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Supreme Court Of India
N. SANTOSH HEGDEAND S.B. SINHA, JJ
KAPILA HINGORANI - Petitioner;
Versus
STATE OF BIHAR -Respondent.
IAs Nos. 7 & 9-10 in Writ Petition (C) No. 488 of 2002
Decided on January 13,2005
Advocates appeared
Mohan Parasaran, Additional Solicitor General and Prabha Shanker Mishra, Senior Advocate (Amicus Curiae) [Tathagat Harsh Vardhan, Ms Priya Hi ngorani , Advocates, petitioner in person, Dr. Aman Hingorani, B.B. Singh, Ms Sunita R. Singh, Rajeev Shanker Dwivedi, Amit Kumar, Ashish Kumar, Vishnu Sharma, Gaurav Dhingra, Ms Sandhya Goswami, Ms Sushma Suri, Advocate for the Attorney General for India and Ashok Mathur, Advocates] for the appearing parties.
1998(4) SCC 59-Relied.
Constitution of India-Articles 21, 12 and 23-Non-payment of salaries to workmen and employees of State owned Corporations, Public sector undertakings or statutory bodies since long-Govt. companies/public sector undertakings being "States" would be constitutionally liable to respect life and liberty of all persons in terms of Article 21 of the Constitution of India-It had an additional liability having regard to its right of extensive supervision over the affairs of the company The State having regard to its right of supervision and/or deep and pervasive control cannot be permitted to say that it did not know the actual state of affairs of the State Government undertakings and/or it was kept in dark that the salaries of their employees had not been paid for years leading to starvation death and/or commission of suicides by a large number of employees- Concept of accountability arises out of power conferred on an authority-State acts in a fiduciary capacity- The State may not be liable in relation to day to day functioning of the companies but its liability would arise on its failure to perform constitutional duties and functions by the public sector under takings as in relation there to the State constitutional obligations. (Paras 29 to 33)
(2001)7 SCC 1 (1994)4 SCC 548, (1982)3 SCC 235, (1983)1 SCC 124, (1985)3 SCC 545 (1964)7 SCR 17, (1982)2 SCR 1, (1977)3 SCC 483, (1981)2 SCR III, (2003) 2SC 111(1998)4 SCC 59, (1994)12 ITR 458, (1969)1 SCR 988, (1967)1 SCR 934, (1985)4 SCC 11, (1951)1 SCC 478, (1998)4 SCC 59 (1978) 4 SCC 257, (1993)3 SCC 601. (2001)5 SCC 111, (1975)1 SCC 485, 1975 SC 1331, (1981)1 SCC 722, (1991) 4 SCC 578-Referred.
Constitution of India-Articles 21, 12 and 23-Non payment of salaries to workmen and employees of State owned corporations, public sector undertakings or statutory bodies since long-Financial stringency may not be ground for not issuing requisite directions when question of violation of fundamental right arise-By no stretch of imagination, the liability of State of Bihar can be shifted to Union of India only because the Union of India allegedly is repository fund raised it through central excise and other lines and impost the same by itself would not mean that it is directly or vicariously liable for the failing on the part of State Public sector undertakings-Either precedentially or jurisprudentially Union of India cannot be held liable-No such direction can be issued-State cannot escape its liability when a human death and suicide by employees had taken place due to nonpayment of salary for a long time-State of Bihar is directed to deposit a sum of 50 crores in two instalments before High Court for disbursement of Salaries to the employees of corporations-High Court may strive to dispose of all liquidation proceedings in respect of Govt. companies owned and controlled by State of Bihar. (Paras 64, 66, 73 & 74)
AIR 1987 SC 359, (1980)4 SCC 162, AIR 1996 SC 2969, (1993)3 SCC 584, (1995)4 SCC 507-Referred.
Constitution of India-Article 298-1f confers prerogative upon the State to carry on trade and business-While doing so State must fulfil its constitutional obligations-It must oversee protection and preservation of rights as adumbrated in Articles 14, 11, 21 and 300A of the Constitution of India-State cannot be permitted to say that it has no such duty towards it own citizens. (Paras 35 and 37)
Constitution of India-Article 21- The terms life used in Article 21 has a wide and far reaching concept-It includes livelihood and so many other facets there of-Life mean something more than mere animal existence and the inhibition against the deprivation of life extends to all those limits and faculties by which life is enjoyed.
(1997)94 SC 113, 1983(1) SCC 124, AIR 1978 SC 597, (1985)3 SCC 545, AIR 1967 SC 1836, AIR 1963 SC 1295, JT 2003(3) SC 359, AIR 1997 SC 1539, AIR 1982 SC 6 AIR 1997 SC 95, AIR 1997 SC 10, AIR 1996 SC (1993)1 SC 645, (2002)8 SCC 481, AIR 1995 SC 92, AIR 1997 SC 125, AIR 1987 SC 955, AIR 1995 SC 92, AIR 1997 SC 125, AIR 1987 SC 955, AIR 1999 SC 822, AIR 1997 SC 3011, (1999)2 SC 34 (2001)6 SCC 496, (2003)1 SCC 104-Referred.
Interpretation of Statutes-Constitutional provisions must be so interpreted so as to advance its socio economic objectives, exaction of labour and services against payment of less than the minimum wages amounts to forced labour within the meaning of Article 23 of Constitution of India-Interpretation of Constitution of India or Statute would change from time to time-Being a living organ it is ongoing and with passage of time law must change-New rights may have to be found out within the Constitutional Scheme-Horizons of Constitutional law are expanding. (Paras 57 and 59)
(1996)2 SCC 549, (2002)1 SCC 429, 252 US 416 (433), (1980)2 SCC 768, (2000)2 SCCC 465, 1989 (Supp.) (1) SCC 258, (1990)1 SCC 520, 1995 Supp. (2) SCC 182, (1997)11 SC 121, (1982)3 SCC 235, (1938)7 SCC 292, (1990) 1 SCC 328, JT 2003(3) SC 382 - Referred.
Administration of Justice-Corporate veil in certain situations can be pierced or lifted-Whenever a corporate entity is abused for an unjust and inequitable purpose, the court would not hesitate to lift the veil and took into the realities so as to identify the persons who are guilty and liable therefor. (Para 24)
(1988)4 SCC 59-Relied upon.
Constitution of India-Article 21 r/w Articles 12 and 23-Non-payment of salaries to workmen and employees of State owned Corporations, PSUs or statutory bodies in the State of Bihar since tong-Govt. Companies PSUs being 'States' would be constitutionally liable to respect life and liberty of all persons-They must do so in cases of their own employees-State of Bihar, for all intent and purport, is the sole share holder-State acts in a fiduciary capacity-State having regard to its right of supervision and/or deep and pervasive control, cannot be permitted to say that it did not know the actual state of affairs of the State Govt. undertakings and/or it was kept in dark that the salaries of their employees had not been paid for years leading to starvation deaths and commission of suicide by a large number of employees. (Paras 29 to 33)
(2001) 7 SCC 1; (1999)4 SCC 458; (1982)3 SCC 235; (1983)1 SCC 124; (1985)3 SCC 545; 1964 (7) SCR 17; 1982 (2) SCR 1; (1977)3 SCC 483; 1981 (2) SCR 111; (2003)2 SCC 111; 1897 AC 22; (1944)12 ITR 458; 1969 (73) ITR 702; 1967 (1) SCR 934; (1985)4 SCC 11; (1995)1 SCC 478; (1988)4 SCC 59; (1978)4 SCC 257; (1999)3 SCC 601; (2002)5 SCC 111; AIR 1975 SC 1331; (1981)1 SCC 722-Referred to.
(1975)1 SCC 485; (1991)4 SCC 578-Since held not correctly decided.
Constitution of India-Article 298-Article 298 confers a prerogative upon the State to carryon trade or business-While doing so the State must fulfil its constitutional obligations-it must oversee protection and preservation of the rights as adumbrated in Articles 14, 19, 21 and 300-A of the Constitution-If it is considered to be the duty of the citizen to remind himself of the aspirations of the Constitution makers, the State cannot be permitted to say that it has no such duty towards its own citizens. (Paras 35 and 37)
Interpretation of Statutes-A statute should be interpreted in the light of international Treaties and Conventions-Being a living organ, it is ongoing and with the passage of time, law must change-New rights may have to be found out within the constitutional - scheme-Constitutional provisions must be so interpreted so as to advance its socio-economic objectives-Exaction of labour and services against payment of less than the minimum wages amounts to forced labour within .- the meaning of Article 23 of the Constitution. (Paras 57, 59 and 64)
(2002) 1 SCC 428; (1996)2 SCC 549; 252 US 416 (433); (1980)2 SCC 768; (2000)2 SCC 465; 1989 Supp. (1) SCC 258; (1990)1 SCC 520; 1995 Supp (2) SCC 182; (1997) 11 SCC 121; (1982)3 SCC 235; (1998)7 SCC 392; (1990)1 SCC 328; JT 2003 (3) SC 382-Referred to.
Constitution of India-Article 21- The term 'life' used in Article 21 of the Constitution has a wide and far reaching concept-It includes livelihood and so many other facts thereof-Life means some thing more than mere animal existence and the inhibition against the deprivation of life extends to all those limits and faculties by which life is enjoyed. (Para 54)
(1877) 94 US 113; (1983)1 SCC 124; (1985)3 SCC 545; AIR 1978 SC 597; AIR 1967 SC 1836; AIR 1963 SC 1295; JT 2003 (3) SC 399; AIR 1997 SC 1539; AIR 1982 SC 6; AIR 1997 SC 95; AIR 1997 SC 10; AIR 1996 SC 1; (1993)1 SCC 645; (2002)8 SCC 481; AIR 1995 SC 92; AIR 1997 SC 125; AIR 1987 SC 965; AIR 1999 SC 822, AIR 1997 SC 3011; (1999)2 SCC 34; (2001)6 SCC 496; (2003)1 SCC 184-Referred to.
Constitution of India-Article 21 r/w Articles 12 and 23-Non-payment of salary to workmen and employees of State owned corporations and PSUs since long-Financial stringency may not be a ground for not issuing requisite directions when a question of violation of fundamental right arises-Either precedentially or jurisprudentially the Union of India cannot be held liable-If the State or State agencies have failed to perform their duties, it cannot under the wrap of financial stringency seek to shift its liability to the Union of India or the State of Jharkhand-State cannot escape its liability when a human rights problem of such magnitude involving starvation deaths and suicide by employees had taken place due to non-payment of salary for a long time-State of Bihar directed to pay Rs.50 crores at present for disbursement of salary to the employees of Corporations-High Court directed to dispose of all liquidation proceedings. (Paras 62 to 74)
20 ELER 20832 : (1990)901 F 2d 1550; AIR 1987 SC 359 : 1986 Supp. SCC 517; (1980)4 SCC 162; AIR 1996 SC 2969; (1993)3 SCC 584; (1995)4 SCC 507-Referred to.
ORDER
1. This Court in this case disposed of on 9-5-2003 since reported as Kapila Hingorani v. State of Bihar1 issued certain directions. Those directions need not be reproduced herein. Pursuant to or in furtherance of those directions, the State of Bihar has deposited a sum of Rs 50 crores. The High Court of Judicature at Patna has also constituted a Committee headed by Honble Mr Justice Uday Sinha, a former Judge of the Patna High Court.
2. A report of the said Committee has been placed before us, from a perusal whereof it appears that a sum of Rs 25,98,65,883.00 had been recommended for payment to the employees of most of the undertakings. Payment to Bihar State Sugar Corporation was said to be in the pipeline which came to be about Rs 17 crores. It has been pointed out that BSIDC and units of other corporations in Jharkhand have not been paid yet and the Committee is left with Rs 6 crores and odd.
3. An application for clarification has been filed by the petitioner herein a marked as IA No. 7 of 2004 wherein it has been prayed that Jharkhand Hill Area Lift Irrigation Corporation Limited (JHALCO) be treated as successor of Bihar Hill Area Lift Irrigation Corporation (BHALCO) from 15-11-2000 onwards. It has further been contended that employees of Bihar Hill Area Lift Irrigation Corporation Ltd. would be absorbed by Jharkhand Hill Area Lift Irrigation Corporation Ltd., only if they forego their claim of salary for period prior to the respective dates of absorption.
4. A prayer therefore has been made to clarify the order dated 9-5-20031 as to whether the State of Bihar or the State of Jharkhand or both would be required to pay the unpaid salary to the employees of BHALCO.
5. Another interlocutory application being IA No. 9 of 2004 has been filed by the petitioner praying therein for a direction upon the respondent C State of Bihar and/or State of Jharkhand to deposit sufficient sum of money with the Honble Patna High Court so that at least the employees of the corporations listed in the order dated 9-5-20031 be paid their salaries.
6. Counter-affidavits affirmed by Shri Ashok Kumar Choudhary, Chairman, Bureau of Public Enterprises, Government of Bihar, Patna have been filed on behalf of the State of Bihar both in IA No.7 and IA No.9 of 2004. In the counter-affidavit filed in IA No.7 of 2004, it has been contended that the Government of Bihar will initiate liquidation proceedings in respect of BHALCO and having regard to the offer made by the State of Jharkhand no relief should be granted by this Court to the employees of the said Corporation as they may still choose to exercise their option to get absorbed in JHALCO.
7. In the counter-affidavit filed in IA No.9 of 2004, the State of Bihar has contended that the direction issued by this Court in its order dated 9-5-20031 being extraordinary in nature and by way of one-time arrangement only, no direction should be issued directing the State of Bihar to make any further payment.
8. The State of Jharkhand has also been impleaded as a party herein and it has filed a counter-affidavit affirmed by one Shri Binod Kumar Verma, Managing Director, JHALCO, Ranchi wherein a contention is raised that BHALCO is still under the control of the State of Bihar. It has further been affirmed that instead and in place of BHALCO, a new corporation known as JHALCO had been incorporated and registered with the Registrar of Companies, Jharkhand on or about 22-3-2002. The said JHALCO is, thus, said to be a new corporation and has nothing to do with BHALCO and in any event, it is not the successor of BHALCO.
9. It is not in dispute that pursuant to or in furtherance of the directions issued by this Court, the Central Government has exercised its jurisdiction under Section 65 of the States Reorganisation Act.
10. The Union of India has filed an affidavit wherein it has been contended that winding-up applications have already been filed by the State of Bihar in relation to .the following eighteen companie
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