Holding

A transfer of a public undertaking employee is a condition of service and cannot be set aside unless the order is shown to be malafide or violative of statutory provisions; Rule 4.1.1 does not prohibit such transfers.

Summary

The National Hydroelectric Power Corporation transferred two employees from its corporate office to a new project at Itanagar. The employees challenged the transfers, arguing that corporate office and project units are separate seniority units and that transfers without consent violate Rule 4.1.1 of the Seniority Rules. The High Court set aside the transfers, but the Supreme Court reversed, holding that transfer is a condition of service for public undertaking employees and may not be interfered with unless shown to be malafide or contrary to statutory provisions. The Court interpreted Rule 4.1.1 to protect seniority based on length of service, not to prohibit transfers between units, especially when the project is new. Consequently, the appeals were allowed, the High Court order was set aside, and the writ petitions dismissed.

Issues considered

Whether a transfer of a public undertaking employee is an incident or condition of service that can be challenged in court.
Whether Rule 4.1.1 of the Seniority Rules bars transfer of an employee from one seniority unit (Corporate Office) to another (Project) without consent.
Whether the transfer orders were passed with malafide intent or in violation of any statutory provision.
Whether the transfers adversely affect the employees' seniority rights.

Subjects

transfer of servicepublic undertakingseniority rulesmalafideadministrative lawcondition of serviceemployee rights

Judgment

A NATIONAL HYDROELECTRIC POWER CORPORATION LTD.
v.
SHRI BHAGWAN AND ANR.

SEPTEMBER 11, 2001

B [S. RAJENDRA BABU, DORAISWAMY RAJU, JJ.]

Service Law :

Trans.fer-Government or public undertaking employee-Transferable
Posts-Employees tram:ferredfrom Corporate Office to new Project-Transfer
c orders challenged-Held, transfer is not only an incident but condition of
service-Judicial Inte1ference-Scope of-Held, unless the transfer order is
ma/a.fide or in violation of statutory provisions prohibiting such transfer Courts/
Tribunals not to inte1fere.

D Respondents, B & P, were transferred from Corporate Office of the
appellant to the Project at Itanagar. The transfer orders were challenged
by respondents in writ petitions before High Court which were allowed
and the transfer orders were set aside on the ground that Corporate Office
and the Projects constitute different units for purposes of seniority under
the Rules which bar the transfer of an employee from one seniority to
E
another seniority unit except \\'ith his consent. However, High Court rejected
the plea of malafides. Hence this appeal.

Appellant contended that transfer was an incident of service and was
made in accordance with law and in public interest; that there was no
F proof of malafides or contravention of any specific statutory provision in
passing the transfer orders; that Rule 4.1.1 or Seniority Rules was
misconstrued, completely overlooking R. 5.14 of the Recruitment Rules;
that there was no loss of seniority of respondents since the projects were
new; and that transfers were absolutely necessary for undertaking new
G projects assigned to it in order to adjust staff from various Projects or
Corporate Offices.

Respondents contended that their seniority rights would be adversely
affected by the transfer orders since the Corporate Office and Projects are
distinct and separate entities for the purposes of seniority and such an
H order could not have been made without their consent; and that construction
18
NATIONAL HYDROELECTRIC POWER CORPN. LTD. v. SHRI BHAGWAN 19
placed by High Court on the scope of Rule 4.1.1 of the Seniority Rules was A
correct.

Allowing the appeal, the Court
}
HELD : 1.1. It is by now well-settled that no Government servant or
employee of public undertaking has any legal right to be posted forever at B
any one particular place since transfer of a particular employee appointed
to the class or category of transferable posts from one place to other is not
only an incident, but a condition of service, necessary too in public interest
and efficiency in the public administration. Unless an order of transfer is
shown to be an outcome of malafide exercise of power or stated to be in c
violation of statutory provisions prohibiting any such transfer, the Courts
or the Tribunals cannot interfere with such orders as a matter of routine,
as though they are the Appellate Authorities substituting their own decision
for that of the Management, as against such orders passed in the interest of
administrative exigencies of the service concerned. [22-E-F]
D
1.2. In the instant case, Rule 4.1.1 of the Seniority Rules does not
interdict any transfer of the employees from one Office or Project or Unit
to any one of the other as along as the seniority of such an employee is
protected based on the length of service with reference to the date of
promotion or appointment to the grade concerned irrespective of the date E
of transfer. No adverse consequences detrimental to the seniority of the
respondents resulting from such transfer is bound to occur since the project
undertaken to which they have been transferred is itself a new one. With
the rejection of the plea of malafides, the High Court was not justified in
interfering with the impugned orders of transfer. (22-H; 23-A; 22-E]
F
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1095-1096 of
2001.

From the Judgment and Order dated 1.8.2000 of the Punjab and Haryana
I High Court in W.P. Nos. 1686 & 1705 of 2000.
G
B. Datta and Ajit Pudussery for the Appellant.

Jitendra Sharma, Ms. Minakshi Vij and P.N. Jha for the Respondents.

The Judgment of the_ Court was delivered by
H
20 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
A RAJU, J. The above appeals have been filed against the common order
dated 1.8.2000 of the Punjab and Haryana High Court, wherein the orders of
transfer of the respondents to Subansiri Hydroelectric Project, Jtanagar, were
set aside. The respondent-Shiv Prakash initially joined service of the National
Hydroelectric Power Corporation Limited, Faridabad (hereinafter referred to as
'the Corppration') as Attendant Grade-III on 3.6.1982 pursuant to a letter of
B appointment dated 25.5.1982. In 1987, he was selected and appointed as
Operator, Photostat Machine, by an order dated 29.9.1987 and thereafter
promoted as Operator, Photostat Machine Grade-II, pursuant to the order dated
1.1.1993. He was further promoted as Operator, Phot.ostat Machine Grade-I, in
1998 an,d by an order dated 5.1.2000, he was transferred from E&M Division,
c Corporate Office, to the Project at Itanagar. So far as Shri Bhagwan is concerned,
he joined the service. of the Corporation as Attendant Grade-Ill in 1981 pursuant
to an appointment letter dated 15.4.1981 and in 1996, he was selected and
appointed as Assistant Grade-III (Hindi}:While working in the office of Director
(Schemes"II), Corporate Office, by an order dated 5.1.2000 he was transferred
D to the Project at Itanagar.

The orders of transfer came to be challenged on the ground that they
were conu·ary to the settlement entered into between the Cm:poration a~d its
employees Union and the Model Standing Orders framed under the Industrial
Employment (Standing Orders), 1946. Motive to penalize for Trade Unions
E activities of the. respondents was also averred to be yet another reason. Per
contra, the appellant-Corporation contended that the plea of alleged malafides
is baseless and that after drawing the necessary transfer allowance and other
allowance for giving effect to the order of transfer, it is not given to and as a
matter of fact, the respondents were estopped from challenging the orders of
transfer. The transfer was said to be consistent with the terms and conditions
F
embodied in the letter of appointment as well as recruitment rules framed for
the Corporation employees, according to which every employee is liable to be
transferred and posted at any place within its service and in the absence of any
bar as such for being so transferred from the Corporate Office to the Project
and vice versa. By way of replication, their case was reiterated by the employees.
G The High Court was of the view that the Corporate O(fice and the Projects
constitute different units for purposes of seniority, as di.sclosed from the relevant
rules, and that, therefore, an employee borne on a particular seniority unit
cannot be transferred to another seniority unit, except with his consent. The
pica based on the terms and conditions embodied in the letters of appointment
came to be rejected for the reason that the lett<:rs of appointment have to be
H
NATIONAL HYDROELECTRIC POWER CORPN. LTD. v. SHRI BHAGWAN [RAJU, J.] 21
read in consonance with the rules and if so done, the transfers under challenge A
cannot be upheld, having regard to what the High Court has viewed to be the
bar contained in the rules against an employee from one seniority to another
seniority unit. The plea of malafides urged on behalf of the employees and the
I one based on estoppel urged on behalf of the Corporation came to be rejected,
while allowing the Writ Petitions by quashing the orders of transfer. Hence,
B
these appeals.

Heard Shri B. Datta, learned senior Advocate for the appellant-Corporation
and Shri Jitendra Sharma, learned senior Advocate, for the respondent-
employees. It was urged for the appellant-Corporation that transfer being an
incident of service,· no exception could be taken to the impugned orders of c
transfer, which came to be made according to the appellant in accordance with
law and in public interest, particularly in the absence of any proof of malafides
or contravention of any specific prohibitory provision in this regard, rendering
the employees immune from such transfers. Rule 4.1.1 of the Seniority Rules
was, according to the appellant, misconstrued completely giving a go-by to R
D
5.14 of the Recruitment Rules and a proper construction of the same would
really support the stand of the Corporation to justify the transfers in the case
on hand. The assumption made by the High Court on the alleged grievance of
loss of seniority is said to be unwarranted having regard to the fact that the
Projects to which the respondents were transferred being n~w, no such grievance
could have been countenanced. It was also urged that the Government of India, E
from time to tiine, assigned new Projects to the Corporation for being executed
and implemented and the above transfers become absolutely necessary for
undertaking such new Projects in order to adjust the staff from various Projects
or Corporate Offices where they were either not required or found to be surplus
and so far as the case on hand is concerned, staff from the lowest level, namely, F
Class-IV, to the level of General Managers have been transferred, offering a
package deal under which they were permitted to not only keep their families
at the previous place of posting or any place of their choice in India entitling
them to House Rent Allowance of that Station, but also giving themin addition,
special House Rent Allowance of ten per cent of presently drawn basic pay,
giving them, at the same time, temporary accommodation at the project site free G
of cost, besides granting them other benefits like site compensatory allowance,
monthly ad hoc monetary assistance, free transport of essential commodities to
the site and mess facilities, etc. More than one and a half times the insurance
coverage that they would have got in the previous place of posting also become
due to them for which the premium is said to be borne by the Corporation, in H
22 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
A addition to the travel facilities to the members of the family.

The learned senior counsel for the respondents, while adopting the
reasoning of the High Court in the order under appeal, strenuously urged that
as per the Seniority Rules, which came into force w.e.f. 1.6.1976, the Corporate \
Office and the Projects constituted different units for purposes of seniority and
B consequently, the High Court was justified in coming to the conclusion that the
transfer from one unit to the other unit could not have been made without
consent of the employee concerned to his detriment in respect of his rights of
seniority. Argued the learned senior counsel further that the construction placed
by the High Court on the scope of Rule 4.1.1 of the Seniority Rules is correct
C and that the transfer envisaged therein related to the transfer of employees from
one cadre to the other cadre in the same Office, Project or Unit and not
otherwise, since the Corporate Office and Projects are distinct and separate
entities for the purpose of seniority. The learned senior counsel for the
respondents repeatedly urged that the rights of the employees in respect of their
D seniority would be adversely affected by the impugned transfers and, therefore,
no interference is called for in these appeals.

On a careful consideration of the submissions of the learned counsel on
either side and the relevant rules to which our attention has been invited to, we
are of the view that the High Court was not justified in interfering with the
E impugned orders of transfer. It is by now well-settled and often reiterated by
this Court that no Government servant or employee of public Undertaking has
any legal right to be posted forever at any one particular place since transfer
of a particular employee appointed to the class or category of transferable posts
from one place to other is not only an incident, but a condition of service,
F necessary too in public interest and efficiency in the public administration.
Unless an order of transfer is shown to be an outcome of malafide exercise of
power or stated to be in violation of statutory provisions prohibiting any such
transfer, the Courts or the Tribunals cannot interfere with such orders as a
matter of routine, as though they are the Appellate Authorities substituting their
own decision for that of the Management, as against such orders passed in the
G interest of administrative exigencies of the service concerned. On the facts and '-~
circumstances of the cases before us, we are also unable to agree with the
learned counsel for the respondents that Rule 4.1.1 of the Seniority Rules
interdicts any transfer of the employees from one Office or Project or Unit to
any one of the other as Jong as the seniority of such an employee is protected
H based on the length of service with reference to the date of promotion or
NATIONAL HYDROELECTRIC POWER CORPN. LTD. v. SHRI BHAGWAN [RAJU, J.] 23
appointment to the grade concerned irrespective of the date of transfer. We also A
consider it to be a mere submission in vain, the one urged on the basis of
alleged adverse consequences detrimental to their seniority resulting from such
transfer. In the facts of the present cases, at any rate, no such result is bound
! to occur since the project undertaken to which the respondents have been
transferred is itself a new one and, therefore·, we see no rhyme or reason in the
B
alleged grievance.

Consequently, we are of the view that with the rejection of the plea of
malafides by the High Court, no further interference could have been thought
of by the High Court in these cases. We are also informed that the respondents
have since joined at the Project site and are serving there. c
The appeals are allowed accordingly. The impugned judgment of the
High Court is hereby set aside and the Writ Petitions filed by the respondents
shall stand dismissed. There will be no order as to costs.

A.KT. Appeals allowed.

,.- I