Case: Centre For Pil  Vs. Union Of India

Shri P.J. Thomas was appointed to the Indian Administrative Service (Kerala Cadre) 1973 batch where he served in different capacities with the State Government including as Secretary, Department of Food and Civil Supplies, State of Kerala in the year 1991. During that period itself, the State of Kerala decided to import 30,000 MT of palmolein. The Chief Minister of Kerala, on 5th October, 1991, wrote a letter to the Prime Minister stating that the State was intending to import Palmolein oil and that necessary permission should be given by the concerned Ministries. On 6th November, 1991, the Government of India issued a scheme for direct import of edible oil for Public Distribution System (PDS) on the condition that an ESCROW account be opened and import clearance be granted as per the rules. Respondent No. 2 wrote letters to the Secretary, Government of India stating that against its earlier demand for import of 30,000 MT of Palmolein oil, the present minimum need was 15,000 MT and the same was to meet the heavy ensuing demand during the festivals of Christmas and Sankranti, in the middle of January, 1992, therefore, the State was proposing to immediately import the said quantity of Palmolein on obtaining requisite permission. The price for the same was fixed on 24th January, 1992, i.e., 56 days after the execution of the agreement. The Kerala State Civil Supplies Corporation Ltd. was to act as an agent of the State Government for import of Palmolein. The value of the Palmolein was to be paid to the suppliers only in Indian rupees. Further, the terms governing the ESCROW account were to be as approved by the Ministry of Finance. This letter contained various other stipulations as well. This was responded to by the Joint Secretary, Government of India, Ministry of Civil Supplies and Public Distribution, New Delhi vide letter dated 26th November, 1991 wherein it was stated that it had been decided to permit the State to import 15,000 MT of Palmolein on the terms and conditions stipulated in the Ministrys circular of even number dated 6th November, 1991. It was specifically stated that the service charges up to a maximum of 15% in Indian rupees may be paid. After some further correspondence, the order of the State of Kerala is stated to have been approved by the Cabinet on 27th November, 1991, and the State of Kerala actually imported Palmolein by opening an ESCROW account and getting the import clearance at the rate of US $ 405 per MT in January, 1992.5. The Comptroller and Auditor General (`CAG), in its report dated 2nd February, 1994 for the year ended 31st March, 1993 took exception to the procedure adopted for import of Palmolein by the State Government. While mentioning some alleged irregularities, the CAG observed, "therefore, the agreement entered into did not contain adequate safeguards to ensure that imported product would satisfy all the standards laid down in Prevention of Food Adulteration Rules, 1956".This report of the CAG was placed before the Public Undertaking Committee of the Kerala Assembly. The 38th Report of the Kerala Legislative Assembly - Committee on Public Undertakings dated 19th March, 1996, inter alia, referred to the alleged following irregularities:-a. That the service fee of 15% to meet the fluctuation in exchange rate was not negotiated and hence was excessive. Even the price of the import product ought not to have been settled in US Dollars.b. That the concerned department of the State of Kerala had not invited tenders and had appointed M/s. Mala Export Corporation, an associate company of M/s. Power and Energy Pvt. Ltd., the company upon which the import order was placed as handling agent for the import.c. That the delay in opening of ESCROW accounts and in fixation of price, which were not in conformity with the circular issued by the Central Government had incurred a loss of more than Rupees 4 crores to the Exchequer.6. The Committee also alleged that under the pretext of plea of urgency, the deal was conducted without inviting global tenders and if the material was procured by providing ample time by inviting global tenders, other competitors would have emerged with lesser rates for the import of the item, which in turn, would have been more beneficial.7. The Chief Editor of the Gulf India Times even filed a writ petition being O.P. No. 3813 of 1994 in the Kerala High Court praying that directions be issued to the State to register an FIR on the ground that import of Palmolein was made in violation of the Government of India Guidelines. However, it came to be dismissed by the learned Single Judge of the Kerala High Court on 4th April, 1994. Still another writ petition came to be filed by one Shri M. Vijay Kumar, who was MLA of the Opposition in the Kerala Assembly praying for somewhat similar relief. This writ petition was dismissed by a learned Single Judge of the Kerala High Court and even appeal against that order was also dismissed by the Division Bench of that Court vide order dated 27th September, 1994.8. Elections were held in the State of Kerala on 20th May, 1996 and the Left Democratic Front formed the government. An FIR was registered against Shri Karunakaran, former Chief Minister and six others in relation to an offence under Section 13(2) read with Section 13(1) (d) of the Prevention of Corruption Act, 1988 and Section 120B of the IPC. The State of Kerala accorded its sanction to prosecute the then Chief Minister Shri Karunakaran and various officers in the State hierarchy, who were involved in the import of Palmolein, including respondent No. 2 on 30th November, 1999.9. Shri Karunakaran, the then Chief Minister filed a petition before the High Court being Criminal Miscellaneous No.1353/1997 praying for quashing of the said FIR registered against him and the other officers. Shri P.J. Thomas herein was not a party in that petition. However, the High Court dismissed the said writ petition declining to quash the FIR registered against the said persons. In the meanwhile, a challan (report under Section 173 of the Code of Criminal Procedure) had also been filed before the Court of Special Judge, Thiruvananthapuram and in this background the State of Kerala, vide its letter dated 31st December, 1999 wrote to the Department of Personnel and Training (DoPT) seeking sanction to prosecute the said person before the Court of competent jurisdiction. Keeping in view the investigation of the case conducted by the agency, two other persons including Shri P.J. Thomas were added as accused Nos. 7 and 8.10. Shri Karunakaran challenged the order before this Court by filing a Petition for Special Leave to Appeal, being Criminal Appeal No. 86 of 1998

Court's reasoning:
the registration of the FIR against the appellants and others cannot be held to be the result of mala fides or actuated by extraneous considerations. The menace of corruption cannot be permitted to be hidden under the carpet of the legal technicalities...".The Government Order granting sanction (Annexure R-I in that petition) was also upheld by this Court and it was further held that"our observations with respect to the legality of the Government Order are not conclusive regarding its constitutionality but are restricted so far as its applicability to the registration of the FIR against the appellant is concerned. We are, therefore, of the opinion that the aforesaid Government Order has not been shown to be in any way illegal or unconstitutional so far as the rights of the appellants are concerned...".Granting liberty to the parties to raise all pleas before the Trial Court, the appeal was dismissed. In the charge-sheet filed before the Trial Court, in paragraph 7, definite role was attributed to Accused No. 8 (respondent No. 2 herein) and allegations were made againstthe proviso to Section 4(1) Parliament has put its faith in the High Powered Committee consisting of the Prime Minister, the minister for Home Affairs and the Leader of the Opposition in the House of the People. It is presumed that such High Powered Committee entrusted with wide discretion to make a choice will exercise its powers in accordance with the 2003 Act, objectively and in a fair and reasonable manner. It is well settled that mere conferment of wide discretionary powers per se will not violate the doctrine of reasonableness or equality. The 2003 Act is enacted with the intention that such High Powered Committee will act in a bipartisan manner and shall perform its statutory duties keeping in view the larger national interest. Each of the Members is presumed by the legislature to act in public interest. On the other hand, if veto power is given to one of the three Members, the working of the Act would becomeAs 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 Yadavs 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 theprocess. 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.45. Even in R.K. Jains 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 thisthe circumstances, under the scheme of that Act it was held that while discharging the functions as a Chancellor, the Governor does everything in his discretion as a Chancellor and he does not act on the aid and advice of his Council of Ministers. This judgment has no application to the scheme of the 2003 Act. As stated hereinabove, the CVC is constituted under Section 3(1) of the 2003 Act. The Central Vigilance Commissioner is appointed under Section 4(1) of the 2003 Act by the President by warrant under her hand and seal after obtaining the recommendation of a Committee consisting of the Prime Minister as the Chairperson and two other Members. As submitted by the learned Attorney General although under the 2003 Act the Central Vigilance Commissioner is appointed after obtaining the recommendation of the High Powered Committee, such recommendation has got to be accepted by the Prime Minister, who is the concerned authority under Article 77(3), and if such recommendation is forwarded to the President under Article 74, then the President is bound to act in accordance with the advice tendered. Further under the Rules of Business the concerned authority is the Prime Minister. Therefore, the advice tendered to the President by the Prime Minister regarding appointment of the Central Vigilance Commissioner will be binding on the President. It may be noted that the above submissions of the Attorney General find support even in the judgment of the Division Bench of this Court in Bhuri Naths case (supra) which in turn has placed reliance on the judgment of this Court in Samsher Singh v. State of Punjab [(1974) 2 SCC 831]  in which a Bench of 7 Judges of this Court held that under the Cabinet system of Government, as embodied in our Constitution, the Governor is the formal Head of the State. He exercises all his powers and functions conferred on him by or under the Constitution with the aid and advice of his Council of Ministers. That, the real executive power is vested in the Council of Ministers of the Cabinet. The same view is reiterated in R.K. Jains case (supra). However, in Bhuri Naths case (supra) it has been clarified that the Governor being the constitutional head of the State, unless he is required to perform the function under the Constitution in his individual discretion, the performance of the executive power, which is coextensive with the legislative power, is with the aid and advice of the Council of Ministers headed by the Chief Minister. Thus, we conclude that the judgment in Bhuri Naths case has no application as the scheme of the Jammu and Kashmir Shri Mata Vaishno Devi Shrine Act, 1988 as well as the scheme of Maharshi Dayanand University Act, 1975 as well as the scheme of the various Endowment Acts is quite different from the scheme of the 2003 Act. Hence, there is no merit in the contention advanced on behalf of respondent No. 2 that in the matter of appointment of Central Vigilance Commissioner under Section 4(1) of the 2003 Act the President is not to act on the advice of the Council of Ministers as is provided in Article 74 of the Constitution. Unanimity or consensus under Section 4(2) of the 2003We find no merit in these submissions. To accept the contentions advanced on behalf of the 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. Underthe proviso to Section 4(1) Parliament has put its faith in the High Powered Committee consisting of the Prime Minister, the minister for Home Affairs and the Leader of the Opposition in the House of the People. It is presumed that such High Powered Committee entrusted with wide discretion to make a choice will exercise its powers in accordance with the 2003 Act, objectively and in a fair and reasonable manner. It is well settled that mere conferment of wide discretionary powers per se will not violate the doctrine of reasonableness or equality. The 2003 Act is enacted with the intention that such High Powered Committee will act in a bipartisan manner and shall perform its statutory duties keeping in view the larger national interest. Each of the Members is presumed by the legislature to act in public interest. On the other hand, if veto power is given to one of the three Members, the working of the Act would becomeunworkable. One more aspect needs to be mentioned. Under Section 4(2) of the 2003 Act it has been stipulated that the vacancy in the Committee shall not invalidate the appointment. This provision militates against the argument of the petitioner that the recommendation under Section 4 has to be unanimous. Before concluding, we would like to quote the observations from the judgment inGrindley and Another v. Barker, 1 Bos. & Pul.which reads as underthink it is now pretty well established, that where a number of persons are entrusted with the powers not of mere private confidence, but in some respects of a general nature and all of them are regularly assembled, the majority will conclude the minority, and their act will be the act of the whole.The Court, while explaining the raison detre behind the principle, observedis impossible that bodies of men should always be brought to think alike. There is often a degree of coercion, and the majority is governed by the minority, and vice versa, according to the strength of opinions, tempers, prejudices, and even interests. We shall not therefore think ourselves bound in this case by the rule which holds in that. I lay no great stress on the clause of the act which appoints a majority to act in certain cases, because that appears to have been done for particular reasons which do not apply to the ultimate trial: it relates only to the assembling the searchers; now there is no doubt that all the six triers must assemble; and the only question, what they must do when assembled? We have no light to direct us in this part, except the argument from the nature of the subject. The leather being subject to seizure in every stage of the manufacture, the tribunal ought to be composed of persons skilful in every branch of the manufacture. And I cannot say there is no weight in the argument, drawn from the necessity of persons concurring in the judgments, who are possessed of different branches of knowledge, but standing alone it is not so conclusive as to oblige us to break through the general rule; besides, it is very much obviated by this consideration when all have assembled and communicated to each other the necessary information, it is fitter that the majority should decide than that all should be pressed to a concurrence. If this be so, then the reasons drawn from the act and which have been supposed to demand, that the whole body should unite in the judgment, have no sufficient avail, and consequently the general rule of law will take place; viz. that the judgment of four out of six being the whole body to which the authority is delegated regularly assemble and acting, is the judgment of the all."