Supreme Court Upholds Employee Allocation by One-Man Committee in Telangana-Andhra Pradesh Power Dispute (07 December 2020)

Introduction

Date of the Judgment: 07 December 2020

Citation: (2020) INSC 926

Judges: Ashok Bhushan, J., M.R. Shah, J.

Can a committee’s decision on employee allocation be challenged after it has been deemed final and binding? The Supreme Court of India addressed this crucial question in a dispute between Telangana and Andhra Pradesh power utilities. This case arose from the bifurcation of Andhra Pradesh, leading to disagreements on how to distribute employees of the power sector undertakings. The Supreme Court, after a series of proceedings, upheld the One-Man Committee’s final report, emphasizing the binding nature of its decisions. The judgment was delivered by a two-judge bench comprising Justice Ashok Bhushan and Justice M.R. Shah.

Case Background

The Andhra Pradesh Reorganisation Act, 2014, led to the creation of Telangana from the erstwhile state of Andhra Pradesh. This division sparked disputes over the allocation of employees in state-owned power utilities. The power utilities of Telangana unilaterally relieved 1157 employees to join Andhra Pradesh utilities, based on the principle of nativity. The High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh struck down this action, disapproving the principle of nativity.

The Supreme Court, in its judgment dated 28.11.2018, upheld the High Court’s decision and appointed a One-Man Committee, headed by Justice D.M. Dharmadhikari, a former Judge of this Court, to determine the modalities for distributing the personnel between the two states. The court explicitly stated that the Committee’s decision would be final and binding on all parties.

Timeline

Legal Framework

The core legal provision at play is Section 82 of the Andhra Pradesh Reorganisation Act, 2014, which states:

“82. Provision for employees of Public Sector Undertakings, etc.— On and from the appointed day, the employees of State Public Sector Undertakings, corporations and other autonomous bodies shall continue to function in such undertaking, corporation or autonomous bodies for a period of one year and during this period the corporate body concerned shall determine the modalities for distributing the personnel between the two successor States.”

This section mandates that the concerned corporate bodies should determine the modalities for distributing personnel between the two successor states within one year of the appointed day (02.06.2014). The power utilities of both states failed to reach a consensus, leading to the present dispute.

Arguments

Arguments by Telangana Power Utilities:

• The One-Man Committee’s mandate was limited to allocating 1157 employees, and the Final Report dated 26.12.2019 had already completed this task.
• The Concluding Report exceeded the mandate, disregarding the Final Report and the finalized modalities.
• The ratio of 3552:2550 for employees of Andhra Pradesh and Telangana utilities, respectively, was not prescribed by Government Orders except for headquarters posts.
• The total number of employees (6102) mentioned in the Concluding Report was erroneous and did not account for employees in two distribution companies of Telangana.
• The allocation of 584 additional employees to Telangana utilities was excessive and went against the modalities.
• The principle of reciprocity was not part of the modalities.
• The selection of 584 employees was beyond the list of 2165 employees, violating the Supplementary Report.
• The Concluding Report was not final as it allowed further changes, with Andhra Pradesh utilities deleting and adding names even after the report.
• The Telangana State is geographically and population-wise smaller than Andhra Pradesh, yet it received a disproportionately higher number of employees.

Arguments by Andhra Pradesh Power Utilities:

• The Concluding Report was within the remit of the Supreme Court and the One-Man Committee.
• The Committee considered all modalities and did not go beyond the orders of the court.
• Government Orders dated 29.05.2014 were not challenged and were binding on all parties.
• The ratio of employees between Telangana and Andhra Pradesh is 2550:3552, as per Government Orders.
• The One-Man Committee’s remit was not limited to 1157 employees, as the dispute involved all employees.
• The population ratio was a basis for allocation as per the Andhra Pradesh Reorganisation Act, 2014.
• The dispute arose from the unilateral relieving of 1157 employees by Telangana based on nativity, which was struck down by the High Court.
• The Final Report only approved the list of 655 employees from Telangana to Andhra Pradesh, with no reciprocal allocation.
• The Supplementary Report was issued to correct the imbalance, entrusting Andhra Pradesh with selecting 584 employees to be allocated to Telangana.
• The 242 employees who voluntarily joined Telangana utilities were not part of the allocation process.
• The selection of 584 employees was not solely based on nativity, but considered other modalities.
• The modifications after the Concluding Report were consequential and in line with the directions.
• The direction to exclude employees retiring in 2020 was in line with an agreement between the parties.

Arguments by Telangana Electricity Engineers Association:

• The One-Man Committee has gone outside the limits of Concluding Report and Supplementary Report.
• The allocation in Telangana is excessive and affects the promotion prospects of engineers.

Arguments by APSPDCL Relieved Employees:

• The distribution business of Anantapur and Kurnool districts was merged with Andhra Pradesh Southern Power Distribution Corporation Ltd. by G.O. No.24 dated 29.05.2014 and those employees were not subject to any further allocation.
• Their names were not included in the Final Report dated 26.12.2019, but were suddenly included in the Supplementary Report and the Concluding Report.

Arguments by Other Employees:

• The applicants who were relieved from Telangana State power utilities to Andhra Pradesh power utilities are not being paid salary citing direction No. I of Concluding Report dated 20.06.2020.
• They seek direction to A.P. power utilities to retain the applicants as per their options.

Innovativeness of the Argument:

The Telangana power utilities innovatively argued that the One-Man Committee exceeded its mandate by going beyond the allocation of the initial 1157 employees, and that the principle of reciprocity was not part of the modalities. They also emphasized the geographical and population disparity between the two states to argue against the allocation.

Sub-Submissions Table:

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issues that the court addressed were:

1. Whether the One-Man Committee exceeded its mandate by going beyond the allocation of the initial 1157 employees.
2. Whether the One-Man Committee’s Concluding Report was final and binding.
3. Whether the allocation of employees was done as per the modalities and legal provisions.
4. Whether the principle of reciprocity was valid in the allocation process.
5. Whether the selection of 584 employees was done as per the Supplementary Report.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Cases:

• Telangana Judges Association Vs. Union of India, (2018) SCC Online SC 1729 – The Court referred to this case in its judgment dated 28.11.2018 while deciding the Civil Appeal No.11435/2018.

Legal Provisions:

• Section 82 of the Andhra Pradesh Reorganisation Act, 2014 – This provision deals with the allocation of employees in public sector undertakings.
  
  “82. Provision for employees of Public Sector Undertakings, etc.— On and from the appointed day, the employees of State Public Sector Undertakings, corporations and other autonomous bodies shall continue to function in such undertaking, corporation or autonomous bodies for a period of one year and during this period the corporate body concerned shall determine the modalities for distributing the personnel between the two successor States.”
• Section 2(h) of the Andhra Pradesh Reorganisation Act, 2014- This section defines population ratio.
• Section 53 of the Andhra Pradesh Reorganisation Act, 2014- This section deals with transfer of assets and liabilities.

Government Orders:

• G.O.Ms.No. 24 dated 29.05.2014 – Issued by Government of Andhra Pradesh regarding the reassignment of distribution business of Ananthapur and Kurnool districts to APSPDCL.
  
  “As the two districts of Ananthapur and Kurnool fall within the residual state of AP, in accordance with Schedule XII of Andhra Pradesh Reorganization Act 2014, it is necessary to reassign the distribution business of these two districts to the present APSPDCL from APCPDCL. The assets and liabilities shall be reassigned to APSPDCL as per the Section 53 of the Act.”
• G.O.Ms.No. 25 dated 29.05.2014 – Issued for allocation of AP GENCO for Telangana, specifying that posts and staff to be transferred to the newly created Telangana GENCO would be in accordance with the Guidelines contained therein.
• G.O.Ms.No. 26 dated 29.05.2014 – Issued containing Guidelines on separate creation of TRANSCO for Telangana State.
  
  “Posts at AP TRANSCO Head Quarter shall be divided between two Transcos based on population ratio of respective state. Based on this principle, head quarter posts transferred to TG TRANSCO is listed in Annexure- C.”

Authority Table:

Judgment

Treatment of Submissions:

How authorities were viewed by the Court:

• Telangana Judges Association Vs. Union of India, (2018) SCC Online SC 1729*: This case was referred to in the earlier order of the Supreme Court and was not directly used in the reasoning of the present judgment.
• Section 82 of the Andhra Pradesh Reorganisation Act, 2014*: The court interpreted this section to mean that the corporate bodies were to determine the modalities for distributing the personnel.
• G.O.Ms.No. 24 dated 29.05.2014*: The court relied on this order to confirm the allocation of employees in the Ananthapur and Kurnool districts.
• G.O.Ms.No. 25 dated 29.05.2014*: The court relied on this order to confirm the allocation of employees in APGENCO.
• G.O.Ms.No. 26 dated 29.05.2014*: The court relied on this order to confirm the allocation of employees in TRANSCO.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to uphold the finality of the One-Man Committee’s decision, which was agreed upon by all parties. The court emphasized that the Committee’s decisions were binding and not subject to re-examination. The Court also considered the following factors:

• The need to maintain a balance in the allocation of employees between the two states.
• The importance of following the modalities and legal provisions.
• The need to avoid reopening issues that had already been decided by the One-Man Committee.
• The need to ensure financial neutrality in the allocation process.
• The need to give effect to the intent of the Andhra Pradesh Reorganisation Act, 2014.

Sentiment Analysis:

Fact:Law Ratio:

Logical Reasoning:

The court considered all the arguments and documents placed before it and concluded that the One-Man Committee’s decision was fair and in accordance with the law.

The court rejected the argument that the One-Man Committee exceeded its mandate, stating that the committee was entrusted to determine the modalities for distributing the personnel between the two states. The court emphasized that the decision of the One-Man Committee was final and binding on all parties.

The court also rejected the argument that the One-Man Committee had not followed the modalities or legal provisions. It noted that the committee had considered all the relevant factors and had made a fair and equitable decision.

The court also upheld the principle of reciprocity, stating that it was necessary to maintain a balance in the allocation of employees between the two states.

The court also rejected the argument that the selection of 584 employees was not done as per the Supplementary Report, stating that the committee had considered all relevant factors and had made a fair decision.

The court quoted from the judgment:

“We make it clear that the decision of the one man Committee head by Justice Dharmadhikari shall be final and binding on all the parties including Power Utility Companies of the two States as well as the employees and shall be executed by all the parties as an order of this Court.”

“The liberty granted to parties to seek clarification or further direction was with object to complete the process of distributing the personnel between two States. There was no right of appeal given to any of the parties or any officer or employee against the report of One-Man Committee.”

“The exercise undertaken by the One-Man Committee is to allocate 655 from Telangana State to Andhra Pradesh and same number from Andhra Pradesh to Telangana State. Apart from the above two allocations, other personnel, who were working in Telangana State and Andhra Pradesh were not disturbed by allocation.”

There were no dissenting opinions in this case. The bench comprised of two judges who concurred on the judgment.

Key Takeaways

• The decision of a committee appointed by the Supreme Court is final and binding on all parties involved.
• Employee allocation in public sector undertakings post-state reorganization should be based on modalities and legal provisions, not on the principle of nativity.
• Reciprocity can be a valid principle in employee allocation to ensure a balanced distribution.
• The allocation process should be carried out in a fair and equitable manner, considering all relevant factors.
• The finality of the allocation process should be respected.
• The One-Man Committee’s Concluding Report is to be implemented by all parties.
• Employees should seek redressal of salary and allowance grievances before appropriate forums, not by challenging the allocation.

Directions

The Supreme Court directed that the power utilities of both states and all concerned parties must carry out and implement the directions of the One-Man Committee’s report.

Conclusion

The Supreme Court’s judgment in the Telangana Power Generation Corporation Ltd. vs. Andhra Pradesh Power Generation Corporation Ltd. case is a significant ruling that resolved a long-standing dispute over employee allocation between the two states. By upholding the One-Man Committee’s final report, the court emphasized the binding nature of decisions made by such committees and the need for all parties to abide by them. The judgment underscores the importance of following legal provisions and modalities in such matters. The Supreme Court’s intervention ensured a fair and equitable resolution, bringing closure to the dispute and providing clarity on the allocation of employees in the power sector undertakings.