This chapter relates to the challenges posed by bifurcation with respect to division of employees. The author points out that it was not easy to resolve these complex issues harmoniously.

The division of Andhra Pradesh state is peculiar compared to the division of other states done earlier. When Chhattisgarh got divided from Madhya Pradesh or Jharkhand from Bihar, the demand for division came from a place where the capital is not located. The moment the division was agreed to they did not ask for any share in institutions located in the capital city but went away to establish their own capital and institutions. In the case of Andhra Pradesh it is different. The demand for division came from Telangana, an area where the capital city is located. Since the division was done against the wishes of the residuary state which is going to be located away from the capital city, the new Andhra Pradesh government started demanding for a share in the institutions located mostly at Hyderabad and had statewide jurisdiction. This equally applies to the institutions located in the Andhra area which have statewide jurisdiction. Since those in Andhra are very few and most of them are located in Hyderabad, Telangana was not keen on sharing those institutions and was happy with a formula of appropriating the institutions by the respective state governments as per their geographical location.

Most of these institutions are listed out in Schedule 9 and 10 of the act. Schedule 9 deals with the commercial organisations like the APSRTC, APIIC et cetera. Schedule 10 on the other hand deals with training institutions and universities. But the drafting of the act was so bad that even institutions like the State Election Commission, Backward Classes Commission, Women’s Commission which are statutory bodies and are neither training institutions nor education institutions, are also listed as part of Schedule 10.

Regarding Schedule 9 institutions the act proposed units located at the district level to be allotted to the State as per their geographical location and assets of the head office to be shared in the population ratio of 58:42. The process of division of the Staff as well as the definition of the headquarters was left vague. These issues where there was no clarity were interpreted differently by both the states leading to avoidable friction.

Regarding the Schedule 10 institutions Telangana government was of the view that all such institutions located within Hyderabad belong to them and they are willing to provide the necessary services to Andhra Pradesh on a mutually agreed basis. The Telangana Chief Secretary who was instrumental in drafting the bill as Additional Secretary, Home, Government of India, was firm that the institutions located at Hyderabad along with the corpus belong to Telangana. Section 75 of the act was relied upon by them in favour of their argument.

Andhra Pradesh had a different point of view on the issue. Section 75 in our opinion deals only with provision of services and as far as ownership is concerned part VI of the act applies since this alone discusses about division of assets and liabilities. Due to the totally divergent points of view on Schedule 10 institutions there was no possibility of resolving the issue harmoniously. Most of these institutions were located in Hyderabad and the local administration and police was with them; they occupied all these institutions. When we started fighting for our right it led to a lot of unpleasant incidents and confrontation between the two governments and their functionaries.

It all started with the National Institute of Tourism and Hospitality Management. Mrs Chandana Khan, who was Special Chief Secretary, Tourism in the undivided state was also chairman of NITHM. After bifurcation of the State she was allotted to the Andhra Pradesh cadre and in her capacity as the chairman of the institute she went to attend the board meeting at the Institute. The Telangana government made exhaustive police arrangements to prevent her from going into the office. In protest, she sat on the footpath and held the board meeting and showed exemplary spirit of devotion to duty. Mr Sam Bob, who was chairman for the National Construction Academy, was also prevented from entering the office by the Telangana police. But other officers were not equal in their commitment to the cause.

In the meetings conducted by the Home Secretary, Government of India there used to be heated discussion on this issue between me and the chief secretary of Telangana. About the officers who were Central home secretaries, as explained earlier, the first one was partial to Telangana, the second one was transferred out before he could come to grips with the issues, and the third one never held any meeting.

A Forest Service officer (IFS) allotted to AP cadre was the Director of AP State Remote Applications Centre. He came to me one day and informed me that the institute had a corpus of Rs. 30 crore and the Telangana government was trying to take that money away with the help of the Telangana officers. We made our position clear to the Telangana government that we are willing to share the corpus on population basis but they were not agreeable for the same and wanted to appropriate all the assets of Schedule 10 institutions including the corpus. I asked the officer whether he can silently transfer the whole amount to a bank in Vijayawada so that we can thwart the designs of the Telangana government to take over the corpus. He agreed to attempt it and after a day came back and told me that he was able to accomplish it unnoticed by others. The moment employees from Telangana came to know of it they started an agitation and lodged a complaint to the police who were ready to arrest him. I spoke to the police commissioner and informed him that the decision to transfer the corpus was taken at my level and that if at all a case was to be booked it should be against me, not against that officer. I also told him any attempt to take action on the officer would have serious consequences. This had its effect and the attempt to arrest the officer was dropped by the Telangana police.

After the first two incidents we realised that there was no point in trying to forcibly enter the offices and being prevented by the police. To ensure that the rights of the state are protected we started appointing officers from our side to Schedule 10 institutions. When there was a vacancy in the Centre for Good Governance I appointed the secretary GAD, Mr Meena as Director in charge. It was supposed to be a paper order required to be presented in a court of law for asserting our rights. The Telangana government, thinking that he was coming to take charge, made elaborate police arrangements to prevent him from entering the office. When we came to know of this, we had a hearty laugh as we were not interested in a confrontation with them on this issue but gave that order only to strengthen our case before the central government or in a court of law at a later date.

It was Schedule 10 institutions which led to a lot of unpleasant incidents between the two states. There was a meeting at Hyderabad organised by the then additional secretary, GOI Mr AK Singh with reference to Schedule 10 institutions. In that meeting there was heated exchange of views between me and the chief secretary of Telangana. He was insisting that Section 75 deals with the ownership of Schedule 10 institutions. I had a different point of view. I was arguing that since these institutions are built with the resources of the combined state they have to be shared between the states on mutually agreed criteria, preferably the population ratio. We were very clear that it is not Section 75 that governs the ownership of Schedule 10 institutions but Part-VI of the Act which deals with the division of assets and liabilities. I met the then Union Home Secretary Mr Anil Goswami and showed him this particular section and impressed on him that Part-VI, not Section 75 which should govern division of schedule 10 institutions. The Union law department also concurred with our view on the issue but no clarification was issued by Government of India as the file did not get cleared in the home ministry.

We had no other go but to approach a court of law which reference to Schedule 10 institutions. It began with the State Council of Higher Education. In this case the Telangana government wrote a letter to the bank requesting them to freeze the account. When this matter was taken to the High Court, the judgement went in favour of Telangana. Applying this judgement to all Schedule 10 institutions, the Telangana government started taking control of all the institutions located in Hyderabad. We were convinced that we had a strong case and can win the appeal in the Supreme Court. Accordingly we filed a case in the Supreme Court. The then Advocate General Sri Venugopal played a very important role in drafting the affidavit and guiding us in filing this case. I constituted a small core committee with Principal Secretary Higher Education and retired IAS officer Mr Balasubramanian who had a legal background and Mr Prem Chandra Reddy dealing with the bifurcation issues in the secretariat. We carried the day in the Supreme Court and won the case. The Supreme Court also left a small window for the central government to intervene and decide the issue. I believe subsequently the central government took a view that the corpus funds of the institutions should be divided on population basis but the buildings and the land would go to the state where they are situated. This can be a fair view of the issue provided the Centre compensates Andhra Pradesh for these facilities to be created in the new state. I am not sure whether the state government has approached Government of India with any such request.

The next major issue was the division of Schedule 9 institutions. A committee under the chairmanship of retired IAS officer Mrs. Sheila Bhide was entrusted the work of division of assets and liabilities of these institutions. During Governor’s rule, assets and liabilities of Transco and Genco were divided between the two states. Division of the staff including the staff of Genco and Transco was not completed during that period, and was left to be handled by a committee of chief secretaries under the chairmanship of Union Home Secretary. As for the division of the assets and liabilities of Schedule 9 institutions, the units located in the districts were divided as per their geographical location and the headquarters assets were to be divided in the population ratio of 58:42 between the states. The only problem was with reference to definition of the headquarters. Andhra Pradesh’s argument was that all common facilities established along with the head office are part of the headquarters. For example, the APSRTC workshop located at Hyderabad and processing plant of the milk Federation located at Hyderabad. The Telangana government’s view was that the common facilities are not part of the headquarters and only the building where the head office islocated is to be considered as headquarters. This has to some extent complicated the division process of some of the Schedule 9 institutions whose headquarters comprised more than the head office. But the more important issue which became difficult to sort out was the division of employees of the Schedule 9 institutions.

Both the state governments proposed and insisted on different criteria for division of the employees. The Six-point formula ensured that the local candidate criterion was applied for recruitment of government jobs. But no such criteria were laid out for recruitment in these Schedule 9 institutions. This led to a process of recruitment in which most of the people who got employment were from Andhra area. The contention of the Telangana government was that the nativity principle was to be adopted for division of staff since most of them are from Andhra area. We were not in favour of such criteria for the simple reason that these are commercial undertakings and any such criteria would result in more staff coming over to the corporations in the Andhra Pradesh, making them financially unviable. We felt applying any such criteria would make the division retrospective, which was not envisaged in the act. We were insisting on application of local candidate criteria and dividing them based on population ratio. This led to a virtual stalemate in division of the staff of the Schedule 9 institutions. Even a series of meetings at the Union Home Secretary level could not resolve the issue.

Though Schedule 9 institutions were yet to be divided, the division of Transco and Genco took place at the time of Governor’s rule and they started functioning as independent units for the two respective states. Employees’ division was yet to take place and they were allotted on a temporary basis to work in the respective utilities. Suddenly, one fine day the Telangana Government relieved the staff working in Telangana Transco and Genco who were not native to Telangana. They started coming and reporting to the respective institutions of Andhra Pradesh but we were not prepared to take them since there was no formal allocation of the staff based upon mutually agreed criteria. The issue was brought to the notice of the Union Home Secretary who requested the Telangana government to take them back but they refused to do the same. They moved the High Court which gave an order that the salaries of the staff should be paid (shared) by both the states. Even this was not implemented by the Telangana government. There was a meeting convened in this regard by the Union Home Secretary with the chief secretaries and managing directors of the power utilities of the two states. In this meeting the Union Home Secretary, Mr LC Goyal questioned the Telangana government representatives how they relieved the staff unilaterally without consulting the Andhra Pradesh Government. Telangana Chief Secretary Mr Rajiv Sharma did not reply but Genco MD Sri Prabhakara Rao got agitated and started shouting that this is one more example of exploitation of Telangana interest. Angered by this outburst, the home secretary requested him to leave the meeting and he walked out of the meeting stating that he could not care less. We were not agreeable for the sharing of the costs as ordered by the High Court and went in appeal to the Supreme Court which gave orders that the Telangana government should take the staff back and pay their salaries till final allocation is done.

By then the Sheela Bhide committee finalised the division of the assets and liabilities of Schedule 9 institutions. But having seen the attitude of the Telangana government with reference to the division of the staff and more particularly the way they relieved the staff from Genco and Transco based upon nativity, I got alerted. I thought that if the Sheela Bhide committee recommendations are implemented and the division of the assets and liabilities is done, what happened in Genco and Transco might be repeated in other Schedule 9 institutions and staff would be relieved from these institutions also based upon nativity. As the residuary state, responsibility for implementation of the final orders on bifurcation of Schedule 9 institutions is on Andhra Pradesh. Keeping this in mind I stalled further action in terms of implementation of the Sheela Bhide committee recommendations. I took a view that division of Schedule 9 institutions should be comprehensive including the division of the staff and till that is decided, division of assets and liabilities has no meaning and wrote a letter to the Union Home Secretary accordingly. This ensured that focus got shifted to division of employees in Schedule 9 institutions.

Another major issue was the division of the staff of different cadres working with the government between the two states. The state was divided on June 2, 2014 and immediate staff division was done on a temporary basis. The process of division of the staff was left to a committee chaired by a retired IAS officer and consisted of the chief secretaries of both the states as well as an officer from the Department of Personnel, Government of India. Two very competent officers Mr Prem Chandra Reddy from Andhra Pradesh and Mr Ramakrishna Rao from Telangana were entrusted the task of assisting this committee by the respective state governments. Both of them played a key role in ensuring the division of the staff was done in a smooth and systematic manner without any hiccups.

As was the case with the division of the Schedule 9 institutions, the main issue was deciding the criteria. Telangana was in favour of applying the principle of nativity while Andhra Pradesh was particular that the local candidate as defined for admission to educational institutions and employment should be followed. We were of the view that nativity has no legal backing and hence local candidate should be the basis for deciding the allocation of the staff. Initially Telangana was very keen that the nativity principle should be applied but finally it came round and agreed for applying the principle of local candidate for the division of the staff between the states. The second issue was whether the division should be done taking the total cadre (sanctioned posts) into consideration or the actual posts filled up. Once this issue was resolved, division of the staff and state-wise allocation started.

There were problems from employees’ associations, particularly from Telangana. They expected that once the division of the state was done and employees of Andhra origin go back to Andhra cadre, there would be vacancies facilitating quick promotions for them. But as per the formula worked out, posts were allocated on population basis and wherever the number of employees allocated to a state was more than the posts allocated to that state they were allotted back to the state where there is deficit of personal with reference to the posts as per a formula starting from the juniormost. The Telangana associations were not happy with this formula as the expected promotions did not materialise. They started protesting and complaining that Mr Kamalanathan was acting in a manner favourable to Andhra Pradesh. In fact there was no such partiality on the part of Mr Kamalanathan as he was strictly going by the rules and most of the time he was looking for unanimity between the two chief secretaries for him to start the process of division. Overall, if at all there was one area where there was substantial progress by the time I retired in terms of the division issues, it was division of the staff between the states and the contribution of Mr Prem Chandra Reddy and Mr Ramakrishna Rao needs to be specially mentioned in this regard. Issues of Deputy Collectors got stuck in the courts on seniority issue and could not be completed by the time I retired. Division of the police battalions was also not completed by the time I retired.

There is one incident which happened with reference to Schedule 10 institutions which needs a special mention. One day it came to my notice that there was a corpus of Rs 1,000 crore in the labour cess account. We had the experience of AP State Remote Applications Agency where the Telangana government tried to appropriate the Rs 30 crore corpus and we were able to successfully transfer the amount to Vijayawada and ensure that it did not happen. We were worried that the Telangana government may try to appropriate this labour cess amount. One Mr Murali Sagar working with AP government at that time was in charge of the labour cess. We thought it would be prudent to move this amount also to Vijayawada so that the amount would be safe and would also be a bargaining point at a later date regarding division of corpus of different Schedule 10 institutions. We never had an intention of appropriating the amount but were willing to share it on population basis. Unfortunately the Telangana government had a different view stating that all the Schedule 10 institutions including the corpus belong to the respective States as per the geographical location. If they apply that principle to labour cess that would be a big loss. This was apprised to the Chief Minister and with his consent I advised Mr Murali Sagar to transfer the amount to a bank in Vijayawada. When he was in the process of doing it, information leaked and Telangana employees complained to the police. They also gheraoed him. In the afternoon he came to my office to brief me on this and when he was returning to his office he was picked up by the police. I rang up the Commissioner of Police, Hyderabad and informed him that the transfer of amount was done under my orders and hence if any action is contemplated it should be against me, not against the officer concerned. After the phone call I had an occasion to go to the Telangana Chief Secretary to discuss another issue. The Commissioner of Police rushed there. The Telangana CS also looked visibly annoyed that we have transferred the Rs 1000 cr corpus to a bank at Vijayawada. For the first time I saw him losing his cool and being in a highly agitated mood. In the evening, I attended a programme at Ravindra Bharati along with our Chief Minister who also enquired about this incident. I informed him that I spoke to the Commissioner of Police and the officer would be released shortly. By 7 o’clock in the evening he was released by the police after questioning.

The Telangana government did not leave the issue at this stage. They conducted a raid on the house of Mr. Murali Sagar and booked a case against him and went to Andhra Bank to collect evidence about the transfer of funds. When this came to my notice, as the Governor was entrusted with special responsibility for the common capital area, I rang up the Secretary to the Governor, Mr Ramesh Kumar and briefed him that the manner in which the Telangana government was pursuing this as a criminal case was not proper, as the transfer of funds is from one government bank to another. I requested him to inform the Governor and ensure that no further action is taken by the police in this regard. He discussed the matter with the Governor and tried to tell me that no such thing had happened. I had to tell him strongly that the information the Governor received was not correct and if they want I can send the Andhra Bank manager whom the police met to collect evidence. After my second phone call, the Governor got alerted and firmly told the police not to proceed further in this matter.

The next day I went to brief the Governor on this matter. By then the Telangana chief secretary had come and told him his version and left. Based upon the briefing received from him, the Governor was in an angry mood and started shouting at me why I transferred those funds to Vijayawada. Immediately I got up and told him there is nothing much to discuss if he has already formed an opinion about the issue based upon the briefing he received from the chief secretary of Telangana and I can only be in a position to explain if he has an open mind on the issue and started walking away. He then calmed down, called me back and requested me to sit and took the briefing from me. I told him what happened earlier with reference to the state remote applications agency funds and the general view of the Telangana state government that all corpus funds of Schedule 10 institutions belong to them, and the only way to save our interests was to transfer the funds to Vijayawada. After hearing me he was convinced with my argument.

The Union Cabinet Secretary called both the chief secretaries for a briefing and after hearing us requested us to sort out the issues on a mutually accommodative basis. The unfortunate thing is when there were issues on which the states did not agree, Government of India failed to intervene and resolve the issues. Most of the time they were looking for both of us to sit together and sort out issues on an amicable basis. Since that was not happening, matters started ending up in the courts for a decision.

I introduced Mr Murali Sagar to the Chief Minister and informed him that we will have to take care of him as he stood firm in our state interests against all odds. When the final allocation of officers was made by the Kamalanathan committee, as per the formula he was allotted to Telangana. I took up the matter with the Department of Personnel and told them we would be creating an additional post to accommodate him. The issue could not be sorted out before my retirement and he came to me even after my retirement on this issue and I pursued the matter with the then AP Chief Secretary, Mr Tucker. Finally Government of India orders allocating Mr Murali Sagar to Andhra Pradesh cadre came one month before his retirement in August 2017, and he retired in September.

The latest position on each one of these contentious issues is as follows: The division of the staff is successfully completed for most of the cadres and the Kamalanathan committee is wound up. The only cadres that are yet to be divided are deputy superintendents of police, additional SPs and excise superintendents, which are stuck in courts of law with reference to fixation of seniority and other issues. Till those court cases are sorted out, division of these cadres cannot be completed. Regarding Schedule 9 institutions the Sheela Bhide committee still continues and out of 91 (89 Schedule 9 institutions and two others) referred to the committee, division of 41 institutions is completed by the committee. Final orders with the consent of both the government were issued only with respect to a few institutions though informally they all are functioning separately. Regarding Schedule 10 institutions, in about 10% of the institutions where both the states have mutually agreed, the division is completed. Since the AP government feels the central government circular about the division of corpus without division of assets is not in conformity with the Supreme Court judgement, they filed a case in High court against the Centre’s order and are awaiting further orders on that.

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