High Court junks pleas against privatisation of Chandigarh power wing

Nearly four years after the UT Powermen Union moved the Punjab and Haryana High Court against the privatisation of the electricity wing, a Division Bench today dismissed both this and another plea. Among other things, the Bench of Chief Justice Sheel Nagu and Justice Anil Kshetarpal asserted judicial review of policy decisions was ‘extremely narrow.’

Referring to a Supreme Court verdict, the court observed the judgment held it was neither within the domain of the courts nor scope of judicial review to embark upon an inquiry as to whether a particular public policy is appropriate or whether better public policy can be evolved.

The dismissal of the pleas, along with the court’s observations on judicial review, has cleared a significant hurdle in the privatisation process. The court had twice granted stay, which was vacated by the Supreme Court. Meanwhile, the bidding process continued and Eminent Electricity Distribution Limited was considered to be the highest bidder. But a letter of interest was not issued due to the writ petition’s pendency. The company was represented by senior advocates Chetan Mittal and Sumeet Mahajan. The Centre was represented by Additional Solicitor-General of India Satya Pal Jain with senior panel counsel Dheeraj Jain and Neha Sharma. UT was represented by senior standing counsel Amit Jhanji with counsel Sumeet Jain, Himanshu Arora and Zaheen Kaur.

The Bench, on a previous date of hearing, was told on the petitioner’s behalf that the union was aggrieved by the decision to privatise the electricity wing by selling 100 per cent stake of the government in the absence of any provision under Section 131 of the Electricity Act-2003.

The Bench was also told that the process of privatisation of the electricity wing could not be initiated at all, especially when it was running in profits. The sale of 100 per cent stake was unjust and illegal as the electricity wing was revenue surplus for the past three years. It was economically efficient having transmission and distribution losses less than the target of 15 per cent fixed by the Ministry of Power.

It has also contended that the transfer scheme without calling for objections from all the stakeholders could not be legally sustained and acted upon. As per section 131(2) of the Act, power could not be transferred to a totally private entity with no stake or control of the government.

The Bench asserted Section 131 did not envisage existence of a transfer scheme before inviting bids. In fact, the transfer scheme was required to be drawn up after identifying a transferee. “The petitioners are the employees of the UT Electricity Department. Proviso to Section 133 itself ensures that the service conditions of the employees shall not be in any way less favourable than those which would have been applicable to them if there had been no transfer under the transfer scheme,” the Bench added.

The court added it was clarified during the course of hearing that the immovable assets of UT electricity wing was not proposed to be transferred.

What court observed

• The court referred to “extremely narrow” scope of judicial review in policy decisions, while citing a Supreme Court verdict.
• Petitioners had argued the 100 per cent sale of the government’s stake was unjust under Section 131 of the Electricity Act-2003.
• The court clarified the transfer scheme did not require a prior bidding process, and the service conditions of employees would not be adversely affected.
• The Bench was told that the immovable assets of the UT electricity wing were not part of the proposed transfer.