Vineet Narain and the Direction to Give the CVC Statutory Status

The Single Directive. The Court then examined the obstacle. The Single Directive was a consolidated set of instructions issued to the Central Bureau of Investigation by the various Ministries and Departments, first issued in 1969 and amended many times. Directive No. 4.7(3) provided that in regard to any person who is or has been a decision-making level officer of the rank of Joint Secretary or above in the Central Government, or such officers on deputation to a public sector undertaking, officers of the Reserve Bank of India of equivalent level, Executive Directors and above of the Securities and Exchange Board of India, and Chairmen, Managing Directors and Executive Directors of nationalised banks and officers one level below their Boards, there should be prior sanction of the Secretary of the Ministry or Department concerned before the Special Police Establishment takes up any enquiry, including ordering a search, and that without such sanction no enquiry shall be initiated.

Held on the Single Directive. After considering the material, the Court held that the Single Directive cannot be upheld as valid on the ground of its being permissible in exercise of the power of superintendence of the Central Government under section 4(1) of the Delhi Special Police Establishment Act 1946, and that the matter had thereafter to be considered de hors, that is independently of, the Single Directive. In the result the Court struck down Directive No. 4.7(3).

Held on the Court's own power. In view of the common perception, shared by the Government of India and by the Independent Review Committee it had itself appointed, of the need to insulate the Central Bureau of Investigation from extraneous influence, it was imperative that action be taken to ensure proper implementation of the rule of law. This, the Court said, is the need of equality guaranteed by the Constitution, and the right to equality in such a situation is that of the Indian polity and not merely of a few individuals. There are ample powers conferred by article 32 read with article 142 to make orders which have the effect of law by virtue of article 141, and a mandate to all authorities to act in aid of the Court's orders under article 144; and that power has been exercised, where need be, by issuing necessary directions to fill the vacuum till such time as the legislature steps in to cover the gap or the executive discharges its role.

Held: the directions. The Court directed, so far as the Central Bureau of Investigation and the Central Vigilance Commission are concerned:

1. The Central Vigilance Commission shall be given statutory status.
2. Selection for the post of Central Vigilance Commissioner shall be made by a Committee comprising the Prime Minister, the Home Minister and the Leader of the Opposition, from a panel of outstanding civil servants and others with impeccable integrity furnished by the Cabinet Secretary; the appointment to be made by the President on the Committee's recommendations, and to be done immediately.
3. The Commission shall be responsible for the efficient functioning of the Central Bureau of Investigation. While Government shall remain answerable for its functioning, to introduce visible objectivity the Commission shall be entrusted with the responsibility of superintendence over the Bureau's functioning, the Bureau reporting to it on cases taken up, the progress of investigations, and the chargesheets filed and their progress; and the Commission shall review the progress of all cases moved by the Bureau for sanction of prosecution which are pending with competent authorities, especially those in which sanction has been delayed or refused.
4. The Central Government shall take all measures necessary to ensure that the Bureau functions effectively and efficiently and is viewed as a non-partisan agency.
5. The Commission shall have a separate section in its Annual Report on the Bureau's functioning after the supervisory function is transferred to it.
6. Recommendations for the appointment of the Director of the Central Bureau of Investigation shall be made by a Committee headed by the Central Vigilance Commissioner, with the Home Secretary and the Secretary (Personnel), the final selection to be made by the Appointments Committee of the Cabinet from the panel recommended.
7. The Director shall have a minimum tenure of two years, and his premature transfer would need the endorsement of the Selection Committee.
8. Parallel directions were given for the Enforcement Directorate: a Selection Committee headed by the Central Vigilance Commissioner including the Home Secretary, the Secretary (Personnel) and the Revenue Secretary to prepare a panel for the appointment of its Director; a minimum tenure of two years for that Director, with premature transfer for any extraordinary reason needing the approval of the same Committee; the post to be upgraded; no premature media publicity by either agency; and adjudication or prosecution to be commenced within a year.

The Court closed by saying that the documents placed before it revealed a distressing situation which must be cured if the rule of law is to prevail, that no action within the constitutional scheme found necessary to remedy the situation was too stringent in the circumstances, and that the directions required the strict compliance of the Union of India and all concerned.

Why it matters. Two of MU's eight labels take their present shape from this judgment. The Central Vigilance Commission Act 2003 is direction 1 enacted; its section 4 is direction 2; its section 8(1)(a) is direction 3; its section 14 is direction 5. Sections 4A and 4B of the Delhi Special Police Establishment Act are directions 6 and 7, and chapter 800 reads them. Section 25 of the Central Vigilance Commission Act 2003, which chapter 680 reads, is direction 8 for the Enforcement Directorate.

The Independent Review Committee

An answer that mentions only the Court misses half the mechanism. The Government of India had itself appointed an Independent Review Committee to examine the working of the agencies, and the Court records that its Summary of Recommendations included conferring statutory status on the Commission, constituting a Committee for the selection of the Central Vigilance Commissioner, the Commission overviewing the Bureau's functioning, a Selection Committee for the Director, a minimum two-year tenure for the Director, and the endorsement of the Selection Committee for a premature transfer.

The Court adopted them. It said in terms that to the extent it agreed with the conclusions and recommendations of the Committee, and that was a large area, it had adopted them in formulating its directions.

Why that matters for an answer on judicial activism. The Court did not invent an institutional design. It took a design the executive's own committee had produced and which the executive had not implemented, and made it binding until Parliament acted. That is a much easier position to defend than the objection that a court legislated, and it is the point to make when a question asks whether Vineet Narain exceeded the judicial function.

The constitutional technique, stated plainly

Article 32 gives the Supreme Court power to issue directions, orders or writs for the enforcement of fundamental rights.

Article 142 empowers it to pass such decree or order as is necessary for doing complete justice in any cause or matter before it.

Article 141 makes the law declared by the Supreme Court binding on all courts within India.

Article 144 requires all authorities, civil and judicial, to act in aid of the Supreme Court.

Put together, and this is the Court's own reasoning, the directions have the effect of law and bind all authorities, and they operate until the legislature steps in. That last qualification is essential and is what distinguishes the exercise from legislation: the directions were expressly interim, and in 2003 Parliament did step in and replaced them with an Act.

Which is the answer to the standard criticism. The directions were not permanent judicial law-making. They were a stop-gap that lasted six years and was then superseded by the very legislature whose inaction had made it necessary.

What the case did not do

It did not decide the hawala case. The prosecutions that followed largely failed for want of evidence, the diaries being held insufficient. A student who writes that Vineet Narain convicted anybody is wrong.

It did not give the Commission an investigating force. The Commission superintends; it does not investigate. Chapter 750 makes that the centre of its criticism.

It did not settle the sanction question. The Single Directive fell in 1997, was re-enacted in substance as section 6A of the Delhi Special Police Establishment Act in 2003, and had to be struck down again in 2014. Chapter 840 works that sequence.

And it did not make the Bureau independent of the Government. Direction 3 says in terms that Government shall remain answerable for the Bureau's functioning, and the superintendence transferred to the Commission is over corruption cases. Chapter 790 reads what section 4 of the 1946 Act now says.

A worked example: the Directive in operation

A complaint in 1995 alleges that a Joint Secretary took money to clear a licence.

Under Directive No. 4.7(3). The Central Bureau of Investigation cannot begin an enquiry, cannot register a case and cannot order a search, until the Secretary of the Ministry in which the Joint Secretary works has given prior sanction. Without it no enquiry shall be initiated at all.

Why the Court held that could not stand. The instruction was defended as an exercise of the Central Government's power of superintendence under section 4(1) of the 1946 Act. The Court held it could not be sustained on that ground and struck it down. The vice is that the decision whether even to look is given to the accused officer's own department, before there is any material to look at, so the very inquiry that would show whether there was anything to investigate is prevented.

After the judgment. The Bureau may begin the enquiry, subject to the ordinary law. The superintendence over its functioning in corruption cases passes to the Commission. The Director who runs it is chosen by a committee headed by the Central Vigilance Commissioner and cannot be moved for two years without that committee's endorsement.

And in 2003 the same obstacle came back, as section 6A of the 1946 Act inserted by section 26(c) of the Central Vigilance Commission Act itself. Chapter 840 works it, and it is the sharpest illustration in this book of an institution's design being contested over decades.

What beginners get wrong

That Vineet Narain created the Central Vigilance Commission. The Commission existed from 1964. The Court directed that it be given statutory status.

That the Court gave the Commission control of the CBI. It gave it superintendence over the Bureau's functioning in the sense set out in direction 3, and said that Government remains answerable.

That the directions were permanent. They were expressly to fill the vacuum until the legislature stepped in, and Parliament stepped in with the Act of 2003.

That the Court directed the investigation. It said in terms that it would not direct or channel the investigations, and that its monitoring would end when a charge sheet was filed.

Quick revision

Vineet Narain v. Union of India, (1998) 1 SCC 226, 18 December 1997, J.S. Verma CJ, S.P. Bharucha and S.C. Sen JJ, on the hawala or Jain diaries case.

Technique: the continuing mandamus, monitoring without directing the investigation, ending when a charge sheet is filed.

Struck down: Directive No. 4.7(3) of the Single Directive, prior sanction of the Secretary before any enquiry against an officer of Joint Secretary rank and above; not sustainable as superintendence under section 4(1) of the DSPE Act 1946.

Power used: articles 32, 141, 142 and 144, to fill the vacuum till the legislature steps in.

Directed: statutory status for the CVC; selection of the Central Vigilance Commissioner by a Committee of the Prime Minister, Home Minister and Leader of the Opposition, appointment by the President; superintendence over the CBI's functioning with reporting and review of pending sanctions; a separate section in the Annual Report; the Director, CBI selected by a Committee headed by the Central Vigilance Commissioner with a minimum tenure of two years; and the same for the Director, Enforcement Directorate.

Source of the design: the Government's own Independent Review Committee, whose recommendations the Court adopted.

Test yourself

1. What was the Single Directive and why was it struck down? It was a consolidated set of instructions issued to the Central Bureau of Investigation by the Ministries and Departments, first issued in 1969. Directive No. 4.7(3) required the prior sanction of the Secretary of the Ministry concerned before the Special Police Establishment took up any enquiry, including ordering a search, against an officer of Joint Secretary rank or above and equivalent officers in public undertakings, the Reserve Bank, the Securities and Exchange Board and nationalised banks, and provided that without such sanction no enquiry shall be initiated. The Court held it could not be upheld as valid on the ground of being permissible in exercise of the Central Government's power of superintendence under section 4(1) of the Delhi Special Police Establishment Act 1946, and struck it down.

2. On what constitutional basis did the Court issue institutional directions? On articles 32 and 142, which give ample power to make orders having the effect of law by virtue of article 141, with a mandate to all authorities to act in aid of the Court's orders under article 144. The Court said the power is exercised by issuing necessary directions to fill the vacuum until the legislature steps in to cover the gap or the executive discharges its role, and that the need for insulating the agency was the need of equality guaranteed by the Constitution, the right in such a situation being that of the Indian polity and not merely of a few individuals.

3. List the directions concerning the Central Vigilance Commission and the Central Bureau of Investigation. Statutory status for the Commission; selection of the Central Vigilance Commissioner by a Committee of the Prime Minister, the Home Minister and the Leader of the Opposition from a panel furnished by the Cabinet Secretary, with appointment by the President; the Commission to be responsible for the efficient functioning of the Bureau and entrusted with superintendence over it, the Bureau reporting on cases taken up, progress of investigations and chargesheets, and the Commission reviewing pending sanctions for prosecution especially where delayed or refused; the Central Government to ensure the Bureau is effective and viewed as non-partisan; a separate section in the Commission's Annual Report on the Bureau; recommendations for the Director to be made by a Committee headed by the Central Vigilance Commissioner with the Home Secretary and Secretary (Personnel); and a minimum tenure of two years for the Director, with premature transfer needing the Committee's endorsement.

4. Answer the objection that the Court legislated. Three things answer it. The design was not the Court's: it was the Government's own Independent Review Committee's, which the Court expressly adopted to the extent it agreed, and which the executive had not implemented. The directions were expressly interim, to fill the vacuum until the legislature stepped in. And the legislature did step in, six years later, with the Central Vigilance Commission Act 2003, which enacted the directions and superseded them.

5. Did the case make the Central Bureau of Investigation independent of the Government? No. Direction 3 states in terms that Government shall remain answerable for the Bureau's functioning, and what was transferred to the Commission was superintendence over its functioning to introduce visible objectivity. The present position, after the Act of 2003 amended section 4 of the 1946 Act, is that superintendence in Prevention of Corruption Act matters vests in the Commission and in all other matters in the Central Government.