Supreme Court Ruling on Power Sector Employee Allocation in Telangana and Andhra Pradesh

The Supreme Court of India in Telangana Power Generation Corporation Ltd. vs. Andhra Pradesh Power Generation Corporation Ltd. addressed a longstanding dispute over the allocation of employees between the two states following the bifurcation of Andhra Pradesh and Telangana in 2014. This case arose due to differing interpretations of employee allocation under the Andhra Pradesh Reorganisation Act, 2014, leading to multiple legal battles between the two states and their power utilities.

The Supreme Court had earlier entrusted the task of allocation to a One-Man Committee headed by Justice D.M. Dharmadhikari, whose final report was contested by various parties, including power utilities and employee associations. The primary contention revolved around the fairness of employee allocations, financial implications, and compliance with the original reorganisation provisions.

Background of the Case

• The Andhra Pradesh Reorganisation Act, 2014 provided for the division of employees between the two states, but disagreements arose over its implementation.
• The Telangana and Andhra Pradesh power utilities failed to reach a consensus on the allocation process.
• The Telangana Power Utilities unilaterally relieved 1,157 employees from Telangana to Andhra Pradesh, leading to litigation.
• The Andhra Pradesh High Court struck down Telangana’s decision, which was later upheld by the Supreme Court in 2018.
• The Supreme Court then appointed a One-Man Committee to finalize the allocation process.

Petitioner’s Arguments

The Telangana Power Generation Corporation Ltd. (TSGENCO) and other Telangana power utilities argued:

• The allocation of employees should be limited to the 1,157 employees originally disputed.
• The One-Man Committee had exceeded its jurisdiction by modifying the final allocation process.
• The final allocation created an imbalance, placing an excessive number of employees in Telangana.
• The committee deviated from the agreed allocation modalities and overburdened Telangana with more employees than it could accommodate.

Respondent’s Arguments

The Andhra Pradesh Power Generation Corporation Ltd. (APGENCO) countered:

• The allocation process had to consider all eligible employees, not just the 1,157 disputed cases.
• The final allocation maintained financial neutrality and ensured fairness.
• Population ratio was a valid factor in determining employee distribution.
• The One-Man Committee had acted within its jurisdiction and followed proper allocation procedures.

Supreme Court’s Observations

The Supreme Court, in its judgment delivered by Justices Ashok Bhushan and M.R. Shah, made several key observations:

1. Authority of the One-Man Committee

The Court held:

“The decision of the One-Man Committee shall be final and binding on all the parties including power utility companies of the two states as well as the employees.”

Thus, challenges to the Committee’s final allocation were not maintainable.

2. Scope of Employee Allocation

The Court ruled that the allocation process was not limited to 1,157 employees but included all allocable employees in accordance with Section 82 of the Andhra Pradesh Reorganisation Act.

3. Balancing Employee Distribution

The Court rejected claims of overburdening Telangana, stating:

“The One-Man Committee was tasked with ensuring a balanced allocation in line with the reorganisation principles.”

4. Financial Neutrality

The Court emphasized that financial considerations played a crucial role in the allocation process and that any modifications made were within legal limits.

Final Judgment

• The Supreme Court upheld the final allocation by the One-Man Committee.
• All parties were directed to comply with the allocation without further disputes.
• Challenges to the report were dismissed, with the Court stating that no further modifications were necessary.

Implications of the Judgment

The judgment has far-reaching implications:

• Establishes a binding precedent for employee allocation in state bifurcations.
• Reaffirms the authority of the One-Man Committee in complex administrative disputes.
• Ensures stability in power sector employment between Telangana and Andhra Pradesh.
• Limits future legal challenges to reorganisation-related allocations.

The ruling brings closure to a long-standing issue and paves the way for smoother administration in the bifurcated states.

Petitioner Name: Telangana Power Generation Corporation Ltd..
Respondent Name: Andhra Pradesh Power Generation Corporation Ltd..
Judgment By: Justice Ashok Bhushan, Justice M.R. Shah.
Place Of Incident: Telangana, Andhra Pradesh.
Judgment Date: 07-12-2020.

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