Holding

Because the licence was revoked before the Ordinance came into force, Section 6‑A(2) does not apply and therefore Section 6‑A(3) cannot deem the respondent an employee of the Board.

Summary

The respondent, a suspended employee of Mirzapur Electricity Supply Co., filed a writ petition seeking reinstatement after the company's licence was revoked on 1 September 1975 and the Uttar Pradesh State Electricity Board took over the undertaking. The Board had agreed not to take on any employee against whom disciplinary proceedings were pending. The respondent relied on Section 6‑A(3) of the Indian Electricity (Uttar Pradesh Second Amendment) Ordinance, 1975, which deems employees of a revoked licencee to become employees of the Board. The Supreme Court held that because the licence revocation occurred before the Ordinance came into force on 27 November 1975, Section 6‑A(2) was inapplicable, and consequently the operation of Section 6‑A(3) could not be invoked. Hence the respondent was not a deemed employee by operation of law. The Court allowed the appeal, dismissed the writ petition and awarded no costs.

Issues considered

Whether a person whose disciplinary proceedings were pending at the time of a licence revocation prior to the commencement of the Indian Electricity (Uttar Pradesh Second Amendment) Ordinance, 1975, becomes a deemed employee of the State Electricity Board under Section 6‑A(3).

Legislation cited

Indian Electricity Act, 1910s. 4, s. 4-A, s. 4(i), s. 5, s. 6
Indian Electricity (Uttar Pradesh Second Amendment) Ordinance, 1975s. 6-A(2), s. 6-A(3)

Subjects

deemed employeelicence revocationstatutory interpretationelectricity boarddisciplinary proceedingsmandamuswrit petition

Judgment

A U.P. STATE ELECTRICITY BOARD THROUGH ITS -..~
'
CHAIRMAN AND ORS.
v.
SRI RADHEY MOHAN VERMA

MARCH 31, 1994
B
[K. RAMASWAMY AND N. VENKATACHALA, JJ.]

Indian Electricity (Uttar Pradesh Second Amendment) Ordinance,
1975-Ss.6A(2), 6A(3)(i}-Suspended employee of erstwhile company claim-
c ing after takeover to be deemed employee of Board-Held, takeover under
memorandum· of understanding having taken place even before Ordinance
came into force, S.6 A(2) was not applicable-Respondent not a deemed
employee of Board.

D The Respondent was a suspended employee of the Mirzapur
Electricity Supply Company. Under a memorandum of understanding the
company's licence was revoked on September 1, 1975 and the Appellant
Board took over the company. One of the terms of takeover was that the
Board will not take any employee against whom disciplinary proceedings .•
were pending.
E
Under S.6A(2) of the Indian Electricity (Uttar Pradesh Second
Aniendment) Ordinance, 1975, which came into force on November 27,
1975, the licence of every undertaking shall stand revoked from that date
unless revoked earlier. Thereupon under S. 6A(3) (i) every employee of the ,r..
F licensee shall become an employee of the Board. The Respondent's writ
petition claiming reinstatement on the basis of the above provisions was ....
allowed by the High Court. The Board appealed to this Court.

Allowing the Appeal, this Court

G HELD : The Respondent was not a deemed employee by operation
of law. The Ordinance had come into force on November 27, 1975. Much
prior to the Ordinance coming into force, the licence of the company stood
revoked on September 1, 1975. The consequence was that S. 6A(2) became
.............
inapplicable and it not being a statutory revocation, operation of sub-sec-
H lion (3) was not extended. [297-D-F]
294
U.P. STATE ELECTRICITY BOARD v. R.M. VERMA 295

CIVIL APPELLATE JURISDICTION : Civil appeal No. 4317 of A
1994.

From the Judgment and Order dated 9.9.91 of the Allahabad High
Court in C.M.W.P. No. 12217 of 1983.

B. Sen and Pradeep Misra for the Appellants. B

Bharat Sangal for the Respondent.

The following Order of the Court was delivered :

Leave granted. c
The appeal· is directed against the order of the High Court of
Allahabad in CM.W.P. No. 12217183. The respondent was admittedly a
suspended employee of Mirzapur Electricity Supply Co. (for short 'Com-
pany) against whom disciplinary proceedings were pending. On September
1, 1975, under s.4(i) of the Indian Electricity Act, 1910, for short 'the Act', D
the licence of the Company was revoked under a memorandum of under-
standing and an agreement reached with the appellant. One of the terms
thereof was that the appellant will not take any employee against whom
disciplinary proceedings were pending. The appellant took over the Com-
pany. Eight years thereafter, the respondent filed the writ petition placing E
reliance on Section 6-A of the Act as amended by an U.P. Act and
contended that the respodent was entitled to be taken into service, but was
unlawfully prevented from discharging his duties. The High Court accepted
the contention and issued the mandamus as prayed for with consequential
reliefs.
F
The only question that arises in this case is whether the respondent
• is entitled to the relief under section 6-A(3) of the Act. Sub-section 2 of s.
6-A reads thus :

"6-A(2) Notwithstanding anything contained in sections 4, 4-A, G
5 and 6, the licence of every undertaking, unless revoked before
the commencement of the Indian Electricity (Uttar Pradesh
Second Amendment) Ordinance, 1975, shall stand revoked with
effect from the appointed day."

Sub-section (3) of s. 6-A says that on revocation of the licence under H
296 SUPREME COURT REPORTS [1994] 3 S.C.R.

A sub-section (2) the following provisions shall have effect, namely :

(a) every undertaking the licence in respect of which stand revoked
shall by virture of this section stand and be deemed to have stood
transferred to and vest and be deemed to have vested in the State
Electricity Board, hereinafter in this section called 'the Board',
B free from any debt., motgage of similar obligation of any licence
attaching to the undertaking;

Provided that any such debt, mortgage or similar obligation
shall attach to the amount payable for the undertaking as men-
tioned in Cl.(h).
c
(b) the rights, powers, authorities, duties and obligations of the
licensee under his licence shall stand transferred to the Board and
the licence shall cease to have further operation;

(c) the licensee shall deliver forthwith the undertaking to the Board
D or to such officer as the Board may appoint in that behalf, and if
any property or asset, book of account, register or other document
forming part of the undertaking be in the possession, custody or
control of any person other than a licence, such person shall also
deliver the same to the Board or to such officer as aforesaid;
E
(!) the owner of every undertaking shall, within sixty days from the
appointed day or within such further time as the Board may allow
in that behalf, furnish to the Board or to such officer as the Board
may specify, complete particulars of all liabilities and obligations
incurred on the security of the undertaking and subsisting on the
F appointed day, and also of all agreements and other instruments,
pertaining to the undertaking (including agreements, decrees,
awards, standing orders and other instruments relating to leave,
pension, gratuity, provident fund and other terms of service of any
person employed in the undertaking) in force immediately before
G the appointed day and the Board shall afford him all reasonable
facilities for the· same;

(g) the following provisions shall govern the working in the under-
taking immediately before the appointed day;

H (h) every person who has been immediately before the appointed
U.P. STATE ELECTRICITY BOARD v. R.M. VERMA 297

day in the employment of the licensee shall become on and from A
the appointed day an employee of the Board on- the same terms
and conditions and with the same rights as to pensions, gratuity
and other matters as would have been admissible to him if the
undertaking had not been transferred to and vested in the Board
and continue to do so unless and until his employment under the
Board is terminated or until his remuneration or other terms and B
conditions of employment are duly altered by the Board:"

A combined reading of these provisions clearly indicates that notwithstand-
ing anything contained in sections 4, 4-A, 5 and 6 the licence of every
undertaking, unless revoked before the commencement of the Indian C
Electricity (Uttar Pradesh Second Amendment) Ordinance, 1975 shall
stand revoked with effect from the appointed day. On revocation of the
licence under s. 2, the consequences enumerated in clauses (a) to (g) of
S.6-A(3) would flow. The owner of every undertaking shall furnish to the
Board or to its authorised officer complete particulars of the liabilities and
pre-existing obligations. As seen, Cl.(g) postulates that every person who D
• has been immediately before the appointed day, in the appointment of the
licensee (Mirzapur Electricity Supply Co.) shall become on and from the
appointed date employee of the Board on the same terms and condi-
tions ....... It is seen that admittedly the licence of the Company was revoked
on September 1, 1975. The Ordinance had come into force on November E
27, 1975. Much prior to the Ordinance had come into force, licence of the
Comapany stood revoked on September 1, 1975. The consequence is that
s. 6-A(2) became inapplicable. Once sub-s.2 becomes inapplicable and it
not being a statutory revocation, operation of sub-s. (3) is not extended,
consequently, the respondent was .not a deemed employee by operation of
law. Unfortunately, the High Court had not considered this statutory F
operation. Therefore, the High Court bas committed manifest error of law
in allowing the writ petition and issuing mandamus and the consequential
benefits sought for by the Respondent. It is open to the respondent to
persue the remedy other than the relief sought for under s.6-A(3). The
appeal is allowed. The writ petition is stands dismissed. No costs. G
S.M. Appeal allowed.