K.C.Shrivastava vs M.P.Power Management Co.Ltd And Others

Learned counsel for the respondent has informed this Court that the issue regarding grant of electricity at concessional rate has already been

considered by the Principal Seat at Jabalpur in the case of M.P.Vidyut Mandal Pensioners' Association and another Vs. M.P.Power  Transmission

 Co.Ltd.and  others W.P.No.821/2013 vide order dated 16.03.2017. The order passed by the Co-ordinate Bench of this Court reads as under:-

“Petitioner, an association of retired personnel (pensioners) of the Madhya Pradesh State Electricity Board (now bifurcated into six companies

formed under the Companies Act, 1956, viz. Madhya Pradesh Power Transmission Co. Ltd., Madhya Pradesh Power Management Co. Ltd., Madhya

Pradesh Power Generating Co.Ltd., Madhya Pradesh Madhya Kshetra Vidyut Vitran Co.Ltd., Madhya Pradesh Poorv Kshetra Vidyut Vitran

Co.Ltd. And Madhya Pradesh Paschim Kshetra Vidyut Vitran Co.Ltd.), being aggrieved of non-continuation of electricity at concessional rate has

approached this Court seeking quashment of order dated 07.06.2012, 11.07.2012, 17.08.2012 and 19.07.2012 and for a direction to the respondents to

extend the benefit of concessional rate of electricity.

Decision was taken by the erstwhile Board on 11.06.1996 to grant concession in respect of supply of electricity to the retired employees of the

Board w.e.f. 1.1.1996 to the extent of 50% of the benefit available to serving class III and IV employees vide Board's Order  No.01-07/WAC/5382

dated 11.06.1996. That, for retired Class I and Class II officers, Board while accepting the recommendation by one man wage Advisory Committee

by its order 87 No.01-07/WAC/1C295 dated 30.10.1996, extended 50% of the benefit of free electricity as available to working officers on the same

terms and conditions with effect from 1.06.1996. 3. That, on the reorganization of erstwhile Madhya Pradesh Electricity Board, the State of Madhya

Pradesh has made the Madhya Pradesh Electricity Reforms First Transfer Scheme, 2003 under Section 131 & 133 of the Electricity Act, 2002 which

has been notified on 30.09.2003 and subsequently amended vide notification dated 13.06.2005 and dated 24.02.2012. By notification dated 19.09.2007

the State Government has fixed the appointed date as 01.06.2005. That sub rule 7(11) of the First Transfer Scheme 2003 envisaged:

“(11) In regard to the finding and due payment of the terminal benefits to the existing pensioners of the Board as on the date of the transfer

following arrangement, but not limited to them, shall be made and till such time such payments shall be duly made by the Board:-

(a) All the existing pensioners of the Board, ason the date of transfer of the personnel, shall be treated as deemed transferred to Transco and they

shall be paid terminal benefits regularly by the Transco. The priority of payment of pension and other terminal benefits to the existing pensioners shall

be at par with the payment of salary and wages to the personnel of the Transco.

(b) A separate fund shall be created by Transcofor payment of pension and other terminal benefits of the existing pensioners through regular

subscription of appropriate amount into a Terminal Benefits Trust being created by the State Government.

(c) The amount of pension and other terminalbenefits payable during each year, as well as subscription to the fund to be built up for payment of

pension and other terminal benefits in future, to the existing pensioners as on the date of transfer, shall be a charge on the revenues of the Transco till

the requisite fund is built up with the Terminal Benefit Trust. For the purpose of sub rule 10 and 11 the term : (i) “Existing Pensioners means all the

persons eligible for the pension as on the date of the transfer from the Board and shall include such family members of the personnel who are entitled

for pension and other terminal benefits,

and

(ii) “Terminal Benefits†means the gratuity, pension, dearness allowance and other applicable relief, medical benefit, and other applicable benefits

including the right to have the appropriate revisions in the above benefits consistent with the practice that were prevalent in the Board.â€​

Similar provision exist in sub rule 7 (10) for theofficers and employees who retired on after 01.06.2005.l The expenditure on payment of pension and

terminal benefits shall be a charge on the revenue of the company from which the officer or employer retires on or after 1.06.2005.

That, after coming into existence of 6 companies,the Board of Directors of the Madhya Pradesh Power Transmission Company Ltd. Vide circular

dated 07.06.2012 withdrew the concessional electricity tariff to the retired employees. Remaining companies also followed the same vide order dated

07.06.2012, 11.07.2012, 17.08.2012 and 19.07.2012 respectively.

It is the contention of the petitioner that nonextension of the concessional electricity tariff is in gross violation of the Transfer scheme, 2013. It is

further contended that even Madhya Pradesh Electricity Regulatory Commission by framing Madhya Pradesh Electricity Regulatory Commission

(Terms & Conditions for Allowing Pension and Terminal Benefits Liabilities of Personnel of the Board and Successor Entities) Regulation, 2012 has

protected the privilege extended to the retired employees. It is contended that on an application filed under Right to Information Act, 2005 petitioner

came across the note-sheet wherefrom it is gathered that the privilege of concessional rate of tariff has been discontinued till further orders on the

basis of resolution dated 06.06.2012 by Madhya Pradesh Power Transmission Company Ltd. resolving that in view of the issue of pension being under

consideration of Madhya Pradesh Electricity Regulatory Commission and allocation of pension liability being not clear. It is urged that being a privilege

extended and protected vide notification dated 30.09.2003 and 13.06.2005 and affirmed by Regulation 2012, the respondents are not justified in

discontinuing the privilege.

Respondents, on their turn, have countered theclaim. It is urged that successor companies of the erstwhile Madhya Pradesh State Electricity Board

were formed in accordance with the provisions of the M.P.Vidyut Sudhar Adhiniyam 2000. It is contended that the privilege has not been extended

vide M.P.Electricity Regulator Commission (Terms and Conditions for Allowing Pension & Terminal Benefits Liabilities of Personnel of Board and

Successor Entities) Regulations, 2012. It is further contended that the provisions contained under Section 133 of the Electricity Act, 2003 provides for

protection of service condition of serving employees of the Electricity Boards. But does not provide for protection of benefits applicable to the

pensioners of the Electricity Boards. It is urged that power to confer privilege with the formation of new companies, vests with these new companies

who are empowered to take their decision. It is submitted that the grant of electricity at concessional rate being the discretion of the employer and

being a privilege and not a condition of service cannot be claimed as a matter of right.

Considered the rival submissions.

Before examining as to whether the respondentsare justified in discontinuing the concession in the rate in supplying the electricity, it is first to be

determined as to whether the facility/privilege extended to the petitioners who are class different from those in service was in the nature of condition

of service, or it was only a privilege extended. And even if it is in nature of condition of service whether the employer cannot change the condition of

service.

For a benefit to be treated as a condition ofservice imperative it is to be incorporated in the Rules or made applicable by virtue of executive fiat. In

other words, when incorporated in the Rules governing service conditions or made applicable by virtue of Executive Instructions, any benefit extended

becomes a condition of service. Furthermore, trite it is that the expression “condition of service†also takes within its fold even the terminal

benefits as well as pensionary benefits.

The order dated 11.06.1996 whereby for the firsttime the retired employees of the Board were extended the benefit of electricity at concessional

rate itself indicate that there was no such condition when the pensioners were in service prior to 11.06.1996 that after retirement also the employees

will continue to get the benefit.

True it is that with the advent of the ElectricityAct, 2003 and in furtherance to stipulation contained under Section 131 and 133 that the State

Government has framed the Rules for regulating the transfer and vesting of functions, properties and interests, right and liabilities of the Madhya

Pradesh State Electricity Board in the State Govt. and retransfer and re-vesting thereof by the State Government in any other company or body

corporate or authority and also for the transfer of personnel of the Madhya Pradesh State Electricity Board to any other company or body corporate

or authority and for determining the terms and conditions, known as Madhya Pradesh Electricity Reforms First Transfer Scheme Rules, 2003;

whereunder sub-rule (10) of Rule 7 the State Government is to notify appropriate arrangement in regard to the funding of the pension funds and other

personnel related funds by the transferees to the extent they are not funded on the date of transfer of the personnel from the Board including for the

due payment of the amounts to personnel who retire after the date of transfer by the respective transferee to which these personnel are transferred

and till such time, such payments shall be duly made by the Board.

True even it may be that under the Scheme 2003 “Existing Pensioner†means all the persons eligible for the pension as on the date of his

transfer from the Board and shall include family members of the personnel and that “Terminals Benefits†means the gratuity, pension, dearness

and other applicable relief, medical benefit, and other applicable benefits including the right to have the appropriate revisions in the above benefits

consistent with the practice that were prevalent in the Board. However, even if the contention on behalf of petitioner to be accepted that the privilege

of concession in the rate of electricity are “benefits consistent with the practice that were prevalent in the Boardâ€, then also, the discretionary

powers of respective companies to continue or not to continue such benefits cannot be ruled out. In other words, merely because a prevalent practice

as to benefit has been nomenclatured as 'terminal benefits†no vested right accrue in favour of retired officers/employees to claim a benefit which is

more or less a privilege as a matter of right.

It is however borne out from record that thefacility of extending benefit of concessional supply of electricity is not treated as a part of service

condition this will be evident from the minutes of Board of Directors of MPPTCL dated 6.6.2012 whereby, with an unanimous opinion it was held that

it cannot be treated to be a service condition but have perspective of Industrial relation. Following resolution was passed in the perspective of industrial

relation : “Resolved further that in view of the issue of pension being under consideration of M.P. Electricity Regulatory commission and allocation

of pension liability being still not clear, the benefit of concessional electricity tariff to the pensioners of MPSEB/MPPTCL be discontinued till further

orders.â€​

Though it is contended that the Board ofDirectors while passing resolution on 6.6.2012 glossed over the fact that the MPERC had in exercise of

the powers under Section 61, 62, 86 and 181(2) (ZP) of 2003 Act and Section 26 read with Section 55 of the Madhya Pradesh Vidyut Sudhar

Adhiniyam, 2000 framed Madhya Pradesh Electricity Regulatory Commission (Terms and Conditions for Allowing Pension and Terminal Benefits

Liabilities of the Personnel of the Board and Successor Entities) Regulations, 2012. It will, however, be evident that the definition of Pensioners and

Terminal Benefits remained the same as was brought in vogue vide First Transfer Scheme, 2003.

Thus, even if the contentions raised on behalf ofthe petitioner that the concessional rate of electricity extended to the pensioners was a condition of

service then also it is within the power of the employer to unilaterally withdraw the same.

Condition of service can be changed unilaterallyby the employer as has been held by the Supreme Court in State of West Bengal vs. Ratan Behari

Dey : (1993) 4 SCC 62; wherein, their Lordships were pleased to hold :

“7. ... Now, it is open to the State or to the Corporation, as the case may be, to change the conditions of service unilaterally. Terminal benefits as

well as pensionary benefits constitute conditions of service. The employer has the undoubted power to revise the salaries and/or the pay-scales as also

terminal benefits/pensionary benefits. The power to specify a date from which the revision of pay-scales or terminal benefits/pensionary benefits, as

the case may be, shall take effect is a concomitant of the said power. ...â€​ Furthermore,

“10. As rightly pointed out in Krishena Kumar, Nakara was a case where an artificial date was specified classifying the retirees, governed by the

same Rules and similarly situated, into two different classes, depriving one such class of the benefit of liberalised pension Rules. It was found in that

case that the specification of the date (from which the liberalised Rules were to come into force) was arbitrary. Whereas in this case, the employees

retiring prior to April 1, 1977 and those retiring thereafter were governed by different sets of Rules. The arguments to the contrary may means that

the Government can never change the conditions of service relating to retiral benefits with effect from a particular date. No such absolute proposition

can be stated that while effecting any such change, no date from which such change will come into force can be specified. As stated above, a date

can be prescribed but such date should not be drawn in such a manner as to bring about discrimination between persons situated similarly i.e., in a

manner violative of Article 14. This aspect has been elaborately dealt with the explained in Krishena Kumar and we do not think it necessary to repeat

the same.â€​

(emphasis supplied)

In Sitaram Jivayachai Gavali vs RamjibhaiPotiyabhai Mahala :(1987) 2 SCC 262, it has been observed:

“13. ... It is well recognised that a new service condition may be brought into effect by an executive order, and such condition would remain in

force as long as it is not repealed either expressly or by necessary implication by another executive order or a rule made under the proviso of Article

309 of the Constitution or by a statute. ...â€​

Even otherwise the benefit extended to thepensioners being in the name of concession, it does not create any vested right in such pensioners.

Recently, in the context of concession in the tariff rate granted to an industrial unit, it has been held in Kothari Industrial Corporation limited vs. Tamil

Nadu Electricity Board : (2016) 4 SCC 134: “12. In Para 47 of the report this Court has considered and had thought it appropriate to extract the

views expressed in an earlier decision i.e. State of Rajasthan v. J.K. Udaipur Udyog Ltd., 2004 (7) SCC 673 :

... '25. An exemption is by definition a freedom from an obligation which the exemptee is otherwise liable to discharge. It is a privilege granting an

advantage not available to others. An exemption granted under a statutory provision in a fiscal statute has been held to be a concession granted by the

State Government so that the beneficiaries of such concession are not required to pay the tax or duty they are otherwise liable to pay under such

statute. The recipient of a concession has no legally enforceable right against the Government to grant of a concession except to enjoy the benefits of

the concession during the period of its grant. This right to enjoy is a defeasible one in the sense that it may be taken away in exercise of the very

power under which the exemption was granted. (See Shri Bakul Oil Industries v. State of Gujarat, Kasinka Trading v. Union of India and Shrijee Sales

Corpn. v. Union of India.).â€​

On the aforesaid basis in Para 48 of the report inShree Sidhbali Steels Ltd. (supra) it was concluded as follows :

From the principle enunciated in the above mentioned decision in Udaipur Udyog case there is no manner of doubt that the rebate which was

granted to the petitioners, was, by definition, a freedom from an obligation which the appellants otherwise were liable to discharge. The rebate was a

privilege granting an advantage which was not made available to others. The rebate granted under Section 49 of the Electricity (Supply) Act of 1948

was, therefore, a concession granted by the State Government so that the beneficiaries of such concessions were not required to pay the electricity

tariff they were otherwise liable to pay under the said Act during the period of its grant. The petitioners, as recipients of a concession, accepted to

enjoy the benefits of the concession during the period of its grant. This right to enjoy was a defeasible one in the sense that it was liable to be taken

away or withdrawn in exercise of the very power under which the exemption was granted.

In the light of the above discussion and theearlier views of this Court, as set out above, it has to be held that the principle of promissory estoppel

would have no application to the case of the appellants so as to entitle the appellants any right to the continuation of the concessional tariff earlier

granted.â€​

The issue raised in the present petition as toentitlement of the pensioners for grant of electricity at concessional rate when examined in the light of

the above analysis, the action of respondent in withdrawing the same cannot be faulted with as would warrant an indulgence.

Consequently, petition fails and is dismissed. Nocosts.â€​

In view of the aforesaid, no order is required to be passed in the writ petition. The present writ petition is dismissed as the pensioner is not entitled for

electricity at concessional rate.