Dismissed

Sanjeev Kumar and 6 Others v. State of U.P. and 5 Others

Allahabad HC19 Apr 2019WRIA/2258/2019

Case brief

AI extract

What is this about?

Technician Grade-II employees of the U.P. Power Corporation challenged an office memorandum fixing ten years' service experience for promotion to Junior Engineer. Holding that the 1972 Regulations and Section 79(c) of the Electricity (Supply) Act, 1948 stood superseded once UPSEB became a company, the court found no ground to interfere and dismissed the writ petition.

What the court decided

AI extract

Sanjeev Kumar and 6 Others Vs State of U.P. and 5… — Service and Employment | Allahabad HC (2019)

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AFR RESERVED

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Writ-A No. 2258 of 2019

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Sanjeev Kumar and others Vs. State of U.P. and others ******

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Hon'ble Rohit Ranjan Agarwal,J.

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1 . Heard Sri R.K.Ojha, learned Senior Counsel assisted by Sri Shivendu Ojha for the petitioner, learned standing counsel for respondent no.1, Sri G.K.Singh, learned Senior Counsel assisted by Sri Abhishek Srivastava for respondent nos.2 to 6, Sri H.N.Singh, learned Senior Counsel assisted by Sri Arvind Kumar Tiwari for newly impleaded respondent nos.7 to 10 and Sri Ashok Khare, learned Senior Counsel assisted by Sri Shantanu Khare counsel for newly impleaded respondents nos.11 and 12.

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2. Present writ petition has been filed with the following prayer:

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“(a) A writ order or direction in the nature of certiorari quashing the impugned order dated 3.10.2018 (Annexure 23 to the writ petition) passed by the Respondent no.6 with approval of the Board of Directors, so far as, it relates to fixing 10 years of service experience of Technician Grade-II for promotion to the post of Junior Engineer, as well as, second seniority list published by the Respondent no.4 containing letter no.120A-7/Mu.A.(Ha.)/2019 dated 24.1.2019 (Annexure-11) to the writ petition.

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(b) A writ order or direction in the nature of mandamus commanding the Respondents to promote the petitioner son the post of Junior Engineer by ignoring condition of 10 years of service experience as Technician Grade-II on the basis of merits as provided.

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(c) A writ order or direction in the nature of mandamus commanding the respondents to redraw seniority list in accordance with law.”

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Petitioners, who are seven in number are the employees of U.P. Power Corporation Limited (hereinafter called as the “UPPCL”) and working as Technician Grade-II. They were appointed in the year 2013 pursuant to an advertisement so issued by respondent Corporation in the year 2011. It was in the year 2018 that a tentative

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seniority list was published and objections were invited upto 3.1.2019. Petitioners raised two fold objection, firstly, claiming that their seniority should be fixed from the year 2011 and not from 2013 as held by Apex Court in the case of Pawan Pratap Singh and others vs. Reevan Singh and others, 2011(3)SCC 267 and further they claimed that those employees who are appointed by direct recruitment should be put before the promotees.

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According to them, seniority of petitioner no.1 was fixed at Sl.no.4214, petitioner no.2 at Sl.no.4181, petitioner no.3 at Sl. no.4980, petitioner no.4 at Sl.no.4278, petitioner no.5 at Sl.no.5413, petitioner no.6 at Sl.no.4364 and petitioner no.7 at Sl.no.5177.

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Grievance of the petitioners is that employees who were promoted from Class IV to Technician Grade-II were placed from Sl.No.3229, whereas the batch of petitioners started from 4046.

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Petitioners further claimed that now from the post of Technician Grade-II promotion is being made to the post of Junior Engineer (Electrical), which according to them is governed by Regulations known as Uttar Pradesh State Electricity Subordinate Electrical and Mechanical Engineering Service Regulations, 1972 framed by U.P. State Electricity Board (UPSEB) in exercise of powers under Section 79(c) of the Electricity (Supply) Act, 1948. Further, Rule 5 of 1972 Regulations specifies the source of recruitment to ordinary grade, as direct recruitment, as also by promotion in accordance with procedure given in Regulations 17 and 18. According to them Regulation 17 stipulates promotion to ordinary grade from amongst the operating staff who had put three years or more continuous service. It was on 6.11.2008 that an office order was issued with the approval of the Board of Directors under which Regulation 17 stood substituted by providing for promotion to the post of Junior Engineer.

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Further, on 4.11.2011 another office order was issued by respondents modifying the earlier order. The promotion was to be made from amongst the operating staff on the basis of seniority list and interview with marks being allotted on the basis of academic/technical qualification, experience and interview. It was 118^th meeting of the Board of Directors of UPPCL held on 8.9.2015 that a resolution was passed modifying the earlier procedure for promotion from Technician Grade-II to Junior Engineer. Resolution No.118 (43) provided for the same. By said resolution entire mechanism for promotion from Technician Grade-II to Junior Engineer was provided. Copy of the minutes of the meeting is at page 976, 977 and 978 of the paper book. Pursuant to the decision of the Board, the respondent Power Corporation on 8.10.2015 issued an office order. Thereafter on 5.9.2017, U.P.P.C.L. published a detailed procedure in respect to direct recruitment to the post of Technician Grade-II, as well as for promotion of Technician Grade-II to Junior Engineer. Pursuant to such office order respondent no.6, i.e., Electricity Service Commission (Commission) issued an advertisement No.04/ESC/2017/JE–Department, which notified for 677 post of Junior Engineer Electrical/Mechanical and 258 posts of Junior Engineer (Electrical and Mechanical) to be filled up by way of promotion from Technician Grade-II under 40% quota and 8.33 % quota respectively.

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This advertisement was challenged by means of writ petition No.47128 of 2017. On 10.10.2017, this Court granted interim mandamus directing that till next date of listing no promotion be made in pursuance of the advertisement. One of the grounds of challenge in the said writ petition was in regard to the 10 years service experience fixed for promotion from Technician Grade–II to Junior Engineer, and also condition of written examination. Thereafter on 3.10.2018 an office order was issued by the U.P.P.C.L. in pursuance to the meeting of the Board of Directors

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held on 25.9.2018, exercising power under Section 179 and in view of Articles of Association 47, 38, it was resolved, and selection procedure for the post of Junior Engineer from Technician Grade-II was modified and selection procedure was to contain 100% marks consisting of 30 marks for High School, 35 marks for ITI/Higher Technical Education and 35 marks for experience. It was further provided that for promotion only those candidates will be considered who had completed 10 years of service. It was on 3.8.2018 that a withdrawal application was moved in the writ petition so filed and the said writ petition was dismissed as withdrawn.

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According to the petitioners, resolution of Board dated 25.9.2018 and office order dated 3.10.2018 have modified the earlier provision whereby the written examination has been deleted but barrier of 10 years experience continues.

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Apprehension of the petitioners are, that respondents will redraw the eligibility list and call persons who have completed 10 years service of Technician Grade-II and the petitioners will be deprived of their chance.

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Sri R.K.Ojha, learned senior counsel submitted that 1972 regulations have been framed in exercise of powers under Section 79 (C) of the Electricity Supply Act, 1948 and the said Regulations can only be amended by exercising power so given under Section 79(c) of the 1948 Act. He further laid emphasis that U.P. Electricity Reforms Transfer Scheme, 2000 was framed under Sections 23(1) & 23(2) of the Reforms Act where under Clause 6(10) further clarifies that subject to the provisions of Reforms Act and Scheme, transferee (i.e.UPPCL) shall frame Regulations governing condition and service and till such Regulations are framed the existing service condition of the Board shall apply on UPPCL. Further, the Resolution passed by the Board of Directors modifying the earlier procedure is in teeth of the provisions of 1948 Act as well as the

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Reforms Act and the conditions so laid down was beyond the competence of the respondents. He further placed reliance upon the decision of the Supreme Court in the case of SRD Nutrients Private Ltd. Vs. Commissioner of Central Excise, Guwahati, 2017(AIR)SC 5299 , in the case of M.C.Mehta vs. Union of India and others, 2018 Legal Eagle 454 and Division Bench of this Court in the case of Daya Shanker Singh vs. State of U.P. and others, 2008(3)ADJ 23 .

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He further submitted that quality point marks as provided by the office order dated 3.10.2018 in regard to experience was just to oust the petitioners’ candidature and the Board does not have any power to pass such resolution. Sri Ojha invited attention of this Court to 1972 Regulations of UPSEB and specially to Regulation 17 on page 938 of the paper book which provided for appointment to ordinary grade by promotion, which laid down the criteria. He next invited the attention of the Court to 2008 office order, by which Regulation 17 of the 1972 Regulations regarding the promotion to the post of Junior Engineers were modified and the conditions so laid down. In 2008 Regulations 10 quality point marks were now being awarded for interview. Thereafter in 2011 the said procedure was again modified. He further invited attention of the Court to the minutes of the meeting of the Board held on 8.9.2015 and at page 977 of the paper book at paragraph 4 it was resolved by the Board that as there was difficulty in preparing common seniority list, as such in case of promotion from Technician Grade-II to Junior Engineer all the candidates has to appear for written examination. Sri Ojha thereafter submitted that this provision for written examination was done away by the Board meeting held on 25.9.2018 and office order dated 3.10.2018 whereby the written examination was substituted by quality point marks on the basis of experience and for promotion to Junior Enginees’r 10 years service as Technician Grade-II was made compulsory, meaning thereby that

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the Level Playing Field was done away by the respondent Corporation which lagged competence in view of the statutory provisions of the Electricity Act 1948 and the Regulations of 1972.

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Sri G.K.Singh, learned senior counsel appearing for the respondent Corporation submitted at the very outset that arguments of counsel for the petitioners does not have legs to stand as the controversy in regard to competence of Board of Directors of the UPPCL and Resolution so passed by it and also the question regarding Section 23(1) and(7), 52 and 54 of the Reforms Act, 1999 read with clause 6(10) of Transfer Scheme 2000 and the procedure prescribed under Section 79(c) of the 1948 Act, has already been dealt with, and decided by Division Bench of this Court in the case of Rajeev Kumar Jauhari and others vs. State of U.P. and others, 2006 (10)ADJ 729, which was affirmed by the Apex Court in Civil Appeal No. 2663 of 2007 decided on 25.8.2011. Sri Singh further submitted that as UPSEB was made a Government Company in the year 1999, the procedure of Companies Act is applicable and the respondent Corporation had rightly passed the Board Resolution modifying the service condition which was in conformity with the Article of Association of the said Company. He further placed reliance upon the judgment of the Apex Court in the case of K.Jagdeesan vs. Union of India and others, 1990 (2) SCC 228 and submitted that the petitioner could not claim any right to be promoted and he has a right to be considered for promotion. He further placed before the Court a decision of this Court passed in Writ-A No.26353 of 2018 whereby the office memorandum dated 3.10.2018, which is under challenge in the present petition was also challenged and the same was dismissed.

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Sri Ashok Khare, learned Senior Advocate also appearing for the newly impleaded respondent submitted that the petitioners could not plead malafide against a statute and further they will have a

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chance when they complete the conditions so enumerated.

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Sri H.N.Singh, learned Senior Advocate appearing from the newly impleaded respondents submitted that the earlier resolution of the Board passed in the year 2015 was never challenged and the same became final. He further submitted that the advertisement of the year 2017 so challenged was withdrawn and as such the same became final. He further submitted that the Board Resolution has never been challenged and it is only the consequential order pursuant to the Board Resolution issued by the Corporation is under challenge. He has relied upon the decision of the Apex Court in the case of P. Suseela and others vs. University Grants Commission and others, 2015 (8) SCC 129.

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With the consent of the counsel for the parties, this matter is being decided at the admission stage without calling for the reply.

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17 The question for consideration before this Court is as to whether the office memorandum dated 3.10.2018 issued pursuant to the Board Resolution dated 25.9.2018 can be challenged on the ground that it was passed against the provisions of Section 23(1) and (7), 52 and 54 of the Reforms Act 1999 read with clause 6(10) of Transfer Scheme 2000 and procedure prescribed under Regulation 79(c) of 1948 Act, which could continue, and promotion can only be made pursuant to the Regulation so framed in the year, 1972.

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It is not in dispute that until 1989 the power generation, distribution and transmission was in the hands of UPSEB. It was in the year 1980 that a Company was incorporated in the name of U.P. Rajya Vidyut Utpadan Nigam Ltd. and in 1985 another Company, U.P. Jal Vidyut Nigam Ltd. was incorporated. In 1999 the State Legislature enacted U.P. Electricity Reforms Act, 1999, under which a Company, namely, U.P. Power Corporation Ltd. (UPPCL) was

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incorporated under the Companies Act, 1956. It was a legal successor of UPSEB. The State Government, exercising power under Section 23(1) and (2) of 1999 Reforms Act published U.P. Electricity Reforms Transfer Scheme ,2000. As the employees of UPSEB became the employees of UPPCL and other Companies so incorporated, such as U.P. Rajya Vidyut Utpadan Nigam Ltd. and U.P. Jal Vidyut Nigam Ltd.

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A similar controversy arose in regard to the employees of U.P. Rajya Vidut Utpadan Nigam Ltd, regarding the procedure for making Rules and Regulations governing recruitment and conditions of Service for employees of the Corporation, and in particular to U.P. Rajya Vidyut Utpadan Nigam Ltd. The employees of UPRVUNL challenged the Regulations of 2006 so framed before this Court in the case of Rajeev Kumar Jauhari (supra). The Division Bench of this Court dealt in depth the entire Regulations and service condition so framed and this Court held as under:

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“14. Coming to the question No. 1, the submissions of Sri Khare, Senior Advocate, appearing on behalf of the petitioner is that in view of Section 23(1) and (7), 52 and 54 of Reforms Act, 1999 read with Clause 6(10) of Transfer Scheme, 2000, the procedure prescribed under Section 79(c) of 1948 Act would continue to apply and UPRVUNL can frame Regulations only in accordance with the procedure prescribed under Section 79(c) of 1948 Act and not otherwise. He contended that there is no other procedure provided under the Reforms Act, 1999 or the Transfer Scheme or anywhere else and, therefore, the procedure prescribed under the 1948 Act would continue to apply with the only change that in place of UPSEB, it would be read as UPRVUNL. In our view, the aforesaid submission ignores the specific provision contained under Section 23(7) of the Reforms Act, 1999 and apparently a misreading of all the above provisions of the Reforms Act, 1999. However, before deliberating on Section 23 in depth, it would be prudent to consider the effect of Reforms Act, 1999 on the provisions of the Electricity Act, 1910 (in short '1910 Act') and 1948 Act. Section 54 of the Reforms Act provides the effect of enactment and enforcement of Reforms Act, 1999 and reads as under:

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(1) Except as provided in Section 55, the provisions of this Act, notwithstanding that the same are inconsistent with or contrary to the provisions of the Indian Electricity Act, 1910 or the Electricity (Supply) Act, 1948 shall prevail in the manner and to the extent provide in Sub-section (3).

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(2) Subject to Sub-section (1), all matter in the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948, with which the

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Board has been concerned or dealing with, shall be subject to the following:

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(a) the Board shall cease to undertake the functions which are to be discharged by the Commission in terms of the provisions of this Act, or any rules or regulations made under the Act:

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(b) upon the issue of notifications in terms of Section 23 of this Act, the Board shall cease to undertake such of the functions of the Board as are assigned under the notification to the companies or body corporate or persons or authority.

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(3) Subject to Sub-sections (1) and (2), upon the establishment of the Commission, the provisions of the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 shall, in so far as this State is concerned, be read subject to the modifications, and reservations provided in this Act including the following:

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(i) All references to the State Electricity Board in the Indian Electricity Act, 1910 in so far as this State is concerned shall be read as reference to the Commission or companies or body corporate or person or authority as provided in this Act or any rules or regulations framed under this Act and wherever it relates to general policy matters the State Government.

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(ii) The provisions of Sections 3 to 11, 28, 36(2), 49A, 50, 51 and 52 of the Indian Electricity Act, 1910, to the extent this Act has made specific provisions, shall not apply in the State.

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(iii) The provisions of all other sections of the Indian Electricity Act, 1910 shall apply except that:

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(a) the terms "licence", or "licensee" shall have the meaning as defined in this Act and the licences issued under the said Act of 1948 shall be construed as having been issued under this Act;

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(b) the reference to the sections of the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 in the provisions of the Electricity (Supply) Act, 1948 shall be taken as reference to the corresponding provisions of this Act to the extent modified by this Act.

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(c) the reference to arbitration in this Act. except where it is by the Central Electricity Authority, shall be taken as reference to the proceedings under Section 34 of this Act and the arbitration procedure prescribed under the Indian Electricity Act, 1910 shall not apply;

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(iv) The schedule to the Indian Electricity Act, 1910 shall be applicable only with reference to the provisions of this Act wherein the applications of the Schedule are specified and not otherwise.

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(v) All reference to the State Electricity Board in the Electricity (Supply) Act, 1948, in so far as this Slate is concerned shall be read as references to the Commission or companies or body corporate or person or authority as provided in this Act or any rules or regulations framed under this Act and wherever it relates to general policy matter, the State Government.

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(vi) In respect of matters provided in Sections 5 to 15, 16, 17, 18, 19, 20, 23 to 26, 27, 37, 40 to 43, 44, 45 to 54, 56 to 69, 72, 75 and 76 to 83 of the Electricity (Supply) Act, 1948, to the extent this Act has made specific provisions, the provisions of the Electricity (Supply)

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Act, 1948 shall not apply in the State.

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(vii) The provisions of all other sections of the Electricity (Supply) Act, 1948 shall apply except that:

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(a) the terms ''licence", or "licensee" shall have the meaning as defined under this Act and the licences issued under the said Act of 1948 shall be construed as having been issued under this Act;

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(b) the reference to the sections of the Indian Electricity Act, 1910 and Electricity (Supply) Act, 1948 in the provisions of the Electricity (Supply) Act, 1948 shall be taken as reference to the corresponding provisions of this Act to the extent modified by this Act;

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(c) the reference to arbitration in these provisions except where it is by the Central Electricity Authority shall be taken as reference to the proceedings under Section 34 of this Act and the arbitration procedure prescribed under the Electricity (Supply) Act, 1948, shall not apply.

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(viii) The provisions of Section 72 and 73 of the Electricity (Supply) Act, 1948 shall be restricted to generating companies and references to the State Electricity Board in these sections shall stand omitted.

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(ix) The Schedules to the Electricity (Supply) Act, 1948 shall be applicable only with reference to the provisions of this Act wherein the application of the Schedules are specified and not otherwise.

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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

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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

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by Section 23(7) of the Reforms Act, 1999 read with Clause 6(10) of the Transfer Scheme, 2000.

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Thus from the reading of paragraph nos.14 and 15 of the aforesaid judgment, it is clear that Section 79(c) of 1948 Act stood superseded and the transferee in the said case which was UPRVUVNL had power to make its Regulations under Article of Association or under the Companies Act in respect of its employees whether transferred or subsequently recruited and for the said purpose Section 79(c) of 1948 Act had no application and stood superseded by Section 23(7) of the Reforms Act, 1999 read with clause 6(10) of the Transfer Scheme 2000. This judgment was upheld by the Apex Court in Civil Appeal No.2663 of 2007 on 25.8.2011.

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Thus, the argument of petitioners regarding the competence of Board Resolution dated 25.9.2018 and thereafter issuance of office memorandum dated 3.10.2018 has no legs to stand. Further, the Division Bench in case of Rajeev Kumar Jauhari (supra) went on to consider the question regarding framing of Regulation.

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The Court held that as employees of UPSEB stood transferred to new Nigam which was registered as a Company and is governed by Article of Association and the Nigam so incorporated was not a statutory body but a Company registered under the Companies Act, thus the Nigam was empowered to determine the condition of service of service of it employees, and the manner in which such provisions can be made would be governed by Article of Association of such Company, and when the Company itself is not statutory, to accept such Company to frame statutory regulations for governing its employees is wholly untenable. Relevant paragraph is extracted as under:-

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“Sri Khare lastly sought to argue that Section 23(7) of the Reforms Act, 1999 read with Clause 3 (10) of the Transfer Scheme, 2000 use the

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word 'Regulation' and therefore, UPRVUNL can only change the condition of service by framing statutory Regulations and not the Regulations, which are non statutory In our view, this submission is to be noted for rejection only. UPRVUNL is not a statutory body, but a Company registered under the Companies Act. It is not disputed that the employment and contract of the petitioners which was earlier with a statutory autonomous body, namely, UPSEB, stood transferred to UPRVUNL and now it is UPRVUNL, who is empowered to determine the conditions of service of its employees. The manner in which such provision can be made would be governed by the Article of Association of such Company and when the Company itself is not statutory, to expect such company to frame statutory Regulations for governing its employees is wholly untenable. The effect of transfer of service from statutory body to a non statutory bod), namely, a company registered under the Company Act, would deprive the statutory protection available to the employees and now the matter would be governed by ordinary law of contract. Normally, the transfer of contract involves the consent of the employees also, but in the present case, the petitioner's contract has been transferred to UPRVUNL by statute itself and, therefore, the employees have no role and their consent is not required. The only rider on the power of transferee employer is that the service condition whenever changed would not be less beneficial and will not deprive past benefits accrued to the transferred employees before transfer, that is, to the extent provided under Section 23(7) of the Reforms Act, 1999. The protection under Section 23(7) neither continue the status of the transferred employee with the new companies as statutory nor otherwise has any other role except to prevent employer from exercising its ordinary powers available in Common Law, which would be contrary to the protection given under Section 23(7) of the Reforms Act, 1999. For all other purposes, the transferee company is free to formulate its policies and enter into contract or lay down terms and conditions of its employees in the manner, it find best suited for the efficient functioning of the company. Merely for the reason that the State Government is 100% share holder of the company does not identify the company itself with the State Government. In Shrikant v. Vasant Rao , the Court held in para 24 that in the matter of a company where the entire share capital is held by the State Government, yet it cannot be identified with the State Government and is always entitled to act and proceed in a manner a company function. This principle was recognized as long back as in 1970 also by a Constitution Bench in R.C. Cooper v. Union of India , and at page 584, the Apex Court held- "A company registered under the Companies Act is a legal person, separate and distinct from its individual members. Property of the Company is not the property of the shareholders. A shareholder has merely an interest in the Company arising under its Article of Association measured by a sum of money for the purpose of liability, and by a share in the profit. "

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Thus it is clear that the Regulation framed in the year 1972 and further the Reforms Act of 2000 will have no effect as far as the service conditions of the employees are concerned, which are being framed and modified by the Resolution of the Board of Directors of the respondent Company which is a 100% Government Company.

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Moreover, the petitioners were appointed in the year 2013 when UPSEB was already converted into a Company and was registered under the Companies Act, as such no benefit can be extended to the petitioners, nor they can claim any benefit of the Regulation of 1972 or the transitory provisions of 2000 as they had been appointed subsequently.

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In the case of Rajeev Kumar Jauhari (supra) the employees were originally employees of UPSEB and subsequently became the employees of UPRVUNL, and there the Court refused to grant them benefit so claimed, and held that Article of Association of the Company provided the power for determining the service condition of its employees.

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Reliance placed by Sri Ojha on the decision in the case of S.R.D. Nutrients Pvt. Ltd. (supra) is in regard to challenge of notification issued by the Excise Department wherein findings recorded in paragraph 22 was relied upon, which reads as under:

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“We are in agreement with the aforesaid reasons accorded by the Rajasthan High Court, since it is in consonance with the legal principle enunciated by this Court. For this purpose, we may refer to the judgment in the case of Collector of Central Excise, Patna v. Tata Engineering and Locomotive Co.10 In 10 1997 (92) ELT 303 (SC) that case, issue pertained to valuation of cess which was levied @ 1/8 per cent of ad valorem ‘value’ of the central excise duty. The Court held that the calculation of 1/8 per cent ad valorem of the motor vehicle for the purposes of the levy and collection of the automobile cess must be made that was being calculated since automobile cess was to be levied and calculated as if it was excise duty. As a fortiorari, the Education Cess and Higher Education Cess levied @ 2% of the excise duty would partake the character of excise duty itself.

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Insofar as judgment of Calcutta High Court in Biswanath Hosiery Mills Ltd. case is concerned, we find that the same would have no bearing in the present case. In the said case, cess was payable under Section 5A of the Textiles Committee Act, 1963. After going through the provisions of Textiles Committee Act, 1963 and the Textile’s Committee (Cess) Rules, 1975, the High Court found that as per the scheme of Textiles Committee Act and the rules framed therein, levy of cess was independent of excise under the Act which was a complete code containing all the provisions relating to levy, collection, exemption and application of cess. Therefore, even the legislative intendment underlying Textiles Committee (Amendment) Act and rules read with the preamble, aims and objects of the Act was clearly discernable, namely, the legislature intended to levy

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the cess under the Act independent of and in addition to the excise duty which was payable under the Central Excise and Salt Act, 1944.”

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Further, reliance placed by Sri Ojha in the judgment of Sri M.C.Mehta (supra), relying upon paragraph nos.12 and 13, which reads as under:

¶87

“ 12. It was put to the learned Attorney General to point out the public order situation which necessitated the amendment to the Rules and curtailing the period of 90 days for filing objections by the public to 3 days. Apart from submitting that there were riots in Delhi, nothing further was stated and not a single instance of any riot in any part of Delhi was pointed out to us nor any FIR placed before us. We were also not told of any exigency that could affect the interest of the public which necessitated curtailing the period of 90 days for filing objections by the public to only 3 days.

¶88

On the other hand, the overwhelming number of objections and suggestions given over a limited period indicates the concern of the public in Delhi which is vitally interested in the proposed amendments. Therefore, realising the importance of given an adequate opportunity to the public to raise objections which would have a vital impact on the Master Plan for Delhi, the future of Delhi and the future generations in Delhi, the order dated 6^th March, 2018 was modified, thereby requiring the Central Government to provide 15 days time to the public for giving its objections and suggestions as against 90 days time to the public for giving its objections and suggestions as against 90 days time to the public for giving its objection was rightly raised to this by the learned Attorney General on 15^th May, 2018 considering the concern and interest of the public in Delhi and the future generations. It is under these circumstances, that the order dated 15^th May, 2018 was passed.”

¶89

Both the cases so relied upon in relation to the amendment of Rules has no bearing in the present case as the challenge in the present case is in regard to the office memorandum issued pursuant to the Board Resolution whereas the judgment relied upon are in regard to the amendment of Rules.

¶90

The argument of counsel for petitioner cannot be accepted as the Regulations of 1972 ceased t o apply in regard to the service condition of the employees of respondent Corporation, after UPSEB became a Government Company and UPPCL came into existence after being incorporated as a Company under the Companies Act, as held in the case of Rajeev Kumar Jauhari (supra).

¶91

¶92

This Court in the case of Jagesh Kumar vs. State of U.P. and others, Writ-A No.26535 of 2018, decided on 17.1.2019, also upheld the office memorandum dated 3.10.2018, which was under challenge. In the said case, this Court held as under:

¶93

“The employer, after considering requirement of job of Junior Engineer has laid down the selection criteria by fixing the marks against various heads. This Court is not supposed to decipher the discretion of the authority and requirement of job in fixing the criteria.

¶94

I do not find any illegality or arbitrariness in fixing the criteria or giving 35 marks for high technical qualification. Merely, since the petitioner does not possess high technical qualification, the marks fixed for the same cannot be said to be arbitrary. I do not consider that there is any ground to interfere in this petition.

¶95

This, writ petition is, therefore, dismissed being devoid of merit and substance.”

¶96

Further, the argument of Sri G.K.Singh, counsel for the respondent Corporation that the petitioner has a right to be considered for promotion but they cannot claim any right to be promoted is fortified by the decision of Apex Court in the case of K. Jagdeeshan (supra) in which it was held as under:

¶97

“4. The main argument of learned counsel for the appellant is that the Tribunal was in error in holding that the rule affected merely a chance of promotion which the appellant had. It was submitted by him that although the appellant could not claim any right to be promoted, he certainly had the right to be considered for promotion and the amendment to the rule carried out by the said Notification depriving of that right was bad in law.

¶98

Strong reliance was placed by the learned counsel for the appellant on the decision of this Court in T.R. Kapur and Others v. State of Haryana and Others where it was held that right to be considered for promotion is a condition of service. This decision is, however, of no assistance to the learned counsel in support of his argument because the Bench which rendered the said decision has stated (at paragraph 16, page 595 of the said report) as follows: (SCC p.595,para 16)

¶99

"It is well settled that the power to frame. rules to regulate the conditions of service under the proviso to Article 309 of the Constitution carries with it the power to amend or alter the rules with a retrospective effect. It is equally well settled that any rule which affects the right of a person to be considered for promotion is a condition of service although mere chance of promotion may not be."

¶100

It was further held that: (SCC p.595, para 16)

¶101

¶102

"an authority competent to lay down qualifications for promotion, is also competent to change the qualifications. The rules defining qualifications and suitability for promotion are conditions of service and they can be changed retrospectively"

¶103

It was, however, clarified that: (SCC p.595, para 16)

¶104

"unless it is specifically provided in the rules, the employees who are already promoted before the amendment of the rules, cannot be reverted and their promotions cannot be recalled."

¶105

Considering the rival submission so made it is clear that the respondent Corporation, which came into existence as a Company has the power to define service conditions of its employees exercising power under Article of Association and can pass requisite Board Resolutions. The said Board Resolutions passed by the respondent Corporation is not under challenge and it is only the consequential office memorandum issued on 3.10.2018, which is under challenge.

¶106

It was also in the year, 2011, thereafter in 2015 that Board Resolutions were passed by respondent Corporation and service conditions were modified which was never challenged. It is undisputed that a Company registered under the provisions of the Companies Act is a legal person having separate and distinct identity apart from its members.

¶107

As far as the Regulations of 1972 and the provisions of Section 79(c) of the 1948 Act are concerned, the same having been held not applicable and stands superseded after the incorporation of the respondent as a Company as held by this Court in the case of Rajeev Kumar Jauhari (supra).

¶108

Thus, I find no ground for interference in the impugned orders.

¶109

The writ petition is dismissed. No order as to cost.

¶110

Order Date :- 19.4.2019 AKJ

Sanjeev Kumar and 6 Others v. State of U.P. and 5 Others

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Sanjeev Kumar and 6 Others v. State of U.P. and 5 Others

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