JOIN USHolding that the touchstone for the appointment of CVC is the "institutional integrity" as well as the personal integrity of the candidate, the court also faulted the HPC's decision to recommend Thomas(60) for appointment as Central Vigilance Commissioner on grounds of arbitrariness, ignoring "relevant material".
A three-member bench of the court headed by Chief Justice S H Kapadia rejected the contention of Thomas and the government that the appointment of CVC cannot be brought under judicial review and said the legality of the recommendation can very much be reviewed by it.
Coming down heavily on the HPC's decision, the court said in future appointments to CVC's post should not be restricted to civil servants alone and that people of impeccable integrity from other fields should be considered.
Thomas, a former IAS officer of 1973 batch who was appointed as CVC on September 7 last despite a dissenting note by leader of opposition Sushma Swaraj in the HPC, is facing a corruption case in a Kerala court relating to Palmolein import scam that allegedly caused a loss of over Rs two crore to the state.
Thomas was the Food Secretary in the Kerala government at the time of import and the then chief minister K Karunakaran was also another accused in the case. Karunakaran died recently.
Disposing of a PIL filed by an NGO CPIL and others that included former CEC J M Lyngdoh, the court said "It is declared that the September 3, 2010 recommendation of the HPC recommnending the name of P J Thomas as CVC under the proviso to Section 4(1) of the 2003 Act is non-est(does not exist) in law and, consequently, his impugned appointment as CVC is quashed."
The 71-page verdict written by Justice Kapadia noted that not only the corruption case was pending against Thomas but there were notings by the Department of Personnel and Training (DoPT) which had repeatedly recommended "penalty proceedings" against him between 2000 to 2004.
The bench, which also included justices K S Radhakrishnan and Swatanter Kumar, held that institutional integrity of the CVC is the primary consideration which the HPC failed to take into account while recommending Thomas for appointnment as CVC.
"In the present case, this vital aspect has not been taken into account by the HPC while recommending the name of P J Thomas for appointment as CVC. We do not wish to discount personal integrity of the candidate," said the bench.
But, the court said, "What we are emphasizing is that institutional integrity of an institution like CVC has got to be kept in mind while recommending the name of the candidate.
"Whether the incumbent (Thomas) would or would not be able to function? Whether the working of the institution would suffer? If so, would it not be the duty of the HPC not to recommend the person.
"In the present case the entire emphasis has been placed by the CVC, the DoPT and the HPC only on the bio-data of the empanelled candidates. None of these authorities have looked at the matter from the larger perspective of institutional integrity including institutional competence and functioning of CVC," it said.
In the context of dissent registered by leader of the opposition Sushma Swaraj, who was a member along with Prime Minister Manmohan Singh and Home Minister P Chidambaram in the HPC, the court said if there was a dissent note by any of the members of the HPC it has to be given with sufficient reasons and has to be considered by the majority.
Further, the majority should also give reasons for their decision as this will lead to a transparent process in public interest and also inspire public confidence.
"The decision to recommend has got to be an informed decision keeping in mind the fact that CVC as an institution has to perform an important function of vigilance administration," said the bench.
"If a statutory body like HPC, for any reason whatsoever, fails to look into the relevant material having nexus to the object and purpose of the 2003 CVC Act or takes into account irrelevant circumstances then its decision would stand vitiated on the ground of official arbitrariness," the bench said.
"The HPC had to take into consideration what is good for the institution and not what is good for the candidate," the bench said.
It criticised the panel headed by prime minister that it took its decision only after considering Thomas' bio data and failed to look beyond it, ignoring the corruption case pending against him.
"Moreover, we are surprised to find that between 2000 and 2004 the notings of DoPT on June 26, 2000, January 18, 2001, June 20, 2003, February 24, 2004, October 18, 2004 and November 2, 2004 have all observed that penalty proceedings may be initiated against Thomas," said the bench.
"Whether state should initiate such proceedings or the Centre should initiate such proceedings was not relevant. What is relevant is that such notings were not considered at all," the bench said.
Thomas was the Union Telecom secretary before he was made the 14th CVC in September last year.
The scam in which Thomas was listed as the eighth accused related to Palmolein imports in 1991. A case was filed in connection with the imports in 1992 and Thomas figured in the chargeshseet filed in 1998.
While maintaining that it did "not wish to discount personal integrity" of Thomas, the bench said that "even on personal integrity, the HPC has not considered the relevant material."
"The fact remains that the HPC, for whatsoever reason, has failed to consider the relevant material keeping in mind the purpose and policy of the 2003 CVC Act," it added.
"It is the independence and impartiality of the institution like CVC which has to be maintained and preserved in larger interest of the rule of law," the bench said.
"Whether the institutional competency would be adversely affected by pending proceedings and if by that touchstone the candidate stands disqualified then it shall be the duty of the HPC not to recommend such a candidate," the bench said.
"In the present case apart from the pending criminal proceedings, as stated above, between the period 2000 and 2004 various notings of DoPT recommended disciplinary proceedings against Thomas in respect of Palmolein case. Those notings have not been considered by the HPC.
Dwelling upon the history of establishment of the CVC as corruption watchdog institution, the court said that it's status is akin to what is known as "integrity institutions" in various western democarcies.
"CVC as an integrity institution was set up by the Government in 1964. The sole purpose behind setting up of the CVC was to improve the vigilance administration of the country," it said adding that "in Australia, US, UK and Canada there exists a concept of integrity institutions."
"In Hongkong we have an Independent Commission against corruption. In Western Australia there exists a statutory Corruption Commission. In Queensland, we have Misconduct Commission. In New South Wales there is Police Integrity Commission. All these come within the category of integrity institutions," said the bench.
"In our opinion, CVC is an integrity institution. This is clear from the scope and ambit of the 2003 CVC Act," said the bench while also pointing out the "statutory autonomy and insulation from external influences" of the institution, which also controls CBI.
Emphasising the importance of CVC as an institution, the bench rued that the panel headed by the Prime Minister examined the question of Thomas' candidature as CVC "has gone by personal integrity of the officers empanelled and not by institutional integrity."
The court also ruled that the post of CVC should not be restricted to civil servants alone and asked the government to consider persons of "impeccable integrity" from other fields as well.
"It shall not be restricted to civil servants," the bench said adding "All the civil servants and other persons empanelled shall be outstanding civil servants or persons of impeccable integrity."
Dismissing the government's contention that the court was not empowered to subject the HPC's decision to judicial review, the bench ruled that it was empowered indeed to do so.
"Government is not accountable to the courts in respect of policy decisions. However, they are accountable for the legality of such decisions," the bench said adding "The validity of this recommendation falls for judicial scrutiny in this case."
"If a duty is cast under the proviso to Section 4(1) on the HPC to recommend to the President the name of the selected candidate, the integrity of that decision making process is got to ensure that the powers are exercised for the purposes and in the manner envisaged by the said Act, otherwise such recommendation will have no existence in the eye of law," said the court.
In its ruling the court said that there was no need to have a consensus among the members of the HPC on question of recommending for appointment at the post of CVC as that would amount to conferring veto power on one of its members.
"To accept the contentions advanced by petitioners would mean conferment of a veto right on one of the members of the HPC. To confer such a power on one of the members would amount to judicial legislation," the bench reasoned.
The court also asked the government as to what to do in the case of a dissent by one member of the HPC.
"The question still remains as to what should be done in cases of difference of opinion amongst the HPC members. As in the present case, if one member dissents, that member should give reasons for the dissent and if the majority disagrees with the dissent, the majority shall give reasons for overruling the dissent," the bench said.
Rejecting the government's defence that Thomas did not need an additional vigilance clearance before his appointment as CVC as he had been already cleared by the vigilance prior to his appointment as a secretary to the government, the bench said, "We find no merit in the above submissions."
"Appointment to the post of the CVC must satisfy not only the eligibility criteria of the candidate but also the decision making process of the recommendation," the bench said.
"The decision to recommend has got to be an informed decision keeping in mind the fact that CVC as an institution has to perform an important function of vigilance administration."
When institutional integrity is in question, the touchstone should be public interest which has got to be taken into consideration by the HPC and in such cases the HPC may not insist upon proof," said the bench.
We should not be understood to mean that the personal integrity is not relevant. It certainly has a corelationship with institutional integrity," it added.