Sharma Vs. Chair. Upseb  Insc 139 (24 February 2005)
Hegde, B.N. Srikrishna & P.K. Balasubramanyan
Nos. 23, 26, 29, 31-34 & 36 IN O R D E R By an order made on 13th January, 1998, a High Powered Committee came to
be appointed to carry out investigations into five areas, as indicated in the
order. The High Powered Committee was initially headed by Shri S. Venkatnarayanan
(IAS) Retd., Former Chairman, National Power Finance Corporation, who was
substituted later on by Shri P.K. Kaul, former Cabinet Secretary of the
Government of India. The High Powered Committee (hereinafter referred to as the
"Kaul Committee"), with the expert advice and assistance of M/s
Central Power Research Institute, Bangalore and Indian Institute of Management,
Lucknow, made an indepth investigation into the areas of reference and produced
a Report in two volumes.
the issues on which the Kaul Committee had adversely commented is that
transfers and postings of officers and staff are not made in the State
Electricity Board in a transparent and accountable manner.
guidelines for transfer policy of officers of the State Government (see at Page
495 Volume IA of the Paper Book), are supposed to be the transfer policy of
such officers of the Board also, they have been observed in breach. The State
Government has power under the Electricity Act to issue directives in the
nature of policy directives, but with Board's Chairman and top Executive heads
packed by political boses, the State Government appears to be exercising
unbridled power of interference in the day to day working of the Electricity
Board. This interference in transfers and postings with political patronage has
totally destroyed the autonomous nature of the Electricity Board, which has been
identified as a serious malaise affecting the functioning of the Electricity
original Electricity Board has now been split into U.P. Power Corporation
Limited (for distribution and Transmission), with five subsidiary distribution
companies, namely, Kanpur Electric Supply Company Limited (KESCO), Purvanchal Vidyut
Vitaran Nigam Limited, Varanasi, Madyanchal Vidyut Vitaran Nigam Limited, Lucknow,
Paschimanchal Vidyut Vitaran Nigam Limited, Meerut and Dakshinanchal Vidyut Vitaran
Nigam Limited, Agra. Thermal generation is entrusted to U.P. Rajya Vidyut Utpadan
Nigam Limited and Hydro generation to U.P. Jal Vidyut Nigam Limited. All these
companies are Government companies, though under the provisions of the
Electricity Act, yet independent bodies subject only to the directives of the
State Government only on matters of general policy.
there has been large scale interference with the autonomous functioning of the
Electricity Board (now transformed into eight autonomous Corporations), is
evident from the highly critical report made by Kaul Committee, whose findings
are as under:
The State Electricity Board is functioning as an extension of the State
Government of UP and individual UP politicians have long regarded the UPSEB as
a social service agency, not a commercial enterprise.
Although the UPSEB is, on paper, an independent entity, its management serves
at the pleasure of Government of UP and changes frequently.
GOUP officially imposes noncommercial constraints on UPSEB pricing and
While individual politicians interfere unofficially in personnel, operations,
collections, procurement and more.
Employee morale and productivity are low due to lack of accountability and
Corruption is generally accepted to be serious at all levels." (See: Kaul
Committee Report Volume 1 Page 70) Learned amicus curiae took us to the several
paragraphs of the Kaul Committee's Report which highlighted the deplorable
state of affairs found by it.
we queried the learned counsel appearing for the State of U.P. and the learned
counsel representing the electricity Corporations as to under what authority
there was governmental interference with the day to day affairs of the
Corporations in the matters like transfers and postings of officers and staff,
neither of them was in a position to contest the situation that no minister or
Government officer had any role to play in the transfers/postings of officers
and staff of such Corporations.
amicus curiae suggested that as the transfer season is round the corner, it is
necessary to pre-empt another round of transfers/postings in the manner and for
the reasons as highlighted by the Kaul Committee report.
submitted that one way to ensure transparency in the matter of
postings/transfers of officers of these Corporations would be to appoint an
independent monitoring committee consisting of persons with impeccable
reputation and proven administrative ability, which would look into each and every
case of posting/transfer and ensure that they are totally free from political
have heard the learned counsel for the State of U.P. and the Corporations. We are satisfied that the suggestion
made by the amicus curiae has merit and needs to be accepted. That there is
imperative necessity to act urgently, is born out by the facts. Considering
that the transfers are likely to be made in a couple of months, we think that
urgent steps are needed to be taken. We, therefore, direct as follows:
Minister of the State of U.P., nor any Government officer shall
interfere with the transfers/postings of the officers in any of the
Corporations named above.
postings/transfers of the officers/staff of the aforesaid Corporations shall be
monitored by an independent committee consisting of the following persons:
S. Venkatnarayanan, (IAS) Retd. Former Chairman, National Power Finance
Corporation, as Chairman;
member of the U.P.S.C. to be nominated by the Chairman of the U.P.S.C.;
A nominee of the Chairman of the Central Electricity Authority.;
nominee of the Comptroller and Auditor General; and
nominee of the Central Vigilance Commission.
proposals for transfers/postings of officers and staff of the aforesaid
Corporation should, before finalization, be placed before the independent
committee which shall examine and approve the transfers/postings on merits and
in the light of the guidelines for transfer policy of officers. (see at Page
495 of Volume IA of the Paper Book).
transfer/posting which is disapproved by the said Committee shall be made by
the Board of Directors of any of the aforesaid eight Corporations.
Committee shall make a report to this Court containing its observations with
regard to the transfers/postings of officers and staff, if any, made for the
year 2005, after all such cases have been considered and decisions thereupon
Chairman, Union Public Service Commission, the Chairman, Central Electric
Authority, the Comptroller and Auditor General and the Central Vigilance
Commission shall appoint one nominee each to be a member of the Independent
Committee referred to in paragraph 2 of this order. The said nominations shall
be made within a period of 3 weeks of receipt of a copy of this order.
Chairman of the said independent Committee shall be entitled to remuneration of
Rs. 3,000/- per sitting, while each of the members shall be entitled to
remuneration of Rs. 2,500/- per sitting. The remuneration payable to the
Chairman and the members of the said Committee as well as the expenditure
incurred by the Committee in the discharge of its functions shall be payable in
equal proportion by the abovesaid eight Corporations and the State of U.P.. The U.P. Power Corporation Limited shall, in the
first instance, defray the expenses of the said Committee and pay the
remuneration fixed per sitting and shall be entitled to recover the
proportionate shares from the other Corporations as well as the State of U.P.
Registrar General is directed to forthwith forward a copy of this order to Shri
S. Venkatnarayanan, (IAS) Retd. Former Chairman, National Power Finance
Corporation, the Chairman, U.P.S.C., the Comptroller and Auditor General and to
Central Vigilance Commission, for information and immediate action.