Nullification Of Court Direction By Legislation Impermissible Without Altering Basis Of Judgment : Supreme Court In ED Director's Case

While holding the extensions given to the term of ED Director Sanjay Kumar Mishra, the Supreme Court reiterated that a legislative act to nullify a judgment, without taking away its basis, is an impermissible exercise.

A bench comprising Justices BR Gavai, Vikram Nath and Sanjay Karol noted that ignoring the direction given by the Supreme Court in the 2021 judgment in the case Common Cause vs Union of India that SK Mishra should not be given further extensions, the Union Government extended his tenure two times after that, in November 2021 and November 2022.

Referring to various precedents such as Madras Bar Association vs Union of India (2021), Medical Council of India v. State of Kerala and others,Madan Mohan Pathak and another v. Union of India and others, the bench observed that the legislature can nullify the effect of a judgment by taking away its base or curing the defects in the law. This can be done retrospectively also. However, an enactment which merely nullifies a judgment is unconstitutional.

Justice BR Gavai wrote in the judgment : 

"It could, thus, clearly be seen that this Court has held that the effect of the judgments of this court can be nullified by a legislative act removing the basis of the judgment. It has further been held that such law can be retrospective. It has, however, been held that retrospective amendment should be reasonable and not arbitrary and must not be violative of the fundamental rights guaranteed under the Constitution. It has been held that the defect pointed out should have been cured such that the basis of the judgment pointing out the defect is removed. This Court has, however, clearly held that nullification of mandamus by an enactment would be impermissible legislative exercise. This Court has further held that transgression of constitutional limitations and intrusion into the judicial power by the legislature is violative of the principle of separation of powers, the rule of law and of Article 14 of the Constitution of India". 

Defending the extension of Mishra's term, Solicitor General of India Tushar Mehta argued that the amendment made to the Central Vigilance Commission Act and the Fundamental Rules altered the basis of the Common Cause judgment. However, bench noted that in the Common Cause judgment, the Supreme Court had acknowledged the power of the Centre to extend the term of the ED Director. It was specifically held in that judgment that the Government has the power to appoint ED director beyond a term of 2 years. 

"It is not, as if, that this Court has held that the Government had no power to make an appointment beyond the period of two years. By the impugned Amendments, the position is clarified, the challenge to which, we have found to be unsustainable. As such, the contention that the very foundation on which judgment of this Court in the case of Common Cause (2021) was based is taken away is without substance", the Court stated in the judgment.

Since there was a specific mandamus issued in the Common Cause case that Mishra should not be given further extensions, it was binding on both the Union and Mishra, who were parties to that case.

"The mandamus issued to be parties was binding on them. We, therefore, find that the respondent No.1 could not have issued orders dated 17th November 2021 and 17th November 2022 in breach of the mandamus issued by this Court vide its judgment dated 8th September 2021 in Common Cause (2021)".

Though the Court held the extensions to be illegal, it allowed Mishra to continue as ED Director till July 31, 2023, taking into consideration that concerns expressed by the Union Government regarding peer review by international body FATF and smooth transition.

Reports on other aspects of the judgment can be read here