DR. JAYA THAKUR v. UNION OF INDIA & ORS.

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A 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.

99Copy pinpoint99. That leaves us with the next question, as to whether the B impugned orders dated 17th November, 2021 and 17th November 2022, which grant extension for a period of one year each, are valid in law or not.

100Copy pinpoint100. In the case of Common Cause (2021), what was under challenge was the order dated 13th November 2020, vide which the C President of India had approved the modification of the order dated 19th 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 D 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.”

101Copy pinpoint101. 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 period 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 G 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 H

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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.”

102Copy pinpoint102. 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 D 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 attained 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 G 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

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A clear that no further extension shall be granted to the second Respondent.” [emphasis supplied]

103Copy pinpoint103. As such, it is clear that this Court issued a specific mandamus that no further extension shall be granted to the second respondent. B 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.

104Copy pinpoint104. A Constitution Bench of learned Seven Judges of this Court in the case of Madan Mohan Pathak and another v. Union of India C and others23 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 employees. The said settlements were also approved by the Board of the LIC as also by the Central Government. An Ordinance was promulgated by the President of India on 25th 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., 25th 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 24th January 1974 read with the administrative instructions.

105Copy pinpoint105. 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 29th May, 1976, the Act impugned before this Court was enacted. The effect 23 H (1978) 2 SCC 50

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of the enactment was to annul the benefits which the employees of the A LIC were entitled to in view of the mandamus issued by the Calcutta High Court.

106Copy pinpoint106. Bhagwati, J (speaking for himself, Krishna Iyer and Desai, JJ.) observed thus: “9. ….We are, therefore, of the view that, in any event, irrespective B 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.” C

107Copy pinpoint107. 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 D 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 E 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.” F

108Copy pinpoint108. 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. G

109Copy pinpoint109. 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 H

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A 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.” B

110Copy pinpoint110. Relying on the aforesaid observation, this Court in the case of S.R. Bhagwat and others v. State of Mysore24 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 C be made ineffective with the aid of any legislative power by enacting a provision 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 D may only refer to two of these judgments. xxx xxx xxx 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 E 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 F in our view would be clearly impermissible legislative exercise.”

111Copy pinpoint111. 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.

112Copy pinpoint112. A similar view has been taken by this Court in the case of G Medical Council of India v. State of Kerala and others25.

113Copy pinpoint113. Recently, in the case of Madras Bar Association v. Union of India and another26, a bench of learned three Judges of this Court, 24 (1995) 6 SCC 16 25 (2019) 13 SCC 185 H 26 2021 SCC OnLine SC 463= (2022) 12 SCC 455

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after considering the earlier judgments of this Court on the issue of A 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: B 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. C [Lohia Machines Ltd. v. Union of India, (1985) 2 SCC 197 : 1985 SCC (Tax) 245] 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 D 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. E 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 F 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 G Article 14 of the Constitution of India.”

114Copy pinpoint114. 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 H

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A 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 B 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.

115Copy pinpoint115. Though it is the contention of the learned Solicitor General C 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.

116Copy pinpoint116. 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 G be parties was binding on them. We, therefore, find that the respondent No.1 could not have issued orders dated 17th November 2021 and 17th November 2022 in breach of the mandamus issued by this Court vide its judgment dated 8th September 2021 in Common Cause (2021).

117Copy pinpoint117. 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 H

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(supra) is concerned, the said judgment would be of no assistance to the A 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 B 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 C 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.”

118Copy pinpoint118. As such, it could thus clearly be seen that counsel for the D 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 Kishori27 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 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.

119Copy pinpoint119. Though we have held that orders dated 17th November 2021 and 17th 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 27 (1986) 1 SCC 722 H

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A the matter, we find that in order to ensure the transition to be smooth in the larger public interest, it will be appropriate to permit respondent No.2 to continue to be in office till 31st of July 2023.

120Copy pinpoint120. Before we part with the judgment, we place on record our deep appreciation for the assistance rendered by the learned Amicus B 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 C assistance rendered by Mr. Ravi Raghunath, learned Advocate-on- Record, who ably assisted the learned Amicus Curiae.

121Copy pinpoint121. In the result, we pass the following order: (i) The challenge to Central Vigilance Commission (Amendment) Act, 2021 and the Delhi Special Police D Establishment (Amendment) Act, 2021 as well as to the Fundamental (Amendment) Rules, 2021 is rejected and the writ petitions are dismissed to that extent. (ii) The impugned orders dated 17th November 2021 and 17th November 2022 granting extensions to the tenure of the E 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 31st July, 2023.

122Copy pinpoint122. 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.

Bibhuti Bhushan Bose Petitions disposed of. G (Assisted by : Rahul Rathi, LCRA)