In a significant ruling by the Supreme Court of India, the case of Union of India vs. Doly Loyi has brought to light crucial issues surrounding the promotion of government servants facing criminal charges. The appeal arose from a decision made by the Delhi High Court on April 26, 2013, which upheld the Central Administrative Tribunal's (CAT) ruling that favored the respondent's claims regarding his promotion denial due to ongoing criminal proceedings.

The respondent was appointed as an Assistant Commissioner of Income Tax on December 16, 1987, and subsequently received promotions to higher posts. However, his career faced a setback when an FIR was filed against him in December 2001, alleging serious offenses under the Indian Penal Code and the Prevention of Corruption Act. Following the FIR, the Central Board of Direct Taxes (CBDT) sanctioned his prosecution in June 2006.

   

The respondent challenged the sealed cover procedure adopted by the DPC in the CAT, which ruled in his favor, prompting the government to appeal to the Delhi High Court. The High Court dismissed the appeal, leading to the current Supreme Court case.

Central to the arguments were the Office Memoranda (OM) that guide the DPC's procedures. The OM dated September 14, 1992, stipulates that government servants under suspension, those facing disciplinary action, or those with pending criminal charges cannot be promoted until their situations are resolved. The key question arose as to whether the mere grant of sanction for prosecution constituted a pending criminal charge.

The appellants contended that the respondent's case fell under the third clause of the OM, which allows for the sealing of DPC recommendations when prosecution for a criminal charge is pending. They argued that the respondent's situation justified withholding promotion until the cloud of allegations was lifted.

Conversely, the respondent's counsel argued that there were no disciplinary proceedings or active criminal charges at the time of the DPC meeting. He highlighted that the grant of sanction alone did not indicate that prosecution was pending, asserting that no charge sheet had been issued against him at that time.

Upon review, the Supreme Court sided with the respondent. It emphasized that the sealed cover procedure should only be invoked after the issuance of a charge sheet in a criminal prosecution or a charge memo in disciplinary proceedings. The court referenced its earlier decision in Union of India vs. K.V. Jankiraman (1991), which established that preliminary investigations do not warrant the sealed cover procedure.

The Court determined that the charge sheet against the respondent was filed only after the DPC meeting, thus concluding that the prosecution was not pending at that time. Consequently, the adoption of the sealed cover procedure was deemed unjustified.

The Supreme Court's judgment reinforces the principle that the rights of government employees cannot be overlooked based on mere allegations or the grant of prosecution sanction without formal charges. This ruling serves as a significant precedent for similar cases, ensuring that employees are not deprived of their promotional opportunities without substantive legal grounds. The case illustrates the delicate balance between administrative discretion and the legal rights of individuals within public service, underscoring the necessity for due process in government promotion procedures.