APPOINTMENT
OF CAG : NEED FOR TRANSPARENCY
eaders
will please recall Dr B. P. Mathur's article of this title in
the last issue of COMMON CAUSE and the reference made in the lead
article to the PIL filed by the Public Cause Research Foundation
on the subject in the Supreme Court. The matter came up for hearing
on July 14, 2008 and after hearing the parties, the Bench headed
by the Chief Justice of India decided to dismiss the petition.
The Solicitor General of India, who put in an appearance on behalf
of the Respondent, took the plea that the Constitution does not
lay down any guidelines for appointment to the office of CAG and
hence, there is no need to do so. It is unfortunate that the Union
of India has missed yet another opportunity of bringing in greater
objectivity and transparency in the procedure for appointment
to a constitutional office. The campaign for an open and accountable
government should, however, continue apace, as it draws its sustenance
from universal concepts of good governance.
We are reproducing below the synopsis and list of dates, grounds
and prayers contained in the petition for the information of our
readers.
- Editor
IN
THE SUPREME COURT OF INDIA
(CIVIL
ORIGINAL JURISDICTION)
WRIT
PETITION (CIVIL) No. 618 OF 2007
IN THE MATTER OF:
Public Cause Research Foundation (A Registered Trust) Through
Arvind Kejriwal, Managing Trustee
O/o Public Cause Research Foundation
109, Pandav Nagar, Ground Floor, New Delhi 92 … PETITIONER
VERSUS
UNION
OF INDIA
Through
the Cabinet Secretary,
South
Block, New Delhi ….RESPONDENT
SYNOPSIS
AND LIST OF DATES
This Petition is preferred under Article 32 of the Constitution
of India, by way of Public Interest Litigation, raising a public
grievance with respect to the high handed, arbitrary and unfair
manner and procedure being adopted by the Government of India
in making appointment to the important constitutional office of
the Comptroller & Auditor General of India (hereinafter referred
to as CAG).
Article 148 of the Constitution of India provides that there shall
be a Comptroller & Auditor General of India, the said post
is a Constitutional Post and the Constitution has given great
importance to the office of the Comptroller & Auditor General.
There is a parity of status between the CAG and a Judge of the
Supreme Court in most respects. The status of the office of the
CAG is unique in our federal set up, he being a common functionary
between the Union and the States with regard to audit and control
of expenses. Under the circumstance, the CAG has been given the
same conditions of service and facilities as are provided to a
judge of the Supreme Court, with the exception of tenure. The
Petitioner humbly submits that the office of the CAG, which has
aptly been described as the Sentinel of Democracy by the founders
of our Constitution (as is evident from the Parliamentary Debates),
is fundamental to the functioning of our system. As is clear from
the relevant provisions of the Constitution and the Comptroller
& Auditor General (Duties, Powers and Conditions of Service)
Act, 1971, the CAG controls all disbursements of money and also
audits all accounts of the monies administered by or under the
authority of the Parliament or the Legislature of a State. The
CAG exercises supervision over the accounts of all expenditure
incurred by the ministries, departments and organizations of the
Centre that, in the aggregate, is of the order of about Rs. 5,60,000
crore, besides exercising supervision over Accountant-Generals
of States who in turn are responsible for the accounts and audit
of all State Governments, involving aggregate expenditure of the
order of Rs. 5,00,000 crore. It is the duty of the CAG to ensure
that withdrawals from the Consolidated Funds are not made without
legal sanction. The CAG is a Constitutional entity and enjoys
office for a period of six years.
The CAG is required to bring out every year a series of reports,
undertake audits and highlight instances of fraud, misapplication
of funds and corruption. This formidable task is not a mere formality,
but a responsibility owed to the people of India. It cannot be
gainsaid that the office of the CAG is the single most important
post that, in the opinion of the founders of our Constitution,
was considered to be instrumental in ensuring that public funds
are utilised in an efficient manner, that instances of fraud,
misuse and corruption are minimized and thereby improving the
culture of accountability to the people of India. The Petitioner
begs to refer in this context to the words of Dr. Rajendra Prasad,
that "It is of highest importance that a proper check is
maintained on expenditure and that the funds drawn by various
government departments are not in excess of the appropriations…the
office of the Comptroller & Auditor General has the power
to see that the monies granted by the Legislature to the Executive
Authorities are spent for purposes meant and that accounts are
maintained in a proper and efficient manner. In a democratic set
up involving allocation of hundreds of crores of rupees, the importance
of this kind of scrutiny and check can never be over-emphasized".
A review of the debates of the Constituent Assembly on the relevant
provisions will indicate that an amendment laying down the qualifications
was moved, but withdrawn after it was clarified by the framers
of the Constitution that their intention was only to appoint a
person who had sufficient knowledge of the accounting and auditing
systems and has practical experience of working as an Accountant-General.
The Petitioner submits that the Constitution lays emphasis on
the ability, knowledge and judgment of the CAG, making the capacity/
qualifications of the incumbent vital. Needless to say, the duties
cast upon the CAG by the Constitution and the CAG Act of 1971
are such as can only be performed by a person possessing sound
knowledge of budgetary control, financial management, auditing
and accounting, as also a wide experience of this work of a highly
technical nature. On tracing the history of this important office,
it becomes evident that it has always been considered a highly
technical post right since 1914 and that appointments to this
post were generally restricted to those members of the Indian
Civil Service who had the experience of working in the Accounts
Department. The first three incumbents of this post in free India
were from the Indian Audit & Accounts Service.
It is, however, unfortunate that the Union of India, in recent
years, has disregarded the Constitutional mandate and the incumbents
to this very vital post have been chosen without any guidelines
and ostensibly in an arbitrary manner. The Union of India has
not laid down any policy as to the minimum qualifications/ requirements
that have to be borne in mind while selecting incumbents to this
post, which is not only important for the functioning of democracy
but also entails work of a highly technical nature. Since 1978,
the Union of India has resorted to the practice of selecting an
officer from among officers of the Indian Administrative Service
nearing superannuation and has disregarded the essential and basic
requirement of selecting a person of special background and experience
in budgetary control, financial management, accounts and audit.
Now that the term of the present incumbent is ending on 7th
January 2008, it is likely that an officer of the Indian Administrative
Service nearing superannuation, who may not have the requisite
background and qualifications, may again be appointed to the post,
unless this Hon'ble Court intervenes in this very important matter
for the proper functioning of this important constitutional functionary.
The Comptroller and Auditor General is the sole authority under
the Constitution who is required to oversee the disbursement/expenditure
of all finances sanctioned by the Parliament/Legislatures. In
order to strengthen the Executive's accountability to the people
and ensure the independence and insulation from political influence
of the office of the CAG, it is desirable that the government
follows certain set norms/ guidelines in the matter of appointment
to this office, rather than exercise arbitrary power.
Before Independence, the persons who held the office of CAG were
British officers. Sir Ernest Burdon (May 1929 to August 1940),
Sir Alexander Badenoch, (September 1940 to March 1945) and Sir
Bertie Staig (April 1945 to August 1948) were all members of the
ICS and had worked for most of their careers in the Audit and
Accounts Department, rising up the ladder to earn their promotion
as Auditor General of India. For example, Alexander Badenoch had
initially worked as Dy Accountant General in the office of Accountant
General, Madras Province. Such exposure gave these officers' sufficient
experience and knowledge of the work of the Accounts and Audit
department.
It may also be mentioned that soon after independence, persons
appointed as CAG were professionals with experience of accounts,
audit and finance. The first three CAGs were from the Indian Audit
& Accounts Service (IA&AS); the fourth S Ranganathan was
from the I.C.S and the fifth was again from the IA&AS.
Aug
1948 to Aug 1956: Mr. V Narahari Rao.
Aug
1954 to Aug 1960: Mr. Ashok Chanda.
Aug
1960 to Aug 1966: Mr. A K Roy.
Aug
1966 to March 1972: Mr. S Ranganathan
April
1972 to March 1978: Mr. A Baksi
From 1978 onwards, Government has been appointing officers who
did not have intimate knowledge of the work of accounts and audit.
They were as follows:
April
1978 to
February1984:
Shri Gian Prakash, who was working as Defence Secretary before
appointment as CAG.
March
1984 to
March
1990: Post of CAG held by Shri T N Chaturvedi, who was working
as Secretary, Ministry of Home Affairs.
April
1990 to
February1996:
Post of CAG was held by Shri C G Somiah, who was Home Secretary
and later CVC.
March
1996 to
February
2002: Shri V K Shunglu, who was working as Secretary, Industry.
Occupied the post of CAG.
March
2002: Shri V N Kaul, who was working as Secretary, Petroleum is
presently the CAG and due to retire on 08.01.2008. The Petitioner
seeks intervention of this Hon'ble Court for laying down appropriate
guidelines in the matter of appointment to the aforesaid office
in terms of and for proper implementation of the constitutional
mandate.
The criterion on the basis of which selection is made for the
post of CAG is not known. It is believed that at present, the
proposal to fill the post of CAG is initiated by the Ministry
of Finance and sent to the Prime Minister's Office. It is understood
that Government follows an informal criterion that only an officer
holding the post of Secretary to Government of India should be
appointed to the post. If this were true, the policy is flawed
and liable to create a serious conflict of interest. An officer
holding the post of Secretary Defence is responsible for all the
expenditure incurred, as well as the contracts entered into by
the Defence Ministry. Similarly, the Petroleum Secretary is responsible
for the policy relating to import of petroleum (of the order of
$ 50 billion annually) and oversees the functioning of mega PSUs
under the Ministry, such as ONGC, IOC, BPCL, etc. Officers who
immediately preceding the appointment as CAG were working as Secretary
of key expending ministries may find it difficult independently
to audit the transactions entered during their stewardship without
running into a serious conflict of interest situation.
The Petitioner is, therefore, approaching this Hon'ble Court by
way of this writ petition to direct the Union of India to follow
an objective policy/ guideline in the matter of appointment to
the office of CAG, including minimum technical qualifications
in audit and accounts. As the term of the present incumbent of
this post comes to an end on 7th January 2008, there
is an obvious urgency for laying down the policy/ guidelines for
the selection of the next incumbent.
01.11.20007:
Hence this writ petition is being filed in public interest.
GROUNDS
Being highly aggrieved, the petitioner prefers this writ petition
on the following grounds amongst others:
A. Because the office of the CAG, which has aptly been described
as the Sentinel of Democracy by the founders of our Constitution,
is fundamental to the functioning of our system. As is clear from
the relevant provisions of the Constitution and the Comptroller
& Auditor General (Duties, Powers and Conditions of Service)
Act, the CAG controls all disbursements of money and also audits
all accounts of monies administered by or under the authority
of the Union Parliament or the Legislature of a State. It is therefore
vital to the functioning of our Democracy that appointment to
this important post is made only in accordance with certain norms/
guidelines.
B. Because the Government, over the years, has disregarded the
Constitutional requirement and the incumbents to this very vital
post have apparently been chosen without any guidelines and in
an arbitrary manner. The Government obviously does not have any
policy as to the minimum qualifications/requisites that have to
be borne in mind while selecting the incumbents to this post which
is not only important for the functioning of democracy but also
entails work of a highly technical nature. Since 1978, the post
of CAG has been held by persons appointed from among superannuating
officers of Indian Administrative Service, and it is likely that
Government may again appoint a superannuating IAS officer when
the post falls vacant on 7th January 2008.
D. Because the appointment of retiring Secretaries to the Government
of India to the constitutional office of the CAG can potentially
give rise to a serious conflict of interest, since such appointees
may, in the course of their duties as the supreme audit authority,
be called upon to audit the accounts of their erstwhile ministries
for the period of their tenure as secretary and to point a finger
at any irregularity, impropriety, waste, or loss of public funds,
at whatever level it might have occurred E. Because the Constitution
lays emphasis on the ability, knowledge and judgment of the CAG,
making the capacity/ qualifications of the incumbent vital. The
duties cast upon the CAG by the Constitution and the CAG Act of
1971 are such as can only be performed by a person possessing
sound knowledge of auditing and accounting as also wide experience
of this kind work which is of a highly technical nature. Such
a person alone can ensure that the expenditure to be charged to
the Consolidated Fund of India or of the States under the Appropriation
Acts passed by the Parliament and the State Legislatures is carefully
audited and there is no diversion or misuse of funds. Therefore,
it is important that certain guidelines should be laid down entailing
requirements of minimum qualifications, such as minimum experience
in relation to audit and accounts, for the incumbent of this post.
F. Because the debates of the Constituent Assembly on the relevant
provisions indicate that an amendment laying down the qualifications
for this post was moved, but withdrawn after it was clarified
by the framers of the Constitution that their intention was only
to appoint a person who had sufficient knowledge of the accounting
and auditing systems and had the practical experience of working
as an Accountant General.
G. Because the Comptroller and Auditor General is the sole authority
under the Constitution to whom the various Governments are accountable
for the disbursement /expenditure of all finances sanctioned by
the Parliament and thus in order to strengthen the requirements
of accountability to the people, the independence of the office
of the CAG has to be maintained and for achieving this purpose,
it is desirable that the Government should follow certain set
norms/guidelines in the matter of appointment to this office,
rather than exercise arbitrary power. The Executive should not
be given exclusive power to appoint the CAG. As the CAG enforces
the accountability of the Executive on behalf of the Parliament,
a high level independent Committee should recommend the appointment
of the CAG, so that transparency in his appointment is ensured.
PRAYER
In view of the circumstances as stated above, the petitioner most
respectfully prays that this Hon'ble Court may most graciously
be pleased to:
a)
Issue a writ of mandamus or any other appropriate writ, order,
or direction calling upon the respondents to evolve a policy,
including guidelines, as to the requisite qualifications/experience
in the matter of appointment to the office of the Comptroller
& Auditor General of India;
b)
issue a writ order or direction setting out a mode of selection
through a wide based independent manner as in the case of several
other high offices;
c)
Further direct the respondents to produce the records relating
to the conditions governing the appointments made till date to
this important constitutional position;
And
d)
Pass such other further Order or Orders, as this Hon'ble Court
may deem fit and proper in the facts and circumstances of the
case.
DRAWN AND FILED BY
Ms.
KAMINI JAISWAL
Advocate for the Petitioner
01.11.2007
