Dismissed

National Confederation of Officers Association v. the Deputy Secretary to Government

Kerala HC21 Feb 2019WP(C)/20004/2018

Case brief

AI extract

What is this about?

Petitioners challenged the selection process for the CMD post of HLL Lifecare Ltd, alleging illegal deviation from PESB guidelines and Article 14 violation. The Court found special circumstances warranting the alternative procedure and confirmed compliance with central approval requirements, dismissing the writ petition.

What did the court decide?

The writ petition was dismissed; reliefs sought by the petitioners were denied.

National Confederation of Officers Association Vs the… — Company and Corporate | Kerala HC (2019)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE V.G.ARUN

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THURSDAY ,THE 21ST DAY OF FEBRUARY 2019 / 2ND PHALGUNA, 1940

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WP(C).No. 20004 of 2018

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PETITIONERS:

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1 NATIONAL CONFEDERATION OF OFFICER'S ASSOCIATION OF CENTRAL PUBLIC SECTOR UNDERTAKINGS (REGD.NO. DNE 707/2005) HAVING ITS HEAD OFFICE AT MADHU MALATHI, 19, SAKET CO-OPERATIVE HOUSING SOCIETY, BEHIND HOC COLONY, PANVEL, RAI GAD, MAHARASHTRA 410206, REPRESENTED BY G. ANIL KUMAR, GENERAL SECRETARY, KERALA ZONE

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2 H.GUNASEKARAN C 8/7, SAF GAMES VILLAGE, KOYAMBEDU, CHENNAI 107

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BY ADV. SRI.T.R.RAVI

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RESPONDENTS:

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1 THE DEPUTY SECRETARY TO GOVERNMENT OF INDIA, MINISTRY OF PERSONNEL, PUBLIC GRIEVANCES AND PENSIONS, DEPARTMENT OF PERSONNEL AND TRAINING, OFFICE OF THE ESTABLISHMENT OFFICER, NORTH BLOCK, NEW DELHI.

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2 THE SECRETARY TO GOVERNMENT OF INDIA DEPARTMENT OF HEALTH & FAMILY WELFARE, NEW DELHI

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3 HLL LIFECARE LIMITED HLL BHAVAN, POOJAPPURA PO, THIRUVANANTHAPURAM-695012, REPRESENTED BY THE CHAIRMAN AND MANAGING DIRECTOR

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W.P.(C) No.20004 of 2018

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4 PUBLIC ENTERPRISES SELECTION BOARD DEPARTMENT OF PERSONNEL AND TRAINING, BLOCK NO. 14, CGO COMPLEX, LODHI ROAD, NEW DELHI-110003, REPRESENTED BY ITS SECRETARY

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BY ADVS. SMT.C.G.PREETHA, CGC SRI.V.KRISHNA MENON SMT.C.G.PREETHA CGC SMT.J.SURYA SMT.P.VIJAYAMMA SRI.E.K.MADHAVAN

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 21.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.P.(C) No.20004 of 2018

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JUDGMENT

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The challenge in the writ petition is against the process of selection being followed now, for appointment to the post of Chairman and Managing Director of the HLL Lifecare Ltd, the 3^rd respondent herein. The selection and appointment to the post of CMD in the 3^rd respondent was being conducted through the Public Enterprises Selection Board, the 4^th respondent herein. The procedure for selection to be followed is in accordance with Ext.P5, the Guidelines regarding the Board Level Appointments in Central Public Sector Enterprises. Accordingly, the 4^th respondent had issued Ext.P3 notification inviting applications from qualified candidates for the post of CMD in the 3^rd respondent. A reading of Ext.P3 would show that persons with the following employment status were eligible to apply for the notified post:

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“(i) An officer of a Central Public Sector Enterprise (CPSE) (including a full-time) functional Director in the Board of a CPSE);

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(ii) An officer of the Central Government/Armed Forces of the Union;

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(iii) An officer of an All India Service.”

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In the selection process conducted pursuant to

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Ext.P3 notification, 13 applicants were interviewed. Ext.P4

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is the list of persons interviewed and the decision taken by the 4^th respondent pursuant to the interview. As can be seen from Ext.P4, the 4^th respondent did not recommend any candidate for appointment to the notified post. According to the petitioners, in the subsequent selections, the zone of consideration was altered by excluding the first category of persons in Ext.P3 notification, ie, officers of the Central Public Sector Enterprises. In Ext.P6 notification, it is specified that for the purpose of filling up the post of CMD in

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HLL Lifecare Ltd, names of willing and eligible officers, who have been empanelled to hold Joint

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Secretary or equivalent posts at the Centre under the Central

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Staffing Scheme, may be recommended. Since Ext.P6 did not yield the desired result, Ext.P7 was issued, which also contained the Clause extracted above. It is submitted that from Exts.P6 and P7, it became obvious that there was a deliberate attempt to exclude officers of Central Public Sector Enterprises from the zone of consideration. The learned counsel draws attention to Clause (E) of Ext.P5 Guidelines, which provide for appointment in CPSUs by a process other than PESB procedure. Clause (E) of Ext.P5 reads as follows:

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(E) Appointment through other than PESB procedure

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In special circumstances, the appointment to a particular post or posts in a Public Sector Enterprise may be made other than through the PESB with the prior and specific approval of the Appointments Committee of the Cabinet. The Appointments Committee of the Cabinet while granting such an approval, will also specify the body such as, Search Committee, Selection

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Committee, or the Civil Services Board, as the case may be, that shall make the selection for that particular posts or posts, as well as the selection procedure to be followed for filling the particular post or posts.”

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The challenge in the writ petition is primarily on the ground that the respondents had committed an illegality by deviating from the procedure prescribed in Ext.P5 guidelines. The other ground of challenge is that, by eliminating a group of persons from the zone of consideration, the respondents have acted in a discriminatory manner, thereby violating Article 14 of the Constitution of India. The learned counsel for the petitioners contends that if at all there was any special circumstance warranting a deviation from the process of appointment through PESB, such procedure could have been adopted only with the specific approval of the Appointments Committee of the Cabinet and concurrence of the PESB. It is submitted

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that , even in the event of approval being granted by the Appointments Committee of the Cabinet, the Committee has to specify the body such as, Search Committee, Selection Committee, or the Civil Services Board, as the case may be, that shall make the selection for that particular post or posts, as well as the selection procedure to be followed for filling the particular post or posts. It is submitted that neither Ext.P6 or P7 evidences any prior approval by the Appointments Committee of the Cabinet or the prescription of selection body and selection procedure, as specified in Clause (E).

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The learned CGC appearing for the respondents submits that earlier the selection was open to all, including the officers of Central Public Sector Enterprises, as evidenced from Ext.P3 notification. It is submitted that the post of Chairman and Managing Director, HLL Lifecare Ltd

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had been lying vacant since 1.1.2016, consequent to the retirement of the incumbent. In anticipation of the retirement, the 4^th respondent had released an advertisement on 29.5.2015 and had circulated the advertisement to all Public Sector Undertakings as per letter dated 27.5.2015. It is pointed out that there was delay in processing the applications received pursuant to the advertisement, due to litigation initiated at the instance of two internal candidates. That, it was only on finalisation of the court case that the 4^th respondent was able to issue call letters to all the candidates, for attending an interview on 31.1.2017. Along with the counter affidavit, Annexure R1(b), the minutes of the PESB meeting dated 31.1.2017, held for consideration of the eligibility of the candidates interviewed pursuant to Ext.P3, has been produced. In Ext.R1(b), it is stated that, keeping in view the performance of the

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candidates interviewed, with special regard to their suitability for the post, managerial capability, leadership, broad vision, track record, available ACRs and the inputs given by the Additional Secretary, Ministry of Health and Family Welfare, the Board did not recommend any candidate for appointment to the post of Chairman and Managing Director, HLL Lifecare Ltd. It is submitted that the delay in appointing CMD for the 3^rd respondent had prompted the respondents to seek approval for the procedure other than through PESB. The reasons for arriving at such decision has been narrated in detail in paragraph 5 of the counter affidavit, which reads as follows:

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“5. It is submitted that the 3^rd respondent is a multiproduct, multi-location diversified organization with a global presence. Discontinuity in the management would affect the ongoing major projects of the company especially the Integrated Vaccine Complex (IVC) with the financial outlay of Rs.6000 Crores and the Medipark project approved by the Cabinet

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keeping in view the draft National Medical Device Policy, 2015 which has been circulated by the Department of Pharmaceuticals, envisages " Make in India " drive in medical device sector by setting up a strong base for their manufacture, especially those having critical implications in terms of affordability and availability for patients. Medipark would be an exclusive facility with the state-of-art infrastructure which will attract manufacturers in this sector. Apart from boosting the investment in the country and providing affordable medical devices, it will give a fillip to an affordable health care delivery system and also enhance employment opportunities.”

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It is submitted that on the basis of the request, the

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PESB had, vide Annexure R1(c), informed that it had no objection in an alternative route being adopted for selection to the post of CMD in the 3^rd respondent. The Ministry of Heavy Industries and Public Enterprises, Government of India had also agreed to the proposal for exemption. Annexure R1(e) is the approval granted by the Appointments Committee of the Cabinet, to the proposal of the Ministry of Health and Family Welfare, for exemption of

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the appointment of CMD, HLL Lifecare Ltd from the 'Rule of immediate absorption' for a period of five years and for appointment of a Joint Secretary level officer as CMD, through the Civil Services Board procedure under the Central Staffing Scheme. It is submitted that Exts.R1(c), (d) and (e) would clearly show that the requirements under Clause (E) of Ext.P5 guidelines were strictly complied with before issuing the impugned notifications. It is submitted by the learned CGC that as a result of the interim order dated 10.8.2018 issued by this Court, the post of CMD is lying vacant, which has adversely affected the functioning of the 3^rd respondent.

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Having considered the rival contentions, I find that convincing and acceptable reasons have been stated by the respondents for deviating from the normal procedure of selection and appointment through the PESB. The special

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circumstances warranting such a procedure is borne out from the counter affidavit filed on behalf of respondents 1 to

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It cannot be disputed that it was only after exhausting the attempt to find a suitable candidate by conducting selection through PESB that decision was taken to deviate from that procedure and to confine the zone of consideration to the personnel mentioned in Exts.P6 and P7. A reading of Ext.R1(b) minutes also shows that even though 13 candidates were interviewed by the 4^th respondent, of which only one candidate was an officer belonging to the Indian Administrative Service, the others being either internal candidates or officers from other public sector undertakings, the 4^th respondent was not able to find a suitable candidate. Under those circumstances, it was well within the discretion of the respondents to have taken a policy decision to deviate from the normal procedure and to restrict the zone of

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consideration.

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The special circumstances having been made out, the other question to be considered is as to whether the requirements under Clause (E) of Ext.P5 guidelines were complied with before issuing Exts.P6 and P7 notifications. A reading of Exts. R1(c) would show that the PESB had given its concurrence for effecting appointment through procedure other than PESB. Ext.R1(e) is the approval granted by the Appointments Committee of the Cabinet. In Ext.R1(e), it has been stated that the appointment shall be through the Civil Services Board procedure under the Central Staffing Scheme. Therefore, in my considered opinion, all requirements under Clause (E) of Ext.P5 were complied with before issuing the impugned notifications.

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As far as the contention based on Article 14 of the Constitution of India is concerned, I am of the firm opinion

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that for the reason that officers of the public sector enterprises were included in the zone consideration on earlier occasions, such inclusion does not confer any indefeasible right on that class of persons to claim that they shall continue to be included in the zone of consideration, irrespective of the exigencies which warranted a deviation from the normal procedure. Even otherwise, when policy of the Government is founded on acceptable reasons, this Court would be loath to interfere in such decisions, in exercise of the power under Article 226 of the Constitution of India.

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In the said circumstances, the petitioners are not entitled for the reliefs sought and consequently, the writ petition is dismissed.

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Sd/- V.G.ARUN JUDGE

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Scl/21.2

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APPENDIX

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PETITIONER'S/S EXHIBITS:

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EXHIBIT P1 TRUE COPY OF THE BYELAWS OF PETITIONER

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EXHIBIT P2 TRUE COPY OF THE MEMORANDUM AND ARTICLES OF ASSOCIATION OF 3RD RESPONDENT COMPANY

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EXHIBIT P3 TRUE COPY OF THE NOTIFICATION DATED 27.05.2015 CALLING FOR APPLICATIONS FOR THE POST OF CMD OF 3RD RESPONDENT

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EXHIBIT P4 TRUE COPY OF LIST OF CANDIDATES INTERVIEWED

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EXHIBIT P5 TRUE COPY OF THE GUIDELINES FOR 4TH RESPONDENT

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EXHIBIT P6 TRUE COPY OF THE NOTIFICATION DATED 15.11.2017 ISSUED BY 1ST RESPONDENT CALLING FOR APPLICATIONS FOR THE POST OF CMD OF 3RD RESPONDENT

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EXHIBIT P7 TRUE COPY OF THE NOTIFICATION DATED 08.03.2018 ISSUED BY 1ST RESPONDENT CALLING FOR APPLICATIONS FOR THE POST OF CMD 3RD RESPONDENT

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EXHIBIT P8 TRUE COPY OF THE DECISION DATED 01.12.2017 OF 4TH RESPONDENT

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RESPONDENT'S EXHIBITS:

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ANNEXURE R1(A) TRUE COPY OF THE LETTER DATED 17.01.2017 ISSUED BY THE 4TH RESPONDENT ADDRESSED TO THE 2ND RESPONDENT

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ANNEXURE R1(B) TRUE COPY OF THE MINUTE NO.1 OF THE PESB MEETING NO.2/2017 DATED 31/01/2017 ANNEXURE R1(C): TRUE COPY OF THE COMMUNICATION DATED 17.5.2017 ISSUED BY THE PESB.

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ANNEXURE R1(D)	TRUE COPY OF TH	E OM F.NO.9	(7)/2017-
	MGMT DATED 02.0 DEPUTY DIRECTOR, ENTERPRISES	8 2017 ISSUE DEPARTMENT OF	D BY THE PUBLIC
ANNEXURE R1(E):	TRUE COPY OF THE DATED 09.10.20	COMMUNICATION 17 ISSUED	BY THE
	SECRETARIAT OF COMMITTEE OF THE	THE APP CABINET	OINTMENTS
ANNEXURE R1():	TRUE COPY OF THE	COMMUNICATION
	DATED 06.04.20 DEPARTMENT OF PER	18 ISSUED SONNEL AND TRA	BY THE INING

National Confederation of Officers Association v. the Deputy Secretary to Government

Case brief

What is this about?

What did the court decide?

National Confederation of Officers Association v. the Deputy Secretary to Government

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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