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2000 INSC 221
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Smart Summary

Factual and Procedural Background

The respondent, appointed as a Divisional Engineer in the Telecom Department in 1986, became the subject of serious allegations of financial misconduct within two years of service. An FIR was lodged and the Central Bureau of Investigation (CBI) commenced an inquiry, leading to his suspension on 10 March 1988 (revoked within six months). While the investigation continued, the Departmental Promotion Committee (DPC) deferred his promotion to the Senior Time Scale of the Indian Telecommunication Service Group “A”.

On 30 November 1990 the Central Administrative Tribunal directed that the respondent’s case be considered whenever his juniors were evaluated. The DPC subsequently met on 3 April 1991 and placed its recommendation concerning the respondent in a sealed cover pursuant to the Government of India’s “Sealed Cover Procedure” (Office Memorandum No. 22011/2/86-Estt.(A) dated 12 January 1988), because a CBI investigation was still pending.

The Office Memorandum of 31 July 1991 deleted clause (iv) of the Procedure (relating to mere investigations) and instructed that sealed covers so kept be opened, subject to specified clarifications. Meanwhile, on 7 May 1991 CBI sought sanction to prosecute; the Minister of State gave approval on 9 July 1991, further endorsed it on 10 September 1991 after Central Vigilance Commission advice, and the President formally sanctioned prosecution on 30 September 1991.

The Tribunal later ordered the authorities to open the sealed cover and effectuate the DPC recommendation. The Union of India and the Chief General Manager, MTNL, appealed to the Supreme Court challenging that directive.

Legal Issues Presented

  1. Whether, after deletion of clause (iv) of the “Sealed Cover Procedure” on 31 July 1991, the DPC’s recommendation concerning the respondent should have been opened and implemented.
  2. Whether the subsequent grant of sanction to prosecute the respondent brought the case within clause (iii) and paragraph 7 of the Procedure, thereby justifying continuation of the sealed cover until exoneration.

Arguments of the Parties

Appellants’ Arguments (Union of India & MTNL)

  • Since the Minister approved sanction for prosecution on 9 July 1991, the respondent’s case fell under clause (iii) (“sanction for prosecution”) even before the 31 July 1991 amendment; hence the sealed cover had to remain.
  • In any event, paragraph 7 of the Procedure applies because sanction to prosecute was accorded after the DPC recommendation but before actual promotion; therefore the recommendation must stay sealed until the respondent is fully exonerated.

Respondent’s Arguments

  • The Department’s affidavit stated that ministerial approval occurred only on 10 September 1991, after clause (iv) had been deleted; thus clause (iii) could not retrospectively justify the sealed cover.
  • The authorities deliberately failed to implement the 31 July 1991 Office Memorandum and should not benefit from their own inaction.
  • Relying on Union of India v. K.V. Jankiraman (1991) 4 SCC 109 and subsequent cases, the Sealed Cover Procedure is permissible only after issuance of a charge-memo or filing of a charge-sheet, neither of which existed at the relevant time.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Union of India v. K.V. Jankiraman (1991) 4 SCC 109 Sealed cover is applicable only after issuance of a charge-memo or filing of a charge-sheet. Held inapplicable; the clauses considered in Jankiraman differed from those in the present case.
Union of India v. Dr. Sudha Salhan (1998) 3 SCC 394 Followed Jankiraman where the employee had been exonerated. Distinguished; employee in current case is still facing trial.
Bank of India v. Degala Suryanarayana (1999) 5 SCC 762 Applied Jankiraman in circumstances of exoneration. Distinguished on same ground—no exoneration here.
Delhi Development Authority v. H.C. Khurana (1993) 3 SCC 196 Limited Jankiraman to its own facts and upheld sealed cover in other situations. Cited to support validity of sealed cover in present circumstances.
Union of India v. Kewal Kumar (1993) 3 SCC 204 Same as H.C. Khurana; affirmed broader application of sealed cover. Used to reinforce that Jankiraman does not govern the current fact-scenario.

Court's Reasoning and Analysis

The Court noted that the respondent’s recommendation was placed in a sealed cover on 3 April 1991 because a CBI investigation was pending, fitting clause (iv) of paragraph 2 of the Procedure then in force. Though clause (iv) was deleted on 31 July 1991, the same Office Memorandum expressly stated that any case attracting clauses (i)–(iii) would continue in sealed cover.

By 9 July 1991 (or, at the latest, 30 September 1991) sanction for prosecution had been granted, squarely attracting clause (iii). Further, paragraph 7 of the Procedure provides that if such a circumstance arises after DPC recommendation but before actual promotion, the recommendation is deemed sealed and promotion is deferred until the officer is “completely exonerated”. Two factual conditions—existence of a DPC recommendation and absence of actual promotion—were admittedly satisfied; formal sanction to prosecute fulfilled the third condition.

The respondent’s contention that the department’s delay should estop reliance on paragraph 7 was rejected. The Court emphasized that paragraph 7 hinges on “actual promotion”, not on departmental diligence. Additionally, precedents invoked by the respondent (Jankiraman and its progeny) were distinguished because they involved different clauses or cases where the employees had already been exonerated. The Court relied on Delhi Development Authority v. H.C. Khurana and Union of India v. Kewal Kumar to confirm that the Sealed Cover Procedure remains operative in circumstances like the present one.

Holding and Implications

Appeals Allowed; Tribunal’s direction set aside.

The DPC recommendations concerning the respondent will remain in the sealed cover until he is fully exonerated of the criminal charges. Consequently, the respondent receives no notional or actual promotion at this stage. The judgment clarifies the continued applicability of paragraph 7 of the “Sealed Cover Procedure” when sanction for prosecution is granted after DPC recommendation but before promotion, without setting a new precedent beyond reaffirming the Procedure’s scope.

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    Union Of India And Another v. R.S Sharma .

    K.T Thomas, J.— The grievance of the respondent — a Divisional Engineer in the Telecom Department — is that his promotion to the next tier in the cadre (senior timescale in the Indian Telecommunication Service Group “A”) has been temporarily sealed on account of erroneously adhering to the “Sealed Cover Procedure”. The Central Administrative Tribunal (for short “the Tribunal”) which he approached for redressal of his grievance has upheld his contentions and directed the appellants to open the sealed cover and give effect to the recommendations made by the Departmental Promotion Committee (DPC). The Union of India and the Chief General Manager of Mahanagar Telephone Nigam Ltd. have filed these appeals by special leave challenging the aforesaid direction issued by the Tribunal.

    2. The background of passing the said order is the following:

    The respondent was appointed in the Telecom Department during 1986. Hardly two years passed and he got himself delved into the vortex of serious allegations of financial misdemeanours. One of the allegations is that he purchased very sub-standard materials for the Department at very high prices. An FIR was registered and the Central Bureau of Investigation (for short “CBI”) took up the investigation. On 10-3-1988, he was suspended but within six months the suspension order was revoked. Nonetheless CBI continued with the investigation and on completion thereof they applied to the Government of India for according sanction to prosecute the respondent.

    3. In the meanwhile DPC considered the cases of other persons in the Department for promotion, but deferred the case of the respondent on account of the pendency of investigation of the said allegations against him. The respondent then moved the Tribunal and on 30-11-1990, the Tribunal passed an interim direction that DPC should consider the case of the respondent for promotion in the event of considering the claims of any of his juniors attached to the same Department.

    4. Pursuant thereto DPC considered the case of the respondent on 3-4-1991 and adopted a decision. However, DPC did not communicate the decision to anyone and instead it put the recommendations in sealed cover as enjoined by the conditions specified in the “Sealed Cover Procedure” adopted by the Government of India (vide Government of India, Deptt. of Per. & Trg., Office Memo No. 22011/2/86-Estt.(A) dated 12-1-1988).

    5. At this stage, it is relevant to extract para 2 of the said office memorandum. It reads thus:

    “Cases where ‘Sealed Cover Procedure’ applicable.—At the time of consideration of the cases of government servants for promotion, details of government servants in the consideration zone for promotion falling under the following categories should be specifically brought to the notice of the Departmental Promotion Committee:
    (i) government servants under suspension;
    (ii) government servants in respect of whom disciplinary proceedings are pending or a decision has been taken to initiate disciplinary proceedings;
    (iii) government servants in respect of whom prosecution for a criminal charge is pending or a sanction for prosecution has been issued or a decision has been taken to accord sanction for prosecution;
    (iv) government servants against whom an investigation on serious allegations of corruption, bribery or similar grave misconduct is in progress either by CBI or any agency, departmental or otherwise.”

    6. It is not disputed before us that on 3-4-1991 when DPC decided to put the recommendations concerning the respondent in the sealed cover, investigation into the case involved in the aforesaid FIR was pending. Hence the Sealed Cover Procedure was adopted as his case fell within the purview of clause (iv) of the aforesaid second para. But on 31-7-1991 a new development took place. As per Office Memo No. 22011/1/91-Estt.(A) the restriction imposed as per clause (iv) was deleted from the second para of the “Sealed Cover Procedure”. However, three counts of clarifications have been made by the Government of India through the same OM. They are extracted below:

    “It is further clarified that—
    (i) All cases kept in sealed cover on the date of this OM on account of conditions obtainable in para 2(iv) of the OM dated 12-1-1988 will be opened. If the official had been found fit and recommended by DPC, he will be notionally promoted, from the date his immediate junior had been promoted. The pay of the higher post would, of course, be admissible only on assumption of actual charge in view of the provisions of Fundamental Rule 17(1). (Since only officiating arrangements could be made against the vacancies available because of cases of senior officials being in sealed cover, there may not be any difficulty in terminating some officiating arrangements if necessary and giving promotion in such cases.)
    (ii) If any case is in a sealed cover on account of any of the other conditions mentioned in paras 2(i) to 2(iii) of the OM dated 12-1-1988, the case will continue to be in the sealed cover.
    (iii) On opening of the sealed cover because of deletion of para 2(iv) if an officer is found to have been recommended as ‘unfit’ by DPC no further action would be necessary.”

    7. Some further developments which took place in the meanwhile are also relevant. CBI completed (sic the investigation) and submitted a report to the Government on 7-5-1991 and sought for sanction to be accorded to launch prosecution proceedings against the respondent. On 9-7-1991 the Minister of State concerned gave his approval to (sic prosecute) the respondent and referred the matter for the advice of the Central Vigilance Commission (CVC). When the advice was given by CVC the Minister for State gave further approval on 10-9-1991 for adopting follow-up actions on the report. However, the formal order granting sanction to prosecute the respondent was made by the President only on 30-9-1991.

    8. Normally the case of the respondent should have succeeded if the situation which happened on 31-7-1991 was confined to deletion of clause (iv) from the second para of the “Sealed Cover Procedure”. But when the same OM made specific mention of a clarification that the “case will continue to be in the sealed cover on account of existence of any one of the remaining three conditions specified in clauses (i) to (iii) of the first OM” the matter has to be considered from those angles also.

    9. Shri Mukul Rohtagi, learned Additional Solicitor General contended that as the Minister concerned accorded approval for granting sanction to prosecute the respondent as early as 9-7-1991, the recommendations of DPC must remain under sealed cover by virtue of the conditions specified in clause (iii) of the second para of the Sealed Cover Procedure (supra), because in such an event deletion of clause (iv) on 31-7-1991 by itself had no consequence.

    10. Shri Anil Kumar Sharma, learned counsel for the respondent contended that the appellants are debarred from adopting such a contention as the Department stated in the affidavit filed in this Court that the Minister had given approval only on 10-9-1991 and by then clause (iv) in the aforesaid second para of the “Sealed Cover Procedure” was already deleted.

    11. Without conceding to the above position, Shri Mukul Rohtagi, Additional Solicitor General adopted an alternative contention based on para 7 of the Sealed Cover Procedure which reads thus:

    “Sealed cover applicable to an officer coming under cloud before promotion.—A government servant, who is recommended for promotion by the Departmental Promotion Committee but in whose case any of the circumstances mentioned in para 2 above arise after the recommendations of DPC are received but before he is actually promoted, will be considered as if his case had been placed in a sealed cover by DPC. He shall not be promoted until he is completely exonerated of the charges against him and the provisions contained in this OM will be applicable in his case also.”

    12. The conditions necessary to invoke the said clause are:

    (1) Recommendations of DPC should have been made for promoting the government servant.
    (2) After such recommendations and before he is actually promoted any one of the circumstances in clause (ii) (sic iii) of the second para (supra) should have arisen.

    13. Two factual aspects are admitted. One is that the respondent was not actually promoted even now. The other is that formal sanction has been accorded to prosecute him in the meanwhile. If that be so, para 7 of the Sealed Cover Procedure would entirely apply and the recommendations made by DPC in respect of the respondent have to remain in the sealed cover “until he is completely exonerated of the charges against him”.

    14. Shri Anil Kumar Sharma, learned counsel adopted the contention that the situation would not have arisen as envisaged in para 7 of the Sealed Cover Procedure if the appellants had complied with the conditions stipulated in the office memorandum dated 31-7-1991 either on that day itself or at least soon thereafter by promoting the respondent. The learned counsel contended that the Department had wilfully and deliberately avoided to comply with the said office memo dated 31-7-1979, and hence the appellants should not be permitted to take advantage of their own wrong.

    15. We are not impressed by the said arguments for two reasons. One is that, what the Department did not do is not the yardstick indicated in para 7 of the Sealed Cover Procedure, what is mentioned therein is that it cannot apply to the government servant who is not “actually promoted” by that time. Second is that, the stand taken up by the Department is that in spite of deletion of clause (iv) of the second para, the recommendations of DPC must remain in the sealed cover on account of the conditions specified in clause (iii) of the said paragraph by virtue of the operation of para 7 thereof. We cannot say that the said stand was incorrect and, therefore, we are unable to blame the Department for not opening the sealed cover immediately after 31-7-1991.

    16. Learned counsel for the respondent made an endeavour to contend that in the light of the decision of this Court in Union of India v. K.V Jankiraman (1991) 4 SCC 109, (1993) 23 ATC 322 the Sealed Cover Procedure can be resorted to only after charge-memo is received or a charge-sheet is filed and that unless such an event had happened at the relevant time the government employee cannot be denied of his promotion, if he is otherwise entitled to it. Learned counsel also submitted that Jankiraman (1991) 4 SCC 109, (1993) 23 ATC 322 was since followed in Union of India v. Dr Sudha Salhan (1998) 3 SCC 394 and Bank of India v. Degala Suryanarayana (1999) 5 SCC 762. The clauses of the second para of the Sealed Cover Procedure considered in Jankiraman (1991) 4 SCC 109, (1993) 23 ATC 322 were not those involved in the present case and hence that decision is of no avail to the respondent. In the other two decisions the facts warranted application of the ratio contained in Jankiraman (1991) 4 SCC 109, (1993) 23 ATC 322. The added factor in these two cases was that the public servant concerned had been exonerated of the charges framed by the criminal courts. In the present case the respondent is still facing trial for serious offences, and hence the situation is different.

    17. We may also point out, in this context, that in Delhi Development Authority v. H.C Khurana (1993) 3 SCC 196, (1993) 24 ATC 763, JT (1993) 2 SC 695 and Union of India v. Kewal Kumar (1993) 3 SCC 204, (1993) 24 ATC 770, JT (1993) 2 SC 705 this Court found that the ratio in Jankiraman (1991) 4 SCC 109, (1993) 23 ATC 322 is applicable only to the situations similar to the cases discussed therein, and hence the Sealed Cover Procedure resorted to by DPC in those two cases was upheld by this Court.

    18. In our opinion the Tribunal has erred in overlooking para 7 of the “Sealed Cover Procedure” (supra) and hence the direction issued by it as per the impugned judgment cannot be sustained. We, therefore, allow these appeals and set aside the said direction.

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    Comments

    Union Of India And Another v. R.S Sharma .
    (Apr 18, 2000)