The Supreme Court held as under:
1) It couldn’t be said that deputation of Mr. UK Sinha (Mr. Sinha) as a Chairman of SEBI under rule 6(2)(ii) was approved in colourable exercise of power as he was on deputation with UTI AMC since the year 2005 and was in no way responsible for being set on deputation initially under rule 6(2)(iii) and subsequently under rule 6(2)(i);
2) He had no role to play in the grant of approval of deputation, once he had fully disclosed that he had been working as Joint Secretary, Banking;
3) UTI AMC was not a ‘Government company’ under section 617 of the Companies Act and it was for the shareholder to decide what process to follow and whom to appoint;
4) As per the consolidated guidelines, the deputation of Mr. Sinha was covered under rule 6(1)(i) of the IAS Cadre Rules and his recommendation and appointment were not vitiated by mala fide exercise of powers. The search-cum-selection committee, after scrutinizing qualification and experience of the short-listed candidates, unanimously placed his name on top of merit list;
5) He had no role to play in the whole procedure except for accepting the invitation of the search-cum-selection committee for interaction. His appointment was strictly in conformity with the procedure prescribed by service rules, i.e., rules 16 and 26 of the AIS (DCRB) Rules, 1958;
6) The petitioner had not placed on record any material to establish that any conspiracy was hatched to ensure the selection of Mr. Sinha. He had unjustifiably attacked the integrity of the entire selection process. He did not satisfy the test of utmost good faith which was required to maintain public interest litigation;
7) This was not a petition to protect the Fundamental Rights of any class of down trodden or deprived section of the population. It was more for the protection of the vested interests of some unidentified business lobbies;
8) The petitioner was a stool pigeon acting on the directions of the business houses like Sahara and Reliance. It is a well known fact that in recent times, SEBI has been active in pursuing a number of cause célèbre against some very powerful business houses;
9) Therefore, the anxiety of these business houses for the removal of the present Chairman of SEBI was not wholly unimaginable. There was no merit in this petition which was, accordingly, to be dismissed – Arun Kumar Agrawal v. Union of India (2013) 38 taxmann.com 300 (SC).
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