Jagran Prakashan Limited & Anr v. Union of India

RAJIV SAHAI ENDLAW, J. NOVEMBER 17, 2015 "pp"..

(corrected and released on 9th December, 2015).

*IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 17th November, 2015 + JAGRAN PRAKASHAN LIMITED & ANR ..... Petitioners Through: Mr. P.V. Kapur, Sr. Adv. with Mr. Jaideep Bhambani and Mr. Sidhant Kapur, Advs. Versus UNION OF INDIA ..... Respondent Through: Mr. Manish Mohan, CGSC with Ms. Sidhi Arora, Mr. Shivam Chanana and Ms. Pooja Mishra, Advs. CORAM:- HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW 1. The petition impugns the order dated 29th September, 2015 of the respondent Ministry of Corporate Affairs, Government of India of rejection of the application of the petitioner no.1 Company under Section 314(1B) of the Companies Act, 1956 (the 1956 Act) seeking approval of appointment of the petitioner no.2 Shri Tarun Gupta, a relative of the Director of the petitioner no.1 Company, as an Executive President (Commercial) of the petitioner no.1 Company at an annual remuneration of Rs.77,41,539/- for a period of five years with effect from 1st October, 2013 with annual increment of Rs.50,000/- per month. 2. The petitioners had earlier filed W.P.(C) No.7873/2014 impugning the earlier rejection dated 5th August, 2014 of the said application and which writ petition, finding that the order dated 5th August, 2014 had been passed without hearing the petitioners, was allowed vide order dated 12th March, 2015 with a direction to the respondent to decide the application afresh after taking into account submissions made by the petitioners and giving them an opportunity to present their case in a personal hearing. 3. Accordingly, the impugned order is a detailed one, giving reasons therein. 4. In the circumstance, though the petition has come up before this Court for the first time today but it has been enquired from the counsel for the respondent appearing on advance notice as to what purpose issuing formal notice of the petition and calling for a counter affidavit would serve in as much as the stand of the respondent is clear from the impugned order itself. 5. The counsel for the respondent has fairly agreed that the respondent has nothing further to show besides what is stated in the impugned order. 6. The senior counsel for the petitioners and the counsel for the respondent have thus been finally heard on the petition. 7. It is not in dispute that the petitioner no.2 was first appointed to an executive position or an office or place of profit in the petitioner no.1 Company w.e.f. 1st December, 2004 and being even then a relative of a Director, after obtaining permission from the respondent and which permission was again granted in the year 2009 for his re-appointment. The senior counsel for the petitioners informs that even for payment of enhanced remuneration to the petitioner no.2, permission was obtained and granted in the year 2008. The renewal permission granted in the year 2009 was valid till 2013. 8. The petitioner no.1 Company being desirous of re-appointing the petitioner no.2, the application for the period of five years w.e.f. 1st October, 2013 was filed. 9. The respondent, by the impugned order has held:- A. that in view of the coming into force of Section 188(1)(f) of the Companies Act, 2013 (the 2013 Act) w.e.f. 1st April, 2014, no approval for the period w.e.f. 1st April, 2014 onwards is required, subject to the appointment complying with certain prescribed conditions and which aspect has not been gone into in the impugned order; thus the subject application was concerned only for the period of 1st October, 2013 to 31st March, 2014; B. that Director"s Relatives (Office or Place of Profit) Rules, 2003 earlier in force were replaced by Director"s Relatives (Office or Place of Profit) Rules, 2011 and the approval for the period from 1st October, 2013 to 31st March, 2014 was considered under the 2011 Rules; C. the Ministry, in such cases, had been following the principle that the individual appointee in case he happens to be a relative of a Director of the Company from which the remuneration is proposed to be drawn, has t