Centre’s stand on top PSU posts challenged

NEW DELHI, AUG 15: The Centre's stand before the Delhi High Court that appointments to the top executive posts of public sector undertaki...

NEW DELHI, AUG 15: The Centre’s stand before the Delhi High Court that appointments to the top executive posts of public sector undertakings (PSUs) could be made through deputation by ministries concerned with the approval of the Cabinet Secretary has been challenged in a petition.

"Any dilution of standards for selection to such high posts in PSUs will not be in national interest and affect their administration," a rejoinder by the petitioner challenging appointments of top executives without recommendation of Public Enterprises Selection Board’s (PESB), said.

The rejoinder, filed recently by the petitioner advocate B L Wadhera, came in the wake of a direction by the court in its March 23 order to the government seeking details on under which conditions the appointments were made through the PSEB and what were the circumstances for these being affected without the board’s approval.

The petitioner had earlier challenged the appointments of managing directors (MDs) of ten PSUs, including the AirportAuthority of India, National Thermal Power Corporation, Steel Authority of India, National Cooperative Marketing Development Federation of India, National Scheduled Castes and Tribes Finance and Development Corporation, without PSEB’s recommendation during 1995-96.

The other PSUs cited are National Minorities Finance and Development Corporation, National Physical Handicapped Finance and Development Corporation and National Safai Karamchari Finance and Development Corporation.

The petition said top executive posts of the PSUs were very important for effective and productive management as over Rs 160 thousand crore of the nation’s investment was involved in 246 corporations, which was a major part of the economy.

"The management of such a massive investment has to be in the hands of highly competent professionals to ensure best results in the face of stiff competition these public sector giants are facing now," it said.

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The government in its reply had said that as per resolution of March 3, 1987, inspecial cases, recuritment to the high posts could be made from the organised services in public sector enterprises especially when it became difficult to attract good professional managers on tenure basis for the sick’ enterprises.

The petitioner, however, challenged the government’s contention on the ground that paragraph 2 of the notification, which laid down the objective of the PSEB, had spelt out clear guidelines in this regard saying appointment to the posts of chairman, managing director or chairman-cum-managing director (level-II) in PSUs would be done by the board.

He said the government was taking advantage of deletion of some clauses of an earlier notification in the 1987 order and had created two categories of posts — level-I and level-II.

In the case of level-I, appointments were being made through PSEB while in the case of level-II, the appointments were direct which did not augur well for the health of the PSUs, the petition said.