"Privatization Move Is In Direct Conflict With 'Sab Ka Saath Sab Ka Vikas' Agenda": P&H High Court Raps Chandigarh Admin

The Bench of Justice Jitendra Chauhan and Justice Vivek Puri was hearing a plea filed by UT Powermen Union, Chandigarh (Regd.) challenging the decision of the privatization of electricity in UT, Chandigarh.

In the instant application, prayer had been made for stopping further proceedings with regard to privatization of electricity in UT, Chandigarh including the opening and finalization of the tender bids till the final adjudication of the writ petition.

Observing that the administration should safeguard such institutions, the Court remarked:

"They provide a security net for the society to fall back upon, for the poorest of the poor to dream of a better future, for the person at the end of the line to be aspirational so that he too can be part of the Indian dream. All this indicates a social motive and not a profit motive."

Court's observations

The Court observed that the Engineering Wing of the UT administration was akin to Public Sector Undertakings (PSUs), which were created by the Government of India to make a self-sufficient nation and to become the master of our own destiny.

Further, referring to India's First Prime Minister, the Bench noted that while inaugurating the Bhakhra Nangal Dam in October, 1963, Nehru had christened it as 'the temple of modern India' and that the philosophy behind establishing the same was to end India's dependence on the rest of the world.

Importantly, taking into account the submission made by the Union Of India that the moved to privatize the entity was to make India, 'Atamnirbhar Bharat', the Court remarked,

"If the argument on behalf of the respondents is to make India 'Atamnirbhar Bharat', we are at a loss to understand that what can be more 'Atamnirbhar' than an institution made in India, by Indians, operationalized by Indians, creating jobs for Indians and enriching the Indian State with its profits. We also feel that the idea establishing such wings is an egalitarian one with the aim to include those sections of society that need a helping hand."

The philosophy of inclusion, the Court further added, as envisaged by Dr. Ambedkar in the Preamble, also included the concept of 'Economic Justice', and:

"To achieve this ideal of the Constitution as wished about by one of the greatest makers of this country, especially in such precarious times that we live in, it becomes imperative upon the administration to safeguard such institutions that protect the security of the livelihood."

"Privatization is not a panacea for all the ills"

The Court further observed that privatization was not a panacea for all the ills and privatization with the blind motive of so-called efficiency falls flat as this department is not only a profitable one but also time and again matched the high standards of customers' satisfaction and has a big role in maintaining the City Beautiful.

With great pain and anguish, the Court said:

"It is recorded that we are unable to reconcile with the fact that when the whole world is grappling with the deadly virus, when there is no oxygen, no ICUs, a long queue at the cremation grounds and no place in the hospitals, the undue hurry on the part of the administration to hand over the profit-making department to the private entity at this stage of the history and in this situation of crisis faced by the entire mankind, seems to be misplaced."

Further, the Court observed that on account of Covid-19 pandemic, the functioning of the Courts was curtailed to a very great extent and the writ petition could not be decided due to the same.

Thus, keeping in view the exigency of the situation, the Court said that at this stage the cause of justice and humanity would be better served by keeping the operation of communication fast-tracking the privatization in abeyance.

The matter would come up for hearing before the Court on August 18, 2021.

The matter in brief

It was submitted by the petitioner that there is no provision of privatization under the Electricity Act, 2003 and that no provision had been framed for reservation policy for the OBC, BC, sports personnel, ex-army personnel, and various deprived sections of the society.

It was averred that the action of the UT Administration, Chandigarh in taking effective steps to privatize the Electricity Wing, U.T., Chandigarh/power utility in Chandigarh by selling of 100% stake of the Govt. was not legally sustainable, the same being violative of Section 131 (2) of the Act, as per which the power department/utility cannot be transferred to a totally private entity with no stake or control of the Government at all.

It was also submitted that the sale of 100% stake of the U.T. Administration in the Electricity Wing of U.T., Chandigarh which was running in profits and was revenue surplus for the past 3 years and was also economically efficient having T & D losses less than 15 % the target fixed by the Ministry of Power was unjust and illegal.

Hearing the arguments, the Court, last December, stayed the operation and effect of the impugned Office Memorandum and Notice Inviting Bids till further orders and directed that the matter would be heard within six months after the resumption of the normal functioning of the Court.

However, an instruction was issued to M/s Deloitte Touche Tohmatsu India LLP, Gurgaon by UT Administration, Chandigarh (in April 2021), that the process of electricity privatization in Chandigarh be fast-tracked and this instruction was challenged before the High Court by way of an application.

UT Powermen Union, Chandigarh (Regd.) moved a representation on May 3, 2021 and approached the Advisor to the Administrator and Chairman, Disaster Management Committee, Chandigarh, requesting that further proceedings in the matter of privatization be stopped, at least till the matter was finally adjudicated.

It had been asserted that employees of the electricity department at the risk of their lives have been working as Frontline Corona Warriors to ensure that the medical and other institutes are provided uninterrupted electricity supply.

It had been further claimed that without active and functional support of the electricity department employees, fight against the deadly disease would not have been possible and a prayer was made that during this difficult phase of mankind, there ought not to have been undue hurry on the part of the administration to privatize the electricity wing.

However, the Chandigarh Administration and other respondents, in their reply, had submitted that the apprehensions of the petitioner UT Powermen, were totally wrong and baseless and had prayed for dismissal of the petition.

Case title - UT Powermen Union, Chandigarh (regd.) Vs Union of India and Others

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