BCPP MAZDOOR SANGH AND ANR. versus N.T.P.C. AND ORS.

Citation: [2007] 10 S.C.R. 1084 · Decided: 11-10-2007 · Supreme Court of India · Bench: TARUN CHATTERJEE · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
BCPP MAZDOOR SANGH AND ANR. 
v. 
N.T.P.C. AND ORS. 
OCTOBER 11, 2007 
[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 of BALCO-PSU by Government, resulting 
into conversion of BAL CO to private sector and existing management 
deciding to manage BCP P themselves-Transfer of non-executive 
employees from PSU to private sector on basis of agreement between 
D NTPC and BALCO, enabling NTPC to manage and control BCPP-
Justification of-Held: Transfer of employees from NTPC to BALCO 
bad in law-Agreement between NTPC and BALCO empowering 
NTPC to make recruitment on behalf of BAL CO not in existence when 
NTPC made recruitments-In absence thereof, clause of appointment 
E letter and undertakings obtained by NTPC from employees for 
appointment by exercising undue influence illegal, contrary to s. 23 
as well as violative of Article 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 of management violative of Article 
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. 
H 
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 
1084 
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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 N

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