The main legal point established in the judgment is that the autonomy of agencies as outlined in the Act prohibits state interference in their day-to-day proceedings.

1. The Secretary of the department has filed his personal affidavit. The affidavit filed by him simply shows that the Government is disowning these corporations/agencies as their babies. It is submitted by the Secretary in his counter affidavit that the Chairman of the agencies had been appointing people illegally and the State is to put to unnecessary loss. It is also stated in the affidavit that a poor State like Bihar is unable to bear the expenses, therefore, the agency must generate its fund in accordance with the provisions of the Act. On one side, the State Government says that these agencies are developmental autonomous agencies and at the same time the State says that the agencies would not be justified in giving salary to its staff in the revised pay scale. I fail to understand the stand taken by the State Government. If the bodies are autonomous, they would be always free to take their own decision and if it is not autonomous and has to dance to the tune of the State Government or it is a baby delivered by the State authority then the State has to look after it. The State cannot be allowed to act in a dubious manner. They cannot be allowed to eat cake and have it. Looking into the convenience of the State the affidavits are being filed and the authorities say that it is an autonomous body, therefore, the State is not answerable but at the same time they say that the cabinet has taken a decision that the employees of these agencies should not be paid in the revised scale. In paragraph 5 of the affidavit, it is said that the decision regarding the revised pay scale to the State employees do not cover them. The State says that it became necessary that the proposal of revised pay scale for these agencies should be sent to the Council of Ministers. I am again at a loss to understand that if it is an autonomous body under the Act and is getting certain grants from the State Government or the Central Government then how can the State Government take a policy decision in the matter of an autonomous body, how can the State Government thrust its opinion upon an autonomous body. It appears that the State Government wants to have the control of the agency but without any further liabilities. The State Government appears to have created these agencies mainly to avoid direct burden on the exchequer and not to give the status of the government employees, to the employees of the agency. If the State creates an autonomous body under an Act then the State except as provided under the Act cannot interfere with the management of the autonomous body. It cannot ask the management to observe the decision of the State Government nor it can ask its Officers who are sent on deputation to take a decision as the State Government wants.

2. Let the Secretary of the department file his further affidavit that if the agencies are autonomous bodies then under what authority of law or under what authority of administrative business or under what authority of Act No. 3 of 1979, the State has issued a direction that the government employees sent on deputation would be paid in full and the employees engaged by the agencies would not be paid in their revised pay scale. It is also to be seen from Section 3 of the Act that the agency is to be constituted in a particular manner. Section 4 says that for every agency set up under section 3 of the Act, the State Government shall by notification published in the official gazette, constitute a board consisting of the persons well described in sub paragraphs (a) to (m) of sub-section 1 of section 4. A bare perusal of section 4 would show that the Board is to be appointed by the State Government. The policy decisions are to be taken by the Board. Sub-section 2 of Section 4 says that the Chairman of the Board and the Managing Director shall be appointed by the State Government who shall hold office at the pleasure of the State Government and the State Government shall prescribe terms and conditions. In the