Supreme Court Invalidates Extensions Of ED Director SK Mishra's Term; Permits Him To Continue Till July 31

A three-judge bench of Justices BR Gavai, Vikram Nath, and Sanjay Karol heard the batch of petitions challenging Mishra’s appointment as well the recent amendment to the Central Vigilance Commission Act. The petitioners included Congress leaders Jaya Thakur, Randeep Singh Surjewala, Trinamool Congress MP Mahua Moitra, and party spokesperson Saket Gokhale. The bench had reserved its judgement in May.

The bench broadly considered two issues - first, regarding the validity of the amendments; second, the validity of the extensions given for Mishra's term. While ruling in favour of the Union in the first issue, as regards the second issue, the Court held that the extensions were clearly in the teeth of the Common Cause judgment.

"Although the basis of a judgment can be taken away, the legislature cannot annul the specific mandamus that barred further extension...That would amount to sitting in appeal over judicial act", Justice Gavai stated while pronouncing the operative parts of the judgment. Therefore, the orders dated November 17, 2021 and November 17, 2022 granting extension to SK Mishra for a period of one year each were held to be illegal. 

Background

The central government has been embroiled in a prolonged political controversy over its decision to extend ED chief Sanjay Kumar Mishra’s tenure, who was first appointed in November 2018. According to the appointment order, he was set to retire two years later on reaching the age of 60 years. However, in November 2020, the Government retrospectively revised the order, increasing his tenure from two years to three years. The Supreme Court was moved to examine the validity of this retrospective revision and extension of Mishra’s tenure by an additional year in Common Cause v. Union of India. A division bench headed by Justice L. Nageswara Rao held that extensions could only be granted in ‘rare and exceptional cases’ for a short period of time. While affirming the move to extend Mishra’s tenure, the apex court cautioned that no further extension was to be granted to the Chief of the Directorate.

In November 2021, three days before Mishra was about to retire, two ordinances were promulgated by the President of India, amending the Delhi Special Police Establishment Act, 1946 and the Central Vigilance Commission Act, 2003. These ordinances eventually culminated into bills that were approved by the Parliament in December. On the strength of these amendments, the tenure of both the CBI and ED Directors could now be extended by one year at a time till the completion of five years from the initial appointment. In November of last year, Mishra was given another one-year extension, which has been challenged now.

The recent amendment to the Central Vigilance Commission Act has also been challenged before the apex court in at least eight separate public interest litigations. The petitioners include Congress leaders Jaya Thakur, Randeep Singh Surjewala, Trinamool Congress MP Mahua Moitra, and party spokesperson Saket Gokhale. Apart from being assailed for having violated the injunction issued by the apex court in Common Cause, the ordinances were challenged for conferring "unfettered discretion" on the Union over the appointment and tenure of the Directors of CBI and ED, and therefore, allegedly compromising the independence of the investigative bodies.

In a counter-affidavit, the Centre told the Supreme Court that the petitions are motivated by oblique political interests since they have been filed by and on behalf of petitioners belonging to political parties whose leaders are currently being investigated on charges of money laundering. The petitions have been filed “to ensure that the Enforcement Directorate does not and cannot discharge its duties fearlessly,” alleges the Central Government. “The petitioner would only be convinced that these agencies are independent if these agencies were to turn a blind eye to the offences committed by the political leaders of their political party,” the affidavit stated.

In a significant development, in February, amicus curiae KV Viswanathan (who has since been elevated to the top court as a judge) told the a bench comprising Justices Gavai and Aravind Kumar that not only the third extension granted to the chief of Enforcement Directorate, but also the amendment to the Central Vigilance Commission Act permitting the central government to extend the tenure by one year at a time, up to a total of five years, was illegal. “The extension order and the statutory amendments, keeping in mind the long line of judgments from Vineet Narain, Prakash Singh I, Prakash Singh II, Common Cause I, and Common Cause II, are illegal. Not only the extension but also the amendments,” Viswanathan told the bench.

Over the course of several hours, the counsel for the petitioners raised concerns about the independence of investigating agencies and how it was threatened by what senior advocate Gopal Sankaranarayanan described as a ‘carrot-and-stick policy’ of granting piecemeal extensions of only one year at a time to the heads of the said agencies. Sankaranarayanan explained:

“The problem of the carrot-and-stick policy of dangling extensions over the incumbent and making the grant of further extensions contingent on their performance, the investigations presided by the director cannot be independent.”

Viswanathan also spoke about the importance of ensuring the independence of institutions like the Directorate of Enforcement, ardently contending that such institutions ought to be insulated from executive influence in the larger interests of democracy. Notably, he told the bench, “These agencies do important work and need not just independence but the perception of independence.”

The solicitor-general on the other hand, sought to defend the government's decision to extend the tenure of the ED director on the ground that ensuring continuity in leadership was imperative, especially in light of the upcoming Financial Action Task Force (FATF) peer review due to take place in 2023. India's performance according to the watchdog's norms will be assessed this year, after a decade, the law officer informed the bench. He also pointed out that based on this assessment, countries are categorised into lists indicating the level of their performance, which would ultimately entitle (or, disentitle) them from not just receiving financial assistance from international organisations such as the World Bank and the Asian Development Bank, but also borrowing from foreign banks and a host of other benefits.

Besides arguing, inter alia, that the impugned amendment was essential in the national interest, the solicitor-general also vigorously disputed the petitioners' contention that an incremental one-year-at-a-time policy of granting extensions would amount to a carrot-and-stick strategy employed by the government to ensure the obedience of the directors of investigating agencies like Enforcement Directorate and Central Bureau of Investigation. “This argument is a double-edged sword,” said the law officer. He explained, “The policy of granting one-year-long extensions at a time would actually ensure that the officer does not become a law unto themselves, and second, so that they do not become non-performers.”

After hearing the submissions of all the counsel, the three-judge bench of the Supreme Court headed by Justice Gavai reserved its verdict on May 8.

Case Details

Dr. Jaya Thakur v. Union of India & Ors. | Writ Petition (Civil) No. 1106 of 2022 and connected cases.

Citation : 2023 LiveLaw (SC) 518

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