Supreme Court Reinstates CBI Director, Emphasizes Independence: Alok Kumar Verma vs. Union of India (2019)

Date of the Judgment: 08 January 2019

Citation: (2019) INSC 18

Judges: Ranjan Gogoi, CJI, Sanjay Kishan Kaul, J, K.M. Joseph, J

Can the government curtail the powers of the CBI Director without consulting the committee that appointed him? The Supreme Court of India recently addressed this critical question in a case that tested the independence of the Central Bureau of Investigation (CBI). This case revolves around the removal of CBI Director Alok Kumar Verma and the subsequent legal challenge to that decision.

The Supreme Court, in this judgment, examined the extent of the Central Vigilance Commission’s (CVC) and Union Government’s authority to divest the CBI Director of his powers. The core issue was whether such actions could be taken without the prior consent of the committee responsible for his appointment. This judgment underscores the importance of maintaining the CBI’s autonomy and the due process required for any action against its director.

Case Background

On October 23, 2018, the Central Vigilance Commission (CVC) issued an order divesting Shri Alok Kumar Verma, the Director of the CBI, of his powers, functions, duties, and supervisory role. This action was purportedly taken under Section 8(1)(a) and 8(1)(b) of the Central Vigilance Commission Act, 2003, read with Section 4(1) of the Delhi Special Police Establishment Act, 1946. The CVC stated that this was an interim measure pending an inquiry into allegations of corruption against Shri Verma.

Following the CVC’s order, the Government of India, through the Ministry of Personnel, Public Grievances and Pensions, issued a similar order on the same day, October 23, 2018, also divesting Shri Verma of his duties. Additionally, another order was issued on the same day, appointing Shri M. Nageshwar Rao, IPS, as the interim director of the CBI.

These orders were challenged in two writ petitions: one by Shri Alok Kumar Verma himself and another by Common Cause, a registered society. Common Cause also sought the removal of Mr. Rakesh Asthana, Special Director of the CBI, and the constitution of a Special Investigating Team (SIT) to investigate corruption charges within the CBI.

The CVC’s order was based on a complaint dated August 24, 2018, forwarded by the Cabinet Secretary, alleging corruption against Shri Alok Kumar Verma. The CVC claimed that instead of cooperating, Shri Verma sought the identity of the complainant and made allegations against Special Director Rakesh Asthana. The CVC also noted that Shri Asthana had made counter-allegations against Shri Verma.

Timeline

Legal Framework

The case primarily involves the interpretation of the following legal provisions:

• Section 8(1)(a) and 8(1)(b) of the Central Vigilance Commission Act, 2003: These sections outline the functions and powers of the CVC, including its role in overseeing the Delhi Special Police Establishment (CBI) in matters related to the Prevention of Corruption Act, 1988. Specifically, Section 8(1)(a) states that the CVC has the power to “exercise superintendence over the functioning of the Delhi Special Police Establishment in so far as it relates to the investigation of offences alleged to have been committed under the Prevention of Corruption Act, 1988”. Section 8(1)(b) empowers the CVC to “give directions to the Delhi Special Police Establishment for the purpose of discharging the responsibility entrusted to it under sub-section (1) of section 4 of the Delhi Special Police Establishment Act, 1946”.
• Section 4(1) of the Delhi Special Police Establishment Act, 1946: This section deals with the superintendence of the Delhi Special Police Establishment, stating that “The superintendence of the Delhi Special Police Establishment in so far as it relates to investigation of offences alleged to have been committed under the Prevention of Corruption Act, 1988, shall vest in the Commission.”
• Section 4A of the Delhi Special Police Establishment Act, 1946: This section outlines the composition of the committee responsible for recommending the appointment of the CBI Director. It states that “The Central Government shall appoint the Director on the recommendation of 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; (c) the Chief Justice of India or Judge Of the Supreme Court nominated by him — Member;”
• Section 4B of the Delhi Special Police Establishment Act, 1946: This section specifies the term and conditions of service for the CBI Director, particularly stating that “(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 4A.”

The Supreme Court’s interpretation of these provisions was central to its decision.

Arguments

Arguments on behalf of Shri Alok Kumar Verma and Common Cause:

• The primary argument was that the orders divesting the CBI Director of his powers were illegal because they were made without the prior consent of the committee constituted under Section 4A(1) of the DSPE Act. The counsels argued that Section 4B(2) of the DSPE Act, which states that “the Director shall not be transferred except with the previous consent of the Committee”, should be interpreted broadly to include any action that effectively curtails the Director’s powers, not just a physical transfer.

• They contended that the legislative intent behind the DSPE Act and the CVC Act, as well as the directions of the Supreme Court in Vineet Narain vs. Union of India, was to ensure the independence of the CBI and its Director. Any action that undermines this independence requires the consent of the High-Powered Committee.

• It was argued that the CVC’s actions were prompted by collateral reasons and that the allegations against the Director were not sufficient to justify the divestment of his powers. The counsels pointed out that the CVC’s inquiry was initiated based on allegations made by the Special Director, CBI, who himself was under investigation.

Arguments on behalf of the Union of India:

• The Attorney General argued that the role of the Committee under Section 4A(1) of the DSPE Act is limited to making recommendations for the appointment of the Director. Once the appointment is made, the Committee becomes functus officio and does not need to be consulted for actions such as divestment of powers.

• It was contended that Section 4B(2) of the DSPE Act only applies to cases of transfer in the traditional sense, and not to the divestment of powers. The government argued that it has the power to divest the Director of his powers under Section 16 of the General Clauses Act, 1897, which states that the power to appoint includes the power to suspend or dismiss.

• The government argued that the Director, CBI, remains a civil servant subject to disciplinary control and that the CVC’s actions were within its powers to inquire into allegations of corruption. The government stated that the CVC’s actions were necessary due to the serious allegations of corruption against the Director.

Arguments on behalf of the Central Vigilance Commission (CVC):

• The Solicitor General argued that the Director, CBI, remains a civil servant and is subject to service conditions and disciplinary control. It was contended that the only exception is the fixed tenure of two years under Section 4B(1) of the DSPE Act.

• The CVC argued that it had the power to initiate an inquiry and take interim measures to ensure the integrity of the investigation. The CVC stated that it had acted on serious allegations of corruption against the Director and that its actions were necessary to maintain the credibility of the CBI.

Issues Framed by the Supreme Court

The Supreme Court framed the following key issues for consideration:

1. Whether the CVC and the Government of India were competent to divest the Director, CBI, of all his powers, functions, duties, and supervisory role without obtaining the prior consent of the Committee constituted under Section 4A(1) of the DSPE Act.
2. Whether the reasons that prompted the CVC and the Government of India to take the impugned decisions were sufficient and adequate.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

How each authority was viewed by the Court?

• The Supreme Court relied heavily on Vineet Narain [(1998) 1 SCC 226]* to emphasize the need for the CBI’s insulation from external influence.
• The Court distinguished Shankarsan Dash [(1991) 3 SCC 47]* and Jai Singh Dalal [1993 Supp. (2) SCC 600]* stating that when the law does not recognize in any incumbent, who may have been recommended, a right to be appointed it cannot be contended that after the appointment is made the Committee constituted to make recommendations for appointment has to be consulted in all cases of disinvestment of power.
• The Court referred to Prakash Singh [(2006) 8 SCC 1]* to show that various State enactments provide for a tenure of two years to the Director General of Police of the State and expressly contemplates removal of the incumbent before expiry of the tenure on certain specified grounds.
• The Court interpreted Section 8(1)(a) and 8(1)(b) of the Central Vigilance Commission Act, 2003* to determine the powers of the CVC in relation to the CBI.
• The Court interpreted Section 4(1) of the Delhi Special Police Establishment Act, 1946* to understand the superintendence of the Delhi Special Police Establishment.
• The Court interpreted Section 4A of the Delhi Special Police Establishment Act, 1946* to understand the role of the Committee for appointment of the Director.
• The Court interpreted Section 4B of the Delhi Special Police Establishment Act, 1946* to understand the terms and conditions of service of the Director.
• The Court held that Section 16 of the General Clauses Act, 1897* will have no application to the present case in view of the clear and apparent intention to the contrary that unequivocally flows from the provisions of the DSPE Act.

The Supreme Court held that the orders divesting the CBI Director of his powers were illegal because they were made without the prior consent of the Committee constituted under Section 4A(1) of the DSPE Act. The Court interpreted the term “transfer” in Section 4B(2) of the DSPE Act to include any action that effectively curtails the Director’s powers, not just a physical transfer. The Court emphasized that the legislative intent behind the DSPE Act and the CVC Act was to ensure the independence of the CBI and its Director, and any action that undermines this independence requires the consent of the High-Powered Committee.

The Court set aside the following orders dated October 23, 2018:

• The CVC’s order divesting Shri Alok Kumar Verma of his powers.
• The Government of India’s order divesting Shri Alok Kumar Verma of his duties.
• The Government of India’s order appointing Shri M. Nageshwar Rao as interim director.

The Court directed that the matter be considered by the Committee under Section 4A(1) of the DSPE Act within a week. It also directed that Shri Alok Kumar Verma, upon reinstatement, would cease and desist from taking any major policy decisions until the Committee’s decision was available.

What weighed in the mind of the Court?

The Supreme Court’s decision was heavily influenced by the need to maintain the independence and integrity of the CBI. The Court emphasized the legislative intent behind the DSPE Act and the CVC Act, which was to insulate the CBI Director from any extraneous influence. The Court also considered the historical context of the CBI’s evolution and the directions issued in Vineet Narain vs. Union of India, which highlighted the need for a fair and impartial agency.

The Court was concerned that the actions taken by the CVC and the government could undermine the independence of the CBI. The Court noted that the CVC’s inquiry was initiated based on allegations made by the Special Director, CBI, who himself was under investigation. This raised questions about the fairness and impartiality of the process.

The Court also considered the fact that the DSPE Act does not provide for any specific interim measures against the Director, CBI, except for the provision regarding transfer. This led the Court to conclude that the term “transfer” in Section 4B(2) should be interpreted broadly to include any action that curtails the Director’s powers.

The Court’s reasoning was driven by the need to ensure that the CBI can perform its role without fear or favor and in the best public interest. The Court emphasized that the head of the institution, namely, the Director, has to be the role model of independence and integrity, which can only be ensured by freedom from all kinds of control and interference.

Logical Reasoning

Issue 1: Competence to Divest Powers

Issue 2: Sufficiency of Reasons

Key Takeaways

• Independence of CBI Director: The Supreme Court emphasized the importance of maintaining the independence of the CBI Director. Any action that curtails the Director’s powers requires the prior consent of the High-Powered Committee constituted under Section 4A(1) of the DSPE Act.
• Broad Interpretation of “Transfer”: The term “transfer” in Section 4B(2) of the DSPE Act was interpreted broadly to include any action that effectively curtails the Director’s powers, not just a physical transfer from one post to another.
• Legislative Intent: The Court underscored the legislative intent behind the DSPE Act and the CVC Act, which was to shield the CBI Director from any extraneous influence and ensure the integrity of the institution.
• Limited Interim Measures: The Court noted that the DSPE Act does not provide for any specific interim measures against the Director, CBI, except for the provision regarding transfer.
• Role of the Committee: The Committee constituted under Section 4A(1) of the DSPE Act plays a crucial role in protecting the independence of the CBI Director. Its consent is required for any action that affects the Director’s powers.

Directions

The Supreme Court issued the following directions:

• The orders of the CVC and the Government of India divesting the Director, CBI, of his powers were set aside.
• The matter was to be considered by the Committee under Section 4A(1) of the DSPE Act within one week.
• Shri Alok Kumar Verma, upon reinstatement, was to cease and desist from taking any major policy decisions until the Committee’s decision was available. His role was confined to routine functions without any fresh initiative.

Development of Law

The ratio decidendi of this case is that any action that curtails the powers of the CBI Director, including divestment of powers, requires the prior consent of the Committee constituted under Section 4A(1) of the DSPE Act. The Court’s interpretation of the term “transfer” in Section 4B(2) to include any action that effectively curtails the Director’s powers establishes a new position of law. This judgment clarifies that the legislative intent is to ensure the independence of the CBI and its Director.

Conclusion

The Supreme Court’s judgment in the Alok Kumar Verma case is a significant ruling that reinforces the independence of the Central Bureau of Investigation (CBI). By setting aside the orders divesting the CBI Director of his powers, the Court emphasized that any action that curtails the Director’s powers requires the prior consent of the High-Powered Committee. This decision ensures that the CBI can function as an independent and impartial agency, free from undue influence. The judgment underscores the importance of protecting the integrity of investigative bodies and upholding the rule of law.