Appointing a Commission: Section 3

"A definite matter of public importance"

The Act does not define it, and two decisions supply the meaning.

Facts. Ram Krishna Dalmia v. Justice S.R. Tendolkar, AIR 1958 SC 538, [1959] SCR 279, decided on 28 March 1958 by B.P. Sinha, S.K. Das and A.K. Sarkar JJ, arose when the Central Government appointed a Commission under section 3, with Justice S.R. Tendolkar as its member, to inquire into the administration of nine companies and firms connected with Ram Krishna Dalmia. Dalmia challenged both the Act and the notification: the Act, he said, offended article 14 by giving an unguided power to pick individuals for inquiry, and the notification exceeded section 3 because the conduct of named private persons is not a definite matter of public importance.

Held. Both were upheld. The Act does not delegate an arbitrary power, because the discretion is guided by the policy laid down in the Act itself, that a Commission may be appointed only where there exists a definite matter of public importance into which an inquiry is necessary. The conduct of an individual person or company, or of a group of them, may in certain circumstances become a definite matter of public importance within section 3(1) and call for an inquiry. The Court also held that a Commission is merely to investigate, record its findings and make recommendations which are not enforceable proprio vigore, so the inquiry is not a judicial inquiry and neither Parliament nor the Government usurps the judicial function by ordering one; and it struck out of the terms of reference the direction to recommend action by way of securing redress or punishment for wrongs already done, because redress and punishment must come from a court of law.

Why it matters. It is the foundation case of the whole label. It settles that private conduct can be a matter of public importance, that the discretion in section 3 is guided and therefore not arbitrary, and, most importantly, that the report is recommendatory. Chapters 470 and 480 develop the last two propositions.

Facts. P.V. Jagannath Rao v. State of Orissa, AIR 1969 SC 215, [1968] 3 SCR 789, decided on 16 April 1968 by V. Ramaswami, J.C. Shah, V. Bhargava, G.K. Mitter and C.A. Vaidialingam JJ, arose when Orissa appointed a Commission into allegations against Ministers of the previous government. They challenged it as outside section 3, as a mala fide device to destroy political rivals by character assassination, and as a contempt of court because some referred matters were the subject of a pending appeal.

Held. The notification was upheld on all three grounds. Its preamble showed that the object was to take legislative or administrative measures for maintaining high standards of public conduct and purity of political administration in the State in future, which falls within section 3. On mala fides the Court accepted that the appointment may have been partly on account of political rivalry between the party in power and those inquired into, but held that the dominant purpose was to promote purity and integrity in the political life of the State and not the character assassination of rivals, so the notification was bona fide. And ordering an inquiry into matters also before a court is not contempt unless something is done calculated to bring the court into contempt or to obstruct the course of justice.

Why it matters. It supplies the dominant purpose test, which is what a court applies when a Commission is attacked as politically motivated, and chapter 500 uses it.

The provisos: two Commissions on the same matter

Proviso (a). Where a Commission has been appointed by the Central Government to inquire into a matter, no State Government shall, except with the approval of the Central Government, appoint another Commission to inquire into the same matter for so long as the Central Commission is functioning.

Proviso (b). Where a Commission has been appointed by a State Government, the Central Government shall not appoint another Commission to inquire into the same matter for so long as the State's Commission is functioning.

The two are not symmetrical. A State may appoint a second Commission with the Central Government's approval; the Central Government has no corresponding route while a State Commission functions.

And everything turns on "the same matter", which the Act does not define. That is the question State of Karnataka v. Union of India decided, and chapter 500 works it: two notifications are not into the same matter where they are substantially different in nature and object, even if central areas of fact and law are common. The Court's image was that one notification was meant to see whether the veil worn by certain transactions was correct in form and the other to tear that veil down.

The opening words, and what they prove

Section 3(1) now begins: "Save as otherwise provided in the Lokpal and Lokayuktas Act, 2013, the appropriate Government may..."

The footnote records the source: substituted by Act 1 of 2014, section 58 and the Schedule, for "The appropriate Government may", with effect from 16 January 2014.

Read that with chapter 210 and with section 14(4) of the Lokpal Act, which chapter 140 read. Section 58 of the Lokpal Act gives effect to a Schedule that amends four statutes, and this is one of them. Section 14(4) provides that a matter complained of to the Lokpal shall not be referred for inquiry under this Act. The amendment to section 3(1) is the same rule written into the other statute, so that a person reading the Commissions of Inquiry Act alone is told about it.

Why this is the best single illustration in Module I that the labels are one subject. MU prints "Ombudsman" and "Commission of Inquiry" as two labels. Parliament, legislating the first, reached into the statute governing the second and altered its opening words. The two institutions are not neighbours; they are parts of one anti-corruption architecture, and the sequence of chapters in this book follows MU's order while the law does not respect the boundary.

A worked example

Allegations are made in a State that a Minister awarded contracts corruptly.

Route one. The State Government forms the opinion that an inquiry is necessary and appoints a Commission under section 3(1) by notification, specifying the matter, the functions and the time.

Route two. The State Legislature passes a resolution. The Government now shall appoint. This route is available and, because the Government commands the House, is rarely taken against it.

Route three. The Central Government appoints, the matter being relatable to an entry in List II and section 2(a)(i) permitting it. Proviso (a) then prevents the State from appointing another Commission into the same matter without Central approval while the Central Commission functions, which is the situation of the 1977 litigation.

Now change one fact. Suppose a complaint on the same allegations has already been made to the Lokpal under the Lokpal and Lokayuktas Act 2013. Section 14(4) of that Act, and the opening words of section 3(1) of this one, prevent the matter being referred for inquiry under this Act at all.

And suppose the allegations are also the subject of a pending appeal in the High Court. P.V. Jagannath Rao answers it: appointing a Commission is not contempt unless something is done calculated to bring the court into contempt or to obstruct the course of justice.

What beginners get wrong

That the Government must always appoint when asked. It must appoint only when each House resolves.

That a Commission can only inquire into official conduct. Ram Krishna Dalmia holds that the conduct of a private person or company may in certain circumstances be a definite matter of public importance.

That political motivation invalidates a notification. P.V. Jagannath Rao applies a dominant purpose test and accepts that rivalry may be part of the motive.

That two Commissions can never inquire into related facts. The bar is on the same matter, and 1977 shows how differently two notifications may be characterised.

Quick revision

s.3(1): save as otherwise provided in the Lokpal and Lokayuktas Act 2013 (substituted by Act 1 of 2014, s.58 and the Schedule, w.e.f. 16 January 2014), the appropriate Government may if of opinion that it is necessary, and shall if each House of Parliament or the State Legislature resolves, by notification in the Official Gazette appoint a Commission into any definite matter of public importance, with the functions and time specified.

Proviso (a): no State Commission into the same matter while a Central one functions, except with Central approval. Proviso (b): no Central Commission into the same matter while a State one functions.

Ram Krishna Dalmia v. Justice S.R. Tendolkar, AIR 1958 SC 538: the discretion is guided by the Act's own policy and does not offend article 14; the conduct of a private person or company may be a definite matter of public importance; the report is recommendatory; a direction to recommend redress or punishment for past wrongs was struck out.

P.V. Jagannath Rao v. State of Orissa, AIR 1969 SC 215: the dominant purpose test; political rivalry may be part of the motive without making the notification mala fide; appointing a Commission into matters also before a court is not contempt without more.

Test yourself

1. When may and when must the appropriate Government appoint a Commission? It may appoint if it is of opinion that it is necessary to do so, which is the ordinary route and gives the Government a discretion. It must appoint if a resolution in that behalf is passed by each House of Parliament or, as the case may be, by the Legislature of the State. The compulsory route is rarely used because the Government commands a majority in the House.

2. Can a Commission inquire into the conduct of a private company? Give authority. Yes. In Ram Krishna Dalmia v. Justice S.R. Tendolkar, AIR 1958 SC 538, the Supreme Court upheld a notification appointing a Commission into the administration of nine companies and firms, holding that the conduct of an individual person or company, or of a group of them, may in certain circumstances become a definite matter of public importance within section 3(1) and call for an inquiry, and that the Act's own policy guides the discretion so that article 14 is not offended.

3. What is the dominant purpose test and where does it come from? It comes from P.V. Jagannath Rao v. State of Orissa, AIR 1969 SC 215. Where a notification appointing a Commission is attacked as a mala fide device against political rivals, the court asks what the dominant purpose of the appointment was. Political rivalry may be part of the motive without invalidating the notification, provided the dominant purpose is a legitimate one such as promoting purity and integrity in public administration for the future, which the preamble to the notification in that case disclosed.

4. Explain the two provisos to section 3(1) and what turns on them. Where the Central Government has appointed a Commission into a matter, no State Government may appoint another into the same matter while the Central Commission is functioning, except with the Central Government's approval; and where a State has appointed one, the Central Government shall not appoint another into the same matter while the State's Commission functions. Everything turns on the meaning of "the same matter", which the Act does not define and which was decided in State of Karnataka v. Union of India, (1977) 4 SCC 608: two inquiries substantially different in nature and object are not into the same matter even where central areas of fact are common.

5. What do the opening words of section 3(1) tell you about the relationship between the two institutions in Module I? That they are one system rather than two subjects. The words "save as otherwise provided in the Lokpal and Lokayuktas Act, 2013" were substituted into this Act by section 58 and the Schedule of the Lokpal Act with effect from 16 January 2014, and they correspond to section 14(4) of that Act, which forbids a matter complained of to the Lokpal from being referred for inquiry under this Act. Parliament, in creating the ombudsman, reached into the statute governing Commissions of Inquiry and altered its opening words.