North Delhi Power Limited vs Govt. of National Capital Territory of Delhi

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2010 Supreme(SC) 389

Supreme Court of India
THE HONOURABLE MR. JUSTICE V.S. SIRPURKAR & THE HONOURABLE MR. JUSTICE SURINDER SINGH NIJJAR
North Delhi Power Limited & Others
Versus
Govt. of National Capital Territory of Delhi & Others
CIVIL APPEAL No. 4269 OF 2006 WITH CIVIL APPEAL No. 4270 OF 2006
Decided on : 03-05-2010

Advocates appeared:
For the Appearing Parties:P.P. Malhotra, ASG, P.P. Rao, Sudhir Nandrajog, P.S. Patwalia, Jayant Nath, Sr. Advocates, Anupam Verma, Abhay Kumar, Abhishek Munot, Ashish Kumar, Ms. Vibha Datta Makhija, Mansoor Ali Shoket, Ms. A. Ahlawat, Ms. Rani Chhabra, S.K. Dubey, Rakesh K. Sharma, Jamal Akhtar, Ashok Gurnani (for Mrs. Rachna Gupta), Devashish Bharukha, Advocates.

Headnote:(a) Constitution of India – Article 136 – Contention not raised before High Court – Cannot be raised before High Court. (Para 21)
       (b) Delhi Electricity Reforms (Transfer Scheme) Rules, 2001 – Rule 8(3) – Purpose of Rule 8(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 DISCOMs – Ceiling of rupees one crore per annum has been provided – Any amount in excess shall be to the account of the holding company – Amount cannot be included in the revenue requirements of the DISCOMS for any reason – 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. (Para 29)
       (c) Delhi Electricity Reforms (Transfer Scheme) Rules, 2001 – Rule 8(3) – Provision cannot be rendered unconstitutional in any manner – More so when the provision was put in at the instance of the DISCOMs. (Para 30, 31)
       (2009) 5 SCC 625; (2006) 10 SCC 452; (2006) 8 SCC 726; (1978) 2 SCC 50; (2008) 4 SCC 190; (2005) 7 SCC 234 – Distinguished
       (d) Delhi Electricity Reforms (Transfer Scheme) Rules, 2001 – Rule 6(2) and (8) – Transfer of personnel and all the principles are governed by Rule 6 alone – Rule 6(2) provides for transfer of personnel classified into five groups on "as is where is" basis – Specific reference made GENCO, TRANSCO and three DISCOMS – No reference to DPCL – DPCL and no liability of personnel – Rule 6(8) covers employment related matters – High Court correctly appreciated the position. (Para 33)
       (e) Delhi Electric Reforms Act, 2000 – Section 57, 60 and 15 r/w Rule 12(1) and (2) – Government communication dated 21.01.2004 – Removal of doubts under section 60 and Rule 12 and not under section 57 – Bar of two years not applicable. (Para 40, 41)
       (f) Delhi Electricity Reforms (Transfer Scheme) Rules, 2001 – Rule 12(1) – There can be no finality in the matter of removal doubts or the removal difficulties and also taking the decisions under Rule 12(1) – Exercising power under Rule 12(1) once does not exhaust Government’s power to remove difficulties to take decisions.
       (Para 42)
       Facts of the case:
       The question arising in these appeals is “whether the appellants are responsible for meeting the liabilities relating to employees who ceased to be the employees of erstwhile Delhi Electric Supply Undertaking (Predecessor of Delhi Vidhyut Board -DVB) prior to 1.7.2002 on account of their retirement, removal, dismissal or compulsory retirement in accordance with the provisions of Delhi Electric Reforms Act, 2000?"
       The Delhi High Court has held that the appellants alone would be responsible to meet such liabilities.
       Finding of the Court:
       Appeals have no merit.
       Result:
       Appeals dismissed.

Judgment :-

V.S. SIRPURKAR, J

1. This judgment shall dispose of the two appeals being CA No. 4269 of 2006 and CA No. 4270 of 2006. Civil Appeal No.4269/2006 has been filed on behalf of North Delhi Power Limited and Civil Appeal No.4270 of 2006 has been filed by BSES Rajdhani Limited. Since a common question falls for consideration in both the appeals, the same are disposed of by this common judgment. The question can be framed as under:

"Whether the appellants are responsible for meeting the liabilities relating to employees who ceased to be the employees of erstwhile Delhi Electric Supply Undertaking (Predecessor of Delhi Vidhyut Board -DVB) prior to 1.7.2002 on account of their retirement, removal, dismissal or compulsory retirement in accordance with the provisions of Delhi Electric Reforms Act, 2000?"

By the impugned judgment dated 30.3.2006 passed by the Delhi High Court, the High Court has held that the appellants alone would be responsible to meet such liabilities.

2. In order to understand the nature of controversy and the ramifications thereof, some facts common to both these appeals would be necessary.

Common Facts:

3. The Legislative Assembly of the National Capital Territory of Delhi passed the Act on 23.11.2000 being Delhi Electric Reforms Act, 2000 (hereinafter called the "Act, 2000"). This Act came into force on 8.3.2001.

The Preamble of this Act reads as under:

"An Act to provide for the constitution of an Electricity Commission, restructuring of the electricity industry (rationalization of generation, transmission, distribution and supply of electricity), increasing avenues for participation of private sector in the electricity industry and generally for taking measures conducive to the development and management of the electricity industry in an efficient, commercial, economic and competitive manner in the National Capital Territory of Delhi and for matter connected therewith or incidental thereto.

BE it enacted by the Legislative Assembly of the National Capital Territory of Delhi in the Fifty-first year of the Republic of India as follows:"

Section 2 pertains to definitions of relevant terms used in the Act and sub-section (1) contains the definitions clauses. Sub-sections (2) and (3) of Section 2 run as under:

"(2) Words and expressions used but not defined in this Act and defined in the Electricity (Supply) Act, 1948 (Central Act 54 of 1948) have the meanings respectively assigned to them in that Act.

(3) Words and expressions used but not defined either in this Act or in the Electricity (Supply) Act, 1948 (Central Act 54 of 1948) and defined in the Indian Electricity Act, 1910 (Central Act 9 of 1910) have the meanings respectively assigned to them in that Act."

Thus the definitions of relevant terms under Electricity (Supply) Act, 1948 and Electricity Act, 1910 were incorporated in the Act, 2000. Section 3 of the Act, 2000 provides for establishment of Delhi Electricity Regulatory Commission. The functions of this Commission are provided in Section 11. Some of the functions, amongst others, as provided in Section 11 (1) are as under:

"(c) to regulate power, purchase and procurement process of the licensees and transmission utilities including the price at which the power shall be procured from the generating companies, generating stations or from other sources for transmission, sale, distribution and supply in the National Capital Territory of Delhi;

(d) to promote competition, efficiency and economy in the activities of the electricity industry to achieve the objects and purposes of this Act;

(e) to aid and advise the government in matters concerning electricity generation, transmission, distribution and supply in the National Capital Territory of Delhi;

(h) to promote competitiveness and make avenues for participation of private sector in the electricity industry in the National Capital Territory of Delhi and also to ensure a fair deal to the customers;

(k) to regulate the assets, properties and intere

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2010 Supreme(SC) 389

Cases Referred (6)