Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Article 14-Contract Act 1872-s. 23 Disinvestment |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Disinvestment - Transfer of employees from public sector undertaking(PSU) to private sector - NTPC-PSU managing BCPP, wholly owned by BALCO-PSU - NTPC recruiting non-executive employees - Disinvestment of BALCO-PSU by Government, resulting into conversion of BALCO to private sector and existing management deciding to manage BCPP themselves - Transfer of non-executive employees from PSU to private sector on basis of agreement between NTPC and BALCO, enabling NTPC to manage and control BCPP - Justification of - Held: Transfer of employees from NTPC to BALCO bad in law - Agreement between NTPC and BALCO empowering NTPC to make recruitment on behalf of BALCO not in existence when NTPC made recruitments - In absence thereof, clause of appointment letter and undertakings obtained by NTPC from employees for appointment by exercising undue influence illegal, contrary to s.23 as well as violative of Article 14 - Recruitment process was initiated by NTPC and also appointment letters issued by NTPC - Employees were neither party to tripartite agreement nor heard before changing their service condition, thus, action of management violative of Article 14 - Also transfer of only non-executive employees to private sector not sustainable - Factual details show that NTPC was their employer for all purposes - Constitution of India, 1950 - Article 14 - Contract Act, 1872 - s. 23 - Policy decision - Administrative law - Natural justice.NTPC and BALCO are public sector undertakings wholly owned by the Government of India. BCPP is wholly owned by BALCO which was set up for production of power for their units. BALCO entered into an agreement of construction with NTPC. In 1987, NTPC recruited appellants-non executive employees. It issued appointment order stating the terms and conditions of the appointment. They underwent training and on completion of the same, appellants were issued separate appointment orders in the name of NTPC. BALCO and NTPC had entered into an agreement on 22.5.1990 enabling NTPC to manage, operate, supervise, maintain and control BCPP which was to come into operation from 29.6.1987. Appellants were to be posted against the post sanctioned for BCPP, under management of NTPC. When steps were being taken for transferring them to BALCO-public sector undertaking, subsequently by disinvestment policy of the Government, the entire management vested with a private concern under Agreement dated 20.6.2002. It resulted into conversion of BALCO, public sector to private sector and existing management decided to manage BCPP by themselves. Employees filed writ petition challenging the decision of their transfer from a Public Sector Undertaking to private management; that clauses 8.2 and 16.3 of the agreement dated 22.05.1990 be declared as illegal, arbitrary and unenforceable against them as it unilaterally changed the service conditions of all those employees who were not party to the agreement; and that the respondents-Management be restrained from transferring the non-executive workers working under BALCO Captive Power Plant-BCPP to the management of BALCO from NTPC. High Court dismissed the writ petitions. Hence the present appeals.Appellant-employees contended that all the non-executive employees/appellants were the employees of NTPC and after disinvestment of BALCO, their services could not be transferred to a private sector organization-BALCO on the strength of agreement between NTPC and BALCO; that their transfer to private organization amounts to retrenchment by NTPC against their wishes; that clause 16.3 is discriminatory since non-executive employees alone were to be transferred to successor organisation; that unilateral changes made to their service conditions when the employees were not party to the agreement cannot be sustained; and that these employees have every right of protection of their service conditions.BALCO and NTPC contended that all the non-executive employees/appellants were not appointed for NTPC, they were selected and appointed only for BCPP which is owned by BALCO, and hence their action to transfer them to BCPP/BALCO was fully justified. |
Judge | Honble Mr. Justice P. Sathasivam |
Neutral Citation | 2007 INSC 1037 |
Petitioner | Bcpp Mazdoor Sangh And Anr. |
Respondent | N.t.p.c. And Ors. |
SCR | [2007] 10 S.C.R. 1084 |
Judgement Date | 2007-10-11 |
Case Number | 678 |
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