“Orders extending ED Chief tenure are illegal” Supreme Court permits ED Chief to continue till 31st July and upheld the validity of ordinance amending the CVC & DSPE Act

“Orders extending ED Chief tenure are illegal” Supreme Court permits ED Chief to continue till 31st July and upheld the validity of ordinance amending the CVC & DSPE Act

“Orders extending ED Chief tenure are illegal” Apex court permits ED Chief to continue till 31st July and upheld the validity of ordinance amending the CVC & DSPE Act

 

Recently, Hon’ble Full Bench of Supreme Court partly allowed and partly dismissed the writ petitions challenging the constitutionality of amendments made in CVC Act and DSPE Act and questioning the validity of extension granted to Enforcement of Directorate Chief.

The Hon’ble Apex court rejected and dismissed the batch of writ petitions filed by several social activist and Congress leaders which seeks to challenge the constitutionality of amendments made in Central Vigilance Commission (Amendment) Act, 2021 and the Delhi Special Police Establishment (Amendment) Act, 2021 as well as to the Fundamental (Amendment) Rules, 2021.

The Hon’ble Full Bench partly allowed the writ petitions and quashed the impugned orders dated 17th November 2021 and 17th November 2022 granting extensions to the tenure of the respondent No.2- Sanjay Kumar Mishra for a period of one year each. However, the Apex court permitted ED Chief to continue till 31st July 2023 on the request made by the Union of India in the wake of certain FATF review.

BRIEF FACTS OF THE CASE

The batch of writ petitions seeks a writ, order or directions in the nature of certiorari for quashing of order dated 17th November 2021 passed by the respondent No.1 for further extension of tenure of the respondent No.2. In Writ Petition (Civil) No.1106 of 2022, a further extension granted to respondent No.2 vide order dated 17th November 2022 has also been challenged. All these petitions also challenge the validity of Central Vigilance Commission (Amendment) Act, 2021, the Delhi Special Police Establishment (Amendment) Act, 2021 and the Fundamental (Amendment) Rules, 2021.

Writ Petition (Civil) No. 1374 of 2020 [Common Cause (A Registered Society) v. Union of India & Ors.1] was filed on 27th November 2020 by Common Cause (a registered society) before this Court in public interest under Article 32 of the Constitution of India praying for quashing of the order dated 13th November 2020 and for a consequential direction to the respondent No.1 to appoint the Director of Enforcement in accordance with the procedure prescribed under Section 25 of the Central Vigilance Commission Act, 2003 (hereinafter referred to as “the CVC Act”).

The Court though dismissed the said Writ Petition (Civil) No. 1374 of 2020 [Common Cause (A Registered Society) v. Union of India & Ors.] vide judgment and order dated 8th September 2021 [hereinafter referred to as “Common Cause (2021)”], yet directed that no further extension shall be granted to the respondent No.2.

After this an Ordinance was promulgated to extend the tenure of ED Chief by making amendments in aforesaid act and in Fundamental Rules. Tenure of ED Chief was extended twice even after the specific directions of the Hon’ble Apex Court.

HON’BLE COURT’S OBSERVATIONS

Hon’ble Full Bench comprising Hon’ble Mr. Justice B.R. Gavai, Hon’ble Mr. Justice Vikram Nath and Hon’ble Mr. Justice Sanjay Karol essentially posed two questions to be considered by the Court which as are as follows-

  1. As to whether the amendment to Section 25 of the CVC Act by the Central Vigilance Commission (Amendment) Act, 2021 and to sub-section (1) of Section 4B of the DSPE Act by the Delhi Special Police Establishment (Amendment) Act, 2021 and the amendment in clause (d) of Rule 56 of the Fundamental Rules, 1922 by the Fundamental (Amendment) Rules, 2021 are liable to be held ultra vires and set aside?
  2. As to whether the extensions granted to the tenure of the respondent No.2 as Director of Enforcement for a period of one year each vide orders dated 17th November 2021 and 17th November 2022 are legal and valid, and if not, whether liable to be set aside?

Answering the first question the Hon’ble court held that “What has been provided by the Amendments to the CVC Act and the DSPE Act is that the period for which such Director of Enforcement or the Director of CBI holds office on his initial appointment may, in public interest, on the recommendation of the Committee, which under the statutory scheme was required to recommend the appointment of such Director, for the reasons to be recorded in writing, be extended up to one year at a time. The second proviso provides that no such extension shall be granted after the completion of a period of five years in total including the period mentioned in the initial appointment. “

And for considering the issue with regard to validity of the Amendments, Hon’ble court referred to some of the judgments of the Court delineating the scope of the judicial review in examining the legislative functions of the Legislature viz. Asif Hameed and others v. State of Jammu and Kashmir and others 1989 Supp (2) SCC 364, Binoy Viswam v. Union of India and others (2017) 7 SCC 59  and held that “It has been the consistent view of this Court that legislative enactment can be struck down only on two grounds. Firstly, that the appropriate legislature does not have the competence to make the law; and secondly, that it takes away or abridges any of the fundamental rights enumerated in Part III of the Constitution or any other constitutional provisions. It has been held that no enactment can be struck down by just saying that it is arbitrary or unreasonable. Some or the other constitutional infirmity has to be found before invalidating an Act. It has been held that Parliament and the legislatures, composed as they are of the representatives of the people, are supposed to know and be aware of the needs of the people and what is good and bad for them. The court cannot sit in judgment over their wisdom.

It has consistently been held that there is always a presumption in favour of constitutionality, and a law will not be declared unconstitutional unless the case is so clear as to be free from doubt. It has been held that if the law which is passed is within the scope of the power conferred on a legislature and violates no restrictions on that power, the law must be upheld whatever a court may think of it.

In the present case, it is nobody’s case that Parliament did not have power to enact on the subject on which the aforesaid Amendments have been enacted. As such, the said ground is not available to the petitioners”

On the next question of whether the said ordinance violates the provisions of constitution, it was held that “It is, thus, clear that it is not at the sweet-will of the Government that the extensions can be granted to the incumbents in the office of the Director of CBI/Director of Enforcement. It is only on the basis of the recommendations of the Committees which are constituted to recommend their appointment and that too when it is found in public interest and when the reasons are recorded in writing, such an extension can be granted by the Government.

What has been directed by this Court in the case of Vineet Narain (supra) and in subsequent judgments relied on by the petitioners is that such Director should have a minimum tenure of two years irrespective of their date of superannuation. By the impugned Amendments, the said period is not tinkered with. What has been done is only a power is given to extend their period for a period of one year at a time, subject to a maximum number of three such extensions. However, this has to be done only when the Committee which is constituted to recommend their appointment finds it necessary, in public interest, to grant such extension. It is further required to record the reasons in writing for the said purpose.

We are, therefore, unable to accept the arguments that the impugned Amendments grant arbitrary power to the Government to extend the tenure of the Director of ED/CBI and has the effect of wiping out the insulation of these offices from extraneous pressures.”

Accordingly the Hon’ble court answered the first questions and rejected the contention of the petitioner to held amendment made in aforesaid acts as unconstitutional.

Answering the second question, the court held that in the past writ petition were allowed issuing mandamus to direct the Union of India to not extend the tenure of ED Chief.

Further, the Apex Court referred to constitution bench judgment rendered in Madan Mohan Pathak and another v. Union of India and others (1978) 2 SCC 50, wherein it was held that

“ I may, however, observe that even though the real object of the Act may be to set aside the result of the mandamus issued by the Calcutta High Court, yet, the section does not mention this object at all. Probably this was so because the jurisdiction of a High Court and the effectiveness of its orders derived their force from Article 226 of the Constitution itself. These could not be touched by an ordinary act of Parliament. Even if Section 3 of the Act seeks to take away the basis of the judgment of the Calcutta High Court, without mentioning it, by enacting what may appear to be a law, yet, I think that, where the rights of the citizen against the State are concerned, we should adopt an interpretation which upholds those rights. Therefore, according to the interpretation I prefer to adopt the rights which had passed into those embodied in a judgment and became the basis of a mandamus from the High Court could not be taken away in this indirect fashion.”

Further, reliance was also placed on Cauvery Water Disputes Tribunal, Re where it was held that “ The principle which emerges from these authorities is that the legislature can change the basis on which a decision is given by the Court and thus change the law in general, which will affect a class of persons and events at large. It cannot, however, set aside an individual decision inter parties and affect their rights and liabilities alone. Such an act on the part of the legislature amounts to exercising the judicial power of the State and to functioning as an appellate court or tribunal.”

Reliance was also placed on S.R. Bhagwat and others v. State of Mysore where it was very categorically held that “ It is now well settled by a catena of decisions of this Court that a binding judicial pronouncement between the parties cannot be made ineffective with the aid of any legislative power by enacting a provision which in substance overrules such judgment and is not in the realm of a legislative enactment which displaces the basis or foundation of the judgment and uniformly applies to a class of persons concerned with the entire subject sought to be covered by such an enactment having retrospective effect.

We may note at the very outset that in the present case the High Court had not struck down any legislation which was sought to be re-enacted after removing any defect retrospectively by the impugned provisions. This is a case where on interpretation of existing law, the High Court had given certain benefits to the petitioners. That order of mandamus was sought to be nullified by the enactment of the impugned provisions in a new statute. This in our view would be clearly impermissible legislative exercise.”

Further it was observed that “Recently, in the case of Madras Bar Association v. Union of India and another, a bench of learned three Judges of this Court, after considering the earlier judgments of this Court on the issue of permissibility of legislative override, observed thus:

“The permissibility of legislative override in this country should be in accordance with the principles laid down by this Court in the aforementioned as well as other judgments, which have been culled out as under:

The effect of the judgments of the Court can be nullified by a legislative act removing the basis of the judgment. Such law can be retrospective. Retrospective amendment should be reasonable and not arbitrary and must not be violative of the fundamental rights guaranteed under the Constitution. [Lohia Machines Ltd. v. Union of India, (1985) 2 SCC 197 : 1985 SCC (Tax) 245

The test for determining the validity of a validating legislation is that the judgment pointing out the defect would not have been passed, if the altered position as sought to be brought in by the validating statute existed before the Court at the time of rendering its judgment. In other words, the defect pointed out should have been cured such that the basis of the judgment pointing out the defect is removed.

Nullification of mandamus by an enactment would be impermissible legislative exercise (see : S.R. Bhagwat [S.R. Bhagwat v. State of Mysore, (1995) 6 SCC 16 : 1995 SCC (L&S) 1334] ). Even interim directions cannot be reversed by a legislative veto (see : Cauvery Water Disputes Tribunal [Cauvery Water Disputes Tribunal, In re, 1993 Supp (1) SCC 96 (2)] and Medical Council of India v. State of Kerala [Medical Council of India v. State of Kerala, (2019) 13 SCC 185] ).

Transgression of constitutional limitations and intrusion into the judicial power by the legislature is violative of the principle of separation of powers, the rule of law and of Article 14 of the Constitution of India.”

In the end, it was observed that “As already discussed herein above, this Court has specifically issued a mandamus that no further extension shall be granted to the second respondent. The Union of India and the respondent No.2 were both parties in the proceedings before this Court in Writ Petition (Civil) No. 1374 of 2020 [Common Cause (2021)]. The mandamus issued to be parties was binding on them. We, therefore, find that the respondent No.1 could not have issued orders dated 17th November 2021 and 17th November 2022 in breach of the mandamus issued by this Court vide its judgment dated 8th September 2021 in Common Cause (2021).”

In view of the above, the Hon’ble Apex Court partly dismissed and partly allowed the writ petitions.

 

Case Title :- Dr. Jaya Thakur Vs. Union of India & others

Case no. :-   WRIT PETITION (CIVIL) NO.456 OF 2022

Order date :- 11.07.2023

 

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