Grant of exemption from possessing qualifications under Central Electricity Authority (Measures relating to Safety & Electric Supply) Regulations, 2010 in favour of erstwhile employees of Kerala State Electricity Board, is not arbitrary: SC

Read Judgment: Muhammed A.a. & Ors. V. State of Kerala & Ors. 

Pankaj Bajpai

New Delhi, February 22, 2022: While hearing an appeal challenging the deviation made by State of Kerala under the Central Electricity Authority (Measures relating to Safety and Electric Supply) Regulations, 2010 (Safety Regulations) for erstwhile employees of KSEBL vis-à-vis new employees, the Supreme Court has held that the grant of exemption from possessing the qualifications provided under Safety Regulations in favour of erstwhile employees of Kerala State Electricity Board Limited (KSEBL) cannot be termed as arbitrary. 

While finding that the promotion and other service conditions of the officers and employees transferred to KSEBL under the transfer scheme are protected u/s 131 & 133(2) of the Electricity Act, 2003 in conjunction with the transfer scheme and the tripartite agreement dated August 1, 2014, the Division Bench of Justice L. Nageswara Rao and Justice B.R Gavai observed that such protection cannot be extended to the employees who were engaged by KSEBL after October 31, 2013.

Going by the background of the case, a petition was filed in the High Court of Kerala for a declaration that Regulation 116 of the Central Electricity Authority (Measures relating to Safety and Electric Supply) Regulations, 2010 (Safety Regulations) is ultra vires the regulation making power of the Central Electricity Authority under the Electricity Act, 2003, and, therefore, void. The petition also sought for a declaration that the State of Kerala has no power to allow deviation under Regulation 116(1) in respect of qualifications prescribed in Regulations 6 and 7 of the Safety Regulations. A further relief of declaration that the Order issued by the State of Kerala as arbitrary, illegal, unreasonable and without jurisdiction was sought in the petition. 

The Single Judge High Court declared Regulation 116 to be beyond the power conferred on the Central Electricity Authority under the Electricity Act to the extent that it permits the State Government to make deviations. Further, the order by which exemption from acquiring qualification was granted to erstwhile employees was held to be unsustainable and the KSEBL was directed to make promotions strictly in accordance with the provisions contained in Regulations 6 and 7 of the Safety Regulations. 

On appeal by KSEBL, the Division Bench of the High Court held that the Regulation 116 of the Safety Regulations is neither ultra vires the Electricity Act nor manifestly arbitrary and that it is well in line with the objects and purpose of the enactment. Referring to Section 133(2) of the Electricity Act, the High Court was of the opinion that the exemption from the applicability of Regulation 6 & 7 of the Safety Regulations can be granted only in favour of persons who were employed with the KSEBL on the date of the formulation of the transfer scheme. 

After considering the submissions, the Top Court found that the service conditions of the erstwhile employees of KSEB are protected by the proviso to Section 133 of the Electricity Act, and after the transfer scheme was formulated, the erstwhile employees were entitled to claim that the conditions of their service cannot be altered to their detriment in view of the tripartite agreement dated August 1, 2014.

In the facts of the present case, granting exemption to the erstwhile employees of the KSEB from possessing the qualifications provided in Regulations 6 and 7 is permissible exercise of power under Regulation 116 of the Safety Regulations, added the Court. 

Speaking for the Bench, Justice Rao observed that width and amplitude of Regulation 116 cannot be restricted by interpreting the word ‘deviation’ as having lesser scope than exemption, and hence, ‘deviation’ from the Regulations would amount to either exemption or relaxation.

“Prior to the 2010 Regulations, the Indian Electricity Rules, 1956 framed under Section 37 of the Indian Electricity Act, 1960 were in force. Rule 133 of the said Rules would show that State Governments/Central Government were empowered to grant exemption from the safety provisions contained therein. The power of exemption has been in existence even prior to Electricity Act. A perusal of the order dated 13.02.2019 would demonstrate that the State Government directed deviation from the implementation of qualifications prescribed under Regulations 6 and 7 of the Safety Regulations. Though the word exemption was not employed in the order dated 13.02.2019, the effect of the direction issued by the Government was to exempt the employees from the prescribed qualifications. In other words, Regulations 6 and 7 were relaxed in favour of the erstwhile employees”, added the Bench. 

Therefore, the Apex Court concluded that as the exercise of power by the State Government in issuance of the order dated February 13, 2019 is well within its jurisdiction, grant of exemption in favour of erstwhile employees cannot be termed as arbitrary. 

However, the extension of the continuity to employees appointed after October 31, 2013 is not reasonable and only the transferred employees are entitled for protection of their service conditions, added the Court.