Respond to pleas challenging CAG's appointment: HC

The Delhi High Court Wednesday sought a response from the central government on two separate pleas seeking quashing of Shashi Kant Sharma's appointment as Comptroller and Auditor General of India (CAG) on grounds of conflict of interest.

A division bench of Justice B.D. Ahmed and Justice Vibhu Bakhru agreed to examine the issue and asked the government to file its reply by Aug 8.

The plea contended that as the government auditor, Sharma would be judging a number of defence deals that were concluded or cleared when he was defence secretary.The Supreme Court had asked former chief election commissioner N. Gopalaswami, one of the petitioners, to move the Delhi High Court and declined to entertain his plea seeking the quashing of Sharma's appointment.

The petition was moved by a group of eminent people who held important positions in the government and the Election Commission. They urged the court to direct the government to "frame a transparent selection procedure based on definite criteria" for appointing the CAG.

Appearing for the petitioners, Prashant Bhushan contended before the court that the appointment should be "fair and transparent" so that a compatible person is appointed.

He also submitted that Sharma's appointment was "arbitrary" as it has been made without any transparency or procedure and without any call for applications.

"They must frame transparent criteria. The person should be of highest integrity. The post requires independence from the government. There was no advertisement, criteria, no short-listing of candidates, nothing at all," Bhushan argued.

The lawyer said that Sharma had "most serious conflict of interest" as he has been involved in defence acquisitions for the last 10 years. 

"Every year, more than Rs.1 lakh crore is spent on defence acquisitions. All these purchases would now come before the CAG or are already under CAG audit," Bhushan told the court, adding that several of these deals are now being probed by the CBI. 

Sharma's appointment as CAG was "arbitrary, opaque and made without any procedure and criteria", the petition said.

The appointment was "liable to be declared non est or void as it is made arbitrarily by a procedure that does not withstand the test of constitutionality, also on the ground of conflict of interest", the petition said.

It sought the framing of a "transparent selection procedure based on a definite criteria..." for the appointment of CAG and pleaded for the setting up of a "broad-based non-partisan selection committee, which after calling for applications and nominations, would recommend the most suitable person for appointment as the CAG to the president".

Sharma was a joint secretary in the defence ministry (2003-07), the director general of acquisitions in charge of all defence purchases (in 2010) and was appointed the defence secretary in July 2011 before being appointed the CAG, the petition said.

The petitioners contended that the CAG under Vinod Rai (since retired) had also made serious observations in the recent past on the defence ministry's procurement policy.

The CAG earlier noted that between 2007-11, India concluded five offset contracts in the defence sector worth Rs.3,410 crore that were not in consonance with the provisions laid down in the defence procurement procedure.

The high court has clubbed the two public suits, one filed by Gopalaswami and others and another filed by advocate M.L. Sharma.

Besides Gopalaswami, the petition was moved by former navy chiefs Admiral (retd.) R.H. Tahiliani and Admiral L. Ramdas, former secretaries to the government Kamal Kant Jaswal, Ramaswamy R. Iyer and E.A.S. Sarma, among others.