North
Delhi Power Ltd. Vs. Govt. of N.C.T. & Ors. [2010] INSC 337 (3 May 2010)
Judgment
"REPORTABLE"
IN THE
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No. 4269 OF
2006 North Delhi Power Limited .... Appellant Versus Govt. of National Capital
Territory of Delhi & Ors. .... Respondents WITH CIVIL APPEAL No. 4270 OF
2006 BSES Rajdhani Power Limited & Anr. .... Appellants Versus Govt. of
National Capital Territory of Delhi & Ors. .... Respondents
V.S.
SIRPURKAR, J
1. This
judgment shall dispose of the two appeals being CA No. 4269 of 2006 and CA No.
4270 of 2006. Civil Appeal No.4269/2006 has been filed on behalf of North Delhi
Power Limited and Civil Appeal No.4270 of 2 2006 has been filed by BSES
Rajdhani Limited. Since a common question falls for consideration in both the
appeals, the same are disposed of by this common judgment. The question can be
framed as under:
"Whether
the appellants are responsible for meeting the liabilities relating to
employees who ceased to be the employees of erstwhile Delhi Electric Supply
Undertaking (Predecessor of Delhi Vidhyut Board - DVB) prior to 1.7.2002 on
account of their retirement, removal, dismissal or compulsory retirement in
accordance with the provisions of Delhi Electric Reforms Act, 2000?"
By the
impugned judgment dated 30.3.2006 passed by the Delhi High Court, the High
Court has held that the appellants alone would be responsible to meet such
liabilities.
2. In
order to understand the nature of controversy and the ramifications thereof,
some facts common to both these appeals would be necessary.
Common
Facts:
3. The
Legislative Assembly of the National Capital Territory of Delhi passed the Act
on 23.11.2000 being Delhi Electric Reforms Act, 2000 (hereinafter called the
"Act, 2000"). This Act came into force on 8.3.2001.
The
Preamble of this Act reads as under:
3
"An Act to provide for the constitution of an Electricity Commission,
restructuring of the electricity industry (rationalization of generation,
transmission, distribution and supply of electricity), increasing avenues for
participation of private sector in the electricity industry and generally for
taking measures conducive to the development and management of the electricity
industry in an efficient, commercial, economic and competitive manner in the
National Capital Territory of Delhi and for matter connected therewith or incidental
thereto.
BE it
enacted by the Legislative Assembly of the National Capital Territory of Delhi
in the Fifty-first year of the Republic of India as follows:"
Section 2
pertains to definitions of relevant terms used in the Act and sub-section (1)
contains the definitions clauses. Sub-sections (2) and (3) of Section 2 run as
under:
"(2)
Words and expressions used but not defined in this Act and defined in the
Electricity (Supply) Act, 1948 (Central Act 54 of 1948) have the meanings
respectively assigned to them in that Act.
(3) Words
and expressions used but not defined either in this Act or in the Electricity
(Supply) Act, 1948 (Central Act 54 of 1948) and defined in the Indian
Electricity Act, 1910 (Central Act 9 of 1910) have the meanings respectively
assigned to them in that Act."
Thus the
definitions of relevant terms under Electricity (Supply) Act, 1948 and Electricity Act, 1910 were incorporated in the
Act, 2000. Section 3 of the Act, 2000 provides for establishment of Delhi
Electricity Regulatory Commission. The functions of this Commission are
provided in Section 4
11. Some
of the functions, amongst others, as provided in Section 11 (1) are as under:
"(c)
to regulate power, purchase and procurement process of the licensees and
transmission utilities including the price at which the power shall be procured
from the generating companies, generating stations or from other sources for
transmission, sale, distribution and supply in the National Capital Territory
of Delhi;
(d) to
promote competition, efficiency and economy in the activities of the
electricity industry to achieve the objects and purposes of this Act;
(e) to
aid and advise the government in matters concerning electricity generation,
transmission, distribution and supply in the National Capital Territory of
Delhi;
(h) to
promote competitiveness and make avenues for participation of private sector in
the electricity industry in the National Capital Territory of Delhi and also to
ensure a fair deal to the customers;
(k) to
regulate the assets, properties and interest in properties concerned or related
to the electricity industry in the National Capital Territory of Delhi
including the conditions governing entry into, and exit from the electricity
industry in such manner as to safeguard the public interest;
(l) to
issue licences for transmission, bulk supply, distribution or supply of
electricity and determine the conditions to be included in the licences;"
4. Under
Section 14 of the Act, 2000, the subject of incorporation of companies for the
purposes of generation, transmission or distribution of 5 electricity was dealt
with. Sub-sections (1), (2) and (6) of Section 14, which are relevant for our
purposes provide as under:
"14(1)
The government may, as soon as may be after the commencement of this Act, cause
one or more companies to be incorporated and set up under the provisions of the
Companies Act, 1956 (Central Act 1 of 1956) for the purpose of generation,
transmission or distribution of electricity, including companies engaged in
more than one of the said activities in the National Capital Territory of Delhi
and may transfer the existing generating stations or the transmission system or
distribution system, or any part of the transmission system or distribution
system, to such company or companies.
14(2) The
government may designate any company set up under sub-section (1) to be the
principal company to undertake all planning and coordination in regard to
generation or transmission or both; and such company shall undertake works
connected with generation or transmission and determine the requirements of the
territory in consultation with the other companies engaged in generation or
transmission for the National Capital Territory of Delhi, the Commission, the
Regional Electricity Board and the Central Electricity Authority and any other
authority under any law in force for the time being, or any other government
concerned.
14(6) The
government may convert the companies set up under this Act to joint venture
companies through a process of disinvestment, in accordance with the transfer
scheme prepared under the provisions of this Act."
Section
15 of the Act, 2000 provides for Reorganisation of Delhi Vidyut Board and
transfer of properties, functions and duties thereof. Sub- 6 sections (3), (6),
(7) and (9) of Section 15, which are relevant for purposes provide:
"15(3)
Such of the rights and powers to be exercised by the Board under the
Electricity (Supply) Act, 1948 (Central Act 54 of 1948), as the government may,
by notification in the official gazette, specify, shall be exercisable by a
company or companies established as the case may be, under Section 14, for the
purpose of discharge of the functions and duties with which it is entrusted.
15(6) A
transfer scheme may - (a) provide for the formation of subsidiaries, joint
venture, companies or other schemes of divisions, amalgamation, merger,
reconstruction or arrangements;
(b)
define the property, interest in property, rights and liabilities to be
allocated - (i) by specifying or describing the property, rights and
liabilities in question, (ii) by referring to all the property, interest in
property, rights and liabilities comprised in a specified part of the
transferor's undertaking, or (iii) partly in one way and partly in the other:
Provided
that the property, interest in property, rights and liabilities shall be
subject to such further transfer as the government may specify;
(c)
provide that any rights, or liabilities specified or described in the scheme
shall be enforceable by or against the transferor or the transferee;
(d)
impose on any licensee an obligation to enter into such written agreements
with, or execute such other instruments in favour of any other 7 subsequent
licensee as may be specified in the scheme;
(e) make
such supplemental, incidental and consequential provisions as the transferor
licensee considers appropriate including provision specifying the order in
which any transfer or transaction is to be regarded as taking effect;
(f)
provide that the transfer shall be provisional subject to the provisions of
Section 18.
15(7) All
debts and obligations incurred, all contracts entered into and all matters and
things done by, with or for the Board, or a company or companies established as
the case may be, under Section 14 or generating company or distribution company
or companies before a transfer scheme becomes effective shall, to the extent
specified in the relevant transfer scheme, be deemed to have been incurred,
entered into or done by, with or for the government or the transferee and all
suits or other legal proceedings instituted by or against the Board or
transferor, as the case may be, may be continued or instituted by or against the
government or concerned transferee, as the case may be.
15(9) The
Board shall cease to exist with the transfer of functions and duties specified
and with the transfer of assets as on the effective date."
Section
16 is extremely important which deals with the subject of Personnel. It
provides:
"(1)
The government may by a transfer scheme provide for the transfer of the
personnel from the Board to a company or companies established as the case may
be, under Section 14 and distribution companies (hereinafter referred to as
"transferee company or 8 companies") on the vesting of properties,
rights and liabilities in a company or companies established, as the case may
be, under Section 14 or the distribution companies.
(2) Upon
such transfers the personnel shall hold office in the transferee company on
terms and conditions that may be specified in the transfer scheme subject,
however, to the following, namely:
(a) that
the terms and conditions of the service applicable to them in the transferee
company shall not in any way, be less favourable than or inferior to those
applicable to them immediately before the transfer;
(b) that
the personnel shall have continuity of service in all respects; and (c) that
the benefits of service accrued before the transfer shall be fully recognized
and taken in account for all purposes including the payment of any and all
terminal benefits."
Section
57 of the Act, 2000 which deals with the Power to remove difficulties reads as
under:
"(1)
If any difficulty arises in giving effect to the provisions of this Act or
rules, regulations, schemes or orders made thereunder, the government may, by
order published in the Official Gazette, make such provisions, not inconsistent
with the provisions of this Act as may appear to it to be necessary or
expedient for removing the difficulty:
Provided
that no order shall be made under this section after the expiry of two years
from the date of the commencement of this Act.
9 (2)
Every order made under this section shall be laid, as soon as may be after it
is made before the Legislative Assembly of the National Capital Territory of
Delhi."
5. In
accordance with the above provisions a Transfer Scheme called "Delhi
Electricity Reforms (Transfer Scheme) Rules, 2001" (hereinafter referred
to as "the Scheme, 2001") came into existence. Rule 2 of the Scheme,
2001 deals with the definitions of various terms. Relevant Clauses (b), (c),
(h) and (k) of Rule 2 read as under:
"(b)
"assets" includes all rights, interests and claims of whatever nature
as well as block or blocks of assets of the Delhi Vidyut Board;
(c)
"Board" means the Delhi Vidyut Board constituted under Section 5 of
the Electricity (Supply) Act, 1958 (54 of 1948);
(h)
"DISCOMS" means and includes DISCOM 1, DISCOM 2 and DISCOM 3
collectively.
(k)
"liabilities" include all liabilities, debts, duties, obligations and
other outgoings including contingent liabilities, statutory liabilities and
government levies of whatever nature, which may arise in regard to dealings
before the date of the transfer in respect of the specified undertakings;"
Rule 3 of
the Scheme, 2000 provides for transfer of assets, etc., of the Board to the
Government as defined in Rule 2(c) above. It provides that all the assets,
liabilities and proceedings of the Board shall stand 10 transferred to and vest
in the government absolutely. Sub-Rule (2) of Rule 3 is significant and
provides as under:
"3(2)
Nothing in Sub-rule (1) shall apply to rights, responsibilities and obligations
in respect of the personnel and personnel related mattes, which have been dealt
in the manner provided under Rule 6."
Rule 4 is
connected only to Rule 3(1) and has nothing to do with Rule 3(2) which deals
with the personnel which subject is exclusively dealt with in Rule 6. Sub-rule
(8) of Rule 6 is very significant and runs as under:
"6(8)
Subject to sub-rule (9) below, in respect of all statutory and other schemes
and employment related matters, including the provident fund, gratuity fund,
pension and any superannuation fund or special fund created or existing for the
benefit of the personnel and the existing pensioners, the relevant transferee
shall stand substituted for the Board for all purposes and all the rights,
powers and obligations of the Board in relation to any and all such matters
shall become those of such transferee and the services of the personnel shall
be treated as having been continuous for the purpose of the application of this
sub-rule."
Sub-rule
(9) of Rule 6 provides:
"6(9)
The government shall make appropriate arrangements as provided in the
tripartite agreements in regard to the funding of the terminal benefits to the
extent it is unfunded on the date of the transfer from the Board. Till such
arrangements are made, the payment falling due to the existing pensioners shall
be made by the TRANSCO, subject to appropriate adjustments with other
transferees.
11 For
the purpose of this sub-rule, the term - (a) "existing pensioners"
mean all the persons eligible for the pension as on the date of the transfer
from the Board and shall include family members of the personnel as per the
applicable scheme; and (b) "terminal benefits" mean the gratuity,
pension, dearness and other terminal benefits to the personnel and existing
pensioners."
6. It is
an admitted case that while the government was contemplating unbundling of
Delhi Vidyut Board (hereinafter referred to as "DVB") for handing
over the distribution of electricity to private companies as also for
restructuring the electricity industry and rationalization of generation,
transmission and supply of electricity by increasing the avenues for
participation of private sector in the electricity industry in the National
Capital Territory of Delhi, the erstwhile employees of the DVB displayed their
apprehension and reservations to the effect that on emergence of the private
companies their services may not be protected. Therefore, these employees were
taken into confidence by assuring them that their services will be protected by
entering into Tripartite Agreements which were executed on 28.10.2000 and
9.11.2000 between Government of National Capital Territory of Delhi
("GNCTD"), DVB and Delhi Vidyut Board Joint Action Committee. The
said committee consisted of various Unions as well as Junior Engineer Officer
Association. Under these Tripartite Agreements, the existing pensioners as well
as the employees were 12 protected. All the existing welfare schemes and
benefits to the retired employees were allowed to continue.
7. After
the Act and the scheme came on the anvil, as a first step of privatization, the
Request for Qualification (RFQ) Documents for privatization of electricity
distribution in Delhi was floated on 15.2.2001 giving in detail the status of
the DVB, the manner of the privatization where it was specifically provided
that DVB is being offered to private companies as a going concern on business
valuation method, transferring all the past, present and future liabilities
including that of existing employees as well as the retirees. The details of
the employees as on 1.1.2000 were also provided. Para 11.6 of the RFQ Document
mentions about the fact that apart from existing employees which were 24,634 in
number as on 1.1.2000, there were about 9200 retired employees. The
aforementioned transfer scheme was notified on 21.11.2001. Under the scheme the
distribution companies, generation, transmission and holding companies were
identified. At the time when the bids were put in by the companies who were in
consideration and the negotiations were on, the DISCOMS put in revised bids.
The present appellants which were South-West Delhi Electricity Distribution
Company Ltd. (now known as BSES Rajdhani Power Ltd.), as also North-West Delhi
Distribution Company Ltd. (now known as NDPL) were amongst those who submitted
the revised bids 13 documents. Their demand was that the contingent liability
arising out of any event including any legal proceedings prior to the transfer
should be limited to Rs.1 crore per annum considered individually or
collectively during the first five years. Based on that sub-rule (3) in Rule 8
came to be added in the Scheme, 2001 on 26.6.2002 which is as under:
"Notwithstanding
anything contained in these Rules including the schedules, the liabilities
arising out of litigation, suits, claims, etc., pending on the date of the transfer
and/or arising due to events prior to the date of the transfer shall be borne
by the relevant distribution company, viz., DISCOM 1, DISCOM 2 and DISCOM 3
respectively, subject to a maximum of Rs.1 crore per annum. Any amount above
this shall be to the account of the holding company in the event for any reason
the Commission does not allow the amount to be included in the revenue
requirement of the DISCOM."
Resultantly
from 1.7.2002, the DVB unbundled into six companies, they being DISCOM 1 (BSES
Yamuna Power Ltd.), DISCOM 2 (BSES Rajdhani Power Ltd.)-appellant and DISCOM 3
(North Delhi Power Ltd.)- appellant, Delhi Power Supply Company Ltd. (TRANSCO)
and generation company (GENCO). Another company called "DPCL"
(holding company) was also constituted with aims and objects to hold shares in
the aforementioned DISCOM companies. The said DPCL holds 49% shares in DISCOM
1, 2 and 3 and holds 100% shares in GENCO and TRANSCO.
For all
practical purposes DVB ceased to exist from 1.7.2002.
8. There
are various schedules attached to the Scheme, 2001. The distribution
undertaking its assets, liabilities and proceedings concerning the distribution
areas are specified in Part III of Schedule H. Relevant Schedules are Part I
for DISCOM 1, BSES and Part III for DISCOM 3, NDPL.
9. Rule
12 of the Scheme, 2001 provides that the decision of the Government shall be
final and sub-Rule (1) stipulates that if any doubt, dispute, difference or
issue shall arise in regard to the transfers under these Rules, subject to the provisions
of the Act, the decision of the government thereon, shall be final and binding
on all parties.
10. On
the backdrop of these legal provisions it will now be proper to see the
individual facts in the two appeals.
11. The
Letters Patent Appeal filed by the appellant before the High Court was
dismissed. It so happened, that respondent No.3 herein Shri K. R. Jain, who was
an erstwhile employee of the Delhi Electric Supply Undertaking (DESU),
superannuated from service on 31.07.1996.
Eventually,
Delhi Vidyut Board (DVB) became successor of Delhi Electricity Supply
Undertaking (DESU). NDPL was incorporated on 04.07.2001 and inherited the
distribution undertaking on 01.07.2002 along with the assets, liabilities,
personnel and proceedings in pursuance of 15 statutory transfer scheme notified
by the Government pursuant to Sections 14-16 and 60 of the Delhi Electricity
Reforms Act, 2000. It was much before that, that respondent No. 3 was
superannuated. His pension was paid from the Terminal Benefit Fund, 2002 of
DVB. The DVB had floated Time Bound Terminal Scale Scheme by its Office Order
dated 23.07.1997 and Resolution No. 216 dated 16.07.1997. Claiming that though
he had superannuated on 31.07.96, still he was covered by the scheme,
respondent No.3 filed a Writ Petition No. 2337 of 2004 seeking appropriate
direction against Delhi Government, Delhi Power Co. Ltd. and Delhi Power Supply
Company and claimed benefits arising out of the Scheme.
Significantly
enough, NDPL was not made a party nor was there any claim against it. This Writ
Petition was allowed by the Learned Single Judge, holding that respondent No.3
was entitled to avail the benefits under Time Bound Promotional Scale Scheme
(TBPS) and that DVB had unjustly denied him his dues. Holding the present
appellant as a successor, Mandamus was issued against the appellant who was not
a party and was not given an opportunity of hearing. This was based on the
statement of an advocate appearing for respondent Nos. 1 and 2 herein to the
effect that it was the appellant-petitioner who was the successor and was as
such responsible to implement the judgment dated 23.03.2004.
12. On
23.11.2004 an application was filed for recall/modification of the judgment
before the Learned Single Judge of the Delhi High Court. This application was,
however, allowed holding that:
(a)
respondent No.3 had retired from DVB on 31.07.96 from Ashok Vihar (b) All
liabilities of DVB, other than those specifically transferred in terms of
Schedules `B' to `F' of the Transfer Scheme shall be the liability of the
holding company.
(c) In
terms of the Rule 6 (2) and (8) of the transfer scheme, only such proceedings
were transferred to successor companies as were pending on 01.07.2002. Since no
proceedings were pending qua the entitlements of respondent No.3, hence it was
the holding company and not the present appellant who would be liable to pay
the arrears and other entitlements of respondent No. 3 under the TBPS Scheme.
13.
Respondent No.1 and 2 filed a Letters Patent Appeal against the modified order
of the Learned Single Judge dated 23.11.2004 vide LPA No. 98/2005. This appeal
came to be allowed by the Division Bench of the High Court. The High Court held
that the appellant-petitioner alone was responsible for the payments claimed by
respondent No.3.
14. The
second matter has emanated out of the judgment and order dated 25.05.2006
wherein the Learned Single Judge of the High Court has dismissed the Writ
Petition filed by the appellant-petitioner being Writ Petition No. 5110 of 2005
[BSES Rajdhani Power Ltd. v. Govt. of NCT of 17 Delhi & Another]. By that
Writ Petition, validity and legality of the letter dated 21.01.2004 issued by
the Government of NCT of Delhi was challenged. By this letter, a clarification
was issued by the Government to the effect that vigilance/ disciplinary/ Court
cases in respect of employees of erstwhile DVB, who could not become part of
any of the companies on the date of restructuring due to
retirement/dismissal/removal/compulsory retirement shall be processed and
decided by the successor company like the appellant-petitioner who would have
been the controlling authority of the employees but for their
retirement/removal/dismissal/compulsory retirement as per the Schedule in the
Transfer Scheme. In pursuance of this letter, all the cases were forwarded with
records involving employees who, due to their retirement/suspension/
termination or death were allegedly not transferred to DISCOMS on 01.07.2002.
This was resisted by DISCOMS including the appellant herein on the ground that
such employees who were not transferred to them were in fact liability of the
holding company. Representations were sent against this clarificatory letter
dated 21.01.2004. Such representations were sent even by NDPL.
However,
in K.R. Jain's case, the Division Bench deciding the LPA, took the view that
such employees were the liability of the transferee DISCOMS like NDPL or, as
the case may be, the BSES. Relying on that judgment, the Writ Petition of the
petitioner was dismissed by judgment dated 25.05.2006 by the Learned Single
Judge of the High Court. Since it would 18 have been futile for the appellant
to go to the Division Bench, it has straightaway moved this Court by way of the
present appeal.
15. In
the impugned judgment, the whole history of the legislation was traced by the
Division Bench and after noting Rules 2 (k), (n) and (l), and Rule 3 along with
Rule 12, it was observed that the assets and liabilities as given in Schedule A
to G to different companies did not relate to the liabilities regarding the
personnel vide Rule 3 (2). Rule 6 was noted to be dealing with the
responsibilities of the personnel and a categorical finding was recorded that
the Schedules under Rule 4 were not helpful to determine the liabilities in
respect of the personnel, even if they were retired personnel and pensioners.
Noting Section 16 of the DERA, 2000 and Rule 6 of the DERR, 2001 and, more
particularly, noting Rule 6 (8), the High Court chose not to agree with the
contentions raised before it that the responsibility of the NDPL was only with
respect to those personnel who had been transferred to the NDPL as per the list
mentioned in Appendix E. It located the following categories of the personnel
required to be dealt with:
"16.
There would be the following categories of personnel required to be dealt with:
(a)
existing employees of DVB on the date of transfer scheme who were on roll and
working;
19 (b)
employees under suspension and facing disciplinary/ departmental proceedings at
the time of the transfer scheme.
(c)
employees terminated, dismissed as a consequence of departmental proceedings
and who had initiated litigation/cases, proceedings against DVB and such
proceeding/ litigation was pending at the time of disbanding of DVB.
(d)
retired employees who after retirement filed cases in courts claiming some
benefits or dues, and such cases were pending at the time of the transfer
scheme.
(e)
retired/dismissed employees of DVB who filed court cases after the transfer scheme
and such case got decided in their favour."
There is
no dispute in respect of personnel at (a). However, Mr. Raj Birbal, learned
Senior Counsel for NDPL contends that the responsibility of NDPL is only in
respect of those personnel who have been transferred to NDPL as per the list
mentioned in appendix E. We do not agree with this contention.
16. The
High Court also noted that except for Rule 6 (8), (9) and (11), other
provisions dealt with existing working personnel of DVB at the time of transfer
and that Rule 6 (11) took care of the categories (b) and (c) shown earlier. It
also noted Rule 8 regarding the pending suits and proceedings and refuted the
contention raised on behalf of NDPL that Rule 8 covers litigations only in
respect of cases between DVB and consumers, 20 contractors and third parties
and not those cases which were between DVB and its retired employees. For that
purpose, the High Court noted the phraseology "all proceedings"
appearing in Rule 8 (1). It also refuted the argument that if the liability
created in Rule 8 (3) had been of the employees, it would not have limited the
liability only to DISCOMS to rupees one crore and it would have mentioned
TRANSCO and GENCO also, and held that the limit of rupees one crore in that
provision was fixed at the representation of DISCOMS like the NDPL, only in
their respect.
The High
Court then noted Rule 5(2), clothing the transferee with the responsibility of
all contracts, rights, deeds, schemes, bonds, agreements and other instruments
of whatever nature relating to respective undertaking and assets and
liabilities transferred to it, to which Board was a party, subsisting or having
effect on the date of transfer, in the same manner as the Board was liable
immediately before the date of transfer and the same shall be in force and
effect against or in favour of respective transferee and may be enforced
effectively as if the respective transferee had been a party thereto instead of
the Board. Interpreting it in the light of various judgments of this Court, the
High Court concluded that not only the assets and liabilities were transferred
to the transferee company but the entire past and future litigation were also
transferred to the transferee company and such litigation could have been in
respect of the employees, consumers and other parties. It reiterated that the
scheme of the Rules 21 provided that all corresponding employees were
transferred by way of forming list in respect to employees who were working in
the respective area while all employees who were under suspension or
termination and in respect of whom any kind of proceedings defined in section 2
(n) were pending at that stage, were also specifically made the responsibility
of the transferee company under Rule 6 (11). The High Court again referred to
Rule 5(2) to note the responsibility of the transferee company and also made
reference to Section 15 of the Act.
17.
Lastly, the High Court has relied on the letter dated 21-22.01.2004 which was
issued by the Government for removal of doubt, dispute and difference under its
power under Rule 12 (1) which clearly fixed the responsibility on the DISCOMS.
In that letter, on a reference having been made by the Delhi TRANSCO seeking
clarification from the Government with respect to the competent authority to
deal with vigilance, disciplinary and Court cases in relation to the employees
of the erstwhile DVB who could not become part of any of the companies on
01.07.2002 in terms of the transfer scheme due to
retirement/dismissal/removal/compulsory retirement by the then DVB, the
Government clarified that such cases would be processed and decided by such
company who would have been the controlling authority of the employee but for
their retirement/removal/ dismissal/compulsory retirement etc. as per Schedule
`B', `C', `D', `E' and 22 `F", thereby clearly fixing the responsibility
on the DISCOMS like the present appellant herein.
18. This
judgment was severely criticized by the learned Senior Counsel Shri P.P. Rao as
well as Shri P.S. Patwalia. They firstly attacked the procedural aspect of the
matter. They pointed out that in the initial Writ Petition i.e. WP (C)
2331/2004 by Shri K.R. Jain, the present appellant was not a party and as such
it had no opportunity to put its say. They pointed out that in his judgment
dated 23.03.2004, the Learned Single Judge, even in the absence of the
appellant, came to the erroneous finding that the appellant was the
successor-in-interest of the DVB. They then referred to the two applications
made on behalf of the appellant i.e. one for impleadment and the second for
recalling the order dated 23.03.2004 and pointed out that by its order dated
23.03.2004 the Learned Judge was pleased to recall his earlier order and held
that the order dated 23.03.2004 would stand issued against the Delhi Power
Company Ltd. i.e. the holding company and the appellant would stand relieved of
the Mandamus issued.
They
referred to the Letters Patent Appeal filed by the Government of NCT and the
Delhi Power Company Ltd. (DPCL) which was entertained by the High Court. It is
obvious that in this LPA the appellant was impleaded as a party. The contention
raised is that instead of deciding the whole controversy itself, the Division
Bench should have remanded back the 23 matter to the Single Judge giving the
opportunity to the present appellant to raise all the questions, and in
proceeding straightaway to decide the controversy involved, the Division Bench
has caused injustice to the appellant. The Learned senior counsel pointed out
that this was done in the absence of the pleadings inasmuch as, in the first
instance, no written statement was filed by the three impleaded respondents
while there was no question of filing the written submission on behalf of the
present appellant who was not a party to the said Writ Petition. Again, it is
pointed out that in the recall application, the respondents, namely, the
Government of NCT of Delhi and the DPCL had not filed any reply whatsoever so
also in LPA no opportunity was given to any of the parties to file pleadings
with respect to the claims made against the appellant herein.
19. The
Learned Counsel also relied on Rules I and I-A of the Delhi High Court rules
for issue of various writs which require every application for the issue of a
direction to set forth all facts on which the relief is sought and to file an
affidavit in support thereof. Our attention was also invited to Rule 6 which
requires filing of an answer to rule nisi and Rule 7 which provides for
ordering the rule nisi to be served on any party to be affected by any order
which the Court may make in the matter. It was pointed out that no such
applications were filed by the Government of NCT and DPCL claiming relief
against the appellant and the Division Bench had no jurisdiction to 24
entertain the claim of both for the first time in their Letters Patent Appeal
No.98/2005. They, therefore, demanded remand on that basis.
20. There
can be no dispute that the procedure in this case was slightly unusual. There
was no justification in the order of the Learned Single Judge accepting a
statement to the effect that the appellant herein was the successor-in-interest
of the DVB and then to fix the liability on the same without even hearing the
appellant. That was certainly incorrect in law as well as in practice. However,
once the recall application was made before the learned Single Judge, the
Learned Single Judge recalled its order and proceeded to hold the DPCL
responsible in place of the appellant, thereby exonerating the present
appellant completely. Once a Letters Patent Appeal was filed against the order
of the Learned Single Judge to that effect, it would have been in the fitness
of things for the Division Bench to remand the matter back, perhaps issuing the
direction that a de novo hearing should be done after impleading the NDPL in
their initial pleadings.
But that
was not done. Instead, the Division Bench gave an opportunity to the appellant
herein to file their written submissions. We find these written submissions on
record. Very significantly, however, in the written submissions, the appellant
herein has not insisted on remand on the technical issue of the absence of
pleadings and the loss of opportunity to it. Instead, detailed submissions were
filed predominantly raising the 25 question that the appellant-NDPL was not in
any way liable to pay for the past liability of the retired employees who were
not the employees on the date of transfer. In the said written submission, the
appellant has taken a complete survey of the relevant provisions of DERA and the
Transfer Scheme Rules, 2001 and every effort was made to show from the said
proceedings that the NDPL could not be made liable for the dues, if any, of the
retired employee who was not on the rolls on the date of transfer.
21. We
have seen these submissions very carefully only to find that this question was
not raised. The order of the Division Bench is also silent about any such
procedural question having been raised by the appellant.
Perhaps,
had such question been raised, the Division Bench would have been justified in
remanding the matter to the Learned Single Judge for deciding all the issues
afresh after joining the NDPL as a party to the original petition. The question
not having been raised before the High Court, cannot be considered at this stage
of litigation when much water has flown under the bridge. Considering the
submissions before the Division Bench which are in extenso, it is difficult to
accept the contention that any prejudice was caused to the appellant. On the
other hand, the question of liability seems to have been thrashed very minutely
in the light of the provisions of the DERA, the Transfer Scheme, Rules,
Tripartite Agreements and the other agreements including the bid documents. If
all 26 this is insufficient, we do not find this question to have been raised
in the present appeal also. The contention raised is, therefore, rejected.
22. Shri
Rao and Shri Patwalia then urged that the whole scheme of disinvestment brought
in by the DERA, 2000 was based on the consent of the interested private
parties. The Act had postulated joint venture companies with private investment
and participation to take over the task of entire distribution of electricity.
For that purpose, bids were invited and the terms of the transfer were settled
by mutual consent taking note of the Tripartite Agreements and the bid
agreement and it was then that the scheme was notified in the shape of Rules
under the Act. Under such circumstances, there can be no further amendment to
the scheme involving additional liability which has to be essentially only with
the consent of the partners of the joint venture.
23. We
have absolutely no quarrel with this proposition. However, this could be true
if there was no "additional liability" brought in. For the reasons
which follow, we do not think that in clothing the NDPL with a liability
regarding the personnel who were retired, compulsorily retired or otherwise
dead, dismissed etc. could be termed as "additional lilability." In
fact the reading of the Rules and, more particularly, Rule 6(8) would indicate
that liability was innate and accepted by the DISCOMS.
24.
Reliance was made on Sections 15 (1) and, more particularly, sub- Section (6)
and (7) by Shri Rao. That Section deals with the subject of reorganisation of
DVB and transfer of properties, functions and duties.
Sub-rule
(6) refers to the transfer scheme while sub-section (7) specifically provides
that the obligations incurred by the Board or companies established under
Section 14 or generating company or distribution company before a transfer
scheme becomes effective shall, to the extent specified in the relevant
transfer scheme, be deemed to have been incurred, entered into or done by, with
or for the government or the transferee. Section 16 deals with the provisions
relating to the transfer of personnel. Shri Rao tried to contend that,
therefore, for resolution of the controversy, transfer scheme alone would have
to be considered in the light of the provisions of the Act. He is, no doubt,
correct. However, in order to show that the transfer scheme does not
contemplate such liabilities as are in question, Shri Rao relied on Rule 3(1).
In our opinion, Rule 3(1) has got nothing to do with such liabilities. That
Rule is independent of Rule 3(2) which reads as under:
"Nothing
in sub-rule (1) shall apply to rights, responsibilities and obligations in
respect of the personnel and personnel related matters, which have been dealt
in the manner provided under Rule 6."
25. By
necessary reference, therefore, Rule 4 would also be pushed to the background
as that Rule specifically relates to the assets and liabilities and proceedings
transferred to the Government under sub-Rule (1) of Rule
3.
Therefore, Rule 4 (a) to (g) would have no application whatsoever when it comes
to consideration of the liability in question of personnel and personnel
related matters. For that matter, even Rule 5 would be of no consequence for
such matters as it specifically provides that all the rights, responsibilities
and obligations in respect of personnel and personnel related to matters have
been dealt with in Rule 6 alone. The reliance of the learned counsel on Rules 4
and 5 is, therefore, uncalled for. The only relevant Rule which would have to
be considered for this purpose is Rule 6 which is a complete code by itself in
relation to personnel and personnel related matters. The words used in Rule
3(2), namely, personnel related matters are sufficiently broad to take into
their sweep the matters regarding the retired, dismissed or dead personnel
also. Rule 6(8) which we have already quoted but would repeat again for the
ready reference is as under:
"(8)
Subject to sub-rule (9) below, in respect of all statutory and other schemes
and employment related matters, including the provident fund, gratuity fund,
pension and any superannuation fund or special fund created or existing for the
benefit of the personnel and the existing pensioners, the relevant transferee
shall stand substituted for the Board for all purposes and all the rights,
powers and obligations of the board in 29 relation to any and all such matters
shall become those of such transferee and the services of the personnel shall
be treated as having been continuous for the purpose of the application of this
sub-rule."
26. The
language is extremely clear. It not only specifies the employment related
matters but also clarifies what those matters would be which include pension
and any superannuation fund or special fund created or existing for the benefit
of the personnel and the existing pensioners. The words `existing pensioners'
are extremely important. A plain reading of this Rule would leave no manner of
doubt in respect of the liability having been transferred to transferee company
and the NDPL is certainly the one. The language is broad enough to include all
dismissed, dead, retired and compulsorily retired employees. As if that was not
sufficient, sub-Rule (9) requires the Government to make appropriate
arrangements in terms of the Tripartite Agreements in regard to the fund of
terminal benefits to the extent it is unfunded on the date of transfer from the
Board. Rule 9(a) and (b) are also very significant and are as under:
"9.
The Government shall make appropriate arrangements as provided in the
tri-partite agreements in regard to the funding of the terminal benefits to the
extent it is unfunded on the date of transfer from the Board. Till such
arrangements are made, the payment falling due to the existing pensioners shall
be made by the 30 TRANSCO, subject to appropriate adjustments with other
transferees.
"For
the purpose of this sub-rule, the term- (a) "existing pensioners"
mean all the persons eligible for the pension as on the date of the transfer
from the Board and shall include family members of the personnel as per the
applicable scheme; and (b) "terminal benefits" mean the gratuity,
pension, dearness and other terminal benefits to the personnel and existing
pensioners."
27. A
glance at these sub-rules is sufficient to come to the conclusion that the
liabilities have undoubtedly been transferred to the DISCOMS which include both
NDPL as well as the BSES. A feeble argument was raised that sub-rule (8) does
not contemplate pension or any liability on account of the revised pay-scale or
interpretation of respective scheme of promotion so far as existing pensioners
or the erstwhile DVB are concerned to the DISCOMS. Considering the broad
language of the Rule, we do not think that such contention is possible.
28. Again
relying on Rule 2 (r) it was feebly tried to be suggested that the DISCOMS were
not the only transferees but it was also the holding company, namely, the Delhi
Power Company Ltd (DPCL). The argument is obviously incorrect as no employees
were ever transferred to the DPCL.
All
transferees came only to the DISCOMS like the NDPL under the 31 transfer
scheme. The High Court has correctly interpreted these Rules and has correctly
come to the conclusions that the liabilities would rest with the DISCOMS
including NDPL and BSES.
29. The
learned counsel next contended that the High Court had erred in interpretation
of Rule 8(3) of the transfer scheme. It was urged that if the Rule is construed
widely, it will be arbitrary and affect the foundation of the privatisation
which is mutual agreement. We do not think so. On the other hand, the purpose
of sub-Rule (3) is to cap any liability arising out of litigation, suits,
claims etc. either pending on the date of transfer and/ or arising due to
events prior to the date of transfer to be borne by the relevant DISCOM 1,
DISCOM 2 or DISCOM 3, respectively. However, it will be subject to a maximum of
rupees one crore per annum and any amount above this shall be to the account of
the holding company and, even for any reason the Commission does not allow the
amount to be included in the revenue requirements of the DISCOMS. The language
is extremely clear. All that it obtains is capping of the liability. However,
the nature of the liability and its being imposed on the DISCOMS alone is as
clear as sunshine. To that extent, there can be no doubt that it includes all
the liabilities including the liabilities on account of the personnel. Unlike
Rule 3, Rule 8 (3) does not make any difference between the liabilities 32
arising out of the transfer under Rule 4 or the liabilities contemplated in
Rule 6. The contention is clearly incorrect.
30. It
was suggested that the non obstante clause in Rule 8(3) if widely construed,
would render the clause unconstitutional. We do not think that the clause can
be rendered unconstitutional in any manner. The language is clear, unambiguous
and must be given its natural meaning. If such a meaning is given, we do not
think that any other interpretation is possible except the one rendered by the
High Court. Shri Rao and Shir Patwalia relied on paragraphs 28 and 29 of the
reported judgment in M. Rathinaswami & Ors. v. State of Tamil Nadu &
Ors. [2009 (5) SCC 625]. In the said paragraphs, it is reiterated that in order
to save a statutory provision from the vice of unconstitutionality sometimes a
restricted or extended interpretation of the statute has to be given. Since we
don't agree that the clause can be rendered unconstitutional in any manner, in
our opinion, the judgment is not apposite.
31.
Similarly reliance was made by Shri Rao on ICICI Bank Ltd. v. SIDCO Leathers
Ltd. & Others [2006 (10) SCC 452], Ramdev Food Products (P) Ltd.v.
Arvindbhai Rambhai Patel [2006 (8) SCC 726], Madan Mohan Pathak & Anr. v.
Union Of India & Ors.[1978 (2) SCC 50], Venture Global Engineering v.
Satyam Computer Services Ltd. & Anr. [2008 (4) SCC 190] and
Shin-EtsuChemical Co. Ltd. v. Aksh 33 Optifibre Ltd. & Anr. [2005 (7) SCC
234]. We have absolutely no quarrel with the principles in all these reported
decisions. However, since the constitutionality of Rule 8(3) cannot be doubted
under any circumstances, all these decisions do not apply to the present
controversy. We must, however, point out that the capping of the liability of
one crore of rupees was at the instance of the DISCOMS only. They were more
aware of the language brought in. They were also aware of the liabilities which
arose, particularly, in view of Rule 6 (8) and they had open eyedly accepted
Rule 8(3). They cannot now find fault with the constitutionality of the
provisions.
32. It
was tried to be suggested by Shri Rao, learned Senior Counsel that under
Section 15(1) of the Act, any property, interest in property, rights and
liabilities which immediately before the effective date belonged to the Board,
stood vested in the Government with effect from the date on which the Transfer
Scheme came into existence by way of its publication. It was also suggested
that under sub-Section (2) of Section 15 of the Act, it was for the Government
to transfer such property and interest in the property, rights and liabilities
to any company established under Section 14 of the Act. It was then tried to be
urged that such transfer of undertaking has been taken care of in Rule 5 of the
Transfer Scheme Rules, 2001. It was then pointed out that as per the Schedules,
the transfer was effected and in case of the present appellant, the transfer
was effected as per Schedule 34 `F'. The learned Senior Counsel very earnestly
suggested that this was all that was transferred and, therefore, a liability
which was not covered under Schedule `F' could not be said to have been
transferred to the appellant. It was then pointed out by reference to Rule 2(t)
that `undertaking' includes "wherever the context so admits the
personnel". It was, therefore, urged that the personnel transferred to the
appellant company were only the ones who were included in the lists. It was
also suggested that under Rule 2(r), the `transferee' includes not only DISCOMS,
like the present appellant, but also the Holding company like Delhi Power
Company Limited. It was, therefore, urged that considering the provisions of
Rule 5 read with Rule 2(r), 2(t), Schedules `F' and `G', was be all and end all
of the matter. It was urged that in the absence of any liability allocated to
DISCOM 3 in Schedule `F' and in terms of para 2 of Schedule `G', allocating of
residuary liabilities to the Holding company, the liability in respect of
existing pensioners would devolve on the Holding company, i.e.
DPCL and
not on the present appellant. The argument is clearly incorrect.
We have
already pointed out that Schedule `F' cannot be read as the exhaustive list of
transfers as regards the assets and liabilities. This is because of the
peculiar language of Rule 3(1) and Rule 3(2). Rule 3(2) very specifically
provides that in the matter of personnel and personnel related matters, Rule
3(1) would be of no consequence. What is provided in Rule 4, on which the heavy
reliance was being placed, is relatable to 35 Rule 3(1) alone. Same logic
applies to Rule 5, which provides for transfer of undertaking. It flows only
from Rule 4. A reading of Rule 5 and, more particularly, Clauses (a) to (g) of
Rule 5(1) correspond to Clauses (a) to (g) in Rule 4(1). Rule 4(1) is again
specific and takes into sweep only sub Rule (1) of Rule 3. It is very clear
that Rule 3(2) makes all the difference and in the clearest possible language,
Rules 4 and 5 relate to the assets, liabilities and proceedings covered only
under Rule 3(1). Rule 5 also has to be read in that context.
33. The
transfer of personnel and all the principles, therefore, are governed by Rule 6
alone. As provided in Rule 6(2), there are lists wherein the personnel have
been classified into five groups based on the principle of "as is where
is", where a specific reference is to be found to GENCO, TRANSCO and three
DISCOMS. Very significantly, there is no reference to DPCL. Thus, no employee
was transferred to DPCL. This is in case of the existing employees. Sub Rule
(8), however, takes into sweep not only the existing employees, who find the
reference in the lists prepared under Rule 6(2), but also makes a reference to
the employment related matters including provident fund, gratuity fund, pension
and any superannuation fund or special fund created or existing for the benefit
of personnel and the existing pensioners. There was no question of existing
pensioners being covered under the lists prepared under Rule 6(2). By 36 using
the words "existing pensioners" and by providing that the relevant
transferee would stand substituted for the Board for all purposes and all the
rights, powers and obligations of the Board in relation to any and all such
matters, the legislative intention is very clearly displayed to the effect that
the existing pensioners on the day of transfer were also covered and stood
transferred to the DISCOMS and not to DPCL and it is only the transferee
DISCOM, who would substitute for the Board. Once these Rules are read in proper
perspective, there is hardly any doubt about the liability of DISCOMS in
respect of existing pensioners on the day of transfer. There can be no dispute
that those who retired and those who were serving with the Board would stand
transferred in respect of their liabilities etc. to the successor company, i.e.
DISCOM-3. The High Court has correctly appreciated this position.
34. This
takes us to the next contention of Shri Rao and Shri Patwalia that the decision
given by the Government on such liability was without any authority or non est
in the light of the provisions of the Act and the Rules.
In that
behalf, Shri Rao, Learned Senior Counsel invited our attention to Rule 12(1),
whereunder a finality is given to the decision of the Government in respect of
any doubt, dispute, difference or issue as regards the transfers under these
Rules. The Rule provides that under any such eventuality, the decision of the
Government shall be final subject 37 to the provisions of the Act. Sub Rule (2)
of Rule 12 provides that the Government may, by order, publish in the Official
Gazette, make such provisions, not inconsistent with the provisions of the Act,
which provisions may appear to be necessary for removing the difficulties
arising in implementing the transfers under these Rules. Section 57 of the Act
is also clear and provides power to the Government to remove any difficulties.
However, there is a rider to the effect that no such order to remove
difficulties could be made by the Government after expiry of two years from the
date of commencement of the Act. It is also provided by sub-Section (2) of
Section 57 that every such order after it is made shall be laid before the
Legislative Assembly. Heavily relying on Section 57, Shri Rao and Shri
Patwalia, learned Senior Counsel contended that the Government's power to make
any such order had already come to an end with the expiry of two years after
the date of notification. This argument and the reliance of the Learned Senior
Counsel on Section 57 can be understood, as in this matter, the Government has
issued the letter dated 21.01.2004 i.e. after more than two years of the
relevant date. This letter is authored by one Shri Y.V.V.J. Rajashekhar, Deputy
Secretary (Power) and is addressed to Delhi TRANSCO Ltd. which is a 100 per
cent Government company. The subject thereof is removal of doubts, disputes and
differences under the provisions of Delhi Electricity Reforms (Transfer Scheme)
Rules, 2001 and issue of clarificatory order of the Government 38 under Rule
12. It is an answer to the letter received from Delhi TRANSCO Ltd. seeking
clarifications from the Government with respect to the competent authority/new
entity to deal with vigilance/ disciplinary/court cases in relation to the
employees of erstwhile DVB who could not become part of any of the companies on
01.07.2002 in terms of the Delhi Electricity Reforms (Transfer Scheme) Rules,
2001. In that, a reference was made in the second paragraph to Section 6 of the
Act read with Section 15 and 16 of the DERA read with Rule 12 of the Delhi
Electricity Reforms (Transfer Scheme) Rules, 2001. It was then conveyed that
being empowered by the directions issued vide No.11 (94)/2003/Power/103 dated
09.01.2004, it is clarified that the vigilance, disciplinary and Court cases in
respect of the employees of the then DVB who could not become part of any of
the companies, namely, DPCL, Delhi TRANSCO, Indraprastha Power Generation Co.
Ltd., BSES Yamuna Power Ltd., BSES Rajdhani Power Ltd. and NDPL on 01.07.2002
i.e. on the date of restructuring due to retirement/dismissal/
removal/compulsory retirement shall be processed and decided by such company
which would have been the controlling authority of the employee but for their
retirement/dismissal/removal/compulsory retirement etc. as per Schedule `B',
`C', `D', `E' and `F' of the Delhi Electricity Reforms (Transfer Scheme) Rules,
2001. It is absolutely clear that by this letter the whole liability was put on
the head of the DISCOMS. The appellant is only one of the 39 DISCOMS who would
have been the controlling authority of the employees had those employees
continued.
35. This
position was, however, opposed by the Learned Senior Counsel for the appellants
pointing out the two earlier letters i.e. a letter dated 17.09.2002 authored by
one Shri Jagdish Sagar, Principal Secretary (Power) to DISCOM 1 and DISCOM 2 as
also the subsequent Office Order dated 30.09.2002 issued by one G. Srinivas,
Administrative Officer (G) of Delhi Power Supply Ltd. In the aforementioned
letter dated 17.09.2002, Shri Jagdish Sagar, Principal Secretary (Power) had
informed one Shri Chalasani, Chief Executive Officer, BSES Rajdhani Power Ltd.
that a copy of the advice of the Law Department of the Delhi Government which
had been accepted by the Government was enclosed with that letter. Amongst the
other liabilities, Part II of this Government decision concerns the liabilities
relating to distribution, business for the tasks undertaken in the period
immediately before the date of transfer but payment against which would have
been made after the date of transfer.
36. A
question has been posed in the following form:
"Whether
the DISCOMS are under obligation to discharge liabilities in respect of any
works completed or liabilities incurred in respect of staff pertaining to the
period before 30.06.2002 on the basis that such payments are normally made in
the month of July?"
40 Answer
to this question is to be found to have been given in the negative. Learned
Senior Counsel insists that the words in the question regarding the liabilities
incurred in respect of staff pertaining to the period before 30.06.2002 would
clearly show that the Government had taken a decision that such liabilities
could not be put on the head of the DISCOMS and, therefore, it was clearly the
liability of the holding company in terms of the answer given to this question.
Learned counsel further pointed out that in pursuance of that, a further Office
Order came to be issued under the signatures of one Shri G. Srinivas,
Administrative Officer on 30.09.2002 in the following manner:
"Consequent
upon unbundling of DVB, a doubt has been raised by Finance Department regarding
payment of arrears of pay and allowance to retired employees to which company
has to pay the same.
It is now
clarified that all such liabilities of erstwhile DVB have been transferred to
the Holding Company as per Transfer Scheme Rule. Therefore, such payment of
arrears pay and allowances to the retirees on account of revision of pay/court
orders, etc. for the period up to 30.06.2002 i.e. prior to unbundling of DVB
will be borne and paid by the Holding Company.
All such
claims will be prepared by APO(B) concerned and after duly auditing the same,
will be forwarded to Holding Company for effecting the payment."
37. Now
relying on this office order very heavily, Learned Senior Counsel pointed out
that the liabilities would be only that of the holding 41 company and not of
the DISCOMS, like the appellant herein. In our opinion, the argument is clearly
incorrect. Firstly, a query made and answered in the letter dated 17.09.2002
does not, in our opinion, pertain to the liability which is in question. The
query is simple and it raises a question, whether, if any, work is completed or
liabilities are incurred in respect of the staff pertaining to period before
30.06.2002, in which case the payments have to be made in the month of July,
would the DISCOMS be under obligation to discharge such liability. The
liability covered under second query, does not, in our opinion, take into its
sweep the liabilities like the present liability. The answer which was provided
when construed closely would bring about the following:
"This
interpretation is further supported by the provision in Schedule `G' by which
all the receivables from sale of power to the consumer of the erstwhile Board
other than to the extent specifically included in schedules D, E and F shall be
to the account of the Holding Company. The Schedule `G' further goes on to say
that the DISCOMS will be authorized to release the receivable of the holding
company and it is apparently for that reason they retain its 20 % share in such
receivables as are collected, which are over and above the amounts included in
Schedule D, E and F in respect of which no such share in the nature of
collection charges is payable. It would not be reasonable to interpret the
rules as assigning the liabilities for any period to the company which was not
also entitled to the receivables pertaining to the same period, in the absence
of any specific provision to the contrary. Therefore, my answer to the first
question is in the negative."
42 In our
opinion, therefore, the reliance on this would be uncalled for.
38. The
office order dated 30.09.2002 is undoubtedly clear in support of the
appellants. However, this office order does not show on what basis this was
issued and under what authority. This seems to have been issued by an
Administrative Officer of the DPCL. However, the last letter dated 21.01.2004
which has been issued by the Deputy Secretary (Power) very clearly spells out
the liability and the said decision has the authority of Section 60 read with
Section 15 and 16 read with Rule 12 of the Transfer Scheme Rules. It has
superseded the earlier direction dated 09.01.2004.
However,
it has not been made available to us. Be that as it may, the clarification is
more than clear which puts the responsibilities of the erstwhile staff on the
DISCOMS.
39. It
was tried to be argued that under Section 57 of the Act such decision could not
be taken after two years of the transfer. This argument is clearly incorrect.
Section 57 operates in entirely different sphere. It speaks about the power of
the Government to remove doubts. It is the power to make provisions for the
smooth operation of the Act and the Rules which have to be brought into effect
by passing orders which are required to be published in the Official Gazette
and such orders would then be given effect by making provisions which are not
inconsistent with the Act. It is for such kind of orders that the Rules apply.
What is referred to 43 in the aforementioned decision is in pursuance of the
power of the Government to make rules under Section 60 pertaining to Section 15
and 16 of the Act. It was tried to be argued that even if Section 60 was
referred to in the aforementioned order, such rules had to be notified.
40. It is
then argued that Section 60 does not empower rule making by a letter. It was
also suggested that the letter dated 21.01.2004, the purpose of which was
mentioned as `removal of doubts' which could not only be done by Section 15 of
the Act and, therefore, that was not question of the letter being effective,
particularly, because it has been passed after two years of the relevant date
and would clearly be hit by provision of Section 57 which does not empower any
rules to be made after two years of the date of transfer. Learned Senior
Counsel, therefore, very heavily relied on this Section, which argument, in our
opinion is incorrect. There is a clear reference made to Rule 12 which runs as
under:
12.
Decision of Government-Final:
(1) If
any doubt, dispute, difference or issue shall arise in regard to the transfers
under these rules, subject to the provisions of the Act, the decision of the
government thereon, shall be final and binding on all parties.
(2) The
government may by order published in the Official Gazette, make such
provisions, not inconsistent with the provisions of the Act, as may appear to
be necessary for removing the difficulties arising in 44 implementing the
transfers under these rules."
41. It
must be said that the powers under sub-Rule (1) and (2) are of different kinds.
The finality of the Government decision is writ large from the provisions of
sub-Rule (1) of Rule 12, while under the provisions of sub-Rule (2), the
Government has the power to make provisions by order published in the Official
Gazette. Therefore, in our opinion, the position taken by the Government in the
letter dated 21.01.2004 is clear and doubtless.
42. One
feeble argument was made that the Government had already exhausted its power
under Rule 12 (1) while taking the decision dated 17.09.2002 and, hence, it had
lost the power to pass any fresh orders.
The
argument is clearly incorrect. There can be no finality in the matter of
removal doubts or the removal difficulties and also taking the decisions under
Rule 12(1). The argument that once the Government has exercised the powers
under Rule 12(1), the power gets exhausted and the decision becomes final and
binding on all the parties, including the Government, is clearly incorrect. The
argument that there is no further power under Rule in the Government to issue
any letter dated 21.01.2004, is also an incorrect argument. In our opinion,
nothing stopped the Government from taking any decision and it has taken a
clearest possible decision by letter 45 dated 21.01.2004 which is binding on
all the parties. This is apart from the fact that the Government has not dealt
with the subject in its earlier decision dated 17.09.2002 as regards the
controversy which has fallen for consideration in this matter. It was in
respect of other liabilities which were covered by Schedules `D', `E', `F' and
`G'. We have already clarified that those liabilities were different from the
liabilities which arose on account of the employees who could not become the
employees of the DISCOMS on the date of transfer due to their retirement,
dismissal, death etc. In our opinion, therefore, the view taken by the Delhi
High Court is the correct view. We have already clarified about the so-called
Office Order dated 30.09.2002 which is overridden by the final decision taken
by the Government in its letter dated 21.01.2004.
43. On
the overall consideration, we are of the clear opinion, that these appeals do
not have any merits and must be dismissed. There shall be no order as to costs.
..............................................J. (V.S. SIRPURKAR)
.............................................J. (SURINDER SINGH
NIJJAR)
New Delhi;
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