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2005 Supreme(Kar) 772
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
N. Santhosh Hegde and S.B. Sinha, JJ.
Kapila Hingorani —Appellant
Vs.
State of Bihar —Respondent
I.A. Nos. 7 and 9-10 in Writ Petition (C) No. 488 of 2002
Decided on : 13-01-2005
Advocate Appeared:
Mr. Mohan Parasaran, Addl. Solicitor General, Prabha Shanker Mishra, Tathagat Harsh Vardhan, Priya Hingorani, Party-in-person, Aman Hingorani, B.B. Singh, Sunita R. Singh, Rajeev Shanker Dwiwedi, Amit Kumar, Ashish Kumar, Vishnu Sharma, Gaurav Dhingra, Sandhu Goswami, Ashok Mathur, Sushma Suri, Attorney General of India, for the Appellant
The main legal point established in the judgment is that the State of Bihar had a constitutional obligation to protect the rights of employees of government-owned companies and corporations, and was directed to deposit specific sums of money for the payment of arrears of salaries.
Headnote:
State of Bihar - Employee Salaries - States Reorganisation Act - Section 65, Article 21 - Bihar State Industries Development Corporation, Bihar State Leather Development Corporation, Bihar State Electronics Development Corporation, Bihar State Sugar Corporation, Bihar State Medicine and Chemical Development Corporation, Bihar State Fruit and Vegetables Development Corporation, Bihar State Agro Industries Corporation, Bihar State Textiles Corporation Limited, Bihar State Small Industries Corporation Limited, Bihar State Handlooms and Handicrafts Corporation, Bihar State Forest Development Corporation Limited, Bihar State Export Development Corporation Limited, Bihar State Construction Corporation Limited, Bihar State Bridge Construction Corporation Limited, Bihar State Police Building Construction Corporation Limited, Bihar State Water and Sewage Disposal Board, Bihar State Panchayati Raj Finance Development Corporation Limited, Bihar State Film Development and Finance Corporation Limited, Jharkhand Hill Area Lift Irrigation Corporation Limited (JHALCO), Bihar Hill Area Lift Irrigation Corporation (BHALCO) - Section 65 of the States Reorganisation Act was exercised by the Central Government. The court held that the State of Bihar had a constitutional obligation to protect the rights of employees of government-owned companies and corporations. The court directed the State of Bihar to deposit a sum of Rs. 50 crores and the State of Jharkhand a sum of Rs. 25 crores within eight weeks. The High Courts were requested to pass appropriate orders in the liquidation proceedings filed by the States of Bihar or Jharkhand, and any amount paid to the employees was to be subject to the orders passed by the appropriate court of law.
Fact of the Case:
The State of Bihar and Jharkhand were directed to deposit sums of money for the payment of arrears of salaries to employees of various corporations. The court considered the human rights aspects and fundamental rights of the employees of public sector undertakings operating in the State of Bihar.
Finding of the Court:
The court found that the State of Bihar had a constitutional obligation to protect the rights of employees of government-owned companies and corporations. It directed the States to deposit specific sums of money and requested the High Courts to pass appropriate orders in the liquidation proceedings.
Issues: The main issue was whether the State of Bihar and Jharkhand were obligated to pay the arrears of salaries to the employees of various corporations.
Ratio Decidendi: The court held that the State of Bihar had a constitutional obligation to protect the rights of employees of government-owned companies and corporations, and directed the States to deposit specific sums of money for the payment of arrears of salaries.
Final Decision: The court directed the State of Bihar to deposit a sum of Rs. 50 crores and the State of Jharkhand a sum of Rs. 25 crores within eight weeks. The High Courts were requested to pass appropriate orders in the liquidation proceedings filed by the States of Bihar or Jharkhand, and any amount paid to the employees was to be subject to the orders passed by the appropriate court of law.
1. This Court in this case disposed of on 9th May, 2003 since reported in Kapila Hingorani Vs. State of Bihar, (2003) 2 BLJR 1354 , 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 Hon'ble 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 had 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 marked as I.A. No. 7 of 2004 wherein it has been prayed that the 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 9th May, 2003 as to whether the State of Bihar or State of Jharkhand or both would be required to pay the unpaid salary to the employees of BHALCO.
5. Another interlocutory application being I.A. No. 9 of 2004 has been filed by the petitioner praying therein for a direction upon the Respondent-State of Bihar and/or State of Jharkhand to deposit sufficient sum of money with the Hon'ble Patna High Court so that at least the employees of the Corporations listed in the order dated 9th May, 2003 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 I.A. No. 7 and I.A. No. 9 of 2004. In the counter-affidavit filed in I.A. 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 close to exercise their option to get absorbed in JHALCO.
7. In the counter-affidavit filed in I.A. No. 9 of 2004, the State of Bihar has been contended that the direction issued by this Court in its order dated 9th May, 2003 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 place of BHALCO, a new Corporation known as JHALCO has been incorporated and registered to the Registrar of Companies, Jharkhand on or about 22nd March, 2002. The said JHALCO is, thus, said to be new Corporation and 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. 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
