The Punjab and Haryana HC ruled that the board chairman of the sugar mill had no statutory power to unilaterally set aside the managing director’s speaking orders.
The Punjab and Haryana High Court has ruled that a whistleblower who flags alleged irregularities cannot become a party in an employer-employee dispute. Justice Harpreet Singh Brar, in a January 19 order, dismissed an impleadment plea filed by the original complainant and quashed an order passed by the chairman of a cooperative sugar mill in Haryana against certain officers.
The case arose from the proceedings at the Shahbad Cooperative Sugar Mill Limited in Haryana, where Satbir Singh and other officers were accused of financial irregularities and procedural lapses in procurement tenders.
The managing director passed detailed orders on October 1 and 8, 2024, exonerating them after examining their replies and records. Two inquiry reports submitted by the Chief Vigilance Officer on August 12 and September 18, 2025, also found no misconduct.
However, on May 21, 2025, Vineet Kumar, the chairman of the Board of Directors of Shahbad Cooperative Sugar Mill, referred the allegations to the Chief Secretary for a fresh probe. Challenging this order, the officers approached the High Court under Articles 226 and 227 of the Constitution.
Separately, Vineet Kumar, who had lodged the original complaint on October 25, 2024, sought to be impleaded as a respondent under Order 1 Rule 10 of the Civil Procedure Code. He argued that the outcome of the writ petitions would affect disciplinary proceedings initiated against him, particularly a charge relating to one of the tenders.
The petitioners opposed the move, contending that the complainant’s role was limited to bringing allegations to the notice of the authorities and that he had no direct stake in the employer-employee dispute. They also argued that the chairman lacked authority to override the managing director’s orders and that the decision was taken without supplying relevant material or granting them a hearing.
Justice Brar first addressed the issue of locus standi. Citing judgments, including Ravi Yashwant Bhoir vs The Collector, District Raigad and R.K. Jain v. Union of India, the court held that service matters are personal in nature and can be challenged only by a person directly aggrieved.
“The whistleblower or complainant, despite having exposed irregularities, remains a stranger to the employer-employee lis and cannot be permitted to become a party,” the court observed, dismissing the impleadment application.
On merits, the court found that under Rule 31(3) of the Haryana Cooperative Societies Act, 1984, the managing director is the principal executive officer and the competent disciplinary authority. The chairman had no statutory power to unilaterally set aside the managing director’s speaking orders.
The order was passed without hearing the petitioners, without supplying them with the material relied upon, and without recording reasons for disagreeing with the earlier findings. Referring to Punjab National Bank v. Kunj Behari Mishra and Raj Kishore Jha v. State of Bihar, the court stressed that reasons are essential and that a person cannot be condemned unheard.
Describing the chairman’s decision as arbitrary and perverse, the court allowed all three writ petitions, quashed the May 21, 2025 order and related proceedings, and directed restoration of the position as it stood before the impugned order. No costs were awarded.
Curated by Shiv Shakti Mishra
