Common Cause (A Regd. Society) & Ors. vs Union of India & Ors.

1.2 With respect to Stock Guru, the investigation was made not by respondent No.2 but by Deputy Director of Income-tax (Investigation) and under Additional Director of Investigation, reporting to Director of Investigation, Investigation-II, Delhi, who in turn reported to the respondent, the then Additional D.G. (IG) Investigation, Delhi. Such conduct on 6.2.2012 led to a seizure of Rs.34.96 crores in cash. Initially, there was a complaint by Mr. Anil Kumar Agrawal (who had nothing to do with this case) that the cash belonged to various depositors and it should not have been seized. On a case filed, the amount was deposited in court as per the order passed by the court. Appraisal report was prepared by the I.O. and sent to assessing officer who initiated assessment proceedings. However, on 3.6.2013 the CBI started an investigation into the conduct of the then I.O. of Stock Guru. The name of respondent No.2 did not figure in the First Information Report filed by the CBI. No wrongdoing, no shortcoming was found by any authority in the action of respondent No.2 when 13 allegations were made by Mr. Anil Kumar Agarwal against respondent No.2. The CVC, Department of Revenue and Department of CBDT got the issues enquired and allegations were found to be baseless. [Para 70][941-F-H; 942-A-B]

1.3 With respect to the allegations made by Mr. Anil Kumar Agrawal, it was clear that since he was criminally prosecuted under section 182 IPC and disciplinary proceedings, had been initiated against him by the Institute of Chartered Accountants of India at the instance of respondent No.2 and respondent No.2 had deposed against him in the criminal case in the court and once upon time Mr. Anil Kumar Agrawal had appreciated the gesture of respondent No.2 it was clearly an afterthought for him to level the allegations which were without any supporting material and had never been substantiated by any material. In the newspaper report dated 15.4.2014 name of respondent No.2 was not mentioned, no supervisory failure was attributed. Respondent No.2 was not subjected to an investigation by the CBI. Thus, the aforesaid cast of aspersions upon respondent No.2 by the petitioners has no basis. Same is not substantiated by any material. [Para 71][942-C-E]

1.4 File No.245/32/2015-AVD.II has been produced which contains the answers of CBI with respect to various queries made which were on the basis of the complaint. It has been mentioned that the CBI has investigated the relevant case during the tenure of Mr. Ranjit Sinha in the Stock Guru scam on the basis of a complaint received from E.O.W., Delhi Police, relating to demand and acceptance of illegal gratification from Mr. Ulhas Prabhakar of M/s. Stock Guru by Mr. Yogender Mittal (IRS-2006), ADIT to help him in the income-tax case. The investigation did not reveal the involvement of respondent No.2. It was also noted that nothing came to the notice of CBI against respondent No.2. [Para 72][942F-G]

1.5 Another aspersion on the integrity cast is relating to a search conducted by criminal investigation division of incometax on Ponty Chadha group M/s. Flora and Fauna Housing Development Pvt. Ltd. on 1.2.2012. It was alleged that respondent No.2 abused his position to under-assess the income of the said company by an amount of Rs.234 crores. It was alleged that he issued a direction to the assessing officer to dispose of the case in a particular manner which could not have been done in view of section 119 of the Income Tax Act and judgment of this Court. Respondent No.2 agreed with the conclusion of the aforesaid officers. In that matter, respondent No.2 had not taken any decision. The decision was taken by the Assessing Officer and the Additional Commissioner in whom the power vested. As the matter was to be decided as per law the assessing officer came to the conclusion that there was no case for addition and passed an order under the Income Tax Act with the approval of the Additional Commissioner. In a meeting held on 22.3.2014, DCIT (Assessing Officer), the Additional Commissioner and Chief Commissioner apprised respondent No.2, Member (Investigation) that they were of the view that no addition of Rs.234 crores was warranted as there was no evidence to suggest much less to prove that an accounted sale to that extent took place in the span of 21 days from 1.9.2011 to 22.9.2011. Thus the facts make it clear that no impropriety has been committed by respondent No.2 and he has not directed the assessing officer to proceed in a particular manner but rather various higher authorities had agreed with the assessing officer and thereafter had put up the matter for discussion with the respondent who had also agreed with them. In the facts of the case, it is clear that the allegation raised with respect to favour being meted out to M/s. Flora and Fauna Housing & Land Development (P) Ltd. at the instance of respondent No.2 has been considered by HSBC and not at all substantiated from the material on record. As a matter of fact, full facts have not been placed on record either by Mr. Anil Agrawal or otherwise to make the position clear. It is apparent that Mr. Anil Agrawal was making reckless allegations and was guilty of suppresio veri and suggestio falsi. [Paras 73, 75 and 77][942-H; 943-A, E-H; 944-H; 945-A-C]

1.6 Another allegation against respondent No.2 was with respect to the failure of respondent No.2 to take appropriate action against the foreign bank account holders in HSBC Bank, Geneva for almost 3 years. It was urged that no prompt action was taken by respondent No.2. Since the formation of SIT the income tax department had not filed even a single prosecution against HSBC account holders. The allegation is not at all substantiated. Rather his functioning has been appreciated by the SIT and his assistance has been sought even by the Chief Vigilance Commissioner. [Paras 78, 80][945-D-E; 947-A]

1.7 Another allegation against respondent No.2 is with respect to the failure to make any headway, as he failed to take action in the income-tax cases, in the 2G scam, unlike the CBI or Enforcement Directorate filed several charge-sheets. The averment in this regard in the petition is in the passing form and is vague. Apart from that, no specific instance has been given in which case there was a failure on the part of respondent No.2. That apart respondent No.2 had made it clear that during the tenure from 1.11.2010 to August 2012 he had taken up the case of Unitech Ltd. whose associates and their sister concern had been granted licences and few other cases of telecom company were investigated and few connected cases of telecom companies were also under investigation for other charges. All necessary investigation was carried out and aforesaid findings were communicated in due time to the Assessing Officer who took appropriate action. Cases of other telecom companies under the jurisdiction of DGIT, Bombay, Chennai, Bengaluru etc. Respondent No.2 as a nodal agency coordinated and made several representations as to the action taken by the income-tax department before a Joint Parliamentary Committee. It could not be pointed out in which particular matter respondent No.2 was found lacking. It was never pointed out to this Court that there was laxity on the part of respondent No.2 when the aforesaid matter C.A. No.10660/2010 was listed in this Court. [Para 81][947-B-F]

1.8 The allegation with respect to Radia Tapes, is that respondent No.2 not taking action against the concerned incumbents. Details of action which were required and could have been taken have not been given in the petition, thus no specific averment has been made in this regard by the petitioners. It is apparent from the reply that respondent No.2 was DGIT Investigation and he joined on 1.11.2010 by which time surveillance of Ms. Nira Radia was over and some intercepts relating to such surveillance were in public domain due to leakage probably in May-June, 2010. When he had taken over as DGIT (Investigation) in November 2010 actionable issues were identified and necessary action was taken either by the Delhi Directorate or was communicated to the Directorates for further action. The information was duly shared with the Assessing Officers and other law enforcing agencies such as CBI, ED etc. The matter was before this Court in Public Interest Litigation (PIL). None of the authorities ever found any shortcoming or inaction on the part of respondent No.2 on this count. It was also not urged before the Court by aforesaid PIL of 2010 whenever it was listed. [Para 82][947-G-H; 948-A-B]

1.9 It has also been pointed out by respondent No.2 that in the petition with respect to APAR of respondent No.2, false averments have been made, that adverse remarks were made by three senior officers of CBDT. The allegation has been termed to be baseless and unfounded and misleading. In the 36 years of service, not even a single remark has been made in the APAR. All the remarks had been based on record as in the form of compendium R-2/1. There is no adverse remark in them. Thus the petition suffers from wrong averments also. Thus, it is apparent that against respondent No.2 unsubstantiated allegations have been made. [Para 83][948-C-D]

1.10 Three representations/complaints were received against respondent No. 2. The PMO had asked for details of the allegations so as to ascertain the facts contained in the representations filed against respondent No.2. Complaints of respondent No.2 were placed before the Committee. Factual inputs on opinion were received with respect to the various aspects in representation from various agencies like CBI, Information Bureau, Department of Revenue, Ministry of Finance and were placed before the HPC which considered all the allegations against all shortlisted candidates. No complaint was received against respondent No. 3. Requisite clearances were given by the IB with respect to respondent Nos. 2 and 3. With respect to the allegations, separate inputs were obtained and placed before the Committee. There was nothing adverse found. [Para 87][951-C-E]

1.11 Each and every aspect and information had been placed before the High Power Committee when the decision was taken. Thus, the integrity of the decision-making process has not impinged in this case in any manner whatsoever. Nor the decision taken to appoint respondent No.2 as CVC, can be said to be suffering from any illegality. The decision cannot be said to be influenced by extraneous considerations and the choice made of respondent No.2 cannot be said to be such which is amenable for interference by the court in judicial review. [Para 104][955-B-C]

2.1 With respect to the appointment of respondent No.3, that since it was alleged that on the administrative side, he was severely indicted for fabricating/forging the APAR of Mr. Malay Mukherjee, General Manager and was cautioned. However, his criminal prosecution ultimately was not fructified. Thus, in view of the order passed in the serious background, it could not be said that person who was accused of fabricating/forging APAR was a person of impeccable integrity fit to hold the office of Vigilance Commissioner of an integrity institution of this country. Respondent No. 3 in his written explanation pointed out that in the past there were 14 such cases when succeeding CMDs, had submitted APAR when reviewing APAR when officers have not worked under him. Thus no action against him was warranted. He had not violated any guidelines. [Paras 105, 109][955-D-E; 956-F-G]

2.2 So far as fabrication and forgery are concerned, no finding has been recorded against respondent No.3 with respect to the APAR for 2009-2010 by any formal order on the administrative side. Thus, his integrity is not going to be affected in the aforesaid factual matrix. [Para 111][958-B]

2.3 There is no finding recorded against respondent No.3 either by the Chief Vigilance Commissioner or the DFS in any manner whatsoever so as to impinge adversely upon his integrity, necessary for such an institution of Vigilance Commission. Apart from that, no representation was filed against respondent No.3. However, this aspect was dealt with and was mentioned in the report which was submitted before the HPC. Thus, there was nothing against the integrity of respondent No.3 so as to hold that the recommendation with respect to him was illegal and void and entire material was placed before the HPC. Thus, no case is made out with respect to the appointment of respondent No.3 as Vigilance Commissioner to make interference in judicial parameters. [Paras 111, 112][958-C-D, F]

3. Judicial determination is confined to the integrity of the decision making process by the HPC. The difference between judicial and merit review, the legality of decision-making process can also be looked into. If the decision is influenced by extraneous considerations or selection is made in breach of the statute or rules, it can be set aside. The Government is not accountable to the courts for the choice made but the Government is accountable to the courts in respect of the lawfulness/legality of its decisions. [Para 85][950-F, G]

4. It is not for this Court to decide on the choice. Nowadays the scenario is that such complaints cannot be taken on face value. Even against very honest persons, allegations can be made. Those days have gone when filing of the complaints was taken as serious aspersions on integrity. Ideally, there should not be any serious complaint as the filing of same raises eyebrows. As in the instant matter, complaints have been looked into and the Court declines to interfere. [Para 113][958-G-H]

Vineet Narain & Ors. v. Union of India & Anr. (1998) 1 SCC 226 : [1997] 6 Suppl. SCR 595; Centre for PIL & Anr. v. Union of India & Anr. (2011) 4 SCC 1 : [2011]

4 SCR 445; K. Karunakaran v. State of Kerala (2000)

3 SCC 761 : [2000] 2 SCR 735 – referred to.