Supreme Court of India
CDR AMIT KUMAR SHARMA ETCversusUNION OF INDIA & ORS ETC
- Citation
- 2022 INSC 1124
- Decided
- 20 October 2022
- Disposal
- Appeal(s) allowed
- Bench
- D Y CHANDRACHUD
Holding
All material that is relevant and could with reasonable probability influence the decision of an adjudicating authority must be disclosed to the parties; reliance on sealed‑cover submissions without such disclosure violates natural justice and renders the decision void.
Summary
The petitioners, former Short Service Commission officers of the Indian Navy, challenged the denial of Permanent Commission (PC) before the Armed Forces Tribunal (AFT). The AFT relied on vacancy calculations and selection board records that were submitted to it in a sealed cover and were not disclosed to the petitioners. The Supreme Court held that any material which could reasonably influence the adjudicating authority’s decision must be disclosed to the parties, and that reliance on sealed‑cover submissions without disclosure violates the principles of natural justice. Consequently, the Court set aside the AFT’s judgment, allowed the appeals, and ordered the original applications to be reinstated for fresh adjudication by the AFT, while maintaining interim protection for the officers. The judgment emphasized that the sealed‑cover practice creates opacity and prejudice, and cannot be permitted as a norm.
Issues considered
- Whether the AFT could adjudicate on the validity of the PC selection process when relevant material was disclosed only to it in a sealed cover.
- Whether non‑disclosure of material that could influence the decision violates the principles of natural justice.
- Whether the sealed‑cover procedure is permissible under the Armed Forces Tribunal Act, 2007.
- Whether the petitioners are entitled to a fresh hearing before the AFT.
Legislation cited
- Armed Forces Tribunal Act, 2007s. 31(1)
Subjects
Natural justiceSealed cover procedureDisclosure of materialArmed Forces TribunalPermanent CommissionIndian NavyVacancy calculationProcedural fairnessGender bias
Judgment
[2022] 18 S.C.R. 625 625
CDR AMIT KUMAR SHARMA ETC A
v.
UNION OF INDIA & ORS ETC
(Civil Appeal Nos. 841-843 of 2022)
OCTOBER 20, 2022 B
[DR DHANANJAYA Y CHANDRACHUD AND
HIMA KOHLI, JJ.]
Principles of Natural Justice – Violation of – Non-disclosure
of relevant material to the affected party – Disclosure in a sealed- C
cover to the adjudicating authority – Armed Forces Tribunal (AFT)
dismissed the applications challenging the denial of Permanent
Commission in the Indian Navy – Whether the AFT could have
adjudicated on the validity of the selection proceedings when
relevant material was disclosed only to the AFT in a sealed cover –
On appeal, held: All material which is relied upon by either party in D
the course of a judicial proceeding must be disclosed – Even if the
adjudicating authority does not rely on the material while arriving
at a finding, information that is relevant to the dispute, which would
with ‘reasonable probability’ influence the decision of the authority
must be disclosed – A one-sided submission of material which forms E
the subject matter of adjudication to the exclusion of the other party
causes a serious violation of natural justice – In the present case,
this has resulted in grave prejudice to officers whose careers are
directly affected as a consequence – Non-disclosure of relevant
material to the affected party and its disclosure in a sealed-cover to
the adjudicating authority (in this case the AFT) sets a dangerous F
precedent – Material which was relied upon by the AFT for
determining the vacancies which were available and for assessing
as to whether they were utilised correctly has not been disclosed to
the appellants – Similarly, the Board proceedings that were relied
upon by AFT to determine if the selection for Permanent Commission G
(PC) was fair have not been disclosed to the appellants – While the
AFT on a perusal of the records concluded that there was no gender
bias or mala fides in the grant of PC, the officers do not possess the
material to challenge this observation – Respondents while protecting
the confidentiality of the proceedings of the Board must disclose
H
625
626 SUPREME COURT REPORTS [2022] 18 S.C.R.
A the position in merit of the appellants vis-à-vis the parameters and
their weightage devised by the respondents – Material prejudice
has been caused by the process which has been followed of
disclosing the information of vacancies and the board proceedings
to the AFT in a sealed cover – Impugned judgment of the AFT set
aside – OAs corresponding to the appeals filed before Supreme
B
Court are restored for fresh adjudication by the AFT – Armed Forces
Tribunal Act 2007.
Practice and Procedure – Disclosure of relevant material to
the adjudicating authority in a sealed cover – Held: It makes the
C process of adjudication vague and opaque – Disclosure in a sealed
cover perpetuates two problems – Firstly, it denies the aggrieved
party their legal right to effectively challenge an order since the
adjudication of issues has proceeded on the basis of unshared
material provided in a sealed cover – Adjudicating authority while
relying on material furnished in the sealed cover arrives at a finding
D which is then effectively placed beyond the reach of challenge –
Secondly, it perpetuates a culture of opaqueness and secrecy – It
bestows absolute power in the hands of the adjudicating authority,
tilting the balance of power in a litigation in favour of a dominant
party which has control over information – Most often than not this
E is the state – A judicial order accompanied by reasons is the hallmark
of the justice system – It espouses the rule of law – However, the
sealed cover practice places the process by which the decision is
arrived beyond scrutiny – The sealed cover procedure affects the
functioning of the justice delivery system both at an individual case-
to case level and at an institutional level – However, it is not that all
F information must be disclosed in the public – Sensitive information
affecting the privacy of individuals such as the identity of a sexual
harassment victim cannot be disclosed – The measure of non-
disclosure of sensitive information in exceptional circumstances must
be proportionate to the purpose that the non-disclosure seeks to
G serve – The exceptions should not, however, become the norm.
Khudiram Das v. State of West Bengal (1975) 2 SCC
81 : [1975] 2 SCR 832, T. Takano v. Securities and
Exchange Board of India Civil Appeal Nos. 487-488
of 2022 – relied on.
H
CDR AMIT KUMAR SHARMA ETC v. UNION OF INDIA & 627
ORS ETC
Union of India v. Lieutenant Commander Annie Nagaraj A
(2020) 13 SCC 1 : [2020] 10 SCR 433; Lt. Col. Nitisha
v. Union of India (2021) SCCOnLine SC 261 : [2021]
4 SCR 633 – referred to.
Case Law Reference
B
[2020] 10 SCR 433 referred to Para 4
[2021] 4 SCR 633 referred to Para 7
[1975] 2 SCR 832 relied on Para 24
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 841- C
843 of 2022.
From the Judgment and Order dated 03.01.2022 of the Armed
Forces Tribunal, Principal Bench, New Delhi in Original Application No.
2167 of 2021 (O.A. 106/2017 RB Mumbai), Original Application No.
2169 of 2021 (O.A. 105/2017 RB Mumbai) and Original Application D
No. 816 of 2019.
With
Civil Appeal Nos. 846 (@ Civil Appeal Nos. 845-846 of 2022),
2457, 2059-2060, 2216, 856-858, 855, 852-854, 844, 847-851 of 2022, E
Diary Nos. 20730 and 23503 of 2022.
Sanjay Jain, ASG, Huzefa Ahmadi, C.U. Singh, Ms. Meenakshi
Arora, R. Balasubramanian, Sr. Advs., Ms. Haripriya Padmanabhan,
Ms. Pooja Dhar, Mantavya Sharma, Ms. Tanya Srivastava, Sudhanshu
S. Pandey, Gaichangpou Gangmei, Arjun D. Singh, Yashvir Kumar, F
Abhishek R Shukla, Brig (Retd.) Vivek Chhatre, Siddhant Buxy, Krishna
Sumanth, Ms. Kamini Jaiswal, Abhimanue Shrestha, Ms. Rani Mishra,
Divyansh Khurana, Anupam Raina, Nikhil Palli, Ms. Kaunain Fatma,
Deepak Goel, Ms. Neela Kedar Gokhale, Anukalp Jain, Ms. Swarupama
Chaturvedi, Arkaj Kumar, Arvind Kumar Sharma, Ms. Shahrukh Alam, G
Alok Kr. Aggarwal, Ms. Anushka Sharma, Ms. Simran Arora, Gaurav
Goel, Advs. for the appearing parties.
H
628 SUPREME COURT REPORTS [2022] 18 S.C.R.
A The Judgment of the Court was delivered by
DR DHANANJAYA Y CHANDRACHUD, J.
1. Leave to appeal under Section 31(1) of the Armed Forces
Tribunal Act 2007 is granted.
B 2. Delay condoned.
3. This batch of appeals arises from a judgment dated 3 January
2022 of the Principal Bench of the Armed Forces Tribunal1. The AFT
dismissed the applications challenging the denial of Permanent
Commission2 in the Indian Navy. The principle issue is whether the AFT
C could have adjudicated on the validity of the selection proceedings when
relevant material was disclosed only to the AFT in a sealed cover.
The Facts
4. On 26 September 2008, the Ministry of Defence notified that
women Short Service Commission3 Officers would be eligible for grant
D of PC prospectively. In Union of India v. Lieutenant Commander
Annie Nagaraj4, the issue for consideration before this court was
whether women who were inducted in various branches of the Indian
Navy prior to 2008 were entitled to the grant of PC. By its judgment
dated 17 March 2020, this Court observed, inter alia, that5:
E (i) As a result of the policy decision of the Union Government
dated 25 February 1999, the terms and conditions of service
of SSC Officers including women with regard to the grant
of PC were governed by Regulation 203 of Chapter IV of
Part III of the Naval Ceremonial, Conditions of Service
and Miscellaneous Regulations 19636;
F
(ii) The stipulation in the policy letter dated 26 September 2008
making it prospective and applicable only to specified
branches/cadres of the Indian Navy (Education, Law and
Naval Construction) was not enforceable;
G
1
“AFT”
2
“PC”
3
“SSC”
4
(2020) 13 SCC 1
5
Paragraphs 109.5, 109.6 and 109.7 of the judgment in Annie Nagaraj.
H 6
“Regulations”
CDR AMIT KUMAR SHARMA ETC v. UNION OF INDIA & 629
ORS ETC [DR DHANANJAYA Y CHANDRACHUD, J.]
(iii) All SSC Officers in the Education, Law and Logistics A
cadres, who were “presently in service” shall be considered
for the grant of PCs;
(iv) The officers were entitled to the grant of PC in view of the
policy letter of the Union Government dated 25 February
1999 read with Regulation 203; B
(v) SSC women officers in the batch of cases before the High
Court and the AFT who are “presently in service” shall be
considered for the grant of PC on the basis of the vacancy
position as on the date of the judgment of the Delhi High
Court and the AFT or as it “presently stands”, whichever is C
higher;
(vi) The applications of the serving officers for the grant of PC
shall be considered on the basis of the norms contained in
Regulation 203, namely,
(a) availability of vacancies in the stablised cadre at the relevant D
time;
(b) determination of suitability;
(c) recommendation of the Chief of Naval Staff; and
(d) empanelment shall be based on the inter-se merit evaluated E
on the ACRs of the officers under consideration, subject to
the availability of vacancies.
5. There are three points in time, which were taken into
consideration by the authorities for the determination of vacancies, namely
(i) August 2015, when the judgment of the High Court in Annie F
Nagaraj (supra) was pronounced;
(ii) September 2016, when the decision of the AFT in
Commander Priya Khurana v. Union of India7 was
pronounced; and
G
(iii) March 2020, when the decision of this Court in Annie
Nagaraj (supra) case was pronounced.
6. Following the above directions, the process for implementing
the judgment was carried out. The respondents worked out a total of 88
7
OA No 143 of 2016 H
630 SUPREME COURT REPORTS [2022] 18 S.C.R.
A vacancies. 306 officers were considered for PC against the 88 vacancies
after which 80 of them were granted PC. The second respondent
(Integrated Headquarters of Ministry of Defence (Navy)) issued a signal
order releasing many SSC officers from service on the ground that they
had not obtained PC. The Signal order only notes the date of commission,
date of release and the Unit of the officer without any reference to the
B
process of selection that was undertaken or the relative merit. Many of
the SSC officers, both men and women, who were not granted PC filed
writ petitions before this Court challenging the rejection of their claim
for PC. In the alternative, they sought directions for the grant of pension.
7. By an order dated 24 August 2021, this Court dismissed the
C writ petitions on the ground that the Court had already laid down the
principles for granting PC in Annie Nagaraj (supra) and Lt. Col. Nitisha
v. Union of India8. It was observed that the officers who were denied
PC would assail the decision on the basis of individual facts and thus, it
would be necessary for them to claim their reliefs before the AFT. The
D relevant observations are extracted below:
“12 The petitioners who are considered for the grant of PC and
were denied it would have to assail the decision not to grant them
PC on the basis of the individual facts in each case. Bearing
this in mind, it would be necessary for them to pursue their
E remedies before the AFT where the facts of each case can be
scrutinized. If the petitioners were to succeed on their plea for
the grant of PC, the alternative claim for invoking the jurisdiction
under Article 142 would cease to have any practical significance.
It is only if the denial of PC is upheld that the alternate plea can
be pressed and this can be pursued after the decision of the AFT,
F by following the remedies available under the statute. Hence, on
a considered view of the matter we are inclined not to entertain
the petitions under Article 32 on merits.”
(emphasis supplied)
G 8. The second respondent, in the written submissions before the
AFT, filed in Cdr AK Sharma v. Union of India9 submitted that the
vacancy calculation is more than an exercise of simple mathematics and
that the “minute details of vacancy calculation cannot be put in the open
8
(2021) SCCOnLine SC 261
H 9
O.A 2167 of 2021
CDR AMIT KUMAR SHARMA ETC v. UNION OF INDIA & 631
ORS ETC [DR DHANANJAYA Y CHANDRACHUD, J.]
domain for the obvious reasons. Accordingly, this Hon’ble Tribunal will A
be provided with a detailed note with respect to vacancy calculation in a
sealed envelope (as and when sought).” It was also submitted that the
fairness of the selection process “would be amply clear from the selection
Board Proceedings which would be provided to this Hon’ble Tribunal
for perusal in the sealed cover, if need for the same arises.” Similarly, in
B
the counter affidavit filed in Commander Barsha Agrawal v. Union
of India10, it was submitted:
“Accordingly, this Hon’ble Tribunal has been provided with a
detailed note with respect to vacancy calculation in a sealed
envelope”.
C
(emphasis supplied)
9. The AFT by the impugned judgment dated 3 January 2022
disposed the cases transferred to the AFT pursuant to the order of this
Court along with cases where the denial of PC was challenged before
the AFT. The impugned judgment of the AFT in paragraph 54 indicates D
that the respondents submitted :
(i) All the files connected with the Selection Board convened in
December 2020;
(ii) The previous Selection Boards held for the grant of PC;
E
(iii) The management of SSC Officers; and
(iv) The dossiers containing the confidential reports of 32 applicants
before the AFT.
10. In addition to the above, the AFT noted in paragraph 81 that
on a perusal of “various records and files submitted by the respondents”, F
the second respondent had considered the following issues:
(a) Selection Boards held prior to 2020;
(b) Baseline for consideration and batches to be considered;
(c) Categorization of officers for consideration; G
(d) Determination of vacancies;
(e) Suitability criteria;
(f) Inter-se merit criteria;
10
OA 2008 of 2021 H
632 SUPREME COURT REPORTS [2022] 18 S.C.R.
A (g) Conduct of Board and results; and
(h) Analysis of the Selection Board Proceedings.
11. In paragraph 99 of the judgment, it is observed that the Board
conducted its proceedings on 18 December 2020 according to the criteria
B approved in the Approach paper. Paragraph 37 of the impugned judgment
extracts the selection procedure that was adopted by Indian Navy.
Paragraph 37 of the judgment is extracted below:
“37. The Counsel then took us through the criteria for selection
and said that marks were apportioned as given below to work out
C inter-se merit. He added that there was no ‘Value Judgment’ mark
as was applicable in promotion boards. He also stated that no one
has been rejected based on medical criteria and all had been
recommended by the CNS. He further added that the merit list
was computer generated based on the criteria mentioned below;
and that out of a total of 381 officers, 80 had been granted PC (41
D women and 39 male officers). The counsel then elaborated on
the factors and their weightage.
Ser Factor Weightage Unsuitability Criteria
(a) ACR Merit 90%
(b) SLt Seniority 04%
E (c) War 02% Officer should not have
been recommended G
and below any time in
the last five CR cycles
held on record
(d) Peer 02% Officer should not have
been recommended G
F and below any time in
the last five CR cycles
held on record
(e) Recommendation for PC 02% Officer should not have
been graded ‘No’ in
recommendation for PC
thrice or more in the last
G
five CRs
12. On perusing the records disclosed in a sealed cover, the AFT
recorded the status of the remaining applicants as follows:
H
CDR AMIT KUMAR SHARMA ETC v. UNION OF INDIA & 633
ORS ETC [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
634 SUPREME COURT REPORTS [2022] 18 S.C.R.
A
B
C
D
E
F
G
H
CDR AMIT KUMAR SHARMA ETC v. UNION OF INDIA & 635
ORS ETC [DR DHANANJAYA Y CHANDRACHUD, J.]
21 OA 2068/2021 Cdr Shruti Released PC 6/8 7/9 NR for PC Not eligible A
Dhawan in ACR for PC
31.12.2020 NR for PC in
Education/GS ACR Already
WP 1471/2020
granted
Batch- 1999
(Tfr-Rajkumar) Rel stayed pension
Service- 22 in service
22 OA 2069/2021 Cdr Bhanu Released PC/ Pension 10/15 15/20 Not eligible
Pratap Singh 31.12.2020 for PC and
Fresh case
Exec/Lgs
Low merit NR Low merit NR
for PC in for PC in
not grated B
pension
ACR ACR
Batch- 2007 Retired being
inadmissible
Service- 14 under Para
96(x) and
(xi) of the
judgment
23 OA 2167/2021 Cdr Amit Released PC/Pension 2/3 NR for PC 9/14 Not eligible
Kumar Sharma in ACR for PC and C
(Tfr-RB 31.12.2020 Low merit NR
not grated
Mumbai) Education/GS for PC in
pension
ACR
Batch- 2003 being
Rel stayed inadmissible
WP No. Service- 18 in service under Para
1269/2020 96(x) and
(Tfr-Rajkumar) (xi) of the
judgment
24 OA 2168/2021 Lt Cdr Yogita Released PC/ Pension 3/3 14/14 Not eligible D
Rani for PC
(Tfr-RB 31.12.2020 Low merit Low merit
Mumbai) Old Education/GS Already
matter, granted
Batch- 2003
transferred pension
from AFT Service- 18
(RB0 Mumbai
25 OA 2169/2021 Cdr Released PC/ Pension 13/14 19/20 Not eligible
(OA 105/2017 PS Soodan 31.12.2020
for PC and
Low merit NR Low merit NR not grated
E
RB Mumbai) for PC in for PC in
Education/ GS Permit to pension
ACR ACR
serve till 20 being
Batch- 2004 Rel stayed yrs (Ref inadmissible
WP 1269/2020 under Para
Service- 17 In service BP/N case)
(Tfr-Rajkumar) 96(x) and
(xi) of the
judgment
F
13. On an examination of the Board proceedings, the AFT
observed that there were no mala fides in the parameters which were
prescribed or the procedure adopted. It was also observed that the
officers were not granted PC because of their comparative merit against
limited vacancies and, in certain cases, the officers were not found G
suitable. The relevant observations are extracted below:
“110. Having heard all parties and examined various records, it is
well established that the IN has formulated a proper procedure
with suitable parameters, and has applied it uniformly to all eligible
SSCOs, both men and women, of all affected Branches/Cadres H
636 SUPREME COURT REPORTS [2022] 18 S.C.R.
A in their consideration for grant of PC. We find no mala fide in the
parameters laid down or the procedure adopted. No gender
discrimination has been observed in the Selection Board held in
Dec 2020 and those held prior to the decision of the Hon’ble
Supreme Court in Annie Nagaraj (supra).
B […]
121. The merit position and status of the rest of the applicants are
given below. The inputs on recommendations for PC; Peer and
War Report entries have all been verified from the CRs. It is seen
from the records that the applicants have not been granted PC
C only because their comparative merit against limited vacancy and
in certain cases, not being found suitable as per the laid down
criteria.”
14. The decision of the AFT has led to the institution of twelve
Civil Appeals before this Court. Twenty-six officers of the Indian Navy
D are appellants before this Court in the Civil Appeals. Of these twenty six
officers, thirteen are still in service pursuant to interim orders. The
remaining thirteen officers are out of service since varying dates in 2020,
2021 and 2022. Apart from the twenty six officers who are appellants
before this Court in the twelve civil appeals, eight officers have filed IAs
for intervention. Seven out of eight officers are protected by interim
E orders while the tenure of the eighth officer (Commander Navneet
Sharma) is to end in the month of December 2022.
15. Notice was issued in this batch of Civil Appeals on 31 January
2022. The grievance of the appellants is that the sealed cover procedure,
which was followed by the AFT, has resulted in substantial prejudice.
F
The Submissions
16. Mr Huzefa A Ahmadi and Mr C U Singh, senior counsel
appearing on behalf of the appellants together with the other counsel -
Ms Kamini Jaiswal, Ms Haripriya Padmanabhan and Ms Puja Dhar
have submitted that the AFT, in the course of its decision, has extensively
G
relied upon material which was submitted by the Naval Authorities in a
sealed cover. It has been urged that this material was never disclosed to
the appellants and if the material had been disclosed to them, they would
have been in a position to demonstrate that much of the data which has
been relied upon is seriously in dispute and is not reflective of the correct
H
CDR AMIT KUMAR SHARMA ETC v. UNION OF INDIA & 637
ORS ETC [ DR DHANANJAYA Y CHANDRACHUD, J.]
position. Mr. R. Balasubramaniam, senior counsel appearing on behalf A
of the respondent, submitted that it is not as if the respondents voluntarily
chose to place the data in a sealed cover and the files which were produced
were on the directions of the AFT.
17. During the course of hearing, three principal submissions have
been urged by Mr. Huzefa A Ahmadi, senior counsel: B
(i) In its decision in Annie Nagaraj (supra), this Court directed
that the highest number of vacancies were to be considered
in determining the claims of the SSC officers for the grant
of PC but this has not been done;
(ii) Several batches have been clubbed together as a C
consequence of which vacancies have not been considered
batch-wise and inter se merit has been skewed; and
(iii) Consideration for the grant of PC was effected on the basis
of ACRs which were written casually at a time when the
officers concerned were not eligible for the grant of PC as D
observed in a subsequent decision of this Court (albeit in
the case of the Army) in Nitisha (supra).
18. While formulating the objections to the findings of the AFT on
merits, it has been submitted by the counsel for the appellants that:
E
(i) The respondents have made no distinction between officers
who were inducted prior to 2008 and those inducted after
2008;
(ii) Data submitted by the Navy shows that vacancies at the
material time were not properly calculated;
F
(iii) There is sufficient data to indicate that many more vacancies
exist in most cadres than what is depicted in the impugned
order;
(iv) The adoption of the 60:40 ratio (PC: SSC Officers) based
on the AV Singh Committee report is flawed since various G
other aspects of the report are yet to be implemented by
the Naval Authorities including the disbursal of monetary
benefits;
(v) The computation of yearly vacancies has proceeded on an
arbitrary basis of 15 years’ distribution; H
638 SUPREME COURT REPORTS [2022] 18 S.C.R.
A (vi) The methodology of dividing the total number of vacancies
by 15 is arbitrary;
(vii) The chart which has been set out in paragraph 95 of AFT’s
decision shows that as many as 14 batches were considered
together; and
B (viii) The grievances of individual officers have not been
adjudicated. For instance, in the case of Commanders Annie
Nagaraj and Amit Sharma, though they were recommended
for the grant of PC and would fall within the existing
vacancies, they have been denied PC on the ground that
C they were not recommended.
19. On the other hand, Mr R Balasubramaniam, senior counsel
appearing on behalf of the respondents made the following submissions:
(i) While computing the vacancies, the Naval Authorities have
correctly borne in mind:
D
(a) The overall cadre structure of the Indian Navy;
(b) The policies which have been consistently followed; and
(c) The pattern of future inductions and retirements; and the need
to maintain a youthful profile in the Indian Navy and a balanced
E cadre structure.
(ii) Grant of PC is governed by Regulation 203 according to
which the availability of vacancies should be in the stabilised
cadre;
(iii) While the stabilised cadre normally comprises only of
F government sanctioned posts in the permanent cadre, in
the spirit of the judgment of this Court, temporary vacancies
and Training Drafting Leave Reserve (TDLR) vacancies
were also added to the stabilised cadre;
(iv) The vacancies of the stabilised cadre were worked out with
G reference to August 2015, September 2016 and March 2020;
(v) The ratio of 60:40 (PC:SSC) has been approved by the
Government of India on 3 November 2008 based on the
AV Singh Committee report;
H
CDR AMIT KUMAR SHARMA ETC v. UNION OF INDIA & 639
ORS ETC [DR DHANANJAYA Y CHANDRACHUD, J.]
(vi) Based on the above, the deficiencies in each stream were A
divided by a 15 year cycle which is the difference between
the life of a PC Officer and SSC Officer in service;
(vii) The deficiencies in manning strength cannot be given to
any particular batch or a few batches because of the policy
of the Navy to have a balanced cadre structure, a youthful B
profile and a proper induction/retirement pattern in the long
run;
(viii) The vacancies assigned to each batch worked out in terms
of the above model provided the maximum vacancies as on
March 2020, the date of the judgment of this Court; C
(ix) Pursuant to the directions given by the AFT, the Navy
carried out a fresh exercise and allotted seven more
vacancies to the Naval Construction Cadre and seven
officers were approved for the grant of PC;
(x) In regard to the clubbing of batches, each SSC Officer was D
given two ‘looks’ (the first and the second ‘look’) pursuant
to consistent practice. The first look is with officers of the
preceding batch, who were not granted PC in their first
look and the second look is with the available next fresh
batch. Hence, each batch was given consideration separately E
and it would not be correct to postulate that 14 batches of
the Logistics Cadre were clubbed together. The distribution
of vacancies per batch on the basis of a 15 year cycle is
justified;
(xi) The manner of writing ACRs is not erroneous. The judgment F
in Nitisha (supra) pertained to the Indian Army which is
distinguishable since :
(a) Unlike the Indian Army where male officers were being
granted PC, in the case of the Indian Navy neither men
nor women officers were granted PC;
G
(b) The ACRs written by officers in the last five years
preceding the conduct of the Board were taken into
consideration which had a specific column on whether
or not a recommendation was being made for PC, since
2015; and
H
640 SUPREME COURT REPORTS [2022] 18 S.C.R.
A (c) If an officer has not been recommended for PC in three
or more ACRs, it would be a disqualification and hence
an officer would not be eligible for grant of PC, even if
higher in merit.
20. The second respondent in the written submissions before this
B Court submitted that (i) it is a norm for the Board proceedings to only be
provided to the AFT in a sealed cover; (ii) the AFT on a perusal of the
proceedings of the Selection Board as well as confidential dossiers of
the individual applicants found that the Navy had considered the claims
of the officers for PC based upon the parameters laid down by this
Court in Annie Nagaraja (supra).
C
The Analysis
21. The AFT, inter alia, had to determine if (i) the Naval Authorities
had correctly computed the vacancies against which the claims of the
SSC Officers would be considered for the grant of PC; and (ii) the
D Selection Board considered the applications for the grant of PC fairly.
The judgment of the AFT indicates that in assessing the validity of the
exercise undertaken to determine vacancies and the fairness of the
selection process, it placed extensive reliance on material drawn from
the data emerging from the files which were submitted by the Union
Government and the Naval Authorities in a sealed cover. The judgment
E of AFT sets out in paragraph 92, a summary of the cadre-wise strength
and vacancies to be considered for granting PC to the affected SSC
officers. In paragraphs 93 and 94, the AFT has set out, in a similar
manner, tabulated statements in regard to the utilisation of vacancies.
This data did not form the subject matter of deliberations before the
F AFT. In fact, the counter affidavits in Commander Barsha Agrawal
(supra) and Commander AK Sharma (supra) indicate that the data
was submitted in the form of a sealed note.
22. Similarly, the Board proceedings were not disclosed to the
appellants. The written submissions before this court and the submissions
G in Commander AK Sharma (supra) before the AFT indicate that the
Board proceedings were not disclosed to the officers and were submitted
to the AFT in a sealed cover. The AFT on a perusal of the Board
proceedings has observed that the second respondent had adopted proper
procedure and suitable parameters that it had uniformly applied. It was
also observed on a perusal of the documents that there was no gender
H
CDR AMIT KUMAR SHARMA ETC v. UNION OF INDIA & 641
ORS ETC [DR DHANANJAYA Y CHANDRACHUD, J.]
bias and that the appellants’ applications for PC were rejected only A
because they were lower in inter se merit.
23. This Court in Annie Nagaraj (supra) had directed that the
applications of the serving officers for PC shall be considered on the
basis of norms in Regulation 203 and paragraph 4 of the implementation
guidelines. The parameters that were directed to be considered were: B
(i) availability of vacancies in stabilized cadre at the material time; (ii)
determination of suitability; and (iii) recommendation of the Chief of
Naval Staff. In terms of paragraph 4 of the implementation guidelines,
the empanelment has to be based on inter-se merit evaluated on the
ACRs of the officers. The Tribunal in paragraph 105 of the judgment
observed that on a perusal of record it was evident that the Indian Navy C
had considered the SSC officers for PC based on the parameters laid
down in Annie Nagaraj (supra). However, the material that has been
relied on to arrive at the finding that there was no infirmity in the process
has not been disclosed to the appellants. The AFT observed that the
weightage to the individual parameters in the selection process for PC is D
the same as it existed before the judgment of this Court in Annie Nagaraj
(supra). Even if the parameters for selection and the weightage of the
individual parameters have been in the public domain, there is no material
on record to determine if the selection has been made in accordance
with the criteria. The AFT has recorded that there are ‘no mala fides’
and ‘no gender bias’ in the selection process. However, there is no E
material available to the appellants to challenge these findings since the
material was disclosed to the AFT in a sealed envelope. The orders
granting PC to other officers also did not contain any reasoning on the
inter-se merit of the applicants. The AFT on a perusal of the files
submitted in a sealed cover recorded the status of the applicants in a F
tabular format that has been extracted in the earlier part of the judgment.
However, the appellants were not privy to such information.
24. Material prejudice has been caused by the process which has
been followed of disclosing the information of vacancies and the board
proceedings to the AFT in a sealed cover. In Khudiram Das v. State of G
West Bengal11, this Court held that the test for determining if material
must be disclosed is whether in all ‘reasonable probability’, the material
would influence the decision of the authority. Ruling in the context of
preventive detention, a four-Judge Bench of this Court observed:
11
(1975) 2 SCC 81 H
642 SUPREME COURT REPORTS [2022] 18 S.C.R.
A “15. Now, the proposition can hardly be disputed that if there
is before the District Magistrate material against the detenu
which is of a highly damaging character and having nexus
and relevancy with the object of detention, and proximity
with the time when the subjective satisfaction forming the
basis of the detention order was arrived at, it would be
B
legitimate for the Court to infer that such material must
have influenced the District Magistrate in arriving at his
subjective satisfaction and in such a case the Court would
refuse to accept the bald statement of the District
Magistrate that he did not take such material into account
C and excluded it from consideration. It is elementary that the
human mind does not function in compartments. When it receives
impressions from different sources, it is the totality of the
impressions which goes into the making of the decision and it is
not possible to analyse and dissect the impressions and predicate
which impressions went into the making of the decision and which
D
did not. Nor is it an easy exercise to erase the impression created
by particular circumstances so as to exclude the influence of such
impression in the decision making process. Therefore, in a case
where the material before the District Magistrate is of a character
which would in all reasonable probability be likely to influence the
E decision of any reasonable human being, the Court would be most
reluctant to accept the ipse dixit of the District Magistrate that he
was not so influenced and a fortiori, if such material is not disclosed
to the detenu, the order of detention would be vitiated, both on the
ground that all the basic facts and materials which influenced the
subjective satisfaction of the District Magistrate were not
F
communicated to the detenu as also on the ground that the detenu
was denied an opportunity of making an effective representation
against the order of detention.”
(emphasis supplied)
G 25. In T. Takano v. Securities and Exchange Board of India12,
a two- Judge Bench of this Court held that the all relevant information
must be disclosed. In this case, the issue for consideration before this
Court was whether an investigation report under Regulation 9 of the
SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations
12
H Civil Appeal Nos. 487-488 of 2022
CDR AMIT KUMAR SHARMA ETC v. UNION OF INDIA & 643
ORS ETC [DR DHANANJAYA Y CHANDRACHUD, J.]
2003 must be disclosed to the person to whom a notice to show cause is A
issued. SEBI had not disclosed the investigation report. It was the
contention of SEBI that it had not relied on the investigation report to
issue the show cause notice. The two Judge Bench observed that
disclosure of information to the parties to the adjudication serves three
purposes: (i) Reliability: The possession of information by both the parties
B
can aid the courts in determining the truth of the contentions; (ii) Fair
Trial: There is a legitimate expectation that parties are provided all the
information for them to effectively participate in the proceedings; (iii)
Transparency and accountability: It is necessary that the adjudication is
not opaque but transparent. Transparency aids in establishing
accountability. The observations on disclosure of information and its C
impact on transparency are extracted below:
“22. […] Keeping a party bereft of the information that influenced
the decision of an authority undertaking an adjudicatory function
also undermines the transparency of the judicial process. It denies
the concerned party and the public at large the ability to effectively D
scruitinise the decisions of the authority since it creates an
information asymmetry.”
23. The purpose of disclosure of information is not merely
individualistic, that is to prevent errors in the verdict but is also
towards fulfilling the larger institutional purpose of fair trial and E
transparency. Since the purpose of disclosure of information targets
both the outcome (reliability) and the process (fair trial and
transparency), it would be insufficient if only the material relied
on is disclosed. Such a rule of disclosure, only holds nexus to the
outcome and not the process. Therefore, as a default rule, all
relevant material must be disclosed. F
26. This court observed that the right to disclosure is not absolute.
Portions that involve information on third-parties or confidential information
on the securities market may be withheld by SEBI. The court directed
that the Board is duty bound to disclose parts of the investigative report
that concern the specific allegations that have been levelled in the show G
cause notice. However, the court also observed that it does not entitle a
person to whom the notice is issued to receive unrelated sensitive
information. The court held that it must first be prima facie established
by SEBI that the disclosure of the information would affect third party
rights. Once a prima facie case of sensitivity is established, the onus H
644 SUPREME COURT REPORTS [2022] 18 S.C.R.
A would then shift to the appellant to prove that the information is necessary
to defend his case appropriately. The conclusions are extracted below:
51 […]
(v) The right to disclosure is not absolute. The disclosure of
information may affect other third-party interests and the stability
B and orderly functioning of the securities market. The respondent
should prima facie establish that the disclosure of the report would
affect third-party rights and the stability and orderly functioning
of the securities market. The onus then shifts to the appellant to
prove that the information is necessary to defend his case
C appropriately; and
(vi) Where some portions of the enquiry report involve
information on third parties or confidential information on the
securities market, the respondent cannot for that reason assert a
privilege against disclosing any part of the report. The respondents
D can withhold disclosure of those sections of the report which deal
with third-party personal information and strategic information
bearing upon the stable and orderly functioning of the securities
market.
52 The Board shall be duty-bound to provide copies of such parts
E of the report which concern the specific allegations which have
been levelled against the appellant in the notice to show cause.
However, this does not entitle the appellant to receive sensitive
information regarding third parties and unrelated transactions that
may form part of the investigation report.”
F 27. The elementary principle of law is that all material which is
relied upon by either party in the course of a judicial proceeding must be
disclosed. Even if the adjudicating authority does not rely on the material
while arriving at a finding, information that is relevant to the dispute,
which would with ‘reasonable probability’ influence the decision of the
authority must be disclosed. A one-sided submission of material which
G forms the subject matter of adjudication to the exclusion of the other
party causes a serious violation of natural justice. In the present case,
this has resulted in grave prejudice to officers whose careers are directly
affected as a consequence.
28. The non-disclosure of relevant material to the affected party
H and its disclosure in a sealed-cover to the adjudicating authority (in this
CDR AMIT KUMAR SHARMA ETC v. UNION OF INDIA & 645
ORS ETC [DR DHANANJAYA Y CHANDRACHUD, J.]
case the AFT) sets a dangerous precedent. The disclosure of relevant A
material to the adjudicating authority in a sealed cover makes the process
of adjudication vague and opaque. The disclosure in a sealed cover
perpetuates two problems. Firstly, it denies the aggrieved party their
legal right to effectively challenge an order since the adjudication of
issues has proceeded on the basis of unshared material provided in a
B
sealed cover. The adjudicating authority while relying on material
furnished in the sealed cover arrives at a finding which is then effectively
placed beyond the reach of challenge. Secondly, it perpetuates a culture
of opaqueness and secrecy. It bestows absolute power in the hands of
the adjudicating authority. It also tilts the balance of power in a litigation
in favour of a dominant party which has control over information. Most C
often than not this is the state. A judicial order accompanied by reasons
is the hallmark of the justice system. It espouses the rule of law. However,
the sealed cover practice places the process by which the decision is
arrived beyond scrutiny. The sealed cover procedure affects the
functioning of the justice delivery system both at an individual case- to
D
case level and at an institutional level. However, this is not to say that all
information must be disclosed in the public. Illustratively, sensitive
information affecting the privacy of individuals such as the identity of a
sexual harassment victim cannot be disclosed. The measure of non-
disclosure of sensitive information in exceptional circumstances must be
proportionate to the purpose that the non-disclosure seeks to serve. The E
exceptions should not, however, become the norm.
29. During the course of the hearing, it has clearly emerged before
this Court that material which was relied upon by the AFT for determining
the vacancies which were available and for assessing as to whether
they were utilised correctly has not been disclosed to the appellants. F
Similarly, the Board proceedings that were relied upon by AFT to
determine if the selection for PC was fair have not been disclosed to the
appellants. We are cognizant of the wide range of sensitive information
in the records of board proceedings. The respondents are not required
to disclose the deliberations on the selection for PC within the closed
Board setting. While the AFT on a perusal of the records concluded that G
there was no gender bias or mala fides in the grant of PC, it must be
borne in mind that the officers do not possess the material to challenge
this observation. The respondents while protecting the confidentiality of
the proceedings of the Board must disclose the position in merit of the
H
646 SUPREME COURT REPORTS [2022] 18 S.C.R.
A appellants vis-à-vis the parameters and their weightage devised by the
respondents.
30. We permitted counsel to address the Court briefly on the nature
of objections which arise on the basis of the data as disclosed. Counsel
for the appellants submitted that instead of a remand to AFT, this Court
B may carry out the exercise. We are not inclined to do so for two reasons.
Firstly, a primary fact-finding role is entrusted to the AFT under the
Armed Forces Tribunal Act 2007. While exercising its appellate
jurisdiction, it would be appropriate if this Court has the benefit of a
considered view of the AFT. To decide the issues for the first time in
appeal, as a matter of first impression, would not be appropriate.
C Secondly, the issues which arise before the AFT primarily turn upon the
determination of vacancies, the manner of utilising them and the fairness
of the selection process. This is an exercise which had to be carried out
by the Naval Authorities while implementing the judgment of this Court.
The correctness of that determination fell for consideration before the
D AFT. In arriving at its conclusion upholding the determination, the AFT
has not had the benefit of considering the objections of the appellants to
the manner in which the exercise was carried out by the authorities. The
objections of the appellants noted above would have been set out before
the AFT if the material was disclosed to the appellants. The failure to
disclose relevant material has caused substantial prejudice to the
E appellants. This case exposes the danger of following a sealed cover
procedure.
31. For the above reasons we are of the view that a remand to
the AFT would be necessitated. We are conscious of the fact that the
AFT carried out a painstaking exercise while disposing of the OAs but
F there has been a clear breach of the principles of natural justice. We are
of the considered opinion that the AFT should be directed to reconsider
the entire matter afresh.
32. We accordingly allow the appeals and set aside the impugned
judgment of the AFT. The OAs corresponding to the appeals which are
G filed before this Court are restored for fresh adjudication by the AFT.
During the pendency of these proceedings, as already noted, some of
the officers in this batch of appeals including some interveners have
continued in service as a result of the protective orders operating in their
favour while the tenure of one officer is to end in December 2022. We
H direct that the officers who are protected by interim orders of this Court
CDR AMIT KUMAR SHARMA ETC v. UNION OF INDIA & 647
ORS ETC [DR DHANANJAYA Y CHANDRACHUD, J.]
shall continue to have the benefit of those orders pending the disposal of A
the proceedings before the AFT and thereafter for a period of eight
weeks from the date of the decision of the AFT should it become
necessary for them to assail the judgment before this Court in appeal.
The officer whose tenure is to end in December 2022 shall also be
entitled to the benefit of the same protection.
B
33. We request the AFT to dispose of the OAs which have been
restored to the file of the AFT expeditiously and preferably by the end of
February 2023.
34. Pending applications, if any, including applications for
impleadment/intervention, stand disposed of. C
Divya Pandey Appeals allowed.
(Assisted by : Rahul Kumar, LCRA)
D
E
F
G
H
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