Economy

CEO should sink or sail with crew, says Delhi High Court

N.S.Vageesh Mumbai | Updated on November 14, 2017

Please pay attention, dear CEOs, MDs, Presidents, Prime Ministers, Chief Ministers, leaders et al. You are morally responsible for the doings of your subordinates and colleagues.

And especially where such doings pertain to court cases or involve contempt proceedings. Claiming privilege on the grounds that you are too busy or that you head a large organisation and cannot be expected to know the minute details of each and every case is not a valid defence. You can't say that you didn't know.

That is, if one goes by the judgment delivered two days ago by Mr Justice P.K. Bhasin of the Delhi High Court in the case of Koshika Telecom Vs IFCI, Atul Kumar Rai, Shalini Soni & R.K.Bansal (CCP (CO) No.30/2010).

In his judgment, the judge has sentenced the three respondents (including Mr Atul Kumar Rai, Managing Director of IFCI) to one month's simple imprisonment. He further imposed a fine of Rs 5 lakh on IFCI to be recovered from Mr Atul Kumar Rai, MD and Ms Shalini Soni, AGM-Law of IFCI.

Contempt proceedings

The case involved contempt proceedings against the four respondents for not heeding the court's directions to release the money in IFCI's possession (following auction of Koshika Telecom's assets) to the official liquidator of Koshika Telecom. Instead of approaching the court for relief or challenging it in the Supreme Court, the IFCI chose to go to a subordinate authority, the Recovery Officer of the Debt Recovery Tribunal (Mr R.K. Bansal) and got him to pass an order in defiance of the court's orders. IFCI got the recovery officer's approval to appropriate part of the sale proceeds of the auctioned assets towards partial discharge of its liability — in direct conflict with the Court's direction.

The judge came down heavily on the appeal made by Mr Atul Rai to let him off on the grounds that as MD he could not be expected to oversee every case and that the court had held him guilty only because he was MD of IFCI and that he did not personally disobey any order of the court.

The Judge criticised the tenor of submissions made on behalf of Mr Rai which showed that he wanted the court to let him off while everyone else under him could be hanged.

In rather colourful language, the Judge said, “In my view, he has missed the bus and it is now too late in the day for him to be praying for exoneration and that too for himself only and leaving his senior law manager and co-contemnor Ms Shalini Soni to sail alone in the sea which has now turned rough. Being the captain of the ship he should not have even made such an attempt to jump out of the ship alone and reach the shore in a single-seater boat meant only for him by filing this review application. He must sail or sink with his co-crew member.”

Published on March 21, 2012

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