HSCC MD Not A 'Civil Post' Under Union, CAT Lacks Jurisdiction: Delhi High Court

The Delhi High Court has held that the managing director of HSCC India, a government-owned company, does not hold a civil post under the Union and therefore cannot invoke the jurisdiction of the Central Administrative Tribunal.

A bench of Justices Anil Kshetarpal and Amit Mahajan said the position was corporate in nature. “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.”

Explaining why the role could not be treated as government service, the court said, “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. 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.”

The ruling came while setting aside orders of the Central Administrative Tribunal in a dispute involving Novman Ahmed, former managing director of HSCC India, a subsidiary of NBCC. The tribunal had stayed his termination and held that his plea was maintainable. The High Court found that the tribunal lacked jurisdiction and declared its orders void.

Ahmed's tenure was cut short after the company flagged alleged procedural irregularities in the execution of certain projects and several administrative decisions.

After considering his response, the board decided to remove him from the post and repatriate him to his parent organization. He then approached the tribunal, which granted interim relief.

Counsel for Ahmed argued that his appointment, service conditions, and disciplinary control were effectively with the Union government, and that he should be treated as holding a civil post. It was also argued that since relief was sought against government authorities involved in the decision, the tribunal could hear the dispute.

The companies countered that HSCC is a separate legal entity. They said its employees are governed by company rules, paid from company funds, and do not form part of government service. They also pointed out that no notification had been issued extending the tribunal's jurisdiction to HSCC.

The court eventually agreed with the companies, holding that the nature of the appointment and disciplinary control was corporate and not governmental.