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Corruption And Central Commission Vigilance

Made by: David Cyril Babu B.A. LLB (Honours) VIIIth Semester Roll No. 18.

Index
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. Research Methodology Acknowledgement Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Conclusion Vineet Narains Case P.J. Thomas Case Questionnaire Result Annexure Bibliography 3 4 5 6 8 10 12 16 20 21 25 27 29 36 42 48 78 85 87 89 91 98 158

Research Methodology
This project has been written after careful reading and examination of books, articles, blogs and expert opinion on the subject, Corruption as well as CVC, CBI, etc. The opinion of experts in this field has also been quoted as and when it was found necessary. I have also included the questionnaire used to gather the opinions and awareness of different people as well as the result in the form of pie-charts to help understand the concept of corruption and stop it in a better and more efficient manner.

Acknowledgement
I would like to thank Dr. Ghulam Yazdani, our Seminar professor, for providing the help and guidance required during the entire stage of the project. He helped form the research methodology till the end of this project. He inspired us every step of the way and I am very grateful for the help and support he showed us for it would not have been possible to complete this project without it.

Chapter 1 Introduction Socio-Economic Offences


All luxury corrupts either the morals or the state. - Joubert The new millennium era has provided a fertile platform for the very inception of an independent field of study. Socioeconomics has emerged as a separate field of study in the late twentieth century. If one looks into the enigma of socioeconomic offences, the root cause lies in the lust for money. These crimes are always committed by educated, highly qualified and socially reputed people. The prominent hallmark in socioeconomic crimes is that these offenders pretend this illegitimately earned money is legitimate money. In the lap of globalization and advancement a new paradox has come in sight. The Free Online Dictionary defines socio-economics as, of, relating to, or involving both economic and social factors. Therefore, socio-economic offences can be defined as offences affecting both social and the economic sphere of a society. Corruption, white-collar crimes, hoarding, profiteering, black marketing, etc are some of the offences prevalent in India which come under the ambit of socio-economic offences. The main focus, with respect to this project, is on corruption, the various aspects, a comparative study and the agencies in India which are empowered to deal with corruption, with special focus on the Central Vigilance Commission.

Chapter 2 Corruption
Corruption is worse than prostitution. The latter might endanger the morals of an individual; the former invariably endangers the morals of the entire country. - Karl Kraus Merriam-Websters defines corruption as: A: impairment of integrity, virtue, or moral principle: Depravity. B: decay, decomposition. C: inducement to wrong by improper or unlawful means (as bribery) D: a departure from the original or from what is pure or correct. Corruption, in one form or the other, with respect to the Indian society, has prevailed from time immemorial. In modern times, people who work on right principles are unrecognized and considered to be foolish. Corruption in India is a result of the nexus between bureaucrats, politicians and criminals. The following is an example as to how corruption has succeeded in changing our society, for the worse: It is a well known fact that when the Verification Officer comes over to verify ones passport, one has to grease his palm so that the procedure is completed without a hitch. Earlier, bribes were paid for getting wrong things done, but now a bribe is paid for getting right things done at right time.
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Moreover, corruption in India has received some sort of sanction as respectable people are involved in it. In todays scenario, even though a person might be otherwise competent with respect to the requirements of a government job, however, he ends up paying lakhs of rupees to the higher officials to get that post. In every office, one has to either give money to the employee concerned or arrange for some sources to get the work done. There is adulteration and duplicate weighing of products in the food and civil supplies department by unscrupulous workers who cheat the consumers and also play with the health and lives of the people. In the assessment of property tax the officers charge money even if the house is built properly according to the Government rules and regulations. These are some of the many instances that are prevalent in the India that we know of. If looked at from a moral, theological or a philosophical view, corruption is any spiritual or moral deviation from an ideal. From the economic viewpoint, corruption is payment for services or material which, under law, the recipient is not due. This may be called bribery, kickback, or baksheesh, as known in the Middle East. From the political viewpoint, corruption happens when an elected representative makes decisions that are influenced by campaign contributions, rather than their own personal beliefs.

Chapter 3 Types of Corruption

Voglewede and Associates.


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The picture is an example of the many forms of corruption prevalent in the society or the workplaces. Some general kinds of corruption which are common in the many countries are as follows:

1. Political Corruption. 2. Administrative Corruption. 3. Legal and Moral Corruption.

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Chapter 4 Political Corruption


Political corruption is the use of power by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by private persons or corporations not directly involved with the government. An illegal act by an officeholder constitutes political corruption only if the act is directly related to their official duties, is done under colour of law or involves trading in influence. Forms of corruption vary, but include bribery, extortion, cronyism, nepotism, patronage, graft, and embezzlement. Corruption may facilitate criminal enterprise such as drug trafficking, money laundering, and human trafficking, though is not restricted to these activities. The activities that constitute illegal corruption differ depending on the country or jurisdiction. For instance, some political funding practices that are legal in one place may be illegal in another. In some cases, government officials have broad or illdefined powers, which make it difficult to distinguish between legal and illegal actions. Worldwide, bribery alone is estimated to involve over 1 trillion US dollars annually. A state of unrestrained political corruption is known as a kleptocracy, literally meaning "rule by thieves".

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World map of the 2010 Corruption Perceptions Index by Transparency International which measures "the degree to which corruption is perceived to exist among public officials and politicians". High numbers (blue) indicate less perception of corruption, whereas lower numbers (red) an indicate higher perception of corruption.
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Chapter 5 Effects of Political Corruption


Effect on politics, administration, and institutions
Corruption poses a serious threat or challenge to development. In the political realm, it undermines democracy and good governance by flouting formal processes. Corruption in elections and in legislative bodies reduces accountability and distorts representation in policy making; corruption in the judiciary compromises the rule of law; and corruption in public administration results in the inefficient provision of services. Corruption erodes the institutional capacity of government as procedures are disregarded, resources are siphoned off, and public offices are bought and sold. At the same time, corruption undermines the legitimacy of government and democratic values such as trust and tolerance.

Economic effects
In the private sector, corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Although some claim corruption reduces costs by cutting bureaucracy, the availability of bribes can also induce officials to contrive new rules and delays. Openly removing costly and lengthy regulations are better than covertly allowing them to be bypassed by using bribes. Where corruption inflates the cost of business, it also distorts the playing field, shielding firms with connections from competition and thereby sustaining inefficient firms. Corruption also generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. Officials may increase
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the technical complexity of public sector projects to conceal or pave the way for such dealings, thus further distorting investment. Corruption also lowers compliance with construction, environmental, or other regulations, reduces the quality of government services and infrastructure, and increases budgetary pressures on government.

Environmental and social effects


Corruption facilitates environmental destruction. Corrupt countries may formally have legislation to protect the environment; it cannot be enforced if officials can easily be bribed. The same applies to social rights worker protection, unionization prevention, and child labour. Violation of these laws rights enables corrupt countries to gain illegitimate economic advantage in the international market. The Nobel Prize-winning economist Amartya Sen has observed that "there is no such thing as an apolitical food problem." While drought and other naturally occurring events may trigger famine conditions, it is government action or inaction that determines its severity, and often even whether or not a famine will occur. Governments with strong tendencies towards kleptocracy can undermine food security even when harvests are good. Officials often steal state property. In Bihar, more than 80% of the subsidized food aid to poor is stolen by corrupt officials. Similarly, food aid is often robbed at gunpoint by governments, criminals, and warlords alike, and sold for a profit.

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Effects on Humanitarian Aid


The scale of humanitarian aid to the poor and unstable regions of the world grows, but it is highly vulnerable to corruption, with food aid, construction and other highly valued assistance as the most at risk. Food aid can be directly and physically diverted from its intended destination, or indirectly through the manipulation of assessments, targeting, registration and distributions to favour certain groups or individuals. Elsewhere, in construction and shelter, there are numerous opportunities for diversion and profit through substandard workmanship, kickbacks for contracts and favouritism in the provision of valuable shelter material. Thus while humanitarian aid agencies are usually most concerned about aid being diverted by including too many; recipients themselves are most concerned about exclusion. Access to aid may be limited to those with connections, to those who pay bribes or are forced to give sexual favours. Equally, those able to do so may manipulate statistics to inflate the number beneficiaries and siphon of the additional assistance.

Other areas: health, public safety, education, trade unions, etc.


Corruption is not specific to poor, developing, or transition countries. In western countries, cases of bribery and other forms of corruption in all possible fields exist: under-the-table payments made to reputed surgeons by patients attempting to be on top of the list of forthcoming surgeries, bribes paid by suppliers to the automotive industry in order to sell low-quality connectors used for instance in safety equipment such as airbags, bribes paid by suppliers to manufacturers of defibrillators (to sell low-quality capacitors), contributions paid by wealthy parents to the "social and culture fund" of a prestigious university in exchange for it to accept their children, bribes paid to obtain diplomas, financial and other advantages granted to unionists by members of the executive board of a car
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manufacturer in exchange for employer-friendly positions and votes, etc. These various manifestations of corruption can ultimately present a danger for the public health; they can discredit specific, essential institutions or social relationships. Corruption can also affect the various components of sports activities (referees, players, medical and laboratory staff involved in anti-doping controls, members of national sport federation and international committees deciding about the allocation of contracts and competition places).

Affected Agencies/Institutions

Voglewede and Associates.


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Chapter 6 Conditions Favourable for Corruption


It is argued that the following conditions are favourable for corruption:

Information deficits:
o

Lacking freedom of information legislation. For example, the Indian Right to Information Act 2005 is perceived to have "already engendered mass movements in the country that is bringing the lethargic, often corrupt bureaucracy to its knees and changing power equations completely." Lack of investigative reporting in the local media. Contempt for or negligence of exercising freedom of speech and freedom of the press. Weak accounting practices, including lack of timely financial management. Lack of measurement of corruption. For example, using regular surveys of households and businesses in order to quantify the degree of perception of corruption in different parts of a nation or in different government institutions may increase awareness of corruption and create pressure to combat it. This will also enable an evaluation of the officials who are fighting corruption and the methods used. Tax havens which tax their own citizens and companies but not those from other nations and refuse to disclose information necessary for foreign taxation. This enables large scale political corruption in the foreign nations.
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o o

Lacking control of the government:


o

Lacking civic society and non-governmental organisations which monitor the government. An individual voter may have a rational ignorance regarding politics, especially in nationwide elections, since each vote has little weight. Weak civil service and slow pace of reform. Weak rule of law. Weak legal profession. Weak judicial independence. Lacking protection of whistleblowers.

o o o o o

Government Accountability Project


o

Lack of benchmarking; i.e., continual detailed evaluation of procedures and comparison to others who do similar things, in the same government or others, in particular comparison to those who do the best work. For example, the Peruvian organisation Ciudadanos al Dia has started to measure and compare transparency, costs, and efficiency in different government departments in Peru. It annually awards the best practices that have received widespread media attention. This has created competition among government agencies in order to improve.

Opportunities and incentives:


o

Individual officials routinely handle cash, instead of handling payments on a separate cash deskillegitimate withdrawals from supervised bank accounts are much more difficult to conceal.
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o o o o o

Public funds are centralized rather than distributed. Large, unsupervised public investments. Sale of state-owned property and privatization. Poorly-paid government officials. Government licenses needed to conduct business, e.g., import licenses, and encourage bribing and kickbacks. Long-time work in the same position may create relationships inside and outside the government which encourage and help conceal corruption and favouritism. Rotating government officials to different positions and geographic areas may help prevent this; for instance certain high rank officials in French government services (e.g., treasurer-paymasters general) must rotate every few years. Costly political campaigns, with expenses exceeding normal sources of political funding, especially when funded with taxpayer money.

Less interaction with officials reduces the opportunities for corruption. For example, using the Internet for sending in required information, like applications and tax forms, and then processing this with automated computer systems. This may also speed up the processing and reduce unintentional human errors. A windfall from exporting abundant natural resources may encourage corruption. War and other forms of conflict correlate with a breakdown of public security.

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Social conditions:
o

Family-, and clan-centred social structure, with a tradition of nepotism or favouritism being acceptable. Lacking literacy and education among the population. Frequent discrimination and bullying among the population. Tribal solidarity, giving benefits to certain ethnic groups In the Indian political system, for example, it has become usual that the leadership of national and regional parties are passed from generation to generation, creating a system in which a family holds the centre of power. Some examples are the Dravidian parties of south India and also the Congress party, which is one of the two major political parties in India.

o o

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Chapter 7 Administrative Corruption


The really basic thing in government is policy. Bad administration, to be sure, can destroy good policy, but good administration can never save bad policy. - Adlai E Stevenson Jr.

Administrative corruption occurs when a person indulges in corrupt practices like bribery to get a work done. It includes persons like higher authorities, officers, police officers, clerks, peons, etc. For example, if one gives money one can get anything difficult done very easily. With respect to a drivers license, if one gives money to the officer, theres no need to visit the office, theres no need to give the test. One will get driving license without breaking a sweat. Money makes the world go round is the magic phrase on everyones lips nowadays. With respect to passports, it is a well known fact that if one does not grease the palms of the verification officer, he will not give a satisfactory view or the application might get lost in the process. It is common knowledge that wherever one goes (be it hospitals, courts or other government institutions) one will have to shell out some money for any work to take place without any hindrance. Administrative corruption, the estimated losses, the agencies/ areas affected and the efforts to curb such corruption have been dealt with in the next two chapters.

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Chapter 8 The Affected Agencies


Bureaucracy
A 2005 study done by Transparency International (TI) in India found that more than 50% of the people had firsthand experience of paying bribe or peddling influence to get a job done in a public office. Taxes and bribes are common between state borders; Transparency International estimates that truckers pay annually US $5 billion in bribes. A 2009 survey of the leading economies of Asia, revealed Indian bureaucracy to be not just least efficient, out of Singapore, Hong Kong, Thailand, South Korea, Japan, Malaysia, Taiwan, Vietnam, China, Philippines, and Indonesia; but also found that working with India's civil servants was a "slow and painful" process.

Land and property


Officials often steal state property. In cities and villages throughout India, consisting of municipal and other government officials, elected politicians, judicial officers, real estate developers and law enforcement officials, acquire, develop and sell land in illegal ways.

Tendering processes and awarding contracts


Government officials having discretionary powers in awarding contracts engage in preferential treatment for selected bidders and display negligence in quality control processes. Many statefunded construction activities in India, such as road building, are dominated by construction mafias, which are groupings of corrupt public works officials, materials suppliers, politicians and construction contractors.

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Shoddy construction and material substitution (e.g., mixing sand in cement while submitting expenses for cement) result in roads and highways being dangerous, and sometimes simply washed away when India's heavy monsoon season arrives.

Medicine
In government hospitals, corruption is associated with nonavailability or duplication of medicines, getting admission, consultations with doctors and availing diagnostic services. One more common feature in the government hospitals is the perpetual non-availability of beds for Out Patients or more commonly known as Normal People.

Income tax department


There have been several cases of collusion of officials of the income tax department of India for a favourable tax treatment and relaxed prosecutions in return for bribes.

Preferential award of public resources


As detailed earlier, land in areas with short supply is relatively common, with government entities awarding public land to private concerns at negligible rates. Other examples include the award of mining leases to private companies without a levy of taxes that is proportionate to the market value of the ore.

Driver Licensing
A study4 conducted between 2004 and 2005 found that Indias driver licensing procedure was a hugely distorted bureaucratic process and allows drivers to get licenses despite their low driving ability through promoting the usage of agents. Individuals with high willingness to pay make a significant payment above the official fee and most of these extra payments
4

Bertrand, Marianne et. al. Obtaining a Drivers License in India: An Experimental Approach to Studying Corruption, The Quarterly Journal of Economics (Nov 2007, No. 122,4)
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are made to agents, who act as an intermediary between bureaucrats and applicants. The average license getter paid Rs 1080, approximately 2.5 times the official fee of Rs 450, in order to obtain a license. On average, those who hired agents had a lower driving ability, with agents helping unqualified drivers obtain licenses and bypass the legally required driving examination. Among the surveyed individuals, approximately 60% of the license holders did not take the licensing exam and 54% of those license holders failed an independent driving test.5 Agents are the channels of inefficient corruption in this bureaucratic driver licensing system, facilitating access to licenses among those who are unqualified to drive. Some of the failures of this licensing system are caused by corrupt bureaucrats who collaborate with agents by creating additional barriers within the system against those who did not hire agents.

Black money
Black money refers to money removed from the official economy (via corruption, bribery, tax evasion, etc.) and stored outside of the country. A November 2010 report from the Washingtonbased Global Financial Integrity estimates that India lost at least US$462 billion in illicit financial flows, another word for black money, from 1948 through 2008. The report also estimated the size of India's underground economy at approximately US$640 billion at the end of 2008 or roughly 50% of the nation's GDP.6

Corruption in Driver licensing Process in Delhi. http://www.economics.harvard.edu/faculty/mullainathan/files/Corruption.in.Driving.Licensing. Process.in.Delhi.pdf. 6 Kar, Dev (2010). The Drivers and Dynamics of Illicit Financial Flows from India: 1948-2008. Washington, DC: Global Financial Integrity. http://india.gfintegrity.org/.
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Black Money in Switzerland


According to a 2010 The Hindu article, unofficial estimates indicate that Indians had over US$1456 billion in black money stored in Swiss banks (approximately USD1.4 trillion). While some news reports claimed that data provided by the Swiss Banking Association Report (2006) showed India has more black money than the rest of the world combined, a more recent report quoted the SBA's Head of International Communications as saying that no such official statistics exist. Another report said that Indian-owned Swiss bank account assets are worth 13 times the countrys national debt. The current investigation is undertaken by the Income Tax Department.

Judiciary
According to Transparency International, judicial corruption in India is attributable to factors such as "delays in the disposal of cases, shortage of judges and complex procedures, all of which are exacerbated by a preponderance of new laws".

Armed forces
The Indian Armed Forces have witnessed corruption involving senior armed forces officers from the Indian Army, Indian Navy and Indian Air Force. A number of scandals in the 2000-2010 period damaged the military's reputation; such scandals included skimming of armed forces money, reselling of government property, and faking combat missions. Another example is the recent case brought to light where an ex-military personnel (now working as a lobbyist) tried to bribe the Army Chief V.K. Singh (offering Rs. 14 crores) to accept delivery of substandard trucks for the army.

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Chapter 9 Combating Corruption


Right to Information Act
The Right to Information Act (2005) and equivalent acts in the states require government officials to furnish information requested by citizens or face punitive action, computerization of services and various central and state government acts that established vigilance commissions have considerably reduced corruption or at least have opened up avenues to redress grievances. The 2006 report by Transparency International puts India at the 70th place and states that significant improvements were made by India in reducing corruption.

Ombudsmen
The Lokayukta is an anti-corruption organisation in the Indian states. These institutions are based on the Ombudsman in Scandinavian countries. An amendment to the Constitution has been proposed to implement the Lokayukta uniformly across Indian States as a three-member body, headed by a retired Supreme Court judge or High Court Chief Justice, and comprise of the state vigilance commissioner and a jurist or an eminent administrator as other members. Social welfare worker Anna Hazare leads the movement to compel the Indian Government to notify the Committee for the implementation of the Lokayukta against corruption as an independent body and also giving enough powers to the Lokayukta to also receive corruption complaints against politicians, bureaucrats and even sitting judges. Anna Hazare is pursuing his agenda to pass the Jan Lokpal bill or the Peoples Bill, and has gathered the support of many citizens residing in

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metropolitan cities of India. He was also on an indefinite fast at the Ramlila Grounds, Delhi, in order to campaign for the cause.

Whistleblowers
Whistleblowers play a major role in the fight against corruption. India currently does not have a law to protect whistleblowers, which was highlighted by the assassination of Satyendra Dubey. Indian courts are regularly ordering probe in cases of murders or so-called suicide of several whistleblowers. One of the latest cases of such murder is of V. Sasindran, Company Secretary of Palakkad based Malabar Cement Limited, a Government company in Kerala and his two minor children. Kerala High Court ordered CBI probe on 18 February 2011. Initially, CBI showed its unwillingness for probing into such cases citing over-burden as a reason.

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Chapter 10 Legal and Moral Corruption


Corruption is derived from the Latin verb rumpere, meaning: to break. According to this approach, corruption is where the law is clearly broken. This requires that all laws must be precisely stated, leaving no doubts about their meaning and no discretion to the public officials. A legal interpretation of corruption provides a clearly demarcated boundary between what is a corrupt activity and what is not. If an officials act is prohibited by laws established by the government, it is corrupt; if it is not prohibited, it is not corrupt even if it is abusive or unethical. (John A. Gardiner, 1993. Defining Corruption In: Corruption and Reform 7) The legal approach provides a neutral and static method of adjudicating potentially emotive and perception determined concepts of corruption. An understanding of corruption from law perspective serves to underline a deterioration of self-regulated behaviour and a dependence on the legal approach to determine right from wrong. The complexities of modern governance and a proliferation of corruption scandals have corresponded with a proliferation of complex corruption legislation. Morality is increasingly being legislated for in the absence and loss of faith in self- regulated behaviour. Although an act is committed within legal parameters it may lie outside moral boundaries. A corrupt act can be camouflaged by lawful justification. For example, undue emphasis on narrow legalism has obscured more subtle yet costly manifestations of

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misgovernance, where legal corruption may be more prevalent than illegal forms.7 From this perspective corruption encompasses undue influence over public policies, institutions, laws and regulations by vested private interests at the expense of the public interest. Cultural change, rather than legal change, may be necessary to impede corrupt behaviour. Non-corrupt actions may be within the letter of the law but do not account for the spirit of the law. The legal approach diminishes the role of moral discretion and is constrained by clearly defined edicts.8

(D. Kaufmann, September 2006, Corruption, Governance and Security. In: World Economic Forum. Global Competitiveness Report 2004/2005.) 8 Elaine Byrne, 2007. The Moral and Legal Development of Corruption: Nineteeth and Twentieth Century Corruption in Ireland. PhD Thesis, University of Limerick.
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Chapter 11 History of Corruption in India


The chapter deals with the history of corruption in India, starting from the ancient period moving on to the British period and then moving on to the post-independent period. Accordingly, the chapter has been divided into different sections dealing with the various periods which are as follows:

The Ancient Period


Corruption in India has been a problem ever since the country had a multilayered administration composed of officers, ministers and other administrative chiefs. The corruption problem in ancient India, coupled with bribery, kept infesting the society more and more at an increasing rate. This is quite clear from the way the writers like Ksemendra and Kalhana had condemned the government officials, as well as other employees at different levels, in their celebrated works. Ksemendra in his Dasavataracaritam has advised the king to remove all the officials, ministers, generals and priests from their respective offices with immediate effect, who were either taking bribes themselves or had been indulging in corruption in some other way. Ksemendra also found an answer to the much discussed question as to how corruption should be stopped. He explicitly addressed the contemporary intelligentsia to step forward and shoulder the responsibility of purging their folks.

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Kalhana too was merciless in his condemnation of the corrupt government officers. He damned the officials outright and asked the king to stay alert. Kalhana has also cited some example: He said that Bijja became even richer than the king as he resorted to unfair means of getting money, while Ananda managed to achieve a high post in the office by bribing his higher officials.

Embezzlements and Black Money in Ancient India


Embezzlement in India was also prevalent in the ancient period, mostly among the police and administrative officers. In fact, Kautilya has given a detailed list, referring to not less than forty ways of embezzlement that the treasury officers in his time used to practice. The most common of them were pratibandha or obstruction, prayoga or loan, vyavahara or trading, avastara or fabrication of accounts, pariahapana or causing less revenue and thereby affecting the treasury, upabhoga or embezzling funds for self enjoyment, and apahara or defalcation. He uses a nice metaphor too "Just like one cannot resist tasting the drop of honey or poison that finds itself on the tip of the tongue, a government servant can never resist devouring even a bit of the king's revenue. Just as fish moving under water cannot possibly be found out either as drinking or not drinking water, so government servants employed in the government work cannot be found out while taking money for themselves."

Legal Punishments for Corruptions in Ancient India


There were a wide range of legal punishments for corruptions in ancient India for the depletion of treasury monetary, corporal, and even sentences to death. Sometimes corrupt police officers would let the prisoners break away after taking a healthy amount of bribe. However, if they were caught, both the
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escaping prisoner and the corrupt police official were sentenced to death at the same time. Considering the present day situation of law and order in a number of agitated places in India, as well as the general corruption on the part of some police officers, one can quite confidently conclude that the age of the Arthasastra was quite good enough as it was successful in reducing the number of such cases. The accountants of all sections, departments and tiers needed to submit their accounts and audit reports to their respective higher officials on a regular basis. The work officers or the Karmikas needed to report the details to the Officer in Charge of Accounts, or the Karanika, every year. In Police Administration in Ancient India, K. K. Mishra has explicitly shown how they were punished for lack in their parts in audits and related jobs "If they did not turn up for this purpose and came without the account books or balance sheets properly arranged, they were to be fined ten times of the amount involved. Again, if the workofficer presented himself with the records for being audited but the accounts-officer was not ready for audit, he (accountsofficer) was to be imposed the fine of the first amercement." Passing counterfeit coins as genuine ones was also widely practiced, but werent met with punishments often, very much like the circumstances prevalent today.

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The British Period


Administrative corruption was rife among public servants under British rule. During the early stages of British rule in India, corruption was quite rampant among the officers of the East India Company and of the British government. During the period of war money was spent for procuring essential supplies. It created unprecedented opportunities for dishonest officers and unscrupulous contractors to acquire wealth by illegal means. The wartime scarcities coupled with controls and licensing system provided ample opportunities for bribery and corruption. When His Majesty's government took over the reins of the government from the Company, it applied the same principle to its own Indian staff through which it ruled this huge (then undivided) nation from Peshawar to Dhaka to Kanyakumari. Keep the officers and men happy to win their loyalty was their motto. What is called bribe today was then called a fee or commission, and was given openly across the table and not, as now, under it. So far as the British rulers were concerned, bribery was not an issue at all. It only enabled the government to keep its employees contented with small salaries and run the administration on a low budget while allowing the employees to help themselves with extra pickings from the public as perks of their jobs. A "black money" culture also evolved over time. Taxation rates during both the Mughal and British periods were extortionate. There were taxes on land, on trees, on cattle, on marriage, etc. The Mughals had 40 different taxes. Both Mughal and British tax collectors (the zamindars) used to go to villages and impose tax on the appearance of prosperity. It was natural for people to hide their wealth. The combination of these factors and a shortage economy resulted in the phenomenon continuing.

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The Post-Independence Period


In his magnum opus Discovery of India (1946), the first prime minister of free India, Jawahar Lal Nehru expressed his own anguish in detail about the corruption prevailing during British Rule. According to Nehru, loot (plunder) was the only objective of early British India colonials. The teeming millions of India were awfully poor and growing poorer while the microscopic minority was prospering under colonial rule. Corruption, cruelty, callousness and a complete disregard of public welfare flourish and poison the air, Nehru observed. In 1950, A.D. Gorwalas report observed that quite a few of Nehru's own ministers were corrupt. The Santhanam Committee, 1962 also pointed to the fact that ministers had enriched themselves illegitimately through nepotism. The Government of India tried its best to shield its ministers. V K Krishna Menon, the Indian High Commissioner to Britain in the early 1950s, bypassed protocol to sign a deal worth INR (Indian Rupee) 8 million with a foreign firm for the purchase of army jeeps. While most of the money was paid up front, only a part of the total volume was supplied. Jawahar Lal Nehru, now prime minister of India, forced the government to accept them. Soon after, in February 1956 Krishna Menon was inducted into the Nehru cabinet. Tavleen Sigh in her 2011 article Time for dynastic democracy to die has judiciously observed that: When a parliamentary constituency becomes an inheritance, it becomes a private estate whose purpose is to benefit the family who owns it. And, the reason why most of our political parties have been turned into private property is because politics is the easiest way to make money in India." Thus mass-scale distribution of favours and concessions coupled by reciprocal favours, concessions, bribes, etc., triggered various corruptions and, inter alia, dependence on crimes and criminals
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became inevitable. The findings of British historian Patrick French in his 2011 survey are still quite consistent with the prerequisites of a dynastic democracy. Every Indian MP under the age of 30 is hereditary and two-thirds of Indian MPs under the age of 40 are from political families. During the early 1950s, Indira Gandhi served as an unofficial personal assistant to her father Jawahar Lal Nehru, the then prime minister. In 1955, she became a member of the Congress Party's working committee and within four years, president of the party. This was a formative period, both for the country and the emerging Nehru-Gandhi dynasty. To mimic the tenets of a socialist democracy, massive investments were diverted in building social infrastructure like dams, national highways, mines, and so forth, dubbed as temples of modern India, seeming to replicate the Soviet model of planning. The licensing machinery was often the prime mover behind the parallel economy of corruption and black money. Nehru died in 1964, and was succeeded as prime minister by Lal Bahadur Shastri. In 1966, Prime Minister Shastri died unexpectedly during his official visit to Moscow. Indira Gandhi became the new Prime Minister. By 1973 vast areas of Northern India, including the capital city, New Delhi, were rocked by demonstrations against high inflation, the poor state of the economy, rampant corruption, and poor standards of living. In June 1975, the High Court of Allahabad declared her guilty of illegal practices during the last election campaign, and ordered her to vacate her seat. There were demands for her resignation and Indira Gandhi's response was to declare a state of emergency to suspend democracy for an indefinite period. Political opponents were imprisoned and press was subjected to strict censorship. During the emergency, Indira Gandhis second son Sanjay's influence on Indira and the government increased dramatically. According to Mark Tully, "His inexperience did not stop him from using the draconian powers his mother, Indira Gandhi, had taken
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to terrorise the administration, setting up what was in effect a police state. Indira Gandhi, holding both the posts of the Prime Minister and party president, herself controlled the party funds, creating the precedent for engendering money power in politics. After Indira Gandhis assassination in October 1984, her elder son Rajiv Gandhi was the natural choice to grace the office of prime minister of India. V.P. Singh, Rajiv Gandhis finance minister, appointed an American detective agency, Fairfax, to investigate the illegal stacking of foreign exchange overseas by Indians. Rajiv promptly transferred V.P. Singh from finance to defence. When as Defence Minister V.P. Singh, ordered another enquiry into various transactions, this was regarded as a body blow directed at the first family of the nation, since Prime Minister Indira Gandhi herself had been defence minister in 1981. There was criticism of Singhs conduct in the Cabinet meeting, and he soon resigned from government. A few days later, on 16 April 1987, the Bofors scandal surfaced. Rajiv Gandhi and several others were accused of receiving kickbacks, and there was speculation that the amount was to the tune of INR400 million, from Swedish company Bofors AB in reward for a contract to supply the Government of India with 155 mm field howitzer guns. Sten Lindstrom, Sweden's special prosecutor investigating the pay-offs associated with the sale of weapons by Bofors to the Government of India, revealed that a close friend of Rajiv Gandhis Italian wife Sonia Gandhi, Ottavio Quattrocchi had received kickbacks in the millions. Quattrocchi, in spite of substantial evidence against him, had managed to escape prosecution in India. Rajiv gave no public denial of his and his familys involvement.9

Arun G.Mukhopadhyay, India: dynasty, corruption and plunder, 11 March 2012.


36

Chapter 12 Laws relating to Corruption


(i) The Prevention of Corruption Act, 1988:
The Prevention of Corruption Act 1988 (hereinafter referred to as the Corruption Act) was enacted to consolidate different anticorruption provisions from various pieces of legislation under one umbrella and to make them more effective. The Corruption Act, inter alia, widened the scope of the definition of a public servant; enhanced penalties provided for offences in earlier laws; incorporated the provisions of freezing of suspected property during trial; mandated trial on a day-to-day basis, prohibited the grant of stay on trial; etc. The Corruption Act is the main law for dealing with offences pertaining to corruption in India, however many avenues of corruption cannot be dealt with under the Prevention of Corruption Act, 1988.

(ii) The Indian Penal Code, 1860:

Section 161 to 165 of IPC deals with various offences of corruption and this is the first step to fight against corruption committed by the public servants. Section 161 of IPC deals with a public servant who accepts or obtains or agrees to accept from any person for himself or for any other person any gratification other than the legal remuneration. Section 162 of IPC deals with a person who accepts or obtains or agrees to accept or attempts to obtain for himself or for any other person any gratification by corrupt or illegal means to influence a public servant.

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Section 163 of IPC deals with a person who accepts or obtains or agrees to accept or attempts to obtain for himself or for any other person any gratification for inducing and by exercise of personal influence with any public servant. Section 164 of IPC deals with abetment of offence of sec.162 and 163 IPC. Section 165 of IPC deals with a public servant who accepts or obtains or agrees to accept or attempts to obtain for himself or for any other person any valuable thing without any consideration or less consideration.

(iv) India and the United Nations Convention against Corruption 2003 (UNCAC):
India has welcomed the UNCAC, which provides for international co-operation and mutual legal assistance in investigating cases of corruption and recovery of assets. India signed the UNCAC in December 2005. By signing the Convention India has reiterated its resolve to strengthen international co-operation as envisaged in the Convention. It is in the process of enactment of requisite enabling legislations by the concerned Ministries or Departments before ratifying the Convention. Once ratified, the Convention will boost Indias effort and commitment to fight corruption at both domestic and international level.

(v) The Prevention of Money Laundering Act 2002 (Article 23 of the UNCAC):
Many public servants are able to hold their ill-gotten wealth in foreign countries, which they subsequently transfer to their homeland through money laundering, disguising them as funds, apparently from a legal source. This Act empowers the Directorate of Enforcement, India, and Financial Intelligence Unit,
38

India, both agencies of the Government of India, to investigate and prosecute such persons under the said Act.

(vi) The Foreign Exchange Management Act 1999:


Middlemen or touts, who take huge commissions for brokering deals pertaining to purchases from foreign suppliers, often transfer such money in foreign currencies, claiming it to be the proceeds of some business abroad. This Act empowers the Directorate of Enforcement, India to investigate and prosecute such persons under the said act.

(vii) The Right to Information Act 2005:


It is a well-known fact that too much secrecy in public administration breeds corruption. The Right to Information Act aims at ensuring efficiency, transparency and accountability in public life. This Act requires all public authorities, except the ones that handle work relating to national security, to publish all information about their functioning at regular intervals through various means of communication, including the Internet. Now any person can seek any information from the concerned public authority just by filing an application at almost at no cost. The public authority has to reply to the application compulsorily within 30 days. If the information sought is denied, the applicant has a right to agitate further before the appellate authorities under this Act. This can indeed be described as a revolutionary step towards the eradication of corruption from public life.

(viii) India and the United Nations Convention against Corruption 2003 (UNCAC):
India has welcomed the UNCAC, which provides for international co-operation and mutual legal assistance in investigating cases of corruption and recovery of assets. India signed the UNCAC in December 2005. By signing the Convention India has reiterated
39

its resolve to strengthen international co-operation as envisaged in the Convention. It is in the process of enactment of requisite enabling legislations by the concerned Ministries or Departments before ratifying the Convention. Once ratified, the Convention will boost Indias effort and commitment to fight corruption at both domestic and international level.

(ix) Cases referred by the Central Vigilance Commission (CVC) and the Chief Vigilance Officers (CVOs) of other Government Departments:
The Central Vigilance Commission is a statutory body which monitors corruption in governmental departments. It supervises the work of Chief Vigilance Officers of all the departments of government and issues guidelines to them. The CVC also receives complaints from the general public about corruption. It refers such complaints to the CBI for verification and investigation if found to contain verifiable allegations. The CVOs are in-house supervisors of government departments who monitor the conduct of personnel and enquire into complaints against them pertaining to corruption. If upon enquiry they conclude that a criminal case under the Corruption Act appears to have been made out, they refer the case to the CBI for investigation.

(x)

Use of Telephonic/Electronic Surveillance:

The legal provisions relating to telephonic or electronic surveillance under the Indian Telegraph Act 1885 are effectively used by the CBI to gather accurate information about corrupt activities of the public servants. After ascertaining details about various phone numbers and email identifications used by the public servant, permission of the competent authority is taken to put the same under surveillance. Information gathered during
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such surveillance has been successfully used in exposing big scams.

(xi)

Freezing, Seizure and Confiscation of Properties - The Criminal Law (Amendment) Ordinance, 1944 (Article 31 of UNCAC):

This is an important law on freezing, seizure and confiscation of properties which are proceeds of crime, including offences under the Corruption Act. Such properties identified during investigation can be frozen under this law. Properties can remain frozen till disposal of the case by the court after completion of the investigation. If the alleged offence is proved in the court of law and the property is proved to be the proceeds of crime, the court will order its confiscation.

(xii) Criminal Procedure Code 1973 together with Mutual Legal Assistance Treaties (MLAT) in Criminal Matters and Extradition Treaties:
Sec. 166 A and 166 B of the above code empower the crime investigation agencies of India to make requests to other countries as well as to entertain requests from other countries to render assistance in the investigation of crime registered in the respective countries. Such letters of request are popularly known as Letters Rogatory. Such Letters Rogatory are executed on the basis of Mutual Legal Assistance Treaties and Extradition Treaties India has signed with other countries. To date India has Mutual Legal Assistance Treaties in Criminal Matters with 20 countries and Extradition Treaties with 25 countries. The Mutual Legal Assistance Treaties invariably have a chapter on asset recovery and sharing the same. With other countries, international cooperation is sought on the basis of guarantee of reciprocity.

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Punishment under IPC and Prevention of Corruption Act

No.

Indian Punishment Prevention of Penal Code Corruption Act, 1988 Section 161 3 Years Section 7

Punishment

Not less than six months. May extend to 5 Years. Not less than six months. May extend to 5 Years. Not less than six months. May extend to 5 Years. Not less than six months. May extend to 5 Years. Not less than six months. May extend to 5 Years. Not less than six months. May extend to 5 Years.

Section 162

3 Years

Section 8

Section 163

Section 9

Section 164

3 Years

Section 10

Section 165

3 Years

Section 11

Section 165A

3 Years

Section 12

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Chapter 13 Facts, Figures and a Brief Comparison


Cases of graft registered with the CBI against government servants have been steadily on the rise in the past four years. Statistics with the government show corruption cases against government servants have risen from 17.68% in 2008 to 28.39% in 2011. The figure had shot up to 22.44% in 2009, but fell to 19.72% in 2010. It has picked up again as per statistics till June 30, 2011. In the past four years, 3,621 cases were registered against government officers and other persons with the CBI. There were 991 cases registered in 2008; 1,119 in 2009 and 1,009 in 2010. So far this year, the CBI has registered 502 cases. There has been a decline in the number of cases registered with the CBI against people other than government servants. The percentage of cases for such people was 52.86% of all cases in 2008. The figures were 39.15% and 44.67% in 2009 and 2010 respectively. It has dropped to 41.97% this year. The disposal rate of the CBI in corruption cases has also seen a drop from 33.49% in 2008 to 25.62% this year.10 The figures for 2009 and 2010 were 38.68% and 41.39%. While replying to a written question in the Rajya Sabha, V Narayanswamy, minister of state for the ministry of personnel, public grievances and pension, said: No centralized data is maintained with respect to searches carried out by the CBI while investigating the case.
10

DNA, Zee Research Group


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For years, the government has been unsuccessfully trying to address the issue of corruption among public servants. In 1966, the government formed the administrative reforms commission to revamp the public administrative system. To reduce corruption, the second administrative reforms commission was formed in 2005 with former law minister Veerappa Moily as the chairman. We gave several recommendations to improve governance in our country, but the government did not implement many of them, alleged V Ramachandran, member of the second administrative reforms commission. Things could have been different had the government followed instructions completely. The current political crisis over the Lokpal Bill could have been avoided had the government processed the bill three years ago as per our recommendation. The second administrative commission in its fourth report - Ethics in governance - submitted to the government in January 2007, had recommended establishment of a Lokpal institution. The commission was of the view that the Lokpal should be a threemember body and had recommended that the prime ministers conduct must be scrutinized by the Lokpal.. According to the latest ranking by Transparency International, India is still listed with the most corrupt nations of the world. However, one can take solace in the fact that its ranked above its neighbouring countries (minus Sri Lanka). India has been ranked 95th by Transparency International while Sri Lanka is at 93, Pakistan is at 143 and Bangladesh is ranked at 134. Amongst the SAARC countries, Nepal is ranked at 146. Amongst the developed economies, Russia is the most corrupt nation with the rank of 154. Earlier, India was ranked at the 84th position but the corruption charges in the Commonwealth Games took its toll on Indias ranking. U.S.A. has been ranked 22nd, U.K. is at the 20th position while Denmark, New Zealand and Singapore are the most honest nations sharing the 1st position.
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The following is brief information about the ranking of a few countries: (High scores mean that the country is less corrupt and low mean more corrupt)

Denmark

9.3

New Zealand

9.3

Singapore

9.3

Canada

8.9

Australia

8.7

Switzerland

8.7

15

Germany

7.9

17

Japan

7.8

20

UK

7.6

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22

USA

7.1

25

France

6.8

28

UAE

6.3

54

SA

4.5

69

Brazil

3.7

78

China

3.5

91

Sri Lanka

3.3

95

India

3.1

105

Argentina

2.9

134

Bangladesh

2.4

143

Pakistan

2.3

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146

Nepal

2.2

154

Russia

2.1

178

Somalia

1.1

Nor is the country well organized to combat corruption: A multiplicity of overlapping anti-corruption agencies, and dilatory legal processes for tackling cases, has made it difficult to bring the corrupt to book. Indias campaign finance regime also has potentially negative effects on service delivery: The unregulated cost of elections - and the lack of legitimate funding sources, including a system of public funding - has created incentives to extract rents from administrative functions, including the delivery of services, to fund campaign expenses or pay back contributors. Despite, these systemic problems, many innovations in service delivery have taken place in different sectors and states with positive results for citizens, as this report shows. Further: 1.6 The lack of accountability in turn provides opportunities for corruption. India ranked in ninetieth place in Transparency Internationals Corruption Perception Index (CPI) in 2005. Nor is the country well organized to combat corruption: A multiplicity of anti-corruption institutions with overlapping functions undermines their coherence: A patchwork of Lok Ayuktas, State Vigilance Commissions, and Anti-Corruption Bureaus with widely varying functions constitutes the system for punishing corruption in India's states. Because law and order is a state subject, the Central Bureau of Investigation (CBI) cannot pursue
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corruption allegations against a member of the All-India Services, including the IAS, without state government permission. Departmental disciplinary processes are weak: Civil servants have misused Article 311 of the Constitution, which provides protection against wrongful dismissal, to draw out cases against them to extreme lengths, making it difficult to remove a government servant for non-performance. The Hota Committee on Administrative Reforms has recommended that Article 3 11 be amended to allow for the expedited removal of civil servants involved in corruption cases.11

11

The World Bank Study on Reforming Public Services in India (Feb 2006)
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Chapter 14 Agencies to check Corruption 1. Central Vigilance Commission


Central Vigilance Commission (CVC) is an apex Indian governmental body created in 1964 to address governmental corruption. It has the status of an autonomous body, free of control from any executive authority, charged with monitoring all vigilance activity under the Central Government of India, and advising various authorities in central Government organisations in planning, executing, reviewing and reforming their vigilance work. It was set up by the Government of India in February, 1964 on the recommendations of the Committee on Prevention of Corruption (also known as the Santhanam Committee), headed by Shri K. Santhanam, to advise and guide Central Government agencies in the field of vigilance. Nittoor Srinivasa Rau was selected as the first Chief Vigilance Commissioner of India. The Annual Report of the CVC not only gives the details of the work done by it but also brings out the system failures which leads to corruption in various Departments/ Organisations, system improvements, various preventive measures and cases in which the Commission's advises were ignored etc.

Role
The CVC is not an investigating agency, and it either gets the investigation done through the CBI or through the Departmental Chief Vigilance Officers.

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The only investigation carried out by the CVC is that of examining Civil Works of the Government which is done through the Chief Technical Officer. Corruption investigations against government officials can proceed only after the government permits them. The CVC publishes a list of cases where permissions are pending, some of which may be more than a year old. The CVC has also been publishing a list of corrupt government officials against which it has recommended punitive action. A few years after the murder of IIT Kanpur alumnus NHAI engineer Satyendra Dubey, the CVC launched an initiative to protect whistleblowers. However, this program has been criticized by ex-Chief Justice of India R.C. Lahoti as being ineffective.

Appointment
The Central Vigilance Commissioner and the Vigilance Commissioners shall be appointed by the President by warrant under his hand and seal; provided that every appointment under this sub-section shall be made after obtaining the recommendation of a Committee consisting of:

The Prime Minister Chairperson. The Minister of Home Affairs Member. The Leader of the Opposition in the House of the People (The Lok Sabha) Member.

Removal
The Central Vigilance Commissioner or any Vigilance Commissioner shall be removed from his office only by order of the President on the ground of proved misbehaviour or incapacity after the Supreme Court, on a reference made to it by the President, has, on inquiry, reported that the Central Vigilance
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Commissioner or any Vigilance Commissioner, as the case may be, ought on such ground be removed. The President may suspend from office, and if deem necessary prohibit also from attending the office during inquiry, the Central Vigilance Commissioner or any Vigilance Commissioner in respect of whom a reference has been made to the Supreme Court until the President has passed orders on receipt of the report of the Supreme Court on such reference. The President may, by order, remove from office the Central Vigilance Commissioner or any Vigilance Commissioner if the Central Vigilance Commissioner or such Vigilance Commissioner, as the case may be:

is adjudged an insolvent; or has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or engages during his term of office in any paid employment outside the duties of his office; or is, in the opinion of the President, unfit to continue in office by reason of infirmity of mind or body; or Has acquired such financial or other interest as is likely to affect prejudicially his functions as a Central Vigilance Commissioner or a Vigilance Commissioner.

Organisation
The Central Vigilance Commission has its own Secretariat, Chief Technical Examiners' Wing (CTE) and a wing of Commissioners for Departmental Inquiries (CDI).

Secretariat
The Secretariat consists of a Secretary of the rank of Additional Secretary to the GOI, one officer of the rank of Joint Secretary to the GOI, ten officers of the rank of Director/Deputy Secretary, four Under Secretaries and office staff.

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Chief Technical Examiners' Wing (CTE)


The Chief Technical Examiner's Organisation constitutes the technical wing of the Central Vigilance Commission (India) and is manned by two Engineers of the rank of Chief Engineers (designated as Chief Technical Examiners) with supporting engineering staff. The main functions assigned to this organisation are:

Technical audit of construction works of Governmental organisations from a vigilance angle; Investigation of specific cases of complaints relating to construction works; Extension of assistance to CBI in their investigations involving technical matters and for evaluation of properties in Delhi; and Tendering of advice/assistance to the Commission and Chief Vigilance Officers in vigilance cases involving technical matters.

There are fifteen posts of Commissioners for Departmental Inquiries (CDI) in the Commission, 14 in the rank of Deputy Secretaries/Directors and one in the rank of Joint Secretary to Government of India. The CDIs function as Inquiry Officers to conduct inquiries in departmental proceedings initiated against public servants.

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2. Central Bureau of Investigation


The Central Bureau of Investigation (CBI) is a governmental agency belonging to Government of India that serves as both a criminal investigation body, national security agency and intelligence agency. The CBI is a premier investigating police agency in India. It is an elite force playing a major role in preservation of values in public life and in ensuring the health of the national economy. It is also the nodal police agency in India which coordinates investigation on behalf of Interpol Member countries. The services of its investigating officers are sought for all major investigations in the country. The agency was established in 1941 as the Special Police Establishment. Central Bureau of Investigation was later established on 1 April 1963. Its motto is "Industry, Impartiality, Integrity". The agency headquarters is the new-state-of-the-art building, located in New Delhi. The agency has other field offices located in major cities throughout the India. The CBI is controlled by the Department of Personnel and Training in the Ministry of Personnel, Public Grievances and Pension of the Union Government usually headed by a Union Minister who reports directly to the Prime Minister. While analogous in structure to the FBI, the CBI's powers and function are severely limited to specific crimes based on Acts (mainly the Delhi Special Police Establishment Act, 1946). The CBI is the official Interpol unit for India.

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History
The Central Bureau of Investigation traces its origin to the Special Police Establishment (SPE) which was set up in 1941 by the Government of India. The functions of the SPE were to investigate cases of bribery and corruption in transactions with the War & Supply Department of India, which was set up during the course of World War II, with its headquarters at Lahore. The Superintendent of War Department and SPE was Khan Bahadur Qurban Ali Khan who later on became the Governor of North West Frontier Province on the creation of Pakistan. The first legal advisor of War Department was Rai Sahib Karam Chand Jain. Even after the end of the War, the need for a Central Government agency to investigate cases of bribery and corruption by Central Government employees was felt. Rai Sahib Karam Chand Jain continued to remain the Legal Advisor when this department was later transferred to the Home Department under the Delhi Special Police Establishment Act brought into force in 1946. The scope of SPE was enlarged to cover all departments of the Govt. of India. The jurisdiction of the SPE extended to all the Union Territories and could be extended also to the States with the consent of the State Government concerned. Sardar Patel who was the Deputy Prime Minister of free India and was incharge of the Home Department took special interest in weeding out corruption from the erstwhile princely states like Jodhpur, Rewa, Tonk etc. Sardar Patel directed the Legal Advisor Karam Chand Jain to monitor the criminal proceedings against the Dewans/ Chief Ministers of these states.

D.P. Kohli as director The founder director of the CBI was D.P. Kohli who held office from 1 April 1963 to 31 May 1968. Before this, he was Inspector General of Police of the Special Police Establishment from 1955 to 1963. Before that he held responsible positions in police in
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Madhya Bharat, Uttar Pradesh and Govt. of India. He was Police Chief in Madhya Bharat before joining the SPE. Kohli was awarded 'Padma Bhushan' in 1967 for his distinguished services. Kohli was a visionary who saw in the Special Police Establishment the potential of growing into the national investigative agency. He nurtured the organisation during his long stint as Inspector General and as Director and laid the solid foundation on which the organisation grew over the decades to become what it is today. CBI takes shape As the CBI, over the years, established a reputation of being India's premier investigative agency with adequate resources to deal with complicated cases, demands were made on it to take up investigation of more cases of conventional crime such as murder, kidnapping, terrorism, etc. Apart from this, the Supreme Court and even the various High Courts of the country also started entrusting such cases for investigation to the CBI on petitions filed by aggrieved parties. Taking into account the fact that several cases falling under this category were being taken up for investigation by the CBI, it was found expedient to entrust such cases to the Branches having local jurisdiction. It was therefore decided in 1987 to constitute two investigation divisions in the CBI, namely, Anti-Corruption Division and Special Crimes Division, the latter dealing with cases of conventional crime, besides economic offences. The CBI is a central subject under the Constitution of India, meaning that it reports to the Indian Government and not to the individual states. Director As of November 30, 2010 the director of CBI is former Indian Police Service officer Amar Pratap Singh. He replaced Ashwani Kumar.

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Organisation and rank structure

Organisation chart for the CBI The CBI is headed by a Director, an IPS Officer of the rank of Director General of Police or Commissioner of Police (State). Director is selected based on the procedure laid down by CVC Act 2003 and has a tenure of 2 years. The other important ranks in the CBI can be also handled by IRS officers are Special Director, Additional Director, Joint Director, Deputy Inspector General of Police, Senior Superintendent of Police, Superintendent of Police, Additional Superintendent of Police, Deputy Superintendent of Police. The rest are recruited directly by the CBI, Inspector, SubInspector, Assistant Sub-Inspector, Head Constable, Senior Constable and Constable. According to annual reports Staff of CBI is usually divided between Ministerial staff, Ex-cadre posts which are usually of technical nature, Executive Staff and EDP Staff. Hindi Bhasha staff belongs to the Department of official languages.

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Ministerial Staff includes LDC, UDC, and Crime Assistants etc. Executive Staff includes Constables, ASI, Sub-Inspectors, and Inspectors etc. EDP Staff includes Data Entry Operators, Data Processing Assistants, Assistant Programmers, Programmers and SSA. Jurisdiction powers, privileges and liabilities The legal powers of investigation of CBI are derived from the DSPE Act 1946. This Act confers concurrent and coextensive powers, duties, privileges and liabilities on the members of Delhi Special Police Establishment (CBI) with Police Officers of the Union Territories. The Central Government may extend to any area, besides Union Territories, the powers and jurisdiction of members of the CBI for investigation subject to the consent of the Government of the concerned State. While exercising such powers, members of the CBI of or above the rank of Sub Inspector shall be deemed to be officers in charge of Police Stations of respective jurisdictions. The CBI can investigate only such of the offences as are notified by the Central Government under the DSPE Act. Jurisdiction of CBI vis-a-vis State Police Law and Order is a State subject and the basic jurisdiction to investigate crime lies with State Police. Besides, due to limited resources, CBI would not be able to investigate crimes of all kind. CBI may investigate:

Cases which are essentially against Central Govt. employees or concerning affairs of the Central Govt. and the employees of the Central Public Sector Undertakings and Public Sector Banks. Cases in which the financial interests of the Central Government are involved. Cases relating to the breaches of Central Laws with the enforcement of which the Government of India is mainly concerned.
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Big cases of fraud, cheating, embezzlement and the like relating to companies in which large funds are involved and similar other cases when committed by organised gangs or professional criminals having ramifications in several States. Cases having interstate and international ramifications and involving several official agencies where, from all angles, it is considered necessary that a single investigating agency should be in charge of the investigation.

Corruption in CBI Because of its intensely political overtones, it has been exposed by its former bigwigs like Joginder Singh and BR Lall who were Director and Joint Director respectively, to be engaging in nepotism, mal-prosecution and outright corruption. In his book, Who Owns CBI, BR Lall, an honest and upright officer details the modus operandi of manipulating and derailing investigation. This organisation has become synonymous with corruption as information obtained under the RTI Act has revealed. Even the Top Bosses are known for stooping to illegal fund diversions. RTI activist Krishnanand Tripathi has alleged harassment from CBI in order to save itself from exposure through RTI. CBI has now been exempted from RTI act. Controversies Normally, cases assigned to the CBI are sensitive and of national importance. It is a usual practice for the respective state police departments, to initially register any case coming under its jurisdiction, and if necessary, through mediation by the central government, the cases may be transferred to the CBI. The CBI handles many high profile cases, and is never far from controversy. The CBI has come under severe criticism recently for its mishandling of several scams.

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Bofors scandal In January 2006, it was found that CBI had quietly unfrozen bank accounts of Italian businessman Ottavio Quattrocchi, one of the prime accused in the Bofors scandal of 1986 which had tainted the Rajiv Gandhi government. The CBI was responsible for the inquiry into the Bofors Case. Associates of then Prime Minister Rajiv Gandhi were linked to alleged pay-offs made in the mid1980s by the Swedish arms firm AB Bofors, with $40 million in kickbacks moved from Britain and Panama to secret Swiss banks. The 410 howitzer field guns purchased in the $1,300 million arms sale were reported to be inferior to those offered by a French competitor. The CBI, which unfroze Rs 21 crore in a London bank in accounts held by Bofors scam accused Quattrocchi and his wife Maria in 2006, has facilitated his travel across the globe by asking Interpol to take him off the wanted list on 29 Apr 2009. Following a communication from the CBI, Interpol withdrew the Red Corner Notice against Quattrocchi. The development, that came barely three weeks before the end of the Manmohan Singh governments tenure, brought the issue of the Bofors scandal back to centre stage. It is often suspected that ruling governments interfere with the work of the CBI, and the handling of the Bofors investigation by CBI under Congress governments has created a new synonym for CBI. After letting off the Bofors accused, Oppositions have never tired to call it the 'Congress Bureau of Investigation'. ISRO spy ring case In 1994 two scientists with the Indian Space Research Organisation (ISRO) and two Indian businessmen were arrested for allegedly conspiring to sell space secrets to two Maldivian women, who were originally described by newspapers as agents of Pakistani intelligence, for money and sex. The CBI investigation did not reveal the existence of a spy ring, and by early 1995 it was clear that the case was more a product of inexperience and over exuberation on the part of the police and
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Intelligence Bureau.It was a well planned scheme to remove the then DGP Ramon S by concocted links to Maldivian lady. The scheme was plotted by some officers of Kerala police, the media and Muslim League as DGP was made of sterner stuff. Hawala scandal In 1991 an arrest linked to militants in Kashmir led to a raid on hawala brokers, revealing evidence of large-scale payments to national politicians. The prosecution that followed was partly prompted by a public interest petition (see Vineet Narain), and yet the court cases of the Hawala scandal eventually all collapsed without convictions. The CBI's role was again criticised. In concluding the Vineet Narain case, the Supreme Court of India directed that the Central Vigilance Commission should be given a supervisory role over the CBI. Priyadarshini Mattoo murder case The CBI has been under a cloud owing to its handling of the Priyadarshini Mattoo case, in which Santosh Kumar Singh, the alleged murderer of a 22-year old law student was acquitted for what the case judge called "deliberate inaction" by the investigating team. The accused was the son of a high ranking officer in the Indian Police Service, due to which the case had been shifted from the regular police force to the CBI. However, the 1999 judgment commented on how "the influence of the father of the accused has been there". Embarrassed by the judgment, the-then CBI Director, R K Raghavan, requested two Special Directors, P C Sharma and Gopal Achari, to study the judgement. Subsequently the CBI appealed the verdict in Delhi High court in 2000, after which the High Court issued a bailable warrant against the accused. The case was again prominent in 2006 after much media coverage and public bashing (this was mainly due to a similar acquittal in another high profile case, though not handled by the CBI). The CBI filed an application for early hearing in July 2006. The High Court subsequently found Santosh Kumar Singh guilty of rape
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and murder and awarded a death sentence for the same in October 2006. Nithari Killings The CBI was given the responsibility of investigating the murders of dozens of children in the Nithari village near Noida, UP. This was after the local police was found to be incompetent and lethargic in their investigations. The serial killings were in the Indian and international media for weeks since decomposing bodies were found outside the house of the accused Moninder Singh Pandher. Dawood Ibrahim case In August 2007, the CBI asked its Pakistani counterpart, the Federal Investigation Agency, for its comments on recent media reports about the detention of Dawood Ibrahim by authorities in Karachi. Sister Abhaya murder case Sister Abhaya murder case concerns a nun, who was found dead in water well in Saint Pius X convent hostel in Kottayam, Kerala on 27 March 1992. Altogether there were five CBI inquiries into the murder case so far without any tangible results. Sohrabuddin case CBI has been accused of acting for the ruling party Congress (UPA) to trap its opposition party mainly BJP. CBI, which is dealing with the Sohrabuddin case in Gujrat, questioned Geeta Johri an IPS officer, who claims the CBI is pressuring her to falsely implicate former Gujarat Minister Amit Shah in the Sohrabuddin fake encounter case, Rajkot Police Commissioner Geeta Johri has alleged in the Supreme Court. Sant Singh Chatwal case Sant Singh Chatwal was an accused in the CBIs records for 14 years. CBI had filed two chargesheets naming him as accused;
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sent Letters Rogatory abroad; even sent a probe team to the US and put Chatwal and his wife behind bars from February 2 to February 5, 1997. On May 30, 2007 and August 10, 2008, former CBI Director Vijay Shankar and the agencys present Director Ashwani Kumar respectively signed orders saying there was no need to challenge the discharge of Sant Singh Chatwal and his co-accused. This was done in spite of advice of a string of investigators including a Special Director and Joint Director and it was decided not to appeal his discharge. This, in effect, closed the principal case of bank fraud in which Chatwal had been embroiled for over a decade. Along with four others, Chatwal was charged with being part of a criminal conspiracy to defraud the Bank of Indias New York branch to the tune of US $8,992,815 (Rs 28.32 crore). In all, four chargesheets were filed by the CBI, with Chatwal named as accused in two. The trials in the other two cases are still in progress. RTI applicant Krishnanand Tripathi was denied access to public information concerning the closed cases. CIC later ordered the CBI to disclose the information. But CBI has recently been exempted from RTI act and it is unclear if this information will be disclosed. Sant Singh Chatwal has been awarded with Padma Bhushan despite these cases. Malankara Varghese murder case The Malankara Varghese murder case concerns the death of T.M.Varghese also known as Malankara Varghese,a member of Malankara Orthodox Church's managing committee and a timber merchant in 5 December 2002.On 9 May 2010 charged Father Varghese Thekkekara,a priest and manager of the Angamali diocese in the rival Jacobite Syrian Christian Church (a part of the Syrian Orthodox Church) with conspiracy in the murder of Malankara Varghese and named him as the prime accused.Till date,the prime accused has not been arrested, CBI is highly being criticized for this by Kerala High Court and Media.

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Bhopal gas tragedy The public perceived that the CBI was very ineffective in trying the Bhopal gas tragedy case. The former CBI joint director B. R. Lall has now confessed that he was asked to remain soft on extraditing the Union Carbide CEO Warren Anderson, and dropped charges, including culpable homicide, against those accused in this case, who received two year sentences. 2G Spectrum Scam Radio spectrum which is a precious and scarce natural resource of national importance was allotted by UPA government at throwaway prices to companies through corrupt and illegal means. Supreme Court of India pulled up the CBI many times for its tardy progress in the investigations. It was only after the SC decided to monitor its investigations that CBI moved faster and arrests of high profile persons were made.

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3. Election Commission
The Election Commission of India is an autonomous, quasijudicial, constitutional body of India charged with administering major electoral processes in India. Under the supervision of the commission, free and fair elections have been held in India at regular intervals as per the principles enshrined in the Constitution. Election Commission of India is a permanent body governed by rules specified in the constitution. The Election Commission was established on 25th January 1950. The Election Commission has the power of superintendence, direction and control of all elections to parliament and the state legislatures and of elections to the office of the President and Vice-President. The commission consists of a Chief Election Commissioner (CEC) and two Election Commissioners, appointed by the president of India. Two additional Commissioners were appointed to the commission for the first time on 16th October 1989 but they had a very short tenure till 1st January 1990. Later, on 1st October 1993, two additional Election Commissioners were appointed. The concept of multi-member Commission has been in operation since then, with decision making power by majority vote. The current CEC is Dr. S. Y. Quraishi. The Chief Election Commissioner can be removed from his office by Parliament with two-thirds majority in Lok Sabha and Rajya Sabha on the ground of proved misbehaviour or incapacity. The Election Commission consists of a Chief Election Commissioner and such other Commissioners as the President may, from time to time, fix. Other Election Commissioners can be removed by the President on the recommendation of the Chief Election Commissioner. The Chief Election Commissioner and the two Election Commissioners draw salaries and allowances at par with those of the Judges of the Supreme Court of India as per the Chief Election Commissioner and other Election Commissioners (Conditions of Service) Rules, 1992. All three commissioners

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have equal rights of decision making. Functions 1. Follow the Constitutional duties for conducting the free, fair and peaceful elections to the Parliament and the State Legislatures under Article 324 of the Constitution of India. Ensure that political party(ies) in power, including ruling parties at the Centre and in the States and contesting candidates follow the Model Code Of Conduct. Ensure that official machinery is not misused for electoral purposes. Ensure that electoral offenses, malpractices and corrupt practices such as impersonation, bribing and inducement of voters, threat and intimidation to the voters are prevented by all means.

2.

3. 4.

Model Code of Conduct The Model Code of Conduct for guidance of political parties and candidates is a set of norms which has been evolved with the consensus of political parties who have consented to abide by the principles embodied in the said code and also binds them to respect and observe it in its letter and spirit. Applicability of Code during General Elections and Byelections Code of conduct is applicable during:

General elections to House of People (Lok Sabha): The code is applicable throughout the country. General elections to the Legislative Assembly (Vidhan Sabha): The code is applicable in the entire State.

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By-elections: The code is applicable in the entire district or districts in which the constituency falls.

Budget and Expenditure The Secretariat of the Commission has an independent budget, which is finalised directly in consultation between the Commission and the Finance Ministry of the Union Government. The latter generally accepts the recommendations of the Commission for its budgets. The major expenditure on actual conduct of elections is, however, reflected in the budgets of the concerned constituent units of the Union - States and Union Territories. If elections are being held only for the Parliament, the expenditure is borne entirely by the Union Government while for the elections being held only for the State Legislature, the expenditure is borne entirely by the concerned State. In case of simultaneous elections to the Parliament and State Legislature, the expenditure is shared equally between the Union and the State Governments. For Capital equipment, expenditure related to preparation for electoral rolls and the scheme for Electors' Identity Cards too, the expenditure is shared equally. Chief Election Commissioner of India The Chief Election Commissioner heads the Election Commission of India. The President of India appoints the Chief Election Commissioner and two Election Commissioners. They have tenure of six years, or up to the age of 65 years, whichever is earlier. The Chief Election Commissioner can be removed from office only through impeachment by Parliament. Judicial Review The decisions of the Commission can be challenged in the High court of India and the Supreme Court of India by appropriate petitions. By long standing convention and several judicial pronouncements, once the actual process of elections has started, the judiciary does not intervene in the actual conduct of the polls. Once the polls are completed and result declared, the
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Commission cannot review any result on its own. This can only be reviewed through the process of an election petition, which can be filed before the High Court, in respect of elections to the Parliament and State Legislatures. In respect of elections for the offices of the President and Vice President, such petitions can only be filed before the Supreme Court. New Initiatives The Commission has taken several new initiatives in the recent past. Notable among these are: a scheme for use of State owned Electronic Media for broadcast/telecast by Political parties, checking criminalization of politics, computerization of electoral rolls, providing electors with Identity Cards, simplifying the procedure for maintenance of accounts and filling of the same by candidates and a variety of measures for strict compliance of Model Code of Conduct, for providing a level playing field to contestants during the elections.

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4. Ministry of Law and Justice


The Ministry of Law and Justice is a prominent Ministry of Government of India. Under the Government of India (Allocation of Business) Rules of 1961, the Ministry is vested with the responsibility of (i) administration of legal affairs, (ii) justice, and (iii) legislative affairs in India. It is one of the oldest Ministries operating in India. Earlier, in terms of the Charter Act of 1833 enacted by the British Parliament, the Legislative power was vested in a single authority namely the Governor General of India. The Governor General enacted laws for the British India until 1920. The Government of India Act passed in 1919 vested the legislative power to the Indian Legislature constituted there under. Since then the Ministry of Law has been functioning as the sole repository of legal functions of the Government of India. The Ministry is headed by a Cabinet Minister. Recently the Ministry is headed by Mr. Salman Khurshid. The longest serving minister of this ministry in the history of India was Ashoke Kumar Sen who is regarded as the patriarch of Indian law and justice. Structure The Government of India (Allocation of Business) Rules of 1961 entail the various departments working under the Ministry of Law and Justice of Government of India. In terms of these Rules, the Ministry comprises the following departments; 1. 2. 3. Department of Legal Affairs, Legislative Department, and Department of Justice.

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Department of Legal Affairs The Dept. of Legal affairs render advice to various ministries on legal matters and attend to litigation on behalf of the Government of India in the Courts. The dept. also looks in to matters regarding the treaties with foreign government in matters of civil laws. It further concerns itself with the appointment of Law Officers of the Union of India, namely Attorney General, Solicitor General and Additional Solicitors General. The Allocation of Business Rules identifies the following functions to be carried out by this Department; Advice to Ministries on legal matters including interpretation of the Constitution and the laws, conveyancing and engagement of counsel to appear on behalf of the Union of India in the High Courts and subordinate courts where the Union of India is a party. 1. Attorney General of India, Solicitor General of India, and other Central Government law officers of the States whose services are shared by the Ministries of the Government of India. Conduct of cases in the Supreme Court and the High Courts on behalf of the Central Government and on behalf of the Governments of States participating in the Central Agency Scheme. Reciprocal arrangements with foreign countries for the service of summons in civil suits, for the execution of decrees of Civil Courts, for the enforcement of maintenance orders, and for the administration of the estates of foreigners dying in India intestate. Authorization of officers to execute contracts and assurances and of property on behalf of the President under Article 299(1) of the Constitution, and authorization of officers to
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2.

3.

4.

sign and verify plaints or written statements in suits by or against the Central Government. 5. 6. 7. 8. 9. Indian Legal Service. Treaties and agreements with foreign countries in matters of civil law. Law Commission of India Legal Profession including the Advocates Act, 1961 (25 of 1961) and persons entitled to practice before High Courts. Enlargement of the jurisdiction of Supreme Court and the conferring thereon of further powers; persons entitled to practice before the Supreme Court; references to the Supreme Court under Article 143 of the Constitution of India.

10. Administration of the Notaries Act, 1952 (53 of 1952). 11. Customs Excise and Service Tax Appellate Tribunal. (CESTAT) 12. Income-tax Appellate Tribunal. 13. Appellate Tribunal for Foreign Exchange. 14. Legal aid to the poor. Legislative Department The Legislative Department is mainly concerned with drafting of all principal legislation for the Central Government i.e. Bills to be introduced in Parliament, Ordinances to be promulgated by the President, measures to be enacted as President's Acts for States under the President's rule and Regulations to be made by the President for Union territories. It is also concerned with election Laws namely the Representation of the People Act 1950 and the Representation of the People Act 1951. In addition it is also entrusted with task of dealing with certain matters relating to
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List III of the Seventh Schedule to the Constitution like personal law, contracts evidence etc. The responsibility of maintaining up to date the statutes enacted by Parliament is also with this Department. The Allocation of Business Rules identify the following functions to be carried out by this Department; 1. The drafting of Bills, including the business of the Draftsmen in Select Committees, drafting and promulgation of Ordinances and Regulations; enactment of State Acts as President's Acts whenever required; scrutiny of Statutory Rules and Orders (except notifications under clause (a) of section 3, section 3A and section 3D, of the National Highways Act, 1956 (48 of 1956). Constitution Orders; notifications for bringing into force Constitution (Amendment) Acts. (a) Publication of Central Acts, Ordinance and Regulations; (b) Publication of authorised translations in Hindi of Central Acts, Ordinances, Orders, Rules, Regulations and bye-laws referred to in section 5(1) of the Official Languages Act, 1963 (19 of 1963). Compilation and publication of un-repealed Central Acts, Ordinances and Regulations of general statutory Rules and Orders, and other similar publications. Elections to Parliament, to the Legislatures of States, to the Offices of the President and Vice-President; and the Election Commission. Preparation and publication of standard legal terminology for use, as far as possible, in all official languages. Preparation of authoritative texts in Hindi of all Central Acts and of Ordinances promulgated and Regulations made by the President and of all rules, regulations and orders made by the Central Government under such Acts, Ordinances and Regulations.
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2. 3.

4.

5.

6. 7.

8.

Making arrangements for the translation into official languages of the States of Central Acts and of Ordinances promulgated and Regulations made by the President and for the translation of all State Acts and Ordinances into Hindi if the texts of such Acts or Ordinance are in a language other than Hindi. Publication of law books and law journals in Hindi.

9.

10. Marriage and divorce; infants and minors; adoption, wills; intestate and succession; joint family and partition. 11. Transfer of property other than agricultural land (excluding benami transactions registration of deeds and documents). 12. Contracts, but not including those relating to agricultural land. 13. Actionable wrongs. 14. Bankruptcy and insolvency. 15. Trusts and trustees, Administrators, General and Official Trustees. 16. Evidence and oaths. 17. Civil Procedure including Limitation and Arbitration. 18. Charitable and religious endowments and religious institutions. Department of Justice The Department of Justice performs the administrative functions in relation to the appointment of various judges at various courts in India, maintenance and revision of the conditions and rules of service of the judges and other related areas. The Allocation of Business Rules identifies the following functions to be carried out by this Department;

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1.

Appointment, resignation and removal of the Chief Justice of India and Judges of the Supreme Court of India; their salaries, rights in respect of leave of absence (including leave allowances), pensions and travelling allowances. Appointment, resignation and removal, etc., of Chief Justice and Judges of High Courts in States; their salaries, rights in respect of leave of absence (including leave allowances), pensions and travelling allowances. Appointment of Judicial Commissioners and Judicial officers in Union Territories. Constitution and organisation (excluding jurisdiction and powers) of the Supreme Court (but including contempt of such Court) and the fees taken therein. Constitution and organisation of the High Courts and the Courts of Judicial Commissioners except provisions as to officers and servants of these courts. Administration of justice and constitution and organisation of courts in the Union Territories and fees taken in such courts. Court fees and Stamp duties in the Union Territories. Creation of all India Judicial Service. Conditions of service of District Judges and other Members of Higher Judicial Service of Union Territories.

2.

3. 4.

5.

6. 7. 8. 9.

10. Extension of the Jurisdiction of a High Court to a Union Territory or exclusion of a Union Territory from the Jurisdiction of a High Court. Law Ministers of India

Dr. B. R. Ambedkar (15th August 1947 - October 1951) Kailash Nath Katju (October 1951 - March 1952)

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Charu Chandra Biswas (March 1952 - April 1957) Ashoke Kumar Sen ( 19571969, 19851991 ) Panampilly Govinda Menon (19691970) Chaudhary Nitiraj Singh Daulat Singh (19711977) Shanti Bhushan (19771979) Arun Jaitley Justice H.R. Khanna Ram Jethmalani Hansraj Bhardwaj (22 May 2004 28 May 2009) Veerappa Moily (200928 May 2011) Salman Khurshid ( 28 May 2011-incumbent)

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Steps taken by CVC


NATIONAL ANTI-CORRUPTION STRATEGY: VISION, MISSION, OBJECTIVES AND APPROACH

Vision:

A nation built on good governance, transparency and integrity, and free from all forms of corruption, and a responsible society aware of its ethical responsibilities.

Mission:

To channelize, integrate the resources and build synergy into the efforts of all stakeholders in society to promote integrity in governance and progressively eliminate corruption from India through effective prevention, detection and punishment of all corrupt activities.

Objectives:

To ensure adherence to ethical standards and integrity in the functioning of the Indian Republic by engaging all stakeholders by: (a) Raising public awareness to promote zero tolerance towards corruption; (b) Undertaking effective preventive measures to minimize the scope for corruption; (c) Strengthening legal and regulatory framework and capacity building of the institutions of accountability as well as enforcement agencies; (d) Creating sustainable deterrence against corruption by strict and prompt enforcement of anti-corruption laws and regulations; (e) Enhancing collaboration amongst all stakeholders in ensuring that corruption cases are detected, reported, and prosecuted properly;
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(f) Reducing opportunities of investment and utilization of wealth earned through corrupt means.

Approach:

Formulation of the National Anti-Corruption Strategy was a multistep process which involved: (a) Assessing the status of corruption at various levels of governance; (b) Diagnosing its causes; (c) Understanding the expectations of all stakeholders; and (d) Proposing various strategies to combat corruption in an effective and efficient manner. The NACS was formally drafted after obtaining the endorsement of all stakeholders through surveys, interviews, group discussions and consensus building. Based on the feedback received on the draft, necessary amendments were made to ensure that the resultant strategy is practical from an implementation standpoint, with a high probability of success. The NACS then came into being once it was endorsed by all the stakeholders. The strategy itself is hinged upon a multi-pronged approach to tackle corruption. It relies on a combination of prevention, enforcement and awareness raising measures, embedded within the ethical, legal, institutional, social and systemic framework of governance in India. It aims to address both petty and grand corruption by engaging multiple stakeholders of society and by encouraging international cooperation on issues related to corruption. It provides concrete recommendations and action steps to be undertaken in order to progressively eliminate corruption.

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Protection of whistle-blowers and witnesses:

Another aspect that may be mentioned here is the lack of provisions for protection of whistle-blowers and witnesses. The only provisions in the PC Act that, to a very limited extent, provide for protection of whistle-blowers are Sections 5 and 24. While both of these provisions provide some degree of protection against prosecution, they do not afford any protection against action that may be taken by the wrongdoer or his associates. Unlike the United States of America or the United Kingdom, which have specific legislations for whistle blower protection (Whistleblower Protection Act of 1989 in the USA and the Public Interest Disclosure Act of 1998 in the UK), India does not have any separate legislation for the protection of whistle-blowers or even one for witnesses. A specific legislation for protecting whistle-blowers has been recommended on many occasions, including in the Law Commission of Indias 179th Report, pursuant to which a bill titled Public Interest Disclosure (Protection of Informers) Bill, 2002 was proposed. Subsequently, a bill for this purpose has also been circulated to the States. However, no legislation to this effect has yet been passed. While some degree of whistle-blower protection is provided by the Central Vigilance Commission (CVC) in terms of a notification issued by the Government of India (which itself was issued only as an interim arrangement), on many occasions, this protection is rejected on technical grounds. The lack of a legislation and adequate mechanism for protection of whistle blowers and witnesses has often resulted in complaints not being made out of fear of reprisals or in complains being made on an anonymous basis or using pseudonyms, which are then either ignored or not investigated properly, resulting in inaction. Given past cases of severe reprisals even to the extent of deaths suffered by complainants against corruption, such as in the case of Satyendra Dubey, Satish Shetty and Manjunath Shanmugham, it is important that appropriate legislative
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provisions for protection of whistle-blowers and witnesses be introduced either through amendment to the PC Act or through a separate legislation. The act should include whistle blowing against private corporations and business & protection to the whistle blowers till completion of investigations. Recently, the CVC inaugurated a program called Vig-Eye which is a citizen-centric initiative, wherein citizens join hands with the Central Vigilance Commission in fighting corruption in India. Project Vig-Eye is the platform through which vigilance information flows freely through common public, the government agencies and the vigilance commission, making it possible to achieve a step in improving the corruption index of the nation. One can send a blank SMS or VIGEYE to 09223174440 to get an SMS containing the registration link on ones mobile. One has to register before filing a complaint. The important features of Project Vig-Eye are: 1. Citizens have multiple channels to air their grievances and complaints to CVC. a. Through their mobile phones: by downloading the mobile application from the CVC website. b. Through the internet by filling up the complaint form online. The can attach audio/video/photo evidence. c. Through telephone. 2. 3. The entire complaint processing is done online, in digital form, enabling fast and accurate processing complaints. The concerned CVO will interact with the complainant directly over phone/e-mail or in person, as the case may be, to take it forward. Status of the complaint is communicated back to the complainant- the communication loop becomes complete.

4.

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Conclusion
Strategies to deal with corruption at various levels:

1.

Strategy to deal with petty corruption:

a. Government should computerize all activities involving delivery of public services on a mission mode. Adoption of technology would reduce direct interface between the citizens and the public officials. Information about the status of processing of the application of beneficiaries on a First Come First Served basis and the progress of delivery should be displayed in public. The potential of the Unique ID project in preventing corruption in delivery of public services should be fully exploited. This would minimize discretion, subjective intervention of public authorities and enhance objectivity. Action: Government b. Simplification of rules and procedures should be undertaken so as to make them citizen friendly and avoid the need for the citizens to approach public officials for intervention. Review of systems and procedures should also aim at identifying and mitigating the risk of corruption. Department of Administrative Reforms and Public Grievance should take up this exercise at the earliest. Action: Government c. Citizens should be empowered to resist the demand for bribes by instituting mechanisms like Anti Bribery Hot Lines or Whistle Blower provisions so that citizens can report solicitation of bribes which should then be followed by prompt action. Citizens should also be persuaded and convinced to desist from paying bribes through awareness and education campaign. Action: Government, CVC, Citizens

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d. Promoting the involvement of citizens and Civil Society Organisations in keeping vigil through means like social audit. Action: Government, Citizens, Civil Society Organisations

2.

Strategy to tackle grand corruption

Actions to address the Demand Side: a. Political parties should demonstrate political will to fight corruption by adopting and enforcing a code of ethics among members, avoiding conflict of interest in appointment to public offices and adopt integrity in governance and prevention of corruption as a key election manifesto. Political will would also be demonstrated if the National Anticorruption Strategy is adopted and implemented; and the institution of Lokpal is created at the earliest. Action: Political Parties, Parliament b. Until the modalities for state electoral funding are decided, disclosure of source of funding and the annual financial statements of the political parties should be made mandatory. Regulation of election funding and expenditure should be further strengthened. Action: Political Parties, Election Commission c. Concealment of ill gotten wealth should be made difficult by ensuring traceability and transparency of all transactions and investments through the use of instruments like UID, Benami Act and Anti-Money Laundering provisions. Action: Government, Anti-Corruption Agencies d. Promotion of transparency, objectivity and merit in selection and appointment to important public offices including the regulatory bodies. Action: Government

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e. Transparent and participative policy making with regard to policies governing the issue of licenses, auction of public assets and norms for regulation of business in various sectors. Action: Government, Regulatory Bodies f. Strengthening the independence and integrity of regulatory bodies. The performance and effectiveness of regulatory bodies in achieving fair play in regulation of business in their sectors should be evaluated periodically and reported to the Parliament. Action: Government, Regulatory Bodies, Oversight Bodies, Parliament

3.

Strategy to Address Political Corruption:

1.1 Establishment of institutions like the Lokpal and the adoption of a National Anti-Corruption Strategy would clearly demonstrate political will and send a positive signal to one and all. 1.2 Political parties should adopt a code of ethics and vigorously enforce it. Personal integrity should be given due weightage while enlisting members or giving tickets for election. These are mandatory minimum measures for establishing credibility of the political institutions. 1.3 Political parties should avoid conflict of interest while nominating members to public offices like ministers, chairmen or member of parliamentary committees. 1.4 Commitment to maintaining integrity in governance and combating corruption should be made a key election manifesto by all parties. Simultaneously the electorate should also be educated and made aware to give due weightage to this manifesto and the integrity of candidates while casting their vote in elections. 1.5 Modalities for state funding for elections need to be worked out at the earliest. Contributions to the state fund could be given
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tax exemptions. Meanwhile indirect public subsidies like tax credits and free media time on state media could be offered to parties combined with fairly strong regulations on intra-party governance, transparency, accountability of public and party funds. 1.6 Norms for disclosure of source and amount of funding received by parties should be strengthened. Annual financial statements and income and expenditure of the political parties should be made public. This would also foster a culture of transparency and democracy within political parties. 1.7 Political executive should move towards transparent and participative policy making. 1.8 Global Organisation of Parliamentarians against Corruption (GOPAC) established in 2002 is an international network of parliamentarians dedicated to good governance and combating corruption throughout the world. It attempts to build alliances amongst parliamentarians in developing codes of conduct and indicators of performance of parliamentary oversight and to create forums for training parliamentarians on their budgetary and financial oversight role. GOPAC provides an opportunity for Indian parliamentarians to align their strategy for good governance to those of parliamentarians elsewhere in the world. India should actively participate in the South Asia chapter of GOPAC.

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4.

Strategy to Address Administrative Corruption

2.1 Rules, regulations and procedures governing delivery of service and benefits to citizens should be simplified and made citizen friendly. A mission mode exercise should be achieved to achieve this. Exercise should be undertaken to identify the number of submission and approval points involved in activities relating to delivery of public services. Progress in simplification of procedures should be monitored annually in terms of the reduction in processing time and reduction in submission/approval points. 2.2 Improve service delivery by adopting an action plan for improving standards of public service through benchmarking and assessment on the lines of Sevottam pilot project. Innovative and localized solutions should be promoted with the involvement of civil society organisations. Instruments like citizen charters, centralized public grievance and monitoring system (CPGRAMS) and citizen report card system developed by the Public Affairs Centre, Bangalore should be replicated. 2.3 Reduce human interface and exercise of discretionary powers in delivery of public service through e-governance. Using information technology and automation of corruption prone processes should be undertaken on a mission mode. CVC since 2006 (vide its circulars dated 22-11-06 and 18-4-07) has been persuading with the organisations under its jurisdiction to identify and computerize all the activities which are vulnerable to corruption. However the progress in this regard has not been satisfactory. 2.4 Transparency to be maintained in policy making and drafting of regulatory norms. Proactive disclosure system by government agencies should be implemented. The successful model of Mexicos freedom of information programme which has developed tools such as online request processing system could be

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emulated. The RTI Act should be further strengthened to enhance accessibility to institutions and responsiveness of functionaries. 2.5 Government decision making and implementation to be made more participative. 2.6 To fight large scale corruption in Panchayati Raj Institutions, a separate vigilance apparatus with citizens participation should be formed. 2.7 Use of citizens charter should be made mandatory. The charter with clearly laid down information about services, government officials responsible for the delivery, timelines, penalty clauses and grievance redressal in case of noncompliance should be prominently displayed in the public domain. 2.8 Objectivity and transparency should be ensured in senior level appointments by the government. The following recommendations of 10th Report of the ARC should be implemented to achieve this: Bring transparency to the empanelment process of senior officers. Open competition for selection to the posts and Selection to be based on performance and domain competence. Selection through an independent authority like the Central Civil Service Authority. Setting time limits for the selection process. If the administrative ministry disapproves a panel, it should put forward its speaking reasons. Setting of objective and transparent criteria for promotion or appointments to senior positions. 2.9 The following steps should be taken to reduce corruption in public procurement: Make the system objective by introduction of e-procurement and e-payment. There is a strong case for legislating in this area by incorporating globally recognized practices. Introduction of a
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stand still period between the finalization of a tender and the signing of the contract to allow the bidders to review verify and contest the integrity of the process of award. The concept of Integrity Pact should be made more effective by allaying the fear and enhancing the confidence of the private sector. It is actually a public private partnership against corruption in public procurement. Private sector participation in Integrity Pact is still not wholehearted and treated as more of a ritual. Further citizens and civil society organisations should be involved to act as monitors of Integrity Pact. 2.10 Vigilance in public sector undertakings, banks and autonomous bodies should be made more proactive and preventive by adopting a risk management approach. Independent Commission on Anti- Corruption of New South Wales, Australia is well known for its risk management approach to corruption which can be adopted by the CVC. This would include (a) Development of a corruption risk assessment toolkit to be used by the CVOs for assessing their organisations for the risk of corruption (b) Identification of three or four highly sensitive departments per year for suo-moto conduct of risk assessment studies and (c) Table the risk assessment report in the Parliament and give it wide publicity. The Central Vigilance Commission is supporting the development of a Corruption Risk Assessment Model by SCOPE. 2.11 To recognize and reward the efforts of companies that voluntarily embody good anti-corruption policies, a system of credits should be introduced. Companies would be eligible to earn credits on various objective parameters. A framework should be evolved under which specific concessions or incentives should be made available to companies holding credits. Incentives could be in the form of additional points when evaluated for government contracts, priority clearances for major projects, governmental assistance or endorsement in tapping foreign markets, etc.
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Vineet Narains Case


The scam hovered around the fact that the Hawala channels, through which terrorist outfits in Kashmir like Hijbul-Mujahideen used to get funds, were being used to grease the palms of over 115 top bureaucrats and politicians of the country. Naturally, CBI, RAW and every other investigative agencies of the country suppressed the entire case. Hawala is the biggest ever scandal in the world which involved over 115 top politicians and bureaucrats of the country. It was for the first time ever that so many top politicians were caught in a single scandal. Hawala Scam was bigger than even Watergate, Iran-gate, Bofors, Harshad Mehta, Tehelka and Lockheed scams. It was in August 1993, when Narain exposed the Jain Hawala Scam in the 10th volume of Kalchakra video news cassette. Through this expose he proved how the militants of Kashmir and senior Indian politicians were receiving slush money from the same clandestine sources and how Indian investigating agencies were trying to hush the matter up. Shocked with this expose Indias ruling elite got this video cassette banned from the Censor Boards. Narain appealed to the Film Certification Appellate Tribunal. The Tribunal allowed his appeal and decided in his favour. After this moral victory Narain was offered a huge sum of money to detain the release of Kalchakra but he took the matter to the Apex Court through a PIL, demanding a thorough probe into this scam, which had endangered the security of the nation. During 1993-94 he faced severe hardships, total isolation, negligible media response, several threats to life on one side and numerous financial offers on the other. Undeterred by such delicate situations he continued to fight. The dogged perseverance of Narain bore fruits. Several Cabinet Ministers, Chief Ministers, Governors and bureaucrats were charge-sheeted in 1996. This happened for the first time in the
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history of Independent India. On 26th Aug 1999, a book authored by Narain titled, Hawala Key Deshdrohi was released in the Constitution Club of New Delhi. The detailed facts of the case and the judgment have been attached as annexure.

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P.J. Thomas case


Polayil Joseph Thomas is the country's 14th CVC and was appointed under controversial circumstances on September seven, 2010 by a three-member panel headed by Prime Minister Manmohan Singh. Senior BJP leader Sushma Swaraj, who was a member of the panel, had opposed his appointment and had given a dissent note. Union Home minister P. Chidambaram was the other member of the panel. An IAS officer of 1973 batch of Kerala cadre, Thomas was listed as the eighth accused in the palmolein case that pertains to alleged corruption in import of 1,500 tonnes of palm oil from Malaysia through a Singapore-based firm when Congress stalwart late K. Karunakaran was chief minister in 1992. Karunakaran was listed the first accused in the case and the then food minister T H Mustaffa the second accused. The case, still pending in a special court in Thiruvananthapuram, was registered after a Vigilance probe established the CAG's preliminary finding that the state exchequer suffered a loss of Rs 2.09 crores as the deal was cleared without going through the proper bidding route. Thomas was made an accused in the case as he was the food secretary then and a director of the state Civil Supplies Corporation. He was charged with alleged criminal conspiracy with other accused and issuance of government order flouting certain norms of the time. A statement issued by the Kerala IAS Officers Association in support of Thomas recently said he was also subject of delayed judicial process and media trial that have besmirched his reputation before the eyes of the public.

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His supporters have corroborated their faith in Thomas's honesty citing the fact that he was promoted as Chief Secretary by the present the LDF Government, regardless of the fact that it was previous LDF ministries that probed the palmolein scam and pursued it up legally. The UDF Government led by Oommen Chandy in 2005 decided to withdraw the case on the ground that the state had actually benefitted from the deal, but it could not complete the legal formalities as assembly polls were declared in early 2006. Thomas served as Chief Secretary from September 2007 to January 2009, after which he opted for the central deputation and became secretary for Parliamentary Affairs and later as secretary of Telecommunication and IT. The detailed facts and judgment of the case has been attached as annexure.

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Questionnaire
Do you know what is meant by corruption? Yes No In your opinion, which one is correct w.r.t. India? Corruption is: Widely Prevalent Found only in urban areas Found only in rural areas Where (with respect to corruption) does India stand when compared with the neighbouring countries? Better Worse Equals Are you aware of Indias ranking according to Transparency International's survey? Yes No Are you aware of any Indian laws to combat/curb corruption? Yes No

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Who do you think is responsible for all the corruption in India? Politicians Bureaucrats Corporates The People All of the above Do you think the organisations responsible to weed out corruption are doing a good job? Yes No Could do better Do you have any suggestions to improve the current system in place to check corruption?

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The Result
Do you know what is meant by corruption?
No 3%

Yes No

Yes 97%

In your opinion, which one is correct w.r.t. India? Corruption is:


Widely Prevalent Found only in rural areas 0% Found only in urban areas Found only in urban areas 0% Found only in rural areas

Widely Prevalent 100%

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Where (with respect to corruption) does India stand when compared with the neighbouring countries?
Equals 37% Better 20%

Better Worse Equals

Worse 43%

Are you aware of Indias ranking according to Transparency International's survey?


Yes 29% Yes No 71% No

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Are you aware of any Indian laws to combat/curb corruption?


No 23%

Yes No

Yes 77%

Who do you think is responsible for all the corruption in India?


Politicians 8% Bureaucrats Corporates 3% 3% The People 9% Politicians Bureaucrats Corporates The People All of the above All of the above 77%

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Do you think the organisations responsible to weed out corruption are doing a good job?
Could Do Better 7% Yes 10%

Yes No Could Do Better

No 83%

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Do you have any suggestions to improve the current system in place to check corruption?
Some of the suggestions received were: a. Corruption is not just something that has been politically given a meaning. It is as much a bad 'habit' that anything else we consider to be so. To evolve a corruption-free society, one has got to be anti-corrupt from self. Perhaps, we can inculcate the ideology of righteousness with a tinge of anti-corruption when we assign self-worth and respect to a crawling baby. b. We should start from level one... c. Transparency in the system would help put things in place. d. Bringing the Lokpal bill into force would be a great improvement! e. Instead of indulging ourselves in blame game, its us, the citizens of India, who should take the initiative to weed out corruption. No matter to what magnitude we succeed in bringing the winds of change, we should continue our strife without giving up.....after all, no country is born perfect, its us who make one. The most essential component of being a whistle blower is UNITY. Its this solidarity that will stand tall against a corrupt system which will strive hard to shun every voice echoing against it. It might sound a bit utopian but one must never forget that there is a very fine line between utopia & vision and this difference can only be vanquished only when we dream it, believe in it n finally achieve!!

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f. Like it is said 'charity begins at home.' So start from yourself and never ever abide bribing for your minor advantages. g. People of India want all the political parties to: 1. Solve all the burning problems of poor and middle class people immediately. 2. Poor and Middle Class people must get justice in the police station and in the court. 3. Improve and make reforms in judiciary System. 4. Abolish Corruption, Crimes and vices from the society on the spot. 5. Provide huge opportunities to poor and middle class people. Increase their income. Increase their purchasing power. Increase their sources of income. 6. Adopt the policy of distribution of money. Abolish the policy of concentration of money in few hands. 7. Change the education system from the roots and provide true education and enrich the society with love, respect, values, morals, ethics, merits, help, support, co-operation, harmony etc. 2+2=4 is not a true education. 8. Media should work only for the betterment of the society. 9. Public Servants are accountable and answerable for every minute. h. Good thing: We're way more flexible than the west, we change rules and relax limits on human grounds...We are not machines or slaves!!! YAY! Bad thing: Corruption is part of the aforementioned policy, and grossly so. The massive country India is, its difficult to trace corruption at every level. The govt is blamed and
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changed by the corrupt, who stay in the same offices, and the street no matter whom the chair goes to, stay! i. The government of India must become stronger and stand firm against corruption, then and then only there will be a way to decrease corruption in INDIA. j. Corruption is something which cannot be eradicated. It can only be minimized to the point from where people are afraid to let know when these things are out. So the only way to minimize it is by more strict laws and regulations.

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Annexure

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Vineet Narain & Others vs Union of India & Another 18 December, 1997
Background of the case The Judgment of the Court was delivered by Verma, C.J. - These writ petitions under Article 32 of the Constitution of India brought in public interest, to begin with, did not appear to have potential of escalating to the dimensions they reached or to give rise to several issues of considerable significance to the implementation of rule of law, which they have during their progress. They began as yet another complaint of inertia by the Central Bureau of Investigation (CBI) in matters where the accusation made was against high dignitaries. It was not the only matter of its kind during the recent past. The primary question was: Whether it is within the domain of judicial review and it could be an effective instrument for activating the investigative process which is under the control of the executive? The focus was on the question, whether any judicial remedy is available in such a situation? However, as the case progressed, it required innovation of a procedure within the constitutional scheme of judicial review to permit intervention by the court to find a solution to the problem. This case has helped to develop a procedure within the discipline of law for the conduct of such a proceeding in similar situations. It has also generated awareness of the need of probity in public life and provided a mode of enforcement of accountability in public life. Even though the matter was brought to the court by certain individuals claiming to represent public interest, the procedure devised was to appoint the petitioners counsel as the
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amicus curiae and to make such orders from time to time as were consistent with public interest. Intervention in the proceedings by everyone else was shut out but permission was granted to all, who so desired, to render such assistance As they could, and to provide the relevant material available with them to the amicus curiae for being placed before the court for its consideration. In short, the proceedings in this matter have had great educative value and it does appear that it has helped in future decisionmaking and functioning of the public authorities. Facts A brief narration of the facts of this case is necessary: On 25.3.1991, one Ashfak Hussain Lone, alleged to be an official of the terrorist organisation Hizbul Mujahideen, was arrested in Delhi. Consequent upon his interrogation raids were conducted by the Central Bureau of Investigation (CBI) on the premises of Surender Kumar Jain, his brothers, relatives and businesses. Along with Indian and foreign currency, the CBI seized two diaries and two notebooks from the premises. They contained detailed accounts of vast payments made to persons identified only by initials. The initials corresponded to the initials of various highranking politicians, in power and out of power, and of highranking bureaucrats. Nothing having been done in the matter of investigating the Jains or the contents of their diaries, the present writ petitions were filed on 4.10.1993, in the public interest under Article 32 of the Constitution of India. The gist of the allegations in the writ petitions is that government agencies like the CBI and the Revenue authorities had failed to perform their duties and legal obligations in as much as they had failed to investigate matters arising out of the seizure of the "Jain Diaries"; that the apprehension of terrorists had led to the discovery of financial support to them by clandestine and illegal means using tainted funds obtained through "havala" transactions; that this had also disclosed a nexus between politicians, bureaucrats and criminals, who were recipients of money from unlawful sources, given for unlawful considerations
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that the CBI and other government agencies had failed to investigate the matter take it to its logical conclusion and prosecute all persons who were found to have committed an offence; that this was done with a view to protect the persons involved, who were very influential and powerful; that the matter disclosed a nexus between crime and corruption at high places in public life and it posed a serious threat to the integrity, security and economy of the nation; that probity in public life, the rule of law and the preservation of democracy required that the government agencies by compelled to duly perform their legal obligations and to proceed in accordance with law against every person involved, irrespective of where he was placed in the political hierarchy. The writ petitions prayed, inter alia for the following reliefs: [a] that the above said offences disclosed by the facts mentioned in the petition be directed to be investigated in accordance with law; [b] That this Honble Court may be pleased to appoint officers of the police or others in whose integrity, independence and competence this Honble Court has confidence for conducting and/or supervising the said investigation; [c] That suitable directions be given by this Honble Court and orders issued to ensure that the culprits are dealt with according to law; **** [f] That directions be given so that such evil actions on the part of the investigating agencies and their political superiors are not repeated in future." It will be seen that the reliefs sought in the writ petitions fall into two broad classes. The first class relates to investigations in the matter of the "Jain Diaries". The second class (prayer (f)) relates to the manner in which investigations of offences of a similar nature that may occur hereafter should be conducted.
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Independent Review Committee The IRC is a body constituted by the Central Government itself as a result of its perception that the constitution and functioning of the CBI, CVC and Directorate of Enforcement require a close scrutiny in the background of the recent unsatisfactory functioning of these agencies with a view to improve their functioning. The view taken by the IRC is a reaffirmation of this belief shared by everyone. The preface to the report indicates the reason for the constitution of the IRC and says that: "In the past several years, there has been progressive increase in allegations of corruption involving public servants. Understandably, cases of this nature have attracted heightened media and public attention. A general impression appears to have gained ground that the Central investigating agencies concerned are subject to extraneous pressures and have been indulging in dilatory tactics in not bringing the guilty to book. The decisions of higher courts to directly monitor investigation in certain cases have added to the aforesaid belief." There can thus be no doubt that there is need for the exercise we were called upon to perform and which has occasioned consideration of this crucial issue by this Court in exercise of its powers conferred by the Constitution of India. The conclusions reached by the IRC and the recommendations it have made for improving the functioning and thereby the image of these agencies is a further reaffirmation of this general belief. There can also be no doubt that the conclusions reached by the IRC and its recommendations are the minimum which require immediate acceptance and implementation in a bid to arrest any further decay of the polity. It follows that the exercise to be performed now by this Court is really to consider whether any modifications/additions are required to be made to the recommendations of the IRC for achieving the object for which the Central Government itself constituted the IRC. We are informed by the learned Attorney General that further action on
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the report of the IRC could the learned Attorney General that further action on the report of the IRC could not be taken so far because of certain practical difficulties faced by the Central Government but there is no negative reaction to the report given by the Central Government. The only caveat entered by the Attorney General is on the basis of a note by an individual Minister in the Central Cabinet in which emphasis has been laid that the ultimate responsibility for the functioning of these agencies to Parliament is that of the Minister concerned and this aspect may be kept in mind. It has been specifically mentioned that the Minister would remain the final disciplinary authority and would have the power to refer complaints against the agency or its officers to an appropriate authority for necessary action. There can be no quarrel with the Ministers ultimate responsibility to Parliament for the functioning of these agencies and he being the final disciplinary authority in respect of the officers of the agency with power to refer complaints against them to the appropriate authority. Some other specific powers of the Minister were indicated as under: 1. The Minister has the power to review the working of the agencies which are under his Department. 2. The Minister has the power to give broad policy directions regarding investigation and prosecution of classes or categories of cases. 3. The Minister has the power to appraise the quality of the work of the Head of the agency as well as other senior officers of the agency. 4. The minister has the power to call for information regarding progress of cases. It is sufficient to say that the Ministers general power to review the working of the agency and to give broad policy directions regarding the functioning of the agencies and to appraise the
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quality of the work of the head of the agency and other officers as the executive head is in no way to be diluted. Similarly, the Ministers power to call for information generally regarding the cases being handled by the agencies is not to be taken away. However, all the powers of the Minister are subject to the condition that none of them would extend to permit the Minister to interfere with the course of investigation and prosecution in any individual case and in that respect the officers concerned are to be governed entirely by the mandate of law and the statutory duty cast upon them. Validity of Single Directive We may now refer to the two decisions on which specific reliance has been placed by the learned Attorney General before us as well as the IRC in its report. The Delhi Special Police Establishment Act, 1946 is an Act to make provision for the constitution of a special police force in Delhi for the investigation of certain offences in the Union Territories for the superintendence and administration of the said force and for the extension to other areas of the powers and jurisdiction of members of the said force in regard to the investigation of the said offences. Section 6 of the Act requires consent of the State Government to exercise powers and jurisdiction under the Act by the Delhi Special Police Establishment. This is because "Police" is a State subject, being in List II Entry 2 of the Seventh Schedule. For this reason, the learned Attorney General contended that the power and jurisdiction of the State Police in respect of an offence within its jurisdiction remains intact and is not inhibited by the Single Directive; and that the CBI alone is inhibited thereby. Section 2 deals with Constitution and Powers of the Special Police Establishment (SPE). This is how the CBI has been constituted.

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Section 3 provides for offences to be investigated by the SPE and says that the offences or class of offences to be investigated by the agency may be specified by notification in the Official Gazette by the Central government. Section 3 of the Police Act, 1861 is in pari materia with Section 4 of the Delhi Special Police Establishment Act, 1946. These sections read as under: Section 3 of the Police Act, 1861: Superintendence in the State government The superintendence of the police throughout a general police district shall vest in and shall be exercised by the State Government to which such district is subordinate, and except as authorized under the provisions of this Act, no person, officer or court shall be empowered by the State Government to supersede or control any police functionary." Sections 3 and 4 of the Delhi Special Police Establishment Act, 1946: Section 3: Offences to be investigated by SPE The Central Government may, by notification in the Official Gazette, specify the offences or classes of offences which are to be investigated by the Delhi Special Police Establishment. Section 4: Superintendence and administration of SPE.(1) The superintendence of the Delhi Special Police Establishment shall vest in the Central government. (2) The administration of the said police establishment shall vest in an officer appointed in this behalf by the Central government who shall exercise in respect of that police establishment such of the powers exercisable by an Inspector General of Police in respect of the police force in a State, as the Central Government may specify in this behalf." There can be no doubt that the overall administration of the said force, i.e., CBI vests in the Central Government, which also includes, by virtue of Section 3, the power to specify the offences
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or class of offences which are to be investigated by it. The general superintendence over the functioning of the Department and specification of the offences which are to be investigated by the agency is not the same as and would not include within it the control of the initiation and the actual process of investigation, i.e., direction. Once the CBI is empowered to investigate an offence generally by its specification under Section 3, the process of investigation, including its initiation, is to be governed by the statuary processions which provide for the initiation and manner of investigation of the offence. This is not an area which can be included within the meaning of "superintendence" in Section 4(1). It is, therefore, the notification made by the Central Government under Section 3 which confers and determines the jurisdiction of the CBI to investigate an offence; and once that jurisdiction is attracted by virtue of the notification under Section 3, the actual investigation is to be governed by the statuary provisions under the general law applicable to such investigations. This appears to us the proper construction of Section 4(1) in the context, and it is in harmony with the scheme of the Act, and Section 3 in particular. The word "superintendence" in Section 4(1) cannot be construed in a wider sense to permit supervision of the actual investigation of an offence by the CBI contrary to the manner provided by the statuary provisions. The broad proposition urged on behalf of the Union of India that is can issue any directive to the CBI to curtail or inhibit it jurisdiction to investigate an offence specified in the notification issued under Section 3 by a directive under Section 4(1) of the Act cannot be accepted. The jurisdiction of the CBI to investigate an offence is to be determined with reference to the notification issued under Section 3 ant not by any separate order not having that character. This view does not conflict with the decision in J.A.C. Saldanha as earlier indicated. In Saldanha8 the question was whether an unsatisfactory investigation already made could be undertaken by
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another officer for further investigation of the offence so that the offence was properly investigated as required by law, and it was not to prevent the investigation of an offence. The single Directive has the effect of restraining recording of FIR and initiation of investigation and not of proceeding with investigation, as in Saldanha. No authority to permit control of statuary powers exercised by the police to investigate an offence within it jurisdiction has been cited before us except K. Veeraswami which we have already distinguished. The view we take accords not only with reason but also with the very purpose of the law and is in consonance with the basic tenet of the rule of law. Once the jurisdiction is conferred on the CBI to investigate an offence by virtue of notification under Section 3 of the Act, the powers of investigation are governed by the statutory provisions and they cannot be esteemed or curtailed by an executive instruction issued under Section 4(1) thereof. This result follows from the fact that conferment of jurisdiction is under Section 3 of the Act and exercise of powers of investigation is by virtue of the statutory jurisdiction cannot be subject to executive control. There is no similarity between a mere executive order requiring prior permission or sanction for investigation of the offence and the sanction needed under the statute for prosecution. The requirement of sanction for prosecution being provided in the very statute which enacts the offence, the sanction for prosecution is a prerequisite for the court to take cognizance of the offence. In the absence of any statutory requirement of prior permission or sanction for investigation, it cannot be imposed as a condition precedent for initiation of the investigation once jurisdiction is conferred on the CBI to investigate the offence by virtue of the notification under Section 3 of the Act. The word "superintendence" in Section 4(1) of the Act in the context must be construed in a manner consistent with the other provisions of the Act and the general statutory powers of investigation which govern investigation even by the CBI. The necessity of previous sanction for prosecution is provided in
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Section 6 of the Prevention of Corruption Act, 1947 (Section 19 of the 1988 Act) without which no court can take cognizance of an offence punishable under Section 5 of that Act. There is no such previous sanction for investigation provided for either in the Prevention of Corruption Act, or the Delhi Special Police Establishment Act, or in any other statutory provision. The above is the only manner in which Section 4(1) of the Act can be harmonized with Section 3 and the other statutory provisions. The Single Directive has to be examined in this background. The law does not classify offenders differently for treatment there under, including investigation of offences and prosecution for offences, according to their status in life. Every person accused of committing the same offence is to be dealt with in the same manner in accordance with law, which is equal in its application to everyone. The Single Directive is applicable only to certain persons above the specified level who are described as "decision making officers". The question is whether any distinction can be made for them for the purpose of investigation of an offence of which they are accused. Obviously, where the accusation of corruption is based on direct evidence and it does not require any inference to be drawn dependent on the decision-making process, there is no rational basis to classify them differently. In other words, if the accusation be bribery which is supported by direct evidence of acceptance of illegal gratification by them, including trap case, it is obvious that no other factor is relevant and the level or status of the offender is irrelevant. It is for this reason that it was conceded that such case, i.e., of bribery, including trap cases, is outside the scope of the Single Directive after General to support inclusion within the Single Directive of cases in which the offender is alleged to be in possession of disproportionate assets. It is clear that the accusation of possession of disproportionate assets by the person is also based on direct evidence and no factor pertaining to the expertise of decision making is involved therein. We have, therefore, no doubt that the Single Directive cannot include within its ambit cases of possession of disproportionate assets by the
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offender. The question now is only with regard to cases other than those of bribery, including trap case, and of possession of disproportionate assets being covered by the Single Directive. There may be other cases where the accusation cannot be supported by direct evidence and is a matter of inference of corrupt motive for the decision, with nothing to prove directly any illegal gain to the decision-maker. Those are cases in which the inference drawn is that the decision must have been made for a corrupt motive because the decision could not have been reached otherwise by an officer at that level in the hierarchy. This is, therefore, an area where the opinion of persons with requisite expertise in decision-making of that kind is relevant and, maybe even decisive in reaching the conclusion whether the allegation requires any investigation to be made. In view of the fact that the CBI or the police force does not have the expertise within it s fold for the formation of the requisite opinion in such case, the need for the inclusion of such a mechanism comprising of experts in the field as a part of the infrastructure of the CBI is obvious, to decide whether the accusation made discloses grounds for a reasonable suspicion of the commission of an offence and it requires investigation. In the absence of any such mechanism within the infrastructure of the CBI, comprising of experts in the field who can evaluate the material for the decision to be made, introduction therein of a body of experts having expertise of the kind of business which requires the decision to be made, can be appreciated. But then, the final opinion is to be of the CBI with the aid of that advice and not that of anyone else. It would be more appropriate to have such a body within the infrastructure of the CBI itself. The Single Directive cannot, therefore, be upheld as valid on the ground of it being permissible in exercise of the power of superintendence of the Central Government under Section 4(1) of the Act. The matter has now to be considered dehors the Single Directive.

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Directions of Court As a result of the aforesaid discussion, we hereby direct as under: Central Bureau of Investigation (CBI) and Central Vigilance Commission (CVC): 1. The Central Vigilance Commission (CVC) shall be given statutory status. 2. Selection for the post of Central Vigilance Commissioner shall be made by a Committee comprising the Prime Minister, Home Minister and the Leader of the Opposition from a panel of outstanding civil servants and others with impeccable integrity, to be furnished by the Cabinet Secretary. The appointment shall be made by the President on the basis of the recommendations made by the Committee. This shall be done immediately. 3. The CVC shall be responsible for the efficient functioning of the CBI. While Government shall remain answerable for the CBI's functioning, to introduce visible objectivity in the mechanism to be established for over viewing the CBI's working, the CVC shall be entrusted with the responsibility of superintendence over the CBI's functioning. The CBI shall report to the CVC about cases taken up by it for investigation; progress of investigation; cases in which charge-sheets are filed and their progress. The CVC shall review the progress of all cases moved by the CBI for sanction of prosecution of public servants which are pending with the 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 CBI functions effectively and efficiently and is viewed as a non-partisan agency.

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5. The CVC shall have a separate section in its Annual Report on the CBI's functioning after the supervisory function is transferred to it. 6. Recommendations for appointment of the Director, CBI shall be made by a Committee headed by the Central Vigilance Commissioner with the Home Secretary and Secretary (Personnel) as members. The views of the incumbent Director shall be considered by the Committee for making the best choice. The Committee shall draw up a panel of IPS officers on the basis of their seniority, integrity, experience in investigation and anti-corruption work. The final selection shall be made by the Appointments Committee of the Cabinet (ACC) from the panel recommended by the Selection Committee. If none among the panel is found suitable, the reasons thereof shall be recorded and the Committee asked to draw up a fresh panel. 7. The Director, CBI shall have a minimum tenure of two years, regardless of the date of his superannuation. This would ensure that an officer suitable in all respects is not ignored merely because he has less than two years to superannuate from the date of his appointment. 8. The transfer of an incumbent Director, CBI in an extraordinary situation, including the need for him to take up a more important assignment, should have the approval of the Selection Committee. 9. The Director, CBI shall have full freedom for allocation of work within the agency as also for constituting teams for investigations. Any change made by the Director, CBI in the Head of an investigative team should be for cogent reasons and for improvement in investigation, the reasons being recorded. 10. Selection/extension of tenure of officers up to the level of Joint Director (JD) shall be decided by a Board comprising the Central Vigilance Commissioner, Home Secretary and
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Secretary (Personnel) with the Director, CBI providing the necessary inputs. The extension of tenure or premature repatriation of officers up to the level of Joint Director shall be with final approval of this Board. Only cases pertaining to the appointment, or extension of tenure of officers of the rank of Joint Director or above, shall be referred to the Appointments Committee of the Cabinet (ACC) for decision. 11. Proposals for improvement of infrastructure, methods of investigation, etc. should be decided urgently. In order to strengthen CBI's in-house expertise, professionals from the Revenue, Banking and Security sectors should be inducted into the CBI. 12. The CBI Manual based on statutory provisions of the Cr.P.C. provides essential guidelines for the CBI's functioning. It is imperative that the CBI adheres scrupulously to the provisions in the Manual in relation to its investigative functions, like raids, seizure and arrests. Any deviation from the established procedure should be viewed seriously and severe disciplinary action taken against the officials concerned. 13. The Director, CBI shall be responsible for ensuring the filing of charge-sheets in courts within the stipulated time-limits, and the matter should be kept under constant review by the Director, CBI. 14. A document on CBI's functioning should be published within three months to provide the general public with a feedback on investigations and information for redress of genuine grievances in a manner which does not compromise with the operational requirements of the CBI. 15. Time-limit of three months for grant of sanction for prosecution must be strictly adhered to. However, additional time of one month may be allowed where consultation is required with the Attorney General (AG) or any other law officer in the AG's office.
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16. The Director, CBI should conduct regular appraisal of personnel to prevent corruption and/ or inefficiency in the agency. Enforcement Directorate 1. A Selection Committee headed by the Central Vigilance Commissioner and including the Home Secretary, Secretary (Personnel) and Revenue Secretary, shall prepare a panel for appointment of the Director, Enforcement Directorate. The appointment to the post of Director shall be made by the Appointments Committee of the Cabinet (ACC) from the panel recommended by the Selection Committee. 2. The Director, Enforcement Directorate like the Director, CBI shall have a minimum tenure of two years. In his case also, premature transfer for any extraordinary reason should be approved by the aforesaid Selection Committee headed by the Central Vigilance Commissioner. 3. In view of the importance of the post of Director, Enforcement Directorate, it shall be upgraded to that of an Additional Secretary/ Special Secretary to the Government. 4. Officers of the Enforcement Directorate handling sensitive assignments shall be provided adequate security to enable them to discharge their functions fearlessly. 5. Extension of tenure up to the level of Joint Director in the Enforcement Directorate should be decided by the said Committee headed by the Central Vigilance Commissioner. 6. There shall be no premature media publicity by the CBI/ Enforcement Directorate. 7. Adjudication/ commencement of prosecution shall be made by the Enforcement Directorate within a period of one year. 8. The Director, Enforcement Directorate shall monitor and ensure speedy completion of investigations/ adjudications and
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launching of prosecutions. Revenue Secretary must review their progress regularly. 9. For speedy conduct of investigations abroad, the procedure to approve filing of applications for Letters Rogatory shall be streamlined and, if necessary, Revenue Secretary authorized to grant the approval. 10. A comprehensive circular shall be published by the Directorate to inform the public about the procedures/ systems of its functioning for the sake of transparency. 11. In-house legal advice mechanism shall be strengthened by appointment of competent legal advisers in the CBI/ Directorate of Enforcement. 12. The Annual Report of the Department of Revenue shall contain a detailed account on the working of the Enforcement Directorate. Nodal Agency 1. A Nodal Agency headed by the Home Secretary with Member (Investigation), Central Board of Direct Taxes, Director General, Revenue Intelligence, Director, Enforcement and Director CBI as members shall be constituted for coordinated action in cases having politico-bureaucrat-criminal nexus. 2. The Nodal Agency shall meet at least once every month. 3. Working and efficacy of the Nodal Agency should be watched for about one year so as to improve it upon the basis of the experience gained within this period. Prosecution Agency 1. A panel of competent lawyers of experience and impeccable reputation shall be prepared with the advice of the Attorney General. Their services shall be utilized as prosecuting counsel in cases of significance. Even during the course of investigation of an offence, the advice of a lawyer chosen
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from the panel should be taken by the CBI/ Enforcement Directorate. 2. Every prosecution which results in the discharge or acquittal of the accused must be reviewed by a lawyer on the panel and, on the basis of the opinion given; responsibility should be fixed for dereliction of duty, if any, of the officer concerned. In such cases, strict action should be taken against the officer found guilty of dereliction of duty. 3. The preparation of the panel of lawyers with the approval of the Attorney General shall be completed within three months. 4. Steps shall be taken immediately for the constitution of an able and impartial agency comprising persons of unimpeachable integrity to perform functions akin to those of the Director of Prosecutions in U.K. On the constitution of such a body, the task of supervising prosecutions launched by the CBI/ Enforcement Directorate shall be entrusted to it. 5. Till the constitution of the aforesaid body, Special Counsel shall be appointed for the conduct of important trials on the recommendation of the Attorney General or any other law officer designated by him.

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Centre for PIL & Another Versus Union of India & Another 3 March, 201112
Bench: S.H. Kapadia, K.S. Panicker Radhakrishnan, Swatanter Kumar REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL ORIGINAL JURISDICTION WRIT PETITION (C) No. 348 OF 2010 Centre for PIL & Another. ... Versus Union of India & another ... With Writ Petition (C) No. 355 of 2010 JUDGMENT S. H. KAPADIA, CJI Introduction 1. The two writ petitions filed in this Court under Article 32 of the Constitution of India give rise to a substantial question of law and of public importance as to the legality of the appointment of Shri P.J. Thomas (respondent No. 2 in W.P.(C)
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Petitioner(s)

Respondent(s)

www.indiakanoon.org
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No. 348 of 2010) as Central Vigilance Commissioner under Section 4(1) of the Central Vigilance Commission Act, 2003 (2003 Act; for short). 2. Government is not accountable to the courts in respect of policy decisions. However, they are accountable for the legality of such decisions. While deciding this case, we must keep in mind the difference between legality and merit as also between judicial review and merit review. On 3rd September, 2010, the High Powered Committee (HPC for short), duly constituted under the proviso to Section 4(1) of the 2003 Act, had recommended the name of Shri P.J. Thomas for appointment to the post of Central Vigilance Commissioner. The validity of this recommendation falls for judicial scrutiny in this case. If a duty is cast under the proviso to Section 4(1) on the HPC to recommend to the President the name of the selected candidate, the integrity of that decision making process is got to ensure that the powers are exercised for the purposes and in the manner envisaged by the said Act, otherwise such recommendation will have no existence in the eye of law. Clarification 3. At the very outset we wish to clarify that in this case our judgment is strictly confined to the legality of the recommendation dated 3rd September, 2010 and the appointment based thereon. As of date, Shri P.J. Thomas is Accused No. 8 in criminal case CC 6 of 2003 pending in the Court of Special Judge, Thiruvananthapuram with respect to the offences under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 and under Section 120B of the Indian Penal Code (IPC for short) [hereinafter referred to as the Palmolein case]. According to the petitioners herein, Shri P.J. Thomas allegedly has played a big part in the cover-up of the 2G spectrum allocation which matter is subjudice. Therefore, we make it clear that we do not wish to comment in this case on the pending cases and our judgment herein should be strictly understood to be under judicial review on the legality
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of the appointment of respondent No. 2 and any reference in our judgment to the Palmolein case should not be understood as our observations on merits of that case. Facts 4. Shri P.J. Thomas was appointed to the Indian Administrative Service (Kerala Cadre) 1973 batch where he served in different capacities with the State Government including as Secretary, Department of Food and Civil Supplies, State of Kerala in the year 1991. During that period itself, the State of Kerala decided to import 30,000 MT of palmolein. The Chief Minister of Kerala, on 5th October, 1991, wrote a letter to the Prime Minister stating that the State was intending to import Palmolein oil and that necessary permission should be given by the concerned Ministries. On 6th November, 1991, the Government of India issued a scheme for direct import of edible oil for Public Distribution System (PDS) on the condition that an ESCROW account be opened and import clearance be granted as per the rules. Respondent No. 2 wrote letters to the Secretary, Government of India stating that against its earlier demand for import of 30,000 MT of Palmolein oil, the present minimum need was 15,000 MT and the same was to meet the heavy ensuing demand during the festivals of Christmas and Sankranti, in the middle of January, 1992, therefore, the State was proposing to immediately import the said quantity of Palmolein on obtaining requisite permission. The price for the same was fixed on 24th January, 1992, i.e., 56 days after the execution of the agreement. The Kerala State Civil Supplies Corporation Ltd. was to act as an agent of the State Government for import of Palmolein. The value of the Palmolein was to be paid to the suppliers only in Indian rupees. Further, the terms governing the ESCROW account were to be as approved by the Ministry of Finance. This letter contained various other stipulations as well. This was responded to by the Joint Secretary, Government of India, Ministry of Civil Supplies and Public Distribution, New Delhi vide letter dated 26th November, 1991 wherein it was stated that it had been decided to permit the State to import
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15,000 MT of Palmolein on the terms and conditions stipulated in the Ministry's circular of even number dated 6th November, 1991. It was specifically stated that the service charges up to a maximum of 15% in Indian rupees may be paid. After some further correspondence, the order of the State of Kerala is stated to have been approved by the Cabinet on 27th November, 1991, and the State of Kerala actually imported Palmolein by opening an ESCROW account and getting the import clearance at the rate of US $ 405 per MT in January, 1992. 5. The Comptroller and Auditor General (`CAG'), in its report dated 2nd February, 1994 for the year ended 31st March, 1993 took exception to the procedure adopted for import of Palmolein by the State Government. While mentioning some alleged irregularities, the CAG observed, "therefore, the agreement entered into did not contain adequate safeguards to ensure that imported product would satisfy all the standards laid down in Prevention of Food Adulteration Rules, 1956". This report of the CAG was placed before the Public Undertaking Committee of the Kerala Assembly. The 38th Report of the Kerala Legislative Assembly - Committee on Public Undertakings dated 19th March, 1996, inter alia, referred to the alleged following irregularities:- a. That the service fee of 15% to meet the fluctuation in exchange rate was not negotiated and hence was excessive. Even the price of the import product ought not to have been settled in US Dollars. b. That the concerned department of the State of Kerala had not invited tenders and had appointed M/s. Mala Export Corporation, an associate company of M/s. Power and Energy Pvt. Ltd., the company upon which the import order was placed as handling agent for the import. c. That the delay in opening of ESCROW accounts and in fixation of price, which were not in conformity with the circular issued by the Central Government had incurred a loss of more than Rupees 4 crores to the Exchequer.

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6. The Committee also alleged that under the pretext of plea of urgency, the deal was conducted without inviting global tenders and if the material was procured by providing ample time by inviting global tenders, other competitors would have emerged with lesser rates for the import of the item, which in turn, would have been more beneficial. 7. The Chief Editor of the Gulf India Times even filed a writ petition being O.P. No. 3813 of 1994 in the Kerala High Court praying that directions be issued to the State to register an FIR on the ground that import of Palmolein was made in violation of the Government of India Guidelines. However, it came to be dismissed by the learned Single Judge of the Kerala High Court on 4th April, 1994. Still another writ petition came to be filed by one Shri M. Vijay Kumar, who was MLA of the Opposition in the Kerala Assembly praying for somewhat similar relief. This writ petition was dismissed by a learned Single Judge of the Kerala High Court and even appeal against that order was also dismissed by the Division Bench of that Court vide order dated 27th September, 1994. 8. Elections were held in the State of Kerala on 20th May, 1996 and the Left Democratic Front formed the government. An FIR was registered against Shri Karunakaran, former Chief Minister and six others in relation to an offence under Section 13(2) read with Section 13(1) (d) of the Prevention of Corruption Act, 1988 and Section 120B of the IPC. The State of Kerala accorded its sanction to prosecute the then Chief Minister Shri Karunakaran and various officers in the State hierarchy, who were involved in the import of Palmolein, including respondent No. 2 on 30th November, 1999. 9. Shri Karunakaran, the then Chief Minister filed a petition before the High Court being Criminal Miscellaneous No.1353/1997 praying for quashing of the said FIR registered against him and the other officers. Shri P.J. Thomas herein was not a party in that petition. However, the High Court dismissed the said writ petition declining to quash the FIR registered
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against the said persons. In the meanwhile, a challan (report under Section 173 of the Code of Criminal Procedure) had also been filed before the Court of Special Judge, Thiruvananthapuram and in this background the State of Kerala, vide its letter dated 31st December, 1999 wrote to the Department of Personnel and Training (DoPT) seeking sanction to prosecute the said person before the Court of competent jurisdiction. Keeping in view the investigation of the case conducted by the agency, two other persons including Shri P.J. Thomas were added as accused Nos. 7 and 8. 10. Shri Karunakaran challenged the order before this Court by filing a Petition for Special Leave to Appeal, being Criminal Appeal No. 86 of 1998, which also came to be dismissed by this Court on 29th March, 2000. This Court held that after going through the pleadings of the parties and keeping in view the rival submissions made before us, we are of the opinion that the registration of the FIR against the appellants and others cannot be held to be the result of mala fides or actuated by extraneous considerations. The menace of corruption cannot be permitted to be hidden under the carpet of the legal technicalities...;. The Government Order granting sanction (Annexure R-I in that petition) was also upheld by this Court and it was further held that our observations with respect to the legality of the Government Order are not conclusive regarding its constitutionality but are restricted so far as its applicability to the registration of the FIR against the appellant is concerned. We are, therefore, of the opinion that the aforesaid Government Order has not been shown to be in any way illegal or unconstitutional so far as the rights of the appellants are concerned...;. Granting liberty to the parties to raise all pleas before the Trial Court, the appeal was dismissed. In the chargesheet filed before the Trial Court, in paragraph 7, definite role was attributed to Accused No. 8 (respondent No. 2 herein) and allegations were made against him. 11. For a period of 5 years, the matter remained pending with the Central Government and vide letter dated 20th December,
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2004, the Central Government asked the State Government to send a copy of the report which had been filed before the Court of competent jurisdiction. After receiving the request of the State Government, it appears that the file was processed by various authorities and as early as on 18th January, 2001, a note was put up by the concerned Under Secretary that a regular departmental enquiry should be held against Shri P.J. Thomas and Shri Jiji Thomson for imposing a major penalty. According to this note, it was felt that because of lack of evidence, the prosecution may not succeed against Shri P.J. Thomas but sanction should be accorded for prosecution of Shri Jiji Thomson. On 18th February, 2003, the Do.P.T had made a reference to the Central Vigilance Commission (CVC; for short) on the cited subject, which was responded to by the CVC vide their letter dated 3rd June, 2003 and it conveyed its opinion as follows: Department of Personnel; Training may refer to their DO letter No.107/1 /2000-AVD.I dated 18.02.2003 on the subject cited above. 2. Keeping in view the facts and circumstances of the case, the Commission would advise the Department of Personnel & Training to initiate major penalty proceedings against Shri P.J. Thomas, IAS (KL: 73) and Shri Jiji Thomson, IAS (KL:80) and completion of proceedings thereof by appointing departmental IO. 3. Receipt of the Commission's advice may be acknowledged; 12. Despite receipt of the above opinion of CVC, the matter was still kept pending, though a note was again put up on 24th February, 2004 on similar lines as that of 18th January, 2001. In the meanwhile, the State of Kerala, vide its letter dated 24th January, 2005 wrote to the DoPT that for reasons recorded in the letter, they wish to withdraw their request for according the sanction for prosecution of the officers, including respondent No. 2, as made vide their letter dated 31st December, 1999. The
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matter which was pending for all this period attained a quietus in view of the letter of the State of Kerala and the PMO had been informed accordingly. 13. In its letter dated 4th November, 2005, the State took the position that the allegations made by the Investigating Agency were invalid and the cases and request for sanction against Shri P.J. Thomas should be withdrawn. 14. On 18th May, 2006 again, the Left Democratic Front formed the Government in the State of Kerala with Mr. Achuthanandan as the Chief Minister. This time the Government of Kerala filed an affidavit in this Court disassociating itself from the contents of the earlier affidavit. 15. Vide letter dated 10th October, 2006, the Chief Secretary to the Government of Kerala again wrote a letter to the Government of India informing them that the State Government had decided to continue the prosecution launched by it and as such it sought to withdraw its above letter dated 24th January, 2005. In other words, it reiterated its request for grant of sanction by the Central Government. Vide letter dated 25th November, 2006, the Additional Secretary to the DoPT wrote to the State of Kerala asking them for the reasons for change in stand, in response to the letter of the State of Kerala dated 10th October, 2006. This action of the State Government reviving its sanction and continuing prosecution against Shri Karunakaran and others, including Respondent No. 2, was challenged by Shri Karunakaran by filing Criminal Revision Petition No. 430 of 2001 in the High Court of Kerala on the ground that the Government Order was liable to be set aside on the ground of mala fide and arbitrariness. This petition was dismissed by the High Court. In its judgment, the High Court referred to the alleged role of Shri P.J. Thomas in the Palmolein case. The action of the State Government or pendency of proceedings before the Special Judge at Thiruvananthapuram was never challenged by Shri P.J. Thomas before any court of competent jurisdiction. The request of the State Government for sanction by the Central
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Government was considered by different persons in the Ministry and vide its noting dated 10th May, 2007, a query was raised upon the CVC as to whether pendency of a reply to Ministry's letter, from State Government in power, on a matter already settled by the previous State Government should come in the way of empanelment of these officers for appointment to higher post in the Government. Rather than rendering the advice asked for, the CVC vide its letter dated 25th June, 2007 informed the Ministry as follows: Department of Personnel & Training may refer to their note dated 17.05.2007, in file No.107/1/2000-AVD-I, on the above subject. 2. The case has been re-examined and Commission has observed that no case is made out against S/Shri P.J. Thomas and Jiji Thomson in connection with alleged conspiracy with other public servants and private persons in the matter of import of Palmolein through a private firm. The above said officers acted in accordance with a legitimately taken Cabinet decision and no loss has been caused to the State Government and most important, no case is made out that they had derived any benefit from the transaction. (Emphasis supplied) 3. In view of the above, Commission advises that the case against S/Shri P.J. Thomas and Jiji Thomson may be dropped and matter be referred once again thereafter to the Commission so that Vigilance Clearance as sought for now can be recorded. 4. DOPT's file No.107/1/2000-AVD-I along with the records of the case is returned herewith. Its receipt may be acknowledged. Action taken in pursuance of Commission's advice may be intimated to the Commission early; 16. It may be noticed that neither in the above reply nor on the file any reasons are available as to why CVC had changed its earlier opinion/stand as conveyed to the Ministry vide its letter
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dated 3rd June, 2003. After receiving the above advice of CVC, the Ministry on 6th July, 2007 had recorded a note in the file that as far as CVC's advice regarding dropping all proceedings is concerned, the Ministry should await the action to be taken by the Government of Kerala and the relevant courts. 17. The legality and correctness of the order of the Kerala High Court dated 19th February, 2003 was questioned by Shri Karunakaran by filing a petition before this Court on which leave was granted and it came to be registered as Criminal Appeal No. 801 of 2003. This appeal was also dismissed by this Court vide its order dated 6th December, 2006. However, the parties were given liberty to raise the plea of mala fides before the High Court. Even on reconsideration, the High Court dismissed the petition filed by Shri Karunakaran raising the plea of mala fides vide its order dated 6th July, 2007. The High Court had, thus, declined to accept that action of the State Government in prosecuting the persons stated therein was actuated by mala fides. The order of the High Court was again challenged by Shri Karunakaran by preferring a Petition for Special Leave to Appeal before this Court. This Court had stayed further proceedings before the Trial Court. This appeal remained pending till 23rd December, 2010 when it abated because of unfortunate demise of Shri Karunakaran. 18. Vide order dated 18th September, 2007, the Government of Kerala appointed Shri P.J. Thomas as the Chief Secretary. Thereafter, on 6th October, 2008 CVC accorded vigilance clearance to all officers except Smt. Parminder M. Singh. We have perused the files submitted by the learned Attorney General for India. From the said files we find that there are at least six notings of DoPT between 26th June, 2000 and 2nd November, 2004 which has recommended initiation of penalty proceedings against Shri P.J. Thomas and yet in the clearance given by CVC on 6th October, 2008 and in the Brief prepared by DoPT dated 1st September, 2010 and placed before HPC there is no reference to the earlier notings of the then DoPT and nor any reason has been given as to why CVC had changed its views
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while granting vigilance clearance on 6th October, 2008. On 23rd January, 2009, Shri P.J. Thomas was appointed as Secretary, Parliamentary Affairs to the Government of India. 19. The DoPT empanelled three officers vide its note dated 1st September, 2010. Vide the same note along with the Brief the matter was put up to the HPC for selecting one candidate out of the empanelled officers for the post of Central Vigilance Commissioner. The meeting of the HPC consisting of the Prime Minister, the Home Minister and the Leader of the Opposition was held on 3rd September, 2010. In the meeting, disagreement was recorded by the Leader of the Opposition, despite which, name of Shri P.J. Thomas was recommended for appointment to the post of Central Vigilance Commissioner by majority. A note was thereafter put up with the recommendation of the HPC and placed before the Prime Minister which was approved on the same day. On 4th September, 2010, the same note was submitted to the President who also approved it on the same day. Consequently, Shri P.J. Thomas was appointed as Central Vigilance Commissioner and he took oath of his office. Setting-up of CVC 20. Vigilance is an integral part of all government institutions. Anti-corruption measures are the responsibility of the Central Government. Towards this end the Government set up the following departments: (i) CBI (ii) Administrative Vigilance Division in DoPT (iii) Domestic Vigilance Units in the Ministries/ Departments, Government companies, Government Corporations, nationalized banks and PSUs (iv) CVC 21. Thus, CVC as an integrity institution was set up by the Government of India in 1964 vide Government Resolution pursuant to the recommendations of Santhanam Committee.
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However, it was not a statutory body at that time. According to the recommendations of the Santhanam Committee, CVC, in its functions, was supposed to be independent of the executive. The sole purpose behind setting up of the CVC was to improve the vigilance administration of the country. 22. In September, 1997, the Government of India established the Independent Review Committee to monitor the 20 functioning of CVC and to examine the working of CBI and the Enforcement Directorate. Independent Review Committee vide its report of December, 1997 suggested that CVC be given a statutory status. It also recommended that the selection of Central Vigilance Commissioner shall be made by a High Powered Committee comprising of the Prime Minister, the Home Minister and the Leader of Opposition in Lok Sabha. It also recommended that the appointment shall be made by the President of India on the specific recommendations made by the HPC. That, the CVC shall be responsible for the efficient functioning of CBI; CBI shall report to CVC about cases taken up for investigations; the appointment of CBI Director shall be by a Committee headed by the Central Vigilance Commissioner; the Central Vigilance Commissioner shall have a minimum fixed tenure and that a Committee headed by the Central Vigilance Commissioner shall prepare a panel for appointment of Director of Enforcement. 23. On 18th December, 1997 the judgment in the case of Vineet Narain v. Union of India [(1998) 1 SCC 226] came to be delivered. Exercising authority under Article 32 read with 21 Article 142, this Court in order to implement an important constitutional principle of the rule of law ordered that CVC shall be given a statutory status as recommended by Independent Review Committee. All the above recommendations of Independent Review Committee were ordered to be given a statutory status.

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24. The judgment in Vineet Narain's case (supra) was followed by the 1999 Ordinance under which CVC became a multimember Commission headed by Central Vigilance Commissioner. The 1999 Ordinance conferred statutory status on CVC. The said Ordinance incorporated the directions given by this Court in Vineet Narain's case. Suffice it to state, that, the 1999 Ordinance stood promulgated to improve the vigilance administration and to create a culture of integrity as far as government administration is concerned. 25. The said 1999 Ordinance was ultimately replaced by the enactment of the 2003 Act which came into force with effect from 11th September, 2003. Analysis of the 2003 Act 26. The 2003 Act has been enacted to provide for the 22 constitution of a Central Vigilance Commission as an institution to inquire or cause inquiries to be conducted into offences alleged to have been committed under the Prevention of Corruption Act, 1988 by certain categories of public servants of the Central Government, corporations established by or under any Central Act, Government companies, societies and local authorities owned or controlled by the Central Government and for matters connected therewith or incidental thereto (see Preamble). By way of an aside, we may point out that in Australia, US, UK and Canada there exists a concept of integrity institutions. In Hong Kong we have an Independent Commission against corruption. In Western Australia there exists a statutory Corruption Commission. In Queensland, we have Misconduct Commission. In New South Wales there is Police Integrity Commission. All these come within the category of integrity institutions. In our opinion, CVC is an integrity institution. This is clear from the scope and ambit (including the functions of the Central Vigilance Commissioner) of the 2003 Act. It is an Institution which is statutorily created under the Act. It is to supervise vigilance administration. The 2003 Act provides for a mechanism by which the CVC retains control over CBI. That is
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the reason why it is given autonomy and insulation from external influences under the 2003 Act. 27. For the purposes of deciding this case, we need to quote the relevant provisions of the 2003 Act. 3. Constitution of Central Vigilance Commission.(2) The Commission shall consist of - (a) a Central Vigilance Commissioner - Chairperson; (b) Not more than two Vigilance Commissioners -Members. (3) The Central Vigilance Commissioner and the Vigilance Commissioners shall be appointed from amongst persons-(a) Who have been or are in an All-India Service or in any civil service of the Union or in a civil post under the Union having knowledge and experience in the matters relating to vigilance, policy making and administration including police administration; 4. Appointment of Central Vigilance Commissioner and Vigilance Commissioners.(1) The Central Vigilance Commissioner and the Vigilance Commissioners shall be appointed by the President by warrant under his hand and seal: Provided that every appointment under this sub- 24 section shall be made after obtaining the recommendation of a Committee consisting of-(a) the Prime Minister -- Chairperson; (b) the Minister of Home Affairs -- Member; (c) the Leader of the Opposition in the House of the People --Member. Explanation.--For the purposes of this sub- section, "the Leader of the Opposition in the House of the People" shall, when no such Leader has been
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so recognized, include the Leader of the single largest group in opposition of the Government in the House of the People. (2) No appointment of a Central Vigilance Commissioner or a Vigilance Commissioner shall be invalid merely by reason of any vacancy in the Committee. 5. Terms and other conditions of service of Central Vigilance Commissioner (1) Subject to the provisions of sub-sections (3) and (4), the Central Vigilance Commissioner shall hold office for a term of four years from the date on which he enters upon his office or till he attains the age of sixty-five years, whichever is earlier. The Central Vigilance Commissioner, on ceasing to hold the office, shall be ineligible for reappointment in the Commission. (3) The Central Vigilance Commissioner or a Vigilance Commissioner shall, before he enters upon his office, make and subscribe before the President, or some other person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in Schedule to this Act. (6) On ceasing to hold office, the Central 25 Vigilance Commissioner and every other Vigilance Commissioner shall be ineligible for-(a) any diplomatic assignment, appointment as administrator of a Union territory and such other assignment or appointment which is required by law to be made by the President by warrant under his hand and seal. (b) further employment to any office of profit under the Government of India or the Government of a State. 6. Removal of Central Vigilance Commissioner and Vigilance Commissioner.- (1) Subject to the provisions of sub-section (3), the Central Vigilance Commissioner or any Vigilance Commissioner shall be removed from his office only by
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order of the President on the ground of proved misbehaviour or incapacity after the Supreme Court, on a reference made to it by the President, has, on inquiry, reported that the Central Vigilance Commissioner or any Vigilance Commissioner, as the case may be, ought on such ground be removed. (3) Notwithstanding anything contained in sub- section (1), the President may by order remove from office the Central Vigilance Commissioner or any Vigilance Commissioner if the Central Vigilance Commissioner or such Vigilance Commissioner, as the case may be,-(a) is adjudged an insolvent; or (b) has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or (c) engages during his term of office in any paid employment outside the duties of his office; or (d) is, in the opinion of the President, unfit to continue in office by reason of infirmity of mind or body; or (e) has acquired such financial or other interest as is likely to affect prejudicially his functions as a Central Vigilance Commissioner or a Vigilance Commissioner. 8. Functions and powers of Central Vigilance Commission(1) The functions and powers of the Commission shall be to-(a) 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 or an offence with which a public servant specified in sub-section (2) may, under the Code of Criminal Procedure, 1973, be charged at the same trial; (b) give directions to the Delhi Special Police Establishment for the purpose of discharging the responsibility entrusted to it
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under sub-section (1) of section 4 of the Delhi Special Police Establishment Act, 1946: (d) inquire or cause an inquiry or investigation to be made into any complaint against any official belonging to such category of officials specified in sub-section (2) wherein it is alleged that he has committed an offence under the Prevention of Corruption Act, 1988 and an offence with which a public servant specified in subsection (2) may, under the Code of Criminal Procedure, 1973, be charged at the same trial; (e) review the progress of investigations conducted by the Delhi Special Police Establishment into offences alleged to have been committed under the Prevention of Corruption Act, 1988 or the public servant may, under the Code of Criminal Procedure, 1973, be charged at the same trial; (f) review the progress of applications pending with the competent authorities for sanction of prosecution under the Prevention of Corruption Act, 1988; (h) exercise superintendence over the vigilance administration of the various Ministries of the Central Government or corporations established by or under any Central Act, Government companies, societies and local authorities owned or controlled by that Government: (2) The persons referred to in clause (d) of sub- section (1) are as follows: (a) members of All-India Services serving in connection with the affairs of the Union and Group A officers of the Central Government; (b) such level of officers of the corporations established by or under any Central Act, Government companies, societies and other local authorities, owned or controlled by the Central Government, as that Government may, by notification in the Official Gazette, specify in this behalf:
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Provided that till such time a notification is issued under this clause, all officers of the said corporations, companies, societies and local authorities shall be deemed to be the persons referred to in clause (d) of sub-section (1). 11. Power relating to inquiries-The Commission shall, while conducting any inquiry referred to in clauses (c) and (d) of subsection (1) of section 8, have all the powers of a civil court trying a suit under the Code of Civil Procedure, 1908 and in particular, in respect of the following matters, namely:-(a) summoning and enforcing the attendance of any person from any part of India and examining him on oath; (b) requiring the discovery and production of any document; (c) receiving evidence on affidavits; (d) requisitioning any public record or copy thereof from any court or office; (e) issuing commissions for the examination of witnesses or other documents; And (f) any other matter which may be prescribed. THE SCHEDULE [See section 5(3)] Form of oath or affirmation to be made by the Central Vigilance Commissioner or Vigilance Commissioner: & I, A. B., having been appointed Central Vigilance Commissioner (or Vigilance Commissioner) of the Central Vigilance Commission do swear in the name of god/ solemnly affirm that I will bear true faith and allegiance to the Constitution of India as by law established, that I will uphold the sovereignty and integrity of India, that I will duly and faithfully and to the best of my ability, knowledge and judgment perform
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the duties of my office without fear or favour, affection or ill-will and that I will uphold the constitution and the laws. 28. On analysis of the 2003 Act, the following are the salient features. CVC is given a statutory status. It stands established as an Institution. CVC stands established to inquire into offences alleged to have been committed under the Prevention of Corruption Act, 1988 by certain categories of public servants enumerated above. Under Section 3(3)(a) the Central Vigilance Commissioner and the Vigilance Commissioners are to be appointed from amongst persons who have been or are in All India Service or in any civil service of the Union or who are in a civil post under the Union having knowledge and experience in the matters relating to vigilance, policy making and administration including police administration. The underlined words who have been or who are; in Section 3(3)(a) refer to the person holding office of a civil servant or who has held such office. These underlined words came up for consideration by this Court in the case of N. Kannadasan v. Ajoy Khose and Others [(2009) 7 SCC 1] in which it has been held that the said words indicate the eligibility criteria and further they indicate that such past or present eligible persons should be without any blemish whatsoever and that they should not be appointed merely because they are eligible to be considered for the post. One more aspect needs to be highlighted. The constitution of CVC as a statutory body under Section 3 shows that CVC is an Institution. The key word is Institution. We are emphasizing the key word for the simple reason that in the present case the recommending authority (High Powered Committee) has gone by personal integrity of the officers empanelled and not by institutional integrity. 29. Section 4 refers to appointment of Central Vigilance Commissioner and Vigilance Commissioners. Under Section 4(1) they are to be appointed by the President by warrant under her hand and seal. Section 4(1) indicates the importance of the post. Section 4(1) has a proviso. Every appointment under Section 4(1) is to be made after obtaining the recommendation
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of a committee consisting of - (a) The Prime Minister Chairperson; (b) The Minister of Home Affairs - Member; (c) The Leader of the Opposition in the House of the People - Member. 30. For the sake of brevity, we may refer to the Selection Committee as High Powered Committee. The key word in the proviso is the word recommendation. While making the recommendation, the HPC performs a statutory duty. The impugned recommendation dated 3rd September, 2010 is in exercise of the statutory power vested in the HPC under the proviso to Section 4(1). The post of Central Vigilance Commissioner is a statutory post. The Commissioner performs statutory functions as enumerated in Section 8. The word `recommendation' in the proviso stands for an informed decision to be taken by the HPC on the basis of a consideration of relevant material keeping in mind the purpose, object and policy of the 2003 Act. As stated, the object and purpose of the 2003 Act is to have an integrity Institution like CVC which is in charge of vigilance administration and which constitutes an anticorruption mechanism. In its functions, the CVC is similar to Election Commission, Comptroller and Auditor General, Parliamentary Committees etc. Thus, while making the recommendations, the service conditions of the candidate being a public servant or civil servant in the past is not the sole criteria. The HPC must also take into consideration the question of institutional competency into account. If the selection adversely affects institutional competency and functioning then it shall be the duty of the HPC not to recommend such a candidate. Thus, the institutional integrity is the primary consideration which the HPC is required to consider while making recommendation under Section 4 for appointment of Central Vigilance Commissioner. In the present case, this vital aspect has not been taken into account by the HPC while recommending the name of Shri P.J. Thomas for appointment as Central Vigilance Commissioner. We do not wish to discount personal integrity of the candidate. What we are emphasizing is
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that institutional integrity of an institution like CVC has got to be kept in mind while recommending the name of the candidate. Whether the incumbent would or would not be able to function? Whether the working of the Institution would suffer? If so, would it not be the duty of the HPC not to recommend the person. In this connection the HPC has also to keep in mind the object and the policy behind enactment of the 2003 Act. Under Section 5(1) the Central Vigilance Commissioner shall hold the office for a term of 4 years. Under Section 5(3) the Central Vigilance Commissioner shall, before he enters upon his office, makes and subscribes before the President an oath or affirmation according to the form set out in the Schedule to the Act. Under Section 6(1) the Central Vigilance Commissioner shall be removed from his office only by order of the President and that too on the ground of proved misbehaviour or incapacity after the Supreme Court, on a reference made to it by the President, has on inquiry reported that the Central Vigilance Commissioner be removed. These provisions indicate that the office of the Central Vigilance Commissioner is not only given independence and insulation from external influences; it also indicates that such protections are given in order to enable the Institution of CVC to work in a free and fair environment. The prescribed form of oath under Section 5(3) requires Central Vigilance Commissioner to uphold the sovereignty and integrity of the country and to perform his duties without fear or favour. All these provisions indicate that CVC is an integrity institution. The HPC has, therefore, to take into consideration the values independence and impartiality of the Institution. The said Committee has to consider the institutional competence. It has to take an informed decision keeping in mind the abovementioned vital aspects indicated by the purpose and policy of the 2003 Act. 31. Chapter III refers to functions and powers of the Central Vigilance Commission. CVC exercises superintendence over the functioning of the Delhi Special Police Establishment insofar as it relates to investigation of offences alleged to have been committed under the Prevention of Corruption Act, 1988, or an
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offence with which a public servant specified in sub- section (2) may, under the Code of Criminal Procedure, 1973 be charged with at the trial. Thus, CVC is empowered to exercise superintendence over the functioning of CBI. It is also empowered to give directions to CBI. It is also empowered to review the progress of investigations conducted by CBI into offences alleged to have been committed under the Prevention of Corruption Act, 1988 or under the Code of Criminal Procedure by a public servant. CVC is also empowered to exercise superintendence over the vigilance administration of various ministries of the Central Government, PSUs, Government companies etc. The powers and functions discharged by CVC is the sole reason for giving the institution the administrative autonomy, independence and insulation from external influences. Validity of the recommendation dated 3rd September, 2010: 32. One of the main contentions advanced on behalf of Union of India and Shri P.J. Thomas before us was that once the CVC clearance had been granted on 6th October, 2008 and once the candidate stood empanelled for appointment at the Centre and in fact stood appointed as Secretary, Parliamentary Affairs and, thereafter, Secretary Telecom, it was legitimate for the HPC to proceed on the basis that there was no impediment in the way of appointment of respondent No. 2 on the basis of the pending case which had been found to be without any substance. 33. We find no merit in the above submissions. Judicial review seeks to ensure that the statutory duty of the HPC to recommend under the proviso to Section 4(1) is performed keeping in mind the policy and the purpose of the 2003 Act. We are not sitting in appeal over the opinion of the HPC. What we have to see is whether relevant material and vital aspects having nexus to the object of the 2003 Act were taken into account when the decision to recommend took place on 3rd September, 2010. Appointment to the post of the Central
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Vigilance Commissioner must satisfy not only the eligibility criteria of the candidate but also the decision making process of the recommendation [see para 88 of N. Kannadasan (supra)]. The decision to recommend has got to be an informed decision keeping in mind the fact that CVC as an institution has to perform an important function of vigilance administration. If a statutory body like HPC, for any reason whatsoever, fails to look into the relevant material having nexus to the object and purpose of the 2003 Act or takes into account irrelevant circumstances then its decision would stand vitiated on the ground of official arbitrariness [see State of Andhra Pradesh v. Nalla Raja Reddy (1967) 3 SCR 28]. Under the proviso to Section 4(1), the HPC had to take into consideration what is good for the institution and not what is good for the candidate [see Para 93 of N. Kannadasan (supra)]. When institutional integrity is in question, the touchstone should be public interest which has got to be taken into consideration by the HPC and in such cases the HPC may not insist upon proof [see Para 103 of N. Kannadasan (supra)]. We should not be understood to mean that the personal integrity is not relevant. It certainly has a co- relationship with institutional integrity. The point to be noted is that in the present case the entire emphasis has been placed by the CVC, the DoPT and the HPC only on the bio-data of the empanelled candidates. None of these authorities have looked at the matter from the larger perspective of institutional integrity including institutional competence and functioning of CVC. Moreover, we are surprised to find that between 2000 and 2004 the noting of DoPT dated 26th June, 2000, 18th January, 2001, 20th June, 2003, 24th February, 2004, 18th October, 2004 and 2nd November, 2004 have all observed that penalty proceedings may be initiated against Shri P.J. Thomas. Whether State should initiate such proceedings or the Centre should initiate such proceedings was not relevant. What is relevant is that such noting were not considered in juxtaposition with the clearance of CVC granted on 6th October, 2008. Even in the Brief submitted to the HPC by DoPT, there is no reference to the said noting between the years 2000 and 2004. Even in the C.V. of Shri P.J. Thomas, there is
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no reference to the earlier noting of DoPT recommending initiation of penalty proceedings against Shri P.J. Thomas. Therefore, even on personal integrity, the HPC has not considered the relevant material. The learned Attorney General, in his usual fairness, stated at the Bar that only the Curriculum Vitae of each of the empanelled candidates stood annexed to the agenda for the meeting of the HPC. The fact remains that the HPC, for whatsoever reason, has failed to consider the relevant material keeping in mind the purpose and policy of the 2003 Act. The system governance established by the Constitution is based on distribution of powers and functions amongst the three organs of the State, one of them being the Executive whose duty is to enforce the laws made by the Parliament and administer the country through various statutory bodies like CVC which is empowered to perform the function of vigilance administration. Thus, we are concerned with the institution and its integrity including institutional competence and functioning and not the desirability of the candidate alone who is going to be the Central Vigilance Commissioner, though personal integrity is an important quality. It is the independence and impartiality of the institution like CVC which has to be maintained and preserved in larger interest of the rule of law [see Vineet Narain (supra)]. While making recommendations, the HPC performs a statutory duty. Its duty is to recommend. While making recommendations, the criteria of the candidate being a public servant or a civil servant in the past is not the sole consideration. The HPC has to look at the record and take into consideration whether the candidate would or would not be able to function as a Central Vigilance Commissioner. Whether the institutional competency would be adversely affected by pending proceedings and if by that touchstone the candidate stands disqualified then it shall be the duty of the HPC not to recommend such a candidate. In the present case apart from the pending criminal proceedings, as stated above, between the period 2000 and 2004 various notings of DoPT recommended disciplinary proceedings against Shri P.J. Thomas in respect of Palmolein case. Those noting have not been considered by the HPC. As stated above, the 2003 Act confers autonomy and
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independence to the institution of CVC. Autonomy has been conferred so that the Central Vigilance Commissioner could act without fear or favour. We may reiterate that institution is more important than an individual. This is the test laid down in Para 93 of N. Kannadasan's case (supra). In the present case, the HPC has failed to take this test into consideration. The recommendation dated 3rd September, 2010 of HPC is entirely premised on the blanket clearance given by CVC on 6th October, 2008 and on the fact of respondent No. 2 being appointed as Chief Secretary of Kerala on 18th September, 2007; his appointment as Secretary of Parliamentary Affairs and his subsequent appointment as Secretary, Telecom. In the process, the HPC, for whatever reasons, has failed to take into consideration the pendency of Palmolein case before the Special Judge, Thiruvananthapuram being case CC 6 of 2003; the sanction accorded by the Government of Kerala on 30th November, 1999 under Section 197 Cr.P.C. for prosecuting inter alia Shri P.J. Thomas for having committed alleged offence under Section 120-B IPC read with Section 13(1)(d) of the Prevention of Corruption Act; the judgment of the Supreme Court dated 29th March, 2000 in the case of K. Karunakaran v. State of Kerala and Another in which this Court observed that, the registration of the FIR against Shri Karunakaran and others cannot be held to be the result of malafide or actuated by extraneous considerations. The menace of corruption cannot be permitted to be hidden under the carpet of legal technicalities and in such cases probes conducted are required to be determined on facts and in accordance with law. Further, even the judgment of the Kerala High Court in Criminal Revision Petition No. 430 of 2001 has not been considered. It may be noted that the clearance of CVC dated 6th October, 2008 was not binding on the HPC. However, the aforestated judgment of the Supreme Court dated 29th March, 2000 in the case of K. Karunakaran vs. State of Kerala and Another in Criminal Appeal No. 86 of 1998 was certainly binding on the HPC and, in any event, required due weightage to be given while making recommendation, particularly when the said judgment had emphasized the importance of probity in high offices. This is
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what we have repeatedly emphasized in our judgment institution is more important than individual(s). For the above reasons, it is declared that the recommendation made by the HPC on 3rd September, 2010 is non-est in law. Is Writ of Quo Warranto invocable? 34. Shri K.K. Venugopal, learned senior counsel appearing on behalf of respondent No. 2, submitted that the present case is neither a case of infringement of the statutory provisions of the 2003 Act nor of the appointment being contrary to any procedure or rules. According to the learned counsel, it is well settled that a writ of quo warranto applies in a case when a person usurps an office and the allegation is that he has no title to it or a legal authority to hold it. According to the learned counsel for a writ of quo warranto to be issued there must be a clear infringement of the law. That, in the instant case there has been no infringement of any law in the matter of appointment of respondent No. 2. 35. The procedure of quo warranto confers jurisdiction and authority on the judiciary to control executive action in the matter of making appointments to public offices against the relevant statutory provisions. Before a citizen can claim a writ of quo warranto he must satisfy the court inter-alia that the office in question is a public office and it is held by a person without legal authority and that leads to the inquiry as to whether the appointment of the said person has been in accordance with law or not. A writ of quo warranto is issued to prevent a continued exercise of unlawful authority. 36. One more aspect needs to be mentioned. In the present petition, as rightly pointed by Shri Prashant Bhushan, learned counsel appearing on behalf of the petitioner, a declaratory relief is also sought besides seeking a writ of quo warranto. 37. At the outset it may be stated that in the main writ petition the petitioner has prayed for issuance of any other writ, direction or order which this Court may deem fit and proper in
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the facts and circumstances of this Case. Thus, nothing prevents this Court, if so satisfied, from issuing a writ of declaration. Further, as held hereinabove, recommendation of the HPC and, consequently, the appointment of Shri P.J. Thomas was in contravention of the provisions of the 2003 Act, hence, we find no merit in the submissions advanced on behalf of respondent No. 2 on non-maintainability of the writ petition. If public duties are to be enforced and rights and interests are to be protected, then the court may, in furtherance of public interest, consider it necessary to inquire into the state of affairs of the subject matter of litigation in the interest of justice [see Ashok Lanka v. Rishi Dixit (2005) 5 SCC 598]. 38. Keeping in mind the above parameters, we may now consider some of the judgments on which reliance has been placed by the learned counsel for respondent No. 2. 39. In Ashok Kumar Yadav v. State of Haryana [(1985) 4 SCC 417], the Division Bench of the Punjab and Haryana High Court had quashed and set aside selections made by the Haryana Public Service Commission to the Haryana Civil Service and other Allied Services. 40. In that case some candidates who had obtained very high marks at the written examination failed to qualify as they had obtained poor marks in the viva voce test. Consequently, they were not selected. They were aggrieved by the selections made by Haryana Public Service Commission. Accordingly, Civil Writ Petition 2495 of 1983 was filed in the High Court challenging the validity of the selections and seeking a writ for quashing and setting aside the same. There were several grounds on which the validity of the selection made by the Commission was assailed. A declaration was also sought that they were entitled to be selected. A collateral attack was launched. It was alleged that the Chairperson and members of Public Service Commission were not men of high integrity, calibre and qualification and they were appointed solely as a matter of political patronage and hence the selections made by them were
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invalid. This ground of challenge was sought to be repelled on behalf of the State of Haryana who contended that not only was it not competent to the Court on the existing set of pleadings to examine whether the Chairman and members of the Commission were men of high integrity, calibre and qualification but also there was no material at all on the basis of which the Court could come to the conclusion that they were men lacking in integrity, calibre or qualification. 41. The writ petition came to be heard by a Division Bench of the High Court of Punjab and Haryana. The Division Bench held that the Chairperson and members of the Commission had been appointed purely on the basis of political considerations and that they did not satisfy the test of high integrity, calibre and qualification. The Division Bench went to the length of alleging corruption against the Chairperson and members of the Commission and observed that they were not competent to validly wield the golden scale of viva voce test for entrance into the public service. This Court vide Para 9 observed that it was difficult to see how the Division Bench of the High Court could have possibly undertaken an inquiry into the question whether Chairman and members of the Commission were men of integrity, calibre and qualification; that such an inquiry was totally irrelevant inquiry because even if they were men lacking in integrity, calibre and qualification, it would not make their appointments invalid so long as the constitutional and legal requirement in regard to appointment are fulfilled. It was held that none of the constitutional provisions, namely, Article 316 and 319 stood violated in making appointments of the Chairperson and members of the Commission nor was any legal provision breached. Therefore, the appointments of the Chairperson and members of the Commission were made in conformity with the constitutional and legal requirements, and if that be so, it was beyond the jurisdiction of the High Court to hold that such appointments were invalid on the ground that the Chairman and the members of the Commission lacked integrity, calibre and qualification. The Supreme Court observed that it passes their comprehension as to how the appointments of the
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Chairman and members of the Commission could be regarded as suffering from infirmity merely on the ground that in the opinion of the Division Bench of the High Court the Chairperson and the members of the Commission were not men of integrity or calibre. In the present case, as stated hereinabove, there is a breach/ violation of the proviso to Section 4(1) of the 2003 Act, hence, writ was maintainable. 42. In R.K. Jain v. Union of India [(1993) 4 SCC 119] Shri Harish Chandra was a Senior Vice-President when the question of filling up the vacancy of the President came up for consideration. He was qualified for the post under the Rules. No challenge was made on that account. Under Rule 10(1) the Central Government was conferred the power to appoint one of the members to be the President. The validity of the Rule was not questioned. Thus, the Central Government was entitled to appoint Shri Harish Chandra as the President. It was stated that the track record of Shri Harish Chandra was poor. He was hardly fit to hold the post of the President. It was averred that Shri Harish Chandra has been in the past proposed for appointment as a Judge of the Delhi High Court. His appointment, however, did not materialize due to certain adverse reports. It was held by this Court that judicial review is concerned with whether the incumbent possessed requisite qualification for appointment and the manner in which the appointment came to be made or the procedure adopted was fair, just and reasonable. When a candidate was found qualified and eligible and is accordingly appointed by the executive to hold an office as a Member or Vice President or President of a Tribunal, in judicial review the Court cannot sit over the choice of the selection. It is for the executive to select the personnel as per law or procedure. Shri Harish Chandra was the Senior Vice President at the relevant time. The question of comparative merit which was the key contention of the petitioner could not be gone into in a PIL; that the writ petition was not a writ of quo warranto and in the circumstances the writ petition came to be dismissed. It was held that even assuming for the sake of arguments that the allegations made by the petitioner were factually accurate, still,
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this Court cannot sit in judgment over the choice of the person made by the Central Government for appointment as a President of CEGAT so long as the person chosen possesses the prescribed qualification and is otherwise eligible for appointment. It was held that this Court cannot interfere with the appointment of Shri Harish Chandra as the President of CEGAT on the ground that his track record was poor or because of adverse reports on which account his appointment as a High Court Judge had not materialized. 43. In the case of Hari Bansh Lal v. Sahodar Prasad Mahto [(2010) 9 SCC 655], the appointment of Shri Hari Bansh Lal as Chairman, Jharkhand State Electricity Board stood challenged on the ground that the board had been constituted in an arbitrary manner; that Shri Hari Bansh Lal was a person of doubtful integrity; that he was appointed as a Chairman without following the rules and procedure and in the circumstances the appointment stood challenged. On the question of maintainability, the Division Bench of this Court held that a writ of quo warranto lies only when the appointment is contrary to a statutory provision. It was further held that suitability of a candidate for appointment to a post is to be judged by the appointing authority and not by the court unless the appointment is contrary to the statutory rules/provisions. It is important to note that this Court went into the merits of the case and came to the conclusion that there was no adequate material to doubt the integrity of Shri Hari Bansh Lal who was appointed as the Chairperson of Jharkhand State Electricity Board. This Court further observed that in the writ petition there was no averment saying that the appointment was contrary to statutory provisions. 44. As stated above, we need to keep in mind the difference between judicial review and merit review. As stated above, in this case the judicial determination is confined to the integrity of the decision making process undertaken by the HPC in terms of the proviso to Section 4(1) of the 2003 Act. If one carefully examines the judgment of this Court in Ashok Kumar Yadav's
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case (supra) the facts indicate that the High Court had sat in appeal over the personal integrity of the Chairman and Members of the Haryana Public Service Commission in support of the collateral attack on the selections made by the State Public Service Commission. In that case, the High Court had failed to keep in mind the difference between judicial and merit review. Further, this Court found that the appointments of the Chairperson and Members of Haryana Public Service Commission were in accordance with the provisions of the Constitution. In that case, there was no issue as to the legality of the decision- making process. On the contrary the last sentence of para 9 supports our above reasoning when it says that it is always open to the Court to set aside the decision (selection) of the Haryana Public Service Commission if such decision is vitiated by the influence of extraneous considerations or if such selection is made in breach of the statute or the rules. 45. Even in R.K. Jain's case (supra), this Court observed vide para 73 that judicial review is concerned with whether the incumbent possessed qualifications for the appointment and the manner in which the appointment came to be made or whether procedure adopted was fair, just and reasonable. We reiterate that Government is not accountable to the courts for the choice made but Government is accountable to the courts in respect of the lawfulness/legality of its decisions when impugned under the judicial review jurisdiction. We do not wish to multiply the authorities on this point. Appointment of Central Vigilance Commissioner at the President's discretion 46. On behalf of respondent No. 2 it was submitted that though under Section 4(1) of the 2003 Act, the appointment of Central Vigilance Commissioner is made on the basis of the recommendation of a High Powered Committee, the President of India is not to act on the advice of the Council of Ministers as is provided in Article 74 of the Constitution. In this connection, it was submitted that the exercise of powers by the President in appointing respondent No. 2 has not been put in issue in the PIL, nor is there any pleading in regard to the exercise of
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powers by the President and in the circumstances it is not open to the petitioner to urge that the appointment is invalid. 47. Shri G.E. Vahanvati, learned Attorney General appearing on behalf of Union of India, however, submitted that the proposal sent after obtaining and accepting the recommendations of the High Powered Committee under Section 4(1) was binding on the President. Learned counsel submitted that under Article 74 of the Constitution the President acts in exercise of her function on the aid and advice of the Council of Ministers headed by the Prime Minister which advice is binding on the President subject to the proviso to Article 74. According to the learned counsel Article 77 of the Constitution inter alia provides for conduct of Government Business. Under Article 77(3), the President makes rules for transaction of Government Business and for allocation of business among the Ministers. On facts, learned Attorney General submitted that under Government of India (Transaction of Business) Rules, 1961 the Prime Minister had taken a decision on 3rd September, 2010 to propose the name of respondent No. 2 for appointment as Central Vigilance Commissioner after the recommendation of the High Powered Committee. It was accordingly submitted on behalf of Union of India that this advice of the Prime Minister under Article 77(3), read with Article 74 of the Constitution is binding on the President. That, although the recommendation of the High Powered Committee under Section 4(1) of the 2003 Act may not be binding on the President proprio vigore, however, if such recommendation has been accepted by the Prime Minister, who is the concerned authority under Article 77(3), and if such recommendation is then forwarded to the President under Article 74, then the President is bound to act in accordance with the advice tendered. The intention behind Article 77(3) is that it is physically impossible that every decision is taken by the Council of Ministers. The Constitution does not use the term Cabinet. Rules have been framed for convenient transaction and allocation of such business. Under the Rules of Business, the concerned authority is the Prime Minister. The advice tendered to the President by the Prime Minister regarding the
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appointment of the Central Vigilance Commissioner would be thus binding on the President. Lastly, it was submitted that unless the Constitution expressly permits the exercise of discretion by the President, every decision of the President has to be on the aid and advice of Council of Ministers. 48. Shri Venugopal, learned counsel appearing on behalf of respondent No. 2 submitted that though the President has an area of discretion in regard to exercise of certain powers under the Constitution the Constitution is silent about the exercise of powers by the President/Governor where a Statute confers such powers. In this connection learned counsel placed reliance on the judgment of this Court in Bhuri Nath v. State of J & K [(1997) 2 SCC 745]. In that case, the appellants-Baridars challenged the constitutionality of Jammu and Kashmir Shri Mata Vaishno Devi Shrine Act, 1988 which was enacted to provide for better management, administration and governance of Shri Mata Vaishno Devi Shrine and its endowments including the land and buildings attached to the Shrine. By operation of that Act the administration, management and governance of the Shrine and its Funds stood vested in the Board. Consequently, all rights of Baridars stood extinguished from the date of the commencement of the Act by operation of Section 19(1) of the Act. One of the questions which came up for consideration in that case was that when the Governor discharges the functions under the Act, is it with the aid and advice of the Council of Ministers or whether he discharges those functions in his official capacity as the Governor. This question arose because by an order dated 16th January, 1995, this Court had directed the Board to frame a scheme for rehabilitation of persons engaged in the performance of Pooja at Shri Mata Vaishno Devi Shrine. When that matter came up for hearing on 20th March, 1995, the Baridars stated that they did not want rehabilitation. Instead, they preferred to receive compensation to be determined under Section 20 of the impugned Act 1988. This Court noticed that in the absence of guidelines for determination of the compensation by the Tribunal to be appointed under Section 20 it was not possible to award compensation to the Baridars. Consequently,
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the Supreme Court ordered that the issue of compensation be left to the Governor to make appropriate guidelines to determine the compensation. Pursuant thereto, guidelines were framed by the Governor which were published in the State Gazette and placed on record on 8th May, 1995. It is in this context that the question arose that when the legislature entrusted the powers under the Act to the Governor whether the Governor discharges the functions under the Act with the aid and advice of the Council of Ministers or whether he acts in his official capacity as a Governor under the Act. After examining the Scheme of the 1988 Act the Division Bench of this Court held that the legislature of Jammu & Kashmir, while making the Act was aware that similar provisions in the Endowments Act, 1966 gives power of the State Government to dissolve the Board of Trustees of Tirupati Devasthanams and the Board of Trustees of other institutions. Thus, it is clear that the legislature entrusted the powers under the Act to the Governor in his official capacity. On examination of the 1988 Act this Court found that the Governor is to preside over the meetings of the Board and in his absence his nominee, a qualified Hindu, shall preside over the functions. That, under the 1988 Act no distinction was made between the Governor and the Executive Government. That, under the scheme of the 1988 Act there was nothing to indicate that the power was given to the Council of Ministers and the Governor was to act on its advice as executive head of the State. It is in these circumstances that this Court held that while discharging the functions under the 1988 Act the Governor acts in his official capacity. In the same judgment this Court has also referred to the judgment of the Full Bench of the Punjab and Haryana High Court in Hardwari Lal v. G.D. Tapase [AIR 1982 PH 439] in which a similar question arose as to whether the Governor in his capacity as the Chancellor of Maharshi Dayanand University acts under the 1975 Act in his official capacity as Chancellor or with the aid and advice of the Council of Ministers. The Full Bench of the High Court, after elaborate consideration of the provisions of the Act, observed that under the Maharshi Dayanand University Act 1975, the State Government would not interfere in the affairs of the
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University. Under that Act, the State Government is an Authority different and distinct from the authority of the Chancellor. Under that Act the State Government was not authorized to advise the Chancellor to act in a particular manner. Under that Act the University was a statutory body, autonomous in character and it had been given powers exercisable by the Chancellor in his absolute discretion. In the circumstances, under the scheme of that Act it was held that while discharging the functions as a Chancellor, the Governor does everything in his discretion as a Chancellor and he does not act on the aid and advice of his Council of Ministers. This judgment has no application to the scheme of the 2003 Act. As stated hereinabove, the CVC is constituted under Section 3(1) of the 2003 Act. The Central Vigilance Commissioner is appointed under Section 4(1) of the 2003 Act by the President by warrant under her hand and seal after obtaining the recommendation of a Committee consisting of the Prime Minister as the Chairperson and two other Members. As submitted by the learned Attorney General although under the 2003 Act the Central Vigilance Commissioner is appointed after obtaining the recommendation of the High Powered Committee, such recommendation has got to be accepted by the Prime Minister, who is the concerned authority under Article 77(3), and if such recommendation is forwarded to the President under Article 74, then the President is bound to act in accordance with the advice tendered. Further under the Rules of Business the concerned authority is the Prime Minister. Therefore, the advice tendered to the President by the Prime Minister regarding appointment of the Central Vigilance Commissioner will be binding on the President. It may be noted that the above submissions of the Attorney General find support even in the judgment of the Division Bench of this Court in Bhuri Nath's case (supra) which in turn has placed reliance on the judgment of this Court in Samsher Singh v. State of Punjab [(1974) 2 SCC 831] in which a Bench of 7 Judges of this Court held that under the Cabinet system of Government, as embodied in our Constitution, the Governor is the formal Head of the State. He exercises all his powers and functions conferred on him by or under the Constitution with the
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aid and advice of his Council of Ministers. That the real executive power is vested in the Cabinets Council of Ministers. The same view is reiterated in R.K. Jain's case (supra). However, in Bhuri Nath's case (supra) it has been clarified that the Governor being the constitutional head of the State, unless he is required to perform the function under the Constitution in his individual discretion, the performance of the executive power, which is coextensive with the legislative power, is with the aid and advice of the Council of Ministers headed by the Chief Minister. Thus, we conclude that the judgment in Bhuri Nath's case has no application as the scheme of the Jammu and Kashmir Shri Mata Vaishno Devi Shrine Act, 1988 as well as the scheme of Maharshi Dayanand University Act, 1975 as well as the scheme of the various Endowment Acts is quite different from the scheme of the 2003 Act. Hence, there is no merit in the contention advanced on behalf of respondent No. 2 that in the matter of appointment of Central Vigilance Commissioner under Section 4(1) of the 2003 Act the President is not to act on the advice of the Council of Ministers as is provided in Article 74 of the Constitution. Unanimity or consensus under Section 4(2) of the 2003 Act 49. One of the arguments advanced on behalf of the petitioner before us was that the recommendation of the High Powered Committee under the proviso to Section 4(1) has to be unanimous. It was submitted that CVC was set up under the Resolution dated 11th February, 1964. Under that Resolution the appointment of Central Vigilance Commissioner was to be initiated by the Cabinet Secretary and approved by the Prime Minister. However, the provision made in Section 4 of the 2003 Act was with a purpose, namely, to introduce an element of bipartisanship and political neutrality in the process of appointment of the head of the CVC. The provision made in Section 4 for including the Leader of Opposition in the High Powered Committee made a significant change from the procedure obtaining before the enactment of the said Act. It was further submitted that if unanimity is ruled out then the very purpose of inducting the Leader of Opposition in the process of
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selection will stand defeated because if the recommendation of the Committee were to be arrived at by majority it would always exclude the Leader of Opposition since the Prime Minister and the Home Minister will always be ad idem. It was submitted that one must give a purposive interpretation to the scheme of the Act. It was submitted that under Section 9 it has been inter alia stated that all business of the Commission shall, as far as possible, be transacted unanimously. It was submitted that since in Vineet Narain's case (supra) this Court had observed that CVC would be selected by a three member Committee, including the Leader of the Opposition it was patently obvious that the said Committee would decide by unanimity or consensus. That, nowhere was it stated that the Committee would decide by majority. 50. We find no merit in these submissions. To accept the contentions advanced on behalf of the petitioners would mean conferment of a veto right on one of the members of the HPC. To confer such a power on one of the members would amount to judicial legislation. Under the proviso to Section 4(1) Parliament has put its faith in the High Powered Committee consisting of the Prime Minister, the minister for Home Affairs and the Leader of the Opposition in the House of the People. It is presumed that such High Powered Committee entrusted with wide discretion to make a choice will exercise its powers in accordance with the 2003 Act, objectively and in a fair and reasonable manner. It is well settled that mere conferment of wide discretionary powers per se will not violate the doctrine of reasonableness or equality. The 2003 Act is enacted with the intention that such High Powered Committee will act in a bipartisan manner and shall perform its statutory duties keeping in view the larger national interest. Each of the Members is presumed by the legislature to act in public interest. On the other hand, if veto power is given to one of the three Members, the working of the Act would become unworkable. One more aspect needs to be mentioned. Under Section 4(2) of the 2003 Act it has been stipulated that the vacancy in the Committee shall not invalidate the appointment. This provision militates
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against the argument of the petitioner that the recommendation under Section 4 has to be unanimous. Before concluding, we would like to quote the observations from the judgment in Grindley and Another v. Barker, 1 Bos. Pul. 229, which reads as under: I think it is now pretty well established, that where a number of persons are entrusted with the powers not of mere private confidence, but in some respects of a general nature and all of them are regularly assembled, the majority will conclude the minority, and their act will be the act of the whole. 51. The Court, while explaining the raison d'etre behind the principle, observed: It is impossible that bodies of men should always be brought to think alike. There is often a degree of coercion, and the majority is governed by the minority, and vice versa, according to the strength of opinions, tempers, prejudices, and even interests. We shall not therefore think ourselves bound in this case by the rule which holds in that. I lay no great stress on the clause of the act which appoints a majority to act in certain cases, because that appears to have been done for particular reasons which do not apply to the ultimate trial: it relates only to the assembling the searchers; now there is no doubt that all the six tiers must assemble; and the only question, what they must do when assembled? We have no light to direct us in this part, except the argument from the nature of the subject. The leather being subject to seizure in every stage of the manufacture, the tribunal ought to be composed of persons skilful in every branch of the manufacture. And I cannot say there is no weight in the argument, drawn from the necessity of persons concurring in the judgments, who are possessed of different branches of knowledge, but standing alone it is not so conclusive as to oblige us to break through the general rule; besides, it is very much obviated by this consideration when all have assembled and communicated to each other the necessary information, it is fitter that the majority should decide than that all should be
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pressed to a concurrence. If this be so, then the reasons drawn from the act and which have been supposed to demand, that the whole body should unite in the judgment, have no sufficient avail, and consequently the general rule of law will take place; viz. that the judgment of four out of six being the whole body to which the authority is delegated regularly assemble and acting, is the judgment of the all 52. Similarly, we would like to quote Halsbury's Laws of 67 England (4th Ed. Re-issue), on this aspect, which states as under: Where a power of a public nature is committed to several persons, in the absence of statutory provision or implication to the contrary the act of the majority is binding upon the minority. 53. In the circumstances, we find no merit in the submission made on behalf of the petitioner on this point that the recommendation/decision dated 3rd September, 2010 stood vitiated on the ground that it was not unanimous. Guidelines/Directions of this Court 54. The 2003 Act came into force on and from 11th September, 2003. In the present case we find non-compliance of some of the provisions of the 2003 Act. Under Section 3(3), the Central Vigilance Commissioner and the Vigilance Commissioners are to be appointed from amongst persons - (a) who have been or who are in All-India Service or in any civil service of the Union or in a civil post under the Union having requisite knowledge and experience as indicated in Section 3(3)(a); or (b) Who have held office or are holding office in a corporation established by or under any Central Act or a Central Government company and persons who have experience in finance including insurance and banking, law, vigilance and investigations.

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55. No reason has been given as to why in the present case the zone of consideration stood restricted only to the civil service. We therefore direct that : (i) In our judgment we have held that there is no prescription of unanimity or consensus under Section 4(2) of the 2003 Act. However, the question still remains as to what should be done in cases of difference of opinion amongst the Members of the High Powered Committee. As in the present case, if one Member of the Committee dissents that Member should give reasons for the dissent and if the majority disagrees with the dissent, the majority shall give reasons for overruling the dissent. This will bring about fairness-in-action. Since we have held that legality of the choice or selection is open to judicial review we are of the view that if the above methodology is followed transparency would emerge which would also maintain the integrity of the decision- making process. (ii) In future the zone of consideration should be in terms of Section 3(3) of the 2003 Act. It shall not be restricted to civil servants. (iii) All the civil servants and other persons empanelled shall be outstanding civil servants or persons of impeccable integrity. (iv)The empanelment shall be carried out on the basis of rational criteria, which is to be reflected by recording of reasons and/or noting akin to reasons by the empanelling authority. (v) The empanelment shall be carried out by a person not below the rank of Secretary to the Government of India in the concerned Ministry. (vi) The empanelling authority, while forwarding the names of the empanelled officers/persons, shall enclose complete information, material and data of the concerned officer/person, whether favourable or adverse. Nothing relevant or material should be withheld from the Selection Committee. It will not only be useful but would also serve larger public interest and
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enhance public confidence if the contemporaneous service record and acts of outstanding performance of the officer under consideration; even with adverse remarks is specifically brought to the notice of the Selection Committee. (vii) The Selection Committee may adopt a fair and transparent process of consideration of the empanelled officers. Conclusion 56. For the above reasons, it is declared that the recommendation dated 3rd September, 2010 of the High Powered Committee recommending the name of Shri P.J. Thomas as Central Vigilance Commissioner under the proviso to Section 4(1) of the 2003 Act is non-est in law and, consequently, the impugned appointment of Shri P.J. Thomas as Central Vigilance Commissioner is quashed. 57. The writ petitions are accordingly allowed with no order as to costs. .......................................CJI (S. H. Kapadia) ...........................................J. (K.S. Panicker Radhakrishnan) ...........................................J. (Swatanter Kumar) New Delhi; March 3, 2011

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20. Anti-Corruption Cases: K.Sudhakar, Deputy Legal Advisor CBI, Mumbai (Zone-I & Zone-II) 21. http://thinkahead.net.in/ranking-in-corruption-2010%e2%80%93-india-pakistan-usa-russia-%e2%80%93transparency-international/11360.html 22. A New Dimension of Socio-Economic Offences: e-Money Laundering, Gagandeep Kaur Malhotra 23. www.preservearticles.com 24. http://www.corruptioninindia.org/index 25. http://www.indiastudyhub.com

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