[Cites 32, Cited by 0]
Delhi High Court
Nbcc India Limited And Anr vs Novman Ahmed And Anr on 2 April, 2026
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 19.03.2026
Judgment pronounced on: 02.04.2026
Judgment uploaded on: 02.04.2026
+ W.P.(C) 3162/2026, CM APPL. 15250/2026, CM APPL.
15251/2026 and CM APPL. 15252/2026
NBCC INDIA LIMITED AND ANR .....Petitioners
Through: Mr. Brijender Chahar, ASG
with Mr. R.V. Sinha, Mr. A.S.
Singh and Ms. Shriya Sharma,
Advs.
versus
NOVMAN AHMED AND ANR .....Respondents
Through: Mr. Sudhir Nandraj Jog and Mr.
A.K. Behra, Senior Advocates
with Ms. Sakshi Kakkar, Mr.
Shakti Singh and Mr. Sarthak
Karol, Advs. for R-1.
CORAM:
HON'BLE MR. JUSTICE ANIL KSHETARPAL
HON'BLE MR. JUSTICE AMIT MAHAJAN
JUDGMENT
ANIL KSHETARPAL, J.:
1. Through the present Petition filed under Article 226 of the
Constitution of India, 1950 [hereinafter referred to as „Constitution‟],
NBCC (India) Limited/Petitioner No.1 and its subsidiary company
HSCC (India) Limited/Petitioner No.2, seeks issuance of a writ in the
nature of certiorari to quash the orders dated 23.02.2026 [hereinafter
referred to as „IO-1‟] and 27.02.2026 [hereinafter referred to as „IO-
2‟] passed by the Central Administrative Tribunal, Principal Bench,
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New Delhi [hereinafter referred to as „Tribunal‟]. It may be relevant to
highlight that the Petitioners in the present case are incorporated
Government companies.
2. At the outset it may be noticed that the present petition raises a
question of considerable significance touching upon the jurisdictional
contours of the Tribunal. Therefore, the question that would be
answered by way of this judgment is whether an employee appointed
by the Hon‟ble President of India, also acting in the capacity of a
President of an incorporated Government company, can be said, in the
eye of the law, to hold a civil post within the contours of Section 14(1)
of the Administrative Tribunal Act, 1985 [hereinafter referred to as
„Act of 1985‟], thereby conferring jurisdiction upon the Tribunal to
entertain and decide service dispute.
A. FACTUAL BACKGROUND:
3. In order to comprehend the controversy involved in the present
case, the relevant facts in brief are required to be noticed.
4. Upon enactment of the Act of 1985, the Tribunal was duly
constituted, ushering in a specialized adjudicatory regime for service
jurisprudence. The Petitioner No.1 is an incorporated Government
company functioning under the aegis of Respondent No.2/Ministry of
Housing and Urban Affairs, Government of India („MoHUA‟).
Whereas, the Petitioner No.2 is a subsidiary company, incorporated
under the Companies Act, 1956 [hereinafter referred to as „Act of
1956‟] on 13.03.1983, thereby operating within the corporate fold of
the Petitioner No.1.
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5. The dispute seeking jurisdiction of this Court originates from a
Recruitment Notice issued by the Department of Personnel and
Training („DoPT‟) inviting applications for the post of Managing
Director („MD‟) to the Petitioner No.2. At the relevant point of time,
the Respondent No.1 was serving as an Executive Director
(Engineering) [hereinafter referred to as „ED (Eng.)‟] with the
Petitioner No.1. Having been duly selected by the Search-cum-
Selection Committee, the Respondent No.1 was relieved from his
erstwhile position of ED (Eng.) by the Petitioner No.1. Thereafter,
vide Order dated 22.02.2023, the Respondent No.2 conveyed approval
of the Competent Authority for appointment of the Respondent No.1
as MD-Petitioner No.2, for a tenure of five years, from the date of
assumption of charge till a period of five years or until the date of his
superannuation or until further orders, whichever event were to occur
earliest. Pursuant thereto, the Respondent No.1 assumed charge of the
office of MD-Petitioner No.2.
6. However, the Respondent No.1‟s tenure as MD-Petitioner no.2
was short lived as on 18.11.2025, the Company Secretary of the
Petitioner No.1, acting in furtherance of a decision of its Board of
Directors (BoD), sought an explanation from the Respondent No.1
regarding alleged serious procedural lapses, irregularities in project
execution and other operational and administrative matters.
Confronted with the gravity of the issues raised, the Respondent No.1
sought an extension of ten more days for furnishing a detailed
response; however, he was granted five days of time to submit his
response. Consequently, the Respondent No.1 submitted his response
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on 07.12.2025, comprising of more than 2500 pages along with
supporting annexures.
7. Thereafter, the matter was placed before the BoD of the
Petitioner No.1, in the meeting held on 11.12.2025. Upon
consideration, the reply of Respondent No.1 was not found
satisfactory and consequently, a decision was taken to forward the
details of the reply, alongwith remarks of BoD, to the Administrative
Ministry for such further action. In the meantime, the powers vested in
MD-Petitioner No.2 were directed to be seized immediately. This
decision of the BoD was formally communicated to the Respondent
No.1 vide communication dated 16.12.2025. In response, Respondent
No.1 vide email dated 23.12.2025, furnished his comments pointing
out the lacunae and infirmities in the observation and conclusions
arrived at by the BoD.
8. On 31.01.2026, the meeting of BoD of the Petitioner No.2 was
held, wherein the recommendations made by BoD of the Petitioner
No.1 was adopted and the decision so crystallized was duly
communicated to the Respondent No.1. Consequent upon approval of
the Competent Authority, the Respondent No.1 was repatriated to his
parent Cadre, namely, NBCC (India) Limited/Petitioner No.1, and in
the same breath, his services from the post of MD-Petitioner No.2 was
terminated with immediate effect. In swift succession, on 09.02.2026,
a new incumbent assumed the additional charge of MD-Petitioner
No.2.
9. Aggrieved by the aforesaid chain of events, the Respondent
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No.1 invoked jurisdiction of the Tribunal by filing an Original
Application (O.A.) under Section 19 of the Act of 1985. However, at
the very threshold a preliminary objection pertaining to the
maintainability of the O.A. was raised by learned counsel for the
Petitioners and the Respondent No.2, objecting the very jurisdiction of
the Tribunal to entertain the said O.A in absence of notification u/s
14(2) of the Act of 1985 bringing employees of the Petitioner No.2
within its jurisdiction.
10. On 23.02.2026, the aforesaid preliminary objection was
overruled by the Tribunal, while recording the following reasons:
i. That the Respondent No.1, in substance and effect, had sought
relief against the Petitioner No.1 and the Respondent No.2, entities
amenable to jurisdiction of the Tribunal, and not against the Petitioner
No.2 per se.
ii. That the Respondent No.1 was appointed by the Respondent
No.2. Hence, the O.A. is maintainable in terms of Section 14(l)(b)(ii)
of the Act of 1985 because he was holding a civil post.
iii. That the Respondent No.1 is MD of the Petitioner No.2 and was
appointed by the Respondent No.2. Hence, the O.A. is maintainable at
the behest of the Respondent No.1 and not by other employees of the
Petitioner No.2, since his appointment and termination can only be
done by the Respondent No.2.
11. Thereafter, the hearing of the matter was adjourned to
27.02.2026 by the Tribunal and while recording the following reasons,
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the Tribunal proceeded to stay termination of the service of the
Respondent No.1 from the office of the Petitioner No.2:
i. That the resolution dated 11.12.2025 is penal in nature and new
departmental proceedings have been initiated. It was further observed
that the Respondent No.1 had submitted a voluminous reply, running
into more than 2500 pages, on 07.12.2025, however, the decision
thereon was arrived at within a span of merely four days;
ii. That the Respondent No.1 was neither given three months‟
notice nor any payment in lieu thereof was made, requirements which
are mandatory in nature;
iii. That the Respondent No.1 having been appointed on a tenured
post, could not have been repatriated to the Petitioner No.1;
iv. That only the Hon‟ble President of India, being the Appointing
Authority of the Respondent No.1, had the power to terminate his
tenure appointment. Hence, strong prima facie case is made out in
favour of the Respondent No.1.
12. Aggrieved by the conclusions drawn and decisions rendered by
the Tribunal, the present petition assailing the correctness of the
Impugned Orders, has been filed.
13. We have heard learned counsel appearing for the parties and
with their able assistance have perused the paperbook. However,
before adverting to the rival submissions advanced by the parties, we
deem it appropriate to reproduce the relevant provision of Act of
1985, which forms the bedrock of arguments advanced by the parties.
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The relevant extract is as follows:
"14. Jurisdiction, powers and authority of the Central
Administrative Tribunal.--(1) Save as otherwise expressly provided
in this Act, the Central Administrative Tribunal shall exercise, on
and from the appointed day, all the jurisdiction, powers and
authority exercisable immediately before that day by all courts
(except the Supreme Court) in relation to--
(a) recruitment, and matters concerning recruitment, to any
All-India Service or to any civil service of the Union or a civil
post under the Union or to a post connected with defence or in
the defence services, being, in either case, a post filled by a
civilian;
(b) all service matters concerning--
(i) a member of any All-India Service; or
(ii) a person [not being a member of an All-India Service
or a person referred to in clause (c)] appointed to any civil
service of the Union or any civil post under the Union; or
(iii) a civilian [not being a member of an All-India Service
or a person referred to in clause (c)] appointed to any
defence services or a post connected with defence,
and pertaining to the service of such member, person or
civilian, in connection with the affairs of the Union or of
any State or of any local or other authority within the
territory of India or under the control of the Government of
India or of any corporation [or society] owned or
controlled by the Government;
(c) all service matters pertaining to service in connection with
the affairs of the Union concerning a person appointed to any
service or post referred to in sub-clause (ii) or sub-clause (iii)
of clause (b), being a person whose services have been placed
by a State Government or any local or other authority or any
corporation [or society] or other body, at the disposal of the
Central Government for such appointment.
[Explanation.--For the removal of doubts, it is hereby
declared that references to "Union" in this sub-section shall
be construed as including references also to a Union territory.]
(2) The Central Government may, by notification, apply with effect
from such date as may be specified in the notification the provisions
of sub-section (3) to local or other authorities within the territory of
India or under the control of the Government of India and to
corporations [or societies] owned or controlled by Government, not
being a local or other authority or corporation [or society]
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controlled or owned by a State Government:
Provided that if the Central Government considers it expedient so to
do for the purpose of facilitating transition to the scheme as
envisaged by this Act, different dates may be so specified under this
sub-section in respect of different classes of, or different categories
under any class of, local or other authorities or corporations [or
societies].
(3) Save as otherwise expressly provided in this Act, the Central
Administrative Tribunal shall also exercise, on and from the date
with effect from which the provisions of this sub-section apply to any
local or other authority or corporation [or society], all the
jurisdiction, powers and authority exercisable immediately before
that date by all courts (except the Supreme Court) in relation to--
(a) recruitment, and matters concerning recruitment, to any
service or post in connection with the affairs of such local or
other authority or corporation [or society]; and
(b) all service matters concerning a person [other than a
person referred to in clause (a) or clause (b) of sub-section
(1)] appointed to any service or post in connection with the
affairs of such local or other authority or corporation [or
society] and pertaining to the service of such person in
connection with such affairs."
B. CONTENTIONS OF THE PARTIES:
14. This Court has heard learned counsel for the parties at length
and with their able assistance, perused the paperbook along with the
written submissions filed by them.
15. Learned senior counsel for the Respondent No.1, has raised a
preliminary objection with respect to the present petition. In support
of his case, it has been argued that the Petitioners do not possess the
requisite locus standi to challenge the IO-2, since the Appointing
Authority as well as the Disciplinary Authority of Respondent No.1 is
the Hon‟ble President of India whereas the Order dated 04.02.2026,
terminating the service of the Respondent No.1 came to be issued by
the Respondent No.2. In this regard, reliance has been placed upon the
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judgments passed by the Supreme Court in State of Uttar Pradesh
and Anr. v. Audh Narain Singh1; and Anr. and State of Orrisa v.
Ram Chandra Dev & Anr.2.
16. Per contra, while controverting the aforesaid submissions,
learned ASG appearing on behalf of the Petitioners, have argued that
the there was no master and servant relationship between the
Petitioner No.2 and the Respondent No.1. To substantiate the
aforesaid, it was argued that the Petitioner No.2 is a company
incorporated under the Act of 1956 and as such it is not a government
department, and the official working therein can also not be
categorised as civil post holders or government servant. Reliance in
this regard has been placed upon the judgments passed by the
Supreme Court in Dr. S.L. Agarwal v. The General Manager,
Hindustan Steel Ltd3, S.S. Dhanoa v. Municipal Corporation, Delhi
& Ors.4, Heavy Engineering Mazdoor Union v State of Bihar &
Ors.5, and Praga Tools Corporation v. C.A. Imanual & Ors.6.
17. Learned ASG, while controverting the conclusion arrived at by
the Tribunal, has made the following submissions:
17.1 It has been argued that the Impugned Orders are perverse in
nature as the Petitioner No.2 is a distinct entity in terms of Section
2(20) of the Companies Act, 2013 [hereinafter referred to as „Act of
2013‟]. Whereas the appointment of MD-Petitioner No.2, was made in
AIR 1965 SC 360
AIR 1964 SC 685
(1970) 1 SCC 177
(1981) 3 SCC 431
(1969) 1 SCC 765
(1969) 1 SCC 585
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terms of Sections 196 and 197 of the Act of 2013 and the employees
are paid from the funds of company.
17.2 It is argued that the reliance placed upon the judgment of
Supreme Court in State of Gujarat & Ors. v. Raman Lal Keshav Lal
& Ors.7 by the Tribunal in the IO-1, is perverse in view of the
declaration of law on the issue of civil post holder.
17.3 Learned ASG argued that the IO-2 is also bad in law as the
Tribunal failed to take into consideration that an interim relief in the
matter of termination, should not be granted when it effectively acts as
a final relief. Reliance in this regard was placed upon Ashok Kumar
Bajpai v. Dr. [Smt.] Ranjana Bajpai8. Additionally, it was contended
that the Tribunal failed to appreciate the fact that after the Respondent
No.1 was relieved from the post of MD-Petitioner No.2, a new
incumbent had assumed charge of the said office.
18. Per contra, learned senior counsel for the Respondent No.1 has
made the following submissions:
18.1 A reliance was placed on Article 323 A (1) of the Constitution
and Sections 14(1) and 19(1) of the Act of 1985 to argue that upon a
bare reading of the aforesaid provisions, it becomes manifest that the
Respondent No.1 has rightly challenged the Order dated 04.02.2026,
since Respondent No.2 and Petitioner No.1, both are amendable to the
jurisdiction of the Tribunal. Reliance in this regard was placed on the
judgment of Supreme Court in L Chandra Kumar v UOI9 and Rajeev
(1980) 4 SCC 653
2003 SCC OnLine ALL 1296
(1997) 3 SCC 261
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Kumar v Hemraj Singh Chauhan10 to argue that the Tribunals
created under Articles 323-A and 323-B of the Constitution, will
function as a court of first instance.
18.2 It is argued that the O.A. is maintainable even without
impleading the Petitioner No.2, since no relief is sought against it and
it merely acted as an agent, with the principal authority being
responsible for the said termination as held in the judgment of this
Court in Vinay v. Union of India11. It is further contended that the
Petitioner No.2, being a government controlled Central Public Sector
Enterprise (CPSE) under the Respondent No.2, cannot be treated as
wholly independent. Further, it is his case that posts in such
government-controlled entities qualify as civil posts under Section
14(1) of the Act of 1985, requiring no separate notification under
Section 14(2) of the Act of 1985.
18.3 It has been argued that the Respondent No.1 was appointed
through a Government-prescribed process, with the appointment,
service conditions, supervision and disciplinary control vested in the
Hon‟ble President of India. This, as per the Respondent No.1,
establishes a clear master-servant relationship with the Respondent
No.2 and not the Petitioners. Hence, only the Respondent No.2 is
competent to take action.
18.4 While supporting the conclusions drawn by the Tribunal, it was
stated that the termination was rightly stayed as it was stigmatic,
arbitrary and passed in violation of principles of natural justice,
(2010) 4 SCC 554
2024 SCC OnLine Del 6369
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without notice, hearing or any proper inquiry by the Competent
Authority. It has also been the case of the Respondent No.1 that there
has been a clear non-compliance with the prescribed procedure and
terms of appointment, including failure to provide notice or salary in
lieu thereof and lack of approval/participation of the Competent
Authority. Hence, the interim relief was justified in light of Deoraj v.
State of Maharashtra & Ors.12.
C. ANALYSIS AND REASONING:
19. Having heard the rival submissions advanced by the learned
counsel for the parties and upon perusal of the record, this Bench has
identified the following issues for consideration:
(A.) Whether the Petitioners have the locus standi to maintain the
present petition?
(B.) Whether the Respondent No.1 holds a post under the Union
within the meaning of Section 14(1) of the Act of 1985?
(C.) Whether the appointment and termination of the Respondent
No.1 are acts of Union of India or corporate act of the Petitioner No.2,
and whether the Petitioner No.2 is the Competent Authority in this
regard?
(A.) WHETHER THE PETITIONERS HAVE THE LOCUS
STANDI TO MAINTAIN THE PRESENT PETITION?
20. Learned senior counsel for the Respondent No.1 has at the
outset raised objections pertaining to the locus standi of the
(2004) 4 SCC 697
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Petitioners. However, in the considered view of this Court, the said
objection must be examined in light of the prayer sought by the
Respondent No.1 in the O.A., which is reproduced hereinbelow for
ready reference:
"That In light of the facts and circumstances aforesaid, it is most
respectfully prayed that this Hon'ble Tribunal may be pleased to:
a. Quash the Office Order No. 0-17034/21/2020-PS (E-9090867)
dated 04.02.2026 passed by the Respondent No.1; and
b. Quash: the Communication bearing No. HSCC/196-BM/2025-26
dated 02.02.2026 of Company Secretary of Respondent No.3 (NBCC)
by which Petitioner has been informed that the powers of the
Petitioners have been seized and same has been delegated to the
Chairperson of the NBCC(India)Ltd. in the capacity as Chairman,
HSCC (India) Ltd.
c. Direct the Respondent No. 1 to reinstate the Applicant on his post of
Managing Director in the Respondent No. 2 Company; and
d. Pass any such order (s) as this Hon'ble Tribunal may deem fit and
just in the interest of justice."
21. The Respondent No.1 by way of filing the O.A. has prayed for
quashing of HSCC Board Resolution dated 02.02.2026 while
reiterating the decision taken by the BoD of the Petitioner No.1. It is
on the basis of this resolution that, the Competent Authority had
conveyed its approval for the repatriation of the Respondent No.1 to
his parent cadre, which simultaneously resulted in his termination
from the post of MD-Petitioner No.2. It is pertinent to note that the
Competent Authority, namely the President of the Petitioner No.2, had
sanctioned and conveyed its approval to the resolution passed by the
BoD of the Petitioner No.1.
22. By virtue of the enabling powers conferred under Article of
Association (AoA) of the Petitioner No.2, as explained in the
succeeding paragraphs of this judgment, the President of the company
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is authorised to convey such approval. It becomes important to
highlight that this decision cannot be said to have been taken by the
Respondent No.2; rather it was taken by the Hon‟ble President of
India, in her capacity of President of the Petitioner No.2, who is the
head of the company and as such there existed a relationship of master
and servant between the Petitioner No.2 and the Respondent No.1.
Thus, the decision to terminate the services was not taken by the
President in her individual executive capacity, rather it was the
decision of a company head, who is the employer of the Respondent
No.1.
23. The reliance placed on the judgment of Supreme Court in Audh
Narain Singh (Supra) is distinguishable on the facts of the present
case. In the said decision, at the relevant time, the context involved
treasuries being managed through Government Treasurers, who, in
turn, had appointed Tahvildars. The dispute therein, concerned the
termination of service of one such Tahvildar, who was dispensed with
by the Collector, thereby raising the question of whether a Tahvildar
qualified as a Government servant and a holder of a civil post. The
Five-Judge bench of Supreme Court held that the Tahvildar was
indeed a Government servant and holder of a civil post. Consequently,
his services could not be terminated in violation of Article 311 of the
Constitution. Hence, the ratio of the aforesaid judgment bears no
application to the facts and circumstances of the present case.
24. Similarly, the case of Ram Chandra Dev (Supra) is entirely
distinguishable and bears no relevance to the present controversy. In
the aforesaid judgment, the dispute arose from a Writ Petition filed by
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the Zamindars who claimed permanent settlement rights over land in
the Ganjam Plains. The land in question was acquired by both the
States of Orissa and Andhra Pradesh, under the Estate Abolition Act.
The Five-Judge Bench of the Supreme Court held that the Petitioners
therein had no legal right and consequently, their Petition was not
maintainable. In the present case, the issues concern the appointment,
tenure, and termination of an employee in an incorporated
Government company, and do not involve claims to proprietary or
settled rights under a statutory abolition scheme. Therefore, the
principles laid down in the aforesaid judgment are wholly inapplicable
to the facts and legal questions at hand.
25. In view of the aforesaid discussion, we deem it appropriate to
state that the Petitioner No.2 possessed the requisite locus standi to
file the present Petition because the resolution dated 02.02.2026,
which forms the subject matter of challenge before the Tribunal, has
been passed by the BoD of the Petitioner No.2. Therefore, the
company, as the employing entity, is the proper party to maintain the
petition, ensuring that the adjudication pertains to the entity directly
responsible for the administrative action impugned.
(B.) WHETHER THE RESPONDENT NO.1 HOLDS A POST
UNDER THE UNION WITHIN THE MEANING OF SECTION
14(1) OF THE ACT OF 1985?
26. Chapter 1 of Part XIV of the Constitution which delineates the
framework governing „Services Under the Union and the State‟,
thereby furnishing the constitutional backdrop against which the
expression „civil post‟ must be understood and interpreted. The said
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expression, though not exhaustively defined, finds its conceptual
foundation within this constitutional scheme and in particular under
Article 310 of the Constitution. While the services under the Union
and the State stand regulated by the provisions contained in Chapter 1
of Part XIV of the Constitution, Article 310 of the Constitution
specifically provides for both defence services under the Union of
India and civil services under the Union of India or State. It is within
this constitutional architecture that the concept of a civil post emerges,
not as a verbal construct but as a juridical expression, denoting a post
borne on the establishment of the Union or a State, subject to the
sovereign position held by the President or Governor, as the case may
be.
27. It has been contended on behalf of the Respondent No.1 that the
Petitioner No.2, being a wholly owned subsidiary of the Petitioner
No.1 and with the Hon‟ble President of India playing a vital role as
per AoA, cannot be regarded as a completely independent entity.
However, this argument lacks substance.
28. It may be noted that the Petitioner No.1 is an incorporated
Government company, which was incorporated on 15.11.1980. In
turn, the Petitioner No.2 is a subsidiary company of the Petitioner
No.1, incorporated in the year 1983, thereby forming part of the same
corporate structure.
29. Further, a perusal of AoA of the Petitioner No.2, reveals the
pervasive imprint of control, wherein the Hon‟ble President of India is
a major shareholder of the Petitioner No.2. Whereas Articles 94 and
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95 of the AoA confers upon the Hon‟ble President of India an
authority to appoint the Chairman, MD and Directors. Further, Article
120 clothes the Hon‟ble President of India with the power to nominate
any person as her representative, thereby enabling the exercise of such
authority through a designated channel. In particular Clause 3 of
Article 120 of the AoA, authorises the Hon‟ble President of India to
not only cancel any appointment made but also make fresh
appointments, as circumstances may warrant.
30. As is evident from the statutory scheme, the Petitioner No.2,
though a subsidiary of the Petitioner No.1, is not denuded of its
independent corporate existence; rather, it stands as an independent
incorporated company, possessing its own legal identity and corporate
authority. Section 2(87) of the Act of 2013, while delineating the
contours of a subsidiary company, predicates such status upon control
exercised by the holding company, either over the composition of the
board of directors, or the exercise of control over more than one-half
of the total voting power either alone or with its subsidiaries.
31. However, the explanation provided therein confirms that a
subsidiary company is still a body corporate in its own right.
Additionally, Section 2(46) of the Act of 2013 defines a holding
company as one of which other companies are subsidiaries, implicitly
recognising distinct corporate existence of each entity in the group.
Against the aforesaid definitions provided therein, the Act of 2013
proceeds on the basis that a subsidiary is an independent company
merely subject to control in terms of board or voting power, and not as
a department or branch of the holding company.
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32. In this regard a reference may also be made to the judgment of
Supreme Court in Balwant Rai Saluja & Anr. v Air India Ltd. &
Ors.13, wherein the Court affirmed that a subsidiary company is a
distinct legal entity, even if wholly owned and controlled by the
holding company. The Court while relying on Vodafone
International Holdings BV v Union of India14, reiterated that the
holding company does not own the subsidiary‟s assets and that the
business of a subsidiary is managed by its own Board,
notwithstanding shareholding control. With the aforesaid
observations, it was highlighted that any lifting of the corporate veil to
treat the two entities as one is an exception that must be specifically
justified.
33. In the present case, the Respondent No.1 has made no
arguments thereby seeking to lift the corporate veil between the
Petitioner No.1 and the Petitioner No. 2, therefore, in absence of any
such claims made, the Petitioner No.2 could not be regarded as
equivalent to Government, since it exercises powers and functions
through a separate legal persona. The Petitioner No.2 while
functioning as a subsidiary of the Petitioner No.1, nonetheless, retains
an independent juristic identity and autonomy as explained in the
preceeding paragraphs. Moreover, the fact that the Hon‟ble President
of India, in her capacity as the President of the Petitioner No.2,
exercises a significant role under the AoA does not lead to a
conclusion that the Petitioner No.2 is not an independent entity. In
other words, corporate control or representation by the Hon‟ble
(2013) 15 SCC 85
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President of India does not equate to subordination to the Union in the
constitutional sense. The Petitioner No.2 remains a distinct legal
entity, capable of exercising its powers, rights, and obligations
independently of the Union or the Petitioner No.1.
34. The Supreme Court in Dr. S.L Agarwal (Supra), examined the
concept of a civil post in the context of a Government company. After
relying upon the judgment passed in Praga Tools Corporation
(Supra), it was held that such a company is different from the State,
and the employees of an incorporated Government company cannot be
said to hold a civil post. Consequently, the employees of an
incorporated Government company would not fall within the
description of a holder of a civil post under the Union, as stated in
Articles 310 and 311 of the Constitution. More so, since in the case of
the Petitioner No.2, the service conditions of its employees, are
governed by HSCC India Limited Conduct, Discipline and Appeal
Rules, 1985, thereby reflecting the Petitioner No.2‟s internal statutory
regime.
35. The Tribunal has relied upon the judgment passed by the
Supreme Court in Raman Lal Keshav Lal (Supra) to come to a
conclusion that the Respondent No.1 falls within the contours of
Section 14(1)(b)(ii) of the Act of 1985, thereby enabling the
jurisdiction of the Tribunal. However, such reliance placed by the
Tribunal is distinguishable, since, in the aforesaid decision, a Five-
Judge Bench of the Supreme Court was called upon to examine and
determine the following two issues:
(2012) 6 SCC 613
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"1. The Panchayat Service constituted under the Panchayats Act
is a civil service of the State of Gujarat; and
2. that under the unamended Act, there was a common
centralized Panchayat Service."
36. The factual matrix requiring adjudication of the Supreme Court,
pertained to employees of the Municipalities/Municipal Corporations,
who had been posted in the Panchayat services of the State
Government. A Writ Petition was filed seeking issuance of a writ in
the nature of mandamus for the appointment of such employees in
equivalent propos within the Panchayat services of the State
Government along with consequential reliefs. Therefore, it may be
pertinent to highlight that the questions and legal issues arising in
Raman Lal Keshav Lal (Supra) were of materially different character
from those in the present case. Accordingly, the context of inter-
posting under the State framework cannot be equated with the
appointment and tenure of the Respondent No.1 in a wholly or
partially Government-controlled company.
37. Similarly, the reliance placed by the learned senior counsel for
the Respondent No.1 on the judgment of Supreme Court in Kanak
Chandra Dutta (Supra), is also distinguishable. In the said decision,
the Court examined whether a Mauzadar in the Assam Valley held a
civil post under the State of Assam, thereby attracting the protection
under Article 311(2) of the Constitution. Faced with the aforesaid
controversy, the Court went on to observe that there existed a master
servant relationship between the Deputy Commissioner and the
Mauzadar, as the latter functioned as a subordinate public servant
working under the direct supervision and control of the Deputy
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Commissioner. The duties discharged by the Mauzadar were integrally
connected with the affairs of the State, including the collection of land
revenue, poll tax, house tax, tauzi-bahir revenue and the obligation to
deposit the same into treasury within one month of the date of which
they fall due for payment. Against the discharge of these functions, a
Mauzadar was paid remuneration by way of a commission on the
collection of government dues.
38. On the contrary, the Respondent No.1 in the present case, was
not discharging any functions for or on behalf of the Respondent
No.2, rather he was appointed by the Petitioner No.2 to perform the
corporate objectives highlighted in its Memorandum of Association.
Further, his remuneration was also drawn from the funds of the
Petitioner No.2 and not from the Consolidated Fund or any
government treasury of the Respondent No.2. Thus, the essential
indicia of a civil post, namely, performance of duties in connection
with the affairs of the State and the existence of a direct master-
servant relationship with the Government, are conspicuously absent.
Consequently, the ratio of Kanak Chandra Dutta (Supra) has no
application to the facts of the present case.
39. The Tribunal, by way of the IO-1, has held that,
notwithstanding the fact that the Central Government has not issued
any notification under Section 14(2) of the Act of 1985 in respect of
the Petitioner No.2, the OA filed by the Respondent No.1 is
maintainable in terms of Section 14(1)(b)(ii) of the Act of 1985. In
view of this determination, it becomes necessary to undertake a
detailed examination of Section 14 of the Act of 1985.
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40. Section 14(1)(b)(ii) of the Act of 1985 specifically deals with an
individual who is appointed to a civil service of the Union or any civil
post under the Union. On the contrary, in the present case, the
Respondent No.1 was not appointed to any civil service of the Union,
nor did he hold any civil post under the Union. Nevertheless, the
Tribunal proceeded on the observation that the Respondent No.1 had
been appointed by the Union of India, however, such observation, in
view of this Court, constitutes a fundamental factual error.
41. In the present case, the appointment of the Respondent No.1
was made by the Hon‟ble President of India, acting in the capacity of
the President of the Petitioner No.2, and not in her capacity as the
constitutional head of the Union. To put it differently, the appointment
was made pursuant to the AoA of the incorporated Government
company and was accordingly, tenure based and corporate in
character, rather than a civil post held under the Union. Consequently,
the Tribunal has erred in concluding that the Respondent No.1 has
been appointed to a civil post by the Respondent No.2. In fact, the
position held by the Respondent No.1 falls squarely within the ambit
of a tenured post in an incorporated Government company, and, as
such, he cannot be regarded as a „holder of a civil post‟ for the
purpose of Section 14 of the Act of 1985.
42. While it is correct that a notification under Section 14(2) of the
Act of 1985 has been issued by the Central Government with respect
to the Petitioner No.1, however, we must not lose sight of the fact that
the present dispute pertains exclusively to the services of Respondent
No.1 with the Petitioner No.2, especially in the light of the prayer
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made by way of filing the O.A. In that context, the existence of
notification qua the Petitioner No.1 cannot, ipso facto, be
determinative of the jurisdiction of the Tribunal over dispute
pertaining to the Petitioner No.2.
43. Additionally, it is also pertinent to highlight that the very fact
that the notification was issued in relation to the Petitioner No.1, is a
jurisdictional precondition for bringing an authority or body within the
ambit of the Tribunal, thereby enabling the employees of the
Petitioner No.1 to seek redressal of their grievance before the
Tribunal. Consequently, the absence of such a notification in respect
of the Petitioner No. 2 assumes critical significance. As already
established in the preceeding paragraphs, the Petitioner No.2 being an
independent entity with its own administrative and managerial
framework, cannot be subsumed within the ambit of the Petitioner
No.1 merely by virtue of a notification issued in respect of the latter.
Since, the statutory requirement under Section 14(2) of the Act of
1985 does not highlight or talk about such implied extension, and
there exists an absence of a specific notification particularly with
respect to the Petitioner No.2, we are not convinced that, it can be
brought within the jurisdictional sweep of the Tribunal by a process of
association or inference.
44. Accordingly, in view of the absence of notification under
Section 14(2) of the Act of 1985 and taking into consideration the
relief sought by the Respondent No.1 by way of the O.A., we are of
the view that the Tribunal has erred in observing that the Respondent
No.1 is seeking relief against the Petitioner No.1 and the Respondent
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No.2. In fact, the O.A. filed by the Respondent No.1 was directed
solely against the Petitioner No.2, an entity in which the appointment
and termination of Respondent No.1 occurred.
45. Pithily put, the appointments made by the Hon‟ble President of
India, in her capacity as the President of an incorporated Government
company, cannot be equated with the appointments to a civil post
connected with the affairs of the Union of India. The appointment of
the Respondent No.1 was intrinsically linked to the affairs of the
Petitioner No.2 and not to that of the Respondent No.2, thereby
placing him outside the statutory ambit of the various services falling
under Section 14(1) of the Act of 1985.
(C.) WHETHER THE APPOINTMENT AND TERMINATION
OF THE RESPONDENT NO.1 ARE ACTS OF UNION OF
INDIA OR CORPORATE ACT OF THE PETITIONER NO.2,
AND WHETHER THE PETITIONER NO.2 IS THE
COMPETENT AUTHORITY IN THIS REGARD?
46. The argument of learned senior counsel for the Respondent
No.1 to the effect that the appointment was made by the Hon‟ble
President of India is not wholly correct. The appointment was, in fact,
made by the President of the Government company in accordance
with her enabling powers conferred under Articles 94 and 95 of the
AoA. Accordingly, the Respondent No.1 cannot claim that the
Hon‟ble President of India, in her individual capacity or in a capacity
of a Constitutional Head of the Country, is his master or employee.
The authority exercised was purely corporate in nature, arising from
the company as a legal entity and not from the constitutional executive
capacity.
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47. Against this backdrop, the contention of the Respondent No.1
that the Petitioner No.2 is neither his Appointing Authority nor the
Authority for passing the termination order, is also incorrect. On the
contrary, the decision of termination has been taken by the BoD of the
Petitioner No.2, which, upon consideration, concluded that the
explanation furnished by the Respondent No.1 was not satisfactory.
The ultimate authority in this regard was the President of the
company, who is the Competent Authority as per Article 112 of the
AoA, which authorises the President to remove any Director including
the Chairman from the office of the Petitioner No.2. Thus, both the
initiation and the approval of the termination were intrinsically linked
to the corporate governance structure of the Petitioner No.2,
establishing it as the proper authority in the matter.
48. The reliance placed by the Respondent No.1 upon the judgment
passed by this Court in Vinay (Supra) is also distinguishable. This
Court in the said decision while dealing with a writ petition filed
under Article 226 of the Constitution, dismissed the same on the
ground that the Petitioners have an alternative remedy of filing an
O.A. before the Tribunal. In the said case, the Petitioners sought a
direction to the Respondents to keep in abeyance the entire joining
process of candidates selected pursuant to a recruitment process for
filling up the post of Examiner of Patents and Designs Group „A‟
(Gazetted), conducted by Controller General of Patents, Design and
Trademark, Department of Promotion of Industry and Internal Trade,
Ministry of Commerce and Industry. Upon consideration, the learned
Single Judge came to a conclusion that since the matter was related to
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a recruitment exam and interference in an administrative structure, it
fell squarely within the jurisdiction of the Tribunal and hence, the
Petitioners were relegated to the alternative statutory remedy.
Accordingly, this judgment is also not applicable to the facts of the
present case, since the dispute before this Court has come after
exhausting the alternative remedy available to the Respondent No.1
under service jurisprudence.
49. In a similar vein, the reliance placed by learned senior counsels
for the Respondent No.1 on the judgments of Supreme Court in L
Chandra Kumar (Supra) and Rajeev Kumar (Supra), to argue that the
Tribunal created under Articles 323-A and 323-B of the Constitution,
is the first court of instance, is also rendered infructuous. Particularly,
when this Court in preceeding paragraphs have already observed that
the Respondent No.1 does not hold a post as provided under Section
14(1) of the Act of 1985 and accordingly, is not entitled to file an
application before the Tribunal.
50. In L Chandra Kumar (Supra), the question that fell before the
Seven-Judge Bench, inter alia, was to assess whether a Tribunal,
constituted under the aforesaid Articles has the
competence/jurisdiction to test the validity of a statutory
provision/rule and whether the Tribunals could be considered to be an
effective substitute for the High Courts in discharging the power of
judicial review. While answering the aforesaid questions, it was
observed by the Court that in dispute pertaining to service, the Court
of first instance is the Tribunal. On the contrary, the question that has
fallen for the consideration of this Court is whether or not the
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Respondent No.1 held a post falling under Section 14 of the Act of
1985, thereby making him amenable to invoke the jurisdiction of the
Tribunal; accordingly, the decision rendered by the Supreme Court in
L Chandra Kumar (Supra) is not applicable to the facts and
circumstances of the present case.
51. Similarly, in Rajeev Kumar (Supra), the Supreme Court was
met against the factual matrix of Appellants, who were a non-State
Civil Service Officers, filing an impleadment application for the first
time before the Delhi High Court in a proceeding initiated against the
order passed by the Tribunal in an O.A. filed by one Hemraj Singh
and four others, however, the Appellants therein were not a party
before the Tribunal. Pithily put, the Appellants therein participated in
the proceedings for the first time before the Delhi High Court in a
proceeding challenging the Order of the Tribunal, while placing
specific reliance on L Chandra (Supra), to establish that if their rights
are being affected by the judgment of Tribunal, they can come before
the High Court for the first time, even if they were not a party to the
proceedings before the Tribunal. The Supreme Court in the said
decision, held that the Appellants have misinterpreted the law laid
down in L Chandra (Supra) and have failed to treat the High Court as
the first instance, when they had the remedy to approach the Tribunal.
However, in the present case, this Court is not placed with a similar
dispute as the Respondent No.1 herein had effectuated its alternative
statutory remedy. Therefore, the said decision also has no bearing on
the facts of the present case.
52. The next argument of the learned senior counsel for the
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Respondent No.1 also lacks substance. It has been argued that the
Government has laid down certain procedures for appointments in the
Government Companies and that the Petitioner No.2, being a Mini
Ratna CPSE and a wholly owned company of the Petitioner No.1
which is under the administrative control of the Respondent No.2, is
subject to a pervasive governmental control. However, the said
assertion is insufficient to conclude that the Disciplinary Authority
over the Respondent No.1 is the Hon‟ble President of India in her
individual constitutional capacity. The Disciplinary Authority is, in
fact, the President of the company, who happens to be the Hon‟ble
President of India. Therefore, the exercise of disciplinary powers
arises from the corporate office, not from the personal constitutional
role of the President. Accordingly, the legal consequences of such
action must be viewed in a corporate and not a constitutional context.
53. Having meticulously examined the nature of the post held by
the Respondent No.1, and upon drawing a clear distinction between an
employee of the Union and an employee of an incorporated
Government company; based on the statutory provisions and
judgments of the Supreme Court discussed in the preceeding
paragraphs, this Court is satisfied that the post held by the Respondent
No.1 does not constitute a post under the Union within the meaning of
Section 14(1) of the Act of 1985.
54. In consequence, the Tribunal lacked the jurisdiction to entertain
the O.A. filed by the Respondent No.1. The absence of jurisdiction is
a fundamental and incurable defect, rendering all consequential
orders, including the order passed by the Tribunal in the form of IO-2,
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void ab initio. In view thereof, this Court refrains from commenting
upon the correctness or merits of IO-2, since the same is also found to
be without jurisdiction.
D. CONCLUSION:
55. In view of the aforesaid discussion and conclusion arrived at
hereinabove, the present Petition is allowed. The Impugned Order
dated 23.02.2026 is hereby set aside and it is held that the Original
Application filed by the Respondent No.1 was not maintainable before
the Tribunal for want of jurisdiction.
56. As a necessary corollary, the Impugned Order dated
27.02.2026, being founded upon proceedings conducted without
jurisdiction, is also declared to be void and is accordingly set aside.
57. All the pending applications also stand closed.
ANIL KSHETARPAL, J.
AMIT MAHAJAN, J.
APRIL 02, 2026
jai/hr
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