Hon'ble Saurabh Lavania,J.
(As per Hon'ble Saurabh Lavania,J.) Heard Ms. Anjana Rani, learned counsel for the petitioners, Learned Standing Counsel for the respondent No. 1 and Sri N.K. Seith, learned Senior Advocate assisted by Sri Puneet Chandra, learned counsel for the respondent Nos. 2 and 3.
By means of the present writ petition, the petitioners have challenged the validity of Regulation 4 (B) of the U.P. Rajya Vidut Utpadan Nigam Limited Absorption Regulations, 2006 (in short "Regulations of 2006") and have also prayed for consequential reliefs to the main relief.
The facts, in brief, of the case are that all the petitioners were appointed in Uptron India Limited (in short "UIL"). The aforesaid company was running in profit upto 1988-89 but in the financial year 1989-90, the company became sick unit and on 20.06.1994, it was referred to B.I.F.R. The petitioners/employees of UIL were sent on deputation from 15.12.2001, onwards to U.P. Rajya Vidut Utpadan Nigam Limited (in short "UPRVUNL"). The U.P. Electricity Reforms Transfer Scheme, 2000 (in short "Scheme of 2000"), came into force on 14.01.2000. The Scheme of 2000 was framed by the State Government in exercise of powers under Section 23(1) and (2) of the U.P. Electricity Reforms Act, 1999, which received the assent of the President of India on 23.06.1999 and published in U.P. Gazette (Extraordinary) on 07.07.1999. Clause 6 of the Scheme provides for transfer of Personnel of U.P. State Electricity Board (in short "UPSEB") to the three Companies namely UPRVUNL, U.P. Jal Vidhyut Nigam Ltd. (in short "UPJVNL") and U.P. Power Corporation Ltd. (in short "UPPCL"). Certain employees of erstwhile UPSEB were transferred after taking their representations/options, to UPRVUNL prior to the transfer of the petitioners on deputation with effect from 15.12.2001.
It is admitted case of the petitioners that they were sent on deputation in UPRVUNL either on equivalent post or on the lower post and were subsequently absorbed on the post on which they were on deputation in UPRVUNL. It is also admitted position that all the petitioners were initially appointed in UIC, which was not an Energy Sector.
Needless to mention here that UPRVUNL is a body incorporated under the Companies Act 1956.
It is also admitted fact that for absorption of employees of estwhile UPSEB/servants of other corporation of energy sector and other employees who were placed/transferred to the UPRVUNL, the regulations namely UP Rajya Vidut Utpadan Nigam Limited Absorption Regulations, 2006 (in short "Regulations of 2006") were framed. The Regulations of 2006 were framed with the intent to absorb the willing persons working on deputation from different sources in UPRVUNL.
At this juncture, it is relevant to refer the statement of objections and reasons for framing the Regulations of 2006. The same is reproduced hereunder:-
"After the promulgation of up Electricity Reforms Act, 1999 and Formation of U.P. Power Corporation Limited and Kanpur Electricity Supply Company Limited (KESCO) under company act, 1956 and after implementation of U.P. Electricity Reform Transfer Scheme, 2000 framed under section 23 of U.P. Electricity Reforms Act, 1999, representations were invited from the personnel of erstwhile U.P. State Electricity Board for their transfer and absorption in respective companies. The said exercise was to be completed within five years and as such final absorption were made. In the mean time Madhyanchal Vidhyut Vitran Nigam Limited, Purvanchal Vidhyut Vitran Nigam Limited, Dashinanchal Vidhut Vitran Nigam Ltd and Paschimanchal Vidhut Vitran Nigam Limited were also constituted under company Act, 1956. At present 375 personnel working as Executives and 730 personnel working as supervisors in Engineering and Finance and Accounts are absorbed in U.P. Rajya Vidhyut Utpadan Nigam Ltd and 643 Executives and 414 supervisors of Engineering and Finance Accounts, who are absorbed in U.P. Power Corporation Limited as per their representation, are working on deputation in U.P. Rajya Vidhyut Nigam Ltd as per the minimum working requirement of U.P. Rajya Vidhut Utpadan Nigam Ltd, against a sanctioned strength of 1366 post of Executives and 2545 posts for Supervisors in Engineering and Finance and Accounts. Utpadan Nigam feels that on one hand there is already a serious deficiency of personnel in the Nigam, on the other hand if there is a situation of repatriation of such personnel working on deputation the functioning of the Nigam shall be seriously jeopardized.
As such in public interest, it is expedient to make regulations for absorption of such employees who are serving on deputation in the Nigam, protecting their interests and benefits. Also, if sufficient number of personnel are not available according to the requirement of the Nigam, it is absolutely essential and in the public interest to keep provision in the regulation for absorption of personnel in Utpadan Nigam from other sources also, to ensure manning of vacant post."
Clause 2(2), 2(3) and 2(7) are also quoted below for ready reference:-
"2(2). Other Corporations of Energy Sectors includes U.P. Power Corporation Ltd., U.P., Jal Vidhyut Nigam Ltd. Madhyanchal Vidhyut Vitran Nigam Ltd, Poorvanchal Vidhyut Vitran Ltd, Paschimanchal Vidhyut Vitran Nigam Limited, Dakshinanchal Vidhyut Vitran Nigam Limited and Kanpur Electricity Supply Company Limited (KESCO).
2(3). Servants of other corporations of Energy Sector means the servants who were employees of erstwhile U.P. State Electricity Board classified in Schedule-H&I of U.P. Electricity Reforms Act, 1999 and U.P. Electricity Reforms Transfer Scheme 2000 became servants of "other Corporations of Energy Sectors."
2(7). "Other Servants" means those servants from any sources who apply for absorption in the services of U.P. Rajya Vidyut Utpadan Nigam Limited on invitation of applications for the same."
Clause 2(2), 2(3) and 2(7) clarifies the source(s) of employees working in the UPRVUNL and for absorption of whom the Regulations of 2006 were promulgated.
The Regulation 4 is also quoted below for ready reference as the same is in issue and Regulation 4(B) has been challenged, which is the main relief of the petitioners in the instant writ petition:-
"Absorption" of Servant/Servants at different levels in the services of U.P. Rajya Vidhyut Utpadan Nigam Limited shall be made under following terms and conditions:-
(A) For "Servants of other Corporations of Energy Sector:-
Permanent "Absorption" of Servant/Servants from amongst "Servants of other Corporation of Energy Sector" in the services of U.P. Rajya Vidhyut Utpadan Nigam Limited shall be made under following terms and conditions:-
(1). The "Servants of other Corporations of Energy Sector working on deputation in Utpadan Nigam" at the time of enforcement of these regulations shall be eligible for "Absorption".
(2). "Utpadan Nigam" shall issue appropriate orders inviting application for "Absorption" in the services of "Utpadan Nigam" within a week from the date of enforcement of these regulation from those "Servants of other Corporations of Energy Sector" who shall be working on deputation in "Utpadan Nigam" on that date.
(3). The Servants of other Corporations of Energy Sector shall submit their applications for "Absorption" in the services of "Utpadan Nigam" within 15 days from the date of issuance of the above orders.
(4). Such applications given by "Servants of other Corporations of Energy Sector" shall be final and irrevocable.
(5). "Utpadan Nigam" shall be entitled to accept or reject the above applications for various post on the basis of suitability and eligibility of the servant and availability of posts.
(6). "Servants of other Corporations of Energy Sector" shall be permanently "Absorbed" in the services of "Utpadan Nigam" on the same post at which they were working on the date of "Absorption" and their interse seniority vis-a-vis such "Absorbed" servants and the servants who have been already absorbed in the services of "Utpadan Nigam" shall be retained as it would have been in erstwhile U.P. State Electricity Board.
(7). Only regular "Servants of other Corporations of Energy Sector" shall be eligible for "Absorption" in "Utpadan Nigam".
(8). Before final "Absorpotion" in "Utpadan Nigam" No-Objection from their parent department would be necessary.
(9) On "Absorption" the "Servants of other Corporations of Energy Sectors" shall be entitled to "Service Benefits" and the "Terminal Benefits" along with time scale shall be admissible/payable the length of continuous service (with the period of deputation).
(10) Those "Servants of other Corporations of Energy Sector" who do not apply for their "Absorption" or whose applications for "Absorption" are rejected by "Utpadan Nigam" shall keep working on deputation with "Utpadan Nigam" after enforcement of these regulations till new appointments are made by the "Nigam" as per their working requirement. Thereafter, as and when the "Nigam" makes the appointment such servants shall be repatriated to the parent department. However, such servants working with "Utpadan Nigam" on deputation shall be repatriated to the parent department within a maximum period of 12 months from the date of enforcement of these regulations.
(B) For "Other Employees":-
Entry in the services of "Utpadan Nigam" at base and higher levels shall also be made by "Absorption" from amongst suitable candidates from other Public Sector Corporations working on deputation in "Utpadan Nigam" or by the Direct Recruitment in accordance to the needs of the organization in public interest. Thus, "Absorption" can be made at various levels/posts from time to time as per requirement and as per the standards decided by the Board of Directors of "Utpadan Nigam" and the Board of Directors of "Utpadan Nigam" shall also decide on level wise number of posts for such "Absorption" for each year. Such provisions for "Absorption"/Recruitment shall be limited to the period of Reform Process continued in the Energy Sector. The absorption shall be carried out under following terms and conditions:-
(1) For all purposes Absorbed servant/servants shall be treated as the servant of "Utpadan Nigam" from the date of joining in "Utpadan Nigam" after "Absorption". Their Seniority shall be kept at the junior most level of the post appointed at and the interse seniority of such absorbed servants shall be decided by "Utpadan Nigam".
(2) On "Absorption" the "Service Benefits" and "Terminal Benefits" to the absorbed servants shall be admissible/payable as per rules applicable to the servant recruited by "Uptadan Nigam" after 14-01-2000, the date of unbundling of erstwhile U.P. State Electricity Board."
As appears from the contents of the writ petition, the petitioners are aggrieved by the Regulation 4(B), as under the said provision, the previous service of the petitioners in UIL would not be counted for the purposes of seniority and other service/terminal benefits. It is relevant to point out here that in the case of the employees of other Corporations of Energy Sector, the previous service would be counted for determining the seniority and other service/terminal benefits.
The petitioners, being aggrieved, have assailed Regulation 4(B) of the Regulations of 2006 broadly on the ground(s) to the effect that:-
(i) the same is unreasonable and violative to Article 14 and 16 of the Constitution of India.
(ii) the benefit of continuity of service for the purpose of grant of service/terminal benefit is permitted, under the Regulations of 2006, to the employees of other corporation of energy sector and the said benefit is not available to the employees other than the employees of energy sector and being so, the same is unreasonable and hit by Article 14 and 16 of the Constitution of India.
(iii) provisions i.e. Regulation 4(A) and 4(B) are not based on intelligible differentia and are not reasonable.
(iv) not counting of previous service of the employees other than the employees of energy sector, as provided under the Regulations of 2006 is unjust and discriminatory and has no nexus with the object sought to be achieved.
(v) two sets of employees, who are similarly situated cannot be discriminated by the employer.
The case of the respondents-UPRVUNL, as stated in the counter affidavit is to the effect that:-
In the State of Uttar Pradesh, generation, distribution and transmission of electrical energy up to the year 2000 was solely in the hands of the U.P. State Electricity Board (in short ''UPSEB'), a statutory body constituted under Section 5 of the Electricity Supply Act, 1948. With the expansion of the generation units a government company, namely, U.P. Rajya Vidhyut Utpadan Nigam Limited (UPRVUNL) was incorporated under Companies Act, 1956 in the year 1980. A major power Reforms was brought in year 1999 by the legislature by enacting U.P. Electricity Reform, Act, 1999 (Reform Act, 1999), which was assented by the President of India on 23.06.1999 and published in U.P. Gazette (Extraordinary) on 07.07.1999.
The State Government in exercise of the powers under Section 23(1) and (2) of the U.P. Act of 1999 published U.P. Electriciy Reforms Transfer Scheme, 2000 (Transfer Scheme, 2000), which came into force on 14th January, 2000. Under clause 4 and 5 of Scheme all thermal generating undertakings stood transferred to UPRVUNL, hydro generating undertakings transferred to UPJVNL and the undertakings forming part of transmission and distribution to UPPCL. Clause 6 of the scheme provides for transfer of the personnel of UPSEB to the aforesaid three companies.
Like any ordinary corporate employer UPRVUNL also has right to create the post, determine terms and conditions of employment of his employees like all other companies incorporated under companies act, the mode of framing any rules and regulations pertaining to conditions of services etc are required to be framed by a resolution of the Board of Directors and such conditions of services are binding upon the employees in accordance with the stipulation and condition of service as agreed between the parties.
The UPRVUNL is empowered under Article 118 (IX) of Articles of Association of Uttar Pradesh Rajya Vidhyut Utpadan Nigam Limited to frame regulations. It is the prerogative of the organization to frame regulation after taking into consideration all facts and figures, pros and cons, protection of interests and benefits and all other incidental and auxiliary matters, so as to ensure smooth functioning of organization. Any regulation or any rule thereof can be struck down only if it impinges on any fundamental rights provide under the constitution.
The Clause 6(10) of transfer scheme, 2000 empowers 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. 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 Reform Act, 1999 empowering State Government and then to empower the transferee to frame rules and regulations determining terms and conditions of service of its employee.
In the present case, the two classes of employees are mutually exclusive and do not stand on the same footing and as, such there is no discrimination and hence there is no violation of fundamental rights.
Regulations of 2006 were framed solely in Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited not only for those personnel who were willing to be absorbed, but because there was the need to regulate in clear cut terms the modalities for absorption of servants of the other Corporation of Energy Sector and Absorption of Servants of other Corporation in non-energy sector. It may be indicated that the parent organization of the petitioners was the sick Uptron India Limited, which was being would-up and hence the need was felt for absorbing personnel from the Uptron India Limited, so that they would not suffer unemployment.
The Regulation No. 4 lays down the procedure to be adopted for the absorption of (A) Servants of Other Corporations of Energy Sector who were working on deputation in Utpadan Nigam at the time of enforcement of the said Regulation and (B) for absorption from amongst suitable candidates from other Public Sector Corporation working on deputation in Utpadan Nigam or by Direct Recruitment in accordance to the needs of the organization in public interest.
The aforesaid Regulations are categorical in providing two classes of employees for the purpose of their absorption, the one class being employees who were on the role of the erstwhile Uttar Pradesh State Electricity Board as on 14.01.2000, which is the date of trifurcation of Uttar Pradesh State Electricity Board, and the other being employees who came on deputation from other Public Sector Corporation, which were not related to Energy Sector at all. In the latter category petitioners, who were employees of Uptron India Limited (UIL).
The employees including the petitioners of the Uptron India Limited were transferred on deputation from 15.12.2001 onwards to Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited. This clearly implies that on the date of trifurcation of the erstwhile Uttar Pradesh State Electricity Board into three major Corporations, Uttar Pradesh Power Corporation Limited (UPPCL), Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) and Uttar Pradesh Jal Vidyut Nigam Limited (UPJVNL), the petitioners were not on deputation with the UPSEB/UPRVUNL.
Since the employees of Uptron India Limited were not on the role of the erstwhile Uttar Pradesh State Electricity Board on or before 14.01.2000, there can be no rational claim for their parity with employees of the erstwhile Uttar Pradesh State Electricity Board. On the date of trifurcation of the Board, the petitioners were the employees of UIL.
The petitioners are not similarly placed to members of Energy Sector Corporation because as the petitioners were the employees of UIL, which was a Non-Energy sector company, while the Energy Sector Corporation employees working in UPRVUNL are originally belongs to the erstwhile UPSEB (parent organization of U.P. Energy Sector). The energy sector corporation employees absorbed in UJPRVUNL in the year 2007 are actually those employees who were worked together with the UPRVUNL employees, before 14.01.2000 the date of trifurcation of UPSEB into UPCL, UPRVUNL and UPJVNL.
The petitioners cannot be compared with energy sector corporation employees in any way. The petitioners are not only stand apart from the members of the Nigam who were on the roles of the erstwhile Uttar Pradesh State Electricity Board as on 14.01.2000 but also that the two classes of employees are not comparable in any manner such that the benefits allowed to the employees of the Energy Sector and those of Uptron India Limited who are regulated in terms of Rule 4(B) pertaining to "other employees" not originally connected with the Energy Sector.
The petitioners were not absorbed in the services of respondent Nigam all of a sudden. Rather vide Office Letter No.2508/H.R.-03/UNL/2008-5(5)H.R.-03/06 dated 03.10.2008, annexure no.8 to the writ petition, the petitioners were given the right to exercise their options for absorption in the services of the Nigam, subject to the conditions laid down therein. Each condition was clearly spelt out and nothing was concealed so as to place them in a disadvantageous position.
The right to exercise option for accepting or refusing inherently implies that the person exercising his option should take into consideration all the pros & cons of the terms & conditions enumerated in the offer letter. In case the same are unacceptable, the person exercising option has the right to reject the offer. There is no compulsion for such person to accept any offer which might be disadvantageous to him. Having known beforehand that the option once exercised would be final and irrevocable; the person concerned should have examined the same in the light of his interest all the terms & conditions before filling up the option form opting for the services of the Nigam. Raising an issue at this belated stage is legally and administratively irrational, uncalled for and meaningless. Amongst the various conditions spelt out in the Offer Letter No. 2508/HR-03/UNL/2008-5(5)HR-03/06 dated 03.10.2008, annexure no.8 to the writ petition, in para 2(f), it was specified that, those who would be absorbed in the services of the Nigam would have to undergo probation for two years; thereafter if found satisfactory they would be absorbed. The petitioners for UPRVUNL were new recruits for all practical purpose.
There was no compulsion on the part of the petitioners and others similarly placed to have opted for the services of the Nigam when they were informed in detail the conditions of the Nigam, and the consequences thereof in the event of opting for services of the Nigam vide offer letter no.2508 dated 03.10.2008, annexure 8 to the writ petition. The said letter is crystal clear and nothing has been concealed from the petitioners and others similarly placed. If they were unwilling and reluctant they should not have opted for services of the Nigam.
The Hon'ble High Court, Allahabad in C.M.W.P. No. 14670 of 2006, Rajeev Kumar Jauhari and others v. State of U.P. and others on 29.11.2006 has held that- "we are of the considered view that the Uttar Pradesh Rajya Vidhyut Utpadan Nigam Limited Absorption Regulation, 2006 is neither illegal nor arbitrary nor otherwise unjust and Uttar Pradesh Rajya Vidhyut Utpadan Nigam Limited is well within its rights to frame and promulgate the same under provision of Article 118 (IX) of the Article of Association read with section 23(7) of the Reforms Act, 1999 and Clause 6(10) of Transfer Scheme, 2000" and accordingly, the issues involved in the present writ petition is squarely covered under the judgment dated 29.11.2006, the writ petition is liable to be dismissed.
Assailing the Regulation 4(B) of the Regulations of 2006, learned counsel for the petitioners submitted that the Regulation 4(B) is discriminatory in nature. It is further submitted that Regulation 4(B) (1) and (2) of the Regulations of 2006 is unconscionable as it is illegal, arbitrary and discriminatory in nature as it denies service benefits to the petitioners, who belong to UIL, whereas similarly situated persons/employees who fortuitously belong to the Energy Sector(s) and were absorbed in UPRVUNL have been given preferential treatment as their previous service has been counted for the purpose of pensionary and other terminal benefits, such as, seniority, time scale, gratuity etc. The denial of service benefits to the petitioners is bereft of any reason or logic as it creates a class within class which is wholly impermissible, illegal and contrary to the rule law and, thus, is violative of Article 14 and 16 of the Constitution of India and being so is unconstitutional.
Learned counsel for the petitioners further submitted that Regulation 4 has created two classes of employees who have been absorbed in the services pursuant to the Regulations of 2006. This classification amongst the employees wherein service benefits are different even though both set of employees have been absorbed from other Corporations is illegal, arbitrary and discriminatory. Regulation 4(B) in so far as it does not provide continuity of service for the purpose of grant of service/terminal benefits to the petitioners is not based on any intelligible differentia.
It has also been submitted by the learned counsel for the petitioners that there cannot be any distinction with regard to grant of service benefits to the similarly situated employees, irrespective of their source and mode of recruitment, as all similarly situated employees are performing the same duties and functions and have similar responsibilities. The employees of UPPCL and UIL who were working on the same post on deputation and were subsequently absorbed on the same post were having same responsibilities and duties and while working on deputation even after absorption they have the same responsibilities and duties. Thus, discrimination is unjustified. The discriminatory action of the respondents in not extending similar service and terminal benefits while absorbing similarly situated deputationists from different sources i.e. UIL and UPPCL is violative of Article 14 and 16 of the Constitution of India.
Learned counsel for the petitioners lastly submitted that right to seniority is a fundamental right and that has been infringed by the Regulation under challenge.
In view of the aforesaid, the prayer is to interfere in the matter and allow the writ petition.
Sri N.K. Seth, learned Senior Advocate assisted by Sri Puneet Chandra, learned counsel for the respondent Nos. 2 and 3, on the basis of the pleadings on record, submitted that the issue involved in the present writ petition, which includes the challenge made to Regulation 4(B) of Regulations of 2006, has already been taken note of and considered by the Division Bench of this Court and after detailed scrutiny of the Regulations of 2006, this Court has upheld the vires of Regulations of 2006 including Regulation 4(B), which is under challenge, of the Regulations of 2006 and the issue/controversy involved in the instant writ petition, is fully covered under the judgment of the Division Bench of this Court dated 29.11.2006 passed in the Writ Petition No. 14670 of 2006 (Rajeev Kumar Jauhari and others v. State of U.P. and others).
Sri N.K. Seth, learned Senior Advocate further submitted that the Regulations 4(A) and 4(B) have been framed and incorporated under the Regulations of 2006 taking into account the previous service of the employees in the Corporations of Energy Sector and the Public Sector Corporations, as mentioned in the Regulation 2(2), 2(3) and 2(7) of the Regulations of 2006. The difference between the employees covered under Regulation 4(A) and 4(B) is evident from Regulation 2(2), 2(3) and 2(7) of the Regulations of 2006. The employees covered under Regulation 4(A) read with Regulations 2(2) and 2(3) are related to the Scheme of 2000 and on the other hand, the other employees including the petitioners covered under the Regulation 4(B) are not covered under the Scheme of 2000. The petitioners, who were transferred from UIL to UPRVUNL were not the employees of Corporations of Energy Sector. In view of the difference between the two sets of employees, the Regulations 4(A) and 4(B) were framed and benefit of past service was provided to the Employees of Energy Sector.
It is further submitted that providing of service benefits after counting of past service including seniority and terminal benefits are not fundamental rights, it is governed by Rules/Regulations covering the field. The employer has right to modify the service conditions. The service conditions can be modified unilaterally.
Sri N.K. Seth further submitted that in order to save the bread and butter of the employees of UIL, under the policy decision, they were transferred to UPRVUNL with effect from 15.12.2001 and on the other hand, the employees of corporation of energy sector were transferred to UPRVUNL under the Scheme of 2000. Employees of Other Energy Sector, as defined under Regulation 2(3) of the Regulations of 2006, are in fact belong to Energy Sector. The difference between the two sets of employees covered under the Regulation of 2006 is crystal clear and in view of the same, the submission of the counsel for the petitioner that similar situated persons should be treated equal, has no force. The Regulations of 2006 are neither arbitrary nor discriminatory nor hit by Article 14 and 16 of the Constitution of India. Accordingly, the prayer is to dismiss the writ petition.
We have considered the rival submissions of the parties and gone through the record. We have also taken note of the judgment dated 29.11.2006 passed by this Court.
To over view, following questions are required to be considered keeping in view the pleadings on record and submissions made by the counsel for the parties.
(i) Whether the Regulations of 2006 creates two classes between a class of deputationists.
(ii) Whether the right of seniority is a fundamental right.
(iii) Whether the Regulation 4(B) of the Regulations of 2006 is unconstitutional.
(iv) Whether the case of the petitioners is squarely covered under the judgment dated 29.11.2006.
To answer the Question No. (i), we have considered the Regulation 2(2), 2(3) and 2(7) as well as Regulation 4 in its entirety and the pleading on record.
From the pleadings and documents on record, it is evident that:-
Regulations of 2006 were framed in Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited not only for those personnel who were willing to be absorbed, but because there was the need to regulate in clear cut terms the modalities for absorption of servants of the other Corporation of Energy Sector and Absorption of Servants of other Corporation in non-energy sector. It may be indicated that the parent organization of the petitioners was the sick Uptron India Limited and hence, the need was felt for absorbing personnel from the Uptron India Limited, so that they would not suffer unemployment.
The Regulation No. 4 lays down the procedure to be adopted for the absorption of (A) Servants of Other Corporations of Energy Sector who were working on deputation in Utpadan Nigam at the time of enforcement of the said Regulation and (B) for absorption from amongst suitable candidates from other Public Sector Corporation working on deputation in Utpadan Nigam or by Direct Recruitment in accordance to the needs of the organization in public interest.
The aforesaid Regulations are categorical in providing two classes of employees for the purpose of their absorption, the one class being employees who were on the role of the erstwhile Uttar Pradesh State Electricity Board as on 14.01.2000, which is the date of trifurcation of Uttar Pradesh State Electricity Board, and the other being employees who came on deputation from other Public Sector Corporation, which were not related to Energy Sector at all. In the latter category, the petitioners fall being employees of Uptron India Limited (UIL).
The employees including the petitioners of the Uptron India Limited were transferred on deputation from 15.12.2001 onwards to Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited. Thus, on the date of trifurcation of the erstwhile Uttar Pradesh State Electricity Board into three major Corporations, Uttar Pradesh Power Corporation Limited (UPPCL), Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) and Uttar Pradesh Jal Vidyut Nigam Limited (UPJVNL), the petitioners were not on deputation with the UPSEB/UPRVUNL.
The petitioners are not similarly placed to members of Energy Sector Corporation because the petitioners were the employees of UIL which was a Non-Energy sector company while the Energy Sector Corporation employees are originally belongs to the erstwhile UPSEB (parent organization of U.P. Energy Sector). The energy sector corporation employees absorbed in UJPRVUNL in the year 2007 are actually those employees who were worked together with the UPRVUNL employees, before 14.01.2000 the date of trifurcation of UPSEB into UPCL, UPRVUNL and UPJVNL.
In view of the above, the petitioners cannot be compared with energy sector corporation employees in any way. The petitioners are not only stand apart from the members of the Nigam who were on the roles of the erstwhile Uttar Pradesh State Electricity Board as on 14.01.2000 but also that the two classes of employees are not comparable in any manner such that the benefits allowed to the employees of the Energy Sector and those of Uptron India Limited who are regulated in terms of Rule 4(B) pertaining to "other employees" not originally connected with the Energy Sector.
In view of the above, we hold that Regulations of 2006 do not create two classes between a class of deputationists.
In regard to other Questions i.e. Question No. (ii), (iii) and (iv), we have perused the judgment dated 29.11.2006 passed by the Division Bench of this Court in W.P. No. 14670 of 2006 (Rajeev Kumar Jauhari and others v. State of U.P. and others).
This Court in the judgment dated 29.11.2006 has categorically observed as under:-
"The petitioners aggrieved against the aforesaid regulations of 2006 and in particular the conditions under Para 4.0 (A) & (B) of the Regulations, 2006 which has the effect of alteration of their seniority in case the persons already working in other corporations of energy sectors opt for absorption in UPRVUNL, have filed this writ petition challenging the validity of the aforesaid regulations."
In the judgment dated 29.11.2006, this Court after considering the pleadings on record and submissions made by the counsel for the parties, formulated the following issue, for consideration:-
"The rival submissions of the parties, in our view, give rise to the following issues, necessary for adjudication in this petition :
1. What is the procedure of making rules and regulations governing recruitment and conditions of services of the employees for the corporations and in particular UPRVUNL after absorption/final absorption of the employees under Transfer Scheme, 2000?
2. Whether any provision made by UPRVUNL for further recruitment/employment/engagement/absorption/appointment of a person in the service of UPRVUNL which may have the effect of giving him benefit of service rendered elsewhere would be per se illegal or arbitrary or contrary to any provision of law?
3. Whether such a provision as referred to in question no. 2 can be said to be illegal only on the ground that it adversely effects the seniority position of the existing employees of the corporation, which stood finally determined?
4. Whether seniority is such a vested right that cannot be divested or disturbed even by making a provision, which may have an effect of altering seniority position due to subsequent arrivals and would such a provision be per se illegal?
5. Whether Regulations, 2006 is rational, valid and otherwise in accordance with law?"
The Division Bench of this Court in the judgment dated 29.11.2006, answered the Question No. (i) in following terms:-
"We, thus, are of the considered view that the transferee is empowered to make its Regulations in the manner provided in Common Law that is under Article of Association or under the Companies Act in respect to all its employees whether transferred or subsequently recruited and for the said purpose, Section 79(c) of the 1948 Act has no application and it stands superseded by Section 23(7) of the Reforms Act, 1999 read with Clause 6(10) of the Transfer Scheme, 2000.
Thus we hold that a Company can determine terms and conditions of its employees as provided under Article of Association but since the Article of Association of a Company is neither a Rule nor Regulation and has no statutory force the conditions determined thereunder would also be not statutory. The UPRVUNL thus have the power to determine terms and conditions of its employees by making provisions in exercise of powers under provisions of Article of Association read with Companies Act."
In regard to the issues related to "Service Benefits" and "Seniority", the Division Bench of this Court in its judgment dated 29.11.2006, observed as under:-
"Sri Khare vehemently contended that seniority once determined is a vested right and any principle subsequently formulated by the employer, which has the effect of divesting such position in seniority would be illegal by placing reliance on D.P.Sharma Vs. Union of India, AIR 1989 SC 1071. P.D. Agarwal Vs. State of U.P. AIR 1987 SC 1676, Registrar General of India and another Vs. V. Thippa Shetty and others 1998 (8) SCC 690.
In our view, the submission proceeds on the assumption that a particular place in the seniority list is such a right which can be equated with a vested right and cannot be divested. This is against the known principle in service jurisprudence and is wholly untenable. Whether seniority is a condition of service or an incident of service was considered by a three Judges' Bench of the Apex Court in Syed Khalid Rizvi Vs. Union of India 1992 Suppl. JT 169=1993 Suppl. 3 SCC 575 and in para 31 of the judgment, the Apex Court relying on its earlier judgment in A.K. Bhatnagar Vs. Union of India 1991(1) SCC 544 held as under :
"Seniority is an incident of service and where the service rules prescribe the method of its computation, it is squarely governed by such Rules......"
The same view was reiterated in IAS (S.C.S.) Association U.P. Vs. Union of India 1993 Suppl (1) SCC 730 and K. Narayan Vs. State of Karnataka 1993(5) SLR 290 (SC) (Para-5). A constitution Bench of the Apex Court in Prafulla Kumar Das and others Vs. State of Orissa 2003 (XI) SCC 614 held that seniority is merely a civil right and the legislature can, in its discretion bestow or divest the right of the seniority. The relevant extract is reproduced as under :
" Under Article 309 of the Constitution of India, it is open to the Governor of the State of the State to make rules regulating the recruitment, and the conditions of service of persons appointed to such service and posts until the provision in that behalf is made by or under an Act of the legislature. As has been rightly pointed out by the Court in Nityananda Kar Case, the legislature, or the Governor of the State, as the case may be, may, in its discretion, bestow or divest a right of seniority. This is essentially a matter of policy, and the question of a vested right would not arise, as the State may alter or deny any such ostensible right, even by way of retrospective effect, if it so chooses (sic) in public interest." (emphasis added.) The same view has been reiterated by a Full Bench of this Court in Farhat Hussain Azad Vs. State of U.P. and others 2005(1) ESC 161=2005(2) AWC 1221. After referring to A.K. Bhatnagar (Supra), IAS (S.C.S.) Association (Supra) and Prafulla Kumar Das (Supra), the Full Bench also observed that "Seniority is an incident of service and when rules prescribed the method of computation, it is squarely governed by such Rules. No one has vested right to promotion."
In view of the above binding precedents, it is clear that once a policy laying down a principle for determination of seniority formulated, thereafter, seniority would be governed according to that principle and it is a right of an employee so long as that principle operates to claim and seek its enforcement. However, right of employee to have his seniority determined according to a principle already formulated would not deprive the employer from changing the policy and making a different Rule with different principle though obviously it is subject to other statutory limitation, if any, and, of course, if the employer satisfy the test of "State" under Article 12 of the Constitution, such policy decision must be rational, reasonable and not arbitrary. As held by the Constitution Bench in Prafulla Kumar Das (Supra), the rule framing authority may in its discretion bestow or divest the right of seniority for the reason that it is a matter of polity and question of vested right would not arise at all. The reasons for entitling the employer to change polity with altered principle for determining seniority, which may also disturb the position in seniority of the employees are very apparent. If position in seniority is treated to be a vested right, it may prevent an employer to recruit/employ experienced persons with the benefit of service and seniority if it is necessary and in the interest of the institution of the employer. Such a bald proposition would neither be conducive to the betterment of the administration nor would otherwise be in larger public interest. In our mind after the Constitution Bench Judgment of Apex Court that right of seniority does not deprive the employer to change its polity and the question of vested right would not arise ceases the issue and it is not open to the petitioner to advance a submission contrary thereto.
Sri Khare countered this situation contending where certain persons have already been recruited and further absorption from other service is sought to be made, it should be given effect only from the date of absorption and any benefit of past service to persons subsequently absorbed would be illegal and he placed reliance on R.S. Makashi Vs. I. M. Menon 1982 (1) SCC 379, Wing Commander J. Kumar Vs. Union of India 1982 (2) SCC 116, K. Madhavan Vs. Union of India 1987(4) SCC 566 and Sub inspector Roop Lal Vs. Lt. Governor Delhi & others 2000(1) SCC 644, Yogendra Prasad Mandal Vs. State of Bihar & others 1998 (3) SCC 137 and Dwijen Chandra Sarkar & another Vs. Union of India & others 1999 (2) SCC 119. We have examined the aforesaid authorities, but do not find that they lend any support to the petitioners. In R.S. Makashi (supra), the Court did not accept that seniority should be determined only on the basis of date of appointment to the post and any departure from the said rule will be prima facie unreasonable and illegal. It held that there is no basis for such assumption and it is devoid of any legal sanction. In fact, the Court did not recognize existence of any rigid or inflexible rule that seniority should always be determined on the basis of respective date of appointments to the post. Recognizing the right of rule making authority to frame a policy taking note of the relevant circumstances obtaining in relation to each department objectively and fairly, it was held :
"Almost the entire reasoning of the learned Single Judge is based on an assumption that there is an invariable "normal rule" that seniority should be determined only on the basis of the respective dates of appointment to the post and that any departure from the said rule will be prima facie unreasonable and illegal. The said assumption is devoid of any legal sanction. We are unable to recognize the existence of any such rigid or inflexible rule. It is open to the rule-making authority to take a note of the relevant circumstances obtaining in relation to each department and determine with objectively and fairness what rules should govern the inter se seniority and ranking of the personnel working in the concerned departments and the courts will only insist the rules so formulated should be reasonable, just and equitable.
In Wing Commander J. Kumar (Supra), the aforesaid view taken in R.S. Makashi (Supra) has been reiterated in para-34 of the judgment. In K. Madhavan (Supra) also the Apex Court as a rule of thumb did not find that the benefit of past service cannot be allowed, but on the contrary in para-17 of the judgment observed "The retrospective appointment or promotion to a post should be given most sparingly and on sound reasoning and foundation." In Roop Lal (Supra), the Court struck down part of the office memorandum, which denied benefit of service rendered by the deputationists prior to absorption finding it to be violative of Article 14 and 16, and, it held "
"It is clear from the ratio laid down in the above case that any rule, regulation or executive instruction which has the effect of taking away the service rendered by a deputationist in an equivalent cadre in the parent department while counting this seniority in the deputed post would be violative of Articles 14 and 16 of the Constitution."
In Yogendra Prasad Mandal (Supra), certain staff working at Singhbhumi Project of Bihar State Forest Development Corporation rendered surplus sought to be absorbed in State Trading Wing of Forest Department of the State Government. The absorptionists contended that their past service rendered in a Public Sector Corporation should be recognized but it was rejected by the Court in the absence of any provision permitting benefit of such service on transfer and absorption in the State Government, as is apparent from the following :
"We have not been shown any provision or any Rule under which the services of an employee of an autonomous body can be transferred to the State Government with continuity of service or preservation of seniority. In the minutes of 11-11-1981 there is no mention of any continuity of service being maintained or the seniority of the staff absorbed being preserved from the date of their joining the Bihar State Forest Development Corporation. In the absence of this specific provision, the appointment in the State cadre has to be considered as appointment from the date when it takes effect".
The benefit was denied by the Court, since, the service rendered in a public sector corporation was not found equivalent to the service rendered in a government department in the absence of any provision permitting or recognizing such equivalence. The aforesaid judgment, therefore, has no application to the facts in the case. Similarly, in Dwijen Chandra Sarkar (Supra), considering the provisions providing benefit of past service except seniority, it was held that benefit of past service for the purpose of seniority cannot be extended in all cases. In the present case, however, the position is different, since the rules under challenge clearly provide and contemplate benefit of past service to a persons, who may apply for absorption in UPRVUNL. Learned counsel for petitioner could not place any authoritative pronouncement to show that a provision made by an employer recognizing past service of a service of a person sought to be employed either by way of absorption or recruitment by direct appointment or in any other manner would per se be arbitrary, discriminatory and unreasonable. Even otherwise, we are of the view that in the facts and circumstances of the case, the respondent are justified to make such a provision, which has rational nexus and object to be achieved. Recently, in Indu Shekhar Singh & others Vs. State of U.P. & others J.T. 2006(5) SC 260, certain employees working in U.P. Jal Nigam were sent on deputation to Ghaziabad Development Authority. They were permitted to exercise option for absorption to Development Authority on a clear condition that their past services in U.P. Jal Nigam would not count for the purpose of seniority. The deputationists accepted the condition and opted for absorption whereupon the order were issued observing them in Development Authority. Subsequently, they approached this Court seeking a writ of mandamus commanding respondents to give benefit of past service rendered by them for the purpose of seniority. The writ petition was allowed by this Court and in appeal, the Apex Court after considering various judgments including those which have been referred by the learned counsel for the petitioners before us, namely, R.S. Makashi (Supra), Wing Commander J. Kuamr (Supra), K. Madhavan (Supra) and Sub Inspector Roop Lal (Supra) held in para 24 of the judgment that the past services may be directed to be counted towards seniority in two situations-(1) when their exist a rule directing consideration of seniority and (2) where recruitment is made from various sources, it would be rational to frame a rule considering the past service of the employees concerned. It further held that if the situation warrants, a provision may or may not be made to give benefit of past service for the purpose of seniority and accordingly reversed the judgment of this Court. Thus, it can safely be said that if a provision is made for acknowledging past service of a person sought to be recruited in service for the purpose of seniority, this by itself would not be illegal and arbitrary merely for the reason that it may rob off some places in the seniority to the employees who are already in service, but validity of such a provision can be tested on the anvil of Article 14 and 16 to see whether the provision is rational, reasonable and just.
The aforesaid provision has been made by UPRVUNL in the compelling circumstances on account of huge deficiency of working hands and non availability of experienced technical staff. The UPRVUNL after due diligence, found that the experienced staff from other energy sectors may be lured for appointment in UPRVUNL, if certain advantages are to be retained for them. It is also worthy to notice that the advantages, which UPRVUNL intends to confer upon such prospective applicants, is not something, which they did not posses at all. If the benefit in the matter of seniority is sought to be conferred to a person, who has no past service to his credit, such benefit may prima facie be unreasonable. But it is not disputed that the persons working in other energy sectors in the State of U.P., namely, UPPCL or UPJVNL are those, who were working in UPSEB at the time when the petitioners were also working and they were enjoying higher seniority over these petitioners. Therefore, the effect, if any, of implementation of the rules in question would be that if some engineering officers working in UPPCL or UPJVNL, who are already absorbed thereat finally, seeks their appointment by absorption now in UPRVUNL, they would join the later establishment with the benefit of past service and at the best, it would result in restoring their seniority qua petitioners as in UPSEB. No new benefit is sought to be conferred upon them. In the entirety of the facts and circumstances, we do not find in any manner, the provisions under question, unreasonable, irrational or arbitrary. It is always open to the employer to provide weightage to past service and experience of a person in the interest of its institution and to bring more & more efficiency in administration. Therefore, the rules under question are neither illegal nor arbitrary nor violative of Article 14 and 16 of the Constitution."
In relation to Question No. (v), this Court in the judgment dated 29.11.2006 observed as under:-
"Coming to the last submission that Regulations, 2006 is irrational, invalid being malicious and result of mala fide exercise of the power, we find that so far as the plea of mala fide is concerned, the petitioners have not laid down any factual foundation fortifying their submission. In the absence of any pleading, the plea of mala fide cannot even be entertained and, therefore, we reject the aforesaid submission. So far as the rationality of Regulations, 2006 is concerned, this issue has already been dealt with while considering question nos. 2, 3 and 4.
In view of the aforesaid discussions, we are of the considered view that the U.P. Rajya Vidyut Utpadan Nigam Limited Absorption Regulations, 2006 is neither illegal nor arbitrary nor otherwise unjust and U.P. Rajya Vidyut Utpadan Nigam Ltd. is well within its rights to frame and promulgate the same under the provision of Clause 118(IX) of the Article of Association read with Section 23(7) of the Reforms Act, 1999 and Clause 6(10) of the Transfer Scheme, 2000.
In view of the discussions made hereinabove, the writ petition fails and is, accordingly, dismissed.
However, there shall be no order as to costs."
Reverting to Question No. 2, framed above, which is to the effect that whether 'Seniority' is a fundamental right, we on the basis of answer to Question Nos. 2, 3 and 4 framed by the Division Bench of this Court in the judgment dated 29.11.2006, quoted above and judgments referred therein, hold that 'Seniority ' is not a fundamental right rather it has to be fixed as per Rules applicable.
We have already hod, in preceding paras, that the petitioners belong to separate class, as they were employees of UIL, which was not the part of Energy Sector, and class between the class has not been created by Regulations of 2006 and considering the past service of employees of Energy Sector and the employees of other than Energy Sector, the service benefits have been provided under the Regulations of 2006 including the Regulation under issue. Considering the earlier working of petitioners and employees of Energy Sector, the Regulations of 2006 have framed.
In view of the reasons recorded hereinabove and the reasons recorded in the judgment dated 29.11.2006, quote above, while giving the findings on the Question Nos. 2, 3, 4 and 5, formulated in the judgment dated 29.11.2006, we hold that Regulation 4(B) of the Regulations of 2006 is not unconstitutional. Accordingly, answer to the Question No. 3 is "Negative" i.e. against the petitioners.
In view of the above, we are of the view that the present case is squarely covered under the judgment dated 29.11.2006. Question No. 4 is answered accordingly.
Needless to say that the judgment dated 29.11.2006 was challenged before the Apex Court vide Civil Appeal No (s). 2663 of 2007 [Rajeev Kumar Jauhari and another v. State of U.P. and others] and the Apex Court vide judgment and order dated 25.08.2011 passed in Civil Appeal No (s). 2663 of 2007 [Rajeev Kumar Jauhari and another v. State of U.P. and others], dismissed the appeal. The order dated 25.08.2011 reads as under:-
"Heard learned counsel for the appearing parties.
On the facts of the cases, "we are of the opinion that these are not fit cases to interfere under Article 136 of the Constitution of India." We order accordingly.
The Civil Appeals and the Special Leave Petition are dismissed accordingly."
For the foregoing reasons and findings recorded by us in the preceding paras, the writ petition lacks merit. It is accordingly, dismissed with no order as to costs.
Order Date :- 27.09.2019 Arun/-