Pema Chhoda Sherpa v. State of Sikkim

Judgment

#1. The Petitioners are members of “Project affected families”, their lands having been acquired for the development of the Rangit Stage IV, Hydro Electric Power Project, pursuant to an Agreement, dated 09-12-2005, executed between the State- Respondent No.1 with Respondent No.3, through Respondent No.2. The Petitioners are presently employed under the Respondent No.4 Company. In the Writ Petition, they seek the following reliefs; (a) a writ of Mandamus and/or any other appropriate writ, order or direction for quashing the Article 4.16 of the Said Agreement. (b) a writ of mandamus and/or any other appropriate writ, order or direction thereby directing the Respondent No.4 to regularise the services of the Petitioners in view of the regularisation orders issued by the Respondent No.3 to the Petitioners. WP(C) No.33 of 2022 2 Pema Chhoda Sherpa and Others vs. State of Sikkim and Others a writ of Mandamus and/or any other appropriate (c) writ, order or direction thereby directing the Respondent No.4 to fix pay scale for the Petitioner Nos.1, 2 and 18 as at par with 3rd grade and the Petitioner Nos.3 to 17 and 19 to 29 as at par with 4th grade and all entitlements to be provided to the Petitioners at par with other regular project affected employees of Respondent No.4. (d) a writ of Mandamus and/or any other appropriate writ, order or direction thereby direct the Respondents to rehabilitate the Petitioners as per the Article 3.6 of the said Agreement. (e) pass any other appropriate order/orders as this Hon‟ble Court may deem fit and proper in the facts and circumstances of the case.

#2. A brief summation of the facts of the Petitioners case is that, the Respondent No.3 was selected by Respondent No.1, to develop the Rangit Stage IV Hydro Electric Power Project in West/South Sikkim and a consequent Agreement dated 09-12-2005 entered into between Respondent No.1 and Respondent No.3, for the Project, on a build, own, operate and transfer basis (BOOT), through the Sikkim Power Development Corporation (SPDC). Pursuant thereto, lands were acquired from the Petitioners for the above purpose and they were offered appointments in the office of Respondent No.3, in various posts on ad hoc basis, in terms of Clause 4.16 of the Agreement which provides as follows;

4.16 Displaced Families The Company shall provide employment to one member of each of the displaced families or adversely affected as a result of the acquisition Rehabilitation Plan referred to in Clause 3.6 and 4.4 above in the process of the construction of the Project and such employment shall cease immediately on completion of construction of the project. the Projects covered (i) On completion of the period of probation of six months and fulfillment of the terms and conditions of the ad hoc appointments, the services of the Petitioners were regularised by the WP(C) No.33 of 2022 3 Pema Chhoda Sherpa and Others vs. State of Sikkim and Others Respondent No.3 in 2008 and 2009, vide various orders (Annexures R-3 to R-30 collectively). In the meanwhile, in the year 2015 the Respondent No.3 became insolvent and the financial creditor approached the National Company Law Tribunal (NCLT), Hyderabad Branch. The NCLT ordered the commencement of Corporate Insolvency Resolution Process (CIRP) against the Respondent No.3, vide order dated 09-04-2019. The Petitioners made claims against the Respondent No.3 through Legal Notice dated 13-11-2019, to Amit Jain, Resolution Professional. The Resolution Professional addressed the claims of the Petitioners upon which their pending salaries and Employees Provident Fund (EPF) were credited to their accounts. The NCLT then permitted Respondent No.4 to take over the Project of Respondent No.3. The Petitioners continued working in their respective posts in the Project under Respondent No.4 and received monthly salaries from the Respondent No.4 in terms of the regularisation orders issued by the Respondent No.3. The Petitioners legal notice, dated 22-12-2021, communicated to the Respondent No.4 that, their services be regularised in terms of Clause 3.6 of the Agreement. Legal notice was also issued to the Respondent Nos.1 and 2, who directed the Petitioners to get their claims addressed by the Respondent No.4. The Respondent No.4 declined to regularise the services of the Petitioners in view of Clause 4.16 of the Agreement dated 09-12-2005. The Petitioners claim that the services of Project affected persons, working in the Teesta Stage V Hydro Electric Project under Respondent No.4 are permanent, hence they seek parity with such employees.

#3. As per Learned Senior Counsel for the Petitioners the Respondents No.1, 2 and 3 failed to comply with Clause 3.6 of the WP(C) No.33 of 2022 4 Pema Chhoda Sherpa and Others vs. State of Sikkim and Others Agreement which provided for rehabilitation and resettlement plan for the Project affected persons, in coordination with Respondent No.1, which unfortunately has not been drawn up till date. The Petitioners are rendered not only landless now but also homeless, as the lands acquired by the Respondent No.3 from the Petitioners was their only source of livelihood. Permanent jobs in the Project had been promised and provided to the Petitioners by Respondent No.3. The Project having been taken over by Respondent No.4, it becomes their responsibility to ensure continuity of the permanent services of the Petitioners. Emphasising on the permanent employment afforded of the employees in the Teesta Stage V Hydro Electric Project of Respondent No.4, Learned Senior Counsel urged that the Petitioners be treated on parity with the said employees, as employees of both Projects are Project affected families under Respondent No.4. That, not only does Clause 4.16 of the Agreement suffer from inherent defects rendering it unsustainable but the Petitioners have also been working below the prevalent minimum wage, under Respondent

No.4. The prayers in the Writ Petition thus be granted. To support his contentions, reliance was placed on Modified Voluntary Retirement Scheme of 2002 of Azam Jahi Mill Workers Association vs. National Textile Corporation Limited and Others1 and Union of India and Others vs. Munshi Ram2.

#4. Learned Government Advocate while contesting the claims of the Petitioners, submitted that Clauses 3.6, 4.4 and 4.16 contained in the Agreement, dated 09-12-2005, casts a duty upon Respondent No.4 to take steps for rehabilitation and resettlement of the Project affected families and the responsibility does not vest on 1 (2022) 17 SCC 797 2 2022 SCC OnLine SC 1493 WP(C) No.33 of 2022 5 Pema Chhoda Sherpa and Others vs. State of Sikkim and Others Respondents No.1 and 2. Clause 3.6 of the Agreement clearly provides that, the Company shall wherever required and subject to the approval of any competent authority, prepare a rehabilitation and resettlement plan in coordination with the Government for local residents, who may be adversely affected or displaced, due to construction of the Project at the site as on the effective date. The provision requires all expenses to be borne by the Company, for costs of preparation and implementation of the rehabilitation and resettlement plan. The rehabilitation and resettlement plan were duly implemented under State supervision. The relief against the State Government is sought for only in prayer (d) of the Writ Petition, viz., to rehabilitate the Petitioners as per Clause 3.6 of the Agreement, which having been complied with, the State-Respondent is not liable to take further steps. That, the instant Petition is an afterthought and hit by delay and laches as apparent from the pleadings as the Petitioners were provided employment way back in the year 2008 and the Petition has rather belatedly been filed in

#2022. Hence, the Petition deserves to be dismissed.

#5. Learned Deputy Solicitor General of India (DSGI) for the Respondents No.3 and 4 resisting the stance of the Petitioners contended that, this Court has no jurisdiction to consider the instant matter which was settled by the NCLT, vide its Order dated 24-12- 2020, on which count succour was obtained from Ghanashyam Mishra and Sons Private Limited through the Authorised Signatory vs. Edelweiss Asset Reconstruction Company Limited through the Director and Others3. That, the employees of Respondent No.3 have been taken over by Respondent No.4, the Agreement was of 2005, the payment made in 3 (2021) 9 SCC 657 WP(C) No.33 of 2022 6 Pema Chhoda Sherpa and Others vs. State of Sikkim and Others 2019 while the Writ Petition has been lodged in 2022, there is no explanation for the delay of seventeen years, which is thereby not maintainable as it suffers from delay and laches. Reliance was placed on Mrinmoy Maity vs. Chhanda Koley and Others4 and Chennai Metropolitan Water Supply and Sewerage Board and Others vs. T. T. Murali Babu5. (i) It was further contended that, the NCLT approved the Resolution Plan submitted by Respondent No.4. The Agreement dated 09-12-2005 executed between the State Government and the Respondent No.3 is a part of the NCLT Order, pursuant to which Respondent No.4 acquired Respondent No.3 Company. The Petitioners having participated in the Resolution Proceedings did not seek quashing of Clause 4.16 of the said Agreement and are therefore estopped from seeking the same now. (ii) It was urged that there has been a misrepresentation and concealment of facts as the Petitioners have stated that they are employees of Respondent No.4 when, in fact, they were contractual employees of Respondent No.3. Respondent No.3 and Respondent No.4 are two separate legal entities. On account of such misrepresentation, they are not entitled to the reliefs. (iii) It was next contended that the Petitioners being contractual employees cannot claim regularisation as a matter of right. Contrary to their claims of not having been rehabilitated, in compliance of Clause 3.6 of the Agreement, dated 09-12-2005, the Petitioners have been rehabilitated and are being paid wages as per entitlements applicable in the State of Sikkim. In this context, the Petitioners had complained before the Labour Department alleging 4 2024 SCC OnLine SC 551 5 (2014) 4 SCC 108 WP(C) No.33 of 2022 7 Pema Chhoda Sherpa and Others vs. State of Sikkim and Others deprivation of minimum wages by Respondent No.4, which was dismissed by the Department, on letter dated 25-11-2021 indicating payment of minimum wages being submitted by Respondent No.4. The land of the Petitioners was acquired following due procedure in terms of the Land Acquisition Act, 1894 and the Petitioners were well compensated for their lands, that aside, the Act (supra) makes no provision for rehabilitation and resettlement. (iv) In a contradictory argument it was submitted in the written arguments of Learned DSGI that, Respondent No.4 was not a party to the Agreement dated 09-12-2005 and therefore did it assume any obligations thereunder. The Petitioners‟ contractual engagement was exclusively with Respondent No.3, which ceased to exist, hence no relief can be sought against Respondent No.4. To buttress her arguments, Learned DSGI sought strength from the Judgment of this Court in Sonam Thendup Bhutia and Another vs. State of Sikkim and Another6. (v) It was urged that there has been no violation of the fundamental rights of the Petitioners, hence the Writ Petition deserves no consideration, for which reliance was placed on Yogesh Mahajan vs. Professor R. C. Deka, Director, All India Institute of Medical Sciences7 and Ganesh Digamber Jambhrunkar and Others vs. State of Maharashtra and Others8.

#6. Learned Counsel for the parties were heard at length, the pleadings perused, as also the citations relied on by Learned Counsel for the parties. 6 2022 SCC OnLine Sikk 113 7 (2018) 3 SCC 218 8 2023 SCC OnLine SC 1417 WP(C) No.33 of 2022 8 Pema Chhoda Sherpa and Others vs. State of Sikkim and Others

#7. The questions that fall for determination are; (i) whether this Court has jurisdiction to consider the matter; and (ii) whether there has been delay and laches in the Petitioners approaching the Court.

#8. Before venturing into a discussion on the above questions, it is essential to point out that the arguments submitted by Learned DSGI to the effect that Respondent No.4 was not a party to the Agreement dated 09-12-2005 and therefore did not assume the obligations of Respondent No.3 are erroneous and misleading as Learned DSGI herself has in an earlier argument conceded that the Agreement dated 09-12-2005, executed between the State Government and the Respondent No.3 is a part of the NCLT Order upon which, Respondent No.4 acquired Respondent No.3 and the Petitioners had participated in the Resolution Proceedings where no issues were raised regarding Clause 4.16 of the Agreement. The argument that Petitioners have stated that they are employees of Respondent No.4 when they are contractual employees of Respondent No.3 cannot be countenanced, in view of the Order of the NCLT dated 24-12-2020, whereby the employees of Respondent No.3 were taken over by Respondent No.4. These points need detain us no further.

#9. While addressing the argument on the jurisdiction of this Court, it is no more res integra that the existence of the statutory remedy does not affect the jurisdiction of the High Court to issue a writ. Nevertheless, Writ Jurisdiction being discretionary by policy, the Writ Courts generally insist that the parties adhere to alternative statutory remedies, as this reinforces the rule of law. However, in exceptional cases, Writ Jurisdiction can still be exercised to access WP(C) No.33 of 2022 9 Pema Chhoda Sherpa and Others vs. State of Sikkim and Others the Court for justice and relief. In this context, in Tamil Nadu Cements Corporation Limited vs. Micro and Small Enterprises Facilitation Council and Another9, the Supreme Court held as follows; judgments “57. Following