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

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

The transfer of employees from NTPC, a public sector undertaking, to BALCO, which became a private organization, was unlawful as no agreement existed empowering NTPC to make recruitment on behalf of BALCO at the time of recruitment. Obtaining undertakings from employees and inserting clauses in appointment letters without employees' consent was contrary to Section 23 of the Contract Act and violative of Article 14. No employee can be transferred without his consent from one employer to another, and unilateral alteration of service conditions without hearing the employees is arbitrary and violative of Article 14.

Parties
Appellants: BCPP Mazdoor Sangh and Anr.; Respondents: N.T.P.C. and Ors.
Jurisdiction
India
Judgment Date
11 October 2007
Procedural Posture
Civil Appellate Jurisdiction / Appeal From High Court Decision in Writ Petition
Outcome
Appeals allowed, High Court order set aside.
Legal Topics
Public Sector Employee Transfer, Disinvestment, Service Conditions, Natural Justice, Arbitrariness Under Article 14
Constitutional Law Contract Law Administrative Law Labour Law Public Sector Employee Transfer Disinvestment Service Conditions Natural Justice +1 more

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Parties

BCPP Mazdoor Sangh and Anr.

Appellants

N.T.P.C. and Ors.

Respondents

Procedural Posture

Civil Appellate Jurisdiction / Appeal From High Court Decision in Writ Petition

Legal Issues

  1. 1 Whether the transfer of non-executive employees from NTPC (public sector) to BALCO (private sector) is lawful
  2. 2 Whether clauses 8.2 and 16.3 of the agreement between NTPC and BALCO are enforceable against employees not party to the agreement
  3. 3 Whether unilateral alteration of service conditions without hearing employees is violative of Article 14 and principles of natural justice

Ratio Decidendi

The transfer of employees from NTPC, a public sector undertaking, to BALCO, which became a private organization, was unlawful as no agreement existed empowering NTPC to make recruitment on behalf of BALCO at the time of recruitment. Obtaining undertakings from employees and inserting clauses in appointment letters without employees' consent was contrary to Section 23 of the Contract Act and violative of Article 14. No employee can be transferred without his consent from one employer to another, and unilateral alteration of service conditions without hearing the employees is arbitrary and violative of Article 14.

Court Disposition

Appeals allowed, High Court order set aside.

Orders

  • Both offending clauses in the agreement (clause 8.2 and clause 16.3) cannot be sustained.
  • All employees are to be retained in NTPC.