LexKAPILA HINGORANI versus STATE OF BIHAR
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
KAP!LA H!NGORANI A v. STATE OF B!HAR MAY 9, 2003 [V.N. KHARE, CJ. AND S.B. SINHA, J.] B Constitution of India, 1950: Articles 12,14,19 21, 23,32 and 300A-Companies!Corporations owned by State of Bihar-Non-payment of sala1y to employees for a long time, in C some cases, for a decade or more-Starvation deaths of and/or suicide by employees/their dependents reported-Writ petition in public interest filed before Supreme Court involving issues regarding liability of State Government of Bihar and that of Union of India and State of Jharkhand-Held, State Government of Bihar has made itself liable to mitigate the sufferings of the D employees of the public sector undertakings or the Government companies- fnterim directions issued suggesting modalities for disbursement of salaries to employees-liquidation proceedings of Government Companies to be disposed of expeditiously-Right of workmen shall be considered in terms of s.529-A of the Companies Act-liability of the State of Bihar cannot be shifted to the Union of India-Only because the Union of India allegedly is repository of E funds raised by it through Central Excise and other levies and impost, the same by itself would not mean that it is indirectly or vicariously liable for the failings on the part of the State Public Sector Undertakings-No direction is issued as against the State of Jharkhand as no step had been taken by the Central Government in terms of Section 65 of the Bihar Reorganisation Act- F The investments made by the State in the public sector undertakings in pursuit of social justice is from public account-ft is in this behalf accountable to the public through the legislature-If the State or the State agencies have failed to perform their duties, it cannot under the wrap of financial stringency seek to shift its liability to the Union of India or lo the State of Jharkhand- Financial stringency may not be a grozmd for not issuing requisite directions G when a question of violation offimdamental right arises-Central Government to take a decision as regards division of assets of Government companies in terms of the Bihar State Reorganisation Act-Whether the State is directly or vicariously liable to pay salaries/remunerations of the employees of the public sector undertakings or the Government companies in all situations is left H 175 176 SUPREME COURT REPORTS [2003] SUPP. I S.C.R. A open-Public Interest litigation-Bihar Reorganisation Act, 2000-S.65- Companies Act, 1956-S.529-A. Rural litigation and Entitlement Kendra and Ors. v. State of Uttar Pradesh and Ors., AIR (1987) SC 359=119861 Supp. SCC 517; B.L. Wadhera v. Union of India, AIR 1996 SC 2969; All India Imam Organization and Ors. B v. Union of India and Ors., 119931 3 SCC 584 and State of H.P. v. H.P. State Recognised and Aided Schools Managing Committee and Ors., 1199514 SCC 507, relied on. Articles 12 and 21-Although a company incorporated under the C Companies Ac/, I956 is a juristic person and indispulab(v has a dis/incl and separa/e entity vis-a-vis its shareholders, !he corporate veil can be pier.:ed when the corpora/e personality is found to be opposed to justice, convenience and interest of the revenue or the workmen or against public interest-The Government companies/public sector undertakings being "State" would be constitutionally liable to respecl life and liberty of all persons in terms of D Article 21-They, therefore, must do so in cases of their own employees-The State mey not be liable in relation to the dcy to dey funclioning of !he Companies, but its liability would arise on its failure to perform the constitutional duties and functions by the public sector undertakings, as in relation thereto the State's constitutional obligations, the State acts in a fiduciary capacity. E Steel Authority of India ltd and Others v. National Union Waterfront Workers and Ors., 120011 7 SCC I; Electronics Corporation of India ltd. and Others v. Secretary, Revenue Department, Govt. of Andhra Pradesh and Others, 1199914SCC458; State of UP. and Ors"v. Renusagar Power Company and F Ors., (19881 4 SCC 59; CIT, Madras v. Meenakshi Mills Ltd and Ors., (19671 l SCR 934; Workmen employed in Assn. Rubber Industry Ltd, Bhavnagar v. Associated Rubber Industry Ltd Bhavnagar and Anr., [19851 4 SCC 11; New Horizons ltd. and Anr. v. Union of India and Ors., f19951 I SCC 478; State of UP. and Ors. v. Renusagar Power Co. and Ors., (19881 4 SCC 59; Hussain
Excerpt shown. Read the full judgment & AI analysis in Lexace.