Watching the watchmen

The appointment of Defence Secretary Shashi Kant Sharma as the next CAG creates a conflict of interest as he will sit in judgment on his accountability in military procurements made during his tenure

May 22, 2013 12:59 am | Updated June 22, 2016 02:19 pm IST

Union Defence Secretary Shashi Kant Sharma has been appointed the Comptroller and Auditor General of India (CAG), replacing Vinod Rai who retires today. While Mr. Sharma is by all accounts an officer of the highest integrity who enjoys the confidence of the government, his choice causes deep misgivings about the continued independence of the CAG and the motivations of a government that has been repeatedly chastised by the Supreme Court for failing to respect the autonomy of independent institutions.

From December 2003, apart from three short stints elsewhere, Mr. Sharma was a key functionary throughout in the Ministry of Defence. His appointments in the Ministry, crucially as Director-General (Acquisitions) from August 2007 to September 2010, and Defence Secretary from July 2011 till today, lead to a fundamental conflict of interest. Not only will Mr. Sharma be a key functionary to be held accountable for defence procurements made under his watch but, specifically, his inputs regarding the contract signed by the Ministry with AgustaWestland, U.K., for the supply of 12 AW-101 VVIP helicopters will have to be closely scrutinised. The CAG is currently tasked with both these functions. Crucially, the CAG’s audit report on the helicopter contract and perceived irregularities therein are yet to be tabled in Parliament.

Perception of impartiality

In these circumstances, appointing Mr. Sharma as the CAG creates an inevitable conflict of interest and adversely impacts the perception of impartiality. Nemo judex in causa sua, i.e. no person shall be a judge in his own cause, is a fundamental principle of administrative law that governs conflicts of interest. Though the CAG is not a judge in law, his task of auditing government accounts, as a matter of principle, requires independence from the government analogous to that enjoyed by a judicial officer. Such a principle will unarguably be violated when Mr. Sharma audits his own Ministry’s actions, especially concerning the hugely controversial helicopter contract, irrespective of how upright he himself might be.

Even if Mr. Sharma recuses himself from such audits, the manner in which his appointment has been made adversely affects the perception of impartiality that is necessary for an independent constitutional office-holder. The Supreme Court has repeatedly held that the test for determining whether a decision-making authority is perceived to be impartial is whether there is a reasonable apprehension of bias from the point of view of an average honest man. One of the key factors giving rise to such an apprehension is the manner of appointment.

By all available accounts, Mr. Sharma’s name was recommended by the government to the President without any public discussion whatsoever, on the criteria used for evaluation and the merits and demerits of available candidates. Was there a shortlist drawn up? If so, on what basis? What qualifications did the candidates possess for being the CAG? In what way was Mr. Sharma considered to have superior credentials? These are some of the many questions that remain unanswered. Seen in light of the embarrassment that several reports of Vinod Rai caused to the government, these unanswered questions give rise to serious concerns regarding the government’s motivations in making such a recommendation. Consequently, a reasonable apprehension of bias concerning the future functioning of the CAG in the public mind is undeniable.

Independence of CAG

That the CAG should not just be impartial but be seen to be so was a key desideratum that influenced the drafters of the Constitution. Specifically, Dr. Ambedkar felt that the CAG “is probably the most important officer in the Constitution of India” (Constituent Assembly, 30 May 1949). As the chief enforcer of financial accountability of the government, it was imperative for the CAG to remain independent of the political executive and for the Constitution to demonstrate as such. This was guaranteed by provisions protecting the salary, tenure and pensions, prohibition on his removal save by impeachment and a bar on post-retirement employment. Curiously, no analogous protection was devised in the appointments mechanism which would be at the sole discretion of the executive. A combination of a lack of consensus regarding an alternative appointment method and faith in the executive acting with utmost probity are probable explanations for this conspicuous omission.

An anomaly

What was a conspicuous omission at the time of drafting the Constitution has, over time, regressed to an egregiously controversial anomaly. Controversial, since the lack of appointment criteria has meant that the position has led to a turf war between the Indian Audits and Accounts Service (IAAS) and the Indian Administrative Service (IAS). Anomalous, since other independent institutions such as the judiciary and the Central Vigilance Commission (CVC) have seen the executive being divested of its unfettered power of appointment. The anomaly has been rendered egregious by the fact that it has not been rectified in case of the CAG despite repeated calls to do so. A High Powered Committee of The National Commission to Review the Working of the Constitution recommended that the power of appointment be kept “outside the exclusive power of the Executive”. Eminent public figures, such as Era Sezhiyan and Ramaswamy Iyer, have, in the pages of this newspaper, called for introspection and reform. Most recently, Jay Panda, Member of Parliament, introduced two Private Members’ Bills to reform the appointments process. Rather than deliberating on these suggestions, the government has deemed it prudent to continue exercising its power of appointment consonant with the opaque letter of the Constitution, disdainfully oblivious to its exalted spirit embodied in Dr. Ambedkar’s words.

Anachronistic practice

The government’s selection of the CAG and the method adopted demonstrate a concerted pushback to the progressive discourse of accountability that has developed in India today. Accountability demands that not only must processes of government be transparent; equally the government must publicly justify its decisions. Claiming the prerogative to appoint, without disclosure and discussion, is widely considered anathema to such developments. But by forcibly trying to extend such an anachronistic practice, the government is throwing down the gauntlet as far as the meaning and significance of accountability in public life in India are concerned.

In the process, it is cocking a snook at the Supreme Court, which has repeatedly berated it for its interference in the functioning of oversight institutions. In quashing the appointment of P.J. Thomas as the Central Vigilance Commissioner, the Supreme Court criticised the government for failing to respect the institutional integrity of the CVC which would be adversely affected by Mr. Thomas’s appointment. Again, in response to interference by the executive in the functioning of the Central Bureau of Investigation (CBI), the Supreme Court strongly condemned its control over the institution. One may have hoped that as a responsible government, such censure would prevent future meddling in oversight institutions. However, in light of the questionable recommendation to the post of CAG, a constitutional functionary higher in status than the CVC or the CBI, it is evident that such hope is plainly misplaced.

There is no gainsaying that reform of the appointment process of the CAG must take place. But more significant than such reform is the government’s choice of the CAG. The appointment of the CAG was a test of the government’s intentions toward the autonomy of independent institutions — would it respect this autonomy, or continue a long and reprehensible tradition of wrecking them for narrow personal or political gains. To any sensible person, there is only one right answer and it is now obvious.

(Arghya Sengupta is a Stipendiary Lecturer in Administrative Law, Pembroke College, University of Oxford)

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