"CVC cannot be the final authority," a bench headed by Chief Justice S H Kapadia said while questioning the clearance given to Thomas by the Central Vigilance Commission in 2007-08 for being appointed as secretary and subsequent empanelment for the post of CVC.
"CVC cannot say that the court might have applied its mind while hearing the case and can the commission say there is no merit in the case while giving clearance to an officer," said the bench, which also comprised justices K S Radhakrishnan and Swatanter Kumar.
The remarks of the bench came after submissions were made by Attorney General G E Vahanvati, who said there was "no stigma" if a chargesheeted officer is considered for the post of CVC.
"The filing of a chargesheet is not a stigma," he said when the bench asked him "does it not, in normal course, be a stigma when a chargesheet is filed against an officer".
Vahanvati made the submission while responding to various questions by the bench, which also sought his view on the criteria of impeccable integrity required for appointment as the CVC. "Impeccable integrity is an important requirement," he said.
However, when the bench asked does the criterion of impeccable integrity apply when there is a stigma of chargesheet, the Attorney General said "this is an area of grey".
While Vahanvati was making the submissions, advocate Prashant Bhushan, appearing for the Centre for public interest litigation, which has challenged appointment of Thomas as CVC, said various factors about the Palmolein import case were not before the CVC when it gave vigilance clearance to him.
The CVC had not taken into account the pending chargesheet, sanction for his prosecution by the state government, the case diary, the report of the committee of public undertaking in Kerala and the CAG report on the Palolein import while giving vigilance clearance to Thomas.
"The CVC gave clearance to Thomas only on the basis of the two-page note placed before it by the Department of Personnel and Training," he said.
At the outset when it was informed by the Attorney General that there were no guidelines or rules for appointment of CVC, the bench said, "For future appointment we would lay down guidelines that there should be some procedure".
The bench stressed that the appointment has to be in accordance with the Vineet Narain case judgement which makes it clear that the CVC has to remain independent, impartial, free and fair and be uninfluenced by the political executive.
"The appointment has to be read or made in the light of the judgement in the Vineet Narain case and CVC Act. If there is some gap we will fill it up by our interpretation," the bench said.
Vahanvati, who said no further inquiry was required once a person is appointed as secretary on clearance by CVC, justified Thomas' appointment by saying that the vigilance clearance given to him in 2007 was not challenged by anyone.
"Nobody ever challenged what CVC said. All these facts were placed before him (CVC)," he said in response to the question of the Bench that the details about the Palmolein case was not put before the commission.
He said there was a detailed office memo in 2005 dealing with the case in which the state government had said that the whole case has to be withdrawn. However, the bench said totality of the circumstances has to be considered in the case.
The court also wanted to know if the CVC report on Thomas was placed before the committee headed by the prime minister, which went into the selection of CVC.
The Attorney General said, "It is not required to be placed once empanelment is given. Once there is a CVC clearance and empanelment, it is difficult to hold another inquiry."
Strongly supporting the appointment of Thomas as CVC, the government said the fact that the case is pending against him does not mean that he does not have impeccable integrity.
"It was legitimate to proceed on the basis that there was no impediment in the way of his appointment on the basis of the pending case which had been found to be without any substance," Vahanvati said referring to the CVC clearance given to Thomas.
"It is well settled that the question of suitability of the candidate is squarely the domain of the appointing authority. The argument about suitability of the candidate cannot be raised in the judicial proceeding," he added.
However, this submission evoked sharp reaction from the bench which said if there can be a judicial scrutiny of the amendments in the constitution how can it be that there cannot be judicial review of such appointments.
The court wanted to know that when 54 persons were empanelled for the post, then on what basis three names were shortlisted for consideration by a three-member committee headed by the Prime Minister.
The Attorney General shot back that "it is well settled that in matters of preparation of the list or recommendations there is no requirement to record reasons".
He also said there is no need of "unanimity" in the three-member committee on the appointment of CVC and "it cannot be said that the Leader of Opposition, who is the member of the committee in addition to PM and Home Minister, has a veto power".
He was referring to a dissent note given by Sushma Swaraj, who had said, "I disagree".
