2019 (8) TMI 917 - HC - Companies Law

Employer in Joint Venture with Govt Deemed 'State'; Inquiry Committee Valid

RAJEEV AGARWAL Versus UNION OF INDIA AND ORS.

RAJEEV AGARWAL Versus UNION OF INDIA AND ORS. - TMI Issues Involved:1. Maintainability of the writ petition under Article 226 of the Constitution of India.2. Validity of the charge-sheet and the authority of the issuer.3. Constitution and bias of the Inquiry Committee.4. Findings of the Inquiry Committee and procedural fairness.5. Allegations of corruption against respondent no.6.Detailed Analysis:1. Maintainability of the Writ Petition:The petitioner argued that Petronet LNG Limited (PLL) is a 'public limited company' and an instrumentality of the government, thus falling within the purview of 'State' under Article 12 of the Constitution of India. The court agreed, noting that PLL was formed as a joint venture by the Government of India, with significant financial control by four central government PSUs, and falls under the purview of the CVC. The court referenced several judgments to support this conclusion, including Essar Steel Limited vs. Union of India and Others and Petronet LNG Ltd. vs. Indian Petro Group and Another. Therefore, the court held that the writ petition is maintainable.2. Validity of the Charge-Sheet and Authority of the Issuer:The petitioner contended that the charge-sheet issued by the Senior Manager HR was invalid as it was not approved by the Board of Directors, the appointing authority under Section 178 of the Companies Act, 2013. The court examined the company's HR policies and delegation of authority manual, which vested disciplinary powers with the MD & CEO in consultation with the head of the HR department. The court found that the charge-sheet was duly approved by the MD & CEO and issued in accordance with the applicable rules. The court also noted that the MD & CEO is authorized to initiate disciplinary proceedings, including the issuance of the charge sheet and appointment of the Inquiry Committee. Thus, the court dismissed the petitioner's arguments on this issue.3. Constitution and Bias of the Inquiry Committee:The petitioner argued that the Inquiry Committee was constituted without the approval of the Board of Directors and included a subordinate of the complainant (respondent no.6), violating principles of natural justice. The court referenced several judgments emphasizing the importance of unbiased and fair inquiry proceedings, including State of U.P. & Ors vs. Saroj Kumar Sinha and State of Punjab vs. V.K. Khanna & Ors. However, the court found that the Inquiry Committee was constituted in accordance with the company's HR policies and that the petitioner had been given multiple opportunities to present his case but chose not to attend the proceedings. Therefore, the court did not find sufficient grounds to quash the Inquiry Committee's constitution.4. Findings of the Inquiry Committee and Procedural Fairness:The petitioner challenged the findings of the Inquiry Committee on several grounds, including the alleged unauthorized disclosure of confidential information and improper acquisition of club membership. The court noted that the petitioner had not submitted a response to the Inquiry Committee's findings and had instead chosen to file the writ petition. The court directed the petitioner to file a response to the findings within three weeks and instructed the respondents to consider the same and pass an order as per law. The court also directed the respondents to address the issue of another senior vice president having the same type of club membership without facing similar disciplinary action.5. Allegations of Corruption Against Respondent No.6:The petitioner, acting as a whistleblower, alleged several instances of corruption against respondent no.6, including awarding contracts to family friends and unauthorized appointments. The court noted that these allegations were not specifically denied by the respondents in their counter affidavits. Given the seriousness of the allegations, the court directed the Chief Vigilance Commissioner to inquire into the allegations made by the petitioner against respondent no.6 and take appropriate action as per law.Conclusion:The court disposed of the writ petition, allowing the petitioner to file a response to the Inquiry Committee's findings within three weeks. The court also directed the Chief Vigilance Commissioner to investigate the corruption allegations against respondent no.6. The applications associated with the writ petition were rendered infructuous and disposed of accordingly.