Indian Oil: Delhi HC upholds preference given to CA in Director (Finance) appointment

New Delhi: The legal case that delayed the appointment of Director (Finance) at Indian Oil Corporation (IOC) finally came to a close as the Delhi High Court (HC) dismissed the petition filed by an IOC official challenging the appointment process. In an order dated August 24 accessed by PSU Watch, the Delhi HC upheld the preference given to Chartered Accountants (CA) over Cost Accountants for appointment to the post of Director (Finance) at Indian Oil and dismissed the petition filed by Ruchir Agarwal, a Chief General Manager (CGM) at IOC.

“On bare perusal of the aforesaid paragraph, it becomes clear that there exists a distinction between the role and responsibility of Chartered Accountants and Cost Accountants… Therefore, it is established that the Chartered Accountants are treated differently than Cost Accountants in some statutes and there can be no embargo upon the authorities to treat them differently,” the Delhi HC said in the judgment. The ruling clears the way for the appointment of Anuj Jain as Director (Finance) at Indian Oil.

Chartered Accountants better suited for role of Director (Finance): HC

The court said categorically that owing to the nature of their work, Chartered Accountants are better suited for the job of Director (Finance). “The job of Director (Finance) pertains to the financial management of the business, where both accounts and finances, inventory, income tax, audit assurance etc need to be supervised by them. For the same, Chartered Accountants are best-suited persons as the work of Cost Accountants only entails supervision of the expenses by the company. The role of the Cost Accountants is also limited to oversee expense reports and analyse data regarding the purchases made by the company. If we compare the nature of the job, it is clear that the Chartered Accountants are better placed to perform the said job as the work is not only limited to the supervision of expenses but also requires management of audits, budgets and providing financial advice. Therefore, the Chartered Accountants can be termed as better qualified for the said job in the respondent Organisation,” the court observed in the judgment.

“Thus, it is crystal clear from the above discussion that the Cost Accountants and the Chartered Accountants cannot be similarly placed for the appointment to the post of Director (finance) in the respondent Organisation and treating them differently does not amount to discrimination and violation of fundamental rights as enshrined in the Constitution of India,” the Delhi HC said.

“Therefore, on the establishment that no prejudice was caused to the petitioner by preferring Chartered Accountants over the Cost Accountants, and the classification as created for the post of Director being well within the bounds of the respondent Body, this Court is inclined to answer the issue in favour of the respondents and against the petitioners,” said the court.

Delhi HC: PSUs need to appoint better-qualified candidates for ops

While dismissing Agarwal’s petition against the preference given to CA candidates over Cost Accountants in the appointment of Director (Finance) at Indian Oil, the court said, “Therefore, in light of the foregoing discussion and the settled principle of law, this Court does not find any compelling reasons to get into the decision made by the expert committee as it is assumed that the experts looked into all the aspects relating to the selection process and then decided to prefer the Chartered Accountants over Cost Accountants and this subissue is also answered in favour of the respondents.”

“The CPSEs are entrusted to work efficiently and generate profits for the government. For the same, the respondent Body needs to appoint better-qualified candidates to run and oversee the operations of the said entities. Therefore, in view of the above said discussion on facts as well as law, this Court does not find any cogent reasons for granting relief to the petitioner. Accordingly, the instant petition is devoid of merits and is dismissed,” said the court.

Agarwal applied for the position of Director (Finance) but was not shortlisted for the interview because he was a Cost Accountant. He then contested the rejection of his candidature for the interview round, arguing that he met the qualification criteria and challenged the ‘qualification’ clause added in the Job Description for the post of Director (Finance) in CPSEs whereby preference has been given to Chartered Accountants over Cost Accountants. The applicant had sought a direction from the court to appear in the interview for Indian Oil’s Director (Finance) post and was allowed to do so. But the public sector head-hunter body, Public Enterprises Selection Board (PESB) picked Jain for the coveted position at Indian Oil.

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