Holding

A transfer of service without the employee’s consent and without a tripartite agreement is void, rendering the NTPC‑BALCO agreement clauses and the appointment undertakings illegal, violative of Section 23 of the Indian Contract Act and Article 14 of the Constitution.

Summary

The case concerned the transfer of 236 non‑executive employees recruited by NTPC for the BALCO Captive Power Plant (BCPP) to BALCO after BALCO was disinvested and became a private concern. The employees argued that they were appointed by NTPC, not BALCO, and that the 1990 NTPC‑BALCO agreement and the clause 14 in their appointment letters, which sought to bind them to BALCO, were illegal because they were made before any such agreement existed and were imposed without their consent. The Court held that the agreement could not be applied retrospectively, that the appointment undertakings violated Section 23 of the Indian Contract Act and Article 14 of the Constitution, and that a transfer of service requires a tripartite agreement with the employee’s consent. Consequently, the clauses effecting the transfer were declared void and all the employees were to remain with NTPC. The High Court order dismissing the writ petitions was set aside and the appeals were allowed.

Issues considered

The validity of transferring public‑sector employees to a private entity without their consent.
Whether clauses 8.2 and 16.3 of the 1990 NTPC‑BALCO agreement are enforceable against employees who were not parties to the agreement.
Whether clause 14 in the appointment letters and the undertakings obtained from the employees are void under Section 23 of the Indian Contract Act and Article 14 of the Constitution.
Whether a tripartite agreement is a prerequisite for the transfer of service.
The legality of giving the 1990 agreement a retrospective effective date of 29‑June‑1987.

Legislation cited

Constitution of Indias. Article 14
Indian Contract Act, 1872s. 16, s. 19A, s. 23

Subjects

disinvestmenttransfer of servicepublic sector undertakingprivate sectorArticle 14Indian Contract Acttripartite agreementundue influenceservice conditionsemployment law

Judgment

\
-~\

A BCPP MAZDOOR SANGH AND ANR.
v.
N.T.P.C. AND ORS.

OCTOBER 11, 2007
B
[TARUN CHATTERJEE AND P. SATHASIVAM, JJ.]

Disinvestment-Transfer of employees from public sector
undertaking(PSU) to private sector-NTPC-PSU managing BCPP,
C wholly owned by BALCO-PSU-NTPC recruiting non-executive
employees-Disinvestment ofBALCO-PSU by Government, resulting
into conversion ofBAL CO to private sector and existing management
deciding to manage BCPP themselves-Transfer of non-executive
employees from PSU to private sector on basis ofagreement between
D NTPC and BALCO, enabling NTPC to manage and control BCPP-
Justification of-Held: Transfer ofemployees from NTPC to BALCO
bad in law-Agreement between NTPC and BALCO empowering
NTPC to make recruitment on behalfofBAL CO not in existence when
NTPC made recruitments-In absence thereof, clause ofappointment
E letter and undertakings obtained by NTPC from employees for
appointment by exercising undue influence illegal, contrary to s. 23
as well as violative ofArticle 14-Recruitment process was initiated
by NTPC and also appointment letters issued by NTPC-Employees
were neither party to tripartite agreement nor heard before changing
.., '

F their service condition, thus, action ofmanagement violative ofArticle
14-Also transfer of only non-executive employees to private sector
not sustainable-Factual details show that NTPC was their employer
for all purposes--Constitution of India, 1950-Article 14-Contract
Act, 1872-s. 23-Policy decision-Administrative law-Natural
G justice.

NTPC and BALCO are public sector undertakings wholly
owned by the Government oflndia. BCPP is wholly owned by BALCO
which was set up for production of power for their units. BALCO

H 1084
BCPPMAZDOORSANGHv. N.T.P.C. 1085

entered into an agreement of construction with NTPC. In 1987, A
NTPC recruited appellants-non executive employees. It issued
appointment order stating the terms and conditions of the
appointment. They underwent training and on completion of the
same, appellants were issued separate appointment orders in the
name of NTPC. BALCO and NTPC had entered into an agreement B
on 22.5.1990 enabling NTPC to manage, operate, supervise,
maintain and control BCPP which was to come into operation from
29.6.1987. Appellants were to be posted against the post sanctioned
for BCPP, under management of NTPC. When steps were being
taken for transferring them to BALCO-public sector undertaking, c
subsequently by disinvestment policy of the Government, the entire
management vested with a private concern under Agreement dated
20.6.2002. It resulted into conversion ofBALCO, public sector to
private sector and existing management decided to manage BCPP
by themselves. Employees filed writ petition challenging the decision D
of their transfer from a Public Sector Undertaking to private
management; that clauses 8.2 and 16.3 of the agreement dated
22.05.1990 be declared as illegal, arbitrary and unenforceable
against them as it unilaterally changed the service conditions of all
those employees who were nof party to the agreement; and that the E
respondents-Management be restrained from transferring the non-
executive workers working under BALCO Captive Power Plant-
BCPP to the management of BALCO from NTPC. High Court
dismissed the writ petitions. Hence the present appeals.

Appellant-employees contended that all the non-executive F
employees/appellants were the employees of NTPC and after
disinvestment of BALCO, their services could not be transferred
to a private sector organization-BALCO on the strength of
agreement between NTPC and BALCO; that their transfer to private
organization amounts to retrenchment by NTPC against their wishes; G
that clause 16.3 is discriminatory since non-executive employees
alone were to be transferred to successor organisation; that
unilateral changes made to their service conditions when the
employees were not party to the agreement cannot be sustained;
and that these employees have every right of protection of their H
1086 SUPREME COURT REPORTS [2007] 10 S.C.R.

A service conditions.

BALCO and NTPC contended that all the non-executive
employees/appellants were not appointed for NTPC, they were
selected and appointed only for BCPP wh~ch is owned by BALCO,
B and hence their action to transfer them to BCPP/BALCO was fully
justified.

Allowing the appeals, the Court

HELD: 1.1. the bipartite agreement between NTPC and
C BAL CO was entered into on 22.05.1990. The appointments of 236
employees was made prior to 22.05.1990 and at the time of
recruitment and appointment by NTPC, no agreement between
NTPC and BALCO was in existence empowering NTPC to make
recruitment and appointment on behalf of BALCO. Therefore, the
D provision made in clause 21.0 of the agreement, the effective' date
and duration of agreement w.e.f 29.06.1987 is contrary to the
provisions of s. 23 of the Contract Act and also violative of Article
14 of the Constitution. By virtue of clause 21.0, the service condition
has been admitted to be changed to the employees by giving effect
E of the agreement dated 22.05.1990 w.e.f. 29.06.1987. The
appointments made prior to 22.05.1990 cannot be termed in
furtherance of the agreement dated 22.05.1990. In such
circumstances, the finding of the High Court that the services of the
employees appointed by NTPC are transferable to BALCO in the
i.
light of the provisions made in clauses 8.2 and 16.3 of the bipartite
F agreement dated 22.05.1990 between NTPC and BALCO cannot be
accepted. It was admitted that the power of attorney was given to
NTPC pursuant to the agreement dated 22.05.1990 and 29.05.1991
and it is only those employees who have been appointed by NTPC
on behalf of BALCO, pursuant to the said power of attorney, can
G only be transferred to BALCO. [Para22] [1100-E; F, G; 1101-A, B)

1.2. The process of recruitment was initiated by NTPC and in
the advertisement, it has been mentioned that 'NTPC Ltd. requires
persons in the following categories for its Korba Super Thermal
H Power Project and BALCO Captive Power Project.' The letters for
/
I BCPPMAZDOORSANGHv. N.T.P.C. 1087

test or interview to the candidates have also been issued by NTPC. A
The said advertisement nowhere stipulates that the said process of
recruitment was on behalf of BALCO. Even those interview letters
do not reveal that the appointments are being made for/on behalf of
BALCO. The appointment letters have also been issued by NTPC.
[Para 23] [1101-B, C, DJ B

1.3. It is evident that during the process of recruitment it was
never disclosed to the candidates/selectees that their recruitment
is exclusively for BALCO, on the other hand, in some of the
appointment letters issued by NTPC, the terms and conditions of C
appointment are mentioned which lead to an irresistible conclusion
that NTPC was their employer in all purposes. Para 8 of the
appointment letter provides for initial appointment and posting to
work at Korba and thereafter liable to be posted at the discretion of
NTPC in other office/project/unit or in any other public sector · D
undertakings in India or abroad. [Para 26] [1103-G; 1104-A, BJ

1.4. NTPC being an undertaking of the Government oflndia
and an instrumentality of State is under constitutional obligation to
act fairly with its employees, particularly, the posts which were
advertised from 1986 till 1988 were not in existence in BALCO as E ,
the BCPP was not fully commissioned. In those circumstances,
NTPC was not justified in inserting clause 14 in the appointment
. ~· letters and obtaining undertakings from the selectees. At the time
of insertion of clause 14 in the appointment letter and obtaining
undertakings from the employees there was no agreement between F
NTPC and BALCO for making recruitment and appointment on
behalf of BALCO for its BALCO Captive Power Plant. In such
circumstances, in absence of such agreement between NTPC and
BALCO, clause 14 of the appointment letter and undertakings
~y obt~ined by NTPC is illegal and against public policy and is contrary G
fo the provisions of s. 23 of the Contract Act as well as violative of
Article 14 of the Constitution of India for the reason that undue
influence was exercised by the management of NTPC on the
unemployed candidates to execute undertakings for appointment.
By virtue of the clause 14, the status of these public servants have H
\

1088 SUPREME COURT REPORTS [2007] 10 S.C.R. ~\

A been sought to be changed which is violative of Article 14.
[Paras 24, 25 and 27] [1102-A, B, C; 1103-E, F; 1104-C, D]

Central Inland Water Transport Corporation Limited and Anr.
v.BrojoNathGangulyandAnr., [1986] 3SCC156; andMahavir Auto
B Store and Ors. v. IOC and Ors., [1990] 3 SCC 752, referred to.

1.5. No employee could be transfen-ed without his consent from
one employer to another. In order to bind the appellants, there must
be a tripartite agreement. Since there is no tripartite agreement, the
transfer from one employer to another cannot be effected~
C Therefore, the transfer of employees from NTPC-a public sector
undertaking to BALCO which is a private organization was bad in
law. [Paras 28 and 30] [1104-G; 1107-D, E)

Mis. Pyarchand Kesarimal Ponwal Bidi Factory v. Omkar
D Laxman Thange and Ors., [1969] 2 SCR 272, referred to.
Nokes v. Doncaster Amalgamated Collieries Ltd., (1940) 3 All
E.R. 549, referred to.

1.6. The Government or its instrumentality cannot alter the
E conditions ofService of its employees and any such alteration causing
prejudice cannot be effected without affording opportunity of pre-
decisional hearing and the same would amount to arbitrary and
violative of Article 14. The employees are neither party to tripartite
agreement nor they have been heard before changing their service ~ .
F condition. Therefore, the action of the management was violative
of Article 14 of the Constitution oflndia. [Para 29] [1105-D, E]

HL. Trehan and Ors. v. Union ofIndia and Ors., [1989] 1 SCC
764; and Jawaharlal Nehru Universityv. Dr. K.S,_.ffn1. _atkgr cmdOr-0:;
1

G [1989] Supp. 1 SCC 679, referred to.

1. 7. Appointment orders were issued by NTPC and Rules,
procedure in respect of probation, training, D.A. and .other
allowances, absorption in the regular scale, governed by certified
standing orders and other Rules and Regulations of the company-
H
BCPPMAZDOORSANGHv. N.T.P.C. 1089

NTPC. Even in the appointment order, it had been specifically stated A
that in the event of their appointment, they have to execute service
agreement in favour of NTPC or any other Department or
Undertaking of Government of India for three years. All the
employees selected and appointed executed a service agreement
in favour of NTPC. All the appointment orders were sent with the B
specific conditions by the Senior Personal Officer, NTPC Korba
Super Thermal Power Project, Bilaspur. Posting orders were also
issued by NTPC. Perusal of agreements executed by the selectees
clearly show that there is no reference that the said agreement is
for and on behalf of the BALCO whereas it only refers NTPC. All C
the abovementioned factual details clearly support the case of the
employees that they were selected and their services could be
continued only at NTPC or any other public sector undertakings of
Government oflndia. There is no iota of evidence or indication that
they would be transferred to a private concern with less service D
benefits. [Para 31] [1107-E, F, G; 1108-A, B]

1.8. Clause 16.3 of the agreement dated 22.05.1990 makes it
clear that non-executive employees are to be transferred to
successor organization and there is no reference to executives. On
the other hand, it was demonstrated by facts and figures, that the E
executives working in BALCO are to be transferred to other
establishments of NTPC. Even though the non-executive employees
are also having a special knowledge i.e., technicians, in the absence
of any plausible reason retaining executives alone with NTPC and
transferring non-executive employees to a private organization F
cannot be sustained and hit by Art. 14 of the Constitution. On the
other hand, the appellants-non-executive employees are to be
retained by NTPC and posted in their various units. On consideration
of various aspects starting from calling for applications and
subsequent actions taken by NTPC, the employees have made out G
a case for continuing their service in NTPC.
[Paras 32] (1108-C, D, E, G}

BALCO employees' Union (Regd.) v. Union of India and Ors.,
[2002) 2 SCC 333; and All India !TDC Workers' Union & Ors. v. !TDC H
1090 SUPREME COURT REPORTS [2007] 10 S.C.R. ~
A and Ors., [2006] 10 SCC 66, referred to.

1.9. NTPC requested this Court that if the claim of the
employees are acceptable, they are ready to consider the case of
the employees whose appointment letter neither contain clause 14
nor clause 16 and have not given an undertaking and they will be
B taken back by the NTPC in the phased manner. On consideration
of the relevant materials, both the offending clauses in the agreement
cannot be sustained and all employees are to be retained in NTPC.
(Para 33] (1108-G; 1109-A, B]

c 1.10. Inasmuch as the claim of the employees relates to
interpretation of certain clauses in the agreement, appointment
letters and no disputed facts are involved and taking note of the fact
that the issue relates to employment of few hundreds of employees
and in the light of the assertion that transferring them to private
D organization from a public sector undertaking without their specific
consent is arbitrary and unreasonabl~ and that the alternative
remedy is rule of discretion and not the rule oflaw, the conclusion
of High Court that the writ petitions under Article 226 of the~
Constitution by the employees are maintainable, is accepted.
E [Para 18] (1097-C, D, E]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 678 of
2006.
From the Judgment and final Order dated 25.03.2004 of the High
F Court of Chhattisgarh at Bilaspur in Writ Petition No. 2087 of2001.
WITH
C.A. Nos. 683, 724, 726 & 727 of 2006.

G Indira Jaising and Ravindra Shrivastava, Barun Kumar Sinha,
Pratibha Sinha, B.K. Satija, Lakshmi Raman Singh, Atul Kumar, Kunal
Verma, Md. Mannan, Rajul Shrivastav and Anshul Garg for the Appellants.

Raju Ramachandran and C.A. Sundaram, S.K. Dhingra, Y.K. Rao,
Madhu Sikri, Saket Sikri, P.C. Sen and Vishwajit Singh for the
H
BCPPMAZDOORSANGHv. N.T.P.C. 1091
[P. SATHASIVAM, J.]
Respondents. A
The Judgment of the Court was delivered by
P. SATHASIVAM, J. 1. Since all the above appeals were directed
against the common order dated 25.03.2004 passed by the High Court
ofChhattisgarh at Bilaspur in Writ Petition Nos. 2087 and 2072 of2001 B
and 557 of2004, they are being disposed of by the following common
judgment.
2. The appellants before us are employees recruited by National
Thermal Power Corporation (for short 'NTPC') by calling for list of C
names from the employment exchange and appointed by following the
procedure. When steps were being taken for transferring them to Bharat
Aluminium Company Limited (for short 'BALCO') which was originally
a Public Sector Undertaking under the Government of India, subsequently
by policy of disinvestment the entire management had vested with Mis
Sterlite under Agreement dated 20.06.2002 w.e.f 01.07.2002. Aggrieved D
by the decision of their transfer from a Public Sector Undertaking to private
management, those employees approached the High CoUit of Chhattisgarh
at Bilaspur by filing writ petitions seeking various reliefs. They mainly
prayed for an order declaring clauses 8.2 and 16.3 of the agreement dated
22.05.1990 as illegal, arbitrary and unenforceable against them who are E
non-executive workers as it unilaterally changes the service conditions of
all those employees who were not party to the agreement. In the same
wTit petitions, they also prayed that the respondents-Management be
restrained from enforcing the said clauses and thereby transferring the non-
. executive workers working under BALCO Captive Power Plant (for F
short 'BCPP') to the management ofBALCO from NTPC.

3. The case of the appdlants/employees is that they were enrolled
in the Employment Exchange, Korba and when NTPC Korba Super
Thermal Power Project asked to supply the names of Artisan (Trainee), G
their names were sent to NTPC. On 26.07 .1987, NTPC conducted a
written/trade test for the post of Artisan Trainee (Fitter/Electrician) and
the appellants appeared in the test on the appointed date, time and venue.
The appellants received appointment orders duly signed by the Deputy
General Manager. (P&A), Korba Super Thermal Power Project of H
\

1092 SUPREME COURT REPORTS [2007] 10 S.C.R.
A

A NTPC. In these appointment orders, it is categorically stated that the terms
and conditions of appointment of all the appellants are same. They were
required to undergo training for a period of one year and also required
to submit indemnity bond on the stamp paper ofRs.55/- to remain in the
service of NTPC or any other department or undertaking of Government
B oflndia, for at least three years. On completion of training, the appellants
were issued separate appointment orders in the name of NTPC (a
Government of India Enterprise) BCPP. The order further states that after
their training, the appellants will be posted against the post sanctioned for f
BCPP which is under the management of NTPC and in case at a later
C date, it is decided by BALCO to directly manage the plant/station or
transfer its management to some other existing or new organization (called
successor organization) then their post and services will stand transferred
to BALCO or such successor organization as the case may be.,
4. When they were working with NTPC, which was managing
D BCPP, the Government oflndia decided.to disinvest shares ofBALCO,
which resulted into conversion ofBALCO a public sector enterprise to
private sector organization and the existing management decided to
manage BCPP by themselves. In view of this, the appellants who were
appointed by NTPC should be posted to other projects of NTPC.
E
5. BALCO entered into an agreement of construction of Captive
Thermal Power Station for their aluminium complex at Korba with NTPC
on 30.07.1984. Again BALCO entered into another agreement on
22.05.1990 with NTPC. In view of clause 8.2 of the said agreement,
F recruitment of non-executive staff shall be undertaken by NTPC
specifically for BCPP as per NTPC's recruitment norms and policies. It
was further made clear that the staff shall be governed by NTPC' s policies,
rules and regulations and in the event of transfer of management from
NTPC to any other agency, their services shall be transferable to the
G successor organization as per provisions of clause 16.0. Clause 16.3 of
the said agreement makes it clear that in the event of transfer of ,-
management, BALCO shall ensure transfer to the successor organization
of all non-executive staff recruited for BCPP as per provision contained
in clause 8.0 and such NTPC executives posted at BCPP who are
H declared by NTPC as surplus to its requirements as a result of the transfer
\_
BCPPMAZDOORSANGHv. N.T.P.C. 1093
[P. SATHASIVAM, J.]
of management. It also makes it clear that the terms and conditions of A
such transfer shall not be inferior to those enjoyed by the employees on
the date of transfer. In cases where such transfer is not found possible,
BALCO shall be responsible for all consequent liabilities including
retrenchment compensation, if any.
6. The said agreement entered into between the two parties cannot B
be made retrospectively in case it affects the rights and liabilities of the
third person. The same was entered into between two parties without
knowledge, consent and willingness of the employees. Therefore, these
clauses are not binding nor can be enforced against the employees, unless
they agree to such conditions. The appellants are employees of NTPC C
forever. Further during the course of employment process, NTPC has not
disclosed to the appellants that they are employing them for and on behalf
of BALCO as their agent. Therefore, the 0 & M Agreement i.e.
Agreement to manage BCPP on behalf ofBALCO is not applicable to
the appellants. D
7. Before the High Court, the managements, namely, NTPC and
BALCO filed separate counter affidavit. According to them, the writ
petition filed by the employees as well as their union under Article 226 of
the Constitution ofindia is not maintainable as the appellants have not E
been able to show their legal right. In any case, contractual rights between
the parties are not enforceable under Article 226 or 227 of the Constitution
ofindia. Highly disputed questions cannot be decided in a writ petition
under Article 226. Further, the provisions of the Madhya Pradesh
Industrial Relations Act are applicable to BALCO and NTPC and the F
appellants have efficacious alternative remedy of approaching the Labour
Court.

8. According to NTPC, it is merely an agent of BALCO on a
specific Power of Attorney given to them. The ownership of BCPP
-"f belongs to BALCO. Recruitment was made pursuant to an agreement G
exclusively for BCPP with specific undertaking from the non-executive
employees. Those employees joined employment knowing fully well the
meaning of undertaking. TI1ey have no right to question the agreement
between BAL CO and NTPC. The construction of BCPP was entrusted
H
1094 SUPREME COURT REPORTS [2007] 10 S.C.R.

A by BALCO to NTPC. Apart from the construction work, the operation
and maintenance of BCPP was also entrusted to NTPC. In order to carry
out the operation and maintenance of BCPP, NTPC recruited required
number of workmen and supervisors starting from 1980's. The recruitment
of these employees was for the limited purpose of carrying out the 0 &
B M ofBCPP as long as the management of BCPP remained with NTPC.
The offer of appointment as well as the undertaking given by the
employees specifically bring out the above fact. Besides, the 0 & M
agreement signed between NTPC and BALCO also makes it clear that
the recruitment made by NTPC is specifically for BCPP and in the event
c of transfer ofO & M ofBCPP to any other agency, the services of such
employees will be transferable to the successor agency. BCPP was and
is being managed by NTPC on behalf of its owner i.e. BALCO which is
being operated under the specific Power of Attorney. In view of the same,
the manpower of this plant is shown separately from the manpower of
D NTPC in its annual report. The balance sheet, profit and loss account
statement of NTPC also do not include BCPP, hence it is not another
unit or division of NTPC.

9. The employees have misunderstood the action taken by the
respondents. The BCPP is owned by BALCO. The BALCO, because
E of their Jack of expertise, wanted NTPC to maintain the plant on behalf
ofBALCO. Based on the agreement, various administrative actions were
taken and all those actions that were taken for and on behalf of BALCO
and not for NTPC. Due to oversight, certain lapses have crept into a few
appointment letters and the appellants cannot take advantage of lapses in
F a few cases. These employees have also executed an undertaking and in
all the appointment letters it is specifically written on the right hand comer
of page 1 that the appointment is for BCPP.
10. As per clauses 8.0 and 16.3 of the agreement dated 22.05.1990
G entered into between NTPC and BALCO, since these employees were y-
recruited and appointed for BCPP they can be transferred to BCPP which
was made clear to them by mentioning in para 14 of majority of
appointment letters. It was also made clear that at a later date if it is
decided by BALCO to directly manage the plant/station or transfer its
H management to some other existing or new organization, then their post
BCPPMAZDOORSANGH v. N.T.P.C. 1095
[P. SATHASIV AM, J.]
and services will stand transferred to BALCO or such successor A
organization as the case may be. They will not have any option to remain
on the rolls of NTPC. Once BCPP owned by BALCO is taken over by
BALCO, the entire non-executive staff of BCPP will continue to remain
in BCPP under the management ofBALCO in terms of clauses 8.0 and
16.3 of the Agreement. Once the plant is taken over, if the non-executive B
employees are not going to BALCO and if they are to be taken by NTPC,
they will become surplus and NTPC will have no option except to order
retrenchment. To avoid such contingency, it is just and proper that the
non-executive employees should go along with the plant.
11. Similar details have been furnished in the counter affidavit filed C
on behalf of BALCO.
12. Additional counter affidavit has also been filed on behalf of
NTPC clarifying certain facts. It is reiterated that neither the union nor
the workers can compel NTPC to continue the management. It is also D
reiterated that all the employees were aware of the fact that BCPP is
owned by BALCO and NTPC is merely an agent to run the establislunent
for some time and not permanently.
13. The High Court, after considering the claim of both parties with
reference to terms and conditions of the agreement after finding that the E
writ petition by the employees are maintainable and noting the tenns and
conditions, particularly, clauses 8.0 and 16.3, the undertaking of the
'>- employees accepted the stand taken by the management and dismissed
all the writ petitions filed by the employees. In the same order, the High
Court has also recorded the statement of the learned Additional Solicitor F
General, who appeared for NTPC that if any representation is made to
the NTPC and if any vacancy in any of their projects is available, the
same will be considered. Aggrieved by the dismissal of all the writ
petitions, the union as well as the employees filed the above appeals.
G
14. We heard Ms. Indira Jaising, Mr. Ravindra Shrivastava, learned
senior counsel and Mr. Lakshmi Raman Singh and Mr. Atul Kumar,
learned counsel on behalf of the appellant-employees and Mr. Raju
Ramachandran, Mr. C.A. Sundaram, learned senior counsel and Mr. S.K.
Dhingra, learned counsel for the respondents-Managements. H
1096 SUPREME COURT REPORTS [2007] 10 S.C.R.

A 15. Ms. IndiraJaising and Mr. Ravindra Shrivastava, learned senior '>-
counsel for the employees, submitted as follows:
(i) That all the non-executive employees were recruited by NTPC;
training was imparted by NTPC and in the appointment orders, it was
made clear that their service terms and conditions will be as applicable
B
to NTPC employees and in future their services may be transferred to
any project of NTPC, therefore, all the non-executive employees/
appellants herein are the employees ofNTPC and after disinvestment of
BALCO, their services cannot be transferred to a private sector
organization - BALCO on. the strength of 0 & M agreement dated
C 22.05.1990 and the subsequent agreement dated 20.06.2002 entered into
between NTPC and BALCO.
(ii) that their transfer to private organization amounts to retrenchment
by NTPC against their wishes which is not permissible under law~
D
(iii) that clause 16.3 is discriminatory since it applies only to non-
executive employees and they alone are to be transferred to successor
organization whereas the executives working in BALCO are to be
. /
transferred to other establishments of NlfPC.
E (iv) that unilateral changes made to their service conditions particularly
when these employees were not party to the agreement cannot be
sustained. Inasmuch as these employees enjoy service facilities in NTPC
which is a Government of India undertaking, they have every right of
protection of their service ~onditions. The appellants being workers not
F being in equal bargaining .Powers have no option-but to sign on the dotted
lines. They want to securk employment, in those circumstances it is unjust
and unreasonable to irl'ipose terms and conditions of the agreement in
which they were no~,parties to the same.
(v) that under .a special scheme, namely, land owner category some
y-
G persons were appo(nted by NTPC and they cannot be transferred to other
organization, particularly, to a private organization.
i

16. On the other hand, learned senior counsel Mr. C.A. Sundararn
appearing for BALCO and Mr. Raju Ramachandran appearing for NTPC
H
BCPPMAZDOORSANGHv. N.T.P.C. 1097
[P. SATHASIVAM,J.]
--t by taking us through the appointment letters, undertakings, terms and A
conditions of the agreement dated 22.05.1990, particularly, clauses 8.0
and 16.3 submitted that all the non-executive employees/appellants were
not appointed for NTPC, on the other hand, they were selected and
appointed only for BCPP which is owned by BALCO hence their action
to transfer them to BCPP/BALCO is fully justified and the High Court B
was right in dismissing the writ petitions filed by those employees.
17. We have carefully perused all the relevant materials and
considered the rival submissions.
18. Though no serious objection was made as to the maintainability C
of the writ petition, however, learned senior counsel appearing for the
Management pointed out that even if there is any breach by BAL CO of
its obligations in the matter of terms and conditions of employment, the
appellants have appropriate remedy under Industrial Law. Inasmuch as
the claim of the employees relates to interpretation of certain clauses in D
the agreement, appointment letters and no disputed facts are involved and
taking note of the fact that the issue relates to employment of few hundreds
of employees and in the light of the assertion that transferring them to
private organization from a public sector undertaking without their specific
consent is arbitrary and unreasonable and also of the settled position that E
alternative remedy is rule of discretion and not the rule of law, we accept
the conclusion of the High Court and hold that the writ petitions under
Article 226 of the Constitution filed by the employees are maintainable.
19. In order to answer the contentions raised and in the light of the
reliefs prayed for by the employees, it is useful to refer to the relevant F
clauses in the agreement. First agreement between the BALCO and NTPC
was executed in July, 1984. Since we are very much concerned about
the subsequent agreement dated 22.05.1990, we will consider the relevant
clauses of 1990 agreement. Among various clauses, clauses 8.2, 8.5,
~"1 16.3 and 21.0 are relevant, which read as under: G
"8.0 PERSONNEL MANAGEMENT

8.2. Non-Executives

H
1098 SUPREME COURT REPORTS [2007] 10 S.C.R.

A Recruitment of non-executive staff(supervisory and workmen)
shall be undertaken by NTPC specifically for BCPP as per
NTPC recruitment norms and policies, this staff shall be
governed by the NTPC' s policies, rules and regulations. In the
event of transfer of management from NTPC to any other
B agency, their services shall be transferable to the successor
organization as per provisions of clause 16.0."

"8.5 Terms and Conditions of Service

BCPP employees would for the matters of discipline, be governed
C by Standing Orders, Conduct, Disciplines and Appeal Rules; etc.
framed by NTPC and BALCO shall have no jurisdiction in such
matters during the period NTPC manages BCPP on behalf of
BALCO. If BALCO enters into any agreement with its own
employees for grant of any benefits or change in any terms and
D conditions, it shall have no effect whatsoever or NTPC for any
dispensation influenced by the said agreement for employees
engaged in BCPP, Revision of terms and conditions of BCPP
employees will .be in accordance with the policy laid down by
NTPC for these employees, which may be similar to that of other
E employees of NTPC or might be different on merit of each case
as consciously decided by NTPC."

"16.0Transfer of management:

16.3 Transfer of staff:
F
In the event of transfer of management, BALCO shall ensure
transfer to the successor organization of all non-executive staff
recruited for BCPP as per provision contained in clause 8.0, and
such NTPC executives posted at BCPP who are declared by
NTPC as surplus to its requirements as a result of the transfer of
G
management. Terms and conditions of such transfer shall not be
inferior to those enjoyed by the employees on the date of transfer.
In cases where such transfer is not found possible, BALCO shall
be responsible for all consequent liabilities including retrenchment
compensation, if any.
H
BCPPMAZDOORSANGHv. N.T.P.C. 1099
[P. SATHA.SIVAM,J.]
At the end of plant life, BALCO shall be responsible for all A
liabilities including retrenchment compensation etc., when the non-
executives and such NTPC executives posted at BCPP who are
declared surplus are retrenched or any other dispensation as
deemed fit is resorted to."
B
"21. 0 Effective date and duration of agreement:
The agreement shall come into force from 29.6.1987 ......."

20. Clause 8.5 makes it clear that in respect of matter of discipline,
the relevant Rules, Standing Orders framed by NTPC alone are applicable C
for employees of BCPP and BALCO has no jurisdiction in those matters
during the period NTPC manages BCPP on behalf of BALCO. Likewise,
though clause 16.3 enables BALCO to transfer all non-executive staff to
the successor organization, namely, new management, it makes it clear
that terms and conditions of such transfer shall not be inferior to those D
> enjoyed by the employees on the date of transfer. As per clause 21.0,
the agreement of the year 1990 deemed to come into operation from
29.6.1987. In other words, all the terms and conditions have retrospective
effect from 29.061987. With this background, we will consider whether
those terms are sustainable and the action of the management in
transferring the employees-appellants to BCPP which is a private E
management is justifiable or not?
21. It is not in dispute that NTPC is a public sector undertaking
wholly owned by the Government oflndia. Likewise, initially BALCO
was also a public sector undertaking and BCPP is wholly owned by F
BALCO which was set up for production of power for their units.
Subsequently in the year 2001, by virtue of disinvestment policy of the
Government oflndia, BALCO including BCPP were transferred to Mis
Sterlite which is a private concern. Though the agreement between
BALCO and NTPC was entered into on 22.5.1990 enabling the NTPC G
to manage, operate, supervise, maintain and control BCPP in all aspects,
as per clause 21.0, the terms and conditions deemed to come into
operation from 29.6.1987. Learned senior counsel appearing for the
appellants, by placing the relevant materials, submitted that most of the
employees were appointed prior to the agreement dated 22.5.1990, H
1100 SUPREME COURT REPORTS [2007] 10 S.C.R.

A however, admittedly they were not parties to the agreement. In other >-
words, according to the employees, the said agreement was only bipartite
i.e., between BALCO and NTPC and that they were on the rolls of
NTPC on the date of the said agreement without their being party various
terms and conditions which affect their services are not enforceable against
B them. The appointment lett~rs of employees are annexed in Vol. II of the
appeal paper book which clearly show that they were appointed in the
year 1987. It is not in dispute that the agreement was executed on
22.5.1990. In order to bind these employees, the management could have f
executed a tripartite agreement by taking their consent. At this juncture,
C it is relevant to mention that even as per the agreement, particularly, clause
16.3 insists that in the event of transfer to the successor organization or
new management, the terms and conditions of such transfer shall not be
inferior to those enjoyed by the employees on the date of transfer. Learned
senior counsel appearing for the employees pointed out that inasmuch as
D these persons p~ovided more b~n~fits as per the Standing Orders/Ru.les
of NTPC and If the transfer is Implemented, all the non-executive
employees have to work with a private concern with less benefits and
privileges compared to NTPC which is a public sector undertaking.
22. The bipartite agreement between NTPC and BALCO was
E entered into on 22.05.1990. It is brought to our notice that the
appointments of 236 employees are made prior to 22.05.1990 and at
the time of recruitme11t and appointment by NTPC, no agreement between
NTPC and BALCO was in existence empowering NTPC to make
recruitment and appointment on behalf ofBALCO. Therefore, as rightly
F pointed out by learned senior counsel for the employees, the provision
made in clause 21.0 of the agreement, the effective date and duration of
agreement w.e.f29.06.l 987 is contrary to the provisions of Section 23
of the Indian Contract Act and also violative of Article 14 of the
Constitution of India. By virtue of the aforesaid clause, the service
G condition has been admitted to be changed to the employees by giving r-~
effect of the agreement dated 22.05.1990 w.e.f. 29.06.1987. Even during
the course of arguments made on behalf of BALCO,it was not seriously
disputed that the appointments made prior to 22.05.1990 cannot be
termed in furtherance of the agreement dated 22.05.1990. In such
H circumstances, the finding of the High Court that the services of the
BCPPMAZDOORSANGHv. N.T.P.C. 1101
[P.SATHASIVAM,J.]
employees appointed by NTPC are transferable to BALCO in the light A
of the provisions made in clauses 8.2 and 16.3 of the bipartite agreement
dated 22.05.1990 between NTPC and BALCO is not acceptable. Even
for the sake of argument, it was admitted that the power of attorney was
given to NTPC pursuant to the agreement dated 22.05.1990 and
29.05.1991, it is only those employees who have been appointed by B
NTPC on behalf of BALCO, pursuant to the said power of attorney, can
only be transferred to BALCO.
23. Now we will consider the appointment letters and the
undertakings. It is not in dispute that the process of recruitment was initiated
by NTPC and in the advertisement, it has been mentioned that "NTPC C
Ltd. requires persons in the following categ01ies for its Korba Super
Thermal Power Project and BALCO Captive Power Project." The said
advertisement nowhere stipulates that the said process of recruitment was
on behalf ofBALCO. The letters for test or interview to the candidates
have also been issued by NTPC, which are in the appeal paper-book. D
Even those interview letters do not reveal that the appointments are being
made for/on behalf of BALCO. As stated earlier, it is not in dispute that
those appointment letters have also been issued by NTPC. Learned senior
counsel appearing for the management, by drawing our attention to clause
14 of the appointment letters, submitted that those employees are E
precluded from raising such contention. We are unable to accept the same.
It is true that in some of the appointment letters, clause 14 reads as under:
"14. Your appointment as Jr. Tech (elect) will be against the post
sanctioned for BALCO Captive Power Plant/Station, which is F
presently under the management of National Thermal Power
Corporation Limited. In case at a later date it is decided by
BALCO to directly manage the Plant/Station or transfer its
management to some other existing or new organization (called
successor organization) then your post and your services will stand G
transferred to BALCO or such successor organization as the case
may be. You will be not have any option to remain on the rolls of
National Thermal Power Corporation Ltd., or claim any benefit/
compensation for the past services from NTPC but shall be
governed by the terms and conditions as applicable to BALCO
H
1102 SUPREME COURT REPORTS [2007] 10 S.C.R.

A or such successor organization, as the case may be. Accordingly
please submit an undertaking in the enclosed fonnat, while accepting
this offer of appointment."

24. It is to be noted that at the time of insertion of above-mentioned
clause 14 in the appointment letter and obtaining undertakings from the
B employees there was no agreement between NTPC and BALCO for
making recruitment and appointment on behalf of BALCO for its BALCO
Captive Power Plant. In such circumstances, as observed earlier and rightly
pointed out by learned senior counsel for the employees in the absence
of such agreement between NTPC and BALCO, clause 14 of the
C appointment letter and undertakings obtained by NTPC is illegal and is
contrary to the provisions of Section 23 of the Indian Contract Act. In
this connection, reliance wa5 placed on a judgment of this Court rendered
in the case of Central Inland Water Transport Corporation Limited
andAnr., v. Brojo Nath Ganguly andAnr., [1986] 3 SCC 156. In para
D 91, this Court made the following observation:
"91. Is a contract of the type mentioned above to be adjudged
voidable or void? If it was induced by undue influence, then under
Section 19A of the Indian Contract Act, it would be voidable. It
E is, however, rarely that contracts of the types to which the principle
formulated by us above applies are induced by undue influence as
defined by Section 16( 1) of the Indian Contract Act, even though
at times they are between parties one of whom holds a real or
apparent authority over the other. In the vast majority of cases,
F however, such contracts are entered into by the weaker party under
pressure of circumstances, generally economic, which results in·
inequality of bargaining power. Such contracts will not fall within
·the four comers of the definition of "undue influence" given in
Section 16(1). Further, the majority of such contracts are in a
standard or prescribed form or consist of a set of rules. They are
G
not contracts between individuals containing terms meant for those
individuals alone. Contracts in prescribed or standard forms or
which embody a set of rules as part of the contract are entered
into by the party with superior bargaining power with a large
number of persons who have far less bargaining power or no
H
I
>- BCPPMAZDOORSANGHv. N.T.P.C. 1103
(P. SATHASIV AM, J.]
bargaining power at all. Such contracts which affect a large number A
of persons or a group or groups of persons, if they are
unconscionable, unfair and unreasonable, are injurious to the public
interest. To say that such a contract is only voidable would be to
compel each person with whom the party with superior bargaining
power had contracted to go to court to have the contract adjudged B
voidable. This would only result in multiplicity oflitigation which
no court should encourage and would also not be in the public
interest. Such a contract or such a clause in a contract ought,
therefore, to be adjudged void. While the law of contracts in
England is mostly judge-made, the law of contracts in India is C
enacted in a statute, namely, the Indian Contract Act, 1872. In
order that such a contract should be void, it must fall under one of
the relevant sections of the Indian Contract Act. The only relevant
provision in the Indian Contract Act which can apply is Section
23 when it states that "The consideration or object of an D
agreement is lawful, unless ... the court regards it as ... opposed
to public policy."

In view of the same and of the fact that words and phraseology used in
the undertakings are same which are in a stereotype form, it is justified in
arriving at a conclusion that undue influence was exercised by the E
management of NTPC on the unemployed candidates to execute
undertakings for appointment.

25. NTPC being an undertaking of the Government of India and an
instrumentality of State is under constitutional obligation to act fairly with F
its employees, particularly, the posts which were advertised from 1986
till 1988 were not in existence in BALCO as the BCPP was not fully
commissioned. In those circumstances, NTPC was not justified in inserting
clause 14 in the appointment letters and obtaining undertakings from the
selectees.
G
26. As rightly pointed out by learned senior counsel for the
employees and from the materials brought on record either before the High
Court or this Court, it is evident that during the process of recruitment it
was never disclosed to the candidates/selectees that their recruitment is
H
1104 SUPREME COURT REPORTS [2007] 10 S.C.R.

A exclusively for BALCO, on the other hand, in some of the appointment
letters issued by NTPC, the terms and conditions of appointment are
mentioned. It provides pay-scale ofNTPC, allowances and HRA payable
as per rules of NTPC and <?ther facilities as admissible under the rules of
NTPC. It also provides other benefits of the company - contributory
B provident fund and gratuity are payable as per rules of NTPC. Para 8 of
the appointment letter provides for initial appointment and posting to work
at Korba and thereafter liable to be posted at the discretion of NTPC in
other office/project/unit or in any other public sector undertakings in India
or abroad. The aforesaid terms and conditions lead to an irresistible
C conclusion that NTPC was their employer in all purposes.
27. The materials placed clearly show that clause 14 referred to
above is against public policy and contrary to Section 23 of the Indian
Contract Act as well as violative of Article 14 of the Constitution oflndia
for the reason that undue influence was exercised by NTPC management
D and the selected candidates to accept the terms and conditions stipulated
therein. By virtue of the aforesaid clause 14, as pointed out earlier, the
status of these public servants have been sought to be changed which is
again violative of Article 14. In Mahavir Auto Store and Ors. v. JOC
and Ors., [1990] 3 SCC 752, this Court has observed in para 18 that
E even in the field of public law, the persons affected should be taken into
confidence.
28. The next submission ofleamed senior counsel for the employees
was that transfer of employer is not permissible without tripartite
F agreement. As per the law laid down in Nokes v. Doncaster
Amalgamated Collieries Ltd., (1940) 3 All E.R. 549 and decision of
this Court in Manager, Mis. Pyarchand Kesarimal Ponwal Bidi Factory
v. Omkar Laxman Thange & Ors., [1969] 2 SCR 272, the consent
must be express and consciously accorded in the course of negotiation
G contemporous with the process of transfer so as to amount to an informed
consent. Consequently, in order to bind the appellants, there mustbe a
tripartite agreement. Since there is no tripartite agreement, as observed
above, the transfer from one employer to another cannot be effected.
In Nokes v. Doncaster Amalgamated Collieries Ltd., (supra), it
H
J- BCPPMAZDOORSANGHv. N.T.P.C. 1105
[P. SATHASIVAM, J.]
was observed as under: A
"It will be readily conceded that the result contended for by the
respondents in this case would be at complete variance with a
fundamental principle of our common law - namely, that a free
citizen, in the exercise of his freedom, is entitled to choose the
employer whom he promises to serve, so that the right to his services B
cannot be transfen-ed from one employer to another without his
assent. ...."

This Court in Pyarchand v. Omkar Laxman (supra) held thus:
c
"A contract of service being thus incapable of transfer unilaterally,
such a transfer of service from one employer to another can only
be affected by a tripartite agreement between the employer, the
employee and the third party, the effect of which would be to
terminate the originai contract of service by mutual consent and to D
make a new contract between the employee and the third party."

29. The Government or its instrumentality cannot alter the conditions
of service of its employees and any such alteration causing prejudice
cannot be effected without affording opportunity of pre-decisional hearing
and the same would amount to arbitrary and violative of Article 14. As E
pointed out earlier, in the case on hand, the employees are neither party
to tripartite agreement nor they have been heard before changing their
service condition. Therefore, the action of the management is violative of
Article 14 of the Constitution of India. Similar view has been taken by
this Court in HL. Trehan and Ors. v. Union ofIndia and Ors., [1989] F
1 SCC 764. In para 11 of the judgment, this Court observed as under:

" ..... It is now a well established principle of law that there can
be no deprivation or curtailment of any existing right, advantage
or benefit enjoyed by a Government servant without complying with G
the rules of natural justice by giving the Government servant
concerned an opportunity of being heard. Any arbitrary or
whimsical exercise of power prejudicially affecting the existing
conditions of service of a Government servant will offend against
the provision of Article 14 of the Constitution. Admittedly, the H
A employees of CORIL were not given an opportunity of hearing or
representing their case before the impugned circular was issued by
the Board of Directors. The impugned circular cannot, therefore,
be sustained as it offends against the rules of natural justice."

B 30. It is useful to refer to the judgment of this Court in Jawahar/a/
Nehru University V. Dr. KS Jawatkar and Ors., (1989) Supp. 1 sec
679. In this case, Jawaharlal Nehru University was the appellant before
this Court. The main contention of the appellant-University was that the
respondent was appointed at the Centre of Post Graduate Studies, Imphal
and when the Centre was transferred to Manipur University his services
C were automatically transferred to that University and consequently he could
not claim to be an employee of the appellant-University. The argument
proceeds on the assumption that the Centre of PG studies at Imphal was
an independent entity which existed by itself and was not a department
of the appellant-University. Rejecting the said contention, this Court hdd
D~ ~

"7 .............. The Centre of Post-Graduate Studies was set up
at Imphal as an activity of the appellant University. To give
expression to that activity, the appellant University set up and
E organised the Centre at Imphal and appointed a teaching and
administrative staff to man it. Since the Centre represented an
activity of the appellant University the teaching and administrative
staff must be understood as employees of the appellant University.
In the case of the respondent, there can be no doubt whatever
F that he was and continues to be, an employee of the appellant
University. There is also no doubt that his employment could not
be transferred by the appellant University to the Manipur University
without his consent notwithstanding any statut01y provision to that
effect whether in the Manipur University Act or elsewhere. The
contract of service entered into by the respondent was a contract
G
with the appellant University and no law can convert that contract
into a contract between the respondent and tl1e Manipur University
without simultaneously making it, either expressly or by necessary
implication, subject to the respondent's consent. When the Manipur
University Act provides for the transfer of the services of the staff
H
BCPPMAZDOORSANGHv.N.T.P.C. 1107
[P. SATHASIVAM, J.]
working at the Centre of Postgraduate Studies, Imphal, to A
employment in the Manipur University, it must be construed as a
provision enabling such transfer of employment but only on the
assumption that the employee concerned is a consenting party to
such transfer. It makes no difference that the respondent was not
shown in the list of Assistant Professors of the appellant University B
or that the provision was not indicated in its budget; that must be
regarded as proceeding from an erroneous conception of the status
of the respondent. The position in law is clear, that no employee
can be transferred, without his consent, from one employer to
another. The consent may be express or implied. We do not find c
it necessary to refer to any case law in support of this conclusion.

8. Inasmuch as the transfer of the Centre of Post-graduate Studies
from the appellant University to the Manipur University could not
result in a transfer of the employment of the respondent from the
D
one to the other, it must be concluded that the respondent continues
in the employment of the appellant University ..........."

It is clear that no employee could be transferred without his consent from
one employer to another. Therefore, in view of the aforesaid rulings the
transfer of employees from NTPC - a public sector undertaking to E
BALCO which is a private organiz.ation is bad in law.
31. The above discussion would clearly show that all appointment
orders were issued by NTPC and Rules, procedure in respect of
probation, training, D.A. and other allowances, absorption in the regular F
scale, governed by certified standing orders and other Rules and
Regulations of the company i.e., NTPC. Even in the appointment order,
it had been specifically stated that in the event of their appointment, they
have to execute service agreement in favour of NTPC or any other
Department or Undertaking of Government oflndia for three years. It is G
not disputed that all the employees selected and appointed executed a
service agreement as suggested in favour of NTPC. All the appointment
orders were sent with the above referred specific conditions by the Senior
Personal Officer, NTPC Korba Super Thermal Power Project, Bilaspur.
Posting orders were also issued by NTPC. Perusal of agreements
H
1108 SUPREME COURT REPORTS [2007] 10 S.C.R.

A executed by the selectees clearly show that there is no reference that the
said agreement is for and on behalf of the BALCO whereas it only refers
NTPC. All the abovementioned factual details clearly support the case
of the employees that they were selected and their services could be .
continued only at NTPC or any other public sector undertakings of
B Government of India There is no iota of evidence or indication that they
will be transferred to a private concern with less service benefits.

32. Learned senior counsel appearing for the employees finally
submitted that the impugned clauses in the agreement are liable to be
C interfered with on the ground of discrimination. Clause 16.3 of the
agreement dated 22.05.1990 makes it clear that non-executive employees
are to be transferred to successor organization and there is no reference
to executives. On the other hand, it was demonstrated before us, by facts
and figures, that the executives working in BALCO are to be transferred
to other establishments of NTPC. Even though the non-executive
D employees are also having a special knowledge i.e., technicians, in the
absence of any plausible reason retaining executives alone with NTPC
and transferring non-executive employees to a private organization cannot
be sustained and hit by Art. 14 of the Constitution of India. On the other
hand, the appellants-non-executive employees are to be retained by NTPC
E and posted in their various units. We are also conscious of the earlier
decisions of this Court in BALCO Employees' Union (Regd) v. Union
of India & Ors., [2002] 2 SCC 333 (BALCO's case) and All India
!TDC Workers' Union & Ors. v. !TDC & Ors., [2006] 10 SCC 66
(ITDC's case) up~lding the policy of disinvestment. Learned senior
F counsel appearing f6t the Management strongly relying on BALCO's case
and ITDC' s case submitted that no employee of public sector undertaking
has a vested right in continuing to be employed by an instrumentality of
the State. There is no quarrel as to the proposition laid down in BALCO's
and ITDC' s case. However, considering our discussion relating to various
G aspects starting from calling for applications and subsequent actions taken
by NTPC, we are satisfied that the employees have made out a case for
continuing their service in NTPC.

33. At the end of the arguments, Mr. Raju Ramachandran, learned
H senior counsel appearing for the NTPC requested this Court that if the
BCPPMAZDOORSANGHv. N.T.P.C. 1109
[P. SATHASIVAM,J.]

-.( claim of the employees are acceptable, they are ready to consider the A
case of the employees whose appointment letter neither contain clause
14 nor clause 16 and have not given an undertaking and they will be taken
back by the NTPC in the phased manner. While appreciating the gesture
of the learned senior counsel and considering the relevant materials, we
are of the view that both the offending clauses in the agreement cannot B
be sustained and all employees are to be retained in NTPC.

34. In the light of the above discussion, common order dated
25.3.2004 passed by the High Court of Chhatisgarh in W.P. Nos. 2087
of 2001, 2072of2001 and 557of2004 are set aside and the appeals C
filed by the employees are allowed. No order as to costs.

N.J. Appeals allowed.