Case: North Delhi Power Ltd Vs. Govt. Of N.C.T.

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." 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 It has superseded the earlier direction dated 09.01.2004.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 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 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 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.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]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. In stead, 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. In stead, detailed submissions were filed predominantly raising the 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 this is insufficient, we do not find this question to have been raised in the present appeal also. The contention raised is, therefore,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 theis, 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.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.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.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 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 anddo 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 arising out of the transfer under Rule 4 or the liabilities contemplated in Rule 6. The contention is clearlydo 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 Highhave 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 theargument 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 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 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 thisis absolutely clear that by this letter the whole liability was put on the head of the DISCOMS. The appellant is only one of the DISCOMS who would have been the controlling authority of the employees had those employeesour 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 presentanswer which was provided when construed closely would bring about theinterpretation 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 theour 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 theSenior Counsel, therefore, very heavily relied on this Section, which argument, in our opinion is incorrect.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 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.