii) that he was also investigating the income tax cases in the

2G scam and failed to take any action unlike the CBI or the ED

which filed several charge­sheets.

12. As against respondent No.3, Mr. T.M. Bhasin appointed as VC

the case set up by the petitioner is that he had been serving as the

CMD in the public sector Indian Bank from 1.4.2010 with its

headquarters in Chennai, who was indicted in a detailed inquiry by

the CVC  in 2013 for forging and tampering with the appraisal report

of the then  General  Manager  of Indian  Bank which is  a criminal

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offence. One Mr. Malay Mukherjee in this connection had complained

on 11.7.2011 that his Annual Performance Appraisal Report (APAR)

has been tampered. It was found by the Commission that APAR was

mala fidely  tampered and forged and grading of ‘excellent’ was

substituted by ‘average’ with a view to destroy the career of Mr. Malay

Mukherjee. It  was a criminal offence for  which investigation  was

suggested to establish the facts. However, another VC had stated that

departmental action be taken. The then CVC approved departmental

action. On that office memorandum dated 11.12.2012 was issued to

Department of Financial Services (DFS), Government of India to take

departmental action against Mr. Bhasin.

13. In response to the aforesaid, the Department of Financial

Services wrote to the Commission that departmental action may not

stand scrutiny of law.  The opinion was reiterated by  the  then VC

which was approved by the CVC, however, Department of Financial

Services said that the matter ought to be closed and Mr. Bhasin was

cautioned. The same  was approved by the  Commission and  was

carried out by the Government of India. It is averred that yet another

important political functionary wrote a letter to the Prime Minister on

11.6.2015 stating that charge against Mr. Bhasin was very serious

and the recommendation of Selection Committee to appoint him must

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be withdrawn. Thus, Mr. Bhasin by no stretch of imagination can be

said to have impeccable integrity or unblemished record as per the

requirement of law. Thus, the appointments are illegal, arbitrary, in

negation of rule of law and therefore in violation of Articles 14 and 16

of the Constitution of India. It is averred that transparency was not

followed and there was no scope for public inputs. Complaints made

against  respondent Nos.  2 and 3 were not  duly considered.  Thus,

transparency was not  observed.  Non­production of  serious adverse

material and representations against respondent Nos. 2 and 3 would

vitiate the appointment process and in case material was produced,

and despite  that  appointments were made, then the appointments

would be mala fide, arbitrary and illegal.

14. In the counter affidavit filed by respondent  No.1 in case of

Common Cause, as per section 3(3) of the Act, for appointment to the

post  of  CVC as well  as VC, the person must have knowledge and

experience in the matters relating to (a) vigilance, (b) policy making

and (c) administration including police administration. Therefore,

fixing minimum years of experience exclusively in any of the above

fields  would  be contrary to the expressed legislative intent  which

requires that such person must have knowledge and experience in all

the three fields.   The decision of this Court in Centre for PIL (supra)

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has been relied upon. The guidelines  laid down therein have been

duly complied with. The guidelines framed provided the criteria as

well as the procedure to be followed, inviting nominations,

shortlisting of eligible candidates, final selection, to be made by the

Committee. The vacancies inviting applications for the posts of CVC

and VC were issued by respondent No.1 vide O.M. dated 13.10.2014.

It was uploaded on the website of Department of Personnel & Training

(DoPT) and the advertisement published in newspapers also referred

to the vacancy circular.  The  process  adopted  by respondent  No.1

included inviting applications through advertisement from all eligible

persons, thereafter scrutiny and sorting of the applications under a

welldefined criterion was done by a Committee of  Secretaries  and,

thereafter, the  list  was  furnished to the Committee as provided  in

section 4 of the Act. A fully transparent process had been adopted.

Office Memorandum dated 13.10.2014 has prescribed eligibility and

other requirements as under:

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

(a) who have been or are in an All-India Service or in any civil service  of  the  Union  or  in  a  civil  post  under  the  Union  having knowledge 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 corporation established by or under  any Central  Act  or  a  Government  company owned or controlled by the Central Government and persons who have expertise and experience in finance including insurance and banking, law, vigilance, and investigations :

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Provided  that,  from  amongst  the  Central  Vigilance Commissioner  and  the  Vigilance  Commissioners,  not  more than  two  persons  shall  belong  to  the  category  of  persons referred to either in clause (a) or clause (b). In case of persons falling under section 3(3)(a) of the Act as above, such persons,  preferably,  have held or is  holding the post  of  a  Secretary  to  the  Government  of  India  or  any equivalent post 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 holding the position  of  Chairman/Managing  Director/Chief  Executive Officer  of a  Schedule.  “A” Central  Public  Sector  Enterprise and has served as a whole time Director on the Board for a period of at least 3 years. In respect  of  persons  who have expertise  and experience  in finance,  including insurance and banking, law, vigilance and investigation and falling under the second part of section 3(3) (b)  of  the  Act  as  above,  such  persons  must  have  acquired eminence  and  have  outstanding  achievement  in  the  said fields(s) provided that such persons who are in employment in a private company must have held or is holding the position of Managing  Director/CEO,  as  a  Whole-Time  Director  on  the Board of the Company for a period of at least three years. All  the  applicants  should  be  of  outstanding  merit  and impeccable integrity and should have knowledge and at least 25 years of experience in the relevant field(s). The applicants should not be more than 62 years of age as on 1st January  2015  so  that  the  persons  to  be  considered  for selection will get at least 3 years tenure as a Central Vigilance Commissioner or the Vigilance Commissioner."

15. Experience of 25 years has been prescribed in the relevant

field(s). Advertisements were published in three leading newspapers,

i.e., Times of India, The Hindu, and Dainik Bhaskar (Hindi Daily) in

all their editions in India on 14.10.2014 inviting applications for the

aforesaid posts. The last date of receiving the applications was

5.11.2014. It was also uploaded on the website ‘www.persmin.nic.in’

by DoPT. The publication has been certified as per the

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communication received from the Directorate of Advertising and

Visual Publicity  (DAVP),  Ministry of Information & Broadcasting, it

has been placed on record. Multiple channels of communication were

utilised to give wide publicity to the advertisement.

16. Pursuant to the advertisement, total 132 applications were

received 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 the CVC Act, 2003

No. of applications received for CVC

post

No. of applications received for

VC post

No. of applications

received after 5.11.2014

1. 3(3)(a) 48 43 08

2. 3(3) (b) category - I 05 19 02

3. 3(3) (b) category - II 03 02 02

56 64 02

Total                                                                                    132   

The shortlisting  was  done by a Committee  comprising  of the

Cabinet Secretary, the Secretary (Department of Financial Services)

and  the  Secretary (Personnel). In the  meeting  dated  9.4.2015, the

Committee went through the relevant record, scrutinized all the

applications and examined the experience of each candidate and

shortlisted a panel of 12 names for the post of CVC and 10 names for

the post of VC for placing before Selection Committee for

consideration.

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17. It is further contended by respondent No.1 that the first meeting

of the Committee headed by the Prime Minister was held on

23.5.2015 which was attended by the Home Minister and the leader

of Congress Legislative Party. The Committee went through agenda

containing the details, notwithstanding the shortlisting of details of

all the 132 applicants and decided to obtain further information of

certain candidates.    

                     18. On 23.5.2015,  a  communication was received from the  PMO

containing extracts of all allegations from a representation made by

one of the  members of the  Common  Cause vide his letter dated

20.5.2015 and requesting for inputs on the said allegations against

Mr. K.V. Chowdary. The same was sent on 25.5.2015 to CBI and the

Department of Revenue for their inputs. The PMO also requested the

IB on 23.5.2015 to provide their  inputs. The following replies were

received :

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

(ii)  Two replies  were  received  from the  Department  of  Revenue  on 27.05.2015  and  is  part  of  the  record  that  was  placed  before  the Committee.

(iii) Inputs from IB were received in PMO on 26.05.2015 and in DoPT on  28.05.2015  and  is  part  of  the  record  that  was  placed  before  the Committee.

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(iv)  A reply on ACR was received on 29.05.2015 and is  part  of the record that was placed before the Committee.”

19. The Agenda note for the second meeting to be held on 1.6.2015

was circulated on 27.5.2015 which included the details of all

complaints against various candidates including the closed

complaints. With respect to Mr. K.V. Chowdary, it was mentioned in

the agenda note that other inputs will be placed before the Committee

during the meeting as some inputs were awaited. Accordingly,

additional inputs with the gist of the complaints regarding Mr. K.V.

Chowdary were placed before the Committee in the second meeting

held on 1.6.2015. The gist with annexures at correspondence

containing  plethora of documents of File  No.399/15/2014­AVD­III

was made available.  Not only the complaints/documents but a brief

summary of the complaints  and the inputs  obtained  from various

agencies including the gist of the note for Mr. K.V. Chowdary were

also placed before the Committee. The gist included the details and

the inputs received from various agencies like CBI, IB, and

Department of Revenue. On 1.6.2015 a letter from the Department of

Revenue  was received  stating that  no  adverse remarks  have  been

found in the Appraisal Performance Report of available ACRs. of Mr.

K.V.  Chowdary  for the period from 1978 to  2013­14.  Letter  dated

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26.5.2015 of another public functionary regarding Mr. K.V. Chowdary

was also placed before the Committee.  

20. It is further contended that the details of the complaints

including the closed complaints against Mr. T.M. Bhasin along with

inputs in relation to the same were also part of the agenda at para 3.7

and Annexure E which was placed before the Committee. The

Committee after taking into consideration all the  material placed

before it recorded thus:

"The representations received from Shri Prashant Bhushan, Anil  Kumar 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 their comments. The above letters and comments of the agencies concerned were placed before the Committee. Another complaint received by the CBI relates to the case of M/s. Flora and Fauna Housing and Land Development Pvt. Ltd. about an unaccounted income of Rs.234 crores. This was also a part of the complaint made by Shri Prashant Bhushan and based on the investigation inputs received, the matter was found to be unsubstantiated. Having considered the contents of the letters and the comments thereon, the Committee was of the view that the allegations were not substantiated."

21. The file was sent to the Hon. President of India through

MOS(PP) and then by the PMO on 5.6.2015 containing the agenda as

well as the gist of the complaints which was received from the

President’s Secretariat on 8.6.2015 along with the Warrants of

Appointment  and order  of  oath.  After  obtaining  their consent, the

Warrants of  Appointment were handed over personally to both Mr.

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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 not found substantiated. The Committee

had taken  note of inputs received from various investigation  and

intelligence agencies and after satisfying themselves the allegations

were found untenable and that they were the persons of impeccable

integrity and satisfied the requirement of law, had recommended the

appointments. There was no procedural irregularity or illegality. The

present petition is in no manner public interest litigation. Complaints

were baseless. There was no illegality or arbitrariness in their

appointments.

22. In the counter affidavit filed by respondent No.2, Mr. K.V.

Chowdary, it is contended that petition is based upon hearsay and

letters written 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 not placed before the High Power Committee (HPC) and as

such this Court had made interference. Mr. P.J. Thomas was accused

of  an offence under section 13(2)  read with section 13(1)(d)  of the

Prevention of Corruption Act (for short, “PC Act”) and section 120B of

Indian Penal Code, 1860 (for short, “IPC”). The Charge­sheet was filed

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before the Special Judge, Thiruvananthapuram. The definite role was

attributed  to  him and there  were  several  allegations made against

him. A note was put up for holding a departmental inquiry for

imposing  a  major  penalty.  The  Central  Vigilance  Commission  had

sent the opinion to initiate major penalty proceedings against Mr. P.J.

Thomas and another. The High Court of Kerala in its judgment had

also alleged the role of Mr. P.J. Thomas in Palmolein case. The action

of the State Government for initiating criminal case or pendency of

the case or penalty before Special Judge, Thiruvananthapuram was

never questioned or challenged by Mr. Thomas before any court of

competent jurisdiction. Later, CVC had changed the opinion without

any reason while  giving  vigilance  clearance  on  6.10.2008.  Besides

this, Court has made observations in one of its earlier judgments in

K. Karunakaran  v. State of Kerala  (2000) 3 SCC 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 respondent No.2,

there is no such incriminating material borne out from official

records.  The allegations are unfounded,  made by busy­bodies with

sinister  motives.  The  High Power  Committee  along with reports  of

various authorities, Department of Revenue, CBI and Intelligence

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Bureau had examined the allegations which belie the correctness of

the unfounded allegations. Mr. Anil Kumar Agrawal has annexed the

ground against  respondent No.2.  The answering respondent  in his

capacity  as  Director  General  of Income tax (Inv)  Delhi (DGIT)  had

granted approval in the year 2011 for initiating criminal prosecution

under section 182 IPC against Mr. Agrawal. Further, the proceedings

were instituted by  the  Institute  of  Chartered Accountants  of India

based on a complaint filed by an officer working under the answering

respondent. Since then, Mr. Agrawal had started personally

attacking, writing a volley of frivolous and vexatious complaints to

many authorities in the Government etc. Complaints by other public

institutions  smack of  venom against  several  political  persons.  The

petition has not been filed with due diligence. Facts have not been

verified by filing applications under the RTI Act or some other legal

means. They have relied upon  motivated complaint by Mr. Anil

Agrawal who was seeking pound of flesh from answering respondent

for aforesaid reasons. The allegations are not supported by any

evidence whatsoever.  Petitioners have not  explained  the basis.  Mr.

Anil Agrawal had written hundreds of letters against answering

respondent No.2 when he was being considered for the post of

Member, CBDT, Chairman, CBDT and finally while being considered

for the post of CVC. Mr. Agrawal had supplied false and motivated

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information to one of the members of the Common Cause and other

political functionaries to initiate frivolous and vexatious proceedings.

It amounts to a proxy war by Mr. Anil Agrawal through the petitioners

and other public functionaries.  One of the  members of  Common

Cause had unleashed a slander campaign in the social media and

press during the selection process with a view to prejudice the

Selection Committee. Communications were released to media even

while the selection process was in progress, it apparently intended to

damage the prospects of selection of answering respondent  No.2.

Thus, it was  made an issue private and personal to them. The

allegations made fall short of the minimum standard of credibility. An

effort has been made to somehow indict the answering respondent by

placing reliance on a letter Annexure P3 in which false statements

were  made about the answering respondent's service record that

three senior officers of CBDT made serious adverse remarks in his

performance appraisal reports. Thus, the petitioners are guilty of

malice in law by stating incorrect facts. For perjury, petitioners be

prosecuted.

24. It is further contended by respondent No.2 in reply that while he

was posted as Director General of Income tax (Investigation), Delhi

from 1.11.2010 to 28.8.2012 and further from 29.8.2012 to

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29.7.2014 he was posted as Member, CBDT. Thus, he was a Member

(Inv) CBDT from 12.10.2012 to 31.10.2014. His duties included

overall  supervision of investigations under the direct  tax  laws and

formulation of policies relating to direct taxes. He was appointed as

Chairman, CBDT, Department of Revenue from 1.8.2014 to

31.10.2014. After his superannuation, he was appointed as Advisor

to Department of Revenue on black money and functioned as such

from 1.11.2014 to 4.6.2015.

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

were allocated coal blocks, chit fund scams, undisclosed foreign bank

accounts  including  in  HSBC, Geneva etc.  Many cases  investigated

under his supervision finally led to detection and assessment of

substantial  undisclosed income and  criminal  prosecutions.  During

his tenure as Member (Inv) the number of cases in which prosecution

proceedings were  launched,  went up  from 149 to 669 and further

offences compounded increased from 83 to 900. Respondent No.2 was

adjudged one of the best Probationers during training and was

awarded silver medal, was promoted out of turn from Deputy

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Commissioner of Income tax to Joint CIT on being graded as

"outstanding" by UPSC. Very few may be 15 to 20 officers hold such

record in the IRS at all times put together. His work, conduct, and

integrity had always been rated at the highest level, ACRs. recorded

by  a  wide range of officers over a  period  of years  bear sufficient

testimony.  A verbatim extract  of the remarks of the reporting and

reviewing officers has been annexed as R2/1 to the counter affidavit.

26. It is further contended that his application dated 7.8.2014 was

duly forwarded by the Department of Revenue along with his ACRs.,

integrity certificate and vigilance clearance including a certificate that

no disciplinary or criminal proceedings were either pending or

contemplated against him. The DoPT has again called the

applications vide communication dated 13.10.2014 for CVC. This

advertisement/notification appeared  in the newspapers and on the

Government website.  Application dated 21.10.2014 was again duly

forwarded. The petition is based mainly on the representations made

by Mr. Anil Kumar Agrawal who represented the grievances of one of

his client M/s. Dharampal   Satyapal Ltd., searched by the

Investigation Wing  (Unit II)  on 21.1.2011 when he  was  serving as

DGIT   (Inv), Delhi. He had made allegations on 5.2.2011 and

18.2.2011 that his client was being harassed in his capacity as DGIT

21

(Investigation). Answering respondent had quickly responded and

brought harmony between the investigating officers and the taxpayer

to facilitate further investigation. Ultimately I.O. made a reference to

the CBI and other agencies. This did not suit the interest of Mr. Anil

Agarwal. He had represented himself as whole­time Director of M/s.

Dharamal Satyapal Ltd. It was found to be in violation of the

provisions of Institute of Chartered Accountants of India Act and a

complaint was filed by the I.O. Mr. Gaurav Dudeja, DDIT

(Investigation) before the Institute of Chartered Accountants. The

institute found Mr. Agrawal  prima facie  guilty of professional

misconduct and initiated disciplinary proceedings as per Rule 9(1) of

the Chartered Accountants (Procedure of Investigations of

Professional and other  Misconduct and  Conduct of Cases) Rules,

2007  and  decided to  proceed  under  Chapter  V  of the  Rules. The

consequential judicial proceedings were still pending. Consequently,

Mr. Agrawal in order to arm­twist the officers of the income­tax

department and by way of intimidation had been consistently writing

unfounded and baseless complaints against certain targeted officials

of the department  levelling serious allegations.  In the case of M/s.

Sanjay Parwal and other connected cases complaints were found to

be baseless and unfounded and the outcome of arm­twisting tactics.

22

27. It is further contended that answering respondent  No.2  had

authorized the filing of a complaint under section 182 IPC against Mr.

Anil Agarwal in his capacity as DGIT (Investigation) with the approval

of CBDT. It was filed by the Deputy Director of Income Tax

(Investigation),  Headquarters,  New Delhi,  before  ACMM, Tis  Hazari

Court, Delhi. Copy of complaint has been placed on record. It was

mentioned in the complaint that false complaint had been filed

against the officers to damage the reputation against the highly

placed authorities. The court has taken cognizance of the complaint.

Bailable warrants were  issued on 6.2.2012 as service of  summons

was intentionally evaded by Mr. Anil Agarwal. Various witnesses have

been examined in the said case including answering respondent No.2.

The case was still pending. Due to aforesaid reasons, Mr. Anil Kumar

Agarwal  had  been levelling  wild  allegations  against the  answering

respondent. Under Secretary has sought the comments of answering

respondent as per O.M. dated 19.9.2014. The answering respondent

has offered comments to the aforesaid effect. Same has been placed

on record. Regarding the visits to Mr. Ranjit Sinha, Director, CBI, it is

contended that respondent No.2 was heading the Investigation

Division of CBDT and in that capacity, he had met the heads of other

investigating agencies including the then Director, CBI. The

answering respondent met the Director at his residence on a couple of

23

occasions for some official work. He had also  met him and his

predecessor in their respective offices in  North  Block  and in  CBI

Headquarters several times on official work. This can be verified from

the registers of said offices. It is contended that he had never

discussed the cases of Mr. Moin Qureshi or stock guru with the then

Director  of  CBI  or  during  any  such  meeting.  Petitioners  have  not

substantiated by any record their allegations that some cases have

been mutually and improperly settled. The allegations are based on

conjectures and surmises.

28. That  in the averments made and the  facts  mentioned  in  the

letter {P­3} written by the member of Common Cause dated 20.5.2015

it was nowhere observed by this Court that the impact of the

meetings has to be investigated by the CBI. The aforesaid averment is

wrong and false and afterthought.

29. With respect to the allegations regarding Mr. Moin Qureshi, it is

contended in the counter affidavit filed by respondent No.2 that he

was a taxpayer in Delhi whose cases were investigated by the Delhi

Directorate by conducting search on 15.2.2014. Respondent No.2 was

a Member (Investigation), CBDT at that point of time. In that capacity,

he monitored the cases across the country. The facts of the case and

the findings have been submitted to the Government from time to

24

time. All necessary actions including reference to foreign tax

authorities, references under Mutual Legal Assistance to Hong Kong,

sharing the information with the Enforcement Directorate, DRI, other

relevant departments/agencies, Department of Financial Services and

RBI regarding illegal activities of certain foreign banks, banks were

taken in due time and with good results. The investigation apart from

leading to detection of undisclosed incomes and assets had led to the

filing of prosecution proceedings against certain persons. This Court

in connection with coal mines allotment case i.e. W.P. (Civil) No.463

of 2012 directed filing of investigation report relating to involvement

of certain persons and report was filed on 16.10.2014  in a sealed

cover  before this  Court  on 17.10.2014. This Court  had passed an

order on 8.12.2014 in which this Court has not expressed any

dissatisfaction regarding the nature of work of the Investigation

Division much less in respect of the work of the answering

respondent. No such allegation was ever made in the Court. Thus, the

allegations made in the petition are baseless.

30. With respect to allegations regarding stock guru it is contended

in the counter affidavit of respondent No.2 that stock guru and the

persons involved who were running a Ponzi scheme was investigated

by the Deputy Director of Income Tax (Investigation) under an

25

Additional Director of Investigation reporting to Director of

Investigation (Investigation­II, Delhi) who in turn reported to the

answering respondent as the then DGIT (Investigation) Delhi. A

search conducted on 6.1.2011 led to the seizure of Rs.34.69 crores in

cash.  Mr. Anil Agarwal complained that the cash belonged to various

depositors and it should not have been seized. Some depositors filed a

separate case in a court in Delhi.    The seized money was deposited

in court as per the order that was passed. Certain allegations were

made against the IO  of  stock  guru namely  Yogender  Mittal,  DDIT

(Investigation). Name of the answering respondent did not figure

anywhere in the FIR filed by the CBI nor there was any allegation of

any  wrong doing against him.  No shortcoming  was found in his

actions. The CVC, Department of  Revenue and CBDT had also got

this issue enquired and apparently dismissed the allegations made

against respondent No.2 as baseless. In "Let us Share" annual

publication of CBDT many cases with which answering respondent

was associated were reported year after year. During the relevant year

also two cases were reported.

31. With respect to allegations of M/s. Flora and Fauna Housing

Development Pvt. Ltd., it is contended in the counter affidavit filed by

respondent No.2 that a search was conducted by the Criminal

26

Investigation Division of the  Income Tax Department on the Ponty

Chadda Group on 1.2.2012. The said Division was being headed by

Smt M. Sailoo, DGIT (I & CI) Delhi at that time. They prepared an

Appraisal Report and sent it to the Assessing Officer in the Central

Charge.  While completing the assessment for  the Assessment Year

2012­13 in March 2014, the Assessing Officer found a suggestion in

the Appraisal Report that an addition of an amount of Rs.234 crores

be  made as  unaccounted  sales for the  period from 01.09.2011  to

22.09.2011 as not acceptable. After a close scrutiny of this Appraisal

Report, the Assessing Officer found that there is  a discrepancy  in

treating this amount of Rs.234 crores as unaccounted sales in the

said Appraisal Report. It was identified that it was a mistake that has

been committed  by  the  accountant in  posting  cumulative  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 Charge

who were not convinced of the correctness of the suggestion of

bringing the sum of Rs.234 crores to tax as unaccounted sales

consulted the I&CI  Division,  who stated that the  matter  may be

decided as per Law after taking into consideration the seized material,

Appraisal Report, and Submissions of the assessee. On a

27

consideration of the facts, the Assessing Officer came to a conclusion

that there is  no  case for  an  addition and  passed the  Assessment

Order under IT Act with the approval of the Additional Commissioner.

In a meeting held on 28.03.2014, the DCIT (the Assessing Officer), the

Additional Commissioner, Commissioner and the Chief Commissioner

apprised the Member­investigation that they were of the view that no

addition of Rs.234 crores was 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 days from 1.9.2011 to 22.9.2011.

      The answering respondent No.2 also agreed with the conclusion

and signed the minutes of the meeting. There was no case for making

an addition. He had not taken any such decision. The decision was

taken by the Assessing Officer and the Additional Commissioner in

whom the power is vested. They had brought it to the notice of the

Commissioner, the Chief Commissioner and even the then Member

probably due to the huge amount involved and to avoid complaints of

this kind. Mr. Anil Kumar Agarwal has no connection with the said

case. It is not brought on record that the background note submitted

jointly by the DCIT, Additional CIT, CIT and CCIT and the record of

the discussion in the  meeting which clearly  mentioned that the

answering respondent had only concurred with the prior decision of

28

the officers concerned of not making the addition on that issue. The

record  of the  discussion in the  meeting  had  also  been  placed  on

record and was signed by all present. In this Court false averment

has been made in the petition. The allegations were probed by the

competent authority and no irregularity whatsoever was found.

32. With respect to the allegations regarding the handling of

accounts in the HSBC Bank it is pointed out in the counter affidavit

by respondent No.2 that information regarding certain bank accounts

held by persons of Indian origin in HSBC, Geneva was obtained by

the Government (CBDT) from French Government relating to about

628 persons around June 2011. The CBDT passed­on the said

information to 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 were investigated 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 Delhi region. As per the procedure that is

laid down, the Investigation Division prepared Appraisal Reports and

29

sent them to the Assessing Officers concerned for further action such

as assessment of income, recovery of tax, levy of penalty, initiation of

prosecution proceedings in appropriate cases, etc.

33. It is further contended that the answering respondent No.2 was

the only DGIT (investigation) who submitted proposals for the

approval/ consideration of  the CBDT for action (prosecution under

the IT Act, and action under the Banking Companies Regulation Act,

etc.) against the concerned foreign bank, its Indian affiliates and the

persons concerned.  

34. The answering respondent No.2 also held several video

conferences periodically, that is to say, on 15.11.2012, 01.05.2013,

20.01.2014,  20.06.2014,  etc.  The  answering respondent  submitted

that  he  was  also instrumental in issuing  several instructions  and

guidance notes for dealing with this category of cases which was a

new and hitherto not­conceived kind of a work for the Investigating

Officers  and  Assessing Officers.  The  answering respondent further

submitted that hundreds of references were made through the

Commissioners concerned, through the Foreign Tax Authorities under

the provisions of Double Tax Avoidance Agreements (DTAA)/Tax

Information Exchange Treaties as the  information received through

the French Government was incomplete in most cases. Only when it

30

became clear that there was no possibility of getting further

documents/information from the Swiss Tax Authorities due to certain

limitations in the Tax Treaties, the Assessing Officers could go ahead

with making assessments and further actions, including prosecution.

35. Efforts made by the answering respondent No.2 that a

methodology called "Consent Waiver Mechanism" was devised due to

which, with the consent of tax­payers, the copies of the Foreign Bank

Accounts could be obtained from the foreign bank directly without

going through the Swiss Tax authorities under the DTAA in about 80

cases, though they could not be obtained under DTAA. This  is an

innovative and successful action that has been evolved on account of

the contribution of answering respondent.

36. The answering respondent No.2 further submitted that having

regard to the seriousness of the matter,  he had devised a diligent

procedure for analyzing the database. He also actively collaborated

with French Tax Authorities and obtained information in respect of

575 cases which were hitherto not available to the Indian Authorities.

This analysis that he had adopted has resulted in the detection of

these new accounts and this method of analysis was new even to the

French Authorities, who initially shared the information with Indian

Authorities.

31

37. The answering respondent No.2 submitted that the assessment

proceedings were conducted by Assessing Officers situated across the

country  and  it involved  making  references to foreign  jurisdictions,

local inquiries which took considerable  time and ultimately all the

assessments have been completed by the Assessing Officers

concerned within the statutory time allowed under the Income Tax

Act. After that, the Assessing Officers started initiating prosecution

proceedings in appropriate cases. Prosecution proceedings are to be

initiated  by  Assessing  Officers concerned across the country  with

necessary sanction from the Commissioners of Income Tax concerned

(Sec. 279 of the Income Tax Act). The answering respondent further

submitted that these are quasi­judicial functions to be exercised by

the empowered officers and the CBDT only provides necessary

guidance and  monitors the progress. He submitted that he has

exercised these functions diligently due to which as on 31­03­2015,

about 121 prosecutions were launched in this category of cases and

some more were in process. He further submitted that he had further

followed up the proposals earlier submitted by him as DGIT

(Investigation)  Delhi  and certain actions were  initiated,  wherever it

was possible. Under these circumstances and the various efforts put

in by him, including evolving of innovative methods of analysis; it is

32

incorrect and absolutely inappropriate to allege that he had not

initiated prosecution in these cases.

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 submit

and bring to the notice of this Court the following observations of SIT

in its 3rd Report:

“Shri K.V. Chowdary Advisor to CBDT and former Chairman, CBDT carried  out  detailed  investigation  and  visited  Paris  in  December  2014. During the said visit,  he met the French authorities dealing with HSBC foreign accounts matters and new lines/modes of 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 been received in 575 cases in the last week of February 2015. Based upon new inputs (mostly in existing 624 cases), further investigation is in progress. It has been observed that some of the cases which were hitherto not actionable may become actionable as a result of such further investigations."

39. The answering respondent No.2 is assisting SIT even after he

had been appointed CVC. The Chairman of SIT on Black Money has

issued a direction to the following effect :  

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

Proceedings dated 24.7.2015 has been placed on record.

33

40. With respect to the allegation of failure to make any headway in

2G scam investigation, it was submitted that answering respondent

No.2 worked as DGIT (Investigation) Delhi from 1.11.2010 to August

2012. During this period the case of Unitech Ltd., whose

associate/sister concern was granted telecom licence and few

connected cases of  other  telecom companies  being  investigation  in

other charges were investigated in the Delhi Directorate by DIT (Inv)­I

who functioned under him. All necessary investigations were carried

out and findings were communicated to the Assessing Officers who

took appropriate actions. However other cases of telecom companies

were within the jurisdictions of DGsIT (Inv), Mumbai, Chennai,

Bengaluru etc. for the purpose of making presentations and meetings

on behalf of the Income­Tax Department, DGIT (Investigation), Delhi

was appointed as  the Nodal  authority.  They had coordinated  with

other DGsIT and other investigating agencies including CBI, ED etc.

and had also made several presentations on the action taken by the

Income Tax Department before the Joint Parliamentary Committee.

41. This Court has never expressed dissatisfaction or  inadequacy

regarding the functioning.

42. With respect to the allegation regarding Radia Tapes when

answering respondent  No.2 had  joined as DGIT  (Investigations)  on

34

1.11.2010, the surveillance of Ms. Nira Radia was over.  Actionable

issues were identified and necessary action was taken either by the

Delhi Directorate or was communicated to other  Directorates for

further action. The information was duly shared with the assessing

officers, and other law enforcement authorities such as CBI, ED etc.

The matter was before this Court. The representations were

submitted from time to time. None of the authorities found any

shortcomings or inaction on his part on this count. No such

allegation was made before this Court against  him by the counsel

appearing in 2G scam case.  

43. In the counter  affidavit filed by Mr.  T.M.  Bhasin,  respondent

No.3, in the reply contends that the petition is based upon

suppression and false averments have been made. As such petition

suffers from suppressio veri, suggestio falsi. Respondent No.3 has an

excellent academic record and vast experience and expertise in the

field of banking.  He is (i) an  M.Sc.  Gold  Medalist, (ii) LLB,  MBA

Finance from Delhi University, (iii) Topper in the Delhi University in

the flagship one­year programme  viz.  ‘Criminology and Forensic

Science’;  and (iv) CAIIB. In addition to the above qualifications, he

had a wide and varied experience in Banking where he joined as a

Probationary Officer in 1978 and in course of time got due

35

promotions and reached the level of General Manager in 2003.   He

has got about 8 years of experience as a Whole Time Director in two

Public Sector Banks, comprising of Executive  Director (ED) from

November 2007 to March 2010 in UBI and as Chairman and

Managing Director of the Indian Bank for the period 2010­2015.  It is

pointed  out that at the time  of his  present selection  he  was the

longest serving Senior­most Chairman & Managing Director in Public

Sector Banks.  He had also headed the Indian Banks’ Association as a

Chairman and was also Chairman of the Indian Institute of Banking

Personnel Selection and was also President of the Indian Institute of

Banking Finance (IIBF) since 2014.   He had also experience in the

Insurance Sector having worked for nearly five years as a Director on

the Board of United India Insurance Company.   That during his 37

years long Banking career he has an impeccable record of integrity,

sincerity, honesty, and dedication towards duty.   Under his

stewardship as  CMD of Indian  Bank, the  Bank  had  won various

National Awards like the following:

 National Award for excellence in Lending to Micro Enterprises

for FY 2012 on 4th April 2013 from Hon'ble President of India.

 National Award to Banks FY 2013 – First Prize for Excellence in

lending to Micro Enterprises on 01.03.2014 from Hon’ble Prime

Minister of India.

36

 Indira  Gandhi  Rajbhasha  Puraskar for  2012­2013 for  South

Zone TOLIC from Hon’ble President of India.

 First price and Best Bank Award for extending credit to SHGs

on 24.02.2014 from Hon’ble Chief Minister of Tamil Nadu

consecutively for five years.

44. It was further stated that initially he was given five years tenure

as Chairman & Managing Director of the Indian Bank from 1.4.2010

to 31.3.2015. Being satisfied with the performance of the Bank during

the said  period,  his tenure  was further extended  by  Appointment

Committee of the Cabinet vide Government notification dated

27.3.2015 from 1.4.2015 up to the date of his superannuation  i.e.

31.5.2016. At each stage of new appointment/assignment above, all

necessary clearances had been obtained by DFS from the CVC, CBI,

DoPT and other concerned departments  and agencies.  Respondent

No.3 had applied for the post of Vigilance Commissioner pursuant to

a notification dated 13.10.2014.

45. With respect to the allegation of tampering with APAR of Mr.

Malay Mukherjee, respondent No.3 received a letter from Ms. Sumita

Dawara, Director of Financial Services dated 4.11.2010 to send

details  of  Annual  Performance  Appraisal  Reports (APAR)  of  eligible

GMs for selection as Executive Director by 15.11.2010 on an urgent

basis.  The respondent states  that the relevant APAR of  Mr.  Malay

37

Mukherjee, the then GM, Indian Bank for the period 2009­10, duly

appraised by Mr. V.Ram Gopal (Executive Director) was received on

November 15, 2010, and he, as reviewing authority, concurred with

Average Rating Appraisal done by Mr. V. Ram Gopal and it was sent

to the DFS in compliance with the letter dated 4.11.2010. The

respondent states that Mr. Malay Mukherjee claimed to have

submitted his APAR for the year 2009­2010 on 29.07.2010 and by

which time Mr. Sundarrajan, the former CMD had demitted office on

31.3.2010. As per Rule 5(7) of All India Services (Performance

Appraisal Reports) Rules 2007, a retired official can review the

performance of the appraisee only within one month of the date of his

retirement. As previous CMD had demitted office as early as

31.03.2010, the respondent who was the incumbent CMD had rightly

exercised his Reviewing Authority powers, which was the extant

practice too. There is nothing on record of the Bank to substantiate

the  version of  Mr.  Malay  Mukherjee,  about the  submission of the

APAR for 2009­2010 on 29.07.2010. Even going by averments of Mr.

Malay  Mukherjee, the APAR  was dated 07.07.2010, whereas  Mr.

Sundarrajan the earlier CMD had demitted office over three months

earlier.  The Vigilance Department of the Indian Bank had during its

internal inquiry found out that the statement of Mr. Malay Mukherjee

38

claiming to have sent the APAR by courier and the proof produced

thereof was unsubstantiated.

46. Nothing on record was found to substantiate the version of Mr.

Malay Mukherjee about the submission of APAR for the period 2009­

2010  on  29.7.2010.  According to  Mr.  Mukherjee  APAR was  dated

7.7.2010 whereas Mr. Sundarrajan had demitted the office more than

three months before. The Vigilance Department of Indian Bank had

during its internal inquiry found that the claim of Mr. Mukherjee that

APAR was sent by courier on 29.7.2010 was not substantiated. Said

courier was sent from Zonal Office to Bhopal. The petitioners have

relied 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 the

matter, that the CVC  may ask for certain documents from the

CVO/DFS so as to ascertain as to the APAR and then to reach a final

conclusion. The CVC had agreed with the VC(G) in this regard. That

there was disagreement with VC(G) on two occasions i.e. on

15.10.2012 and 30.11.2012 and it is the majority view that prevails.   

47. Pursuant to the majority opinion steps of follow up were taken

whereafter the CVO and DFS have opined that there is no conclusive

evidence for initiating even  departmental inquiry  as that  may  not

39

stand the scrutiny of law as is apparent from OMs. dated 27.8.2012

and 24.12.2012.

48. Respondent No.3 had received OM dated 6.9.2013. For the first

time, he was provided an opportunity to submit his version on the

various allegations made by Mr. Malay Mukherjee. Answering

respondent  submitted the  detailed  32 pages reply  with  130 pages

Annexures and it was the normal practice to write APAR once the

previous CMD had retired. Thus, he had not committed any illegality

or irregularity in doing so.

49. Considering the reply submitted by answering respondent No.3

on 26.9.2013, the Department of Financial Services sent a

Memorandum dated 10.3.2014 as R­III to CVC, clarifying the whole

matter and appraisal of Mr. Mukherjee’s APAR and holding that the

deponent had not violated any guideline and no disciplinary action

was warranted.

50. A detailed version of Department of Financial Services

summarised in the file notings of CVC dated 31.3.2014, 28.4.2014

and 6.5.2014, thus, gave finality/closure to the whole issue, has been

accepted by the respondents in the counter affidavit. Same is

extracted hereunder :

40

   "The  Extract  of  the  official  file  notings  dated  28.04.2014,  on  the observations 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 an administrative nature and not exactly a vigilance issue”

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

following noting:

"I am in agreement with VC (R) that writing of APAR and its review is essentially an administrative matter. However, in this case, it had acquired vigilance overtones due to allegations of tampering of APAR. DFS, after the inquiry, has come to the conclusion that the evidence is not sufficient to  prove  the  most  crucial  charge  of  tampering  with  the  APAR of  Shri Malay Mukherjee. I am inclined to agree with DFS in this respect. DFS has however pointed out that Shri  Bhasin wrote the APAR of 2009-10, without having overseen the work of Mr. Malay Mukerjee. Shri Bhasin, in his defense, has cited past precedents. DFS has also conceded the need to have  uniform  guidelines  in  Banks  to  avoid  such  confusions  and inconsistencies. However, DFS has considered it unethical on the part of Shri Bhasin to have written ‘Average' at two places. For this Shri Bhasin may be cautioned and the case closed as proposed by VC (R)"

                   52. No punishment was imposed. Only an observation was made to

be cautious.  The same was advisory  in nature and not  a penalty.

Thus after receipt of reply matter stood concluded. The allegations of

tampering and forging were found baseless and closed. The factum of

closure has been suppressed by the petitioner. The clearance of

respondent No.3 had been made by the CVC also and CVC has given

the clearance in which it was opined that there was nothing adverse

against the answering respondent.

41

53. Mr. Prashant Bhushan, learned counsel appearing for the

petitioner submitted that the appointment of respondent Nos.2 and 3

as per mandate of this Court in  Centre for PIL  (supra), respondent

Nos.2 and 3 could not be termed as persons of impeccable integrity,

consequently they could not be said to be fit to hold the office of CVC

and VC in the absence of Lokpal is required to discharge important

functions and to ensure that functionaries versed with integrity in the

interest of the nation considering the higher responsibilities.

Respondent Nos. 2 and 3 could not be said to be suitable  for the

posts in question. The appointment of  Mr. K.V. Chowdary, CVC,

respondent No.2 has been assailed. It was urged by learned counsel

that respondent No.2 had connections with Mr. Ranjit Sinha, former

CBI Director. There was quid pro quo between them since respondent

No.2 was given clean chit in stock guru scam and in turn income tax

department in its appraisal report of Mr. Qureshi gave clean chit to

Mr. Ranjit Sinha. Since respondent No.2 was involved in stock guru

scam and gave favourable report to Mr. M.Qureshi the credentials of

respondent  No.2  could  not  be said to  be  proper  and  trustworthy.

Respondent No.2 was also involved in M/s. Flora and Fauna Housing

Development Pvt. Ltd. and in  waiving off Rs.234 crores and  had

influenced the decision  making by the assessing officer in illegal

manner. It  was also  urged that respondent  No.2 did  not actively

42

investigate the foreign accounts in HSBC Bank, Geneva. There was

failure of respondent No.2 to  make any headway into the scam

investigation as no action was taken with respect to Radia Tapes. All

these facts  have  not  been  examined by the  Union  of India  before

making appointment of CVC as such same is liable to be quashed.

54. With respect to the appointment of VC, Mr. T.M.Bhasin learned

counsel has urged that he was indicted in a detailed inquiry by the

CVC in 2013 for forging and tampering with the appraisal report of

Mr. Malay Mukherjee, General Manager, Indian Bank. Even his

criminal prosecution was suggested by one of the Vigilance

Commissioners since he had fabricated the APAR of Mr. Malay

Mukherjee, the appointment of respondent No. 3 as Vigilance

Commissioner was null  and void since  there  was  finding of  moral

turpitude by the CVC against Mr. T.M.Bhasin which made him unfit

to hold the office of Vigilance Commissioner.

55. It was also urged by learned counsel that in order to ensure a

transparent procedure for an appointment it is necessary the persons

who have been empanelled should be disclosed to the public so that it

can send information in respect of such persons to the Government.

43

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 contended that on the basis of representations filed by

Mr. Anil Kumar Agrawal and others, were looked into, reports were

called from concerned departments, viz., Department of

Revenue/MoF/IB/CBI etc. Clearances were obtained and it was

found that there was no merit in the aforesaid objections which were

raised in the representations and the Committee has taken a

unanimous decision,  with respect to  suitability  vigilance  clearance

has been obtained. It is not open within parameters of judicial review

as  laid down in  Centre  for  PIL  (supra) to make  interference  in the

appointments made unanimously by the High Power Committee on

due consideration of entire material. It was pointed out that the due

procedure has been adopted for appointments of CVC and VC and

has produced the various files for perusal of this Court. He has taken

the Court in extensive details with respect to the procedure adopted

with the help of record. Various other files as to matter in question as

prayed by the Common Cause Society have also been produced.

57. Per contra, Mr. C.S. Vaidyanathan learned senior counsel

contended on behalf of respondent No.2 that the allegations made in

44

the petition are based upon the incorrect statement and on an

imaginary  basis  and  are  not supported  by  any  material, they  are

based upon assumptions made by the petitioners with respect to the

integrity of  respondent No.2.  There was absolutely nothing against

respondent No.2.  The requisite  clearances had been obtained from

various  departments and there  was  nothing against in the entire

service record of Mr. K.V. Chowdary. His record was excellent with

rich experience and has been found fit by the High Power Committee

in an objective manner after duly considering the various aforesaid

objections which were raised in the representations filed by Mr. Anil

Kumar Agarwal. He had the personal axe to grind against respondent

No.2. As he was prosecuted as per the approval granted by

respondent No.2 and disciplinary proceedings had also been initiated

by the Institute of Chartered Accountants, on that basis respondent

No.2 had deposed against him in a criminal case pending in the court

at  Delhi. Thus, baseless and reckless allegations  were repeatedly

made by him at every juncture whenever respondent No.2 was

selected for any high office. These allegations were never found to be

proved and were mischievously raised with the objective to malign

him due to personal vengeance. The aspersions cast have been

refuted and it was asserted that no case for interference in the

judicial review was made out.

45

58. Mr. P.S. Patwalia, learned senior counsel on behalf of

Mr.T.M.Bhasin, VC, contended that firstly no representation was filed

against Mr.T.M.Bhasin by any of the incumbents still the High

Powered Committee was apprised of the said aspect relating to APAR

of  Mr.  Malay  Mukherjee and it was found that the allegation of

fabrication of APAR was not substantiated. The conclusion was

reached that it was not a case even to hold a departmental inquiry

and it was held and simply a caution was issued. It was also urged

that there was no fabrication of the APAR of Mr.Malay Mukherjee and

he is said to have sent an APAR for 2009­2010 which was signed by

the retired CMD Mr. Sundarrajan on 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. Even otherwise erstwhile CMD had

demitted the office on 31.3.2010 and as per Rule 5(7) of the Rules of

2007, a retired official can review the performance of the appraisee

only within one month from the date of his retirement. Since the CMD

had demitted the office on 31.3.2010 the power could not have been

exercised  by  him on  7.7.2010.  No  such  APAR had  been received.

Such power was rightly exercised by respondent No.3 to write APAR

in the capacity of reviewing officer to make a remark in the APAR. For

46

perjury, the petitioners be prosecuted. Further communication dated

4.11.2010 was required to be sent. It was not a case of fabrication or

forging the APAR at all  as suggested by the petitioners.  When the

various departments have not found anything against answering

respondent  and  after respondent  No.  3  had filed  a representation

matter was dropped. It could not be said that there was anything to

blame the outstanding record and high integrity of respondent No.3.

59. It need not be re­emphasized that the Central Vigilance

Commission is one of the integrity institutions. It was set up in 1964.

After the decision rendered by this Court in Vineet Narain (supra), the

2003 Act has been enacted and its function is to improve the

vigilance administration of the country and to have anti­corruption

measures. Pursuant to recommendations  made by the Reviewing

Committee, the report made by it in December 1997 statutory status

was suggested. This Court in Vineet Narain (supra) had observed that

the given status as recommended by the independent Reviewing

Committee, in the year 1999 an Ordinance was  issued which was

replaced by the 2003 Act.  Section 4  lays down constitution of  the

Committee. The Prime Minister as Chairperson, the Home Minister as

a member and Leader of Opposition in the House of People is also a

member of the said Committee. In case there is no Leader of

47

Opposition, the leader of opposition to include the leader of the single

largest group in opposition and no appointment made shall be

invalid,  may  be  by reason  of  any  vacancy in the  Committee.  The

appointment has to be made by the President as provided in section

5. The oath has to be administered. Section 6 deals with removal of

Commissioner and Vigilance Commissioner, contains safeguards. On

a reference being made by  the President  on  the ground of  proved

misbehavior or incapacity to this Court. On inquiry, it was reported

that CVC or VC be removed on said grounds. The other exigencies

with respect to removal contained in sub­section (3) to section 6 on

being declared insolvent or convicted of an offence, engages during

his term of office in any paid employment outside the duties of his

office or in the opinion of President is unfit by reason of infirmity of

mind or  body,  has acquired such  financial  or  other interest  as is

likely to affect his functioning as the CVC or VC.

60. Just to exercise superintendence  over the functioning  of the

Delhi Special Police Establishment with respect to offences under the

P.C. Act, 1988 or an offence with which a public servant specified in

sub­section (2) under the Cr.P.C. may be charged with at the trial,

and may issue directions to the CBI, review the progress of

investigations conducted by CBI,  review the progress of applications

48

pending  with the competent authority for sanction  of prosecution

under the P.C. Act, exercise superintendence over vigilance of various

Ministries etc. It can enquire into an investigation to be made as the

member of All India Services etc. as provided in section 8. The

Vigilance Commission is an institution. Thus, the institution’s

competency is to be ensured by the Government as well as its

integrity. Consequently, the personal integrity of an individual also

becomes relevant as it has correlation with the institution's integrity.

IN RE: APPOINTMENT OF CVC :

61. In the backdrop of aforesaid first, we consider the case of

Mr.K.V.Chowdary appointed as CVC. The process of appointment that

has been followed reflects that the procedure followed was by issuing

advertisement in newspapers. Wide publicity was given, various

advertisements throughout India were issued. 132 applications were

received. The Committee headed by Cabinet Secretary shortlisted 12

names of  CVC and 10 names  for  V.C.  However,  details  of  all  131

applicants  which  included work experience,  ACR grading wherever

applicable, vigilance clearance, age criteria, experience in the matter

relating to vigilance, policy making and administration were placed

before the Committee – HPC. The HPC in its meeting dated 23.5.2015

shortlisted six candidates for the post of CVC and 2 candidates for

49

the post of Vigilance  Commissioner and called for inputs on the

representations. The second meeting of the Committee took place on

1.6.2015. The agenda placed before the Committee contained all the

details including vigilance details of shortlisted applicants. The details

of Mr. K.V.Chowdary were placed in the file and the details of Mr.

T.M.Bhasin were placed.

62. There were three representations/complaints against Mr.

K.V.Chowdary. The Prime Minister’s Office had asked for inputs on

the allegations so  made as to ascertain the correctness of facts

contained in the representations.

63. So far as Mr. T.M.Bhasin is concerned no such complaint was

received. However, during vigilance inquiry which was conducted by

respondent No.1, mentioned as to the complaint with regard to Mr.

Malay Mukherjee and said fact was mentioned under the heading of

vigilance clearance. It was mentioned that there was nothing adverse

against  Mr.  Bhasin on  that  account.  The Department of  Financial

Services had while giving its report went into the entire allegations

with regard to Mr. Malay Mukherjee as against Mr. T.M.Bhasin and

cleared him. The CVC also has given clearance to Mr. T.M.Bhasin on

2.2.2015.

50

64. With respect to Mr. K.V.Chowdary complaints were placed

before the Committee along with the facts and true position regarding

the allegations. Note that was placed before the Committee,

mentioned all the allegations made in three complaints and

imputation of the factual position received with regard to the same

from various agencies like IB, CBI, Department of Revenue, Ministry

of Finance which was summoned by the PMO so as to place the same

before the HPC. The Committee considered all the allegations against

all shortlisted candidates including Mr. K.V.Chowdary and Mr.

T.M.Bhasin and unanimously decided to appoint them as Chief

Vigilance Commissioner and Vigilance Commissioner respectively.

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

(A) Minutes of the meeting of the Selection Committee held on

23.5.2015 and 1.6.2015;

(B) Meeting notice and agenda  for  the  first  meeting of  HPC

held on 23.5.2015;

(C) Meeting  notice  and agenda  for the  Selection  Committee

meeting held on 1.6.2015;

(D) Folder G containing IB reports;

(E) Folder (I) vigilance clearance from the Department of

Financial Services and CVC;

51

(F) Representations and letters submitted against the

appointment of respondent Nos.2 and 3;

(G) Complaints and inputs on the same placed before the

Committee;

(H) Annexure E containing the record of CVC, DoPT, DFS in

the case of respondent No.3 regarding his role in APAR of Mr.

Malay Mukherjee;

(I) Income tax record regarding  assessment  proceedings of

M/s. Flora and Fauna Housing and Land Development Pvt. Ltd.

which was 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. Flora

and Fauna Housing and Land Development for the assessment

year 2012­13 containing following folders/details of which are

furnished in the tabular form :

Sl. No. Record Page Brief Description of the record submitted

1 Folder – 1 1­11 Copy of the Income tax return filed by M/S Flora and Fauna Housing & Land Development (P) Ltd for Assessment Year 2012­13

2 Folder – 2 1­124 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 sales ledgers of the various depos]

3 Folder – 3 1­39 Background note for the meeting of the officers of

52

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 also contains minutes of the said meeting.

4 Folder – 4 1­786 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 submitted 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.

5 Folder – 5 1­43 Correspondence 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 2012­13.

6 Folder – 6 1­5 Copies of assessment order and office note  (original in Folder­4 above)  

7 Folder – 7 1­12 Explanatory brief of the records given by CBDT: Contained in the secret communication of CBDT to Department of Personnel & Training vide F.No.286/73/2015­IT (Inv.II) dated 13.9.2017

IN RE: APPOINTMENT OF RESPONDENT NO.2

66. Even before the appointment of respondent No.2 some

representations  were filed  not to appoint  him  as  CVC. The  main

thrust of the arguments raised by the petitioners' counsel was that

the appointment violated the  institutional integrity and respondent

No.2 could not be said to be a person of impeccable integrity. For this

various reasons have been assigned without meaning to give clean­

chit. We examine them whether the prima facie case is made out by

53

the petitioners to make interference. We propose to discuss them in

seriatim:

Respondent No.2 met Mr. Ranjit Sinha the then Director, CBI

who 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

interfere in investigation prosecutions carried out by CBI in 2G scam

case and to recuse himself from 2G scam case. This Court had also

observed against Mr. Sinha that the meetings with accused in coal

scam were inappropriate.  These  allegations  are  against  Mr.  Ranjit

Sinha. However, what is submitted 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 minutes on earlier occasions and 8

minutes on a later date. When the meetings were held, respondent

No.2 was probing the interception dealings of Hawala dealer Mr. Moin

Qureshi.  Mr.  Ranjit Sinha,  Director,  CBI,  was investigating  Stock

Guru scam where senior income tax officers were involved in which

Mr.  Sinha  was investigating the role of respondent  No.2.  Certain

senior income tax officers had taken a bribe to favour two scamsters

of  Stock  Guru and had misappropriated  about  Rs.40 crores.  Said

officers were working under respondent No.2. Thus, it was not

appropriate for respondent No.2 to meet Mr. Ranjit Sinha. Income tax

department gave a clean chit to Mr. Ranjit Sinha in respect of Mr.

54

Moin Qureshi and CBI gave a clean chit to respondent No.2. Thus,

respondent No.2 and Mr. Ranjit Sinha helped each other.

67. In the counter  affidavit filed by respondent No.2  it  has been

stated that since he was heading the Investigation Division of CBDT

and  in that  capacity,  he had met  the heads of  other investigating

agencies on several occasions including the Joint Director, CBI,

Mr.Ranjit Sinha. Answering respondent met the Director on a couple

of occasions at the residence and in the office of several officers. At no

point of time, the cases of Mr. Moin Qureshi or Stock Guru were ever

discussed with the then Director of CBI Mr. Ranjit Sinha.  

68. With respect to the  arguments this  Court  on  14.5.2015  has

observed as under :

“36. As mentioned above, it is not necessary for us to examine whether the investigation into the case of the Dardas was in any manner influenced by Mr. Sinha at any point of time. What is of importance is that as justice must  not  only  be  done  but  it  must  also  appear  to  have  been  done, similarly,  investigations must not only be fair  but must appear to have been conducted in a fair manner. The fact that Mr. Sinha met some of the accused persons without the investigating officer or the investigating team being present disturbs us with regard to the fairness of the investigations. This is all the more so if we keep in mind the fact that in the 2G scam investigations, this Court had concluded in its order dated 20th November, 20141 that Mr. Ranjit Sinha should not interfere in the investigation and prosecution  of  the  case  relating  to  the  2G spectrum allocation  and  to rescue  himself  from the  case.  That  a  SIT was  not  ordered  in  the  2G spectrum case is not relevant. A view was taken that Mr. Sinha should be directed to not interfere in the investigations in that case and that, coupled with  his  meeting  accused  persons  in  the  Coal  Block  Allocation  case without the investigating officer being present, is enough to persuade us that  some further  inquiry is  necessary to ensure that  the investigations

55

have been fair in the coal block allocation cases where Mr. Sinha has had one or more meetings with one or more accused persons... ...

46.  With regard to  IA No.13 of  2014,  since  we have held that  it  was completely  inappropriate  for  Mr.  Ranjit  Sinha  to  have  met  persons accused  in  the  Coal  Block  Allocation  case  without  the  investigating officer being present or without the investigating team being present, it is necessary  to  look  into  the  question  whether  any  one  or  more  such meetings  of  Mr.  Sinha  with  accused  persons  without  the  investigating officer have had any impact on the investigations and subsequent charge sheets or closure reports filed by the CBI. We require assistance in this matter, particularly for determining the methodology for conducting such an inquiry. For rendering assistance to us in this regard, notice be issued to the Central Vigilance Commission returnable on 6th July 2015."

69. No observations were made by this Court against respondent

No.2 Mr. K.V. Chowdary and there was no allegation has been made

against Mr. K.V. Chowdary in this Court by any person including the

same counsel for the petitioner. The petitioners have come up with

the case that there was meeting on two occasions, whereas

respondent No.2 has disclosed that in the office there were several

meetings. It  was  usual to  meet for  Heads  of various investigating

agencies in connection with official work. There being no other

material to substantiate aforesaid aspersions it is simpliciter an

assumption  that the meetings  took place with an evil  design.  The

highest officers might have discussed the other issues. There is no

other supporting material  to substantiate the aforesaid aspersions.

How the help was extended, in what manner and in Stock Guru scam

there was no allegation against respondent No.2 in any  manner

56

whatsoever. Thus, it is far­fetched to urge that the aforesaid meetings

were to extend help to each other.

70. With respect to Stock Guru, the investigation was made not by

respondent No.2 but by Deputy Director of Income­tax (Investigation)

and under Additional Director of Investigation, reporting to Director of

Investigation, Investigation­II, 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 seizure  of  Rs.34.96  crores in cash.

Initially, there was a complaint by Mr. Anil Kumar Agrawal who had

nothing to do with this case that the cash belonged to various

depositors and it should not have been seized. On a case filed the

amount was deposited in court as per the order passed by the court.

Appraisal report  was  prepared by the I.O. and sent to assessing

officer who initiated assessment proceedings. However, on 3.6.2013

the CBI started an investigation into the conduct of the then I.O. of

Stock Guru, that is Mr. Yogender Mittal, who was DIG – Investigation.

The name of respondent No.2 did not figure in the First Information

Report filed by the CBI. No wrongdoing, no shortcoming was found by

any authority in the action of respondent No.2 when 13 allegations

were made by Mr. Anil Kumar Agarwal against respondent No.2.   The

57

CVC, Department of Revenue and Department of CBDT got the issues

enquired and allegations were found to be baseless.

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

Agrawal, it was clear that since he was criminally prosecuted under

section 182 IPC and disciplinary proceedings, had been initiated

against him by the Institute of Chartered Accountants of India at the

instance of respondent No.2 and respondent No.2 had deposed

against him in the criminal case in the court and once upon time Mr.

Anil Kumar Agrawal had appreciated the gesture of respondent No.2

it was clearly an afterthought for him to level the allegations which

were without any supporting material and had never been

substantiated by any material. In the newspaper report dated

15.4.2014 name of respondent No.2 was not mentioned, no

supervisory failure was attributed. Respondent No.2 was not

subjected to an investigation by the CBI. Thus, the aforesaid cast of

aspersions upon respondent No.2 by the petitioners  has no basis.

Same is not substantiated by any material and is simply stated to be

rejected.

72. File No.245/32/2015­AVD.II has been produced which contains

the answers of CBI with respect to various queries made which were

on the basis of the complaint. It has been mentioned that the CBI has

58

investigated the relevant case during the tenure of Mr. Ranjit Sinha in

the  Stock  Guru scam on the  basis of a complaint received from

E.O.W.,  Delhi  Police, relating to  demand and acceptance  of illegal

gratification from Mr. Ulhas Prabhakar of M/s. Stock Guru by Mr.

Yogender Mittal (IRS­2006), ADIT to help him in the income­tax case.

The investigation did not reveal the involvement of Mr. K.V.

Chowdary. It was also noted that nothing came to the notice of CBI

against Mr. K.V. Chowdary.

73. Another aspersion on the integrity cast is relating to a search

conducted by criminal investigation division of income­tax on Ponty

Chadha group M/s. Flora and Fauna Housing  Development Pvt. Ltd.

on 1.2.2012. It was urged by learned counsel for the petitioners that

respondent No.2 abused his position to under­assess the income of

the said company by an amount of Rs.234 crores. He issued a

direction to the assessing officer to dispose of the case in a particular

manner which could not have been done in view of section 119 of the

Income Tax Act and judgment of this Court. The  CBDT  had no

jurisdiction to instruct the assessing officer to dispose of a case in a

particular manner.

74. On behalf of respondent No.2, it was contended that search was

conducted by criminal investigation division headed by Smt. M.

59

Saillo, DGIT, Delhi. It was not conducted by respondent No.2. They

prepared an appraisal report and sent it to the assessing officer in the

Central charge.  While completing the  assessment for the relevant

assessment year. The assessing officer on a suggestion in the

appraisal report that addition of an amount of Rs.234 crores be made

as the accounted sale from 1.9.2011 to 22.9.2011 as not acceptable

since appraisal report was prepared by a team of aforesaid DGsIT.

Since discrepancy was found in the appraisal report it was identified

that it was a mistake committed by the accountant in posting

cumulative sales of various depots in the month of September 2011 in

actual sales.

75. As the matter was to be decided as per law the assessing officer

came to the conclusion that there  was  no case for addition and

passed an order under the Income Tax Act with the approval of the

Additional Commissioner. In a  meeting held on 22.3.2014, DCIT

(Assessing Officer), the Additional Commissioner and Chief

Commissioner apprised respondent No.2, Member (Investigation) that

they were of the view that no addition of Rs.234 crores was warranted

as there was no evidence to suggest much less to approve that an

accounted sale to that extent took place in the span of 21 days from

1.9.2011 to 22.9.2011. Respondent No.2 agreed with the conclusion

60

of the aforesaid officers. Respondent No.2 had not taken any decision.

The decision was taken by the Assessing Officer and the Additional

Commissioner in whom the power vested. They thought it fit to bring

it  to  the notice of  the Commissioner, the Chief  Commissioner and

even the member involved and to avoid/protect themselves from the

mischievous complaints and since the appraisal report was sent by

DGIT. Mr. Anil Agarwal had circulated this note for the purpose of

making false allegations against respondent No.2 and the note that

was submitted by DCIT, Additional CIT, CIT and CCIT and the record

of the discussion in the meeting had been suppressed which

indicated that respondent  No.2 had concurred  with the aforesaid

officials.  The Record of  Discussion  in Minutes of the meeting with

Member (Inv) on 28.3.2014 by officers of CCIT, Central Region, New

Delhi, contained the following :

“4.  The  Hon’ble  Member  considered  the  material  placed  along  with background note and printout  of accounts  found in seized material  and agreed with the view taken by field officers. He agreed with the decision of not making addition on the issue mentioned in Appraisal Report.

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

76. The background note R2/20 and the detailed minutes of  the

meeting R2/21 have been placed on record. Besides we have seen the

record pertaining to income­tax assessment of M/s. Flora and Fauna

61

Housing and Land  Development Pvt. Ltd. contained in 7 folders.

Folder 2 contains the correspondence of the officer with the superiors

also  Directorate  of I  &  CI,  mainly  on the  alleged issue  of  Rs.234

crores.  Folder  3 contains  background note for the  meeting  of the

officers on 28.3.2014 and to apprise him of the decision taken by

Assessing  Officer for not  making the addition of alleged issue of

Rs.234 crores.  Folder 4 contains  notices issued  by the  Assessing

Officer to the assessee, replies etc. Approved assessment order

submitted by A.O. to Additional Commissioner for his approval.

Approval  was given by the Additional  Commissioner.  Copies of  the

assessment orders and explanatory briefs of record given by CBDT. In

Folder 7 the aforesaid stand is fully substantiated by the document

that has been placed on record.

77. It is apparent that the assessing officer has taken a decision for

not  making addition and  he  wanted confirmation and the senior

officers  considered  the matter  in detail  and then background note

was prepared and record of discussion has been placed on record and

that was agreed to by respondent No.2. He has not issued a direction

as suggested on behalf of the petitioners rather approval was sought

by the assessing officer as the stake was high and appraisal report

was prepared by the earlier  DGIT  level  and she had considered  it

62

appropriate to seek the approval so as to allay the apprehension of

compliance in future. Thus the facts make it clear that no impropriety

has been committed by respondent  No.2 in the aforesaid factual

background and the background on record and he has not directed

the assessing officer  to proceed  in a particular manner but rather

various higher authorities had agreed with the assessing officer and

thereafter had put up the matter for discussion with the respondent

who had also agreed with them. In the facts of the case, we find that

allegation raised with respect to favour being meted out to M/s. Flora

and Fauna Housing & Land Development (P) Ltd. at the instance of

respondent No.2 has been considered by HSBC and not at all

substantiated from the material on record. As a matter of fact, full

facts have not been placed on record either by Mr. Anil Agrawal or

otherwise to  make  the position clear. It is  apparent that  Mr.  Anil

Agrawal was making reckless allegations and was guilty of suppresio

veri  and  suggestio falsi. It is  apparent  that  no direction had been

issued  by respondent  No.2 for  not  making the  addition.  The  said

allegation levelled by Mr. Anil Agrawal had been looked into by the

concerned authorities and no irregularity whatsoever was found.

78. The next aspersion cast upon respondent No.2 is with respect to

the failure of respondent No.2 to take appropriate action against the

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foreign bank account holders  in HSBC Bank, Geneva for almost 3

years. It was urged that no prompt action was taken by respondent

No.2. Since the formation of SIT the income tax department had not

filed even a single prosecution against HSBC account holders. It was

contended by learned counsel on behalf of respondent No.2 that the

information regarding bank accounts held by the persons of Indian

origin in  HSBC,  Geneva  was  obtained  by the  Government (CBDT)

from French Government 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 were conducted in Delhi under respondent No.2

whereas total 140 searches were undertaken across the country. The

best results  were  achieved  by the  Delhi  Region.  The Investigation

Division prepared appraisal reports and sent them to their assessing

officers for further action such as assessment of income, recovery of

tax, levy of penalty, initiation of prosecution proceedings in

appropriate cases. It was also pointed out that respondent No.2 was

the only  DGIT (Investigation)  who submitted the  proposal for the

prosecution against the concerned foreign banks and its Indian

affiliates, and  persons concerned. It  was also contended that yet

respondent No.2 had closely monitored the investigation and

functions  of  other ITOs., followed up the  cases  by  holding weekly

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meetings, guidance, suggestions, interaction. Video conferencing were

also held. The information received from the French Government was

incomplete in most of the cases. When it became clear that there was

no possibility of getting further information the assessing officer could

go ahead with making assessment including the prosecution. Consent

waiver  mechanism  was devised by the respondent  which  was an

innovative action.  He  had obtained information in respect of 575

cases  which were  hitherto  not  available to Indian authorities.  The

judicial functions were to be exercised by the entire officers and the

CBDT only provides the necessary guidance and monitors the

progress. About 121 prosecutions were launched by 31.3.2015 and

some more were in progress when the answering respondent left. The

SIT had made the following observations with respect to the action

taken by respondent No.2:

“This  court  through  the  Special  Investigation  Team (SIT) headed by Hon’ble Justice Shri M.B. Shah (Retd.) and Hon’ble Justice Shri Arijit Prasayat (Retd.). In this context, I only beg to submit and bring to the notice of this Honourable Court the following observations of the Hon’ble SIT in its 3rd Report :

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

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

79. It was also pointed out that vide letter dated 24.7.2015 R­2/22,

he was requested to assist the SIT even after taking charge of the post

of CVC.

80. Considering the aforesaid submissions raised on behalf of the

petitioner that during the tenure of Mr. K.V.Chowdary nothing was

substantially done with respect to HSBC Bank is not at all

substantiated.  Rather his  functioning has been appreciated by the

SIT as mentioned above and his assistance has been sought even by

the Chief Vigilance Commissioner.

81. Next  submission raised by  learned counsel  appearing  for the

petitioner is with respect to the failure to make any headway, as he

failed to take action in the income­tax cases, in the 2G scam. Unlike

the CBI or Enforcement Directorate filed several charge­sheets. The

averment 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 there was a failure on the part of respondent No.2. That apart

respondent No.2 had  made it clear that during the tenure from

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1.11.2010 to August 2012 he had taken up the case of Unitech Ltd.

whose associates and their sister concern had been granted licences

and few other cases of telecom company were investigated and few

connected cases of telecom companies were also under investigation

for  other  charges.  All  necessary investigation  was  carried  out  and

aforesaid findings were communicated in due time to the Assessing

Officer who took appropriate action. Cases of other telecom

companies under the jurisdiction of DGIT, Bombay, Chennai,

Bengaluru etc. Respondent No.2 as a nodal agency coordinated and

made several representations as to the action taken by the income­

tax department before a Joint Parliamentary Committee. It could not

be pointed out in which particular matter respondent No.2 was found

lacking. Thus the submission raised on behalf of the petitioners is too

tenuous to be accepted. It was never pointed out to this Court that

there was laxity on 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, the

inaction of respondent No.2 of not taking action against the

concerned incumbents.  Details  of  action  which  were required  and

could have been taken have not been given in the petition thus no

specific averment has been made in this regard by the petitioners.

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When we consider the reply it is apparent that respondent No.2 was

DGIT Investigation and he joined on 1.11.2010 by which time

surveillance of Ms. Nira Radia was over and some intercepts relating

to such surveillance were in public domain due to leakage probably in

May­June, 2010. When he had taken over as DGIT (Investigation) in

November 2010 actionable issues were identified and necessary

action was taken either by the Delhi Directorate or was

communicated to the Directorates for further action. The information

was duly shared with the Assessing Officers 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 or inaction on the part of respondent No.2 on this count.

It  was  also  not  urged  before the  Court by  aforesaid  PIL of 2010

whenever it was listed.

83. Apart from that, it  has also been pointed out by respondent

No.2 that  in the petition with respect to APAR of respondent No.2

false averments have been made, that adverse remarks were made by

three senior officers of CBDT. The allegation has been termed to be

baseless and unfounded and misleading. In the 36 years of service,

not even a single remark has been made in the APAR. All the remarks

had  been  based  on  record  as in the form of compendium R­2/1.

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There is no adverse remark in them. Thus the petition suffers from

wrong averments also. Thus, it is apparent that against respondent

No.2 unsubstantiated allegations have been made.    

 84. This Court in  Centre for PIL  (supra) held while examining the

appointment of Mr. P.J. Thomas. The CVC had observed with respect

to 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 SCC 119 that judicial  review  is  concerned  with  whether  the  incumbent  possessed requisite  qualification  for  appointment  and  the  manner  in  which  the appointment came to be made or the procedure adopted was fair, just and reasonable.  When  a  candidate  was  found  qualified  and  eligible  and  is accordingly appointed by the executive to hold an office as a Member or Vice  President  or  President  of  a  Tribunal,  in  judicial  review the  Court cannot sit over the choice of the selection. It is for the executive to select the personnel as per law or procedure. Shri Harish Chandra was the Senior Vice  President  at  the  relevant  time.  The question of  comparative merit which was the key contention of the Petitioner could not be gone into in a PIL;  that  the  writ  petition  was  not  a  writ  of  quo warranto  and  in  the circumstances, the writ petition came to be dismissed.

60. It was held in R.K. Jain case (supra) that even assuming for the sake  of  arguments  that  the  allegations  made  by  the  Petitioner  were factually accurate, still, this Court cannot sit in judgment over the choice of  the  person  made  by  the  Central  Government  for  appointment  as  a President of CEGAT so long as the person chosen possesses the prescribed qualification and is otherwise eligible for appointment. It was held that this Court cannot interfere with the appointment of Shri Harish Chandra as the President  of  CEGAT on  the  ground  that  his  track  record  was  poor  or because of adverse reports on which account his appointment as a High Court Judge had not materialized.

61. In  Hari Bansh Lal v. Sahodar Prasad Mahto  (2010) 9 SCC 655 the appointment  of  Shri  Hari  Bansh  Lal  as  Chairman,  Jharkhand  State Electricity Board stood challenged on the ground that the board had been constituted in an arbitrary manner; that Shri Hari Bansh Lal was a person of  doubtful  integrity;  that  he  was  appointed  as  a  Chairman  without following  the  rules  and  procedure  and  in  the  circumstances  the appointment  stood  challenged.  On  the  question  of  maintainability,  the

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Division Bench of this Court held that a writ of quo warranto lies only when the appointment 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 the  appointing authority and not by the court unless the appointment is contrary to the statutory rules/provisions. It is important to note that this Court went into the  merits  of  the  case  and  came  to  the  conclusion  that  there  was  no adequate material to doubt the integrity of Shri Hari Bansh Lal who was appointed as the Chairperson of Jharkhand State Electricity Board. This Court  further  observed that  in  the  writ  petition  there  was no averment saying that the appointment was contrary to statutory provisions.

63.  As  stated  above,  we  need  to  keep  in  mind  the  difference  between judicial review and merit review. As stated above, in this case, the judicial determination is confined to the integrity of the decision-making process undertaken by the HPC in terms of the proviso to Section 4(1) of the 2003 Act. If one carefully examines the judgment of this Court in Ashok Kumar Yadav's case (supra) the facts indicate that the High Court had sat in appeal over the personal integrity of the Chairman and Members of the Haryana Public  Service  Commission  in  support  of  the  collateral  attack  on  the selections made by the State Public Service Commission. In that case, the High Court had failed to keep in mind the difference between judicial and merit  review.  Further,  this  Court  found  that  the  appointments  of  the Chairperson and Members of Haryana Public Service Commission was in accordance with the provisions of the Constitution. In that case, there was no issue as to the legality of the decision-making process. On the contrary the last sentence of para 9 supports our above reasoning when it says that it is  always open to the Court to set  aside the decision (selection) of the Haryana Public  Service Commission  if  such decision is  vitiated by the influence  of  extraneous  considerations or  if  such  selection  is  made  in breach of the statute or the rules.

64. Even in R.K. Jain's case (supra), this Court observed vide para 73 that judicial review is concerned with whether the incumbent possessed qualifications  for  the  appointment  and  the  manner  in  which  the appointment came to be made or whether procedure adopted was fair, just and reasonable.  We reiterate  that Government is  not  accountable to the courts for the choice made but Government is accountable to the courts in respect of the lawfulness/legality of its decisions when impugned under the judicial review jurisdiction. We do not wish to multiply the authorities on this point.”

85. That  judicial  determination is confined to the  integrity of  the

decision making  process  by the  HPC.  That the  difference  between

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judicial and merit review, the legality of decision­making process can

also be looked into. If the decision is influenced by extraneous

considerations or selection 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 made but the Government is accountable to the courts

in respect of the lawfulness/legality of its decisions.

86. In the case of Mr. P.J.Thomas, CVC, it was a binding criminal

proceeding under the P.C. Act and between the period of 2001 and

2004 the DoPT had recommended the disciplinary proceeding against

Mr. P.J.Thomas in respect of  Palmolein case.  The pendency of  the

case before the Special Judge under the P.C. The act was not taken

into consideration as well as the observations made by this Court in

K.Karunakaran v. State of Kerala & Anr.  (2000) 3 SCC 761 in which

an FIR against Mr.  Karunakaran and others  including that of  Mr.

Thomas was held not to be the result of mala fides or actuated by

extraneous considerations. This Court observed that the menace of

corruption could not be permitted to be hidden under the carpet of

legal technicalities and the probe conducted has to be determined in

accordance with law. In the aforesaid background, the

recommendation made by the HPC was held to be non­est in law.

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87. Three representations/complaints were received against Mr.

K.V.Chowdary. The PMO had asked for details of the allegations so as

to ascertain the facts contained in the representations filed against

Mr.Chowdary.  Complaints of  Mr.Chowdary  were placed  before the

Committee. Factual inputs on opinion were received with respect to

the various aspects in representation from various agencies like CBI,

Information Bureau, Department of Revenue, Ministry of Finance and

were placed before the  HPC  which considered all the allegations

against all shortlisted candidates. No complaint was received against

Mr. T.M.Bhasin. Requisite clearances were given by the IB with

respect to Mr. K.V.Chowdary and Mr. T.M.Bhasin. With respect to the

allegations, separate inputs  were obtained and placed before the

Committee. There was 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 visited

his official residence. The inputs on the aforesaid aspects were called

from 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

regarding Mr. Ranjit Sinha. However as already discussed, no

insinuation could be cast upon Mr. Chowdary due to aforesaid visits.

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POINT NO. (II)

89. With respect to Stock Guru scam, the CBI reported that

investigation did not reveal the involvement of Mr. Chowdary.

POINT NO. (III)

90. With regard to issue No.(iii), investigation of hawala dealer Mr.

Moin Qureshi, the comments of Department of Revenue, Ministry of

Finance were obtained as well as inputs from IB and CBI. The IB has

given input that Mr. Moin Qureshi’s link with Mr. Chowdary could

not be confirmed. The Department of Revenue, Ministry of Finance

opined that the allegations made against Mr. Chowdary were found

absolutely  misplaced.  The  petition  of  Mr.  Qureshi filed  before the

Settlement Commission was opposed by the Income Tax Department.

As a result, the same was dismissed. Even before completion of the

assessment, the prosecution under section 277 of IT Act and sections

181, 177, 193, 196, 120B read with section 23 were launched against

Mr. Qureshi.

POINT NO. (IV)

91. With respect to Radia tapes, the Department of Revenue,

Ministry of  Finance opined that  the opinion of  the authorities has

found  no fault  with  Mr. Chowdary. Allegations against him  were

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factually incorrect and baseless. IB has opined that the allegations

could not be established in the course of the discreet inquiry. The CBI

also found nothing adverse against Mr. Chowdary in 2G scam cases

or Radia tapes consequent upon the order dated 21.2.2013 of this

Court.

POINT NO.(V)

92. The allegation that the In­charge of the 2G scam investigation

Mr. Chowdary failed to make any headway in the case, it was opined

by the Department of Revenue, Ministry of Finance that none of the

authorities  i.e. Supreme Court, Central Vigilance Commission, Joint

Parliamentary Committee, Public Accounts Committee before whom

the  DGIT presented periodical reports, found  any shortcoming or

deficiencies.  Mr.  Chowdary,  who was working as  DGIT  (Inv.), took

necessary steps to have 2G cases falling under his jurisdiction

investigated expeditiously and properly. The charges levelled in the

complaint were found baseless and incorrect. IB input was that black

money cases came to a fast track after the constitution of SIT. The

CBI did not report anything against Mr. Chowdary.

POINT NO. (VI)

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93. As to the allegation of HSBC account holders investigation, it

was pointed out that Mr. Chowdary had monitored investigation in

445 cases of HSBC foreign accounts and the best results were

achieved in Delhi cases as compared to other Directorates. Mr.

Chowdary pointed out illegal banking activities in HSBC, Geneva, and

proposed  prosecution  of  HSBC Geneva.  He closely  monitored  and

followed up these cases. The allegation that no progress was made

was found wrong. When SIT was formed in May­June, 2014 by that

time investigation in most of the cases was already at the advanced

stage. IB had given the input in this regard that though  much

progress was not made earlier but after the constitution of SIT, it was

on fast track.

POINT NO. (VII)

94. With respect to adverse remarks in the performance appraisal

reports by three senior officers of CBDT, the Department of Revenue

has forwarded a summary of annual CRs. from November 1978 to

February 2014 which was placed on record and that nothing adverse

was found. IB also made the input that the allegation could not be

corroborated in the course of discreet inquiries.

POINT NO. (VIII)

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95. Mr. Chowdary wrongfully reduced the undeclared wealth of

M/s. Flora and Fauna Housing Development Pvt. Ltd., a company of

Mr. Ponty Chadha by over Rs.200 crores. The allegations were found

to be absolutely baseless by the Department of Revenue, Ministry of

Finance. IB had also placed its inputs regarding the allegation and

adoption of the procedure. It was, however, opined that he enjoyed

good personal and professional  image. Nothing adverse against his

character or integrity has come to notice. The allegation about M/s.

Flora and Fauna Housing Development Pvt. Ltd., was mentioned but

no adverse comment was made.  

POINT NO. (IX)

96. As per the complaint received from  Anil Kumar Agrawal of

forming a nexus between the income tax officers and trying to conceal

the undisclosed income of relative of a Minister, Department of

Revenue opined that it was a motivated complaint and the

complainant did not substantiate it despite three reminders hence it

was closed.

POINT NO.X

97. As to the complaint by Anil Kumar Agrawal regarding corruption

charges in connection  with income tax raids on  M/s.  Raj  Mahal

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Jewellers and protection to  Mr. Gaurav  Dudeja, DDIT (Inv.), the

complaint was closed and it was not found substantiated.

POINT NO.XI

98. Regarding complaint by Mr. H.R.V. Rao forwarded by one of the

Members of Parliament against Mr. Chowdary, parked crores in

amassing properties in his families/relatives names, the Department

of Revenue, Ministry of Finance opined that several verification letters

were sent to the complainant and concerned Member of Parliament

no response was received from them. Thus, the complaint was

ultimately closed as it was not substantiated.

POINT NO.XII

99. The complaint was received from CVC with respect to interception

of Rs.12.30 crores during U.P. elections and the differences between

Member (Investigation) and Member (L&C). The Department of

Revenue, Ministry of Finance opined that the allegations were

examined thoroughly. The allegations made were baseless. There was

no merit or substance in the complaint. The matter was referred to

CVC  for closure  with the  approval of  Finance  Minister.  CVC  had

advised closure of the complaint on 14.7.2014.

POINT NO. XIII

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100. As to the complaint from Advocate,  R.K.  Bansal to CVC vide

office  memorandum dated 7.10.2013  inter alia  referring to Stock

Guru scam and senior officers of ITO, Investigation Wing, regarding

misappropriation of Rs.42­44 crores and that Mr. Chowdary did not

share the information with the investigating agencies.

101. The comments by Department of Revenue Ministry of Finance

disclosed that the CBI had lodged the FIR in the matter, the name of

Mr.  Chowdary  did  not  appear in the  FIR  nor  any  communication

received from the CBI. The findings were referred to the CVC with the

recommendation to close the complaint against Mr. Chowdary with

the approval of Finance Minister. CVC advised closure of the

complaint. IB also opined there was no formal investigation against

Mr. Chowdary.  

102. In reference to complaint about Mr. Anil Kumar Agrawal

regarding administrative misuse and involving income tax raids

conducted at M/s. Iryan Coal during April 2012, the Department of

Revenue pointed out 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 Wing was

found baseless. The matter was referred to CVC. CVC had advised

closure of the complaint.  

104. Thus, each and every aspect and information had been placed

before the High Power Committee when the decision was taken. Thus,

the integrity of the decision­making process has not impinged in this

case in any manner whatsoever. Neither decision was taken to

appoint respondent No.2 as CVC can be said to be suffering from any

illegality. The decision cannot be said to be influenced by extraneous

considerations and the choice made of Mr. Chowdary cannot be said

to be such which is 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 for

the petitioner has  urged that since his criminal prosecution  was

ordered, ultimately it was not fructified. However, on the

administrative side, he was severely indicted for fabricating/forging

the APAR of Mr. Malay Mukherjee, General Manager and was

cautioned. Thus, in view of the order passed in the serious

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background,  it  could not be said that person who was accused of

fabricating/forging APAR was a person of impeccable integrity fit to

hold the office of Vigilance Commissioner of an integrity institution of

this country.

106. The backdrop facts of the aforesaid order of caution unfold that

Mr. Malay Mukherjee was General Manager of Indian Bank. His APAR

for 2009­2010 was required to be written. He had not served under

respondent  No.3  Mr.T.M.Bhasin.  Mr.T.M.Bhasin  was  not reporting

officer but was reviewing authority in the capacity of CMD of Indian

Bank. The predecessor CMD had admittedly retired on 31.3.2010 and

as provided in Rule 7 of All India Services Performance and Appraisal

Report, Rules, 2007, retired official could review the performance of

appraisee  within one  month from  the  date of his retirement.  Mr.

Sundarrajan, former CMD is said to have signed APAR on 7.7.2010

after more than three months which he could not have done. Be that

as it may. Even if he did it unauthorizedly or irregularly such APAR

was not found on an inquiry conducted by the Vigilance Department

of the office.  The courier sent by Mr. Malay Mukherjee  from zonal

office was sent to Bhopal related to some other matter and was not

received by the Head Office. Even if we ignore the aforesaid aspect

question arises whether Mr. T.M.Bhasin has fabricated or forged the

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APAR of Mr. Malay Mukharjee from excellent to average. Whether it

was mentioned to be outstanding by Mr.Sundarrajan.

107. Letter dated 4.11.2011 was issued by the Department of

Financial Services to send the APAR of eligible General Managers for

selection as Executive Director by 15.11.2010 on urgent basis. It was

received on 10.11.2010 by respondent No.3. The relevant APAR of Mr.

Malay Mukherji duly apprised by Mr. Ram Gopal, Executive Director

was received on 15.11.2010. Respondent No.3 as reviewing authority

concurred with the average grading done by Mr. V.Ram Gopal,

Executive Director. It was sent to the F.S. in compliance.

108. Since  Mr.  Malay  Mukherjee claimed that  he  had sent  APAR

dated 7.7.2010 for the period 2009­10 signed by Mr. Sundarrajan,

former CMD on 29.7.2010 and the matter travelled to  the Central

Vigilance Commission. One of the members out of the three opined

that the  CBI  may be asked for a criminal investigation into the

matter. However, the majority view was not to investigate the matter

on criminal side but only the Chief Vigilance Commissioner may call

for certain documents/information from the Chief Vigilance

Officer/DFS to ascertain and come to the final conclusion. The view of

CVC and VC prevailed being the majority view as per section 9(4) of

the Act of 2003. Thus, nothing could be made out by the petitioners

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on the basis of  the observations of  VC(S).  Later on, follow up was

taken in view of the majority view. The Chief Vigilance Commissioner

and the Department of Financial Services stated that there was no

conclusive evidence against Mr. Ram Gopal and respondent No.3 even

to hold a regular departmental inquiry.

109. Later on, memorandum dated 6.9.2013 was received from the

DFS seeking his clarification on the subject matter. Respondent No.3

submitted a written explanation with annexures running in 162

pages and pointed out that in  the past there were 14 such cases

when succeeding CMDs. had submitted APAR when reviewing APAR

when officers have not worked under him. Thus no action against

him was warranted. He had not violated any guidelines. The notings

of Chief Vigilance  Commissioner dated 31.3.2014, 28.4.2014 and

6.5.2014 are extracted hereunder :

“The Extract of the official file notings dated 28.04.2014, on the observations 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 an administrative nature

and not exactly a vigilance issue”

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

following notings :

"I am in agreement with VC (R) that writing of APAR and its review is essentially an administrative matter. However, in this case, it had acquired vigilance overtones due to allegations of tampering of APAR. DFS, after

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the inquiry, has come to the conclusion that the evidence is not sufficient to  prove  the  most  crucial  charge  of  tampering  with  the  APAR of  Shri Malay Mukherjee. I am inclined to agree with DFS in this respect. DFS has however pointed out that Shri  Bhasin wrote the APAR of 2009-10, without having overseen the work of Mr. Malay Mukerjee. Shri Bhasin, in his defense, has cited past precedents. DFS has also conceded the need to have  uniform  guidelines  in  Banks  to  avoid  such  confusions  and inconsistencies. However, DFS has considered it unethical on the part of Shri Bhasin to have written ‘Average' at two places. For this Shri Bhasin may be cautioned and the case closed as proposed by VC (R).”    

111. After receipt  of the  reply,  no  case was found against  him of

tampering or forging. The matter was taken up at the highest level.

He was cautioned which did not amount to any penalty. No inquiry

was held after the reply was sent by respondent No.3. It was opined

by the DFS in its letter dated 10.3.2014, Annexure R­3 that average

is  not sufficient. In  para  9 it  was  mentioned that average is  not

sufficient to prove the charge of tampering. At the most, it may be

unethical to write average in view of the average grading. However,

the  marks received  53  out  of  100  correspond to  average  grading.

However, Mr. Bhasin has not overseen the work of Mr. Malay

Mukherjee. However, Mr. Ram Gopal had overseen the work of Mr.

Malay Mukherjee. So having written the APAR by Respondent No.3,

he has not violated any guidelines. The Department has taken up the

issue and the same was issued in due course. As such the

departmental action against respondent  No.3 or against  Mr.  Ram

Gopal was not warranted. Same has been accepted. It is clear that the

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Chief Vigilance Commissioner had closed the matter on 8.5.2014 and

advised DFS to issue caution letter to respondent No.3. In the

aforesaid circumstances, it cannot be said that there was any

punishment, major or minor, inflicted upon respondent No.3. He tried

to justify his action that though he did not oversee the functioning, he

was justified in writing APAR but so far as fabrication and forgery are

concerned,  no finding  has  been  recorded  against respondent  No.3

with respect to the APAR for 2009­2010 by any formal order on the

administrative side. Thus, his integrity is not going to be affected in

the aforesaid factual matrix. When the APAR purportedly written by

Mr. Sundarrajan was not available and its claimed dispatch on

29.7.2010 was not relating to the APAR. Be that as it may. There is

no finding recorded against respondent No.3 either by the Chief

Vigilance Commissioner or the DFS in any manner whatsoever so as

to impinge adversely upon his integrity, necessary for such an

institution of Vigilance Commission. Apart from that, no

representation was filed against respondent No.3. However, this

aspect was dealt with and was mentioned in the report which was

submitted before the HPC. Thus, there was nothing against the

integrity of respondent No.3 so as to hold that the recommendation

with respect to  him was illegal  and  void  and  entire  material  was

placed before the HPC.

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112. Thus, in our considered opinion the recommendation made of

Mr. Bhasin cannot be said to be suffering from procedural infirmity in

decision making. The integrity of the procedure has been maintained.

Though there was no complaint the aforesaid aspect which has been

urged on behalf of the petitioners was looked into by the High Power

Committee on the basis of inputs made. Thus, nothing adverse was

found in the final conclusion in the matter of writing of APAR of Mr.

Malay  Mukherjee. Thus, we find that no case is  made out  with

respect to the appointment of respondent No.3 as Vigilance

Commissioner to make interference in judicial parameters.

113. We have not interfered with the appointments. The complaints

against Mr. Chowdary were made and they were looked into. It is not

for this  Court to  decide  on the  choice.  We  are  nowadays in the

scenario that such complaints cannot be taken on face value.  Even

against  very honest  persons,  allegations can be made.  Those days

have gone when filing of the complaints was taken as serious

aspersions  on integrity.   Ideally, there should  not  be  any  serious

complaint as the filing of same raises eyebrows.   As in the instant

matter, complaints have been looked into and we decline to interfere.

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114. Resultantly, we find no grounds to quash the appointment of

Respondent No.2 as CVC and respondent No.3 as VC. Writ Petitions

are disposed of accordingly.

............................................ ...J.

(ARUN MISHRA)

...............................................J.  (MOHAN M. SHANTANAGOUDAR)

JULY 02, 2018; NEW DELHI.

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