Director Of Enforcement Can Be Appointed For A Period Of More Than Two Years: Supreme Court

The Supreme Court held that a Director of Enforcement can be appointed for a period of more than two years by following the procedure prescribed Section 25 of the Central Vigilance Commission Act, 2003.

The bench of Justices L. Nageswara Rao and BR Gavai also upheld the power of the Union of India to extend the tenure of Director of Enforcement beyond the period of two years. It clarified that extension of tenure granted to officers who have attained the age of superannuation should be done only in rare and exceptional cases. 

The bench observed thus in its judgment refusing to interfere with the extension of tenure given to the Director of Enforcement Directorate Sanjay Kumar Mishra. Though the bench did not interfere with the extension of tenure, it observed that no further extension shall be granted to him.

Mishra was appointed as Director of Enforcement for a period of two years from the date of his assumption of charge of the post. By an office order dated 13.11.2020, the President of India approved the modification of the order dated 19.11.2018, by amending the period of appointment from two years to three years.

Challenging this order, the NGO Common cause contended that the extension of tenure to three years is contrary to Section 25 of the CVC Act. It was contended that Section 25 (d) which postulates a tenure of two years for a Director of Enforcement cannot be interpreted to confer power on the Government to extend the tenure beyond two year.

Referring to Section 25(f) and the earlier judgments in this regard including, the court observed that the minimum period of two years provided in Section 25 (d) is to prevent extraneous pressure.

"Prescription of a minimum period of two years is to ensure that the Director of Enforcement is not transferred or shifted from the said post during the course of investigation of serious offences. There is no ambiguity in Section 25 (d) of CVC Act and the words 'not less than two years' simply mean a minimum of two years. There is no scope for reading  the words to mean not more than two years. Reading such a restriction would be contrary to the recommendations of the Independent Review Committee and the judgment of this Court in Vineet Narain. Curtailment of the tenure of a Director Enforcement would be detrimental to the interests of officers who are appointed to the post and have service of more than two years before they attain the age of superannuation. Therefore, we hold that a Director of Enforcement can be appointed for a period of more than two years by following the procedure prescribed under Section 25 of the CVC Act", the court said.

The Court also held that the initial appointment of Mishra for a period of two years from 19.11.2018 which extends beyond the date of his superannuation in May, 2020 is in accordance with Section 25 of the CVC Act and cannot be said to be illegal.  Another issue raised in this case was whether there can be extension of tenure of a person who has been appointed as a Director of Enforcement for a period of two years and who has attained the age of superannuation in the interregnum i.e. before the expiry of two years.

"For all practical purposes, he should be treated as the Director of Enforcement till that particular date he was holding an office which is not below the rank of an Additional Secretary to the Government of India. Therefore, he was eligible for extension of tenure", the bench observed.

On the issue of source of power for extension of the tenure, the Union had contended that the extension can be ordered by resorting to Section 21 of the General Clauses Act in the absence of specific provision in the CVC Act. Section 21 provides that  Where, by any Central Act or Regulations a power to issue notifications, orders, rules or bye-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction and conditions if any, to add to, amend, vary or rescind any notifications, orders, rules or bye-laws so issued.

The court agreed with this view that the rule of construction embodied in Section 21 of the General Clauses Act has reference to the context and subject matter of Section 25 of the CVC Act.

The court noted that the justification given by the Union of India for extension of the tenure is that important investigations are at a crucial stage in trans-border crimes.

"Though we have upheld the power of the Union of India to extend the tenure of Director of Enforcement beyond the period of two years, we should make it clear that extension of tenure granted to officers who have attained the age of superannuation should be done only in rare and exceptional cases. Reasonable period of extension can be granted to facilitate the completion of ongoing investigations only after reasons are recorded by the Committee constituted under Section 25 (a) of the Act. Any extension of tenure granted to persons holding the post of Director of Enforcement after attaining the age of superannuation should be for a short period. We do not intend to interfere with the extension of tenure of the second Respondent in the instant case for the reason that his tenure is coming to an end in November, 2021. We make it clear that no further extension shall be granted to the second Respondent.", the Court observed while dismissing the writ petition.

Case : Common Cause (A Registered Society) v. Union of India ; WP(C) 1374 of 2020
Citation : LL 2021 SC 429
Coram: Justice L. Nageswara Rao and B.R. Gavai
Counsel: Sr. Adv Dushyant Dave, SG Tushar Mehta

Click here to read/download  judgment