Sealed-cover evidence use violates natural justice; fair disclosure required before denying Navy Permanent Commission to officers

SC held that reliance on sealed-cover material by AFT in denying Permanent Commission in the Navy violated principles of natural justice. It ruled that all material relied upon or reasonably capable of influencing the decision must be disclosed to the affected officers, subject only to narrowly tailored, proportionate non-disclosure of genuinely sensitive third-party information. SC clarified that a one-sided submission of material to the adjudicating authority, without disclosure to the other side, causes grave prejudice and creates an impermissible culture of secrecy and imbalance of power. Finding clear breach of fair procedure, SC allowed the appeal and directed AFT to reconsider the matter afresh after proper disclosure.

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Issues: Whether the Armed Forces Tribunal's reliance on material and selection-board proceedings disclosed to it in a sealed cover, without disclosure to affected officers, was permissible; whether non-disclosure of such material violated principles of natural justice and caused material prejudice requiring setting aside the AFT judgment and remand for fresh adjudication.

Analysis: The Court examined the sealed-cover practice against the duty to disclose material that would, in reasonable probability, influence adjudication. It applied principles that disclosure promotes reliability, fair trial and transparency, while acknowledging limited exceptions for genuinely sensitive third-party or strategic information. The AFT had relied extensively on vacancy calculations and Board proceedings placed in sealed envelopes and recorded findings of no mala fides and no gender bias without those materials being accessible to the appellants. The Court held that one-sided submission of material to the adjudicating authority, to the exclusion of affected parties, undermines effective challenge and creates opacity in the adjudicatory process. Given the appellants lacked access to the data on vacancies, weightages and inter-se merit that was relied upon, they were deprived of an opportunity to contest critical facts relevant to their claims for Permanent Commission.

Conclusion: The sealed-cover disclosure to the AFT without providing relevant material to the affected officers constituted a breach of natural justice and caused material prejudice; the appeals are allowed, the impugned AFT judgment is set aside and the matters are remanded to the AFT for fresh adjudication with appropriate disclosure safeguards.

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