The Single Bench of the Delhi High Court in the case of N.D. Tyagi vs Power Finance Corporation Ltd. & Ors. consisting of Justice Yashwant Varma observed that a writ petition challenging a chargesheet cannot be entertained unless there is a jurisdictional challenge to the initiation/continuance of disciplinary proceedings.
Facts
The petitioner was employed as an Executive Director in the Power Finance Corporation Limited. In 2008, PFCL incorporated a wholly owned subsidiary called Power Finance Corporation Consulting Limited (PFCCL). Upon the incorporation of the same, the petitioner was transferred as its Chief Executive Officer. In 2013 the Assistant General Manager (HR) passed an order transferring the petitioner back to PFCL. In 2014, a show cause notice came to be issued upon the petitioner considering various breaches when the petitioner was posted as Chief Executive Officer, which were prejudicial to the interest of the PFCCL. So, it was proposed that disciplinary action would be initiated as per Rules 28 and 30 of the Power Finance Corporation Limited (Conduct Discipline and Appeal) Rules.
Procedural History
Considering the reply submitted by the petitioner to the show cause notice, a chargesheet came to be subsequently issued. On commencement of proceedings, the petitioner raised a challenge to the authority of the Enquiry Officer and consequently sought a change of that officer. Consequent to the respondents refusing the prayer for change of the Enquiry Officer in terms of the impugned orders, the instant writ petition came to be instituted before this Court and the Court directed the Enquiry Officer not to proceed with the proceedings till the next date of hearing. The order continued till date and thus the enquiry proceedings have not moved forward. On notice being issued on the writ petition, respondents Nos. 1 and 4 filed their counter affidavits. The writ petition was thereafter and with the consent of parties taken up for final hearing.
Contentions Made
Petitioner: The chargesheet is being assailed here. As far as the alternative prayers were concerned, they would no longer survive as per the subsequent events and the Enquiry Officer having changed during the pendency of the present writ petition. No authority or jurisdiction would vest in PFCL to try the petitioner or to impose penalties for alleged acts of misconduct committed while the petitioner was posted at PFCCL. No proceedings for the alleged infractions were ever initiated or undertaken by PFCCL.
Respondent: The writ petition is premature since only a chargesheet is challenged. Due to absence of any jurisdictional challenge to proceed against the petitioner departmentally, the writ petition itself would not be maintainable and is liable to be dismissed. Since PFCCL was a constituent of PFCL, and the posting of the petitioner in PFCCL was merely a transfer, the disciplinary and administrative control remained with PFCL. The petitioner had asserted in his communication that subject to the Enquiry Officer being changed, he would otherwise have no objection to face the enquiry provided it was done in an unbiased manner.
Learned ASG observed that once the petitioner had recognised the authority of the Managing Director of PFCL to initiate proceedings the challenge to the chargesheet is liable to be negatived on that score alone, since his only objection was with respect to the lack of impartiality. It was further reiterated that the employees of PFCL were merely lent and transferred to PFCCL, which could not be termed or viewed as a deputation as per Umapati Choudhry vs. State of Bihar and State of Punjab vs. Inder Singh. Relying on the relevant Rules pressed into aid, it was submitted that a reading of Rule 37.1 would clearly establish that it would only operate if an officer or employee of PFCL was posted and working in PFCCL. Learned ASG submitted that the moment the petitioner was transferred back to PFCL, it was the Disciplinary Authority of PFCL who had the power to proceed against the petitioner. So, Rule 37.1 cannot possibly be read as empowering the Borrowing Authority to institute the disciplinary proceedings.
Observations of the Court
The Bench noted that the respondents have rightly contended that ordinarily a writ petition challenging a chargesheet would not be liable to be entertained unless there be a jurisdictional challenge to the initiation or continuance of disciplinary proceedings.
Regarding the issue of a compendious Annual Report of PFCL and PFCCL as being liable to be read as evidence of the two corporations in a sense not being separate entities, the Court while relying on Vodafone International Holdings BV vs. Union of India noted that a subsidiary, even if it be a wholly owned subsidiary, upon incorporation under statute is and has always been recognised to be a separate legal entity.
It was also noted that Rules 37.1 and 37.2 cannot possibly be read as conferring a power or authority on PFCCL to proceed against the petitioner even after his services stood repatriated to PFCL. Once the petitioner stood repatriated to his original cadre, it was the Disciplinary Authority of PFCL alone which could have initiated departmental proceedings against him.
Judgment
The Bench was of the view that the submission that the enquiry proceedings are liable to be interdicted since the relevant records are available with PFCCL was without merit and untenable. There was no justification for the Court to go into this question especially when that aspect was yet to be considered by the Enquiry Officer. So, the writ petition was dismissed.
Case: N.D. Tyagi vs Power Finance Corporation Ltd. & Ors.
Citation: W.P.(C) 7741/2015 & CM APPLs. 15189/2015, 29403/2015, 4218/2021, 4628/2021, 23761/2021
Bench: Justice Yashwant Varma
Decided on: 18th May 2022
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