No transfers, no favouritism: HC rules no inter-utility shift between UHBVN, DHBVN; policy to apply across all cadres

The Punjab and Haryana High Court has ruled inter-utility transfers between Uttar Haryana Bijli Vitran Nigam and Dakshin Haryana Bijli Vitran Nigam will not be permitted. Admonishing status-based discrimination within public employment, the Bench also ruled that a provision in policy — permitting inter-utility transfers for higher-ranking officers only — was “arbitrary and unreasonable” and violative of Article 14.

The assertions came as Justice Harpreet Singh Brar ruled that the restrictions in the policy dated April 7 would apply uniformly to all employees of UHBVN and DHBVN and “not exclusively to employees falling under the ambit of Group C and D”.

Court flags ‘status-based discrimination’

Taking exception to the classification created under the policy dated April 7, Justice Brar asserted the purpose the policy would serve by status-based discrimination was unclear, “especially considering that the objective of the policy has essentially been to promote administrative efficiency and accountability.”

Coming down firmly on the exclusion of Group C and D employees, Justice Brar asserted the Court was of the considered opinion that denying the opportunity of inter-utility transfer, in such strict terms, only to the Group C and D was arbitrary and unreasonable as it bears no rational nexus to the objective of the policy.

State must act as a ‘model employer’

Placing the issue in the broader constitutional framework, Justice Brar referred to the obligation of the State and its instrumentalities by asserting: “The State and its instrumentalities, being model employers, are held up to higher standards and therefore, bear an additional responsibility to ensure that their actions are not perceived as arbitrary or violative of the constitutional philosophy.”

Justice Brar made it clear that the duty to act fairly was a part of the procedure envisaged under Articles 14 and 21 of the Constitution. Any approach, especially that of a public employer, exhibiting any signs of arbitrariness would necessarily be in conflict with Articles 14 and 21.

At the same time, Justice Brar clarified that employees could not claim inter-utility transfers as a matter of right, particularly given the distinct legal status of the two utilities. “This Court is of the considered opinion that where the scope of judicial intervention in transfers within the same organisation is rather limited, it would be out of question to interfere in matters pertaining to inter-utility transfers.”

Justice Brar added UHBVN and DHBVN performed similar functions. They were, in fact, distinct entities with separate Boards of Directors managing their affairs. As such, the petitioners had no vested right of inter-utility transfer between UHBVN and DHBVN and the Court could not exercise its writ jurisdiction in the present case.

Policy upheld in part, key provision struck down

The Court noted that the utilities, being autonomous entities under the Companies Act, were competent to frame internal policies. “Being autonomous entities, duly registered under Companies Act, 1956, UHBVN and DHBVN are fully competent to make policy decisions regulating its internal affairs,” Justice Brar asserted.

The Bench observed UHBVN, as such, had formulated the comprehensive policy on Prohibition of Inter-Utility Transfers between UHBVN and DHBVN. Referring to its provisions, the Court upheld the general prohibition on inter-utility transfers, including rejection of pending applications. Referring to Section 3 of the policy, Justice Brar asserted it was abundantly clear that “not only are inter-utility transfers prohibited, but the pending applications for the same, as on the date of implementation of this policy, shall also stand rejected.”

Justice Brar added Section 2, however, limited its application to employees of Group C and D. “In doing so, the respondents have denied them a benefit which has been kept open to higher ranking officers i.e. employees falling under Group A and B. Prima facie, respondent-UHBVN has created two classes within the same set of employees,” the Bench observed.

Final directions

Disposing of the petitions, the Court asserted no inter-utility transfers would be permitted between UHBVN and DHBVN, except those covered by exceptions mentioned in the policy. Section 2 limiting its application to employees of Group C and D was held to be violative of Article 14 as it created an unreasonable classification between employees that had no reasonable nexus to the objective of the policy. The policy would apply uniformly to all employees of UHBVN and DHBVN and, not exclusively to employees falling under the ambit of Group C and D.”

Justice Brar added: “In the event UHBVN or DHBVN are found to be entertaining transfer requests by any employee, irrespective of their group or category, the petitioners shall retain the liberty to initiate contempt proceedings against erring Nigam under Article 215 of the Constitution of India.”