Granting Shifting Permissions is a Quasi-Judicial Act: Delhi High Court Quashes Disciplinary Charges Against MCA Official

Delhi High Court affirms CAT’s decision to quash charges against Raj Singh, emphasizing his adherence to statutory procedures and the judicial nature of his actions.

The Delhi High Court has affirmed the Central Administrative Tribunal’s decision to quash disciplinary proceedings against Dr. Raj Singh, the Regional Director (Southern Region) of the Ministry of Corporate Affairs. The court ruled that the charges of misconduct for allowing the shifting of registered offices of certain companies without due diligence were baseless, highlighting that Singh was exercising quasi-judicial functions.

Dr. Raj Singh, formerly the Regional Director (Northern Region), Ministry of Corporate Affairs, was accused of permitting the shifting of registered offices for five companies within the Carnoustie Group, allegedly without exercising due diligence. These companies were under inspection for financial irregularities linked to M/s Unitech Limited. Despite this, Singh allowed the shifts based on reports from Registrars of Companies (RoC) Delhi and Kanpur, which indicated no pending inspections or complaints. The disciplinary charges were brought against Singh after a confidential report prepared under the direction of an officiating Director General, Mr. Manmohan Juneja, who had previously given a clean chit to other companies within the Carnoustie Group.

The High Court upheld the Tribunal’s view that Dr. Singh’s actions were quasi-judicial. It noted that decisions regarding the shifting of registered offices involved detailed procedures under Rule 30 of the Companies (Incorporation) Rules, 2014, requiring consideration of creditor and public objections, and compliance with statutory requirements. Hence, Singh’s decisions were judicial in nature and could not be grounds for disciplinary action without evidence of extraneous influence or corruption.

The court observed that Singh had relied on reports from RoC Delhi and RoC Kanpur, which stated no pending investigations against the companies. Additionally, the electronic processing system (MCA21) showed no alerts regarding any ongoing inspections, justifying Singh’s decisions based on available data.

The court found merit in Singh’s claim of vindictiveness, observing that the charges were initiated just before a Departmental Promotion Committee (DPC) meeting, possibly to prevent his promotion. The charges stemmed from a confidential report by Juneja, who had reasons for bias against Singh due to prior conflicts and Singh’s findings against the companies Juneja had cleared.

The judgment emphasized, “The orders passed by the respondent, having been passed after following the detailed procedure laid down under Rule 30, were in exercise of his quasi-judicial function. There is no allegation of financial impropriety or undue favor against the respondent.”

The Delhi High Court’s decision underscores the protection granted to officials performing quasi-judicial duties, shielding them from disciplinary actions unless misconduct or corruption is evident. This ruling reinforces the judiciary’s role in safeguarding fair administrative processes and protecting officers from vindictive actions. Dr. Raj Singh’s exoneration sets a precedent for similar cases, emphasizing the importance of objective, evidence-based disciplinary proceedings.

Date of Decision: 15 May 2024