NEW DELHI: This could well be Team Anna's response to finance ministry's notice to Arvind Kejriwal asking him to refund salary for two years for alleged breach of service bond signed in lieu of study leave.

A public interest litigation filed through advocate Prashant Bhushan, a key Team Anna member, in the Supreme Court on Friday sought removal of Industrial Finance Corporation of India (IFCI) CEO and MD Atul Rai, who was a senior finance ministry official, alleging the appointment to be illegal. As an interim measure, it sought stay on Rai's functioning as IFCI head.

The petition by Centre for Public Interest Litigation (CPIL) claimed that Rai as a finance ministry official ensured release of thousands of crores of rupees to IFCI, resigned from his government job and then became its CEO and MD.

A bench of Justices Aftab Alam and R M Lodha issued notices to the Centre, finance ministry, CBI, IFCI and Rai, a 1985 batch IES officer who worked in the department of financial services (DFS), ministry of finance, and also as director and simultaneously as nominee director in the IFCI.

In the last eight years, the Union government released Rs 2,409 crore as grant-in-aid (out of a total bailout package of Rs 5,220 crore announced by the Centre) and Rs 400 crore as loan to IFCI, which was created under Industrial Finance Corporation Act to cater to medium and long-term finance needs of the industrial sector, the petitioner said.

When Rai found that IFCI started generating profits as a consequence of this infusion of funds and government nominee in IFCI R M Malla was sent to SIDBI, he applied for voluntary retirement on February 5, 2007.

"At the same time, by using his influence in government and on the board of IFCI, he ensured that no advertisement was issued for the post of whole-time director. On April 30, 2007, ministry of finance relieved Rai, who on the same date submitted a note seeking permission for taking up appointment as whole-time director in IFCI," the petitioner alleged.

But he did not disclose to the government that the IFCI board, on March 7, 2007, which is nearly 45 days before he was relieved, had resolved to offer him the post of whole-time director, CPIL said.

The petitioner said Rai also violated the Pension Rules by not taking government permission to take up post-retirement commercial employment with an organisation with which he had official dealings during his service.

"Immediately after assuming charge as CEO and MD, Rai introduced a scheme of performance linked incentive for officers of IFCI in August 2007 and in this way rewarded himself, along with his associates, with hefty amounts of incentive even though IFCI was carrying huge non-performing assets and accumulated losses at the time of introduction of the scheme," the petitioner alleged.