Punjab & Haryana High Court Upholds Policy To Privatise Electricity In Chandigarh

The Punjab & Haryana High Court today upheld the Chandigarh U.T. Administration policy to privatise distribution of electricity in Chandigarh. Notice inviting the bids for purchase of 100% shares in the distribution company from the interested entities was issued in 2020.

Chief Justice Sheel Nagu and Justice Anil Kshetarpal dismissed the plea challenging the policy, observing that "the scope of judicial review in a policy decision is extremely narrow."

U.T. Powermen Union moved the High Court by filing the writ petition, wherein it was argued 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 further averred that the action of the U.T. 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 Government was not legally sustainable, the same being violative of Section 131 (2) of the Electricity Act, as per which the power department cannot be transferred to a totally private entity with no stake or control of the Government at all.

After examining the submissions, the Court rejected the petitioner's submission and noted that, "Section 131(2) provides for re-vesting of property, interest, rights or liabilities which vested in the State Government in a government company or in a company or companies in accordance with the transfer scheme. Section 131 does not envisage existence of a transfer scheme before inviting bids."

Speaking for the bench Justice Anil Kshetarpal said, "As per Section 131(5), the transfer scheme is required to include the various provisions as enlisted in Sub Section (5). While interpreting a statutory provision, the Court is not expected to draw inferences based on assumptions and presumptions."

Unless there is a categorical provision explicitly requiring the existence of a transfer scheme before the bids to identify the transferee, the Court would not interfere. The Courts shall avoid filling in perceived gaps or adding meaning that is not explicitly provided by the statute, as this could lead to unintended legal outcomes, added the Court.

The Court further opined the proviso to Section 133 of the 2003 Act itself ensures that the service conditions of the the petitioners , who are of employees of Electricity department shall not be any way be less favorable than those which would have been applicable to them if there had been no transfer under the transfer scheme.

In the light of the above, the plea challenging the policy was dismissed was dismissed.

Mr. Ashwani Kumar Chopra, Senior Advocate with Mr. Akshit Chaudhary, Advocate.

for the petitioner (in CWP-20439-2020).

Mr. Dhiraj Chawla and Mr. Akshit Dhiman, Advocates for the petitioner (in CWP-PIL-54-2022).

Mr. Satya Pal Jain, Additional Solicitor General of India with Mr. Dheeraj Jain, Senior Panel Counsel and Ms. Neha Sharma, Senior Panel Counsel for respondent-Union of India.

Mr. Assem Rai, Advocate for respondent No.6 (in CWP-20439-2020).

Mr. Sumeet Mahajan and Mr. Chetan Mittal, Senior Advocates with Mr. Saksham Mahajan, Mr. Saurabh Gautam, Ms. Shrishti Rai, Mr. Rohit Khanna, Mr. Shrey Sachdeva and Ms. Rabani Attri, Advocates for respondent No.7 (in CWP-20439-2020).

Mr. Amit Jhanji, Senior Standing Counsel with Mr. Sumeet Jain, Additional Standing Counsel,

Mr. Himanshu Arora, Panel Counsel and Ms. Zaheen Kaur, Advocate for the respondent-U.T., Chandigarh.

Title: U.T. Powermen Union, Chandigarh v. Union of India and Others

Citation: 2024 LiveLaw (PH) 327

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