RAM KUNWAR vs BHAGWAN CHARAN

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.

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, as on 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 Transco for 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 terminal benefits 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."

Similar provision exist in sub rule 7 (10) for the officers 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 non extension 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 the claim. 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 respondents are 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 of service 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 first time 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 Electricity Act, 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 re-transfer 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 Board", 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 prelevant 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 the facility 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."

Though it is contended that the Board of Directors 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 of the 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 unilaterally by 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... ." 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." (emphasis supplied)

In Sitaram Jivayachai Gavali vs Ramjibhai Potiyabhai 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. ..."

Even otherwise the benefit extended to the pensioners 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 :

"47. ... ''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.)."

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

"48. 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 the earlier 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."

The issue raised in the present petition as to entitlement 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. No costs.