Document Fragment View

Matching Fragments

1. Whether U.P. Rajya Vidyut Utpadan Nigam Limited Absorption Regulations, 2006 (hereinafter referred to as Regulations. 2006) framed by the U.P. Rajya Vidyut Utpadan Nigam is illegal, arbitrary and ultra vires is the question raised in the writ petition.

2. The facts are not in dispute, but, to appreciate the controversy, may be narrated in brief, as under:

In the State of Uttar Pradesh, generation, distribution and transmission of electrical energy upto 1989 was solely in the hands of the U.P. State Electricity Board (in short 'UPSEB'), a statutory body constituted under Section 5 of the Electricity Supply Act, 1948 (in short '1948 Act'). With the expansion of the generation units, a government company, namely, U.P. Rajya Vidyut Utpadan Nigam Limited (in short 'UPRVUNL') was incorporated under the Companies Act, 1956 in the year 1980. It is wholly owned by the State Government of Uttar Pradesh. Similarly, in 1985, another company, U.P. Jal Vidyut Nigam Limited (in short 'UPJVNL') was incorporated which was also wholly owned by the State Government of U.P. A major power reform was brought into force in the year 1999 by the legislature enacting U.P. Electricity Reforms Act, 1999 (in short "Reforms Act, 1999") which was assented to by the President of India on 23.6.1999 and published in U.P. Gazette (Extraordinary) on 7.7.1999. Section 13 of Reforms Act. 1999 provides for formation of a company namely U.P. Power Corporation Ltd. (in short 'UPPCL') registered under the Companies Act. 1956, which is required to undertake planning and co-ordination in regard to transmission, to determine the electricity requirement in the State in consultation with the generation companies etc. and be a legal successor of UPSEB in relation to all power purchase and transmission agreements. Section 23(1) of Reforms Act, 1999 provides that on and from the date specified in the Transfer Scheme prepared by the State Government to give effect to the objectives of the Act, all properties, interest, right and liabilities of the Board shall be vested in the State Government and. thereafter, shall re-vest in the UPPCL and generating companies in accordance with the Transfer Scheme so specified, on such terms and conditions as may be determined, by the State Government Sub-section 7 of Section 23 relates to the transfer of the employees of UPSEB to UPPCL and other generating companies on notification of Transfer Scheme and reads as under:
1. The absorption of the employees of erstwhile UPSEB having attained finality under the Transfer Scheme 2000, the same cannot be reopened in the garb of the Regulations, 2006.
2. A reading of Section 23(1) and (7), 52 and 54 of Reforms Act, 1999 read with Clause 6(6) and (10) of the Transfer Scheme 2000 makes it clear that the Regulations framed by the erstwhile UPSEB governing the conditions of service of their employees would continue to apply even after transfer and absorption in the three corporations unless altered by the Regulations framed by the Transferee. It is thus permissible only in exercise of power under Section 79(c) of the 1948 Act. However since Regulations, 2006 have not been framed in accordance with procedure prescribed under Section 79(c) of the 1948 Act, therefore, not a validly framed Regulation as permitted under Clause 6(10) of the Transfer Scheme 2000 and is ultra vires of the said provision.

16. For our purpose, since the argument has been advanced with reference to Section 79(c), which empowers the UPSEB to frame Regulations regarding conditions of services of its employees by publication in the official gazette, we proceed to consider only the question of continuity of the said provision in respect to power of UPRVUNL for framing provisions regarding conditions of service and recruitment of its staff under the Reforms Act, 1999 and the Rules and Regulations or the Transfer Scheme framed/issued thereunder. Section 54(3)(VI) of the Reforms Act, 1999 specifically provides that Section 79 of 1948 Act to the extent specific provision has been made under the Reforms Act,1999 shall not apply in the State. We have to see whether any specific provision in respect to the procedure or power of the Company or Body or licensee to whom the distribution or generation of electricity is transferred under the Reforms Act regarding terms and conditions of services of its employees has been made in the Reforms Act, 1999. Section 23(7) empowers the State Government to provide for transfer of personnel to corporation or company and specifically says that on such transfer, the personnel shall hold office or service under the Power Corporation or a company subsidiary to it or the generating company, as the case may be, on terms and conditions, that may be determined in accordance with the Transfer Scheme, 2000 subject however to certain conditions, namely, (a) the terms and conditions of personnel shall not be less favourable which was applicable to them immediately before the transfer, (b) they shall have continuity of service, (c) all benefits of service accrued before the Transfer shall be fully recognized and taken into account for all purposes including payment of any or all terminal benefits. Therefore, the transfer scheme may contain a provision empowering the transferee to determine the terms and conditions of its employees. Clause 6(10) of the Transfer Scheme 2000 empower the transferee to frame its regulations governing the conditions of service of personnel transferred under the scheme and till such time, the existing service conditions of UPSEB shall continue to apply as such. Therefore, a plain reading of Section 23(7) read with Clause 6(10) of the Transfer Scheme, 2000 makes it clear that a provision has been made under the Reforms Act, 1999 empowering the State Government and then to empower the transferee to frame rules/regulations determining terms and conditions of service of its employees. Further Clause 6(10) of the Transfer Scheme specifically empowers the transferee to frame its Regulations. Section 15 of 1948 Act empowers UPSEB to appoint such employees as may be required to enable to carry out its functions and also to delegate, by Regulations, such powers to its Chairman and other Subordinate Officers. Section 79 of the 1948 Act empowers the Board to make Regulations by notification in the official gazette on various matters and Clause (c) thereunder provides the duties of officers and other employees and their salaries, allowances and other conditions of service. It is not disputed between the parties that in exercise of power under Section 79(c) of the Act, UPSEB from time to time framed various Regulations governing conditions of service of its employees. The said terms and conditions have been permitted to continue by virtue of Section 23(7) of the Reforms Act, 1999 till provision is made by the transferee. The State Government has made a provision regarding determination of terms and conditions of the employees in the Transfer Scheme empowering the transferee to make provision and the only restriction is that such provision if made by transferee would not be less favourable to the terms and conditions already applicable to the employees before the transfer and shall protect and recognize fully the continuity of service in all respect and accrued benefits before transfer. There is no other restriction in respect to power of the transferee to make provision determining terms and conditions of service by virtue of Clause 6(10) of Transfer Scheme, 2000. The State Government in the Transfer Scheme, 2000, thus, has clearly empowered the transferee, as a matter of fact, to make Regulations regarding conditions of services of the personnel transferred. In respect to future employment of the person, who are not transferred, the Transfer Scheme specifically does not contain any provision obviously for the reason that Section 23(7) of Reforms Act, 1999 has been enacted with the objective to protect the interest of the existing employees of UPSEB who were to be transferred in respect to terms and conditions and benefits, they were enjoying, before transfer, but there appears no intention of the legislature to restrict the normal power of transferee to frame and make provisions regarding terms and conditions of its employees, which it may recruit or appoint in future after or before finalization of the transfer of the existing employees. In respect to all the employees, therefore, there is a provision under Section 23(7) with respect to determination of terms and conditions which may be provided in the Transfer Scheme and, therefore, in our view reading Section 54 Sub-section 3(VI) of the Reforms Act, 1999 with Section 23(7), a specific provision has been made regarding determination of terms and conditions of the transferred employees under the Act. Therefore, Section 79(c) of the 1948 Act, in our view, shall also stand superseded by the aforesaid provision. We, thus, are of the considered view that the transferee is empowered to make its Regulations in the manner provided in Common Law that is under Article of Association or under the Companies Act in respect to all its employees whether transferred or subsequently recruited and for the said purpose, Section 79(c) of the 1948 Act has no application and it stands superseded by Section 23(7) of the Reforms Act, 1999 read with Clause 6(10) of the Transfer Scheme, 2000.

31. The aforesaid provision has been made by UPRVUNL in the compelling circumstances on account of huge deficiency of working hands and non availability of experienced technical staff. The UPRVUN1. after due diligence, found that the experienced staff from other energy sectors may be lured for appointment in UPRVUNL, if certain advantages are to be retained for them. It is also worthy to notice that the advantages, which UPRVUNL intends to confer upon such prospective applicants, is not something, which they did not posses at all. If the benefit in the matter of seniority is sought to be conferred to a person, who has no past service to his credit, such benefit may prima facie be unreasonable. But it is not disputed that the persons working in other energy sectors in the State of U.P., namely, UPPCL or UPJVNL are those, who were working in UPSEB at the time when the petitioners were also working and they were enjoying higher seniority over these petitioners. Therefore, the effect, if any, of implementation of the rules in question would be that if some engineering officers working in UPPCL or UPJVNL, who are already absorbed thereat finally, seeks their appointment by absorption now in UPRVUNL, they would join the later establishment with the benefit of past service and at the best, it would result in restoring their seniority qua petitioners as in UPSEB. No new benefit is sought to be conferred upon them. In the entirety of the facts and circumstances, we do not find in any manner, the provisions under question, unreasonable, irrational or arbitrary. It is always open to the employer to provide weightage to past service and experience of a person in the interest of its institution and to bring more & more efficiency in administration. Therefore, the rules under question are neither illegal nor arbitrary nor violative of Article 14 and 16 of the Constitution.