Hon’ble Sudhir Agarwal, J.—Whether U.P. Rajya Vidyut Utpadan Nigam Limited Absorption Regulations, 2006 (hereinafter referred to as Regulations, 2006) framed by the U.P. Rajya Vidyut Utpadan Nigam is illegal, arbitrary and ultra vires is the question raised in the writ petition.

2. The facts are not in dispute, but, to appreciate the controversy, may be narrated in brief, as under :

3. In the State of Uttar Pradesh, generation, distribution and transmission of electrical energy upto 1989 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 (in short ‘’1948 Act’). With the expansion of the generation units, a government company, namely, U.P. Rajya Vidyut Utpadan Nigam Limited (in short ‘’UPRVUNL’) was incorporated under the Companies Act, 1956 in the year 1980. It is wholly owned by the State Government of Uttar Pradesh. Similarly, in 1985, another company, U.P. Jal Vidyut Nigam Limited (in short ‘’UPJVNL’) was incorporated which was also wholly owned by the State Government of U.P. A major power reform was brought into force in the year 1999 by the legislature enacting U.P. Electricity Reforms Act, 1999 (in short “Reforms Act, 1999”) which was assented to by the President of India on 23.6.1999 and published in U.P. Gazette (Extraordinary) on 7.7.1999. Section 13 of Reforms Act, 1999 provides for formation of a company namely U.P. Power Corporation Ltd. (in short ‘’UPPCL’) registered under the Companies Act, 1956, which is required to undertake planning and co-ordination in regard to transmission, to determine the electricity requirement in the State in consultation with the generation companies etc. and be a legal successor of UPSEB in relation to all power purchase and transmission agreements. Section 23(1) of Reforms Act, 1999 provides that on and from the date specified in the Transfer Scheme prepared by the State Government to give effect to the objectives of the Act, all properties, interest, right and liabilities of the Board shall be vested in the State Government and, thereafter, shall re-vest in the UPPCL and generating companies in accordance with the Transfer Scheme so specified, on such terms and conditions as may be determined, by the State Government. Sub-section 7 of Section 23 relates to the transfer of the employees of UPSEB to UPPCL and other generating companies on notification of Transfer Scheme and reads as under :

“The State Government may provide in any of the Transfer Schemes framed under this section for the transfer of personnel to the Power Corporation or a company subsidiary to the Power Corporation or a generating company, on the vesting of properties, rights and liabilities in the Power Corporation or a company subsidiary to the Power Corporation or a generating company, as a part of the undertakings transferred under this section and on such transfer the personnel shall hold office or service under the Power Corporation or a company subsidiary to it or a generating company, as the case may be, on terms and conditions that may be determined in accordance with the Transfer Scheme subject however to the following, namely ;

(a) terms and conditions of service of the personnel shall not be less favourable to the terms and conditions which were applicable to them immediately before the transfer;

(b) the personnel shall have continuity of service in all respect; and

(c) all benefits of service accrued before the transfer shall be fully recognized and taken into account for all purposes including the payment of any of all terminal benefits;

Provided that, nothwithstanding anything contained in any other law for the time being in force, and except as provided in the Transfer Scheme and in this Act, the transfer shall not confer any right on the personnel so transferred to any compensation or damages :

Provided further that the posts in the Board of all the personnel whose services are to b