SC dismisses plea challenging appointment of CVC

New Delhi: The Supreme Court today dismissed a plea challenging the appointment of Central Vigilance Commissioner (CVC) K V Chaudhary and Vigilance Commissioner (VC) T M Bhasin.

A bench headed by Justice Arun Mishra said there were no grounds to quash the appointments of Chaudhary and Bhasin.

The court was hearing a plea challenging the appointment of incumbent CVC Chaudhary and VC Bhasin.

The plea alleged that they did not have a “clean record” and a non-transparent procedure was followed while appointing them.

RBI did not do proper auditing: CVC on PNB fraud

Central Vigilance Commissioner K V Chowdary today said the Reserve Bank of India (RBI) had apparently not conducted an audit during the period of time when a Rs 13,000-crore scam hit the Punjab National Bank.

Chowdary stressed the need to put into place a more robust auditing system.

“They did not do this (an audit),” the head of the probity watchdog told PTI.

The CVC exercises superintendence over the CBI which is looking into the over Rs 13,000-crore PNB fraud case.

The RBI had the regulatory responsibility for the banking sector but any lack of integrity would be looked at by the Central Vigilance Commission, he added.

Chowdary said according to the RBI, it had switched over from a periodic audit to a “risk-based” audit which is conducted when there is a financial risk involved.

“To determine risk, they must have some parameters. Based on that they would have done that (auditing). (But) there was no apparent audit by the RBI during this period (of fraud),” Chowdary said.

Union Finance Minister Arun Jaitley had in February slammed regulators for failing to detect the fraud, saying that unlike politicians, regulators in the Indian system were unaccountable.

Chowdary pointed out that the RBI issues general guidelines as a regulator and also when foreign exchange is involved.

“They are not going to see from branch to branch and bank to bank what they are supposed to do,” he said.

It was primarily the responsibility of the banks to ensure that their business was conducted in a proper and ethical way, he added.

He said when something goes wrong, “one cannot blame everybody”.

“There is a systemic issue (here). They (RBI) have decided instead of every year or every once in two, three or four years, they will do it (risk-based auditing).

“It is a good policy. But how they determine the risk parameters… and why this (fraud) did not come up are matters of detail,” Chowdary said.

He, however, clarified that it was not just the PNB where an alleged fraud had taken place or that other banks were “100 per cent correct”.

“But we have to only hope that they (the other banks) have a better system and that they are following the system,” Chowdary said.

On a bank’s role in checking frauds, Chowdary said there are “no timelines” when it comes to deeper decision making processes.

“There should be defined timelines. The preventive vigilance mechanism has to be strengthened. The guidelines and operating procedures have to be strengthened. It has to be ensured that they are followed,” he said.

Asked about the investigation in the PNB scam, he said what the CVC was doing in the case could not be disclosed now as “it is work in progress”.

“There are so many issues that the CVC is examining both with reference to processes set in motion by the RBI,” Chowdary said.

The CBI is among various agencies looking into the over Rs 13,000-crore fraud allegedly committed by billionaire jeweller Nirav Modi and his uncle and Gitanjali Gems promoter Mehul Choksi.

Media termed me guilty, Thomas tells Supreme Court

Controversial former central vigilance commissioner (CVC) P.J. Thomas Tuesday moved the Supreme Court seeking a CBI probe into the “distorted reporting” by the media of the court proceedings against him.


Thomas, whose appointment as the head of the Central Vigilance Commission was set aside by the apex court, said that “distorted” reporting and telecasting of the court proceedings that were “prejudicial” to his interest should be inquired into.


The former CVC appealed to the court to initiate contempt proceedings against all those found guilty of publishing or telecasting the distorted version of the court proceedings while it heard a petition by the Centre for Public Interest Litigation (CPIL) challenging his appointment on the grounds of a criminal case against him in Kerala relating to the import of palm oil at inflated rates.


Thomas said that there were 783,000 results on the internet describing him as “tainted” based on media reports.


He went on to ask who would take “corrective steps for damage control”.


He asked what the remedies available to him were “when billions of people who might have gone through the news sensationalised by the media are believing that the applicant (Thomas) is tainted based on distorted reporting of the court proceedings”.


An apex court bench of Chief Justice S.H. Kapadia, Justice K.S. Panickar Radhakrishnman and Justice Swatantar Kumar had March 3 quashed Thomas’ appointment as the head of the Central Vigilance Commission.


Thomas said that a news channel had led the distorted campaign against him, which was followed by other news channels and media publications. He has asked the court to frame guidelines on media reporting of court proceedings.


“A situation has come in which, the applicant, inspite of his honesty, integrity and dedicated service to the country, is labelled as a tainted person, and the allegation has gone to the extent that he was shown as a person who shamed India, seriously affecting the reputation and credibility of the applicant, including his right to life,” Thomas told the court in his application.


Refering to the apex court verdict of March 3, Thomas said that the court had not heard him “effectively and properly” and his “merit and eligibility” for selection as CVC was not mentioned anywhere in the judgment.


Thomas said that he was told by his counsel that during the course of the hearing, the court had said that it was more concerned with the future appointments of the CVC.


Targeting senior counsel Prashant Bhushan for leading the charge against him, Thomas said that there was nothing in the records of the case available with the court to show that the CPIL had given him any authority to appear on its behalf.


CVC committee not told of pending chargesheet against Thomas

central vigilance commissioner

The Supreme Court was told Thursday that the high-powered committee for the selection of central vigilance commissioner (CVC) was not informed about a pending chargesheet against P.J. Thomas and the sanction granted by the Kerala government to prosecute him in the palm oil import case.

The high-powered selection committee comprises Prime Minister Manmohan Singh, Home Minister P. Chidambaram and Leader of Opposition in the Lok Sabha Sushma Swaraj.

The selection committee, by a majority, disregarded Swaraj’s objection and had selected Thomas as CVC.

Attorney General G. Vahanvati told the apex court bench headed by Chief Justice S.H. Kapadia: ‘The fact of the pending case (of P.J. Thomas) was not placed before the selection committee. All that was needed to place before the selection committee was the biodata of the empanelled officer.’

At this the court asked: ‘What is the consequence of the selection committee not being made known the relevant facts (about P.J. Thomas).’

The apex court said that before going into the merit of the case, it wanted to know if correct procedure was followed in the selection of CVC.

The court asked how many people were there in the zone of selection for the CVC; what was the criteria of shortlisting such officers, if there were only three officers; and if there were more, then on what grounds they were eliminated.

The court also wanted to know if other two officers on the panel suffered from any infirmity as was the case with P.J. Thomas and why he alone was preferred for selection as CVC.

I am victim of political cross-fire, Thomas tells apex court

Central Vigilance Commissioner (CVC) P.J. Thomas Monday told the Supreme Court that he was the victim of a political cross-fire between late former Kerala chief minister K. Karunakaran and Left Democratic Front (LDF) leader and Chief Minister V.S. Achuthanandan.”Unfortunately, this respondent was caught in the middle of political battle which arose between the former chief minister of Kerala, Sri Karunakaran, and the present Chief Minister, Sri Achuthanandan,” Thomas told the court in his affidavit, filed over a petition challenging his appointment as the CVC.

The CVC filed his reply in response to a notice issued to him by the apex court bench of Chief Justice S.H. Kapadia, Justice K.S. Radhakrishnan and Justice Swatanter Kumar on a petition by the Centre for Public Interest Litigation (CPIL).

The petition questioned his appointment as the CVC when he was facing court proceedings in a criminal case involving the import of palm oil in Kerala in 1991, allegedly causing a huge loss to the public exchequer.

Thomas was secretary, food and civil supplies, in the Kerala government when the controversial import deal was finalised.

“The sword of this prosecution which is purely based on political overtones has been hanging over this deponent’s (Thomas) head for almost 20 years,” Thomas said in his affidavit.

He also referred to the withdrawal of the case by former chief minister Oommen Chandy’s government, led by the Congress, and its subsequent re-opening by the Achuthanandan government.

Pointing to the political nature of the case, Thomas said in his affidavit: “The same LDF government appointed the deponent (Thomas) as chief secretary to its government on Sep 18, 2007. Clearly, the continuation of the prosecution in the palmolein case was meant to target Karunakaran and not the deponent.”

The CVC took exception to the use of expressions like “dishonest”, “dubious” and “suspect” while referring to his integrity.

He said that the usage of these expression about his integrity were defamatory and there was no judicial or administrative finding to support such words which were being used in such a casual manner.

Thomas said that in 1991 when the Kerala government imported the palm oil at $405 per tonne, on the same day the West Bengal government imported the same oil for $407 per tonne.

He said: “The CAG had no opportunity to know that other states had imported palmolein oil at the same rate and in any event, the state of West Bengal had imported at $407 on the same day that Kerala imported at $405. What is more, the CAG had no material in his hands to show that the state of Kerala made a profit of Rs.7.6 crore as against an allegation of Rs.2.32 crore.”

Thomas said he was repeatedly cleared as far as his professional conduct and integrity were concerned. He said the central government gave a clean chit to him twice.

He told the court that even the then CVC had said that no case was made out against him or other Indian Administrative Service officers in the palm oil import case in Kerala.

Thomas said as far as the scandal involving the 2008 second generation airwave allocation to telecom companies was concerned, he became the telecom secretary months after the allotment process was over.

Can Thomas be an effective CVC, asks Supreme Court

The Supreme Court Monday asked the central government if Central Vigilance Commissioner P.J. Thomas could function effectively in view of various charges hurled against him.

The apex court bench headed by Chief Justice S.H. Kapadia wondered if a person who is an accused and facing a chargesheet could head a watchdog body.

The court asked the attorney general to be prepared to argue the case on these lines when it comes up for hearing after two weeks.

In the meanwhile, the government has handed over to the court all details regarding Thomas’ appointment, including consultations between Prime Minister Manmohan Singh, Home Minister P. Chidambaram and Sushma Swaraj, leader of the opposition in the Lok Sabha.