Holding

The Supreme Court held that the High Court’s interim direction mandating equal pay for equal work was unjustified and set it aside, affirming that the service conditions of NTPC employees transferred to NPTC are protected and cannot be less favourable.

Summary

The National Power Transmission Corporation (NPTC) was created to take over assets and employees of several generating corporations, including the National Thermal Power Corporation (NTPC). NTPC and the Government issued instructions and a circular effecting the transfer, which the Corporate Executive Association of NTPC challenged as violative of Articles 14, 16(1), 21 and 23 of the Constitution. The Delhi High Court, on an interim basis, ordered that NPTC could not recruit from any source other than NTPC without court permission and that if employees recruited from other corporations received higher emoluments, NTPC employees should be given the same. NPTC appealed to the Supreme Court, arguing that the direction was premature, inconsistent with the Attorney General’s undertaking that transferred employees would not suffer less favourable service conditions, and beyond the scope of the writ. The Supreme Court held that the terms and conditions of service of NTPC employees were protected, no irreparable injury would result, and the High Court’s interim direction on equal pay was unjustified. Consequently, the direction was set aside and the appeal was allowed.

Issues considered

Whether the High Court could, at the interlocutory stage, direct that NTPC employees be granted equal pay for equal work if employees recruited from other corporations received higher emoluments.
Whether such a direction conflicted with the Attorney General’s undertaking and the Government instructions protecting the service conditions of transferred employees.
Whether the transfer and absorption of NTPC employees into NPTC violated constitutional guarantees of equality and non‑discrimination under Articles 14, 16(1), 21 and 23.
Whether the High Court had jurisdiction to issue the interim relief sought.

Legislation cited

Constitution of Indias. Article 136, s. Article 14, s. Article 16(1), s. Article 21, s. Article 226, s. Article 23
Industrial Disputes Act, 1947

Subjects

equal pay for equal worktransfer of employeesservice conditionsinterim reliefconstitutional challengepublic sector corporationgovernment instructionswrit petitionArticle 226Article 136

Judgment

A NATIONAL POWER TRANSMISSION CORPORATION LTD.
v.
CORPORATE EXECUTIVE ASSOCIATION OF NTPC (CEAN)
NEW DELHI AND ORS.

MARCH 13, 1992
B
[M.N. VENKATACHALIAH AND R.C. PATNAIK, JJ.]

Constitution of India, 1950 : Article 226.

c Fonnation of National Power Transmission Corporation-Transfer of
assets and employees of National Thennal Power Corporation and other
generating organisations-~etition challenging transfer-Claim of equal pay
for equal work by employees recruited from National Thermal Power Cor-
poration-Direction by High Court at interlocutory stage, 'if employees
D recruited from other Corporations receive higher emolument then employees
recruited from National Thermal Power Corporation should be treated on
par'-Direction held unjustified.

The National Power Transmission Corporation (NPTC) was incor-
porated on 23rd October, 1989. Governments of India issued instructions
E regarding transfer of assets and employees from other generating or-
ganisations to NPTC. The National Thermal Power Corporation (NTPC)
also issued a circular in conformity with the Government's instructions.
The respondent-association filed a writ petition in the Delhi High Court,
challenging the instructions and the circular. Based on the undertaking
F given by the Attorney General the Division Bench of the High Court passed
an interim order directing that the NPTC should not recruit persons from .
any source other than· NTPC and if it recruits employees from other
Corporations, it should pay equal pay for equal work i.e. in case the
employees recruited from other Corporations get higher emolum~nts
doing the same nature of work then the employees recruited from NTPC
G should also be paid the same higher emoluments. NPTC filed an appeal
in this court challenging the interim order on the ground that having
regard to the scope of the writ petition and the relief sought, the High
Court erred in passing the interim order.

H Allowing the appeal, this court;
234
N.P.T.C. v. NTPC ASSCN. [PATNAIK, J.] 235

HELD : The terms and conditions of service of employees of National A
Thermal Power Corporation were protected in the instructions issued by
the Government of India and the circular issued by the National Thermal
Power Corporation as also in the undertaking given by the learned Attor-
ney General. The employees of National Thermal Power Corporation on
transfer-absorption were not to suffer any detriment as regards the terms
and conditions of service enjoyed by them before their transfer-absorption.
B
No irreparable injury was going to be caused to the employees of National
Thermal Power Corporation if the impugned direction was not given. In
fact the said direction militated against the obse1'Vation made by Division
Bench of the High Court. The High Court at the interlocutory stage should
not have given the direction that if the employees of other Corporations c
other than National Thermal Power Corporation receive higher emolu-
ments, the employees of National Thermal Power Corporation should also
be entitled to the same. Accordingly, the direction given by the High Court
is set aside. [241G-H, 242A-C]

State of Andhra Pradesh & Ors. v. G. Sreenivasa Rao & Ors., [1989) D
2 sec 290, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2257 of
1992.

From the Judgment and Order dated 21.10.91 of the Delhi High E
Court in C.M. No.4875 of 1991 in C.W. No.2377 of 1991.

G. Ramaswamy, Attorney Generai, P.P. Malhotra, S.K. Dhingra, J.C.
Seth and Gurnam Singh for the Appellants.

G.B. Pai, Janarangana Das, Amarendra Bal, Dr. Rajeev Dhawan,
F
G.V. Rao and Ms. Kamini Jaiswal for the Respondents.

The following Judgment of the Court was delivered by

PATNAIK, J. Special leave granted.
G
On 23rd October, 1989 was incorporated National Power Transmis-
sion Corporation (NPTC) with the object of developing a power system
network in all its aspects including planning, investigation, research, design
and engineering preparation and construction of sub-stations, load
despatch stations and communication facilities, co-ordination of regional H
236 SUPREME COURT REPORTS [1992] 2 S.C.R.

A and national grid system, providing consultancy, execution of turnkey jobs
and purchase and sale of power. To achieve these objectives, it was decided
to transfer it transmission lines and sub-stations of the various generating
organisations and sub-stations of the various generating organisation name-
ly (a) National Thermal Power Corporation (NTPC}, (b) Nuclear Power
B Corporation of India Ltd. (NPC}, (c) North Eastern Electric Power Cor-
poration Ltd.. (NEEPCO), (d) National Hydro-Electric Power Corporation
(NHPC), (e) Neyveli Lignite Corporation Ltd. (MLC}, (f) Tehri Hydro
Development Corporation Ltd. (THDC}, (g) Damodar Valley Corporation
(DVC}, (h) Bhakra Beas Management Board (BBMB).

C On 12th July, 1991, the Ministry of Power and Non-Conventional
Energy Sources, Department of Power, Government of India issued in-
structions to NTPC and NPTC by way of follow up measure pertaining t_o
_transfer of assets, service conditions of employees, their absorption etc.
The NTPC issued circular dated 18.7.1991 in confrrmity with the aforesaid
instructions of the Government of India.
D
The respondent No. 1, an Association of Corporate Executive of
NTPC filed a writ application in the High Court of Delhi for invalidating
the aforesaid instructions of the Government of India and the circular
issued by the NTPC as violative of Articles 14, 16(1), 21 and 23 of the
E Constitution of India and for an appropriate order, direction or writ in the
nature of mandamus, restraining the respondents from giving effect to
Paragraph 2(1}(b) of the instructions issued in letter dated 12.7.1991 and
the entire circular dated 18.7.1991. It also moved ail application for interim
. directions. By then, 2509 eawloyee had already been transferred to NPTC.
At the hearing-of the said interlocutory application, the learned Attorney
F General appearing on behalf of the Government of India and also on behalf
of the NPTC gave an undertaking in terms whereof an order was passed
by the High Court on 14.8.1991. The order sofaras is relevent is extracted
hereinbelow :-

"We have heard the parties counsel_ and the Attorney General -
G
wishes to make a statement giving an undertaking on behalf of
the National Power Transmission Corporation. He states by
way of undertaking as follows:-

The services of the above employees shall not be deemed
H to be interrupted by National Power Transniission Corporation
N.P.T.C. v. NTPC ASSCN. (PATNAIK, J.] 237

consequent on such transfer and absorption. A
The terms and conditions of service .applicable to these
employees after transfer and absorption shall not, in any way,
be less favourable then those applicable, to them immediately
before the transfer.
B
In the event of retrenchment of any employee who is a
workman as defined in the Industrial Disputes Act, 1947, the
National Power Transmission Corporation shall be legally liable
to pay compensation on the basis of that his service is con-
tinuous and has not been interrupted by the transfer.
c
That if the writ petitioners succeed in t4e writ petition, the
entire position shall be r~versed, as per directions, order and
any interim order, and all interim orders as agreed to will be
subject to the result of the writ petition.
D
That·during the pendency o,f the writ petition, the National
Power Transmission Corporation sh!ill not regnit persons from
any source other than the National Thermal Power CorporatioQ
without the permission of the Court.

We have heard the iindertaking of the Attorney General E
given on behalf of the Union of India and on behalf of National
Power Transmission Corporation. The words in the undertak-
ing to the effect that transfer and absorption of employees of
the National Thermal Power Corporation in the National
Power Transmission Corporation shall, however, be the matter
of fmal adjudication of the writ petition, and be subject thereto. F

Liberty is given to both the pai1ies to mention the matter
in case of difficulty and in case of any changed situation. No
action be taken unilaterally affecting which are subject matter
of this writ petition without permission of this Court. If the G
assets of the National Thermal Power Corporation are to be
transferred to the National Power Transmission Corporation,
then prior to taking such action, the Court be approached."

Somedays later, an application was filed l>y the National Power
Transmission Corporation for modification of the following direction con- H
238 SUPREME COURT REPORTS [1992) 2 S.C.R.

A tained in paragraph 6 of the aforesaid order:

"the National Power Transmission Corporation shall not recruit
persons from any source other than the National Thermal
Power Corporation without the permission of the Court."

B The justification f<:>r making the application was the necessity of the
Corporation to recruit/absorb more hands from the generating corpora-
tions with a view to running the Corporation effectively and efficiently for
the purpose of transmission of energy.

c fer of The Association opposed the said Motion contending that the trans-
assets and employees was illegal and neither the Government of India
nor the NTPC had a right to change the service conditions of the
employees unilaterally nor could they force on employees a transfer to
National Power Transmission Corporation and against that background
the High Court had, on the undertaking of the learned Attorney General,
D directed that National Power Transmission Corporation should not recruit
persons from any source other than the NTPC without the permission of
the Court. If the NTPC desired to recruit and absorb in its employment,
employees from other Corporations, it should pay equal pay for equal work
to its employees. More specifically, if the employees to be recruited by the
NPTC from other Corporations received higher emoluments, the
E
employees of the NTPC should also be entitled on par with employees of
other Corporations to higher emoluments. The NPTC as a condition for
the modification and as a privilege of recruiting its employees from other
Corporations should pay higher emoluments to the employees of NTPC as
the purchase price. The Division Bench observed as under:-
F
"It is necessary and desirable that the new Corporation must
be able to function by taking into its fold employees from
various organisations, whose transmission lines are to be taken
over."
G It went out:-

"In this connection we may refer to che undertaking given by
the learned Attorney General, that the terms and conditions of
service applicable to these employees after transfer and absorp-
H tion shall not, in any way, be less f~vourable than those ap-
N.P.T.C. v. NTPC ASSCN. [PATNAIK, J.) 239

plicable to them immediately before the transfer. In ocher A
• words, the pay of all sorts of employees will be protected. Even ·
after protection of the pay if certain disparity in the emoluments
of various sets. of employees remains, we expect that keeping
in view the principle of equal pay for equal work for the
employees who are placed in the same circumstances and
situation, and who· discharge· the same duties and respon-
B
sibilities, and work in the same set of conditions, will be kept
in view by the respondents, and such disparities, if any, would
normally be rectified by them, by raising the sa,lary and allowan-
ces of the lower paid employees to the level of the higher paid
employees, but at any rate that stage has not yet come, and the c
employees transfe"ed from respondent No.2 to respondent No.3,
in case they face the situation, they can always move the matter
with respondent No.3, or the Court. ·

However, even after so holding (underlining supplied) it directed D
that in the event :-

"some employees happen to get higher emoluments than some
employees doing equal work, those employees who are trans-
ferred from respondent J\!o.2 to respondent No.3 shall also get
the same emoluments, and the shortfall in their emoluments, E
shall be made up by the respondents by raising their emolu-
ments equal to the emoluments drawn by the corresponding
employees of the other Corporations taken over by respondent
No.3, during the pendency of the petition."

The NPTC being aggrieved by the aforesaid direction as quoted F
above issued by the High Court has moved this Court under Article 136 of
the Constitution of India urging that having regard to the scope of the writ
petition, the reliefs sought, the High Court was in error in directing by way
of interim order that in the event some employees of the Corporat!ons
other than the NTPC happened to get higher emoluments doing the same G
nature of work then the employees of NTPC would also be entitled to get
the said higher emoluments. It has been urged on behalf of the appellant
that the directions is inconsistent with the finding recorded by the Division
Bench in an earlier paragraph and invoking the doctrine of equal pay for
equal work at an interlocutory stage is misconceived and when the various H
240 SUPREME COURT REPORTS [1992] 2 S.C.R.

A controversies are being e~ed by the High Court and when the main
writ application is being heard it was improper and inexpedient to _give by
way of interim order the direction as contained in paragraph 3 of the
directions quoted above.

The learned Attorney General appearing for the NPTC has urged
B that having regard to the instruction issued by he Government of India and
the circular issued by the NTPC and the undertaking given by him in the
proceedings before the High Court, the employees of NTPC are ~ot being
subjected to any term and condition of service less advantageous than those
enjoyed by them before their absorption/transfer. The scale of pay and
C other emoluments which they were enjoying before transfer are not being
affected. However, if they are entitled to higher emoluments by applicati_on
of doctrine of equal pay for equal work, it is open to them to make a
demand for the same which will be considered by the employer and if they
are aggrieved, it is always open to them to move ·the Court but having
D regard to the nature and scope of the writ application the claim for equal
pay for equal work on the ground that some employees of some Corpora-
tions would receive higher emoluments is outside the scope of writ applica-
tion and was not available to be u11ged on an application moved by the
Corporation for modification of an order restraining it from recruiting
.E employees from Corporations other than NTPC. The employees of NTPC
· has not come with any independent application in that behalf. He has also
urged that the claim was pre-mature. He has drawn our attention to the
observation made by the Division Bench to the effect that the stage for
claim of equal pay for equal work has not been reached and in such
eventuality if the employees are aggrieved, they are at liberty to move the
F
employer or the Court ~d has submitted that the third direction in last
paragraph is inconsistent with the aforesaid observation.

Dr. Rajiv Dhawan, Senior Advocate appearing for the Association
respondent No.l has combated the aforesaid submissions of the learned
G Attorney General submitting that the difference in emoluments by way of
higher D.A. is not by reason of the experience, ability or qualification.
Inasmuch as transferred employees would form part of a single service,
different scales of pay or emoluments would be unreasonable, arbitrary and
unjust. He has contended that the employees of the various Corporations
H could not be forcibly transferred and the High Court had restrained NPTC
N.P.T.C. v. NTPC ASSCN: [PATNAIK, J.] 241

for recruiting from other sources and if the said Corporation wanted A
recruitment from other sources, it should be agreeable to pay to the
employees of NTPC also on equitable ground higher emoluments if the
employees of other Corporations received higher emoluments doing the
same nature of work with similar responsibilities. He has sought to distin-
guish the rule laid down in the case of State of Andhra Pradesh & Ors. v. B
G. Sreenivasa Rao & Ors., (1989] 2 SCC 290 confining the holding therein
to the facts of the said case and urged that having regard to the similar
nature of work, ability and experience, the employees of NTPC cannot be
discriminated against.

Having heard the learned Attorney General, Shri P.P. Malhotra, c
Shri. G.B. Pai and Dr. Rajiv Dhawan, Senior Advocates at considerable
length and giving our anxious consideration to the matter, we are of the
view that we should be cautious in our approach having regard to the fact
that the Division Bench of the High Court is hearing the substantive
petition· since some days and any observation touching merit would embar- D
ras the learned Judges who should bring an independent mind to bear on
the controversies raised before them. Hence we do not express any opinion
on whether or not there has been a forced transfer of the employees of
various Corporations to NPTC and whether or not such transfer/absorption
in valid and even whether or not some of the employees so absorbed can E
claim equal pay for equal work on the ground that employees of some
Corporations recruited by NPTC received higher emoluments. We are of
the view that tbe learned Judges rightly observed that the stage for ad-
judicating tht.. -iuestion raised in the interim application had not been
reached. That was the correct approach having regard to the facts and
circumstances of the case.
F

The terms and conditions of service of employees of NTPC were
protected in the instructions issued by the Government of India and the
circular issued by the NTPC as also in the undertaking given by the learned
Attorney General. The employees of NTPC on transfer/absorption were G
not to suffer any detriment as regards the terms and conditions of service
enjoyed by them before their transfer/absorption. The counsel for NPTC
even. did not rule out the possibility of ratinoalisation of emoluments at
later stage if the transfer/absorption is up-held by the Court. No irreparable
injury was going to be caused to the employees of NTPC if the third H
242 SUPREME COURT REPORTS (1992) 2 S.C.R.

A direction quoted above by us was not given. The said direction in our view
militated against the observation made,. by Division Bench in an earlier
paragraph which has been underlined by us for emphasis: If the appellant's
prayer was granted, the employees of NTPC were not in a less favourable
position than they were. We are, therefore, of the view that the High Court
B .· at that interlocutory stage should not have given the direction that if the
employees of other Corporations other than NTPC receive higher emolu-
ments, the employees of NTPC should also be entitled to the same.

We, therefore, set aside the direction (iii) contained in last paragraph
of the order passed by the Division Bench on 21.10.1991 and allow the
C appeal. ':Ii.

T.N.A. Appeal allowed.

I
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