2013 (11) TMI 1795 - SC - Indian Laws

Summary

Issues Involved:
1. Constitutional Accountability and Statutory Answerability
2. Social Justice and Dignity of Living
3. Payment of Salaries and Absorption of Employees
4. Role of the State as a Model Employer
5. Liquidation Proceedings and Division of Assets

Summary:

1. Constitutional Accountability and Statutory Answerability:
The Supreme Court addressed the unbearable tragedy faced by employees due to starvation and stress caused by the abandonment of responsibility by the States of Jharkhand and Bihar. The Court criticized the States for their stance that JHALCO and BHALCO being companies under the Companies Act, 1956, the employees should initiate winding up proceedings to get their dues. The Court emphasized that such a stance is devoid of constitutional accountability and statutory answerability.

2. Social Justice and Dignity of Living:
The Court referred to various precedents to highlight the importance of social justice, dignity of living, and the judiciary's role in ensuring these principles. It stressed that the Preamble of the Constitution and directive principles of State policy cast a responsibility on the State to sustain social and economic security. The Court reiterated that the employer, within the meaning of Article 12 of the Constitution, has a sacrosanct duty to act in terms of the sacred objectives of social and economic justice.

3. Payment of Salaries and Absorption of Employees:
The litigation history revealed that BHALCO employees were not paid salaries for years, leading to starvation deaths and suicides. The Supreme Court had earlier directed the State of Bihar to deposit Rs. 50 crores for salary disbursement. Despite directions, the States failed to resolve the issue, leading to further litigation. The High Court directed the State of Bihar to pay salaries till 16.6.2011 and JHALCO to absorb the unabsorbed employees. The Supreme Court modified this, directing the States of Bihar and Jharkhand to pay salaries from 1.1.1995 to 13.9.2004, with interest, and closed the claim for absorption.

4. Role of the State as a Model Employer:
The Court emphasized that both States and Corporations have failed to act as model employers. They have shown a lack of responsibility and vision, treating employees with indifference. The Court highlighted that a model employer must ensure the legitimate aspirations of employees are not guillotined and that they are treated with dignified fairness.

5. Liquidation Proceedings and Division of Assets:
The Central Government directed the State of Bihar to initiate liquidation proceedings for BHALCO, which the State of Jharkhand conceded to. The Supreme Court noted the States' vacillating stands and directed that the States of Bihar and Jharkhand must pay the employees their due salaries for the specified periods, with interest, and compute the salary component after granting the benefit of pay revision extended to other employees. The claim for absorption was closed.

Conclusion:
The Supreme Court's judgment underscores the constitutional duty of States to ensure social and economic justice for employees, the necessity for prompt and responsible action in bifurcation scenarios, and the imperative for States to act as model employers. The Court provided specific directions for payment of salaries and interest to the affected employees, thereby addressing their prolonged suffering.