Central Vigilance Commission asks officers to watch out for 'reckless decisions’

CVC oversees and supervises the vigilance aspect of organisations owned or controlled by the Central government, including state-owned companies.

“Recklessness in decision making”; “exercise of discretion in excess where no public interest is served”; and “failure to keep superiors informed” -- these are among the irregularities that the Central Vigilance Commission (CVC) has asked chief vigilance officers to review, in addition to the usual ones such as demand for bribes, assets disproportionate to known sources of income, and straight misappropriation or cheating.

The circular, issued on May 23, seeks to ensure that this approach does not target officers taking risks or using their discretion in the course of work. (File Image)

The circular, issued on May 23, seeks to ensure that this approach does not target officers taking risks or using their discretion in the course of work. It stated that commercial risk-taking is a part of business and that not every loss caused to a government organisation, financial or otherwise, needs to be probed.

CVC oversees and supervises the vigilance aspect of organisations owned or controlled by the Central government, including state-owned companies, and the circular emphasises the importance of looking at patterns and circumstances “to take a view whether the official’s integrity is in doubt”.

The latest circular aims to provide clarity in corruption cases , and also defines specific acts of banks and insurance companies that merit investigation.

In the case of banks, the circular listed irregularities leading to the creation of fictitious accounts, misappropriation of bank’s property; disclosure of secret or confidential information even if it does not fall strictly within the scope of bank’s confidentiality issues; falsification of records; and failure to take necessary action to protect the interest of the bank.

It added that if bank officials acted in a manner to frustrate the policies of the bank or seems to have complied with unauthorised and unlawful oral instructions of seniors without bringing it to the notice of competent authority, those too may come under the purview of vigilance.

In the case of public sector insurance companies, the master circular lists payment of an inflated claims; acceptance of a bad risk for insurance cover; collusion with doctors, hospitals, and third party administrators; and deliberate bad underwriting practices.

CVC said the circular was its effort to consolidate “all the guidelines/office orders/circulars issued by CVC in the past .”

Former Enforcement Directorate (ED) director, Karnal Singh said “the circular seems to give clarity on various aspects of an official’s daily decision making including commercial decisions. It seeks to find a pattern -- like if an officer is trying to give undue benefits to somebody and whether he/she is working within the legal framework of law or not. Such decisions need monitoring at different levels”.

‘Carefully study the case’

To be sure, while the circular asks chief vigilance officers (CVOs) of the state-owned companies and officials dealing with disciplinary issues in departments to tread carefully, doing so will require nuance of the sort usually not displayed by vigilance officials. For instance, the circular asks them to “carefully study the case, consider all relevant factors and weigh the circumstances to come to a conclusion whether there is reasonable ground to doubt the integrity of the official concerned.”

Indeed, the circular seems cognizant of this risk, for it elaborates that the idea is to not reduce but enhance the level of managerial efficiency and effectiveness in an organization. “Commercial risk taking is a part of business activities. Therefore, every loss caused to the organisation, either in pecuniary or non- pecuniary terms, need not be considered as having a vigilance angle. Thus, whether a person of common prudence, working within the ambit of the prescribed rules, regulations and instructions, would have taken the decision in the prevailing circumstances in the commercial/operational interest of the organisation, is one possible criterion for determining the bona fides of the case.”

“A positive response to this question may indicate the existence of bonafides. A negative reply, on the other hand, might indicate their absence and presence of vigilance angle.”

The circular also specified what is to be done in the case of quasi-judicial functions performed by officials, such as investigating allegations of corruption, and recommending disciplinary actions.

In certain cases, it is routinely defended that the official had exercised his quasi-judicial powers, and no disciplinary proceedings were warranted. In certain other cases, for similar lapses, disciplinary proceedings were proposed alleging that the official had shown recklessness or acted negligently and lacked devotion to duty”.

Principled laid down by SC

The CVC has cited a Supreme Court ruling in in 1993 in K K Dhawan Vs Union of India case, which laid down the criteria for examination of cases against officers exercising quasi-judicial functions.

The circular stated : “The principles laid down by Supreme Court for determining as to whether an act of a judicial officer has been actuated by an oblique manner or corrupt practice are as below: Since, direct evidence of corruption may not always be forthcoming in every case involving a misconduct, a wanton breach of the governing principles of law or procedure may well be indicative in a given case of a motivated, if not reckless disregard of legal principle.”

The circular further stated that “a charge of misconduct against a judicial officer must be distinguished from a purely erroneous decision whether on law or on fact.”

Senior advocate Pramod Kumar Dubey said, “In my view, with this circular, public servants would be able to take better decisions in the interest of the organizations with regard to the commercial activity. We have come across many cases in the past, where public servants have regularly been prosecuted merely on the basis of taking decision though there was no criminal intent nor was there any pecuniary advantage obtained or given to any party”.

“Furthermore, this circular will give the opportunity to the officer (s) to be heard before the appropriate authority, explaining the circumstances under which the decision was taken. And hence, this circular will lower down the volume of registration of cases where bonafide decisions have been taken,” Dubey added.