Plea challenges shortlisting of National Mineral Development Corporation Director candidate; Karnataka HC stays interview

New Delhi [India], June 5 : The Karnataka High Court has stayed the Centre's decision qualifying and shortlisting the name of Satyender Rai for the post of Director (Production) of National Mineral Development Corporation Limited and further fixing of the date of interview for the said post on June 5.
The bench of Justice SR Krishna Kumar of Karnataka High Court in an order passed on June 4 decided to stay the interview scheduled for today.
The impugned communication dated May 27, in so far it relates to Satyender Rai is stayed, till the next date of hearing, the court stated.
While fixing the matter for July 2, the court clarified that liberty is reserved in favour of the respondents to seek vacation/modification of this order.
The court also issued notice to the Union of India through the Public Enterprises Selection Board (PESB), the Ministry of Steel, and the National Mineral Development Corporation (NMDC) Ltd, after noting the detailed submissions of the petitioner.
Petitioner TK Srinivasan, a shareholder of NMDC, submitted through a plea that NMDC Ltd is a Government Company within the meaning of the Companies Act. Therefore, the appointment of Directors is not under the provision of the Section 152 of the Companies Act, 2013, i.e., appointing Director by the shareholder in the Annual General Body Meeting or Extra-ordinary General Board Meeting.
The plea further stated that the President of India, represented by the Ministry of Steel, Government of India forward the name and public Enterprise Selection Board (PESB) shortlists the candidates select the candidate and forward the same through DOPT to the ACC (Appointment Cabinet Committee), headed by the Prime Minister for selection/appointment.
Therefore, the appointment of the Director to the NMDC company is by way of an executive action, executive process, evaluation, etc., emanating from writ jurisdiction under Article 226 of the Constitution of India.
The petitioner further submitted that NMDC has two major mines producing about 14 Million tonnes of iron ore, situated in Sandur Taluk. Besides, NMDC also has an office in Bangalore. The NMDC also acquired the land for the steel plant in the district of Bellary.
"The incumbent (Satyender Rai) would be the Mines Manager under the Mines Act of the two mines in the state of Karnataka. If an inexperienced person/disqualified person is appointed for production and achieves the production targets as per the job description and in the event of his failure it will adversely affect the shareholders," it stated.
Petitioner further submitted, "I being one of the shareholders, have locus standi to question the illegal and arbitrary action and procedure that is being resorted to and followed by the executive, i.e., Public Enterprises Selection Board and the Ministry of Steel."
The plea submitted that if an ineligible person, disqualified person, or inexperienced person and a person naive to mining and production of minerals is appointed as director, the company would suffer huge losses, resulting in losses to its shareholders.
Recently, a shareholder of the National Mineral Development Corporation (NMDC) served a legal notice to the Chairperson of the Public Enterprises Selection Board (PESB) seeking review of the shortlisting of Satyendra Rai by the PESB.
It claimed that Satyender Rai has been shortlisted for the post of Director (Production), which has been questioned in the legal notice and claimed to be violative of guidelines regarding Board Level Appointments for Public Sector Enterprises as well as internal guidelines.