2001 (3) TMI 900 - SC - Companies Law

Supreme Court Upholds Appointment Set Aside, Emphasizes Integrity of Selection Process

The Supreme Court dismissed the appellant's civil appeal, upheld the setting aside of his appointment as Member (Technical) of the Company Law Board, and ... Appointment of Member (Technical), CLB - Held that:- Appeal dismissed. The appointment of the appellant was correctly set aside as he had been unduly favoured and the candidate selected by the Selection Committee and placed on the merit list had been deprived of appointment. On the facts of this case the contention raised on behalf of the appellant that the 2nd respondent could not challenge the appellants appointment since he (2nd respondent) had not challenged the rejection of his name by the Appointment Committee cannot be accepted. Even assuming that the 2nd respondent could have challenged the rejection of his name by the Appointment Committee he would have a cause of action to challenge the appointment of the appellant who was undisputedly placed below him in the panel drawn up by the Selection Committee. However, as the post of the Member (Technical), CLB has remained vacant for a long time, it is absolutely necessary that this post be filled up as expeditiously as possible. Only the Report of the Selection Committee and the materials placed before it must be placed before the Appointments Committee for its consideration. The Appointments Committee must now select from amongst these names. Issues Involved:1. Locus standi of the 2nd respondent to challenge the appellant's appointment.2. Entitlement of the appellant to the post after the rejection of the 2nd respondent.3. Interference by the Secretary of the Appointments Committee.4. Jurisdiction of the Central Administrative Tribunal.5. Appropriate remedy and directions for filling the post of Member (Technical), CLB.Issue-wise Detailed Analysis:1. Locus standi of the 2nd respondent to challenge the appellant's appointment:The appellant argued that the 2nd respondent had no locus standi to file the petition before the Central Administrative Tribunal as he had not challenged his own rejection by the Appointments Committee. However, it was held that the 2nd respondent, being placed higher in the merit list by the Selection Committee, had a cause of action to challenge the appointment of the appellant. The court concluded that the 2nd respondent could challenge the appellant's appointment even if he had not formally contested the rejection of his name by the Appointments Committee.2. Entitlement of the appellant to the post after the rejection of the 2nd respondent:The appellant contended that he should automatically be appointed as his name was second in the Select List after the rejection of the 2nd respondent. The court referred to the case of A.P. Aggarwal v. Government of NCT of Delhi but distinguished it on the grounds that in the present case, the selection process was marred by interference and favouritism, and there was no office memorandum requiring selection from the reserve panel. The court held that the appellant was unduly favoured, and the candidate selected by the Selection Committee was deprived of the appointment.3. Interference by the Secretary of the Appointments Committee:The court found that the Secretary of the Appointments Committee had interfered with the selection process by placing adverse comments and materials before the Appointments Committee, which were not considered by the Selection Committee. This interference led to the rejection of the 2nd respondent's name and the subsequent favouritism towards the appellant. The court observed that such conduct was impermissible under the Rules and undermined the sanctity of the selection process.4. Jurisdiction of the Central Administrative Tribunal:The appellant argued that the Central Administrative Tribunal had no jurisdiction to entertain the petition as the post of Member (Technical), CLB was not a civil post under the Union. However, both the Central Administrative Tribunal and the High Court had concluded that the post was a civil post based on various Rules indicating government control. The Supreme Court expressed reservations about this view but chose not to interfere, leaving the question open for a future case. The court emphasized that the facts of the case were gross, and the appointment of the appellant was rightly set aside.5. Appropriate remedy and directions for filling the post of Member (Technical), CLB:Given the long vacancy of the post, the court directed that the three names selected by the Selection Committee, along with the materials placed before it, should be submitted to the Appointments Committee without any additional notings or comments. The Appointments Committee was instructed to select from among these names based solely on the Selection Committee's report and materials. This approach was deemed to serve the interest of justice and expedite the filling of the post.Conclusion:The Supreme Court dismissed the appellant's civil appeal, upheld the setting aside of his appointment, and provided specific directions to ensure the expeditious and fair selection of a Member (Technical) for the Company Law Board. The court emphasized the need to avoid interference and favouritism in the selection process and to maintain the integrity of the recommendations made by the Selection Committee.