Dr. Jaya Thakur Vs. Union of India & Ors Case Summary You Can Listen To

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Dr. Jaya Thakur Vs. Union of India & Ors

Supreme Court Of India Writ Petition Civil /456/2022

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2023 INSC 616 1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

WRIT PETITION (CIVIL) NO.456 OF 2022

DR. JAYA THAKUR ...PETITIONER (S)

VERSUS

UNION OF INDIA & ORS. ...RESPONDENT (S)

WITH

WRIT PETITION (CIVIL) NO. 1271 OF 2021

WRIT PETITION (CIVIL) NO.1274 OF 2021

WRIT PETITION (CIVIL) NO.1272 OF 2021

WRIT PETITION (CIVIL) NO.1307 OF 2021

WRIT PETITION (CIVIL) NO.1330 OF 2021

WRIT PETITION (CIVIL) NO.14 OF 2022

WRIT PETITION (CIVIL) NO.274 OF 2022

WRIT PETITION (CIVIL) NO.786 OF 2022

M.A. NO. 1756 OF 2022 IN WRIT PETITION (CIVIL) NO.1374 OF

2020

WRIT PETITION (CIVIL) NO.1106 OF 2022

J U D G M E N T

B.R. GAVAI, J.

1. This batch of writ petitions seeks a writ, order or directions

in the nature of certiorari for quashing of order dated 17

November 2021 passed by the respondent No.1 for further

extension of tenure of the respondent No.2. In Writ Petition (Civil)

No.1106 of 2022, a further extension granted to respondent No.2

vide order dated 17

th November 2022 has also been challenged.

All these petitions also challenge the validity of Central Vigilance

Commission (Amendment) Act, 2021, the Delhi Special Police

Establishment (Amendment) Act, 2021 and t he Fundamental

(Amendment) Rules, 2021.

2. The facts, in brief, giving rise to the present writ petitions

are as under. The reference hereinafter to the parties would be

made as found in the cause-title of Writ Petition (Civil) No.456 of

2022.

3. The respondent No.2-Sanjay Kumar Mishra in Writ Petition

(Civil) No. 456 of 2022, who was working as Principal Special

Director in the Directorate of Enforcement (“ED” for short) was

appointed as Director of Enforcement for a period of two years

from the date of his assumption of charge of the post or until

further orders, whichever was earlier, vide order dated 19

November 2018.

4. Vide order dated 13

th November 2020, the President of India

approved the modification of the order dated 19

th November 2018

by amending the period of appointment from two years to three

years.

5. Writ Petition (Civil) No. 1374 of 2020 [Common Cause (A

Registered Society) v. Union of India & Ors.

1] was filed on 27

November 2020 by Common Cause (a registered society) before

this Court in public interest under Article 32 of the Constitution

of India praying for quashing of the order dated 13

th November

2020 and for a consequential direction to the respondent No.1 to

appoint the Director of Enforcement in accordance with the

procedure prescribed under Section 25 of the Central Vigilance

Commission Act, 2003 (hereinafter referred to as “the CVC Act”).

6. This Court though dismissed the said Writ Petition (Civil)

No. 1374 of 2020 [Common Cause (A Registered Society) v.

Union of India & Ors. ] vide judgment and order dated 8

September 2021 [hereinafter referred to as “Common Cause

2021 SCC OnLine SC 687

(2021)”], yet directed that no further extension shall be granted

to the respondent No.2.

7. On 14

th November 2021, since Parliament was not in

session, the President of India promulgated the Central Vigilance

Commission (Amendment) Ordinance, 2021, thereby inserting

two new provisos to Section 25(d) of the CVC Act.

Simultaneously, the President of India also promulgated the

Delhi Special Police Establishment (Amendment) Ordinance

2021, thereby inserting two new provisos to Section 4B(1) of the

Delhi Special Police Establishment Act, 1946 (hereinafter

referred to as “the DSPE Act”).

8. On 15

th November 2021, the Fundamental Rules, 1922 was

amended by the Fundamental (Amendment) Rules, 2021,

whereby the fifth proviso to F.R. 56(d) was substituted by a new

proviso.

9. On 15

th November 2021 itself, a meeting of the Committee

headed by the Central Vigilance Commissioner was held to

consider the proposal for extension of the tenure of the

respondent No.2. The Committee decided to extend the tenure of

the respondent No.2 as Director of Enforcement for a period of

one year i.e. upto 18

th November 2022 in public interest.

10. Vide Office Order No.238 of 2021 dated 17

th November

2021, the tenure of the respondent No.2 was extended for a

period of one year beyond 18

th November 2021 i.e. upto 18

November 2022 or until further orders, whichever was earlier.

11. Challenging the vires of the Amendment Ordinances and/or

the Fundamental (Amendment) Rules, 2021 and/or the said

Office Order dated 17

th November 2021, Writ Petition (Civil) Nos.

1307 of 2021, 1272 of 2021, 1274 of 2021, 1330 of 2021 and

1271 of 2021 came to be filed before this Court.

12. On 18

th December 2021, Parliament enacted the Central

Vigilance Commission (Amendment) Act, 2021 and the Delhi

Special Police Establishment (Amendment) Act, 2021.

13. Challenging the vires of the Amendment Acts and/or the

Office Order dated 17

th November 2021, Writ Petition (Civil) Nos.

14 of 2022, 274 of 2022 and 456 of 2022 came to be filed before

this Court. In some of the petitions, a challenge has also been

made to the amendment to the DSPE Act insofar it provides for

extension of the tenure of the Director of Central Bureau of

Investigation (“CBI” for short).

14. That during the pendency of the said writ petitions, vide

order dated 17

th November 2022, passed by the respondent No.1,

the term of the respondent No.2 was further extended for a period

of one year i.e. from 18

th November 2022 to 18

th November 2023.

Being aggrieved thereby, Writ Petition (Civil) No. 1106 of 2022

has been filed before this Court.

15. We have heard Mr. K.V. Viswanathan, learned Amicus

Curiae. We have also heard Mr. Anoop G. Choudhary, Mr. Gopal

Sankarnarayanan, Dr. Abhishek Manu Singhvi, learned Senior

Counsel, Mr. Prashant Bhushan, Mr. J.S. Sinha, and Mr.

Sharangowda, learned counsel appea ring on behalf of the

petitioners and Mr. Tushar Mehta, learned Solicitor General and

Mr. S.V. Raju, learned Additional Solicitor General, appearing on

behalf of the respondent-Union of India, and Ms. Vanshaja

Shukla, learned counsel appearing on behalf of the respondent

No.3 in M.A. No.1756 of 2022.

16. Mr. Anoop G. Choudhary, learned Senior Counsel

appearing on behalf of the petitioner in Writ Petition (Civil) No.

456 of 2022 and Writ Petition (Civil) No.1106 of 2022 submits

that any action which nullifies the effect of the order of this Court

dated 8

th September 2021 is not permissible in law.

17. Mr. Choudhary further submits that the respondent No.2

was also a party to the judgment of this Court in the case of

Common Cause (2021) . He submits that, as such, the direction

of this Court that no further extension should be granted to the

respondent No.2 is binding on him as well as the Union of India.

Learned counsel submits that the stand taken by the respondent

No.1 that the basis on which the direction was issued by this

Court was that the officer concerned had attained the age of

superannuation and on account of amendment to the

Fundamental Rules (hereinafter referred to as “FR”), the

extension to the term of the Director of Enforcement is

permissible and as such, the basis of the judgment of this Court

in the case of Common Cause (2021) is taken away by amending

the FR, is wholly without substance.

18. Mr. Gopal Sankarnarayanan submits that this Court in

paragraph 23 of the judgment in the case of Common Cause

(2021), though has upheld the power of the Union of India to

extend the tenure of Director of Enforcement beyond the period

of two years, it has made it clear that extension of tenure granted

to officers who have attained the age of superannuation should

be done only in rare and exceptional cases. He submits that this

Court has specifically stated that any extension of tenure granted

to persons holding the post of Director of Enforcement after

attaining the age of superannuation should be for a short period.

It is submitted that all these directions issued by this Court have

been annulled by the respondent No.1 -Union of India. He

submits that though the respondent No.2 was initially appointed

for a period of 2 years, by virtue of extensions granted, he will

continue for a period of 5 years.

19. Mr. Sankarnarayanan further submits that the words that

have been used by this Court are, “to facilitate the completion of

on-going investigations” and “in rare and exceptional cases”.

However, ignoring those words, extension is being given to the

respondent No.2 on the ground of a vague concept of “public

interest”.

20. Mr. Sankarnarayanan further submits that in view of the

judgment of this Court in the case of Madras Bar Association

v. Union of India and another

2, the effect of the judgments of

the Court can be nullified by a legislative act of removing the

basis of the judgment. Such law can be retrospective. However,

retrospective amendment should be reasonable and not arbitrary

and must not be violative of the fundamental rights guaranteed

under the Constitution. He further submits that nullification of

mandamus by an enactment is also an impermissible legislative

exercise. Since there is a specific mandamus that the respondent

2021 SCC OnLine SC 463= (2022) 12 SCC 455

No.2 should not be granted further extension, nullification of

such a mandamus cannot be permitted.

21. Mr. Sankarnayaranan submits that this Court in the cases

of Vineet Narain and others v. Union of India and another

Prakash Singh and others v. Union of India and others

(Prakash Singh-1)

4, Prakash Singh and others v. Union of

India(Prakash Singh-2)

5 and Prakash Singh and others v.

Union of India and others(Prakash Singh-3)

6 has consistently

held that the tenure of the high-ranking officials like the Director

of Enforcement, the Director of CBI and the Director General of

Police should be for a fixed period of two years in order to insulate

such an officer from extraneous pressures and enable him to

work independently and freely. It is submitted that the very

provision which permits the authority to grant extension is

contradictory to the requirement of insulation. An incumbent if

he performs as per the wishes of the authority, he would get an

(1998) 1 SCC 226

(2006) 8 SCC 1 (Prakash Singh-1)

(2019) 4 SCC 14 (Prakash Singh-2)

(2019) 4 SCC 1 [Prakash Singh-3)

extension. Per contra, if the incumbent in the office does not

perform as per the wishes of the authority, he would be denied

an extension. It is submitted that as such, the very independence

of such an officer would be taken away. It is, therefore, submitted

that the insulation provided to the said offices from extraneous

pressures is taken away. The learned counsel, therefore, submits

that both the Amendments need to be quashed and set aside. So

also, the extension granted to the respondent No.2 needs to be

set aside.

22. Mr. Sharangowda, learned counsel appearing on behalf of

the petitioner in Writ Petition (Civil) no. 274 of 2022 submits that

the vigilance clearance is also required at the stage of extension.

He submits that in the present case no such vigilance clearance

has been done and as such, the extension granted is not

permissible in law.

23. Learned counsel appearing on behalf of t he original

petitioner in Writ Petition (Civil) No.1374 of 2020 submits that

M.A. No.1756 of 2022 filed by the Union of India for modification

of the judgment and order passed by this Court dated 8

September 2021 is not permissible in law. He submits that by

way of present M.A. for modification, the applicants are, in effect,

seeking review of the judgment of this court.

24. Relying on the judgment of the Constitution Bench of this

Court in the case of Beghar Foundation through its Secretary

and another v. Justice K.S. Puttaswamy (Retired) and

others

7, he submits that the Change in Law cannot be a ground

for review.

25. Mr. K.V. Viswanathan, learned Amicus, submitted that this

Court in the case of Vineet Narain (supra) has approved the

recommendations of the Independent Review Committee. He

submits that the said Independent Review Committee was

tasked, inter alia, to examine the structure and working of the

CBI and the ED and suggest the changes needed to ensure

against extraneous pressures, arbitrary withdrawals or transfers

of personnel etc. He submits that insofar as the ED is concerned,

(2021) 3 SCC 1

the Director of Enforcement was to be selected from a panel of

persons who were having a minimum tenure of 2 years.

26. The learned Amicus submits that the amendment to the

CVC Act, the DSPE Act, and the FR are totally contrary to the

spirit of the long line of judgments delivered by this Court. It is

submitted that this Court has held that the tenure of the Director

of CBI as well as the Director of Enforcement should be a fixed

one so that the person holding such an office can act

independently, impartially and without any extraneous

pressures. He submits that the impugned Amendments now

permit for three extensions of one year at a time. It is, therefore,

submitted that the Government can use the ‘carrot and stick’

policy so as to ensure that the said Directors work according to

the wishes of the Government. He submits that a Director would

always succumb to the pressure of the Government so as to

ensure that he gets further extension as provided for in the

statute by amendment. Learned Amicus, therefore, submits that

these provisions being inconsistent with the spirit of the earlier

judgments of this Court that the post of the Director of

Enforcement as well as the Director of CBI should be kept

insulated stand defeated. Learned Amicus, therefore, submits

that such a provision which permits piecemeal extension of

tenure of one year each subject to a maximum cumulative tenure

of five years undermines the independence and integrity of the

office. Learned Amicus submits that the impugned Amendments

would also result in stagnation and inefficiency of

service/administration and cause frustration amongst other

eligible officers in the cadre.

27. Learned Amicus, relying on the judgment of this Court in

the case of Madras Bar Association v. Union of India and

another

8 submits that this Court has struck down the provision

for re-appointment of the Chairperson/Members for another

term of 5 years by holding that such a provision itself has the

effect of undermining the independence of the

Chairperson/Members of N ational Tax Tribunal (NTT). He

(2014) 10 SCC 1

submits that this Court has held that every

Chairperson/Member appointed to NTT would be constrained to

decide matters in a manner that would ensure his reappointment

in terms of Section 8 of the National Tax Tribunals Act, 2005.

His decisions may or may not be based on his independent

understanding.

28. Learned Amicus further relying on the judgment of this

Court in the case of Rojer Mathew v. South Indian Bank

Limited represented by its Chief Manager and others

submits that when the above provision was sought to be

introduced by way of Rules, the same was struck down by this

Court as being in disregard of the binding principles enunciated

by this Court and being destructive of judicial independence.

29. Learned Amicus, relying on the judgment of the Madras

High Court in the case of V. Sasitharan & Ors. v. The

Government of Tamil Nadu & Ors.

10, submits that the

(2020) 6 SCC 1

1995 SCC OnLine Mad 592

extensions granted to the officers beyond the date of retirement

generate disgruntlement and dis-appointment amongst the other

officers, lower down in the ladder whose only aspiration in their

official career would be to reach to the top most post in the

administrative set up. Learned Amicus submits that the Madras

High Court has held that if such extensions are granted as a

matter of bounty, then there is every possibility of the officer in

service playing to the tunes of those in power totally acting

against public interest.

30. Learned Amicus relying on a series of judgments of this

Court including the ones in the case of Shri Prithvi Cotton Mills

Ltd. and another v. Broach Borough Municipality and

others

11, Bhaktawar Trust and others v. M.D. Narayan and

others

12, Cauvery Water Disputes Tribunal, Re

13 and Madras

Bar Association v. Union of India and another

14, submits that

though it is permissible for the Legislature to change the basis

(1969) 2 SCC 283

(2003) 5 SCC 298

1993 Supp (1) SCC 96

2021 SCC OnLine SC 463

on which a decision is given by the Court and, thus, change the

law in general, which will affect a class of persons and events at

large, it is not permissible to set aside an individual decision inter

partes and affect their rights and liabilities. It is submitted that

insofar as the respondent No.2 is concerned, there is a specific

mandamus issued by this Court that he sh all not be granted

further extension. Learned Amicus submits that the impugned

Amendments do not change the basis on which a decision was

given by the Court, but, in effect, nullify the mandamus and, as

such, would not be sustainable.

31. Learned Amicus submits that he is not concerned with what

an individual case is. He submits that he is concerned with the

misuse of powers by any political party, which may be in power.

It is submitted that the impugned Amendments, if permitted to

remain, would lead to a tendency wherein incumbents/officers

would succumb to the pressure of the Government in power and

act as per their desire so that they get further extensions.

Learned Amicus, therefore, submits that the impugned

Amendments are liable to be quashed and set aside. It is

submitted that, in any case, the amended provisions are

manifestly arbitrary.

32. Learned Amicus submits that the argument that the

present incumbent needs to be continued on account of an on-

going mutual evaluation of India by the Financial Action Task

Force (FATF) is also self-contradictory. It is submitted that even

after the Amendment, the respondent No.2 can continue only

upto November 2023, whereas the possible plenary discussions

are likely to be held in the month of June 2024. It is, therefore,

submitted that the contention that the continuation of the

present incumbent is necessary so that India represents its case

effectively in FATF review, is also without substance.

33. Shri Tushar Mehta, learned Solicitor General (“SG” for

short), raised a preliminary objection to the maintainability of the

present writ petitions at the behest of the present petitioners. He

submits that most of the writ petitioners are members of political

parties. He submits that various members of these political

parties are under investigation by the ED. It is, therefore,

submitted that the present writ petitions are not bona fide public

interest litigations, but are filed with an oblique motive.

34. The learned SG submits that the appointment of the

Director of Enforcement in the ED is required to be made by the

Central Government on the recommendation of the Committee

consisting of:

(i) The Central Vigilance Commissioner - Chairperson

(ii) Vigilance Commissioners - Members

(iii) Secretary to the Government of India

in-charge of the Ministry of Home

Affairs in the Central Government - Member

(iv) Secretary to the Government of India

in-charge of the Ministry of

Personnel in the Central Government- Member

(v) Secretary to the Government of India-

in-charge of the Department of Revenue,

Ministry of Finance in the Central

Government - Member

35. Learned SG further submits that the Central Vigilance

Commissioner and the Vigilance Commissioners, prior to being

appointed by the President are required to undergo the process

of recommendation by a High-Level Committee consisting of:

(a) the Prime Minister - Chairperson

(b) the Minister of Home Affairs - Member

the House of the People - Member

36. Learned SG further submits that the provision for removal

of Central Vigilance Commissioner and Vigilance Commissioners

are very stringent. It is submitted that they can be removed from

the office only by an order of the President on the ground of

proved misbehaviour or incapacity or after this Court, on a

reference made to it by the President, has, on inquiry, reported

that the Central Vigilance Commissioner or any Vigilance

Commissioner, as the case may be, ought to be removed on such

ground. It is, therefore, submitted that the Central Vigilance

Commissioner and the Vigilance Commissioners constitute a

body which is totally independent, impartial, impeccable and

isolated.

37. Learned SG submits that, equally, the Director of CBI, prior

to appointment, has to undergo the process of recommendation

by the Committee consisting of:

(a) the Prime Minister - Chairperson

(b) the Leader of Opposition recognised

as such in the House of the People

or where there is no such Leader of

Opposition, then the Leader of the

single largest Opposition Party in

that House. - Member

Judge of the Supreme Court

nominated by him - Member

38. Learned SG further submitted that the extension can be

granted to the incumbents in both the offices only if the High-

Level Committees (mentioned supra) recommend the same, and

that too, in public interest and for the reasons to be recorded in

writing. It is submitted that the provision of granting extension

of one year at a time is made so that the incumbent functions

effectively. Learned SG further submits that the argument that

incremental extensions would lead to the incumbents working

under the pressure of the Government is totally untenable. He

submits that the extensions could be granted only in a case when

the Committee, as provided in Section 25 of the CVC Act,

recommends such an extension. He submits that such

Committee consists of the Central Vigilance Commissioner and

the Vigilance Commissioners who are totally independent,

impeccable and impartial persons. Learned SG submits that if a

long-fixed tenure of 5 years is granted at a time, then there is

also a possibility that a person, knowing that he will continue to

be in the office for a period of 5 years, may not discharge his

duties effectively.

39. Learned SG submits that insofar as the Director of CBI is

concerned, equally, the extension can be granted only in an event

when the Committee consisting of (a) the Hon’ble Prime Minister;

(b) the Leader of Opposition; and (c) the Chief Justice of India or

his nominee would recommend such an extension.

40. Learned SG relying on the judgments of this Court in the

cases of Indian Aluminium Co. and others v. State of Kerala

and others

15, Goa Foundation and another v. State of Goa

and another

16 and K.S. Puttaswamy (Retired) and another

(Aadhar) v. Union of India and another

17 submits that the

judgment delivered by this Court in the case of Common Cause

(2021) was on the basis of the FR and the provisions in Section

25(d) of the CVC Act, as it existed then. However, now the FR as

well as the CVC Act has undergone an amendment. It is,

(1996) 7 SCC 637

(2016) 6 SCC 602

(2019) 1 SCC 1

therefore, submitted that, by an amendment the very basis on

which the judgment was delivered has been taken away. He,

therefore, submits that the Legislature, which is undoubtedly

competent to pass a legislation, has taken away the basis on

which the Common Cause (2021) judgment was rendered upon.

41. The learned SG submits that, the question that will have to

be considered by this Court is that, as to whether this Court

would have rendered the same judgment which was delivered by

it in Common Cause (2021), had it considered the law which has

undergone change. Learned SG submits that when the Common

Cause (2021) judgment was delivered, the FR did not include the

post of Director of Enforcement. Now, the same has been

included by way of an amendment and also a provision has been

made that an extension could be granted upto a period as

provided in the relevant Act. He submits that , since the

amended Section 25 of the CVC Act now permits an extension at

a time for one year could be granted with a rider that the

cumulative period should not be more than 5 years, the

arguments advanced by the petitioners are liable to be rejected.

The learned SG further submits that the scope of interference by

this Court while exercising power of judicial review of the

legislative action of the State is very limited. He submits that

unless the Court finds that the legislation is not within the

competence of the legislature that has enacted the law or it has

violated the fundamental rights or any of the provisions of the

Constitution, it will not be permissible for this Court to interfere

with the same. He relied on various judgments of this Court in

support of this proposition.

42. Learned SG submits that the contention that by the

impugned Amendment to the CVC Act and the DSPE Act, the

mandamus issued by this Court has been annulled is without

substance. It is submitted that the mandamus issued by this

Court was contextual on the basis of the statutory provision

existing then. Since the statutory provision has undergone a

complete change taking away the foundation on the basis of

which the mandamus is issued, the contention in that regard

deserves to be rejected.

43. Learned SG further submitted that India is u ndergoing

FATF review. FATF review plays an important role. It is

submitted that the said evaluation is done by a team including

members from different countries across the world. A mutual

evaluation report provides an in-depth description and analysis

of a country’s system for preventing criminal abuse of the

financial system as well as focused recommendations to the

country to further strengthen its system. It is submitted that the

main component of the evaluation is its effectiveness. It is

submitted that the said evaluation involves various

components/stages. The evaluation had to be done in the year

2019. However, it could not be done on account of the COVID-

19 pandemic. It is submitted that the evaluation has already

begun and is likely to end in June 2024. It is submitted that

since the present incumbent is at the helm of affairs for the last

so many years, it was found necessary that for effective

presentation of the efforts made by the country, he should be

continued till the process of evaluation is complete. Learned SG

submits that though nobody is indispensable, however,

leadership makes a lot of difference. Therefore, it was found that

the present assessment should be done under the leadership of

the present incumbent.

44. Shri S.V. Raju, learned ASG supplemented the arguments

advanced by the learned SG. He submits that in view of the

judgment of this Court in the case of M/s Kishan Lal Lakhmi

Chand and others v. State of Haryana and others

18, the

Legislature has power even to annul the mandamus issued by

the Court. Relying on the judgment of this Court in the case of

Welfare Association, A.R.P., Maharashtra and another v.

Ranjit P. Gohil and others

19, he submits that the words “rare”

and “exceptional” as found in the case of Common cause (2021)

have now been taken away by an Amendment and, as such, no

1993 Supp (4) SCC 461

(2003) 9 SCC 358

interference would be warranted either with the Amendments to

the enactments or to the extensions so granted.

45. Mr. Gopal Sankarnarayanan, in rejoinder, submits that

insofar as the Director of Enforcement is concerned, he is under

the direct control of the Ministry of Finance and the incremental

extension would lead to a situation where the incumbent would

act as per the desires of the Government. The learned Senior

Counsel also relying on the recent judgment of the Constitution

Bench of this Court in the case of Anoop Baranwal v. Union of

India

20 submits that the institutions like the ED and the CBI

need to be kept insulated to protect the democracy. He,

therefore, reiterates that the impugned Amendments so also the

extensions granted to the respondent No.2 be set aside.

46. After hearing the learned counsel for the parties, we find

that, following two questions arise for consideration:

(i) As to whether the amendment to Section 25 of the CVC

Act by the Central Vigilance Commission (Amendment)

2023 SCC OnLine SC 216

Act, 2021 and to sub-section (1) of Section 4B of the

DSPE Act by the Delhi Special Police Establishment

(Amendment) Act, 2021 and the amendment in clause (d)

of Rule 56 of the Fundamental Rules, 1922 by the

Fundamental (Amendment) Rules, 2021 are liable to be

held ultra vires and set aside?

(ii) As to whether the extensions granted to the tenure of the

respondent No.2 as Director of Enforcement for a period

of one year each vide orders dated 17

th November 2021

and 17

th November 2022 are legal and valid, and if not,

whether liable to be set aside?

47. For answering the said questions, we will have to consider

the legal history which gave rise to the provisions for appointment

of the Central Vigilance Commissioner and the Director of CBI as

well as the Director of Enforcement.

48. The case of Vineet Narain (supra) arose out of a complaint

of inertia by the CBI in matters where the accusation made was

against high dignitaries. However, as the case progressed, the

Court posed a question to itself, as to whether it was within the

domain of judicial review and whether the Court could provide

for an effective instrument for activating the investigative process

which was under the control of the executive? This Court

attempted to innovate the procedure within the constitutional

scheme of judicial review to permit intervention by the Court to

find a solution to the problem.

49. This Court in the case of Vineet Narain (supra) found the

necessity for the insulation of the investigating agencies like the

CBI and the Revenue Department from any extraneous influence

to enable them to discharge their duties in the manner required

for proper implementation of the rule of law. This Court observed

thus:

“48. In view of the common perception

shared by everyone including the

Government of India and the Independent

Review Committee (IRC) of the need for

insulation of the CBI from extraneous

influence of any kind, it is imperative that

some action is urgently taken to prevent

the continuance of this situation with a

view to ensure proper implementation of

the rule of law. This is the need of equality

guaranteed in the Constitution. The right

to equality in a situation like this is that

of the Indian polity and not merely of a

few individuals. The powers conferred on

this Court by the Constitution are ample

to remedy this defect and to ensure

enforcement of the concept of equality.”

50. This Court, therefore, issued following directions:

“58. As a result of the aforesaid discussion,

we hereby direct as under:

I. CENTRAL BUREAU OF INVESTIGATION (CBI)

AND CENTRAL VIGILANCE COMMISSION (CVC)

1. The Central Vigilance Commission

(CVC) shall be given statutory status.

2. Selection for the post of Central

Vigilance Commissioner shall be made by a

Committee comprising the Prime Minister,

Home Minister and the Leader of the

Opposition from a panel of outstanding

civil servants and others with impeccable

integrity, to be furnished by the Cabinet

Secretary. The appointment shall be made

by the President on the basis of the

recommendations made by the Committee.

This shall be done immediately.

3. The CVC shall be responsible for the

efficient functioning of the CBI. While

Government shall remain answerable for

the CBI's functioning, to introduce visible

objectivity in the mechanism to be

established for overviewing the CBI's

working, the CVC shall be entrusted with

the responsibility of superintendence over

the CBI's functioning. The CBI shall report

to the CVC about cases taken up by it for

investigation; progress of investigations;

cases in which charge-sheets are filed and

their progress. The CVC shall review the

progress of all cases moved by the CBI for

sanction of prosecution of public servants

which are pending with the competent

authorities, specially those in which

sanction has been delayed or refused.

4. The Central Government shall take all

measures necessary to ensure that the CBI

functions effectively and efficiently and is

viewed as a non-partisan agency.

5. The CVC shall have a separate section

in its Annual Report on the CBI's

functioning after the supervisory function

is transferred to it.

6. Recommendations for appointment of

the Director, CBI shall be made by a

Committee headed by the Central Vigilance

Commissioner with the Home Secretary

and Secretary (Personnel) as members. The

views of the incumbent Director shall be

considered by the Committee for making

the best choice. The Committee shall draw

up a panel of IPS officers on the basis of

their seniority, integrity, experience in

investigation and anti-corruption work.

The final selection shall be made by the

Appointments Committee of the Cabinet

(ACC) from the panel recommended by the

Selection Committee. If none among the

panel is found suitable, the reasons thereof

shall be recorded and the Committee asked

to draw up a fresh panel.

7. The Director, CBI shall have a

minimum tenure of two years, regardless of

the date of his superannuation. This would

ensure that an officer suitable in all

respects is not ignored merely because he

has less than two years to superannuate

from the date of his appointment.

8. The transfer of an incumbent

Director, CBI in an extraordinary situation,

including the need for him to take up a

more important assignment, should have

the approval of the Selection Committee.

9. The Director, CBI shall have full

freedom for allocation of work within the

agency as also for constituting teams for

investigations. Any change made by the

Director, CBI in the Head of an

investigative team should be for cogent

reasons and for improvement in

investigation, the reasons being recorded.

10. Selection/extension of tenure of

officers up to the level of Joint Director (JD)

shall be decided by a Board comprising the

Central Vigilance Commissioner, Home

Secretary and Secretary (Personnel) with

the Director, CBI providing the necessary

inputs. The extension of tenure or

premature repatriation of officers up to the

level of Joint Director shall be with final

approval of this Board. Only cases

pertaining to the appointment or extension

of tenure of officers of the rank of Joint

Director or above shall be referred to the

Appointments Committee of the Cabinet

(ACC) for decision.

11. Proposals for improvement of

infrastructure, methods of investigation,

etc. should be decided urgently. In order to

strengthen CBI's in-house expertise,

professionals from the Revenue, Banking

and Security sectors should be inducted

into the CBI.

12. The CBI Manual based on statutory

provisions of the CrPC provides essential

guidelines for the CBI's functioning. It is

imperative that the CBI adheres

scrupulously to the provisions in t he

Manual in relation to its investigative

functions, like raids, seizure and arrests.

Any deviation from the established

procedure should be viewed seriously and

severe disciplinary action taken against the

officials concerned.

13. The Director, CBI shal l be

responsible for ensuring the filing of

charge-sheets in courts within the

stipulated time-limits, and the matter

should be kept under constant review by

the Director, CBI.

14. A document on CBI's functioning

should be published within three months

to provide the general public with a

feedback on investigations and information

for redress of genuine grievances in a

manner which does not compromise with

the operational requirements of the CBI.

15. Time-limit of three months for grant

of sanction for prosecution must be strictly

adhered to. However, additional time of one

month may be allowed where consultation

is required with the Attorney General (AG)

or any other law officer in the AG's office.

16. The Director, CBI should conduct

regular appraisal of personnel to prevent

corruption and/or inefficiency in the

agency.

II. ENFORCEMENT DIRECTORATE

1. A Selection Committee headed by the

Central Vigilance Commissioner and

including the Home Secretary, Secretary

(Personnel) and Revenue Secretary, shall

prepare a panel for appointment of the

Director, Enforcement Directorate. The

appointment to the post of Director shall be

made by the Appointments Committee of

the Cabinet (ACC) from the panel

recommended by the Selection Committee.

2. The Director, Enforcement

Directorate like the Director, CBI shall

have a minimum tenure of two years. In his

case also, premature transfer for any

extraordinary reason should be approved

by the aforesaid Selection Committee

headed by the Central Vigilance

Commissioner.

3. In view of the importance of the post

of Director, Enforcement Directorate, it

shall be upgraded to that of an Additional

Secretary/Special Secretary to the

Government.

4. Officers of the Enforcement

Directorate handling sensitive assignments

shall be provided adequate security to

enable them to discharge their functions

fearlessly.

5. Extensions of tenure up to the level of

Joint Director in the Enforcement

Directorate should be decided by the said

Committee headed by the Central Vigilance

Commissioner.

6. There shall be no premature media

publicity by the CBI/Enforcement

Directorate.

7. Adjudication/commencement of

prosecution shall be made by the

Enforcement Directorate within a period of

one year.

8. The Director, Enforcement

Directorate shall monitor and ensure

speedy completion of

investigations/adjudications and

launching of prosecutions. Revenue

Secretary must review their progress

regularly.

9. For speedy conduct of investigations

abroad, the procedure to approve filing of

applications for Letters Rogatory shall be

streamlined and, if necessary, Revenue

Secretary authorised to grant the approval.

10. A comprehensive circular shall be

published by the Directorate to inform the

public about the procedures/systems of its

functioning for the sake of transparency.

11. In-house legal advice mechanism

shall be strengthened by appointment of

competent legal advisers in the

CBI/Directorate of Enforcement.

12. The Annual Report of the

Department of Revenue shall contain a

detailed account on the working of the

Enforcement Directorate.

III. NODAL AGENCY

1. A Nodal Agency headed by the Home

Secretary with Member (Investigation),

Central Board of Direct Taxes, Director

General, Revenue Intelligence, Director,

Enforcement and Director, CBI as

members, shall be constituted for

coordinated action in cases having politico-

bureaucrat-criminal nexus.

2. The Nodal Agency shall meet at least

once every month.

3. Working and efficacy of the Nodal

Agency should be watched for about one

year so as to improve it upon the basis of

the experience gained within this period….”

51. In pursuance to the aforesaid directions issued by this

Court, the Government initially issued ordinance and finally

enacted the CVC Act.

52. Section 3 of the CVC Act deals with constitution of Central

Vigilance Commission.

53. Section 4 of the CVC Act deals with appointment of Central

Vigilance Commissioner and Vigilance Commissioners, which

reads thus:

“4. Appointment of Central Vigilance

Commissioner and Vigilance

Commissioners.—(1) The Central Vigilance

Commissioner and the Vigilance Commissioners

shall be appointed by the President by warrant

under his hand and seal:

Provided that every appointment under this

sub-section shall be made after obtaining the

recommendation of a Committee consisting of—

(a) the Prime Minister — Chairperson;

(b) the Minister of Home

Affairs

— Member;

Opposition in the

House of the People

— Member.

Explanation.—For the purposes of this sub-

section, “the Leader of the Opposition in the

House of the People” shall, when no such Leader

has been so recognised, include the Leader of the

single largest group in opposition of the

Government in the House of the People.

(2) No appointment of a Central Vigilance

Commissioner or a Vigilance Commissioner

shall be invalid merely by reason of any vacancy

in the Committee.”

54. Section 6 of the CVC Act deals with removal of Central

Vigilance Commissioner and Vigilance Commissioner, which

reads thus:

“6. Removal of Central Vigilance

Commissioner and Vigilance

Commissioner.—(1) Subject to the

provisions of sub-section (3), the Central

Vigilance Commissioner or any Vigilance

Commissioner shall be removed from his

office only by order of the President on the

ground of proved misbehaviour or

incapacity after the Supreme Court, on a

reference made to it by the President, has,

on inquiry, reported that the Central

Vigilance Commissioner or any Vigilance

Commissioner, as the case may be, ought

on such ground be removed.

(2) The President may suspend from

office, and if deem necessary prohibit also

from attending the office during inquiry,

the Central Vigilance Commissioner or

any Vigilance Commissioner in respect of

whom a reference has been made to the

Supreme Court under sub -section (1)

until the President has passed orders on

receipt of the report of the Supreme Court

on such reference.

(3) Notwithstan ding anything

contained in sub -section (1), the

President may by order remove from office

the Central Vigilance Commissioner or

any Vigilance Commissioner if the

Central Vigilance Commissioner or such

Vigilance Commissioner, as the case may

be,—

(a) is adjudged an insolvent; or

(b) has been convicted of an offence

which, in the opinion of the

Central Government, involves

moral turpitude; or

in any paid employment outside

the duties of his office; or

(d) is, in the opinion of the President,

unfit to continue in office by

reason of infirmity of mind or

body; or

(e) has acquired such financial or

other interest as is likely to affect

prejudicially his functions as a

Central Vigilance Commissioner

or a Vigilance Commissioner.

(4) If the Central Vigilance

Commissioner or any Vigilance

Commissioner is or becomes in any way,

concerned or interested in any contract or

agreement made by or on behalf of the

Government of India or participates in

any way in the profit thereof or in any

benefit or emolument arising therefrom

otherwise than as a member and in

common with the other members of an

incorporated company, he shall, for the

purposes of sub-section (1), be deemed to

be guilty of misbehaviour.”

55. Section 25 of the CVC Act deals with appointments, etc. of

officers of ED, which reads thus:

“25. Appointments, etc., of officers of

Directorate of Enforcement .—

Notwithstanding anything contained in the

Foreign Exchange Management Act, 1999 (42

of 1999) or any other law for the time being in

force,—

(a) the Central Government shall

appoint a Director of Enforcement in

the Directorate of Enforcement in the

Ministry of Finance on the

recommendation of the Committee

consisting of—

(i) the Central Vigilance

Commissioner

— Chairperson

;

(ii) Vigilance Commissioners — Members;

(iii) Secretary to the Government of

India in charge of the Ministry of

Home Affairs in the Central

Government

— Member;

(iv) Secretary to the Government of

India in charge of the Ministry of

Personnel in the Central

Government

— Member;

(v) Secretary to the Government of

India in charge of the

Department of Revenue,

Ministry of Finance in the

Central Government

— Member;

(b) while making a recommendation, the

Committee shall take into

consideration the integrity and

experience of the officers eligible for

appointment;

Additional Secretary to the

Government of India shall be eligible

for appointment as a Director of

Enforcement;

(d) a Director of Enforcement shall

continue to hold office for a period of

not less than two years from the date

on which he assumes office;

(e) a Director of Enforcement shall not be

transferred except with the previous

consent of the Committee referred to

in clause (a);

(f) the Committee referred to in clause (a)

shall, in consultation with the

Director of Enforcement, recommend

officers for appointment to the posts

above the level of the Deputy Director

of Enforcement and also recommend

the extension or curtailment of the

tenure of such officers in the

Directorate of Enforcement;

(g) on receipt of the recommendation

under clause ( f), the Central

Government shall pass such orders

as it thinks fit to give effect to the said

recommendation.”

56. Similarly, by an amendment to DSPE Act by Act No. 45 of

2003 (CVC Act), a provision was made for a Committee for

appointment of the Director of CBI, which reads thus:

“4-A. Committee for appointment of

Director.—(1) The Central Government

shall appoint the Director on the

recommendation of the Committee

consisting of—

(a) The Central Vigilance

Commissioner

— Chairperson;

(b) Vigilance Commissioners — Members;

Government of India in

charge of the Ministry of

Home Affairs in the Central

Government

— Member;

(d) Secretary (Coordination and

Public Grievances) in the

Cabinet Secretariat

— Member;

(2) While making any recommendation

under sub-section (1), the Committee

shall take into consideration the views of

the outgoing Director.

(3) The Committee shall recommend a

panel of officers—

(a) on the basis of seniority, integrity and

experience in the investigation of anti-

corruption cases; and

(b) chosen from amongst officers

belonging to the Indian Police Service

constituted under the All -India

Services Act, 1951 (61 of 1951),

for being considered for appointment as

the Director.”

57. Section 4-B of the DSPE Act deals with the terms and

conditions of service of Director, which reads thus:

“4-B. Terms and conditions of service of

Director.—(1) The Director shall,

notwithstanding anything to the contrary

contained in the rules relating to his

conditions of service, continue to hold office

for a period of not less than two years from

the date on which he assumes office.

(2) The Director shall not be transferred

except with the previous consent of the

Committee referred to in sub-section (1) of

Section 4-A.”

58. It could thus be seen that in view of clause (d) of Section 25

of the CVC Act, as it existed prior to the amendment, it was

provided that a Director of Enforcement shall continue to hold

office for a period of not less than two years from the date on

which he assumes office.

59. Similarly, in view of Section 4B of the DSPE Act, the Director

of CBI was required to continue to hold office for a period of not

less than two years from the date on which he assumes office. It

also provided that the Director shall not be transferred except

with the previous consent of the Committee referred to in sub-

section (1) of Section 4A.

60. By the Central Vigilance Commission (Amendment) Act,

2021, in clause (d) of Section 25 of the CVC Act, the following

provisos have been inserted:

“Provided that the period for which the

Director of Enforcement holds the office on

his initial appointment may, in public

interest, on the recommendation of the

Committee under clause (a) and for the

reasons to be recorded in writing, be extended

up to one year at a time:

Provided further that no such extension

shall be granted after the completion of a

period of five years in total including the

period mentioned in the initial appointment.”

61. Similarly, by the Delhi Special Police Establishment

(Amendment) Act, 2021, in sub-section (1) of Section 4B of the

DSPE Act, the following provisos have been inserted:

“Provided that the period for which the

Director holds the office on his initial

appointment may, in public interest, on the

recommendation of the Committee under

sub-section (1) of section 4A and for the

reasons to be recorded in writing, be extended

up to one year at a time:

Provided further that no such extension

shall be granted after the completion of a

period of five years in total including the

period mentioned in the initial appointment.”

62. Similarly, in clause (d) of rule 56 of the Fundamental Rules,

1922, the fifth proviso has also been substituted, which is as

under:

“Provided also that the Central

Government may, if it considers

necessary in public interest so to do, give

extension in service to the Defence

Secretary, Home Secretary, Director of

Intelligence Bureau, Secretary of

Research and Analysis Wing and Director

of Central Bureau of Investigation

appointed under the Delhi Special Police

Establishment Act, 1946 (25 of 1946) and

Director of Enforcement in the

Directorate of Enforcement appoin ted

under the Central Vigilance Commission

Act, 2003 (45 of 2003) in the Central

Government for such period or periods as

it may deem proper on a case -to-case

basis for reasons to be recorded in

writing, subject to the condition that the

total term of such Secretaries or

Directors, as the case may be, who are

given such extension in service under this

rule, does not exceed two years or the

period provided in the respective Act or

rules made thereunder, under which

their appointments are made.”

63. These two amendments to the CVC Act and the DSPE Act

along with the amendment to the Fundamental Rules, 1922 are

under challenge in the present proceedings.

64. What has been provided by the Amendments to the CVC Act

and the DSPE Act is that the period for which such Director of

Enforcement or the Director of CBI holds office on his initial

appointment may, in public interest, on the recommendation of

the Committee, which under the statutory scheme was required

to recommend the appointment of such Director, for the reasons

to be recorded in writing, be extended up to one year at a time.

The second proviso provides that no such extension shall be

granted after the completion of a period of five years in total

including the period mentioned in the initial appointment.

65. It is the contention of the petitioners that various judgments

of this Court have emphasized the necessity for the purpose of

ensuring complete insulation of the office of the Director of

CBI/Director of Enforcement from all kinds of extraneous

influences, as may be, as well as for upholding the integrity and

independence of the institution of CBI/ED as a whole. It is

contended that the Amendments, which enable the Government

to provide for extension and that too for a period of one year at a

time and which could extend to three extensions in total, would

enable the Government to apply a ‘carrot and stick’ policy. It is

contended that if the Director of CBI as well as the Director of

Enforcement acts as per the desire of the Government, they could

be provided extensions of their tenure. Per contra, if such a

Director does not act as per the desire of the Government, he

would be denied extensions. It is, thus, submitted that the very

purpose of insulating these premium Agencies from extraneous

pressures by the Government is sought to be wiped by the

impugned Amendments.

66. For considering the issue with regard to validity of the

Amendments, it will be apposite to refer to some of the judgments

of this Court delineating the scope of the judicial review in

examining the legislative functions of the Legislature.

67. A bench of three learned Judges of this Court in the case of

Asif Hameed and others v. State of Jammu and Kashmir and

others

21 observed thus:

“17. Before adverting to the controversy

directly involved in these appeals we may

have a fresh look on the inter se functioning

of the three organs of democracy under our

Constitution. Although the doctrine of

separation of powers has not been

recognised under the Constitution in its

absolute rigidity but the Constitution

makers have meticulously defined the

functions of various organs of the State.

legislature, executive and judiciary have to

function within their own spheres

demarcated under the Constitution. No

organ can usurp the functions assigned to

another. The Constitution trusts to the

judgment of these organs to function and

exercise their discretion by strictly following

the procedure prescribed therein. The

1989 Supp (2) SCC 364

functioning of democracy depends upon the

strength and independence of each of its

organs. legislature and executive, the two

facets of people's will, they have all the

powers including that of finance. Judiciary

has no power over sword or the purse

nonetheless it has power to ensure that the

aforesaid two main organs of State function

within the constitutional limits. It is the

sentinel of democracy. Judicial review is a

powerful weapon to restrain

unconstitutional exercise of power by the

legislature and executive. The expanding

horizon of judicial review has taken in its

fold the concept of social and economic

justice. While exercise of powers by the

legislature and executive is subject to

judicial restraint, the only check on our own

exercise of power is the self -imposed

discipline of judicial restraint.

18. Frankfurter, J. of the U.S. Supreme

Court dissenting in the controversial

expatriation case of Trop v. Dulles [356 US

86] observed as under:

“All power is, in Madison's phrase, “of

an encroaching nature”. Judicial power is

not immune against this human

weakness. It also must be on guard

against encroaching beyond its proper

bounds, and not the less so since the only

restraint upon it is self-restraint....

Rigorous observance of the difference

between limits of power and wise exercise

of power — between questions of

authority and questions of prudence —

requires the most alert appreciation of

this decisive but subtle relationship of

two concepts that too easily coalesce. No

less does it require a disciplined will to

adhere to the difference. It is not easy to

stand aloof and allow want of wisdom to

prevail to disregard one's own strongly

held view of what is wise in the conduct

of affairs. But it is not the business of this

Court to pronounce policy. It must

observe a fastidious regard for limitations

on its own power, and this precludes the

court's giving effect to its own notions of

what is wise or politic. That self-restraint

is of the essence in the observance of the

judicial oath, for the Constitution has not

authorized the judges to sit in judgment

on the wisdom of what Congress and the

executive branch do.”

19. When a State action is challenged, the

function of the court is to examine the action

in accordance with law and to determine

whether the legislature or the executive has

acted within the powers and functions

assigned under the Constitution and if not,

the court must strike down the action. While

doing so the court must remain within its

self-imposed limits. The court sits in

judgment on the action of a coordinate

branch of the Government. While exercising

power of judicial review of administrative

action, the court is not an Appellate

Authority. The Constitution does not permit

the court to direct or advise the executive in

matters of policy or to sermonize qua any

matter which under the Constitution lies

within the sphere of legislature or executive,

provided these authorities do not transgress

their constitutional limits or statutory

powers.”

68. It could thus be seen that the role of the judiciary is to

ensure that the aforesaid two organs of the State i.e. the

Legislature and the Executive function within the constitutional

limits. Judicial review is a powerful weapon to restrain

unconstitutional exercise of power by the legislature and

executive. The role of this Court is limited to examine as to

whether the Legislature or the Executive has acted within the

powers and functions assigned under the Constitution. However,

while doing so, the court must remain within its self-imposed

limits.

69. Recently, this Court in the case of Binoy Viswam v. Union

of India and others

22, took survey of the relevant judgments on

the issue and observed thus:

“78. With this, we advert to the discussion

on the grounds of judicial review that are

available to adjudge the validity of a piece of

legislation passed by the legislature. We

have already mentioned that a particular

law or a provision contained in a statute can

be invalidated on two grounds, namely : (i) it

is not within the competence of the

legislature which passed the law, and/or (ii)

it is in contravention of any of the

fundamental rights stipulated in Part III of

the Constitution or any other

right/provision of the Constitution. These

contours of the judicial review are spelled

out in the clear terms in Rakesh Kohli [State

of M.P. v. Rakesh Kohli, (2012) 6 SCC 312 :

(2012) 3 SCC (Civ) 481] , and particularly in

the following paragraphs : (SCC pp. 321-22

& 325-27, paras 16-17, 26-28 & 30)

“16. The statute enacted by Parliament

or a State Legislature cannot be declared

unconstitutional lightly. The court must

be able to hold beyond any iota of doubt

that the violation of the constitutional

provisions was so glaring that the

(2017) 7 SCC 59

legislative provision under challenge

cannot stand. Sans flagrant violation of

the constitutional provisions, the law

made by Parliament or a State Legislature

is not declared bad.

17. This Court has repeatedly stated

that legislative enactment can be struck

down by court only on two grounds,

namely (i) that the appropriate legislature

does not have the competence to make

the law, and (ii) that it does not (sic) take

away or abridge any of the fundamental

rights enumerated in Part III of th e

Constitution or any other constitutional

provisions. In McDowell and Co. [State of

A.P. v. McDowell & Co., (1996) 3 SCC 709]

while dealing with the challenge to an

enactment based on Article 14, this Court

stated in para 43 of the Report as follows

: (SCC pp. 737-38)

‘43. … A law made by Parliament or

the legislature can be struck down by

courts on two grounds and two

grounds alone viz. (1) lack of legislative

competence, and (2) violation of any of

the fundamental rights guaranteed in

Part III of the Constitution or of any

other constitutional provision. There is

no third ground. … if an enactment is

challenged as violative of Article 14, it

can be struck down only if it is found

that it is violative of the equality

clause/equal protection clause

enshrined therein. Similarly, if an

enactment is challenged as violative of

any of the fundamental rights

guaranteed by sub-clauses (a) to (g) of

Article 19(1), it can be struck down

only if it is found not saved by any of

the clauses (2) to (6) of Article 19 and

so on. No enactment can be struck

down by just saying that it is arbitrary

or unreasonable. Some or the other

constitutional infirmity has to be found

before invalidating an Act. An

enactment cannot be struck down on

the ground that court thinks it

unjustified. Parliament and the

legislatures, composed as they are of

the representatives of the people, are

supposed to know and be aware of the

needs of the people and what is good

and bad for them. The court cannot sit

in judgment over their wisdom.”

***

26. In Mohd. Hanif Quareshi [Mohd.

Hanif Quareshi v. State of Bihar, AIR

1958 SC 731] , the Constitution Bench

further observed that there was always a

presumption in favour of constitutionality

of an enactment and the burden is upon

him, who attacks it, to show that there

has been a clear violation of the

constitutional principles. It stated in para

15 of the Report as under : (AIR pp. 740-

41)

‘15. … The courts, it is accepted,

must presume that the legislature

understands and correctly appreciates

the needs of its own people, that its

laws are directed to problems made

manifest by experience and that its

discriminations are based on adequate

grounds. It must be borne in mind that

the legislature is free to recognise

degrees of harm and may confine its

restrictions to those cases where the

need is deemed to be the clearest and

finally that in order to sustain the

presumption of constitutionality the

court may take into consideration

matters of common knowledge,

matters of common report, the history

of the times and may assume every

state of facts which can be conceived

existing at the time of legislation.”

27. The above legal position has been

reiterated by a Constitution Bench of this

Court in Mahant Moti Das v. S.P.

Sahi [Mahant Moti Das v. S.P. Sahi, AIR

1959 SC 942] .

28. In Hamdard Dawakhana v. Union

of India [Hamdard Dawakhana v. Union

of India, AIR 1960 SC 554 : 1960 Cri LJ

735] , inter alia, while referring to the

earlier two decisions, namely, Bengal

Immunity Co. Ltd. [Bengal Immunity Co.

Ltd. v. State of Bihar, AIR 1955 SC 661]

and Mahant Moti Das [Mahant Moti

Das v. S.P. Sahi, AIR 1959 SC 942] , it

was observed in para 8 of the Report as

follows : ( Hamdard Dawakhana

case [Hamdard Dawakhana v. Union of

India, AIR 1960 SC 554 : 1960 Cri LJ 735]

, AIR p. 559)

‘8. Therefore, when the

constitutionality of an enactment is

challenged on the ground of violation

of any of the articles in Part III of the

Constitution, the ascertainment of its

true nature and character becomes

necessary i.e. its subject-matter, the

area in which it is intended to operate,

its purport and intent have to be

determined. In order to do so it is

legitimate to take into consideration all

the factors such as history of the

legislation, the purpose thereof, the

surrounding circumstan ces and

conditions, the mischief which it

intended to suppress, the remedy for

the disease which the legislature

resolved to cure and the true reason for

the remedy….’

In Hamdard Dawakhana [Hamdard

Dawakhana v. Union of India, AIR 1960

SC 554 : 1960 Cri LJ 735] , the Court also

followed the statement of law in Mahant

Moti Das [Mahant Moti Das v. S.P. Sahi,

AIR 1959 SC 942] and the two earlier

decisions, namely, Charanjit Lal

Chowdhury v. Union of India [Charanjit

Lal Chowdhury v. Union of India, 1950

SCC 833 : AIR 1951 SC 41 : 1950 SCR

869] and State of Bombay v. F.N.

Balsara [State of Bombay v. F.N. Balsara,

1951 SCC 860 : AIR 1951 SC 318 : (1951)

52 Cri LJ 1361] and reiterated the

principle that presumption was always in

favour of constitutionality of an

enactment.

***

30. A well-known principle that in the

field of taxation, the legislature enjoys a

greater latitude for classification, has

been noted by this Court in a long line of

cases. Some of these decisions

are Steelworth Ltd. v. State of

Assam [Steelworth Ltd. v. State of Assam,

1962 Supp (2) SCR 589] , Gopal

Narain v. State of U.P. [Gopal

Narain v. State of U.P., AIR 1964 SC 370]

, Ganga Sugar Corpn. Ltd. v. State of

U.P. [Ganga Sugar Corpn. Ltd. v. State of

U.P., (1980) 1 SCC 223 : 1980 SCC (Tax)

90] , R.K. Garg v. Union of India [R.K.

Garg v. Union of India, (1981) 4 SCC 675

: 1982 SCC (Tax) 30] and State of

W.B. v. E.I.T.A. India Ltd. [State of

W.B. v. E.I.T.A. India Ltd., (2003) 5 SCC

239] ”

(emphasis in original)

79. Again, in Ashoka Kumar

Thakur v. Union of India [Ashoka Kumar

Thakur v. Union of India, (2008) 6 SCC 1 : 3

SCEC 35] , this Court made the following

pertinent observations : (SCC p. 524, para

219)

“219. A legislation passed by

Parliament can be challenged only on

constitutionally recognised grounds.

Ordinarily, grounds of attack of a

legislation is whether the legislature has

legislative competence or whether the

legislation is ultra vires the provisions of

the Constitution. If any of the provisions

of the legislation violates fundamental

rights or any other provisions of the

Constitution, it could certainly be a valid

ground to set aside the legislation by

invoking the power of judicial review. A

legislation could also be challenged as

unreasonable if it violates the principles

of equality adumbrated in our

Constitution or it unreasonably restricts

the fundamental rights under Article 19

of the Constitution. A legislation cannot

be challenged simply on the ground of

unreasonableness because that by itself

does not constitute a ground. The validity

of a constitutional amendment and the

validity of plenary legislation have to be

decided purely as questions of

constitutional law. This Court in State of

Rajasthan v. Union of India [State of

Rajasthan v. Union of India, (1977) 3 SCC

592] said : (SCC p. 660, para 149)

‘149. … if a question brought before

the court is purely a political question not

involving determination of any legal or

constitutional right or obligation, the

court would not entertain it, since the

court is concerned only with adjudication

of legal rights and liabilities.’

Therefore, the plea of the petitioner that

the legislation itself was intended to

please a section of the community as part

of the vote catching mechanism is not a

legally acceptable plea and it is only to be

rejected.”

80. Furthermore, it also needs to be

specifically noted that this Court

emphasised that apart from the aforesaid

two grounds no third ground is available to

invalidate any piece of legislation. In this

behalf it would be apposite to reproduce the

following observations from State of

A.P. v. McDowell & Co. [State of

A.P. v. McDowell & Co., (1996) 3 SCC 709] ,

which is a judgment rendered by a three-

Judge Bench of this Court : (SCC pp. 737-

38, para 43)

“43. … A law made by Parliament or

the legislature can be struck down by

courts on two grounds and two grounds

alone viz. (1) lack of legislative

competence and (2) violation of any of the

fundamental rights guaranteed in Part III

of the Constitution or of any other

constitutional provision. There is no third

ground. We do not wish to enter into a

discussion of the concepts of procedural

unreasonableness and substantive

unreasonableness—concepts inspired by

the decisions of United States Supreme

Court. Even in USA, these concepts and

in particular the concept of substantive

due process have proved to be of

unending controversy, the latest thinking

tending towards a severe curtailment of

this ground (substantive due process).

The main criticism against the ground of

substantive due process being that it

seeks to set up the courts as arbiters of

the wisdom of the legislature in enacting

the particular piece of legislation. It is

enough for us to say that by whatever

name it is characterised, the ground of

invalidation must fall within the four

corners of the two grounds mentioned

above. In other words, say, if an

enactment is challenged as violative of

Article 14, it can be struck down only if it

is found that it is violative of the equality

clause/equal protection clause enshrined

therein. Similarly, if an enactment is

challenged as violative of any of the

fundamental rights guaranteed by sub-

clauses (a) to (g) of Article 19(1), it can be

struck down only if it is found not saved

by any of the clauses (2) to (6) of Article

19 and so on. No enactment can be struck

down by just saying that it is arbitrary [

An expression used widely and rather

indiscriminately — an expression of

inherently imprecise import. The

extensive use of this expression in India

reminds one of what Frankfurter, J. said

in Hattie Mae Tiller v. Atlantic Coast Line

Railroad Co., 87 L Ed 610 : 318 US 54

(1943):“The phrase begins life as a literary

expression; its felicity leads to its lazy

repetition and repetition soon establishes

it as a legal formula, undiscriminatingly

used to express different and sometimes

contradictory ideas”, said the learned

Judge.] or unreasonable. Some or other

constitutional infirmity has to be found

before invalidating an Act. An enactment

cannot be struck down on the ground

that court thinks it unjustifie d.

Parliament and the legislatures,

composed as they are of the

representatives of the people, are

supposed to know and be aware of the

needs of the people and what is good and

bad for them. The court cannot sit in

judgment over their wisdom. In this

connection, it should be remembered that

even in the case of administrative action,

the scope of judicial review is limited to

three grounds viz. (i) unreasonableness,

which can more appropriately be called

irrationality, (ii) illegality, and (iii)

procedural impropriety (see Council of

Civil Service Unions v. Minister for the

Civil Service [Council of Civil Service

Unions v. Minister for the Civil Service,

1985 AC 374 : (1984) 3 WLR 1174 : (1984)

3 All ER 935 (HL)] which decision has

been accepted by this Court as well). The

applicability of doctrine of proportionality

even in administrative law sphere is yet a

debatable issue. (See the opinions of

Lords Lowry and Ackner in R. v. Secy. of

State for the Home Deptt., ex p

Brind [R. v. Secy. of State for the Home

Deptt., ex p Brind, (1991) 1 AC 696 :

(1991) 2 WLR 588 : (1991) 1 All ER 720

(HL)] , AC at pp. 766-67 and 762.) It

would be rather odd if an enactment were

to be struck down by applying the said

principle when its applicability even in

administrative law sphere is not fully and

finally settled.”

81. Another aspect in this context, which

needs to be emphasised, is that a legislation

cannot be declared unconstitutional on the

ground that it is “arbitrary” inasmuch as

examining as to whether a particular Act is

arbitrary or not implies a value judgment

and the courts do not examine the wisdom

of legislative choices and, therefore, cannot

undertake this exercise. This was so

recognised in a recent judgment of this

Court Rajbala v. State of

Haryana [Rajbala v. State of Haryana ,

(2016) 2 SCC 445] wherein this Court held

as under : (SCC p. 481, paras 64-65)

“64. From the above extract

from McDowell & Co. case [State of

A.P. v. McDowell & Co., (1996) 3 SCC 709]

it is clear that the courts in this country

do not undertake the task of declaring a

piece of legislation unconstitutional on

the ground that the legislation is

“arbitrary” since such an exercise implies

a value judgment and courts do not

examine the wisdom of legislative choices

unless the legislation is otherwise

violative of some specific provision of the

Constitution. To undertake such an

examination would amount to virtually

importing the doctrine of “substantive

due process” employed by the American

Supreme Court at an earlier point of time

while examining the constitutionality of

Indian legislation. As pointed out in the

above extract, even in United States the

doctrine is currently of doubtful

legitimacy. This Court long back in A.S.

Krishna v. State of Madras [A.S.

Krishna v. State of Madras, AIR 1957 SC

297 : 1957 Cri LJ 409] declared that the

doctrine of due process has no

application under the Indian

Constitution. As pointed out by

Frankfurter, J., arbitrariness became a

mantra.

65. For the above reasons, we are of the

opinion that it is not permissible for this

Court to declare a statute

unconstitutional on the ground that it is

“arbitrary”.”

82. Same sentiments were expressed earlier

by this Court in K.T. Plantation (P) Ltd. [K.T.

Plantation (P) Ltd. v. State of Karnataka,

(2011) 9 SCC 1 : (2011) 4 SCC (Civ) 414] in

the following words : (SCC p. 58, para 205)

“205. Plea of unreasonableness,

arbitrariness, proportionality, etc. always

raises an element of subjectivity on which

a court cannot strike down a statute or a

statutory provision, especially when the

right to property is no more a

fundamental right. Otherwise the court

will be substituting its wisdom to that of

the legislature, which is impermissible in

our constitutional democracy.”

A fortiori, a law cannot be invalidated on the

ground that the legislature did not apply its

mind or it was prompted by some improper

motive.

83. It is, thus, clear that in exercise of power

of judicial review, the Indian courts are

invested with powers to strike down primary

legislation enacted by Parliament or the

State Legislatures. However, while

undertaking this exercise of judicial review,

the same is to be done at three levels. In the

first stage, the Court would examine as to

whether impugned provision in a legislation

is compatible with the fundamental rights or

the constitutional provisions (substantive

judicial review) or it falls foul of the federal

distribution of powers (procedural judicial

review). If it is not found to be so, no further

exercise is needed as challenge would fail.

On the other hand, if it is found that

legislature lacks competence as the subject

legislated was not within the powers

assigned in the List in Schedule VII, no

further enquiry is needed and such a law is

to be declared as ultra vires the

Constitution. However, while undertaking

substantive judicial review, if it is found that

the impugned provision appears to be

violative of fundamental rights or other

constitutional rights, the Court reaches the

second stage of review. At this second phase

of enquiry, the Court is supposed to

undertake the exercise as to whether the

impugned provision can still be saved by

reading it down so as to bring it in

conformity with the constitutional

provisions. If that is not achievable then the

enquiry enters the third stage. If the

offending portion of the statute is severable,

it is severed and the Court strikes down the

impugned provision declaring the same as

unconstitutional.

84. Keeping in view the aforesaid

parameters we, at this stage, want to devote

some time discussing the arguments of the

petitioners based on the concept of “limited

Government”.

xxx xxx xxx

88. Undoubtedly, we are in the era of

liberalised democracy. In a democratic

society governed by the Constitution, there

is a strong trend towards the

constitutionalisation of democratic politics,

where the actions of democratically elected

Government are judged in the light of the

Constitution. In this context, judiciary

assumes the role of protector of the

Constitution and democracy, being the

ultimate arbiter in all matters involving the

interpretation of the Constitution.

89. Having said so, when it comes to

exercising the power of judicial review of a

legislation, the scope of such a power has to

be kept in mind and the power is to be

exercised within the limited sphere assigned

to the judiciary to undertake the judicial

review. This has already been mentioned

above. Therefore, unless the petitioner

demonstrates that Parliament, in enacting

the impugned provision, has exceeded its

power prescribed in the Constitution or this

provision violates any of the provision, the

argument predicated on “limi ted

governance” will not succeed. One of the

aforesaid ingredients needs to be

established by the petitioners in order to

succeed.”

70. It could thus be seen that this Court has held that the

statute enacted by Parliament or a State Legislature cannot be

declared unconstitutional lightly. To do so, the Court must be

able to hold beyond any iota of doubt that the violation of the

constitutional provisions was so glaring that the legislative

provision under challenge cannot stand. It has been held that

unless there is flagrant violation of the constitutional provisions,

the law made by Parliament or a State Legislature cannot be

declared bad.

71. It has been the consistent view of this Court that legislative

enactment can be struck down only on two grounds. Firstly, that

the appropriate legislature does not have the competence to make

the law; and secondly, that it takes away or abridges any of the

fundamental rights enumerated in Part III of the Constitution or

any other constitutional provisions. It has been held that no

enactment can be struck down by just saying that it is arbitrary

or unreasonable. Some or the other constitutional infirmity has

to be found before invalidating an Act. It has been held that

Parliament and the legislatures, composed as they are of the

representatives of the people, are supposed to know and be aware

of the needs of the people and what is good and bad for them.

The court cannot sit in judgment over their wisdom.

72. It has been held by this Court that there is one and only one

ground for declaring an Act of the legislature or a provision in the

Act to be invalid, and that is if it clearly violates some provision

of the Constitution in so evident a manner as to leave no manner

of doubt. It has further been held that if two views are possible,

one making the statute constitutional and the other making it

unconstitutional, the former view must always be preferred. It

has been held that the Court must make every effort to uphold

the constitutional validity of a statute, even if that requires giving

a strained construction or narrowing down its scope.

73. It has consistently been held that there is always a

presumption in favour of constitutionality, and a law will not be

declared unconstitutional unless the case is so clear as to be free

from doubt. It has been held that if the law which is passed is

within the scope of the power conferred on a legislature and

violates no restrictions on that power, the law must be upheld

whatever a court may think of it.

74. It could thus be seen that the challenge to the legislative Act

would be sustainable only if it is established that the legislature

concerned had no legislative competence to enact on the subject

it has enacted. The other ground on which the validity can be

challenged is that such an enactment is in contravention of any

of the fundamental rights stipulated in Part III of the Constitution

or any other provision of the Constitution. Another ground as

could be culled out from the recent judgments of this Court is

that the validity of the legislative act can be challenged on the

ground of manifest arbitrariness. However, while doing so, it will

have to be remembered that the presumption is in favour of the

constitutionality of a legislative enactment.

75. In the present case, it is nobody’s case that Parliament did

not have power to enact on the subject on which the aforesaid

Amendments have been enacted. As such, the said ground is not

available to the petitioners.

76. The next ground on which the validity of the aforesaid

Amendments could be challenged is, as to whether they violate

any of the fundamental rights stipulated in Part III of the

Constitution or any other provision of the Constitution.

77. It is sought to be urged that the aforesaid Amendments

would defeat the directive issued by this court to have a fixed

tenure of the Director of CBI/Director of Enforcement and permit

a ‘carrot and stick’ policy to be adopted by the Executive. It is

sought to be urged that if the aforesaid Amendments are

permitted to exist, it will frustrate the very purpose of insulating

the aforesaid high posts from extraneous pressures. Let us

consider this submission.

78. Insofar as the Director of Enforcement is concerned, the

Central Government can appoint such a Director only on the

recommendation of the Committee consisting of:

(i) the Central Vigilance Commissioner (Chairman);

(ii) Vigilance Commissioners (Members);

(iii) Secretary to the Government of India in-charge of the

Ministry of Personnel in the Central Government

(Member);

(iv) Secretary to the Government of India in-charge of the

Ministry of Home Affairs in the Central Government

(Member);

(v) Secretary to the Government of India in-charge of the

Department of Revenue, Ministry of Finance in the

Central Government (Member).

79. It can thus be seen that a person can be appointed as

Director of Enforcement only if the aforesaid Committee makes a

recommendation to that effect. The said Committee, inter alia,

consists of the Central Vigilance Commissioner as well as the

Vigilance Commissioners.

80. As pointed out herein above, Section 4 of the CVC Act deals

with appointment of Central Vigilance Commissioner and

Vigilance Commissioners. The appointment of Central Vigilance

Commissioner and Vigilance Commissioners can be made only

after a Committee consisting of (a) the Prime Minister

(Chairman); (b) the Minister of Home Affairs (Member); and (c) the

Leader of the Opposition in the House of the People (Member)

recommends for the same. The explanation thereto provides that

when no such Leader of the Opposition in the House of the People

has been so recognized, the Committee shall include the Leader

of the single largest group in opposition of the Government in the

House of the People.

81. A perusal of Section 6 of the CVC Act would reveal that a

very stringent provision has been made for removal of the Central

Vigilance Commissioner and the Vigilance Commissioners. They

can be removed from the office only by an order of the President

on the ground of proved misbehaviour or incapacity and that too,

only after the Supreme Court, on a reference made to it by the

President, has, on inquiry, reported that the Central Vigilance

Commissioner or any Vigilance Commissioner, as the case may

be, ought on such ground be removed.

82. It is, thus, clear that the procedure for removal of the

Central Vigilance Commissioner or the Vigilance Commissioner

is very stringent. Unless on a reference made by the President to

the Supreme Court, the Supreme Court conducts an inquiry and

reports that such Central Vigilance Commissioner or the

Vigilance Commissioner, as the case may be, ought to be removed

on the ground of proved misbehaviour or incapacity, they cannot

be removed. As such, a very strong protection has been provided

to these officers to act independently and the Statute insulates

them from extraneous pressures.

83. As already discussed herein above, the Committee which

recommends appointment of the Director of Enforcement

consists of the Central Vigilance Commissioner as well as the

Vigilance Commissioner. It is to be noted that this Court in the

case of Vineet Narain (supra) directed a Selection Committee for

appointment to the post of Director of Enforcement headed by

the Central Vigilance Commissioner, and including the Home

Secretary, Secretary (Personnel) and Revenue Secretary.

However, Section 25 of the CVC Act provides for a Committee,

which, apart from aforesaid three Members also includes the

Vigilance Commissioners.

84. It could thus be seen that the constitution of the Committee

for appointment of Director of Enforcement is wider than what is

ordered by this Court in the case of Vineet Narain (supra) and

consisting of Central Vigilance Commissioner as well as Vigilance

Commissioners.

85. As already observed herein above, there is safeguard in the

statute which insulate the office of the Central Vigilance

Commissioner and the Vigilance Commissioner from extraneous

pressures and permits them to act independently.

86. Similarly, the appointment of Director of CBI is to be made

only after a candidate is recommended by the Committee

consisting of:

(i) The Prime Minister (Chairperson);

(ii) The Leader of Opposition recognised as such in the

House of the People or where there is no such Leader of

Opposition, then, the Leader of the single largest

Opposition Party in that House (Member);

(iii) The Chief Justice of India or Judge of the Supreme Court

nominated by him (Member).

87. It is to be noted that insofar as the appointment of the

Director of CBI is concerned, this Court in the case of Vineet

Narain (supra) had directed that the recommendations were to

be made by a Committee headed by the Central Vigi lance

Commissioner with the Home Secretary and Secretary

(Personnel) as Members. However, Section 4A of the DSPE Act

provides for a Committee, which is consisting of the Members

which are at much higher pedestal. It is to be chaired by the

Prime Minister, whereas the Chief Justice of India or his/her

nominee and the Leader of Opposition in the House of the People

are its Members. Therefore, the appointment of the Director of

CBI cannot be made unless it is recommended by the High-Level

Committee consisting of the Prime Minister; the Leader of

Opposition; and the Chief Justice of India or Judge of the

Supreme Court nominated by him/her.

88. It is to be noted that the aforesaid provisions have been

made in order to give effect to the directions issued by this Court

in the case of Vineet Narain (supra).

89. This Court in the case of Vineet Narain (supra) has issued

a specific direction that the Director of CBI as well as the Director

of Enforcement shall have a minimum tenure of two years.

90. What has been provided by the impugned Amendments is

that the period for which the initial appointment has been made

could, in public interest, be extended up to one year at a time.

However, this can be done only on the recommendation of the

Committee which is constituted for their appointments. The

second proviso further provided that no such extension shall be

granted after the completion of a period of five years in total

including the period mentioned in the initial appointment. The

impugned Amendments empower the Government to extend the

tenure of the incumbent in the said office by a period of one year

at a time subject to the maximum period of five years including

the period mentioned in the initial appointment. As already

stated herein above, such extensions can be granted by the

Government only if the Committees, which are constituted for

recommending their appointment, recommend their extension, in

public interest and also record the reasons in writing.

91. It is, thus, clear that it is not at the sweet-will of the

Government that the extensions can be granted to the

incumbents in the office of the Director of CBI/Director of

Enforcement. It is only on the basis of the recommendations of

the Committees which are constituted to recommend their

appointment and that too when it is found in public interest and

when the reasons are recorded in writing, such an extension can

be granted by the Government.

92. What has been directed by this Court in the case of Vineet

Narain (supra) and in subsequent judgments relied on by the

petitioners is that such Director should have a minimum tenure

of two years irrespective of their date of superannuation. By the

impugned Amendments, the said period is not tinkered with.

What has been done is only a power is given to extend their period

for a period of one year at a time, subject to a maximum number

of three such extensions. However, this has to be done only when

the Committee which is constituted to recommend their

appointment finds it necessary, in public interest, to grant such

extension. It is further required to record the reasons in writing

for the said purpose.

93. As already discussed herein above, the aforesaid provisions

with regard to appointment have been enacted in pursuance to

the directions given by this Court in the case of Vineet Narain

(supra). When a committee can be trusted with regard to

recommending their initial appointment, we see no reason as to

why such committees cannot be trusted to consider as to whether

the extension is required to be given in public interest or not. At

the cost of repetition, such Committee is also required to record

reasons in writing in support of such recommendations.

94. We are, therefore, unable to accept the arguments that the

impugned Amendments grant arbitrary power to the Government

to extend the tenure of the Director of ED/CBI and has the effect

of wiping out the insulation of these offices from extraneous

pressures.

95. Insofar as challenge to the amendment to the fifth proviso

to clause (d) of Rule 56 of the Fundamental Rules, 1922 is

concerned, it will be relevant to refer to the fifth proviso to clause

(d) of Rule 56, which existed prior to the Amendment. It reads

thus:

“Provided also that the Central

Government may, if it considers

necessary in public interest so to do, give

extension in service to the Defence

Secretary, Home Secretary, Director,

Intelligence Bureau, Secretary, Research

and Analysis Wing and Director, Central

Bureau of Investigation in the Central

Government for such period or periods as

it may deem proper on a case -to-case

basis, subject to the condition the total

term of such Secretaries or Directors, as

the case may be, who are given such

extension in service under this rule, does

not exceed two years. Provided also that

notwithstanding anything contained in

the fifth proviso, the Central Government

may, if considers it necessary, in public

interest, so to do, give an extension in

service for a further period not exceeding

three months beyond the said period of

two years to the Home Secretary and the

Defence Secretary.”

96. The amended fifth proviso to clause (d) of Rule 56 of the

Fundamental Rules, 1922 has already been reproduced by us in

paragraph 62.

97. It can thus be seen that by virtue of the Amendment the

power which was available with the Central Government to grant

extension, if it considers necessary in public interest so to do, in

case of certain officers, has now been also extended to the

Director of CBI appointed under the DSPE Act and Director of

Enforcement in the ED appointed under the CVC Act. The

second change that has been brought is that such extension in

service does not exceed two years or the period provided in the

respective Act or rules made thereunder, under which their

appointments are made.

98. Since we have already held that the amendment to clause

(d) of Section 25 of the CVC Act and to sub-section (1) of Section

4B of the DSPE Act is not unconstitutional, we see no reason to

hold that the amendment to Fundamental Rules, 1922 is

impermissible in law. Consequently, we are of the considered

view that the challenge to validity of Central Vigilance

Commission (Amendment) Act, 2021, the Delhi Special Police

Establishment (Amendment) Act, 2021, and the Fundamental

(Amendment) Rules, 2021 fails and the writ petitions at the

behest of the petitioners to that extent are liable to be rejected.

99. That leaves us with the next question, as to whether the

impugned orders dated 17

th November, 2021 and 17

th November

2022, which grant extension for a period of one year each, are

valid in law or not.

100. In the case of Common Cause (2021) , what was under

challenge was the order dated 13

th November 2020, vide which

the President of India had approved the modification of the order

dated 19

th November 2018, by amending the period of

appointment from two years to three years. As such, in effect,

what was under challenged was one year’s extension granted to

the tenure of the second respondent. It was sought to be urged

before this Court that it was not permissible for the Government

to extend the period of tenure beyond two years. In paragraph

15, this Court posed the following question for consideration:

“The question that remains to be

answered is whether there can be

extension of tenure of a person who has

been appointed as a Director of

Enforcement for a period of two years and

who has attained the age of

superannuation in the interregnum i.e.

before the expiry of two years.”

101. In paragraph 20, this Court observed thus:

“20. We have already held that Section

25(f) of the CVC Act has to be read as the

tenure of office of the Director of

Enforcement is for a minimum period of

two years. There is no proscription on the

Government to appoint a Director of

Enforcement beyond a per iod of two

years. The reasons for fixing the tenure

for a minimum period of two years have

been discussed in the earlier paragraphs.

We are not in agreement with the

submissions made by the learned Senior

Counsel for the Petitioner that extension

of tenure for officers above the rank of

Deputy Director of Enforcement provided

in sub-Section (f) of Section 25 has to be

read as a bar on the power of the

Government to extend tenure of the

Director of Enforcement. As the tenure of

appointment of Director of Enforcement

is not a maximum period of two years, a

person can be appointed as Director of

Enforcement for a period of more than

two years. If the Government has the

power to appoint a person as Director of

Enforcement for a period of more than

two years, Section 25 of the CVC Act

cannot be said to be inconsistent with

Section 21 of the General Clauses Act.

Following the dictum of this Court

in State of Punjab v. Harnek

Singh (supra) in which it was held that

General Clauses Act has to be read into

all Central Acts unless specifically

excluded, we are of the considered view

that the rule of construction embodied in

Section 21 of the General Clauses Act has

reference to the context and subject

matter of Section 25 of the CVC Act. The

judgment of the Constitution Bench of

this Court in Kamla Prasad

Khetan (supra) is applicable to the facts of

this case and the judgments relied upon

by the Petitioner which are referred to

above do not have any application to the

facts of this case.”

102. It could thus clearly be seen that this Court rejected the

contention that the Government does not have a power to extend

the tenure of the Director of Enforcement beyond a period of one

year. In spite of holding this, this Court specifically observed

thus in paragraph 23:

“23. The justification given by the Union

of India for extension of the tenure of

second Respondent is that important

investigations are at a crucial stage in

trans-border crimes. The decision to

extend the tenure of the second

Respondent is pursuant to the

recommendation made by the high -

powered committee. Though we have

upheld the power of the Union of India to

extend the tenure of Director of

Enforcement beyond the period of two

years, we should make it clear that

extension of tenure granted to officers

who have att ained the age of

superannuation should be done only in

rare and exceptional cases. Reasonable

period of extension can be granted to

facilitate the completion of ongoing

investigations only after reasons are

recorded by the Committee constituted

under Section 25(a) of the CVC Act. Any

extension of tenure granted to persons

holding the post of Director of

Enforcement after attaining the age of

superannuation should be for a short

period. We do not intend to interfere with

the extension of tenure of the second

Respondent in the instant case for the

reason that his tenure is coming to an

end in November, 2021. We make it

clear that no further extension shall

be granted to the second Respondent.”

[emphasis supplied]

103. As such, it is clear that this Court issued a specific

mandamus that no further extension shall be granted to the

second respondent. Undisputedly, the Union of India as well as

the respondent No.2- Sanjay Kumar Mishra in Writ Petition (Civil)

No. 456 of 2022 herein were parties to the said proceedings.

104. A Constitution Bench of learned Seven Judges of this Court

in the case of Madan Mohan Pathak and another v. Union of

India and others

23 was considering the question of

constitutional validity of the Life Insurance Corporation

(Modification of Settlement) Act, 1976. In exercise of power

vested under Section 49 of the Life Insurance Corporation Act,

1956, right from 1959, various settlements were arrived at

between the Life Insurance Corporation (“LIC” for short) and its

employees from time to time in regard to various matters relating

to terms and conditions of service of Class III and Class IV

(1978) 2 SCC 50

employees. The said settlements were also ap proved by the

Board of the LIC as also by the Central Government. An

Ordinance was promulgated by the President of India on 25

September 1975, called the Payment of Bonus (Amendment)

Ordinance 1975. Subsequently, the said Ordinance was replaced

by the Payment of Bonus (Amendment) Act, 1976, which was

brought into force with retrospective effect from the date of the

Ordinance, i.e., 25

th September 1975. This amending law

considerably curtailed the rights of the employees to bonus in

industrial establishments. However, it had no impact insofar as

the employees of the LIC were concerned. However, the

employees of the LIC were denied the benefits which they were

entitled to. In these circumstances, the All-India Insurance

Employees’ Association and some others filed writ petition(s)

before the High Court of Calcutta for a writ of mandamus and

prohibition directing the LIC to act in accordance with the terms

of the Settlement dated 24

th January 1974 read with the

administrative instructions.

105. The learned Single Judge of the Calcutta High Court allowed

the writ petition and issued a writ of mandamus and prohibition

as prayed for in the said writ petition. The LIC preferred a Letters

Patent Appeal (“LPA” for short). However, during the pendency

of the LPA, on 29

th May, 1976, the Act impugned before this Court

was enacted. The effect of the enactment was to annul the

benefits which the employees of the LIC were entitled to in view

of the mandamus issued by the Calcutta High Court.

106. Bhagwati, J (speaking for himself, Krishna Iyer and Desai,

JJ.) observed thus:

“9. ….We are, therefore, of the view

that, in any event, irrespective of whether

the impugned Act is constitutionally valid

or not, the Life Insurance Corporation is

bound to obey the writ of mandamus

issued by the Calcutta High Court and to

pay annual cash bonus for the year April

1, 1975 to March 31, 1976 to Class III

and Class IV employees.”

107. Beg. C.J. in his concurring judgment observed thus:

“32. I may, however, observe that even

though the real object of the Act may be

to set aside the result of the mandamus

issued by the Calcutta High Court, yet,

the section does not mention this object

at all. Probably this was so because the

jurisdiction of a High Court and the

effectiveness of its orders derived their

force from Article 226 of the Constitution

itself. These could not be touched by an

ordinary act of Parliament. Even if

Section 3 of the Act seeks to take away

the basis of the judgment of the Calcutta

High Court, without mentioning it, by

enacting what may appear to be a law,

yet, I think that, where the rights of the

citizen against the State are concerned,

we should adopt an interpretation which

upholds those rights. Therefore,

according to the interpretation I prefer to

adopt the rights which had passed into

those embodied in a judgment and

became the basis of a mandamus from

the High Court could not be taken away

in this indirect fashion.”

108. It could thus be clearly seen that the Constitution Bench of

learned Seven Judges of this Court clearly held that by a

subsequent enactment, the writ of mandamus issued by the

Calcutta High Court crystalizing the rights and liabilities between

the parties cannot be annulled.

109. It will also be apposite to refer to the following observation

of the Constitution Bench of this Court in the case of Cauvery

Water Disputes Tribunal, Re. (supra), which reads thus:

“76. The principle which emerges from

these authorities is that the legislature

can change the basis on which a decision

is given by the Court and thus change the

law in general, which will affect a class of

persons and events at large. It cannot,

however, set aside an individual decision

inter partes and affect their rights and

liabilities alone. Such an act on the part

of the legislature amounts to exercising

the judicial power of the State and to

functioning as an appellate court or

tribunal.”

110. Relying on the aforesaid observation, this Court in the case

of S.R. Bhagwat and others v. State of Mysore

24 observed

thus:

“12. It is now well settled by a catena of

decisions of this Court that a binding judicial

pronouncement between the parties cannot

be made ineffective with the aid of any

legislative power by enacting a provision

(1995) 6 SCC 16

which in substance overrules such judgment

and is not in the realm of a legislative

enactment which displaces the basis or

foundation of the judgment and uniformly

applies to a class of persons concerned with

the entire subject sought to be covered by

such an enactment having retrospective

effect. We may only refer to two of these

judgments.

xxx xxx xxx

15. We may note at the very outset that in the

present case the High Court had not struck

down any legislation which was sought to be

re-enacted after removing any defect

retrospectively by the impugned provisions.

This is a case where on interpretation of

existing law, the High Court had given certain

benefits to the petitioners. That order of

mandamus was sought to be nullified by the

enactment of the impugned provisions in a

new statute. This in our view would be clearly

impermissible legislative exercise.”

111. In the present case also, we may point out that in Common

Cause (2021), this Court had not struck down any law, but had

issued a mandamus which was binding on the parties before it.

112. A similar view has been taken by this Court in the case of

Medical Council of India v. State of Kerala and others

25.

113. Recently, in the case of Madras Bar Association v. Union

of India and another

26, a bench of learned three Judges of this

Court, after considering the earlier judgments of this Court on

the issue of permissibility of legislative override, observed thus:

“50. The permissibility of legislative

override in this country should be in

accordance with the principles laid down

by this Court in the aforementioned as

well as other judgments, which have been

culled out as under:

50.1. The effect of the judgments of the

Court can be nullified by a legislative act

removing the basis of the judgment. Such

law can be retrospective. Retrospective

amendment should be reasonable and

not arbitrary and must not be violative of

the fundamental rights guaranteed under

the Constitution. [Lohia Machines

Ltd. v. Union of India, (1985) 2 SCC 197 :

1985 SCC (Tax) 245]

(2019) 13 SCC 185

2021 SCC OnLine SC 463= (2022) 12 SCC 455

50.2. The test for determining the

validity of a validating legislation is that

the judgment pointing out the defect

would not have been passed, if the altered

position as sought to be brought in by the

validating statute existed before the

Court at the time of rendering its

judgment. In other words, the defect

pointed out should have been cured such

that the basis of the judgment pointing

out the defect is removed.

50.3. Nullification of mandamus by an

enactment would be impermissible

legislative exercise (see : S.R.

Bhagwat [S.R. Bhagwat v. State of

Mysore, (1995) 6 SCC 16 : 1995 SCC

(L&S) 1334] ). Even interim directions

cannot be reversed by a legislative veto

(see : Cauvery Water Disputes

Tribunal [Cauvery Water Disputes

Tribunal, In re, 1993 Supp (1) SCC 96 (2)]

and Medical Council of India v. State of

Kerala [Medical Council of India v. State of

Kerala, (2019) 13 SCC 185] ).

50.4. Transgression of constitutional

limitations and intrusion into the judicial

power by the legislature is violative of the

principle of separation of powers, the rule

of law and of Article 14 of the Constitution

of India.”

114. It could, thus, clearly be seen that this Court has held that

the effect of the judgments of this court can be nullified by a

legislative act removing the basis of the judgment. It has further

been held that such law can be retrospective. It has, however,

been held that retrospective amendment should be reasonable

and not arbitrary and must not be violative of the fundamental

rights guaranteed under the Constitution. It has been held that

the defect pointed out should have been cured such that the

basis of the judgment pointing out the defect is removed. This

Court has, however, clearly held that nullification of mandamus

by an enactment would be impermissible legislative exercise.

This Court has further held that transgression of constitutional

limitations and intrusion into the judicial power by the

legislature is violative of the principle of separation of powers, the

rule of law and of Article 14 of the Constitution of India.

115. Though it is the contention of the learned Solicitor General

that the judgment of this Court in Common Cause (2021) was

rendered on the basis of the FR existing then, which now stand

altered and the very foundation of the judgment is taken away,

we are unable to accept the said contention. On the contrary, as

could be seen from the judgment in Common Cause (2021), this

Court found that there was no proscription on the Government

to appoint a Director of Enforcement beyond a period of two

years. This Court, in fact, observed that the Government has a

power to appoint a person as Director of Enforcement for a period

of more than two years. This Court found that Section 25 of the

CVC Act cannot be said to be inconsistent with Section 21 of the

General Clauses Act. It is not, as if, that this Court has held that

the Government had no power to make an appointment beyond

the period of two years. By the impugned Amendments, the

position is clarified, the challenge to which, we have found to be

unsustainable. As such, the contention that the very foundation

on which judgment of this Court in the case of Common Cause

(2021) was based is taken away is without substance.

116. As already discussed herein above, this Court has

specifically issued a mandamus that no further extension shall

be granted to the second respondent. The Union of India and the

respondent No.2 were both parties in the proceedings before this

Court in Writ Petition (Civil) No. 1374 of 2020 [Common Cause

(2021)]. The mandamus issued to be parties was binding on

them. We, therefore, find that the respondent No.1 could not

have issued orders dated 17

th November 2021 and 17

th November

2022 in breach of the mandamus issued by this Court vide its

judgment dated 8

th September 2021 in Common Cause (2021) .

117. Insofar as the reliance placed by Shri Raju on the judgment

of this Court in the case of M/s Kishan Lal Lakhmi Chand and

others (supra) is concerned, the said judgment would be of no

assistance to the case of the respondents. It would be relevant

to refer to the following observations of this Court:

“8. ……However, to a query put by the

Court to Shri Salve as to how Section 11

of the Act could be upheld validating

retrospectively by retaining the fund

collected under Act 12 of 1983 with the

100

State Government, he stated in fairness

that Section 11 was enacted only to

defuse the effect of the writ of mandamus

issued by this Court in Om Prakash

case [(1986) 1 SCC 722] to refund the fee

collected therein to the appellants

therein, but under its guise the State did

not intend to nor would it intend to retain

the said fund collected under the

predecessor Act 12 of 1983 from

September 30, 1983, the date on which

the notification under Section 5(1) of that

Act was published in the State Gazette

and the entire fund would be passed on

to the credit of the Board under the Act.

In that view Section 11 also is valid.”

118. As such, it could thus clearly be seen that counsel for the

State Government in fairness stated that Section 11 was enacted

only to defuse the effect of the writ of mandamus issued by this

Court in the case of Om Prakash Agarwal v. Giri Raj Kishori

to refund the fee collected therein to the appellants therein.

However, a statement was made that under its guise the State

did not intend to nor would it intend to retain the said fund

collected under the Act, which was held invalid and the entire

(1986) 1 SCC 722

101

fund would be passed on to the credit of the Board under the Act.

As such, on the basis of the concession made by the learned

counsel that the State did not intend to retain the fund collected

and the entire fund would be passed on to the credit of the Board,

this Court did not interfere with Section 11, which was intended

to defuse the writ of mandamus. As such, the said judgment

cannot be said to be an authority to hold that by a legislative

enactment, a writ of mandamus issued by this Court could be

defused.

119. Though we have held that orders dated 17

th November 2021

and 17

th November 2022 granting extensions to respondent No.2

are not valid in law, we are inclined to take into consideration the

concern expressed by the Union of India with regard to FATF

review. We are further inclined to take into consideration that

the process of appointing the Director of Enforcement is likely to

take some time. In that view of the matter, we find that in order

to ensure the transition to be smooth in the larger public interest,

102

it will be appropriate to permit respondent No.2 to continue to be

in office till 31

st of July 2023.

120. Before we part with the judgment, we place on record our

deep appreciation for the assistance rendered by the learned

Amicus Curiae Shri K.V. Viswanathan (as His Lordship then

was), Shri Tushar Mehta, learned Solicitor General, Shri S.V.

Raju, learned Additional Solicitor General, Mr. Anoop G.

Choudhary, Mr. Gopal Sankarnarayanan, Dr. Abhishek Manu

Singhvi, learned Senior Counsel, and Mr. Prashan Bhushan, Mr.

J.S. Sinha, Mr. Sharangowda, and Ms. Vanshaja Shukla, learned

counsel. We also place on record our appreciation for the

valuable assistance rendered by Mr. Ravi Raghunath, learned

Advocate-on-Record, who ably assisted the learned Amicus

Curiae.

121. In the result, we pass the following order:

(i) The challenge to Central Vigilance Commission

(Amendment) Act, 2021 and the Delhi Special Police

Establishment (Amendment) Act, 2021 as well as to the

103

Fundamental (Amendment) Rules, 2021 is rejected and

the writ petitions are dismissed to that extent.

(ii) The impugned orders dated 17

th November 2021 and 17

November 2022 granting extensions to the tenure of the

respondent No.2- Sanjay Kumar Mishra for a period of

one year each are held to be illegal. The writ petitions are

partly allowed to that extent.

(iii) However, the respondent No.2- Sanjay Kumar Mishra is

permitted to continue to hold office till 31

st July, 2023.

122. All the writ petitions as well as Miscellaneous Application

including all pending applications, if any, shall stand disposed of

in the above terms. No order as to costs.

…….........................J.

[B.R. GAVAI]

…….........................J.

[VIKRAM NATH ]

…….........................J.

[SANJAY KAROL ]

NEW DELHI;

JULY 11, 2023

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