Muhammed A.A. vs The State Of Kerala on 18 February, 2022


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Supreme Court of India

Muhammed A.A. vs The State Of Kerala on 18 February, 2022

Author: L. Nageswara Rao

Bench: [ B ], [ L ]

                                           Non-Reportable
           IN THE SUPREME COURT OF INDIA
            CIVIL APPELLATE JURISDICTION
         Civil Appeal Nos._1498-1500 of 2022
     (Arising out of SLP (Civil) Nos.9564-9566 of 2020)


Muhammed A.A. & Ors.                   .... Appellant(s)

                           Versus
State of Kerala & Ors.                 …. Respondent(s)

                          WITH

              Civil Appeal No.1501 of 2022
        (Arising out of SLP (Civil) No.9760 of 2020)

              Civil Appeal No.1502 of 2022
       (Arising out of SLP (Civil) No.10226 of 2020)


                    JUDGMENT

L. NAGESWARA RAO, J.

Leave granted.

1. Writ Petition (Civil) No. 6723/ 2019 (M) was filed in

the High Court of Kerala for a declaration that Regulation

116 of the Central Electricity Authority (Measures

relating to Safety and Electric Supply) Regulations, 2010

(for short “the Safety Regulations’) is ultra vires the

regulation making power of the Central Electricity

Page 1 of 37
Authority under the Electricity Act, 2003 (for short “the

Electricity Act”) and, therefore, void. The Petitioner-

therein also sought for a declaration that the State of

Kerala has no power to allow deviation under sub-

regulation (1) of Regulation 116 in respect of

qualifications prescribed in Regulations 6 and 7 of the

Safety Regulations. A further relief of declaration that

the Order dated 13.02.2019 issued by the State of Kerala

as arbitrary, illegal, unreasonable and without

jurisdiction was sought in the Writ Petition. To the extent

that it permits the State Government to make deviations,

Regulation 116 was declared to be beyond the power

conferred on the Central Electricity Authority under the

Electricity Act by a learned Single Judge of the High

Court of Kerala. The order dated 13.02.2019 by which

exemption from acquiring qualification was granted to

erstwhile employees was held to be unsustainable. The

Kerala State Electricity Board Limited (KSEBL) was

directed to make promotions strictly in accordance with

the provisions contained in Regulations 6 and 7 of the

Safety Regulations. KSEBL, Respondent No.2 in Civil

Page 2 of 37
Appeal arising out of Special Leave Petition (Civil) No.

9564-9566/2020 had challenged the judgment of the

learned Single Judge of the High Court by filing an

appeal.

2. The Division Bench formulated the following points

for consideration: –

“1. Is Regulation 116 of the Central Electricity
Authority (Measures relating to Safety and Electric
Supply) Regulations, 2010, ultra vires the authority
and powers conferred on the Central Electricity
Authority on account of the Statutory Provisions in
the Electricity Act, 2003 and on account of
impermissible delegation or on account of being
manifestly arbitrary?

2. Can the provisions of a scheme framed under
Section 131 r/w Section 133(2) of the Electricity
Act, 2003 offer any protection to officers /
employees who do not possess the qualifications
required in terms of the Safety Regulations?

3. If the answer to the first issue is in the negative,
whether the order issued by the Government of
Kerala on 13-02-2019 suffer from the vice of non-
application of mind or is otherwise arbitrary,
unreasonable or irrational?”

3. The Division Bench of the High Court held that the

Regulation 116 of the Safety Regulations is neither ultra

vires the Electricity Act nor manifestly arbitrary and that

Page 3 of 37
it is well in line with the objects and purpose of the

enactment. It held that the framing of Regulation 116 is

not ultra vires the provisions of the Electricity Act, 2003

and is not beyond the scope of the rule making power of

the Central Electricity Authority. Referring to Section

133(2) of the Electricity Act, the High Court was of the

opinion that the exemption from the applicability of

Regulation 6 & 7 of the Safety Regulations by the order

dated 13.02.2019 can be granted only in favour of

persons who were employed with the KSEBL on the date

of the formulation of the transfer scheme and such of

those employees who have joined service after

31.10.2013 were not entitled to such an exemption. For

this reason, the Government Order dated 13.02.2019

was partly set aside by the Division Bench to the extent

that it granted exemption to the employees/officers who

entered service after 31.10.2013.

4. Mr. V. Chitambaresh, learned Senior Counsel

appearing on behalf of the Appellants in Civil Appeal

arising out of Special Leave Petition (Civil) Nos. 9564-

9566/ 2020 submitted that Regulations 6 and 7 of the

Page 4 of 37
Safety Regulations prescribe qualifications for engineers,

supervisors and technicians, etc. He submitted that the

Division Bench of the High Court exempted all

employees who were working in the Board prior to

31.10.2013 from the qualifications as required under

Regulations 6 and 7 of the Safety Regulations which

results in compromising the safety of people and the

operation of power plants, grid and transmission lines.

Referring to Regulation 116 of the Safety Regulations

which permits deviation from the Regulations, the

learned Senior Counsel argued that the Government

does not have the power to grant exemption. Reliance

was placed on the judgments of this Court in R.B.I. v.

Peerless General Finance & Investment Co. Ltd.1,

M/s. Dhanrajamal Gobindram v. M/s. Shamji

Kalidas & Co.2 and Glynn v. Margetson & Co.3 in

support of the submission that the word “deviation”

cannot be interpreted to mean “exemption”. It was

contended on behalf of the Appellants that a well-

considered judgment of the Single Judge which is also in

1 (1987) 1 SCC 424
2 (1961) 3 SCR 1020
3 (1893) A.C. 351

Page 5 of 37
larger public interest was interfered with by the Division

Bench on an erroneous consideration of law and facts.

Mr. K. Rajeev, learned counsel for the Appellants in Civil

Appeal arising out of Special Leave Petition (Civil) No.

10226/2020 submitted that the transfer scheme was

framed in the year 2013 after the Safety Regulations

came into force in 2010 and that the learned Single

Judge of the High Court correctly held that clause 2(c) of

the tripartite agreement is ultra vires the Electricity Act.

Ms. Aishwarya Bhati, learned Additional Solicitor General

appearing on behalf of the Central Electricity Authority

contended that there is no role for the Central Electricity

Authority in these Appeals, especially when the

Appellants have not made any submissions relating to

the vires of Regulation 116 of the Safety Regulations

before this Court. She contended that deviation is

permissible under Regulation 116 of the Safety

Regulations. The said deviation can be made by the

State Government as ‘Electricity’ falls in List III-

Concurrent List, Seventh Schedule of the Constitution of

Page 6 of 37
India, 1950. However, she contended that lump sum

exemption cannot be granted.

5. Mr. P.V. Surenderanath, learned Senior Counsel

appearing on behalf of the State of Kerala referred to

Section 133 of the Electricity Act which enables the State

Government to formulate a scheme providing for

transfer of officers and employees to the transferee

company on the vesting of the properties, rights and

liabilities in such transferee company. He drew the

attention of this Court to Section 133(2) which provides

for the terms and conditions of transferred personnel to

be in accordance with the transfer scheme. Reference

was made to the proviso to Section 133(2) according to

which the terms and conditions on transfer of such

employees would not in any way be less favourable than

those which would have been applicable to them if there

had been no such transfer under the transfer scheme.

The learned Senior Counsel argued that Regulation 116

of the Safety Regulations permits deviation in respect of

matters referred to in the Regulations. “Deviation” from

the Rules cannot be said to not include “exemption”.

Page 7 of 37
Taking into account the experience of such of those

employees who have been serving for a long period of

time, a decision was taken by the State of Kerala to

exempt the employees from acquiring qualifications

under Sections 6 and 7 of the Safety Regulations. The

State of Kerala has accepted the judgment of the

Division Bench that the exemption from qualification

under Regulations 6 and 7 of the Safety Regulations is

restricted only to those who were in service prior to

31.10.2013 and, therefore, no Appeal has been preferred

by the State against the judgment of the High Court. Mr.

Surender Nath, learned Senior Counsel relied upon the

judgments of this Court to submit that subordinate

legislation cannot be interdicted by this Court unless it is

manifestly arbitrary. He proceeded to submit that there

is no arbitrariness in the Regulations which would

warrant interference. KSEBL was represented by Mr. P.V.

Dinesh, learned counsel who submitted that the relief

that was granted to erstwhile employees of the Board

falls within the scope of Regulation 116 of the Safety

Regulations. The benefit which was given to the

Page 8 of 37
erstwhile employees by the order dated 13.02.2019

cannot be termed as a wholesale exemption. Relying

upon Section 133 of the Electricity Act, Mr. Dinesh

argued that all conditions of service, including promotion

of erstwhile employees of KSEB are protected according

to the proviso to Section 133(2) of the Electricity Act.

Insofar as the safety aspects raised by the Appellants are

concerned, Mr. Dinesh contended that the Appellants

have miserably failed to substantiate the point. He

submitted that qualified personnel are appointed to

crucial posts at generation, transmission and in the

power plants. Mr. P.N. Ravindran, learned Senior Counsel

appearing on behalf of the Respondent No. 6 in Civil

Appeals arising out of Special Leave Petition (Civil) Nos.

9564-9566/2020 contended that the reversal of the

judgment of the Division Bench of High Court would

adversely affect the interests of 17,367 employees. He

supported the submission on behalf of the State and

KSEBL that deviation is equivalent to exemption. The

employees of the KSEBL are so efficient that their

services are being utilized even by the neighbouring

Page 9 of 37
States. Mr. M.T. George, learned counsel appearing on

behalf of the Respondent No.4 in Civil Appeal arising out

of Special Leave Petition (Civil) Nos. 9564-9566/2020

submitted that there is a confusion in the minds of the

Appellants regarding the scope of Regulations 6 and 7 of

the Safety Regulations. He submitted that the said

Regulations pertain only to safety of the officers and

employees and do not concern their service conditions.

He also stated that the Appellants are bound by the

Tripartite Agreement. They cannot be permitted to

approbate or reprobate. Mr. Venugopalan Nair, learned

counsel appearing on behalf of the Respondent No.7 in

Civil Appeal arising out of Special Leave Petition (Civil)

No.9760/2020 supported the submissions of other

Respondents and contended that Regulations 6 and 7 of

the Safety Regulations have nothing to do with the

service conditions of the officers and employees of

KSEBL.

6. The Indian Electricity Act, 1910, the Electricity Act

(Supply) Act, 1948 and the Electricity Regulatory

Commissions Act, 1998 were replaced by the Electricity

Page 10 of 37
Act of 2003. The Electricity Act of 2003 was enacted to

consolidate the laws relating to generation, transmission,

distribution, trading and use of electricity and generally

for taking measures conducive to development of

electricity industry, promoting competition therein,

protecting interest of consumers and supply of electricity

to all areas, rationalization of electricity tariff, ensuring

transparent policies regarding subsidies, promotion of

efficient and environmentally benign policies,

constitution of Central Electricity Authority, Regulatory

Commissions and establishment of Appellate Tribunal

and for matters connected therewith or incidental

thereto. It is necessary to refer to the relevant

provisions of the Electricity Act and the Regulations

made thereunder for a better appreciation of the dispute

before this Court. Section 53 of the Electricity Act

relates to safety and electricity supply. The said Section

enables the Central Electricity Authority to undertake

appropriate measures in consultation with the State

Government for: –

“(a) protecting the public (including the persons

engaged in the generation, transmission or

Page 11 of 37
distribution or trading) from dangers arising from

the generation, transmission or distribution or

trading of electricity, or use of electricity supplied

or installation, maintenance or use of any electric

line or electrical plant;

(b) eliminating or reducing the risks of personal

injury to any person, or damage to property of any

person or interference with use of such property;

(c) prohibiting the supply or transmission of

electricity except by means of a system which

conforms to the specification as may be specified;

(d) giving notice in the specified form to the

Appropriate Commission and the Electrical

Inspector, of accidents and failures of supplies or

transmissions of electricity;

(e) keeping by a generating company or licensee

the maps, plans and sections relating to supply or

transmission of electricity;

(f) inspection of maps, plans and sections by any

person authorised by it or by Electrical Inspector or

by any person on payment of specified fee;

(g) specifying action to be taken in relation to any

electric line or electrical plant, or any electrical

appliance under the control of a consumer for the

purpose of eliminating or reducing the risk of

Page 12 of 37
personal injury or damage to property or

interference with its use.”

7. The Central Electricity Authority is constituted

under Section 70 of the Electricity Act for the purpose of

performing such functions as assigned to it under the

Act. Apart from the others, one of the functions of the

Authority under Section 73 of the Electricity Act is to

specify the safety requirements for construction,

operation and maintenance of electrical plants and

electric lines. The Authority is also empowered to make

Regulations under Section 177 of the Electricity Act

providing suitable measures relating to safety and

electricity supply under Section 53, technical standards

for construction of electrical plants, electric lines and

connectivity to the grid under clause (b) of Section 73

and for other matters of the Electricity Act as provided

for in the Section.

8. The Central Electricity Authority (Measure relating

to Safety and Electric Supply) Regulations, 2010, were

brought into force on 20.09.2010. The relevant

Regulations 6 and 7 relating to safety measures are as

follows: –

Page 13 of 37

“6. Safety measures for operation and maintenance
of electric plants: –

(1) Engineers and supervisors appointed to operate
or under take maintenance of any part or whole of
a thermal power generating station and a hydro
power plant together with the associated sub-
station shall hold diploma in Engineering from a
recognized institute, or a degree in Engineering
from a university.

(2) The Technicians to assist engineers or
supervisors shall possess a certificate in
appropriate trade, preferably with A two years
course from an Industrial Training Institute
recognized by the Central Government or the State
Government.

(3) Engineers, supervisors and Technicians engaged
for operation and maintenance of electric plants
should have successfully undergone the type of
training as specified in Schedule-I provided that the
existing employees shall have to undergo the
training mentioned in sub-regulation (3) within
three years from the date of coming into force of
these regulations.

(4) The owner of every thermal power generating
station and hydro power plant together with their
associated substation shall arrange for training of
personnel engaged in the operation and
maintenance of his generating station along with
associated sub-station in his own institute or any

Page 14 of 37
other institute recognized by the Central
Government or the State Government provided
that separate training shall be given to the persons
engaged in operation and maintenance of thermal
power stations and hydro power stations including
associated sub-stations.

7. Safety measures for operation and maintenance
of transmission, distribution systems: –

(1) Engineers or supervisors engaged in operation
and maintenance of transmission and distribution
systems shall hold diploma in electrical,
mechanical, electronics and instrumentation
engineering from a recognized institute or
university.

(2) The Technicians to assist engineers or
supervisors shall possess a certificate in
appropriate trade, preferably with a two years
course from an Industrial Training institute
recognized by the Central Government or State
Government.

(3) Engineers, supervisors and Technicians engaged
for operation and maintenance of transmission and
distribution systems electric plants should have
successfully undergone the type of training as
specified in Schedule-II

Provided that the existing employees shall have to
undergo the training mentioned in sub-regulation
(3) within three years from the date of coming into
force of these regulations

Page 15 of 37
(4) Owner of every transmission or distribution
system shall arrange for training of their personal
engaged in the operation and maintenance of
transmission and distribution system in his own
institute or any other institute recognized by the
Central Government or State Government.”

9. Further, Regulation 116 of the Safety Regulations

empowers the Central Government or the State

Government to allow deviations in respect of matters

referred to in the regulations by an order in writing.

10. Part XIII of the Electricity Act pertains to

reorganization of KSEB. According to the statement of

objects and reasons of Electricity Act, one of the features

of the electricity Bill, 2001 relates to the incorporation of

a transfer scheme by which company/companies can be

created by the State Government. The State

Governments were given the option of continuing with

the State Electricity Boards which under the new scheme

of things would be a distribution licensee and a State

transmission Utility which would also be owning

generation assets. It provided that the service conditions

of the employees would, as a result of restructuring, not

be inferior.

Page 16 of 37

11. Section 131 of the Electricity Act provides for

vesting of property of the KSEBL in the State

Government. It states that after the property is vested

in the State Government by the State Electricity Board,

the State Government shall re-vest the property in a

Government company or in a company or companies in

accordance with the transfer scheme. Section 131(4) of

the Electricity Act contemplates the formulation of such

a transfer scheme. According sub-section (5) of Section

131 of the Electricity Act, the transfer scheme may:

“(5) x x x

(a) provide for the formation of subsidiaries, joint
venture companies or other schemes of division,
amalgamation, merger, reconstruction or
arrangements which shall promote the profitability
and viability of the resulting entity, ensure
economic efficiency, encourage competition and
protect consumer interests;

(b) define the property, interest in property, rights
and liabilities to be allocated –

(i) by specifying or describing the property, rights
and liabilities in question; or

(ii) by referring to all the property, interest in
property, rights and liabilities comprised in a
described part of the transferor’s undertaking; or

(iii) partly in one way and partly in the other;

Page 17 of 37

(c) provide that any rights or liabilities stipulated or
described in the scheme shall be enforceable by or
against the transferor or the transferee;

(d) impose on the transferor an obligation to enter
into such written agreements with or execute such
other instruments in favour of any other
subsequent transferee as may be stipulated in the
scheme;

(e) mention the functions and duties of the
transferee;

(f) make such supplemental, incidental and
consequential provisions as the transferor
considers appropriate including provision
stipulating the order as taking effect; and

(g) provide that the transfer shall be provisional for
a stipulated period.”

12. Section 133 of the Electricity Act refers to

provisions related to officers and employees, and states

as follows:

“Section 133. (Provisions relating to officers and
employees):

(1) The State Government may, by a transfer
scheme, provide for the transfer of the officers and
employees to the transferee on the vesting of
properties, rights and liabilities in such transferee
as provided under section 131.

Page 18 of 37

(2) Upon such transfer under the transfer
scheme, the personnel shall hold office or service
under the transferee on such terms and conditions
as may be determined in accordance with the
transfer scheme:

Provided that such terms and conditions on the
transfer shall not in any way be less favourable
than those which would have been applicable to
them if there had been no such transfer under the
transfer scheme:

Provided further that the transfer can be
provisional for a stipulated period.

Explanation. – For the purpose of this section and
the transfer scheme, the expression “officers and
employees” shall mean all officers and employees
who on the date specified in the scheme are the
officers and employees of the Board or transferor,
as the case may be.”

13. In exercise of the powers conferred under sub-

sections (1),(2),(5),(6) and (7) of Section 131 and Section

133 of the Electricity Act, the State of Kerala made

Kerala Electricity First Transfer Scheme, 2008 for vesting

of functions, properties, interests, rights, obligations and

liabilities of the KSEB in the State Government. In

exercise of the power conferred under Section 131(2) of

the Electricity Act, Government of Kerala notified a

Page 19 of 37
transfer scheme on 31.10.2013 revesting all the

functions, properties, interests, rights, obligations and

liabilities in KSEBL which is a company incorporated

under the Companies Act, 1956 and fully owned by the

Government of Kerala. Clause (6) of the scheme

provides for transfer of personnel by the State

Government. It is mentioned in the said clause that the

transfer shall be governed by the conditions enumerated

in Schedule- ‘B’ of the scheme and clause (8), which is

relevant to the present dispute, provides as follows: –

“(8) The State Government shall notify appropriate
arrangements in respect of the funding of the
terminal benefits to the extent they are unfunded
on the date of the transfer of the Personnel from
the erstwhile Board or KSEB. As per actuarial
valuation carried out by registered valuer, the
provisional figure of unfunded liability is
approximately, ₹ 7584 Crores (Seven thousand Five
hundred and Eighty Four crores) as on 30”
September, 2011. Actuarial valuation of terminal
liabilities at the time of transfer will be made as
provided under clause 9 (3) of the scheme. Till such
time arrangements are made, the Transferee and
the State Government shall be jointly and severally
responsible to duly such make such payments to
the existing pensioners as well as the personnel

Page 20 of 37
who retire after the date of transfer but before the
arrangements are put in place. The State
Government, Kerala State Electricity Board Limited
and employees’ unions may enter into a tripartite
agreement in consideration of the promises and
mutual conditions set forth therein. A model
Tripartite Agreement is appended as Schedule -C”.

14. Subsequently, a Tripartite Agreement was entered

into between the State of Kerala, Kerala State Electricity

Board Limited (KSEBL), and the Unions and Associations

representing workmen and officers of the erstwhile

Kerala State Electricity Board on 01.08.2014. The State

Government and KSEBL assured the existing employees

that the terms and conditions of service such as

promotions, transfers, wages, compensations, leave,

allowances, etc. upon transfer to KSEBL shall continue to

be regulated by existing regulations/ service rules in

vogue. Therefore, Sections 131 and 133 of the Electricity

Act in combination with the transfer scheme dated

31.10.2013 and tripartite agreement dated 01.08.2014

provided for the transfer of the officers and employees to

KSEBL and terms and conditions of their service upon

their transfer.

Page 21 of 37

15. While the implementation of the Safety Regulations

qua the transferred officers and employees was

underway, O.P. No.7/ 2016 was filed by one Shibu K.S.

before the Kerala State Electricity Regulatory

Commission, Thiruvananthauram alleging non-

compliance of the provisions of Safety Regulations, 2010

relating to the qualification of engineers, supervisors and

technicians engaged in operation and maintenance of

electrical plants and installations. By the order dated

29.12.2016, the Commission held: –

“23. Considering the facts and circumstances of the
case, the Commission orders as follows:

1. In order to implement the Safety Regulations,
the authorities of KSEB Ltd. may have to adopt
strategies to ensure that, –

(1) From among the existing employees, only those
with the specified qualifications as per the Safety
Regulations, are deployed for operation and
maintenance of electrical plants and electrical
systems.

(2) Necessary and sufficient in-service trainings /
courses may be imparted to the willing existing
employees in the grades of lineman, overseer and
sub-engineer to make them eligible for deployment

Page 22 of 37
of duties in accordance with the Safety
Regulations.

(3) Future recruitments of employees are m tune
with the Safety Regulations.

2. The KSEB Ltd has, as per B.O (FTD) No.
2981/2016 (LD.1/1836/2016) dated 18.10.2016,
constituted a Committee to examine all the above
aspects and to submit recommendations for
implementation of the provisions of Safety
Regulations. Government has, in exercise of the
powers under Regulation 116 of the Safety
Regulations, issued GO (Rt) No. 206/2016/PD dated
26.10.2016, granting a period of six months to
implement the Regulations. In view of the above
facts the Commission is of the view that there is no
reason at present to impose on KSEB Ltd, a penalty
under Section 142 of the Act. The KSEB Ltd. is
directed to submit a copy of the report of the
Committee and an action taken report on the
recommendation of the Committee. The copy of
the report of the Committee shall be submitted on
or before 31.3.2017 and the action taken report on
the recommendation of the Committee shall be
submitted on or before 30.4.2017.”

16. Pursuant to the power conferred in the State

Government by Section 131 of the Electricity Act, a

transfer scheme was prepared in 2008 vesting the

Page 23 of 37
functions, properties, interests, rights, obligations and

liabilities of the KSEB in the State Government.

Thereafter, another scheme was prepared on 31.10.2013

transferring (re-vesting) of the functions, properties, all

interests, rights and properties, all rights and liabilities of

the Kerala State Electricity Board to Kerala State

Electricity Board Limited, a company fully owned by the

Government of Kerala. As contemplated in the transfer

scheme, a tripartite agreement dated 01.08.2014 was

entered into between the Government of Kerala, Kerala

State Electricity Board Limited and the associations

representing workmen and officers of erstwhile Kerala

State Electricity Board in order to facilitate smooth

implementation of the revesting scheme. By an order

dated 13.02.2019, Government of Kerala ordered

deviation from the implementation of qualifications

prescribed under Regulation 6 and 7 of the Safety

Regulations for the existing employees of KSEBL, in

exercise of the power conferred on the State

Government under Regulation 116 of the Safety

Regulations. The deviation was applicable to employees

Page 24 of 37
working with the KSEBL on the date of the order dated

13.02.2019 and for all future appointments and

promotions, the qualifications prescribed in the 2010

Regulations were to be strictly followed. The grievance

of the Appellants is that they possess the necessary

qualifications required under Regulation 6 and 7 of the

2010 Regulations and the decision of the Government to

deviate from the requirements of Regulation 6 and 7

would make ineligible employees fit for promotion to the

higher posts which would be detrimental to the interests

of the Appellants. The main contention raised by the

Appellants is that the deviation permitted by the order

dated 13.02.2019 would amount to compromising the

safety norms prescribed by the Central Electricity

Authority which would adversely affect larger public

interest.

17. Re-organisation of the Electricity Board has been

done in terms of the Electricity Act by preparation of a

transfer scheme as contemplated in Section 131 of the

Act. According to Section 133 (2) of the Electricity Act,

the transferred personnel are to be governed by terms

Page 25 of 37
and conditions as may be determined in accordance with

the transfer scheme. The proviso to Section 133 (2)

protects the interest of the transferees in so far as the

conditions of their service are not to be less favorable

than those which would have been applicable to them

had no transfer taken place. Clause 6 of the transfer

scheme provides that the transfer of personnel shall be

subject to the terms and conditions contained in Section

133 and 134 of the Act, though promotion and seniority

have not been specifically mentioned in the transfer

scheme. The transfer scheme in Clause (8) contemplates

the execution of a tripartite agreement between the

State Government, KSEBL and employees’ union. The

parties entered into such a tripartite agreement on

01.08.2014 in which it was agreed that promotions of the

existing employees shall continue to be governed by

existing Regulations/service rules in vogue. It is clear

from the above discussion that the service conditions of

the erstwhile employees of KSEB are protected by the

proviso to Section 133 of the Electricity Act. After the

transfer scheme was formulated, the erstwhile

Page 26 of 37
employees were entitled to claim that the conditions of

their service cannot be altered to their detriment in view

of the tripartite agreement dated 01.08.2014.

18. After the formulation of the first transfer scheme in

2008 whereby all the properties, rights and interests of

KSEB were vested in the Government of Kerala, and

before the re-vesting of all such properties, rights and

interest was done by the State of Kerala in favour of

KSEBL on 31.10.2013, the Safety Regulations were

framed by Central Electricity Authority in 2010. The

Safety Regulations were framed by the Central Electricity

Authority in exercise of its power under Sections 53 and

73 read with Section 177 of the Electricity Act. Section

177 (2) of the Act empowers the Central Electricity

Authority to frame Regulations providing for suitable

measures relating to safety and electricity supply as

contemplated in Section 53 and the technical standards

for construction of electrical plants, electrical lines and

connectivity to the grid as provided in clause (b) of

Section 73 of the Electricity Act. Section 53 of the

Electricity Act deals with safety measures and electricity

Page 27 of 37
supply over which the authority has jurisdiction and on

which it acts in consultation with the State Government.

Similarly, one of the functions of the Central Electricity

Authority under Section 73 of the Act is to specify the

safety requirements for construction, operation and

maintenance of electrical plants and electrical lines and

connectivity to the grid. In furtherance to these Sections

and as per the specific power vested in the Central

Electricity Authority, it framed the Safety Regulations,

Regulation 6 and 7 of which prescribe the educational

qualifications required for appointment to the posts of

engineers, supervisors and technicians in thermal power

generating stations and hydro power plants as well as for

the operation and maintenance of transmission and

distribution systems. The dispute that arises for our

consideration in these appeals is whether these

prescribed educational qualifications in Regulation 6 and

7 can be deviated from by an order of the State

Government. Such a power is traceable to Regulation

116 of the Safety Regulations which enables the Central

Government or the State Government to allow deviations

Page 28 of 37
in respect of matters referred to in the Safety

Regulations, including the ones in Regulations 6 and 7.

19. The principal contention of the Appellants which

found favour with the learned Single Judge of the High

Court is that Regulation 116 is ultra vires the Electricity

Act, 2003. The Division Bench reversed such findings of

the Single Judge. As the learned counsel appearing for

the Appellants have not made any submission relating to

the said point, it is not necessary for us to adjudicate on

the issue of the validity of Regulation 116. The

contention of the Appellants is that the wholesale

exemption granted to the officers and employees from

possessing the requisite educational qualifications as

prescribed in Regulation 6 and 7 is impermissible in

exercise of the power under Regulation 116 of the Safety

Regulations. The argument is based on the language of

Regulation 116 which permits the concerned

Government only to ‘deviate’ from the regulations which,

according to the Appellants, cannot be read as ‘exempt’.

Mr. V. Chitambaresh, learned Senior Counsel, appearing

for the Appellants placed reliance on the dictionary

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meanings of ‘deviation’ and ‘exemption’ and submitted

that the scope of deviation is completely different from

exemption. According to him, exemption from operation

of the Regulation 6 and 7 of the Safety Regulations is

impermissible and the State Government has a very

limited power to deviate from the rules, as and when

found necessary. In other words, he submitted that all

existing employees cannot be exempted from possession

of the requisite educational qualifications under

Regulation 6 and 7 in exercise of power under Regulation

116 of the Safety Regulations.

20. The Appellants have relied upon Glynn v.

Margetson & Co. (supra) which is a judgment of the

House of Lords in which a clause in the bill of lading

mentioning the term ‘deviation’ was to be interpreted.

The dispute in the said case was in relation to the

damage caused to perishable goods loaded in a ship

headed towards Liverpool. Compensation was sought on

the ground that the vessel proceeded to the port in the

north east of Spain and not west-ward in the direction of

Liverpool. The House of Lords was of the opinion that the

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primary intent and object of bill of lading must be

considered and the general / printed words therein must

be construed so as to not conflict with that intent and

object. We are afraid that this judgment is of no

assistance to this Court in interpreting the import of the

word ‘deviation’ as the House of Lords has specifically

interpreted the term / clause in context of the object and

intention of the bill of lading.

21. The other judgment relied upon by the Appellant is

the judgment in M/s. Dhanrajamal Gobindram v. M/s.

Shamji Kalidas & Co. (supra). The question that fell for

consideration in this case pertains to the interpretation

of the words ‘exemption’ and ‘permission’ used in

Section 5 and 21 of the Foreign Exchange Regulation Act,

1973. In context of the dispute that arose in the said

case, this Court was of the opinion that the word

‘exemption’ shows that a person is put beyond the

application of law while ‘permission’ shows that he is

granted leave to act in a particular way. This Court

further held that the word ‘permission’ is a word of wide

import as it means leave to do some act while

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‘exemption’ is just one way of giving leave. The ratio of

this judgment cannot be of any help to the Appellants in

this case. The point raised by the Appellant in this

Appeal is that the term ‘deviation’ used in Regulation

116 of the Safety Regulations cannot be construed in a

manner that it would include ‘exemption’ within its

ambit. The context and the analysis of this Court in M/s.

Dhanrajamal Gobindram v. M/s. Shamji Kalidas &

Co. (supra) with respect to the specific terms in the

background of that context cannot be applied by this

Court in the case at hand. The Appellants have

themselves cited the judgment of this Court in RBI v.

Peerless General Finance & Investment Co. Ltd.

(supra) to contend the word ‘deviation’ has to be

interpreted by following the principle laid down in the

said judgment which is as follows: –

“33. Interpretation must depend on the text and
the context. They are the bases of interpretation.
One may well say if the text is the texture, context
is what gives the colour. Neither can be ignored.

Both are important. That interpretation is best
which makes the textual interpretation match the
contextual. A statute is best interpreted when we

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know why it was enacted. With this knowledge, the
statute must be read, first as a whole and then
section by section, clause by clause, phrase by
phrase and word by word. If a statute is looked at,
in the context of its enactment, with the glasses of
the statute-maker, provided by such context, its
scheme, the sections, clauses, phrases and words
may take colour and appear different than when
the statute is looked at without the glasses
provided by the context. With these glasses we
must look at the Act as a whole and discover what
each section, each clause, each phrase and each
word is meant and designed to say as to fit into the
scheme of the entire Act. No part of a statute and
no word of a statute can be construed in isolation.
Statutes have to be construed so that every word
has a place and everything is in its place. It is by
looking at the definition as a whole in the setting of
the entire Act and by reference to what preceded
the enactment and the reasons for it that the Court
construed the expression “Prize Chit” in Srinivasa
[(1980) 4 SCC 507: (1981) 1 SCR 801: 51 Com Cas
464] and we find no reason to depart from the
Court’s construction.”

Therefore, by applying the above principle to this

case, reliance placed on the interpretation of Court in the

cases of Glynn v. Margetson & Co. (supra) and M/s.

Dhanrajamal Gobindram v. M/s. Shamji Kalidas &

Page 33 of 37
Co
. (supra) for interpretation of Regulation 116 of the

Safety Regulations is misplaced.

22. In the facts of the present case, we are not in

agreement with the Appellants that granting exemption

to the erstwhile employees of the KSEB from possessing

the qualifications provided in Regulations 6 and 7 is an

impermissible exercise of power under Regulation 116 of

the Safety Regulations. Prior to the 2010 Regulations,

the Indian Electricity Rules, 1956 framed under Section

37 of the Indian Electricity Act, 1960 were in force. Rule

133 of the said Rules would show that State

Governments/Central Government were empowered to

grant exemption from the safety provisions contained

therein. The power of exemption has been in existence

even prior to Electricity Act. A perusal of the order dated

13.02.2019 would demonstrate that the State

Government directed deviation from the implementation

of qualifications prescribed under Regulations 6 and 7 of

the Safety Regulations. Though the word exemption was

not employed in the order dated 13.02.2019, the effect

of the direction issued by the Government was to

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exempt the employees from the prescribed

qualifications. In other words, Regulations 6 and 7 were

relaxed in favour of the erstwhile employees. The width

and amplitude of Regulation 116 cannot be restricted by

interpreting the word ‘deviation’ as having lesser scope

than exemption. ‘Deviation’ from the Regulations would

amount to either exemption or relaxation. Therefore, we

are in agreement with the Division Bench that the order

dated 13.02.2019 cannot be said to have been issued

beyond the power conferred by Regulation 116 of 2010

Regulations.

23. The next question that requires to be examined is

regarding the exercise of powers by the Government of

Kerala in issuing order dated 13.02.2019. Drawing from

the interpretation of the relevant provisions as discussed

above, promotion and other service conditions of the

officers and employees transferred to KSEBL under the

transfer scheme are protected under Section 131 and

133(2) of the Electricity Act in conjunction with the

transfer scheme and the tripartite agreement. The

explanation to Section 133 makes it clear that “officers

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and employees” referred to in the section are only those

officers and employees of the Board on the date of

transfer scheme, i.e. on 31.10.2013. By no stretch of

imagination can this protection be extended to the

employees who were engaged by KSEBL after

31.10.2013. The High Court was right in setting aside the

order dated 13.02.2019 which permitted deviation from

Regulations 6 and 7 to all appointments made till the

date of issuance of order dated 13.02.2019, even after

the transfer scheme dated 31.10.2013. By the

impugned judgment, the High Court restricted the

applicability of the order dated 13.02.2019 to such of

those employees transferred from KSEB prior to

31.10.2013.

24. Safety is an important issue which the Central

Electricity Authority has dealt with in the Safety

Regulations enacted in 2010. Mr. P.V. Dinesh, learned

counsel for the KSEBL submitted that the track record of

the personnel working in the Board has been exemplary

and their support was even sought by the States of

Orrisa and Tamil Nadu in the past. He submitted a chart

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to bolster his submission that the electrical accidents are

much less in Kerala compared to the other States. Mr.

Dinesh further stated that efforts would be made to

appoint eligible and qualified personnel in the generating

stations, electrical plants and key positions in

transmission and distribution lines. As the exercise of

power by the State Government in issuance of the order

dated 13.02.2019 is well within its jurisdiction, grant of

exemption in favour of erstwhile employees cannot be

termed as arbitrary. However, the extension of the

continuity to employees appointed after 31.10.2013 is

not reasonable and only the transferred employees are

entitled for protection of their service conditions.

Therefore, we approve the findings recorded by the

Division Bench of the High Court of Kerala.

25. For the aforementioned reasons, the Appeals are

dismissed.

……………………………….J.

[ L. NAGESWARA RAO ]

……………………………….J.

[ B.R. GAVAI ]
New Delhi,
February 18, 2022.

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