SC upholds Govt.’s decision to extend tenure of incumbent Director of Enforcement beyond two years, but orders no further extension to be granted

“There is no fetter on the power of the Central Government in appointing the Director of Enforcement beyond a period of two years.”

Supreme Court: A Division Bench of L. Nageswara Rao and B.R. Gavai, JJ. upheld the Central Government’s order extending the tenure of the incumbent Director of Enforcement Sanjay Kumar Mishra for a period of one year. The Supreme Court held that there is no fetter on the power of the Central Government in appointing the Director of Enforcement beyond a period of two years. Interpreting Section 25 of the Central Vigilance Commission Act, 2003 which prescribes the minimum tenure of the Director of Enforcement, the Court observed:

“The words ‘not less than two years’ cannot be read to mean ‘not more than two years’ and there is no fetter on the power of the Central Government in appointing the Director of Enforcement beyond a period of two years.”

Facts

The instant writ petition in the public interest was filed by ‘Common Cause’ for quashing the order dated 13-11-2020 issued by the Union of India, which extended the tenure of the incumbent Director of Enforcement Sanjay Kumar Mishra by one year, i.e. from two years to three years. Initially, Mishra was appointed as Director of Enforcement on 19-11-2018 for a period of two years.

The petitioner’s grievance was that extension of Mishra’s tenure to three years is contrary to Section 25 of the Central Vigilance Commission Act, 2003 (“CVC Act”). It was averred that Mishra attained the age of superannuation in May 2020 and as such he was not holding any requisite post equivalent or above the rank of Additional Secretary to the Government of India on 13-11-2020 when his tenure was extended. Therefore, Mishra was not eligible to be considered for extension of service as Director of Enforcement.

The contentions made by the petitioner were refuted by the Union of India and its submissions were adopted by the Central Vigilance Commission.

Analysis and Observations

Section 25 of the Central Vigilance Commission Act

Considering Section 25 of the CVC Act, the Supreme Court noted that Section 25(d) provides 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 the office. Extension or curtailment of tenure is provided in Section 25(f) in respect of officers other than that of the Director of Enforcement. The procedure and other conditions of service mentioned in Section 25 are notwithstanding anything contained in any other law for the time being in force.

Initial appointment of Mishra as Director of Enforcement

The petitioner relied on Rule 56 of the Fundamental Rules, which provides that every Government servant shall retire on attaining the age of 60 years. Posts for which there can be extension beyond 60 years have been specifically mentioned in the rule and the post of Director of Enforcement is not mentioned in the rule for which extension of service can be given.

Noting that the non-obstante clause in Section 25 gives overriding power to the said provision notwithstanding anything contained in any other law for the time being in force, the Supreme Court observed:

“The minimum period of two years which is provided in Section 25 would operate notwithstanding the provisions contained in Fundamental Rule 56(a).”   

The Court concluded the issue holding that the initial appointment of Sanjay Kumar Mishra for a period of two years from 19-11-2018 which extends beyond the date of his superannuation in May 2020 was in accordance with Section 25 of the CVC Act and could not be said to be illegal.

Extension of tenure beyond the period of two years

The petitioner contended that Section 25(d) which postulates a tenure of two years for a Director of Enforcement cannot be interpreted to confer power on the Government to extend the tenure beyond two years.

After examining the earlier decision in Vineet Narain v. Union of India, (1998) 1 SCC 226 and the report of the Independent Review Committee constituted in 1997 to suggest measures for strengthening the agencies involved in anti-corruption activities, the Supreme Court observed:

“There is no ambiguity in Section 25(d) of CVC Act and the words ‘not less than two years’ simply mean a minimum of two years. There is no scope for reading the words to mean not more than two years. Reading such a restriction would be contrary to the recommendations of the Independent Review Committee and the judgment of this Court in Vineet Narain.”

The Court said that curtailment of the tenure of a Director of Enforcement would be detrimental to the interests of officers who are appointed to the post and have service of more than two years before they attain the age of superannuation. It was held:

“Therefore, we hold that a Director of Enforcement can be appointed for a period of more than two years by following the procedure prescribed under Section 25 of the CVC Act.”

Extension of superannuated Director

Next, the Supreme Court considered 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.

Having already held that Mishra’s initial appointment could not be termed to be illegal and that he had a right to continue till 18-11-2020 by virtue of his appointment for a period of two years, the Court held:

“For all practical purposes, he should be treated as the Director of Enforcement till that particular date he was holding an office which is not below the rank of an Additional Secretary to the Government of India. Therefore, he was eligible for extension of tenure.”

Source of power for extension of tenure

The Supreme Court then proceeded to deal with the pivotal issue of the source of power for extension of a Director of Enforcement’s tenure. The Union of India submitted that the extension can be ordered by resorting to Section 21 of the General Clauses Act in the absence of specific provision in the CVC Act.

Section 21 provides “power to issue, to include power to add to, amend, vary or rescind notifications, orders, rules or bye-laws“. Following the dictum in State of Punjab v. Harnek Singh, (2002) 3 SCC 481 that the General Clauses Act is a part of every Central Act and has to be read in such Act unless specifically excluded, the Court observed that:

“[T]he 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 Court was of the view that 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. It was held:

“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.”

Extension order not vitiated by malice

The petitioner contended that the order of extension of Sanjay Kumar Mishra’s tenure was vitiated by malice in law. Noting that there was no allegation that the power of extension of tenure was exercised for any unauthorised purpose, the Supreme Court rejected the contention. Note was also taken of the justification given by the Union of India for extension of Mishra’s tenure that important investigations are at a crucial stage in trans-border crimes. The decision to extend his tenure was pursuant to the recommendation made by the high-powered committee.

No further extension

Though the Supreme Court upheld the power of the Union of India to extend Director of Enforcement’s tenure beyond the period of two years, it was made clear that extension of tenure granted to officers who have attained the age of superannuation should be done only in rare and exceptional cases. It was observed:

“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.”

The Court said that it did not intend to interfere with the extension of the incumbent Director of Enforcement Sanjay Kumar Mishra’s tenure for the reason that his tenure is coming to an end in November 2021. However, it was made clear that no further extension shall be granted to him.

The writ petition was dismissed in the above terms. [Common Cause v. Union of India, 2021 SCC OnLine SC 687, decided on 8-9-2021]


Tejaswi Pandit, Senior Editorial Assistant has reported this brief.

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