The privity of contract governs the relationship between employer and employee, and the State Government cannot be held responsible for the financial obligations of a separate legal entity.

ORDER :

1. Heard Ms. Subhash Rathi, learned Additional Chief Standing Counsel for the appellants and Sri Saurabh Srivastava, learned counsel for respondents and perused the record.

2. The aforesaid intra-Court appeals under Chapter VIII Rule 5 of Allahabad High Court Rules, 1952 (hereinafter referred to as "Rules, 1952") have arisen from judgment dated 20.01.2004 passed by learned Single Judge in Writ Petition No.6891 of 2003 (Smt. Durgeshwari Sharma and others Vs. State of U.P. and others) along with connected writ petition disposing of writ petition with common judgment with certain directions.

3. All these appeals have arisen from a common judgment dated 20.01.2004 passed by learned Single Judge deciding six writ petitions together by a common judgment. Operative part of judgment reads as under :-

“The State Government is directed to forthwith release a sum of Rs. 50 lakhs for payment of current salaries of these employees. The State Government will thereafter take an entire view of the matter taking into consideration the number of employees who apply for VRS to the revival of project submitted to the State Government within next three months Rs.50 lakhs shall be treated as ad hoc payment to UPICA for payment of current salary. The remaining amount of arrears of salaries shall be disbursed within next three months.”

4. Details of appeal number, writ petition number and parties are given as under :

5. The facts which are not in dispute are that petitioners-respondents (hereinafter referred to as “petitioners”) are all employees of U.P. Industrial Cooperative Association Ltd., Sarvodaya Nagar, Kanpur (hereinafter referred to as “UPICA”) which is an apex level cooperative society registered under U.P. Cooperative Societies Act, 1965 (hereinafter referred to as “Act, 1965”) having primary societies as its members. Petitioners are employees working in head office and regional offices of UPICA. Purpose of incorporation of UPICA is to develop, organize, promote and strengthen industrial cooperation and to coordinate its activities with such cooperative organization across the State and outside India, as have common objects.

6. Petitioners were not paid salary/arrears of salary/wages by the employer i.e. UPICA. They came to Writ Court by filing writ petitions under Article 226 seeking a mandamus for payment of salary.

7. It appears that during the period when matter was pending before learned Single Judge, considering the fact that State Government has deep and pervasive financial, functional and administrative control over affairs of UPICA, it directed the Government to make funds available for payment of salary to petitioners.

8. The petitioners' employer namely UPICA in a counter affidavit filed through its General Manager Sri Sandeep Kumar, pleaded that UPICA is suffering financial problem for the last ten years but is running only because of social objective to help weavers in cooperative sector. The main object of UPICA is to help weavers and weaker sections of Society and for that reason UPICA is still running. The revival project was submitted to State Government by UPICA, as it has found itself unable to meet out even its routine expenses including payment of salary to its employees. Moreso, most showrooms have become unviable and have been closed. UPICA has no funds.

9.