R.M.Prasad, J.

1. In this writ petition, the petitioner-Corporation has assailed the validity of the resolution of the State of Jharkhand dated 23.3.2002, contained in Annexure 8, establishing the Jharkhand State Forest Development Corporation Limited and the certificate of incorporation of the said Corporation issued by the Registrar of Companies, Jharkhand on 27 March, 2002 vide Annexure 9.

2. The petitioner-Corporation is incorporated under the provisions of the Companies Act vide Registration No. 1193 dated 10.2.1975 with an authorised capital of Rs. Five hundred lacks, out of which the share of the State of Bihar is 51% and 49% is of the Government of India. According to the petitioner, in almost all the States of Union of India such Corporations were established as per the recommendation of the National Commission on Agriculture with objects to :

(i) accelerate and increase forest production and productivity;

(ii) contribute to better utilisation of forestry products including timber, fuelwood, climbers, herbs, fruits and seeds, leaves and any product of the forest;

(iii) contribute to the development of industries based on forest products; and

(iv) increase the availability of supplies of forest products whether major or minor.

3. The Corporation besides other activities prepared its infrastructure for conducting the trade of Kendu leaves efficiently and in pursuance thereof created Circle Offices, Divisional Offices and Range Offices throughout the erstwhile State of Bihar. The purpose of creation of the Corporation was not only for commercial or business activities, rather its main purpose was to perform all its activities in a scientific and skilled manner for systematic extension and development of forest, to control environmental pollution and to maintain ecological balance and protect the same and at the same time by this activities, to create employment among the rural and weaker sections of people living in concerned area. The Corporation in its 86th Boards meeting dated 10.8.2000 approved shifting of its Head Office at Ranchi subject to approval of the State Government, vide Annexure A to Annexure 6.

4. However in the year 2000 the Parliament (sic) Bihar Reorganisation Act, 2000 and in pursuance thereof a new State to be known as "State of Jharkhand" was created comprising the territories of the existing State of Bihar, namely, Bokaro, Chatra, Deoghar, Dhanbad, Dumka, Garhwa, Giridih, Godda, Gumla, Hazaribagh, Koderma, Lohardaga, Pakur, Palamu, Ranchi, Shahebganj, Singhbhum (East) and Singhbhum (West) districts with effect from 15th November, 2000 and thereupon the said territories ceased to form part of the existing State of Bihar, as per the provisions contained in sec. 3 of the said Act. Part VII of the said Act contains the provisions as to certain Corporations and sec. 65 is the provision with respect to certain companies specified in the Ninth Schedule to the Act, which includes the petitioner-Corporation, namely, the Bihar State Forest Development Corporation Limited. It is stated that after the bifurcation of the two States, the petitioner-Corporation conducted its trade of Kendu Leaves and other minor forest produce in the season 2001 in the entire areas under its control irrespective of the fact that major portion of forest area had fallen in the State of Jharkhand and the petitioner Corporation continued making payment of salary to its employees working in different circles, divisions and ranges falling in the State of Jharkhand and the State of Jharkhand facilitated the petitioner-Corporation to continue its trade as per the provisions of sec. 65 of the Act creating an impression that the State of Jharkhand will not interfered in the functioning of the petitioner-Corporation till the assets and liabilities between the two States or until a specific direction is issued by the Government of India.

5. The State of Bihar sent proposal to the Chairman for division of assets and liabilities vide l