The non-disclosure of relevant material to the affected party and its disclosure in a sealed cover causes a serious violation of natural justice, leading to substantial prejudice. All material relied upon by either party in a judicial proceeding must be disclosed to ensure fairness and transparency in the adjudication process.

JUDGMENT

Dr Dhananjaya Y Chandrachud, J. - Leave to appeal under Section 31(1) of the Armed Forces Tribunal Act 2007 is granted.

2. Delay condoned.

3. This batch of appeals arises from a judgment dated 3 January 2022 of the Principal Bench of the Armed Forces Tribunal¹["AFT"]. The AFT dismissed the applications challenging the denial of Permanent Commission²["PC"] in the Indian Navy. The principle issue is whether the AFT could have adjudicated on the validity of the selection proceedings when relevant material was disclosed only to the AFT in a sealed cover.

The Facts

4. On 26 September 2008, the Ministry of Defence notified that women Short Service Commission³[ "SSC"] Officers would be eligible for grant of PC prospectively. In Union of India v. Lieutenant Commander Annie Nagaraj, (2020) 13 SCC 1 the issue for consideration before this court was whether women who were inducted in various branches of the Indian Navy prior to 2008 were entitled to the grant of PC. By its judgment dated 17 March 2020, this Court observed, inter alia, that⁴[Paragraphs 109.5, 109.6 and 109.7 of the judgment in Annie Nagaraj.]:

(i) As a result of the policy decision of the Union Government dated 25 February 1999, the terms and conditions of service of SSC Officers including women with regard to the grant of PC were governed by Regulation 203 of Chapter IV of Part III of the Naval Ceremonial, Conditions of Service and Miscellaneous Regulations 1963⁵["Regulations"];

(ii) The stipulation in the policy letter dated 26 September 2008 making it prospective and applicable only to specified branches/cadres of the Indian Navy (Education, Law and Naval Construction) was not enforceable;

(iii) All SSC Officers in the Education, Law and Logistics cadres, who were "presently in service" shall be considered for the grant of PCs;

(iv) The officers were entitled to the grant of PC in view of the policy letter of the Union Government dated 25 February 1999 read with Regulation 203;

(v) SSC women officers in the batch of cases before the High Court and the AFT who are "presently in service" shall be considered for the grant of PC on the basis of the vacancy position as on the date of the judgment of the Delhi High Court and the AFT or as it "presently stands", whichever is higher;

(vi) The applications of the serving officers for the grant of PC shall be considered on the basis of the norms contained in Regulation 203, namely,

(a) availability of vacancies in the stablised cadre at the relevant time;

(b) determination of suitability;

(c) recommendation of the Chief of Naval Staff; and

(d) empanelment shall be based on the inter-se merit evaluated on the ACRs of the officers under consideration, subject to the availability of vacancies.

5. There are three points in time, which were taken into consideration by the authorities for the determination of vacancies, namely

(i) August 2015, when the judgment of the High Court in Annie Nagaraj (supra) was pronounced;

(ii) September 2016, when the decision of the AFT in Commander Priya Khurana v. Union of India, OA No 143 of 2016 was pronounced; and

(iii) March 2020, when the decision of this Court in Annie Nagaraj (supra) case was pronounced.

6. Following the above directions, the process for implementing the judgment was carried out. The respondents worked out a total of 88 vacancies. 306 officers were considered for PC against the 88 vacancies after which 80 of them were granted PC. The second respondent (Integrated Headquarters of Ministry of Defence (Navy)) issued a signal order releasing many SSC officers from service on the ground that they had not obtained PC. The Signal order only notes the date of commission, date of release and the Unit of the officer without any reference to the process of selection that was undertaken or the relative merit. Many of the SSC officers, both men and women, who were not granted PC file