| In Kapila Hingorani vs State of Bihar, the court insisted that the intricate legal issues raised by those states can wait, but the arrears should be paid immediately. |
| The court has asked them to deposit Rs 100 crore on that account. There were scores of starvation deaths and suicides by employees of state companies who had not received wages for several years. |
| Extraordinary situations demand extraordinary remedies and the court invoked its special powers to pass two reasoned orders in this case. |
| The states have argued that the government is not responsible for payment of salaries of these companies. They contend that the statutory corporations and other public undertakings are not completely under government control. |
| They were set up under the Companies Act. If the employees have any complaint, they should file appropriate applications before the company judge. |
| Already, there are winding up applications in relation to 18 companies. Alternatively, the employees can approach the industrial court for relief, according to the state governments. |
| The Supreme Court not only rejected these contentions, but also took the case above ordinary legal plane. It said that it was not laying down the law at the moment and not examining the vicarious liability of the state for payment of salaries of its undertakings. |
| What it was dealing with was a human rights problem of great magnitude. The duty of the government flows from Article 21 of the Constitution, which deals with life and liberty of the citizens. |
| If the state has a duty to protect these fundamental rights of citizens, they must do so all the more in the case of their own employees. |
| Even legally, the court found prima facie that the state could not take such a hands-off attitude. |
| Although the liability of the directors of the company may be confined to the shares held by them, having regard to the deep and pervasive control the government exercises over its companies, it has an additional duty to see that the human rights of the employees are not infringed. |
| The state also acts in a fiduciary capacity with reference to its constitutional obligation towards its employees. |
| "It is a matter of regret that despite statutory power as also the power of control vested in the state either under the statute or in terms of the articles and memorandum of association of the respective government companies, it did not exercise the same and now raised a contention that the state had no effective control over the functions of the public sector undertakings," the court emphasised. |
| The court had appointed a committee chaired by a retired high court judge to monitor the disbursement of the amount deposited by the two states and lay down the proportion of the liability of the two states as the undertakings are situated in both Bihar and Jharkhand. |
| According to the committee's report, the two instalments of Rs 50 crore each ordered to be paid to the employees are only a pittance when one views what is really due to them. |
| For instance, the approximate amount involved for payment of arrears of salaries of Bihar State Sugar Corporation is Rs 130 crore. The State Leather Industries Development Corporation owes Rs 62 crore in arrears. |
| About the same figure is shown against the State Industrial Development Corporation and the State Agro Industries Development Corporation. Nine other sick companies below them have an arrears of over Rs 100 crore. |
| The Supreme Court has clarified that it was ordering immediate payment as it was a question of "survival" of the employees. No law is laid down. |
| Legal minutiae can wait. This is, thus, an exceptional position. In criminal law, the court has interfered in the name of human rights, as in the case of Gujarat riots. |
| However, invoking human rights in the case of government companies brings in a new dimension to constitutional jurisprudence. |
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