Sh. S.K. Mutreja vs Union Of India (Uoi) And Ors.
2005 Latest Caselaw 83 Del

JUDGMENT

Manmohan Sarin, J.

1. Petitioner by this writ petition seeks, inter alia, the quashing of the appointment letter dated 22nd September, 2004 passed by respondent No. 1 in favor of respondent No. 5 appointing the latter as Director (Operations) in Goa Shipyard Ltd. (respondent No. 4 herein). Petitioner also seeks a writ of mandamus directing respondents 1 to 3 to consider the claim of the petitioner for appointment to the said post being the most meritorious candidate adjudged by the Public Enterprises Selection Board.

2. Notice to show cause was issued in the case on 29th September, 2004 It was directed that appointment would be subject to the outcome of the writ petition. Records of the proceedings of Appointment Committee of Cabinet (ACC) were directed to be produced. An affidavit has been filed by the Secretary to the Government of India, Department of Personnel and Training averring that disclosure of records and documents were detrimental to public interest. However, it is averred that records were offered to be produced for perusal by the court to satisfy itself about the bonafides and genuineness of the plea of privilege. This affidavit was not pressed during the course of hearing and records were made available to the court.

3. Petitioner, a retired Commander after serving Indian Navy for 20 years sought pre-mature retirement. He joined respondent No. 4 as Manager (Ship Building). He was promoted and has been working as Chief General Manager (Operations) with respondent No. 4. For appointment to the post of Director (Operations) with respondent No. 4, the name of the petitioner along with respondent No. 5 and others was considered by the Public Enterprises Selection Board (referred to as ''Board'').

The Board placed the ptitioner as number No. 1 finding him to be the most meritorious candidate. Petitioner is aggrieved by appointment of respondent No. 5 as Director (Operations) by the impugned order. Petitioner also places reliance on the recommendations of the Parliamenary Committee on Public Undertakings which have been accepted by respondent No. 1. The extract of the recommendation and reply of the Government are reproduced for facility of reference:-''The Committee recommended that for efficient functioning of PSEs, preference should be given to candidates from within the undertaking so long as competent persons are available and the appointment of officers of the organized services to the posts of Chief Executives should be avoided.''

Reply of the Government ''In terms of the Government of India Resolution dated 3-3-1987, it is the normal policy of the Government to appoint through fair and objective selection procedure outstanding professional managers to Level I and Level II posts in the Central PSUs. Asper the mandate given to the PESB unless markedly better candidates are available from outside, internal candidates employed in the Public Sector Enterprises are to be given preference appointment to Board Level positions.''

4. Petitioner, therefore, urges that based on the recommendation of the Board and the policy of preferring internal candidates, petitioner who had been adjudged most meritorious candidate was entitled to be appointed. The Board had invited applications vide its advertisement/ circular dated 13th June, 2003. Petitioner was the only internal candidate. Petitioner claims greater experience and expertise and states that he worked in Indian Navy for 20 years and 15 years with respondent No. 4, while respndent No. 5 had worked only with Indian Navy without having any experience whatsoever of working with respondent No. 4 or of ship building. Respondent No. 5 had been placed by the Board below the petitioner in ranking. Petitioner also urges that actin of respondents 1 to 3 is vitiated by possibly placing reliance on the material that was not put up before the Board and which may have been in existence prior to 18th September, 2003. Petitioner also claims that action of respondent No. 4 in ignoring the petitioner's claims is in violation of the directions, guidelines set out in WP(C) 437/1998 titled Warris Rashid Kidwai v. Union of India and the judgment of the Supreme court in Dr. A.K. Doshi v. Union of India , wherein the cort disapproved of the notes made by the Secretary of the Appointments Committee in the file which were not before the Selection Committee and by which Selection Committee's recommendation was sought to be brought to naught.

5. Mr. Pradeep Gupta, learned counsel for the petitioner has submitted that in October, 2000, petitioner had been promoted on officiating basis as Chief General Manager, Goa Shipyard. In October, 2002, he was given regular promotion as Chief General Manager. He submits that regular promotion was given after taking vigilance clearance. Mr.Gupta further submitted that as now advised, petitioner's name figured in the ''Agreed List''. The duration of the Agreed List was only one year. Accordingly, in Jnuary, 2002 or thereafter, petitioner was neither in the Agreed List nor in the ''List of Doubtful Integrity cases''. The duration of Agreed List was one year unless it was reviewed and extended. Mr. Gupta submits that once the petitioner's name ceased to be in the Agreed List in January, 2002, there was no question of any bar operating against the petitioner from being considered, selected and appointed to the post of Director (Operations). He submits that respondents were seeking to cause confusio by treating the three year period in ''Doubtful Integrity List'' cases as the cooling off period, applicable to appointment to senior position of those who had been in Agreed List.

6. Mr. Gupta next submitted that allegations against the petitioner of showing favor in the tender process by violating the procedure have not been substantiated and the same have been dropped. The Central Vigilance Commission (CVC in short) had recommended initiation of minor penalty. The Chairman-cum-Managing Director had differed with the same and set out the reasons and urgency in the execution of the projects. Upon re-consideration of the case by CVC, the recommendation for initiation of mior penalty was dropped and concurrence of CVC was given to ''oral caution'' as being sufficient. Mr. Gupta submitted that petitioner has acted in the interest of organization to avoid delays and to complete time bound projects. Petitioner was only a member of the Price Negotiation Committee. There was no allegation of illegal gratification or receipt of consideration, having been found.

7. Mr. Gupta next submitted that petitioner's appointment and selection has been scuttled on account of deliberate attempt by the Secretary to the Appointment Committee of Cabinet to project the petitioner's case as one of ''Doubtful Integrity''. Accordingly, it has prevented a rationale decision being taken, ignoring the preference as a departmental candidate and being the most meritorious candidate adjudged by the Public Enterprises Selection Board to which he was entitled. It was urged that petiioner had a record of outstanding performance. He made significant contributions to the growth of respondent No. 4-company and such a decision would dampen and discourage the morale of meritorious candidates.

8. Records have been perused. Petitioner's case has been processed with the following comments:-

''Mr. Mutreja has been on the List of officers of doubtful integrity for keeping close watch/surveillance, continuously for a period of 5 years from 1997 to 2001. In terms of the CVC's orders on the subject, the officers who are on such Lists should be kept away from sensitive positions for a period of three years.''

Earlier while recommending the petitioner for appointment, the view taken was that since he had been recommended by the Board, and the Department of defense Production and Supplies, and had been given vigilance clearance by CVC, the fact that he was kept under surveillance by CBI or that ACRs for last three years were approved by the CMD and not by any superior authority should not be held against him. His case was, therefore, recommended and processed for appointment. In the meantime, there was change of Government. It was then directed to be re-processed after the new Government took over. The case was re-processed with part of the note as extracted earlier. It was also observed in the note that the Second Officer namely respondent No. 5 has clear vigilance profile. Proposal was made for appointment of respondent No. 5 which has been duly approved by the Appointments Committee of Cabinet and the Prime Minister.

9. Mr. P.P. Malhotra, learned Addl. Solicitor General in opposition of the writ petition submitted that selection by the Board by itself was not sufficient. Once the selection or recommendation is made, there is a procedure simultaneously to send to the Ministry and to the CVC for their comments. CVC by its letter of 17th November, 2003 noted that while there was nothing on record against the petitioner, however, adverse remarks mentioned in bio-data and report of CBI may be brought to the notice of AC. Mr. Malhotra submitted that for the purpose of appointment to the top and sensitive position, CVC has equated the cases of the ''Agreed List'' with the cases of ''Doubtful Integrity'' list. Rationale being that for top and sensitive posts, credentials to the officers ought to be impeccable. Even if a person was falling in the Agreed list and there was only a shadow of doubt, it was sufficient to dis-entitle him to the top post. It may be noted that when a person is to be kept under surveillance, is put in Category A where CBI and the concerned departments are both in agreement to put him on the said list pending looking into any complaints or suspicion with regard to the officer's integrity. The Agreed List in Category A is reviewed every year. If it is agreed to continue the officer in the list, then he moves from Category A to Category B. Category C was a list where the CBI was of the opinion that officers be kept in the said list while the department takes a different view then the peson be kept in Category C. Doubtful Integrity list includes:-

''Names of those officers only against whom either inquiry is being held or after the conclusion of the inquiry, they have been found to be lacking integrity. It is desired that this list of doubtful integrity is prepared by the Vigilance Section by the 5th January every year on calendar basis and forwarded to the Chief Vigilance Officer duly approved by the Chief Executive by the 31st January.

Whose names should be included in this list?

Those who have been convicted by a Court of Law on a charge of lack of integrity or involved in moral turpitude. The names of those officers may also be included who have been awarded major penalty on the charge of lack of integrity and of those against whom there was a serious charge of dereliction of duty. Their names may also be included who are facing either major penalty proceedings or a Court trial for alleged acts of lack of integrity or moral turpitude. In addition those who were prosecuted but acquitted on technical grounds or given benefit of doubt.''

10. Learned Addl. Solicitor General submitted that the post of Director (Operation) of Goa Shipyard was a top most post in the public undertaking and a highly sensitive one. The operation of Goa Shipyard concerns the building, repairing and catering to the needs of Indian Navy, Coast Guard and Merchant Navy and to some extent contracts from Merchant Navy and other shipping companies for building and repair of ships are executed. Advance Patrol Vessels are also built.

11. Reliance is also placed by Mr. Malhotra on the circular dated 18th August, 1999 where the CVC itself takes cognizance of the sensitivity of the Agreed List, List of officers of doubtful integrity advised as under:-

''Considering the sensitivity of such lists, the Commission, in exercise of powers conferred in Para 3(v) of the Ministry of Personnel, Public Grievances and Pensions, Department of Personnel and Training Resolution No. 371/20/99-AVD-III dated 4/4/99, directly departments/organisations under its purview not to post such officers who are placed on the aforesaid lists in sensitive positions.''

12. The submission being that as far as filling up of vacancies of sensitive posts is concerned, the said lists have to be treated at par. In other words, persons who had either been in the Agreed List or List of Officers of Doubtful Integrity should not be considered for sensitive posts. These guidelines, it is submitted were reiterated in communication dated 7th April, 2000, relating to measures for strengthening vigilance and anti-corruption work-Preparation of Agreed List and action thereon. Inara 3, the CVC advised in the following terms:-

''The Central Vigilance Commission, vide instruction No. 3(v)/99(6) dated 18.08.1999, had directed all the departments/ organisations, under its purview, not to post the officers placed on the Agreed List/List of officers of doubtful integrity in sensitive positions. The action taken in this regard, with specific reference to the officers posted out of sensitive areas, may also be furnished to the Commission. The CVOs may also certify that none of the officers, appearing on the Agreed List and the Lit of officers of doubtful integrity, have been posted in sensitive positions.''

13. Mr. Malhotra submitted that even if the petitioner did not fall in the category of persons of ''Doubtful Integrity'' in terms of instructions and guidelines for such lists, what the court needs to consider is that the petitioner was falling in the ''Agreed List'' and the bar applied for top positions to the ''Agreed List'' also. He further submits that it would make no difference if the case was processed by the Government or Appointments Committee of Cabinet on the basis that petitioner happened to fallen the ''Agreed List'' and not in the ''Doubtful Integrity'' list. Result would be the same. It would be an exercise of futility, if the matter was to be remanded. He submits that use of expression ''List of officers of doubtful integrity'' in para 3 of CVC instructions quoted earlier was perhaps intended to convey that persons of doubtful Integrity had to be watched and not necessarily that the persons must fall in the ''Doubtful Integrity'' list. Since the appointment in this case was for a top position, mere suspicion or doubt was sufficient. The post had to be manned by a person whose integrity should be beyond any pale of doubt.

14. On merits, he submits that CBI had recommended initiation of major penalty since the charges were quite serious and related to placement of order to a known approved supplier, quoting higher rates on the ground of alleged urgency. However, CVC after discussion with CBI and the department advised initiation of minor disciplinary proceedings. Chairman-cum-Managing Director of Goa Shipyard took the view that initiation of disciplinary proceedings would adversely affect the morale of senior officers and advised them to be more careful and adhere to the procedure. The CVC subsequently endorsed the above directions of Chairman-cum-Managing Director of Goa Shipyard for an oral caution.

15. Let us consider the position which emerges having noted the factual matrix and the respective submissions of the parties. Petitioner was found to be the most meritorious candidate by the Public Enterprise Selection Board. Petitioner's credentials, as far as experience and performance is concerned, were found to be outstanding. In October,2000, he was promoted as Chief General Manager of respondent No. 4 and in October,2002 he was given regular promotion. There is also a recommendation of the Parlamentary Committee of Public Undertakings providing for preference to be given to competent persons from the undertaking itself i.e. internal candidates and the Government has accepted the same. The stumbling block faced by the petitioner is that petitiner figured in List-B in the year 1997, in List-A in the year 1998-99 and in 2000. He was under surveillance for these years. His name appeared in List-C again in the year 2001. The CBI had also recommended initiation of major penalty in a case relatig to placement of an order. The Central Vigilance Commission (CVC) after discussion with CBI and the Department advised initiation of disciplinary proceedings for a minor penalty. The Chairman-cum-Managing Director of the Goa Shipyard took the view that was a case of breach of procedure in placement of orders, urgently required to be executed to complete time bound projects. Further initiation of disciplinary proceedings would adversely affect the morale of senior officers and an oral caution was officient. This was accepted by CVC and acted upon.

16. It is in the aforesaid background and relying on the CVC's instructions as reproduced in paras 11 and 12 herein above that the learned Addl. Solicitor General urged that the decision of the Government could not be faulted with in preferring and appointing respondent No. 5, who had a clear vigilance profile. Besides, there can also be no dispute on the proposition that for top and sensitive positions persons with impeccable credentials and integrity, without any pale of doubt, deserve to be appointed and preferred. It is in the light of the foregoing that Mr. P.P. Malhotra, Addl. Solicitor General submits that even if the note, processing the case before the Appointments Committee of the Cabinet, had incorrectly mentioned that the petitioner was in the''doubtful integrity list'' category, considering that the appointment was for a top and sensitive position, the result would have been the same and even if the matter was to be remanded on the ground of erroneous input, it would be an exercise in futility

17. I am not persuaded to accept this for the reason that it is not a matter within the province and domain of the Court to take a decision thereon. There is yet another reason for this. Record shows that when the case was earlier processed in February,2004, despite the adverse remarks and the factum of petitioner having been kept under close watch and surveillance in different lists as noted earlier, his appointment was recommended for approval up to the Prime Minister's level when the matter was directd to be reprocessed after new Government was to take over. The view taken was, being first in the panel, though petitioner had been kept under surveillance by CBI, it could not be held against him as it did not lead to any case or action. Further petiioner could not be held accountable for ACRs not being submitted by the Reporting Authority to the Superior Reviewing Authority. This demonstrates divergent view and perspective in which the matter can be looked at. It is in this background that we have to consider the factum of incorrect mentioning of petitioner figuring in the list of ''officers of doubtful integrity for keeping close watch/ surveillance continuously for a period of five years from 1997 to 2001''. The factum of petitioner not having figured in ''doubtful integrity case list'' is a relevant factor. In these circumstances, it is not for this Court to speculate, especially in view of the facts as noted, whether Appointment Committee of the Cabinet would have taken the same decision if the factual position of petitioner's name not being under doubtful integrity list was correctly given. It is a matter entirely for Apointment Committee of Cabinet to take a decision, considering all relevant factors and the weight age to be accorded to them.

18. In these circumstances, the impugned order which has been passed on processing of a note which incorrectly recorded the petitioner having been in the ''list of doubtful integrity cases from 1997 to 2001'' rather than falling under the Agreed List, as noted in para 15 above, to be kept under watch, cannot be sustained. The impugned order dated 22.9.2004 is set aside with a direction that the case be reprocessed, correcting the error with regard to the petitioner not falling in the list of ''doubtful integrity category'' and reporting the factual position of his being kept under surveillance on the basis of agreed lists A, and lists B and C along with relevant facts. Writ petition is allowed in the above terms.