Holding

When formal sanction to prosecute a government servant is granted, paragraph 7 of the Sealed Cover Procedure continues to apply, preventing promotion until the officer is fully exonerated.

Summary

The respondent, a Divisional Engineer in the Telecom Department, had his promotion placed under a sealed cover because of pending CBI investigations into serious financial misdemeanors. After the investigation, the Government granted formal sanction to prosecute him, but the Departmental Promotion Committee (DPC) had already recorded its recommendation in sealed cover. The Union of India appealed against the Central Administrative Tribunal’s order directing the DPC to open the sealed cover and promote the respondent. The Supreme Court held that once formal sanction for prosecution is accorded, paragraph 7 of the Sealed Cover Procedure bars promotion until the officer is completely exonerated, even though clause 2(iv) was later deleted. Consequently, the sealed‑cover recommendation must remain closed, and the Tribunal’s direction was set aside. The appeals were allowed.

Issues considered

Whether the deletion of clause 2(iv) of the Sealed Cover Procedure removes the sealed‑cover status of the respondent’s promotion case.
Whether paragraph 7 of the Sealed Cover Procedure applies when formal sanction for prosecution has been granted before actual promotion.
Whether the Departmental Promotion Committee’s recommendation can be opened despite the pending prosecution sanction.

Subjects

promotionsealed cover proceduredepartmental promotion committeeformal sanctionexonerationcivil appealservice lawCBI investigation

Judgment

UNION OF INDIA AND ANR. A
v.
RS.SHARMA

APRIL 18, 2000

[K.T. THOMAS, D.P. MOHAPA1RAAND S.N. VARIAVA, JJ.] B

Service Law :

Promotion: Sealed Cover Procedure-Applicability of-The procedure-
Employee-Investigation going on against him on serious allegations offinan-
cial misdemeanors-His case fell within the purview ofpara 2(iv) ofthe office c
memo-Sealed cover procedure adopted for promotion-Para 2(iv) was deleted
but was clarified that cases covered under para 2(iv) would be opened-Before
the case of the respondent could be opened and he could be promoted formal
sanction was accorded to prosecute him by Central Bureau oflnvestigation-
Held, in view of para 7 sealed cover should not be opened till exoneration of D
charges-Government ofIndia, Department of Per & Trag. O.M. No. 22011121
86-Estt. (A) dated 12.1.1988, OM. No. 2201111191 Estt. (A) dated 31.7.1991.

Respondent was a Divisional Engineer in the Telecom Department.
His promotion was temporarily sealed due to the investigations going on
against him on serious allegations of financial misdemeanors. The Central E
Bureau of Investigation completed the investigation and applied to the Gov-
ernment ofIndia for sanction to prosecute the respondent. The Departmen-
tal Promotion Committee considered cases of other persons in the depart-
ment for promotion but deferred the case of the respondent. Pursuant to the
order ofthe liibunal,DPC considered the case of the respondent. In accord- F
ance with para 2(iv) which relates to government servants against whom
investigation on allegations of corruption etc., are in progress, of Govern-
ment of India, Deptt. of Per. & Trag., Office Memo No. 2201112186-Estt. (A)
dated 12.1.1988 sealed cover procedure was adoptedin respondents case. By
Office Memo No. 22011/1191 Estt (A) dated31.7.1.991para2(iv) was deleted
but it was clarified that the cases contained in sealed cover in para 2(iv) G
would be opened while cases falling under other clauses of para 2 would
+ continue to be in the sealed cover. Thereafter, before the respondentcould be
promoted formal sanction was accorded to prosecute him. The Tribunal
then directed the DPC to open the sealed cover and implement the recom-
mendations of DPC. Hence this appeal by Union of India. H
151
152 SUPREME COURT REPORTS [2000] 3 S.C.R.
A The appellants contended that the Minister concerned accorded "i-
approval for granting sanction to prosecute the respondent much before
the deletion of para 2(iv), thus the recommendations of the DPC must
remain under sealed cover by virtue of clause 2(iii) of the Sealed Cover
Procedure which relates to government servants against whom formal
sanction is accorded to prosecute them. More so para 7 of the Sealed Cover
B
Procedure applicable to officers coming under cloud before promotion,
which states, that officers cannot be promoted until completely exonerated
of the charges against them, would apply to the respondent.

The respondent contended that the appellants had deliberately
c denied promotion to the respondent immediately after the deletion of para
2(iv) of the Sealed Cover Procedure, and therefore should not be allowed to
invoke para 7 of the procedure.

Allowing the appeal, this Court

D HELD : 1.1. When formal sanction is accorded to prosecute an
officer against whom charges of financial misdemeanors are levelled, the
sealed cover under para 7 of the Sealed Cover Procedure for promotion of
government servant should not be opened for promotion until charges
levelled against the officer are completely exonerated.[157-B]
E
1.2. Paragraph 7 of the Sealed Cover Procedure states that it cannot
apply to a government servant who is not actually promoted by that time.
In the instant case the respondent was not actually promoted when the
formal sanction had been accorded to prosecute him. Therefore, para 7 of
the sealed cover procedure would apply. [157-D; A]
F ~
1.3. In spite of deletion of clause 2(iv) of the sealed cover procedure
the recommendation of the DPC must remain in the sealed cover on
account of clause 2(iii) of the procedure by virtue of the operation of para 7
of the Sealed Cover Procedure. [157-FJ
G
Union eflndia v. K. V. Jankiraman, [1991] 4SCC109; Union ofIndia v.
Dr. Sudha S~lhan, [1998] 3 SCC and Bank ofIndia v. Degala Suryanarayana, +
(1999] 5 sec 762, distinguished.

Delhi Development Authority v. H.C. Khurana, JT (1993) 2 695 and
H Union ofIndia v. Kewal Kumar, JT (1993) 2 705, held applicable.

'
U.0.1. v. R.S. SHARMA [THOMAS, J.] 153

~ CIVIL APPELLAIB JURISDICTION : Civil Appeal Nos. 6995-6996 of A
1994.

From the Judgment and Order dated 2.2.94 of the Central Administra-
tive Tribunal, New Delhi in O.A. No. 2051/90 and 2026 of 1992.

Mukul Rohtagi, Additional Solicitor General, Raju Ramachandran, B
Ms. Madhu Sikri, V.K. Rao, Ms. Geetanjali Goel, Piyush Sharma, Anil Kumar
Sharma, Ravi Shankar Kumar, Navin Prakash, N.C. Sikri, A.K. Sikri and A.K.
Singh for the appearing parties.

The Judgment of the Court was delivered by
c
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 time scale 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 Tribu-
nal') before which he approached for redressal of his grievance has upheld his
D
contentions and directed the appellants to open the sealed cover and give effect
to the recommendations made by the Departmental Promotion Committee
(DPC). 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. E

The background of passing the said order is the following:

Respondent was appointed in the Telecom Department during 1986.
Hardly two years passed he got himself delved in the vortex of serious
allegations of financial misdemeanors. One of the allegations is that he F
purchased very substandard 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 the CBI continued
with investigation and on completion thereof they applied to the Government
G
of India for according sanction to prosecute the respondent.
'
...... In the meanwhile the 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 H
154 SUPREME COURT REPORTS [2000] 3 S.C.R. t
A an interim direction that the DPC should consider the case of the respondent I
for promotion in the event of considering the claims of any of his juniors
attached to the same Department.
"'
Pursuant thereto the DPC considered the case of the respondent on
3.4.1991 and adopted a decision. However, the DPC did not communicate the
B decision to any one 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 ..i.-
Per. & Trg., Office Memo No. 22011/2/86-Estt.(A) dated the 12th January,
1988).
c
At this stage, it is relevant to extract paragraph 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,
D details of Government servants in the consideration zone for promo-
tion falling under the following categories should be specifically
brought to the notice of the Departmental Promotion Committee:

(i) Government servants under suspension;

E (ii) Government servants in respect of whom disciplinary proceed-
ings 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 sanction for prosecution has been
F issued or a decision has been· take~ to accord sanction for
prosecution;

(iv) Government servants against whom an investigation on serious
allegations of corruption, bribery or similar grave misconduct is
G in progress either by the CBI or any agency, departmental or
otherwise."

It i.s not disputed before us that on 3.4.1991 when DPC decided to put
-..
the recommendations concerning respondent in the sealed cover, investigation
into the case involved in the aforesaid FIR was pending. Hence the Sealed
H Cover Procedure was adopted as his case fell within the purview of clause {iv)
U.0.1. v. R.S. SHARMA [THOMAS, J.] 155

- . .}
of the aforesaid second paragraph. 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 paragraph of the "Sealed Cover
A

Procedure". However, three counts of clarifications have been made by the
Government of India through the same O.M. They are extracted below:

"It is further clarified that: (i) All cases kept in sealed cover on qate B
of this O.M. on accountof conditions obtainable in para 2(iv) of the
-4 O.M. 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 c
actual charge in view of provisions of FR 17(1). (Since only
officiating arrangements could be made against the vacancies avail-
able because of cases of senior officials being in sealed cover, there
may not be any difficulty in terminating some officiating arrange-
ments if necessary and giving promotion in such cases).
D
(ii) If any case is in a sealed cover on account of any of the other
conditions mentioned in para 2(i) to 2(iii) of the O.M. dated 12.1.88,
the case will continue to be in the sealed cover.

(iii) On opening of the sealed cover because of deletion of para 2(iv)
E
if an officer is found to have been recommended as 'unfit by the DPC,
no further action would be necessary."

Some further develdpments which took place in the meanwhile are also
relevant. CBI completed and submitted a report to the Government on
7 .5 .1991 and sought for sanction to be accorded to launch prosecution F
~ proceedings against the respondent. On 9.7.1991 the Minister of State con-
cemed gave his approval to the respondent and refeu-ed the matter for the
advice of the Central Vigilance Commission (CVC). When the advice was
given by the CVC the Minister for State gave further approval on 10.9.91 for
~ . adopting follow up actions on the report. However, formal order granting
G
sanction to prosecute the respondent was made by the President only on
30.9.1991.
+
• Normally the case of respondent should have succeeded if the situation
which happened on 31.7.1991 was confined to deletion of clause (iv) from
second paragraph of the "Sealed Cover Procedure". But when the same O.M. H
156 SUPREME COURT REPORTS (2000] 3 S.C.R.
A made specific mention of a clarification that the "case will continue to be in -4.
the sealed cover on account of existence of any one of the remaining three
conditions specified in clauses (i) to (iii) of the first O.M." the matter has to
be considered from those angles also.

Shri Mukul Rohtagi, learned Additional Solicitor General contended
B that as the Minister concerned accorded approval for granting sanction to
prosec\te the respondent as early as 9.7.1991, the recomlllendations of the
DPC m~t remain under sealed cover by virtue of the conditions specified in
clause (i ~) of the second paragraph of the Sealed Cover Procedure (supra),
because in such an event deletion of clause (iv) on 31.7.1991 by itself had no
c consequenc~:

Shri Allil Kumar Sharma, learned counsel for the respondent ~ontended
that appellants are debarred from adopting such a contention as the Depart-
ment stated iri 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
D paragraph of the "Sealed Cover Procedure" was already deleted.

Without conceding to the above position, Shri Mukul Rohtagi, Addi-
tional Solicitor General, adopted an alternative contention based on Paragraph
7 of the Sealed Cover Procedure which reads thus:

E "Sealed. cover applicable to officer coming under cloud before
promotion:- A Government servant, who is recommended for promo-
tion by the Departmental Promotion Committee but in whose case any
of the ci.rcmnstam.;t:s mt:11tiu11t:d in para 2 above arise aftef the
recommendations of the DPC are received but before he is actually
-·
F promoted. will be considered as if his case had been placed in a sealed
cover by the DPC. He shall not be promoted until he is completely A.
exonerated of the charges against him and the provisions contained
in this O.M. will be applicable in his case also."

The conditions necessary to invoke the said Clause are: ~
' ...
G
(1) Recommendations of the 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) of the second
H paragraph (supra) should have arisen.
U.O.I. v. R.S. SHARMA [THOMAS, J.] 157

.. l- Two factual aspects are admitted. One is that respondent was not
actually promoted even now. The other is that formal sanction has been
A

accorded to prosecute him in the meanwhile. If that be so, paragraph 7 of the
Sealed Cover Procedure would entirely apply and the recommendations made
- by the DPC in respect of the respondent have to remain ~ the sealed cover
"until he is completely exonerated of the charges against him."
B
Shri Anil Kumar Sharma, learned counsel, adopted the contention that
_J
the situation would not have arisen as envisaged in paragraph 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 '1ay itself or at least
soon thereafter by promoting the respondent. Learned counsel contended that c
the Department had willfully and deliberately avoided to comply with the said
Office Memo dated ~l.7.1979, and hence appellants should not be permitted
to take advantage of their own wrong.
~

We are not impressed by the said arguments for two reasons. One is that,
D
what the Department did not do is not the yardstick indicated in paragraph 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
)t.. of clause (iv) of the second paragraph, the recommendations of the DPC must
remain in the sealed cover on account of the conditions specified in clause (iii) E
of the said paragraph by virtue of the operation of paragraph 7 thereof. We

- cannot say that the said stand was incorrect and, therefore, we are unable to
blame the Department for not opening ihe seakli cuver immediately after
31.7.1991.
F
Learned counsel for the respondent made an endeavour to contend that
in the light of the decision of this Court in Union oflndia
,... v. K. V. Janakiraman,
[1991] 4 SCC 109 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 G
submitted that Janakiraman was since followed in Union ofIndia v. Dr. Sudha
+
-- Salhan, [1998] 3 SCC; Bank ofIndia v. Degala Suryanarayana, [1999] 5 SCC
762. The clauses of second paragraph of the Sealed Cover Procedure consid-
ered in Janakiraman 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 H
158 SUPREME COURT REPORTS [2000] 3 S.C.R.
A vrnrranted application of the ratio contained in Janakiraman. 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 the trial for serious offences, and hence the situation is different.

We may also point out, in this context, that in Delhi Development
B Authority v. H.C. Khurana, IT (1993) 2 695 and Union of India v. Kewal
Kumar, IT (1993) 2 705 this Court found that the ratio in Janakiraman is I
\
applicable only to the situations similar to the cases discussed therein, and
hence the Sealed Cover Procedure resorted to by the DPC in those two cases
was upheld by this Court.
c
In our opinion the Tribunal naS'erred in overlooking paragrap~ 7 of the
"Sealed Cover Procedure" (supra) and hence the direction issued by it as per
the impugned judgment cailnot be sustained. We, therefore, allow these
appeals and set aside the said direction.

D N.J. Appeals allowed.