Homnath Neopaney Vs NHPC Ltd. (Sikkim High Court)
Summary: The Sikkim High Court dismissed a writ petition seeking absorption of the petitioners as permanent employees of National Hydro Electric Power Corporation (NHPC) Limited following the 2025 amalgamation of Lanco Teesta Hydro Power Limited (LTHPL) with NHPC. The petitioners had originally been recruited as regular employees of LTHPL. The Ministry of Corporate Affairs’ order dated 02.01.2025 approving the amalgamation provided that, upon the scheme becoming effective, employees of LTHPL would be deemed employees of the transferee company and would be entitled to the benefits for which they were eligible. The High Court held that entitlement under this stipulation depended upon whether the petitioners continued to be employees of LTHPL on the effective date of amalgamation.
The Court noted that insolvency proceedings had been initiated against LTHPL before the NCLT, Hyderabad in 2019 on a petition filed by ICICI Bank Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016. Pursuant to the resolution plan, LTHPL became a subsidiary of NHPC with effect from 09.10.2019 and thereafter became a Government company within the meaning of Section 2(45) of the Companies Act, 2013. NHPC subsequently offered the petitioners fixed-tenure employment for one year with effect from 26.12.2019, which they accepted.
While the petitioners were continuing as employees of NHPC, a joint confirmation petition proposing amalgamation of LTHPL with NHPC was filed before the Central Government on 09.10.2023 and was approved. The scheme stipulated that employees of LTHPL would continue as employees of the transferee company. However, the High Court found that this benefit was confined to persons who were employees of LTHPL on the date of amalgamation. The petitioners had ceased to be LTHPL employees much earlier, as demonstrated by the fixed-tenure NHPC appointment letters issued in 2019. The Court observed that immediately after approval of the resolution plan by the NCLT, the petitioners had opted to become fixed-tenure employees of NHPC and had ceased to continue as employees of LTHPL.
Accordingly, persons who were not employees of the transferor company when the amalgamation scheme became effective could not invoke the provision protecting continuation of employees of the transferor company. Since the petitioners had been fixed-tenure employees of NHPC from 2019 onwards, the High Court held that no relief could be granted to them. The writ petition was therefore dismissed with no order as to costs.
FULL TEXT OF THE JUDGMENT OF SIKKIM HIGH COURT
1. The Petitioners seek directions in the Writ Petition to absorb them as permanent employees of the M/s National Hydro Electric Power Corporation (NHPC) Limited, a Government of India undertaking, consequent upon the scheme of amalgamation, whereby M/s Lanco Teesta Hydro Power Limited (LTHPL), a public limited company, was amalgamated with the NHPC Limited, a Government company in the year 2025.
2. In the order passed by the Ministry of Corporate Affairs, Government of India dated 02.01.2025, it is specifically mentioned that upon the scheme becoming effective the employees of the LTHPL shall be deemed to have become employees of the transferee company and would be entitled to all the benefits to which they may be eligible.
3. The Petitioners were initially recruited as regular employees of the LTHPL. The appointment orders of the Petitioners and the promotions subsequently given to them would establish that they were regular employees of the LTHPL.
4. The entitlement of the Petitioners to the reliefs sought, therefore, depends upon whether they continued to be employees of the LTHPL, on the date on which the scheme of amalgamation became effective. If the Petitioners were on the rolls of the LTHPL, the transferor company, as on the date of amalgamation, they would, subject to the terms of the scheme, be entitled to claim the benefits of the amalgamation or reliefs sought in the matter. However, the records produced before this Court discloses that insolvency proceedings were initiated against LTHPL before the National Company Law Tribunal, Hyderabad, in the year 2019. The subsequent events, particularly the employment accepted by the Petitioners pursuant to the resolution plan are material for deciding the present claim.
5. On a petition filed by ICICI Bank Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016, insolvency resolution proceedings were initiated against the LTHPL. Based on the resolution plan, the LTHPL became a subsidiary company of the NHPC Limited with effect from 09.10.2019. Thereafter, LTHPL became a Government company within the meaning of Section 2(45) of the Companies Act, 2013.
6. The NHPC Limited thereafter offered employment to the Petitioners on a fixed tenure basis for one year, with effect from 26.12.2019. The Petitioners accepted the fixed tenure appointment. The NHPC Limited became the parent company and the LTHPL became its subsidiary company.
7. While the Petitioners continued as employees of the NHPC Limited, a joint confirmation petition was filed before the Central Government on 09.10.2023 proposing a scheme of amalgamation between M/s LTHPL and the NHPC Limited. The same was approved. In that order, it is specifically stipulated that all the employees of the LTHPL, the transferor company, would continue to be employees of the transferee company.
8. The benefit of the aforesaid stipulation, however, is available to persons who were employees of the transferor company, namely, LTHPL, on the date of amalgamation. If the Petitioners were on the rolls of the LTHPL, the subsidiary company, as on the date of amalgamation, the Petitioners would be justified in seeking the reliefs sought before this Court. However, much before amalgamation, the Petitioners had ceased to be employees of the LTHPL, as is evident from the appointment letters appointing them as employees of NHPC on a fixed tenure basis in the year 2019. That means, immediately after the resolution plan was approved by the NCLT, the Petitioners opted to become employees of the NHPC Limited on a fixed tenure basis. They ceased to continue as employees of the subsidiary company, i.e. the LTHPL.
9. In what manner the Petitioners ceased to become employees of LTHPL is known only to them. If the Petitioners were not employees of the LTHPL as on the date of amalgamation, they cannot claim any relief based on the amalgamation order and scheme of amalgamation. The provision in the scheme relating to continuation of the employees of the transferor company cannot be invoked by persons who were not employees of the transferor company on the date on which the scheme became effective.
10. As noted above, the Petitioners were fixed tenure employees of the NHPC Limited from 2019 onwards. In that view of the above, no relief can be granted to the Writ Petitioners.
11. Accordingly, the Writ Petition fails and is hereby dismissed.
12. No order as to costs.
