Delhi HC upholds appointment of Managing Director and an Independent Director to the Board of ONGC

Delhi High Court: A Single Judge Bench comprising of Acting Chief Justice C. Hari Shankar, J, dismissed a writ petition challenging the appointment of the Chairman-cum-Managing Director of ONGC as well as the appointment to the post of Non-Official Director of ONGC, both appointments done by notification by the Union of India.

Mr. Jayant Bhushan, Senior Counsel appeared on behalf of the petitioner while the respondents were represented by Mr. Sanjay Jain, Addl. Solicitor General of India along with Mr. Sanjeev Narula, Central Government Standing Counsel and Mr. Ravindra Agarwal, Advocate. In reference to the challenge against the appointment of the Chairman-cum-Managing Director, it was contended by the petitioner that Respondent 5 (appointed person), while in employ had been placed under suspension by the competent authority under sub-rule (1) of Rule 33 of the ONGC Conduct and Discipline and Appeal Rules, 1994 read with the Code of Conduct. Disciplinary proceedings were contemplated against him and hence, the suspension. He was allowed to carry on work after a period of 90 days as the agency had failed to file the charge-sheet, however the charges were not dropped and proceedings stayed pending.

Concerning the appointment, it was argued that when the Public Enterprises Selection Board (hereinafter “PESB”) invited applications for the post, the format required the applicants to disclose whether any disciplinary proceedings had been held against them in the last 10 years. PESB subsequently decided to recommend Respondent 5 for the post, and due information was put up on the website. The petitioner claims to have lodged complaints against the recommendation on 21st July, 2017 with the Union of India and the PMO. The petitioner had filed RTIs with respect to the disciplinary proceedings but did not get the information as it was protected under Section 8(1)(j) of the RTI Act, the RTIs were not pursued further by the petitioner.

The appointment of Respondent 5 was approved and an order to that effect was passed by the Appointments Committee of the Cabinet. Upon the appointment, the Ministry of Petroleum and Natural Gas passed an order wherein it dropped the proceedings against Respondent 5. The Court found no tenable grounds for challenge under these circumstances. The other challenge was against Respondent 6’s appointment as an Independent Director on the Board of ONGC. The petitioner argued that the appointment was in violation of Section 149(6) of the Companies Act, 2013, under which an Independent Director cannot be related to a promoter, pointing towards State largesse.

The petitioner also contended that the appointment was not in accordance with government directive for consideration of non-official directors for the board of a Central Public Sector Enterprise which required 15 years of experience in the relevant domain of ONGC’s area of operation. The petitioner’s argument revolved around the statement that Respondent 6 was a doctor with a maximum of 10 years experience as a medical professional and none in the relevant domain. The respondents argued that the appointment was due to Respondent 6’s being a “person of eminence with a proven track record” as per para no. A(a)(vi) and not as per para A(a)(iv) as stated by the petitioner. The respondents clarified with proof that Respondent 6 was a qualified doctor having experience of almost 20 years, and had also qualified for UPSC exams in 2000. The petitioner also founded a well-known NGO, Swaraj, which is pro-active in Delhi, working for the benefit of the poor and downtrodden and Dalits. The respondents stated that a doctor with 20 years of experience as well as experience in running an NGO has the adequate skills, experience and knowledge in management and administration required for performing duties of an Independent Director.

The Court, accepted the arguments of the respondents while rejecting the pleas of the petitioner. The Court discussed at length about the responsibilities a litigant must be aware of while filing a PIL. Referring to State of M.P. v. Narmada Bachao Andolan, (2011) 7 SCC 639. The Court observed that the petitioner had made unsubstantiated pleas, failing to make a prima facie case in support of the challenge. Petition dismissed. [Energy Watchdog v. Union of India,  2017 SCC OnLine Del 11422, decided on 06.11.2017]

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