Sealed Cover Procedure and Promotion: Supreme Court Clarifies in Doly Loyi Case (24 September 2024)

Date of the Judgment: 24 September 2024

Citation: 2024 INSC 729

Judges: Sandeep Mehta, J., R. Mahadevan, J.

Can a government servant be denied promotion simply because a sanction for prosecution has been granted against them, or is a charge sheet necessary? The Supreme Court of India addressed this critical question in the case of Union of India vs. Doly Loyi. The court examined the legality of withholding promotions under the ‘sealed cover procedure’ when only a sanction for prosecution was granted but no charge sheet was filed. This judgment clarifies the conditions under which the sealed cover procedure can be invoked, providing much-needed guidance on promotion policies for government employees. The judgment was delivered by a two-judge bench comprising Justice Sandeep Mehta and Justice R. Mahadevan, with Justice Sandeep Mehta authoring the opinion.

Case Background

The respondent, Doly Loyi, was appointed as Assistant Commissioner of Income Tax on 16th December, 1987. He received promotions to Deputy Commissioner of Income Tax, Joint Commissioner of Income Tax, and Additional Commissioner of Income Tax in December 1991, July 2001, and November 2001, respectively. On 31st December, 2001, an FIR was registered against him under Section 120B of the Indian Penal Code, 1860, and Sections 13(1) and 13(1)(d) of the Prevention of Corruption Act, 1988. The FIR alleged that while working as the Special Secretary (Finance) in the Government of Arunachal Pradesh, he conspired with other officers and committed criminal misconduct by abusing his position as a public servant. A sanction for his prosecution was granted by the Central Board of Direct Taxes (CBDT) on 2nd June, 2006.

On 22nd February, 2007, the Departmental Promotion Committee (DPC) convened to consider promotions to the post of Commissioner of Income Tax. Although the respondent was eligible, his vigilance certificate was withheld, and his promotion was kept in a sealed cover due to the pending criminal charges. This decision prevented him from being considered for promotion along with his batchmates.

Timeline

Course of Proceedings

Initially, the respondent filed Original Application No. 8 of 2011 before the Central Administrative Tribunal, Guwahati Bench, challenging the withholding of his vigilance clearance and the sealed cover procedure. The Tribunal allowed the application on 28th June, 2011, directing the appellants to reconsider the respondent’s case. However, the appellants rejected his promotion on 15th September, 2011, stating there was no justification to open the sealed cover.

The respondent then challenged this rejection before the Central Administrative Tribunal, Principal Bench, New Delhi, in Original Application No. 3716 of 2011. The Tribunal allowed the application on 7th March, 2012, quashing the communication dated 15th September, 2011, and directed the appellants to open the sealed cover and promote the respondent with back wages if found fit. The appellants challenged this order before the High Court of Delhi in Writ Petition(C) No. 7960 of 2012, which was dismissed on 26th April, 2013. The present appeal before the Supreme Court arises from this dismissal.

Legal Framework

The case primarily revolves around the interpretation of the Office Memorandum (OM) dated 14th September, 1992, which outlines the procedure for promoting government servants facing disciplinary or court proceedings. According to this OM, the details of government servants falling under the following categories should be brought to the notice of the Departmental Promotion Committee (DPC):

• ✓ Government servants under suspension;
• ✓ Government servants in respect of whom a charge sheet has been issued and the disciplinary proceedings are pending; and
• ✓ Government servants in respect of whom prosecution for criminal charge is pending.

The OM specifies that the DPC should assess the suitability of such government servants without considering the pending disciplinary case or criminal prosecution, and the assessment should be kept in a sealed cover. The cover is to be opened only after the termination of the disciplinary case or criminal prosecution.

The appellants also referred to Rule 9(6)(b)(i) of the CCS(Pension) Rules, 1972, which states that judicial proceedings in criminal cases are deemed to be instituted on the date the Magistrate takes cognizance of the complaint or police report. The relevant portion of the extant rules as relied upon by the learned counsel is as below:

“(b) Judicial proceedings shall be deemed to be instituted –

(i) in the case of criminal proceedings, on the date on which the complaint or report of a Police Officer, of which the Magistrate takes cognizance, is made.”

The respondent highlighted that the OM dated 12th January, 1988, which was in force earlier, included government servants against whom sanction for prosecution had been issued under the ambit of the sealed cover procedure. However, this provision was consciously removed in the OM dated 14th September, 1992. The relevant para of OM dated 12th January, 1988 is reproduced hereinbelow:

“Cases of Government Servants to whom Sealed Cover Procedure will be applicable.

2. At the time of consideration of the cases of Government servants for promotion, details of Government servants in the consideration zone for promotion falling under the following categories should be specifically brought to the notice of the Departmental Promotion Committee: –

(i) Government servants under suspension;

(ii) Government servants in respect of whom disciplinary proceedings are pending or a decision has been taken to initiate disciplinary proceedings;

(iii) Government servants in respect of whom prosecution for a criminal charge is pending or sanction for prosecution has been issued or a decision has been taken to accord sanction for prosecution.

(iv) Government servants against whom an investigation on serious allegations of corruption, bribery or similar grave misconduct is in progress either by the CBI or any other agency, departmental or otherwise.”

Arguments

Appellants’ Arguments:

• ✓ The appellants argued that the phrase “prosecution for a criminal charge is pending” in the OM dated 14th September, 1992, should be interpreted broadly to include cases where an investigation is pending.
• ✓ They contended that the OM does not specify the stage at which a criminal prosecution is considered pending. Therefore, the definition of pendency of judicial proceedings in Rule 9(6)(b)(i) of the CCS(Pension) Rules, 1972, should be adopted.
• ✓ They submitted that the sanction for prosecution is a critical event in a criminal charge, as it is based on the FIR and the material collected during the investigation. Thus, once sanction is granted, the prosecution should be considered pending.
• ✓ They concluded that since the FIR was lodged on 31st December, 2001, and sanction was granted on 2nd June, 2006, before the DPC meeting in February 2007, the sealed cover procedure was correctly applied.

Respondent’s Arguments:

• ✓ The respondent argued that the sealed cover procedure was illegal since none of the three conditions in Para No. 2 of the OM dated 14th September, 1992, were met. He was not under suspension, no disciplinary proceedings were initiated, and no criminal charge was pending.
• ✓ The respondent highlighted that the OM dated 12th January, 1988, included sanction for prosecution as a ground for sealed cover procedure, but this was deliberately removed in the OM of 1992.
• ✓ He contended that mere grant of sanction does not mean a criminal charge is pending.

Issues Framed by the Supreme Court

The core issue framed by the Supreme Court was:

1. Whether by the mere grant of prosecution sanction, it could be said that the prosecution for a criminal charge is pending against the respondent Government Servant and whether grant of sanction for prosecution could be a valid ground for putting the DPC recommendations in a sealed cover?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• ✓ The Supreme Court relied on Union of India v. K.V. Jankiraman [(1991) 4 SCC 109]* to determine that the sealed cover procedure should be used only after a charge memo or charge sheet has been issued.
• ✓ The Court analyzed the Office Memorandum dated 14th September, 1992* to determine the conditions for the sealed cover procedure.
• ✓ The Court noted that the Office Memorandum dated 12th January, 1988* included sanction for prosecution, but this was deliberately omitted in the later OM.
• ✓ The Court considered Rule 9(6)(b)(i) of the CCS(Pension) Rules, 1972*, but found it inapplicable to the sealed cover procedure.
• ✓ The Court referred to the Office Memorandum dated 2nd November, 2012* for clarification on when a prosecution for criminal charge can be said to be pending.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to protect the rights of government employees and ensure fairness in promotion processes. The court emphasized that the sealed cover procedure should not be used arbitrarily and that a charge sheet is a necessary prerequisite to invoke it. The court was also influenced by the fact that the government had consciously removed the provision regarding sanction for prosecution from the 1992 OM, indicating a clear intent to limit the application of the sealed cover procedure. The Court was also concerned about the long delays in investigations and the potential for misuse of the sealed cover procedure to deny promotions unfairly.

Logical Reasoning

Judgment Analysis

The Supreme Court held that the mere grant of prosecution sanction is not sufficient to invoke the sealed cover procedure for promotions. The Court emphasized that the prosecution for a criminal charge is considered pending only when a charge sheet is filed in a competent court. This interpretation is based on the earlier judgment of the Supreme Court in the case of Union of India v. K.V. Jankiraman [(1991) 4 SCC 109]*, which stated that the sealed cover procedure is to be resorted to only after the charge memo/charge sheet is issued. The court noted that the pendency of preliminary investigation prior to that stage is not sufficient to adopt the sealed cover procedure.

The Court also observed that the government consciously removed the provision regarding sanction for prosecution from the OM of 1992, which was present in the earlier OM of 1988. This indicated a clear intention to restrict the application of the sealed cover procedure. The court noted that if the government believes the charges are serious enough to withhold promotion, they have the option to suspend the officer, which would then justify the sealed cover procedure.

The court rejected the appellants’ argument that the definition of pendency of judicial proceedings in Rule 9(6)(b)(i) of the CCS(Pension) Rules, 1972, should be adopted. The court clarified that this rule is not applicable to the sealed cover procedure. The court also noted that the charge sheet against the respondent was filed on 25th October, 2008, which was well after the DPC meeting on 22nd February, 2007. Therefore, the sealed cover procedure was unjustified.

The court stated, “The sealed cover procedure is to be resorted to only after the charge-memo/charge-sheet is issued. The pendency of investigation and grant of prosecution sanction will not be sufficient to enable the authorities to adopt the sea led cover procedure.”

The court further held, “it could not be said that the prosecution for a criminal charge was pending against the respondent when the DPC was convened. Therefore, the move on the part of DPC to resort to the sealed cover procedure was unjustified and unsustainable on facts and in law.”

The Supreme Court also stated, “The letter shows that the DPC assessed the respondent to be ‘FIT’ for promotion. Consequential steps in light of the above recommendations shall follow.”

The court did not find any dissenting opinion in the judgment and the decision was unanimous.

Key Takeaways

• ✓ The sealed cover procedure for promotions cannot be invoked merely based on a sanction for prosecution.
• ✓ A charge sheet must be filed in a competent court for the prosecution to be considered pending.
• ✓ Government authorities cannot use the sealed cover procedure arbitrarily to deny promotions.
• ✓ The judgment protects the rights of government employees and ensures fairness in promotion processes.
• ✓ If the government wants to withhold promotion due to serious allegations, they have the option to suspend the officer, which then justifies the sealed cover procedure.

Directions

The Supreme Court directed that the sealed cover containing the DPC’s assessment of the respondent be opened. The DPC had assessed the respondent as ‘FIT’ for promotion. The court directed that consequential steps be taken in light of this assessment.

Development of Law

The ratio decidendi of this case is that the sealed cover procedure can only be invoked when a charge sheet is filed in a competent court and not merely on the grant of sanction for prosecution. This judgment clarifies the position of law regarding the sealed cover procedure and reiterates that the procedure cannot be used arbitrarily to deny promotions to government employees. This case has further solidified the position that the sealed cover procedure can be used only when a charge sheet is issued and not before that.

Conclusion

In the case of Union of India vs. Doly Loyi, the Supreme Court ruled that the sealed cover procedure for promotions cannot be invoked merely on the basis of a sanction for prosecution. The court clarified that a charge sheet must be filed in a competent court for the prosecution to be considered pending. This judgment protects the rights of government employees and ensures fairness in promotion processes, preventing arbitrary denial of promotions. The court directed that the sealed cover be opened, and the respondent be considered for promotion since the DPC had found him fit.