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Delhi HC Dismisses Challenge To ONGC CMD, Non-Official Director’s Appointment [Read Judgment]

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6 Nov 2017 4:02 PM GMT
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The Delhi High Court on Monday dismissed the PIL moved by Energy Watchdog challenging the appointments of Shashi Shanker and BJP spokesperson Sambit Patra as the CMD and non-official director of Oil & Natural Gas Corporation (ONGC), while reiterating its stand against unsubstantiated pleas being made in the name of public interest litigations.

A bench headed by Acting Chief Justice Gita Mittal dismissed the PIL saying the petitioner has placed nothing on record to support its "bald pleas".

Appointment of Shashi Shanker as CMD

Petitioner's counsel Jayant Bhushan had contended that Shanker has a tainted past and the Vigilance division of the Ministry of Petroleum and Natural Gas had in 2015 suspended him stating that he “has committed gross misconduct" pertaining to procurement of blowout preventers.

He had said his suspension was revoked as the charge sheet against him could not be filed within 90 days.

To this, the court noted that Shanker had applied for the post against the advertisement by Public Enterprises Selection Board.

The bench was critical of the fact that the entire challenge to his appointment was premised on newspaper reports and there was no whisper about him being ineligible for the post.

It went on to note that, "the matter was examined by the Ministry and thereafter referred to the Central Vigilance Commission by the letter dated 3rd of July 2015 for the first stage advice of the Central Vigilance Commission. The matter was examined by the Central Vigilance Commission which after examination, by its letter dated 27th April, 2016, had advised the Ministry to close the matter with regard to the proposed disciplinary proceedings against the respondent no.5. As such, the competent disciplinary authority had taken the decision to close the disciplinary proceedings against the respondent no.5".

Appointment of Sambit Patra as jon-official director on ONGC board

The high court struck down all challenges to appointment of Patra, a doctor, to ONGC Board, as it said, "It needs no elaboration that professionals as doctors, lawyers, chartered accountants would undoubtedly make value additions in any domain or field".

On Patra, a medico, not meeting any criterion for such appointment, the bench took note of his bio-data placed before  it by the Centre which showed that he did his MBBS between 1992-97; qualified his Masters in Surgery in 2002; had qualified the UPSC Combined Medical Services Examination in 2000; joined the Municipal Corporation of Delhi as a Medical Officer in the year 2003 and served as a Senior Medical Officer in the Hindu Rao Hospital till 2012.

It also showed that he has founded a "well-known NGO, Swaraj, which worked constantly in Delhi for the benefit of poor downtrodden and Dalits”.

The Centre had also submitted that his experience as a practicing doctor from as back as the year 2000 as well as his experience in founding and managing the NGO would show that he has adequate skills, experience and knowledge in the management and administration of an organization which are required for performing the duties of an non-official director on the Board of a company and therefore, qualifies as a person of eminence with a proven track record.

"Given the wide diversity in specializations, availability of knowledge, experience, areas of education as well as the multifarious concerns required to be addressed by corporations, it cannot today be contended or held that a person must necessarily possess knowledge and experience only of the business or activity which is being undertaken by the company to whose Board an appointment of an independent director is being contemplated. On the contrary, the expertise in diverse fields and valuable experience of directors on the Board even in areas unrelated to the core businesses of the concerned company, may greatly enrich and contribute to development, diversification and improvement of a corporate entity," the bench said.

"It is to be remembered that under the prescription of company law, ONGC is required to discharge Corporate Social Responsibility (CSR) which directly incorporates concerns of the human rights and environment... today it cannot be contended that knowledge and experience in healthcare would be of no relevance or consequence to the operations of the ONGC. The Board of Directors of such an organization must stay alive to the needs of health and environment and the presence of a medical expert on the Board of Directors cannot be considered to be an appointment on an irrelevant criteria," the court went on to add.

It also noted that there is nothing in the statutory scheme which prohibits or excludes persons who do not feature in the data bank from being appointed as the Independent Directors to the Board.

On Patra being the spokesperson of BJP, the bench said, "To doubt the independence of the respondent no.6 to discharge the duties and functions of a Non-Official Director on the Board of Directors by the respondent no.6 merely because he is a spokesperson of the ruling party or to hold that he would be unable to keep the interest of ONGC in mind would be highly inappropriate."

Pleadings in public interest litigation 

The bench revisited its observations made while dismissing Subramanian Swamy's PIL for probe in Sunanda Pushkar murder case calling for petitioners to put on record what allegations form part of their own knowledge.

"The writ petitioner has placed nothing on record to support the bald pleas taken by it...the petitioner has filed unsubstantiated pleas and also has not made out a prima facie case in support of the challenge," it said.

While concluding, the bench reproduced its observation from Swamy's case saying, "The credibility of the judicial process hinges upon the Petitioners in a PIL... to act responsibly when they make averments in their petitions. The PIL-petitioner must, as should for that matter every writ petitioner, state on affidavit which part of the averments made is true to the Petitioner’s personal knowledge derived from records or based on some other source and what part is based on legal advice which the Petitioner believes to be true".

Read the Judgment Here

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