IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.BALAKRISHNAN NAIR & THE HONOURABLE MR. JUSTICE P.BHAVADASAN WEDNESDAY, THE 2ND DECEMBER 2009 / 11TH AGRAHAYANA 1931 WP(C).No. 26987 of 2009(P) ------------------------------------- PETITIONER(S): ---------------------- 1. K.MURALEEDHARAN NAIR, OVERSEER, K.S.E.B, SECTION OFFICE, NALANCHIRA, THIRUVANANTHAPURAM WEST DIVISION,THIRUVANANTHAPURAM. 2. SUNDARA RAJAN.K.E, ACCOUNTS OFFICER, K.S.E.B,O/O.THE SPECIAL OFFICER (REVENUE), VYDYUTHI BHAVANAM, PATTOM,THIRUVANANTHAPURAM. 3. M.M.VARGHESE, DEPUTY CHIEF ENGINEER, K.S.E.B, O/O.THE CHIEF ENGINEER(CIVIL CONSTRUCTION) SOUTH, VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM. 4. S.SALIM, SUB ENGINEER(TRAINEE), K.S.E.B, ELECTRICAL SECTION, THIRUMALA, THIRUVANANTHAPURAM. 5. A.L. PYLOTH, SPECIAL GRADE DRIVER-I, K.S.E.B, ELECTRICAL CIRCLE STORE, THRISSUR. 6. K.RAJAGOPAL, SUB ENGINEER, K.S.E.B, ELECTRICAL SECTION, POOJAPPURA, THIRUVANANTHAPURAM. 7. K.VASUDEVAN NAIR, SUB ENGINEER, K.S.E.B, ELECTRICAL SECTION, KARAMANA, THIRUVANANTHAPURAM. 8. M.SIVARAJAN, OVERSEER, K.S.E.B, ELECTRICAL DIVISION, POOVAR, NEYYATTINKARA DIVISION, THIRUVANANTHAPURAM. 9. V.SUBRAMANIAN, OVERSEER (ELECTRICAL), 110 KV SUB STATION, NEDUMANGAD, THIRUVANANTHAPURAM. BY ADV. DR.K.P.SATHEESAN & ADV. SRI.K.K.GOPINATHAN NAIR - 2 - WP(C).No. 26987 of 2009(P) RESPONDENT(S): ------------------------- 1. STATE OF KERALA, REPRESENTED BY THE PRINCIPAL SECRETARY, FINANCE (RULES) DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. THE PRINCIPAL SECRETARY, POWER (A) DEPARTMENT., GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 3. KERALA STATE ELECTRICITY BOARD,(K.S.E.B.IN SHORT), REPRESENTED BY ITS SECRETARY, VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM. 4. THE CHIEF ENGINEER (H.R.M.), KERALA STATE ELECTRICITY BOARD, VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM. R1 & R2 BY SPECIAL GOVT. PLEADER SRI. N. MANOJKUMAR. R3 AND R4 BY ADV. SRI.N.N.SUGUNAPALAN, SENIOR ADVOCATE & ADV.SRI.K.S.ANIL, STANDING COUNSEL THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02/12/2009 ALONGWITH W.P.(C) No.16448/09 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 26987 of 2009(P) APPENDIX PETITIONER'S EXHIBITS: Ext.P1: True copy of the Notification, G.O.(Ms) No.37/2008/PD dated 25.9.2008. Ext.P2: True copy of the Order, B.O.(FB) nO.1664/2002 dated 10.12.2002. Ext.P3: True copy of the Order, G.O.(P) No.154/2009/Fin. dated 24.4.2009. Ext.P4: True copy of the Order, G.O.(P) No.158/2009/Fin. dated 30.4.2009. Ext.P5: True copy of the Order, B.O.(FB) No.1390/2009 dated 26.5.2009. Ext.P6: True copy of the Government Order, S.R.O.No.582/2009 dated 4.7.2009. Ext.P7: True copy of the interim order dated 30.7.2009 in WP(C) No.14601/2009 and connected cases. Ext.P8: True copy of the judgment dated 10.8.2009 in WPC No.14601/09 and connected Writ Petitions. Ext.P9: True copy of the Order, G.O.(Rt) No.239/2009/PD dated 18.9.2009. Ext.P10: True copy of the Order, B.O. (MG) No.2448/2009 dated 22.9.2009 (True copy) P.S. TO JUDGE. “C.R.” K. BALAKRISHNAN NAIR & P. BHAVADASAN, JJ. ------------------------------ W.P.(C) Nos.26987, 16448, 17510, 17765, 20436, 20469, 26988, 26992, 27299, 27252, 27263, 27297, 27323, 27330, 27331, 27394, 27522, 27523, 27553, 27623, 27717, 29018, 29466, 29918, 30559, 30655, 30937, 30842, 33672, 33937, 34299 and 34421 of 2009 ------------------------------ Dated this, the 2nd day of December, 2009 JUDGMENT Balakrishnan Nair, J. The petitioners are/were employees of the Kerala State Electricity Board (hereinafter referred to as 'the Board'). The Government amended Rule 60(a) of Part I, Kerala Service Rules, modifying the date of retirement of the Government servants from the last day of the month in which they attain the age of 55 years to the last day of the financial year concerned in which they attain the said age. The benefit of the said amendment has not been extended to the petitioners, by the Managing Committee of the Board and the Government. Feeling aggrieved by the said stand of the Managing Committee and the Government, these Writ Petitions are filed. Since the very same point arises for decision in all these Writ Petitions, WP(C) No.26987/09 etc. - 2 - they are heard together and disposed of by this common judgment. WP(C) No.26987 of 2009: 2. This Writ Petition is treated as the main case for the purpose of referring to the parties and the exhibits. The petitioners, who are employees of the Board, are due to retire from service during this financial year. The Kerala State Electricity Board is a statutory Board, constituted under the provisions of the Electricity (Supply) Act, 1948. The service conditions of its employees were governed by the regulations framed by the Board under Section 79(c) of the aforementioned Act. By virtue of the regulation making power, the Board has adopted the Kerala Service Rules, the Kerala State and Subordinate Services Rules, etc., for regulating the service conditions of its employees. When the Government introduced amendments to these rules from time to time, the Electricity Board, usually, took decisions to adopt those amendments also. Finally, the Board by Ext.P2 Board Order, which was issued WP(C) No.26987/09 etc. - 3 - based on a decision of the Board held on 27.11.2002, provided that all the amendments brought to the Kerala Service Rules and the Kerala Service and Subordinate Services Rules will automatically apply mutatis mutandis to the Board employees also, unless otherwise decided by the Full Board. 3. The retirement age of the employees of the Board was governed by Rule 60(a) of Part I, Kerala Service Rules, (for short, “K.S.R”), which provided that the employees shall retire from service on the last day of the month in which they attain the age of 55 years. The Government, by Ext.P3 order dated 24.4.2009, decided to amend the said rule, by making the date of retirement of all the employees as the last day of the financial year, that is, 31st March of the concerned year. The Government issued Ext.P4 order on 30.4.2009, to extend the benefit of Ext.P3 to all Public Sector Undertakings, Autonomous bodies, Universities, Corporations and Boards under the State Government. It was also ordered that in the case of autonomous bodies, Ext.P3 will apply, subject to the WP(C) No.26987/09 etc. - 4 - decision of their governing bodies. On the basis of Ext.P4, the Electricity Board as per Ext.P5 Board Order, which was issued based on the decision of the Board Meeting held on 21.5.2009, ordered not to make applicable Ext.P3 to the K.S.E.B. employees. The result of Ext.P5 decision was that the Board employees will continue to be governed by the unamended provisions contained in Rule 60 (a) of Part I, K.S.R. Soon thereafter, the Government issued G.O.(P) No.261/2009/Fin, dated 4.7.2009, (a copy of which is produced as Ext.P6), formally amending Rule 60(a) of Part I, K.S.R. with effect from 24.4.2009, that is, the date of Ext.P3. The original sub-rule(a) of Rule 60 of Part I, K.S.R. was substituted by the following sub-rule, which reads as follows: “(a) Except as otherwise provided in these rules the date of compulsory retirement of employees and teachers shall take effect from the afternoon of the last day of the financial year in which they attain the age of 55 years. They may be retained after this date only with the sanction of Government on public grounds which must be recorded in writing, but they must not be retained after the age of 60 years except in very special WP(C) No.26987/09 etc. - 5 - circumstances; Note:- The extended period of service under sub-rule(a) shall be reckoned for all service benefits such as increment, pension, higher grade, accrual of leave, promotion and pay revision”. In view of Ext.P6 formal amendment introduced to Rule 60(a) of Part I, K.S.R., the Board employees claimed the benefit of the same, on the strength of Ext.P2 decision of the Board, which states that unless otherwise decided, all amendments to the Kerala Service Rules and the Kerala State and Subordinate Services Rules will automatically apply to the Board employees. 4. But, while the above developments were taking place, as a result of the enforcement of Electricity Act, 2003 (Act 36 of 2003) (hereinafter referred to as “the Act”), certain drastic changes took place in the administration of the K.S.E.Board. Part XIII of the aforementioned Act provided for re-organisation of State Electricity Board. Section 131 contained in the said Part, provided that all the properties of WP(C) No.26987/09 etc. - 6 - the Board shall vest in the Government with effect from the date on which a transfer scheme prepared by the State Government to give effect to the objects and the purposes of the Act is published or with effect from such further date, as may be stipulated by the State Government. Sub-section (2) of Section 131 of the Act provided for the formation of a Government company or companies, and re-vesting of the properties, which vested in the Government, with all rights and liabilities, in that company/companies, as per the transfer scheme. The State Government, invoking its power under sub-sections (1), (2), (5), (6) and (7) of Section 131 read with Section 133 of the Act, framed Ext.P1 transfer scheme dated 25.9.2008. When Section 131 deals with the properties of the Board, Section 133 deals with its officers and employees. As per Ext.P1 scheme, during the interregnum between the date of issuance of the scheme and the date of establishment of the Government company/companies, the officers and employees of the Board will work under the Managing Committee constituted for running the affairs of the Board. During the WP(C) No.26987/09 etc. - 7 - transitional period, the Managing Committee will be running the affairs of the Board on behalf of the Government. The erstwhile Board was to function as the Managing Committee. The scheme provided that the service conditions of the employees, which existed on the date of introduction of the transfer scheme, will continue to be in force. It further provides that during the transitional period, the officers and employees of the Board will be deemed to be under the services of the State Government. 5. In view of the aforementioned conditions contained in Ext.P1, the petitioners and others claimed that they are Government servants and therefore, they are entitled to continue in service till the end of the financial year in which they attain the age of superannuation. When their claims were resisted by the Board and its management, they approached this Court, seeking appropriate reliefs for retention in service till the end of the financial year. This Court, after hearing both sides, passed Ext.P7, common interim order, in that case and WP(C) No.26987/09 etc. - 8 - connected cases on 30.7.2009. Later, those Writ Petitions were disposed of by Ext.P8 judgment dated 10.8.2009, making Ext.P7 interim order absolute. Since the Managing Committee was running the affairs of the Board on behalf of the Government, this Court directed the Government to take a decision whether Ext.P6 amendment could be made applicable to the Board employees, taking into account the views of the Managing Committee, that may be communicated to them. The Government passed Ext.P9 order dated 18.9.2009, deciding not to make applicable Ext.P6 to the Board employees. Pursuant to the said decision, the Board passed Ext.P10 consequential order on 22.09.2009, superannuating all those who have crossed the date of superannuation as per the unamended provisions of Rule 60(a) of Part I, K.S.R. Challenging Exts.P9 and P10, and seeking consequential reliefs, the Writ Petition was filed. The Electricity Board and the Government have filed separate counter affidavits, resisting the prayers in the Writ Petition. The petitioners have filed a reply affidavit. WP(C) No.26987/09 etc. - 9 - 6. We heard the learned counsel on both sides. The learned counsel, Dr.K.P.Satheesan, appearing for the petitioners, submitted that by virtue of clause 5(6) of Ext.P1, the petitioners are deemed to be Government servants. All Government servants are retiring only on the last day of the financial year in which they attain the age of superannuation. The benefit of Ext.P6 amendment to Rule 60(a) of Part I, K.S.R. is extended to the employees of all public sector undertakings, autonomous bodies, Corporations, Statutory Boards etc. Thus, by not extending the said benefit, the employees of the Board are subjected to hostile discrimination. Since the petitioners are deemed to be under the services of the Government, they need retire from service only on the date when other Government servants, who are similarly placed, retire. The learned counsel made special reference to the last limb of clause 5(6) of Ext.P1 scheme, in support of his submissions. The learned counsel further submitted that once the petitioners are deemed to be Government servants, they are entitled to get the benefits applicable to other Government WP(C) No.26987/09 etc. - 10 - servants. To explain the purport of the deeming provision, the learned counsel relied on the decision of the Apex Court in Ali v. State of Kerala, 2003 (1) KLT 922(SC). After referring to Ext.P9, the impugned order passed by the Government, the learned counsel submitted that the said order does not contain any reason for not extending the benefit of Ext.P6 to the petitioners. Further, it is pointed out that, by Ext.P9, the Government have decided to exempt the Board employees from the operation of Ext.P6. Going by Rule 7 of Part I, K.S.R., the order exempting them from the operation of amended Rule 60(a) is unsustainable. So, the learned counsel prayed for quashing Exts.P9 and P10. 7. Sri. N.Sugathan, learned counsel who appeared for the petitioners in a connected Writ Petition, submitted that going by the counter affidavit filed by the Board, it is seen that as directed by this Court in Ext.P8 judgment, the Board has not chosen to place its views before the Government. The Board took the decision, not to follow Ext.P3, as per Ext.P5 order WP(C) No.26987/09 etc. - 11 - dated 26.5.2009. After Ext.P8 judgment, only the Secretary of the Board communicated its views and though the said action of the Secretary is ratified by the Board, the same will not satisfy the requirements of law. The Board itself should have taken the decision, it is submitted. 8. Sri.N.N.Sugunapalan, learned Senior Counsel, who appeared for the Electricity Board, supported the impugned orders. Referring to clause 5(11) of Ext.P1 scheme, it is submitted that all existing circulars and orders of the Board will continue to remain in force even after the issuance of Ext.P1. Clause 5(6), though, says that the petitioners will be deemed to be under the services of the State Government, the same is qualified by the provision that they will continue to be under the same terms and conditions as were applicable to them while they were working under the Board. According to the learned Senior Counsel, the deeming provision will not enable the petitioners to get all the benefits applicable to the Government servants, unless there is a specific decision to that WP(C) No.26987/09 etc. - 12 - effect. The learned Senior Counsel, after referring to Sections 131 and 133 of the Electricity Act, 2003, submitted that in the light of the provisions of the said Sections read with Ext.P1 scheme, the claim of the writ petitioners is unsustainable. 9. The learned Government Pleader, Sri.Manoj Kumar, also supported the impugned orders and pointed out that the Government have taken the decision in Ext.P9, in the light of Ext.P8 judgment. Both sides are bound by the said judgment and therefore, the contention that Ext.P6 amendment will automatically apply to the petitioners is not available to them, in view of Ext.P8 judgment, which has become final. They can get the benefit of Ext.P6 amendment, if only there is a decision by the Government extending it to the Board employees. The Government have decided against them. Therefore, the Writ Petition is liable to be dismissed, it is submitted. 10. Before referring to the rival contentions, we will refer to the relevant provisions in the Statute. Section 131 of WP(C) No.26987/09 etc. - 13 - the Electricity Act, 2003 deals with vesting of properties, assets and liabilities of the Board in the State Government, subject to the transfer scheme notified and its re-vesting in the Government company/companies formed under the provisions of the Companies Act. Section 133 of the aforementioned Act deals with transfer of officers and employees. The relevant provisions of Sections 131 and 133 of the Act are quoted below, for convenient reference. “131. Vesting of property of Board in State Government.- (1) With effect from the date on which a transfer scheme, prepared by the State Government to give effect to the objects and purposes of this Act, is published or such further date as may be stipulated by the State Government (hereafter in this Part referred to as the effective date), any property, interest in property, rights and liabilities which immediately before the effective date belonged to the State Electricity Board (hereafter referred to as the Board) shall vest in the State Government on such terms as may be agreed between the State Government and the Board. (2). Any property, interest in property, rights and liabilities, vested in the State Government under sub-section (1) shall be re-vested by the State WP(C) No.26987/09 etc. - 14 - Government in a Government company or in a company or companies, in accordance with the transfer scheme to be published along with such other property, interest in property, rights and liabilities of the State Government as may be stipulated in such scheme, on such terms and conditions as may be agreed between the State Government and such company or companies being State Transmission Utility or generating company or transmission licensee or distribution licensee, as the case may be. xxx xxx xxx xxx xxx xxx (5). A transfer scheme under this section may - (a) provide for the formation of subsidiaries, joint venture companies or other schemes of amalgamation, merger, reconstruction or arrangements which shall promote the profitability and viability of the resulting entity, ensure economic efficiency, encourage competition and protect consumer interests; (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; or (ii) by referring to all the property, interest in property, rights and liabilities comprised in a described part of the transferor's undertaking, or WP(C) No.26987/09 etc. - 15 - (iii) partly in one way and partly in the other; (c) provide that any rights or liabilities stipulated or described in the scheme shall be enforceable by or against the transferor or the transferee; (d) impose on the transferor an obligation to enter into such written agreements with or execute such other instruments in favour of any other subsequent transferee as may be stipulated in the scheme; (e) mention the functions and duties of the transferee; (f) make such supplemental, incidental and consequential provisions as the transferor considers appropriate including provision stipulating the order as taking effect; and (g) provide that the transfer shall be provisional for a stipulated period. (6). All debts and obligations incurred, all contracts entered into and all matters and things engaged to be done by the Board, with the Board or for the Board, or the State Transmission Utility or generating company or transmission licensee or distribution licensee, 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 the Board, with the Board or for the State Government or the transferee and all suits or other legal proceedings instituted by or against the Board or transferor, as WP(C) No.26987/09 etc. - 16 - the case may be, may be continued or instituted by or against the State Government or concerned transferee, as the case may be. (7). The Board shall cease to be charged with and shall not perform the functions and duties with regard to transfers made on and after the effective date. Explanation.- For the purposes of this Part, (a) “Government company” means a Government company formed and registered under the Companies Act, 1956 (1 of 1956); (b) “company” means a company to be formed and registered under the Companies Act, 1956 (1 of 1956) to undertake generation or transmission or distribution in accordance with the scheme under this Part.”. “133. Provisions relating to officers and employees.- (1) The State Government may, by a transfer scheme, provide for the transfer of the officers and employees to the transferee on the vesting of properties, rights and liabilities in such transferee as provided under section 131. (2) Upon such transfer under the transfer scheme, the personnel shall hold office or service under the transferee on such terms and conditions as may be determined in accordance with the transfer scheme: WP(C) No.26987/09 etc. - 17 - Provided that such terms and conditions on the transfer shall not in any way be less favourable than those which would have been applicable to them if there had been no such transfer under the transfer scheme. Provided further that the transfer can be provisional for a stipulated period. Explanation.- For the purpose of this section and the transfer scheme, the expression “officers and employees” shall mean all officers and employees who on the date specified in the scheme are the officers and employees of the Board or transferor, as the case may be.”. In the light of the above statutory provisions, we have to interpret the relevant provisions of Ext.P1 scheme. Clause 4(1) of Ext.P1 reads as follows: “(1) The functions, properties and all interests, rights in properties, all rights and liabilities of the Board as specified in the Schedule shall stand vested in the State Government as provided in sub-section (1) of Section 131 of the Act with effect from the date on which this transfer Scheme is published in the official gazette.” WP(C) No.26987/09 etc. - 18 - As per the above quoted provision, the functions, properties and all interests, rights in properties etc. of the Board stand vested in the State Government. Sub-clauses (1) and (2) of Clause 5 of Ext.P1, which deal with management of the Board till the formation of the Government company, read as follows: “5(1) All interests, rights in properties, all rights and liabilities of the Board vested in the State Government under clause 4 shall be administered by the Government in the name as 'Kerala State Electricity Board' by appointing a special officer for this purpose and a managing committee till the date of re-vesting to be notified by the State Government to re-vest the same in a company as provided in sub-section (2) of section 131 of the Act. (2) The managing committee shall consist of the Chairman and Members of the Board and the person who is holding the post of Chairman shall officiate as special officer to act for and on behalf of the State Government to administer all properties, undertakings, assets, liabilities and personnel vested in the State Government as per sub-clause (1) and (2) of clause 4 in the name of transferor.”. WP(C) No.26987/09 etc. - 19 - The fate of the existing employees of the Electricity Board on the notification of Ext.P1 transfer scheme is detailed in clauses 5(6), 5(11) and 6(7). Those provisions are quoted below, for convenient reference. “5(6). The existing officers and employees of the Board, subject to their conditions of service, will continue to discharge their duties, responsibilities, obligations and functions as was done before as per the existing delegation of powers on behalf of the Government in the place of the Board and in the name as 'Kerala State Electricity Board' till it is re-vested in a company by the State Government in accordance with sub-section (2) of Section 131 of the Act and the officers and employees who are discharging their duties under the Scheme during this period shall be deemed to be under the services of the State Government”. “5(11). All orders and circulars issued by competent authorities of the Board till the date of vesting would continue to be applicable during the period till re-vesting and to the transferee on re-vesting and the managing committee shall have power to modify these circulars according to the rules and procedures as was done by the Board.” WP(C) No.26987/09 etc. - 20 - “6(7). The transfer of personnel shall be subject to the terms and conditions contained in section 133 of the Act”. A reading of Clause 5(6) would show that during the transitional period, the officers and employees of the Board shall be deemed to be under the services of the State Government. But, the opening portion of Clause 5(6) would show that, they will be under the services of the State Government with the existing conditions of service.