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TMI Blog2013 (11) TMI 1795X X X X Extracts X X X X X X X X Extracts X X X X ..... urt, for some employees have breathed their last due to starvation, constant stress being unable to meet the keen demands of appetite, and the impecuniosity that hampered them to avail timely treatment, and some families have been unwillingly driven to a state of unmeaningful survival-an animal existence-sans proper food, sans clothes and sans real shelter. It is not because of any natural calamity beyond human control but because two States, namely, State of Jharkhand and State of Bihar deliberately have chosen to create an Evershine catastrophe by their act of abandonment of responsibility to pay despite availing work for some years and thereafter disowning them and nonchalantly shifting the burden to other's shoulder and ultimately arguing in chorus that Jharkhand Hill Area Lift Irrigation Corporation (JHALCO) and Bihar Hill Area Lift Irrigation Corporation (BHALCO) being companies registered under the Companies Act, 1956, it is open to the aggrieved employees or their legal representatives to initiate necessary winding up proceedings to get their dues. We can only say that the stand and stance so adroitly put forth by both the States are shorn of their constitutional accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3)1 SCC 305, the court stated that the basic framework of socialism is to provide a proper standard of life to the people, especially, security from cradle to grave. Emphasis has been laid on a vibrant, throbbing socialist welfare society and what is the duty of the State to achieve the said goal. 8. In J.K. Cotton Spinning and Weaving Mills Co. v. Labour Appellate Tribunal of India AIR 1964 SC 737, this Court clearly stated that the concept of social justice is not narrow, one-sided or pedantic, and is not confined to industrial adjudication alone. It is comprehensive. It is founded on the basic ideal of socio-economic equality and its aim is to eliminate disparities and inequalities. 9. In State of Mysore v. Workers of Gold Mines AIR 1958 SC 923 the Court observed thus: 10.... The concept of social and economic justice is a living concept of revolutionary import; it gives sustenance to the rule of law and meaning and significance to the ideal of welfare State. 10. In Y.A. Mamarde v. Authority under the Minimum Wages Act: (1972) 2 SCC 108, the Court observed that under our present Constitution the State is now expressly directed to endeavour to secure to all workers (whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he concept of social justice, dignity of living and the role of the judiciary. The court is bound to respond within the constitutional framework. In this context, the Preamble of the Constitution becomes extremely significant. The Preamble uses the words "social justice" while speaking of "Justice-social, economic and political". Thus, social facet and the economic aspect are the ideal goal of the welfare State. The Constitution casts a responsibility on the State to sustain social and economic security, for the Preamble is the floodlight illuminating the path to be persuaded by the State to set up a sovereign, socialist, secular, democratic republic. [See: D.S. Nakara (supra)]. 15. It is the duty of the Court to see that the philosophy which is ingrained in our Constitution is not atrophied by the State paving a path of deviancy. 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. In this content, we may fruitfully reproduce a passage from Balbir Kaur and Anr. v. Steel Authority of India Ltd. and Ors. (2000) 6 SCC 493: The concept of social justice i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As the events have been unfolded, in the State of Bihar many a Government corporation and companies were not paying the salaries to the employees and the whole thing was in utter chaos. An employee of a statutory corporation had attempted immolation as a consequence of which he sustained serious injuries and, eventually, succumbed to the same. At that stage a public spirited person, Kapila Hingorani, preferred a writ petition under Article 32 of the Constitution before this Court asserting, inter alia, that various Government companies/public undertakings situate in the State of Bihar have not paid salaries to their workmen and other employees for a long time resulting in deaths and insurmountable miseries befell on large number of families dependant on such employees. The two-Judge Bench, dealing with the case of Kapila Hingorani v. State of Bihar (2003) 6 SCC 1 encapsulated the pivotal controversy thus: If at all and to what extent the Government of the State of Bihar is vicariously liable for payment of arrears of salaries to the employees of the State-owned corporations, public sector undertakings or the statutory bodies is the core question involved in this writ petition. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to see that the life and liberty clause in respect of the employees is fully safeguarded. The Government of the State of Bihar had a constitutional obligation to protect the life and liberty of the employees of the government-owned companies/corporations who are the citizens of India. It had an additional liability having regard to its right of extensive supervision over the affairs of the company. It was further held that the State having regard to its right of supervision and/or deep and pervasive control, could not be permitted to say that it did not know the actual state of affairs of the State Government undertakings and/or it was kept in the dark that the salaries of their employees had not been paid for years leading to starvation death and/or commission of suicide by a large number of employees. It has been ruled therein that concept of accountability arises out of the power conferred on an authority. That apart, the failure on the part of the State in a case of this nature must also be viewed from the angle that the statutory authorities had failed and/or neglected to enforce the social-welfare legislations enacted in this behalf e.g. Payment of Wages Act, Minimum Wages Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o it that the sum so deposited and/or otherwise received from any source including by way of sale of assets of the government companies/public sector undertakings be paid proportionately to the employee concerned wherefore, the parties may file their claims before it. 5. The High Court, however, in its discretion may direct disbursement of some funds to the needy employees, on ad hoc basis so as to enable them to sustain themselves for the time being. 6. The rights of the workmen shall be considered in terms of Section 529A of the Companies Act. 7. The Central Government is hereby directed to take a decision as regards division of assets and liabilities of the government companies/public sector undertakings in terms of the provisions of the State Reorganisation Act, 2000. 22. In the said case I.As. 7 and 9 were filed which were decided on 13.1.2005 as reported in Kapila Hingorani v. State of Bihar (2005) 2 SCC 262. The Court took note of the fact that in pursuance of the order dated 9.5.2003 it had directed to deposit Rs. 50 crores and in furtherance of the said direction the State of Bihar had deposited a sum of Rs. 50 crores and the High Court of judicature at Patna had co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s has been contended on behalf of the State of Jharkhand, that a new corporation named as JHALCO has come into being, but keeping in view the fact that the State of Jharkhand itself has given option to the employees of BHALCO, the order of absorption of those employees who opt for employment may be passed at an early date and not later than six weeks from date. The employees concerned need not file any undertaking at this stage as the question as to whether the State of Jharkhand is liable to pay any salary and other emoluments to the employees of BHALCO is a question which would fall for decision in appropriate proceedings. The Court reiterated the principle stating as follows: 37. We make it clear that we have not issued the aforementioned directions to the States of Bihar and Jharkhand on the premise that they are bound to pay the salaries of the employees of the public sector undertakings but on the ground that the employees have a human right as also a fundamental right under Article 21 which the States are bound to protect. The directions, which have been issued by this Court on 9-5-2003 as also which are being issued herein, are in furtherance of the human and fundamental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k the notice of coming into being of JHALCO and further directed that the employees concerned who were to be absorbed need not give an undertaking of foregoing their claims for the past unpaid salaries. Till then, it seems from the language of the order dated 13.1.2005 that no formal order was passed for absorption. Probably, therefore, this Court gave six weeks' time to such employees. (iii) Again, as in the earlier advertisements, only the employees foregoing their claims over salaries could apply, all the employees probably did not apply restricting the number to only 302. In pursuance of the order dated 13.1.2005, 216 more employees had applied and that too without foregoing their claims over salaries. Because of the said situation a decision was taken in a meeting dated 8.8.2005 to review the financial position of JHALCO to curtail the number of employees and to limit the total number of employees to 214. From Para A(f) of the additional affidavit is seen, it will be clear that though there were 152 excess Class IV employees, there was still requirement of 64 officers, as only 14 officers were engaged as against the total sanctioned strength of 78 officers. The exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bilities and assets. The State of Bihar then has further reiterated that the decision of the Central Government to treat BHALCO as a property of the State of Bihar and direction given vide Letter dated 13.9.2004 to take steps for liquidation of BHALCO is not a correct decision, and that it had written a letter to reconsider the same. (vii) The stand taken by the State of Bihar is a bald one. Seen from any angle, the liability could not be altogether shaken off by the State of Bihar to avoid the same on the specious plea that BHALCO has now become JHALCO. That would be an over simplification of the issue. That is apart from the fact that in the memorandum of association of BHALCO, there is a reference to the six districts of Bihar which continued to be in the State of Bihar as its area of operation. That apart, the Order dated 13.9.2004 which is binding on the State of Bihar. By that order, the Central Government had ordered that the State Government of Bihar will initiate liquidation in respect of BHALCO. If that is so, then by the necessary logic, the liability to pay the arrears of salary is that of the State of Bihar, which it must discharge. (viii) As a writ petition is pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yzing the language employed in Section 65 of the Act and steps taken by JHALCO including the somersault and further taking note of the interim order dated 8.7.2008 the learned single Judge opined as follows: It be noticed that right from the beginning when decision was taken to allow the activities of BHALCO to continue in the territory of State of Bihar by the changed name of JHALCO, no such indication was ever given about the staffs being surplus. Moreover, even the advertisements issued by the JHALCO do indicate that applications were called upon from all the willing employees who want to join the services of JHALCO. At that time also no restriction was imposed over the number of employees to be absorbed. In this view of the matter, I do also subscribe the same view as has been expressed by the Hon'ble Supreme Court by observing "figure of 152 as the excess employees is, therefore, clearly misleading. There does not appear any explanation, nor any statistics to justify the curtailing of the employees of JHALCO and such plea seems to have been taken to get out of the rigor of the courts order dated 13.1.2005". Thus, for the reasons discussed hereinabove BHALCO a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reafter, the Division Bench dealing with the intra-court appeal addressed the issue with regard to absorption and opined that there was no reason that the Respondent employees should face non-absorption by JHALCO and, accordingly, directed as follows: 36. We are also of the considered opinion in view of the fact that these employees continued in service in BHALCO the salaries be paid to the employees by the BHALCO till they and absorbed or stand absorbed in the JHALCO and thereafter JHALCO shall pay the salaries of those employees. However, JHALCO can take a policy decision to deal with the employees stand absorbed by virtue of this order passed by this Court whether they are to be retrenched. If retrenched, then it can be done by paying adequate compensation and that decision is to be taken by the management by application of mind judiciously, and keeping in mind the humanitarian approach and our observation may not be treated to be the direction or licence to the JHALCO to remove those employees without there being any just reasons. 37. Since it was the offer of the JHALCO to absorb the employees then as we have already discussed that the JHALCO shall absorb the employees now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s/files have been amalgamated into the JHALCO and the Head Office of the BHALCO is situate in Ranchi, Jharkhand. It is evident from the notification dated 29.12.2001 issued by the State of Jharkhand that the Head Office of BHALCO which has been changed as JHALCO would be at Ranchi as before and under these circumstances to mulct the liability on the State of Bihar is neither just nor fair. (c) The State of Jharkhand has arbitrarily accepted 300 employees of BHALCO to be absorbed in JHALCO without ascertaining as to how many workmen were working in BHALCO at the time the decision was taken and hence, it is the duty of JHALCO to carry out the obligations. (d) In any case, if the employees have any grievance with regard to their non-payment of salary and service conditions including absorption they can take recourse to the statutory remedies as provided under the Companies Act, 1956 and the Industrial Disputes Act, 1947. 34. Mr. Saran, learned senior Counsel, and Mr. Tapas Kumar Sen, appearing for the State of Jharkhand, have advanced the following contentions: (i) The High Court has fallen into grave error by not appreciating that JHALCO had issued various advertisements to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts initially pressed for absorption, yet in course of hearing she conceded that this Court may mould the relief and issue appropriate direction with regard to payment of salary and give a quietus to the lis. THE NECESSITOUS APPROACH IN PRAESENTI 37. We have already adverted to the orders passed by the High Court, noted the respective contentions at the Bar and stated the chequered history of the litigation. The factual expose, as is evident, reflects a very sad scenario. We call it sad as we are disposed to think that when a State is bifurcated by a Parliamentary legislation, both the States and the Centre are required to take certain decisions under the Act and they are required to be taken in quite promptitude and not leaving the poor employees high and dry and suffer for no fault of theirs. 38. The submission, so assiduously made, that it is open to the employees to seek their remedy under the Companies Act, 1956 or under the provisions of the Industrial Disputes Act, 1947, leaves us totally unimpressed regard being had to the facts and circumstances of the case and the plight in which the employees have been put in. This Court on earlier occasion had also categorically clar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to which the Government of Jharkhand has no objection. 41. At this stage the conduct of the State of Jharkhand is relevant to be noticed. We repeat, we have already approved the view of the Division Bench that the State of Jharkhand could not have taken the decision in a unilateral manner. But what steps it had taken are significant for what we are going to direct at a later stage. From the uncurtaining of facts it is demonstrable that the issue pertaining to employees of BHALCO came up for consideration before the State of Jharkhand for post facto approval of acquisition of BHALCO and making it functional as JHALCO. On 9.1.2002 a memorandum of cabinet was drawn for post facto approval. The proposal of acquisition and adoption of BHALCO as JHALCO was placed before the following conditions: 6. Thus under the circumstances the proposal of acquisition and adoption of BHALCO as JHALCO is proposed with the following conditions: A. The establishment expenditure of JHALCO will be brought down. For this the services of those employees who have irregularly been appointed would be terminated as per rules. B. JHALCO will be given full autonomy and it shall function on commercial lines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y would be payable by JHALCO from that date. Vide notice dated 31.7.2003 time was extended till 7.8.2003. Eventually, the Managing Director of JHALCO passed an office order on 17.4.2004 in respect of one of the employees of BHALCO which has been brought on record as a sample order. The conditions laid down in the said office order are reproduced below: 1. This arrangement is totally temporary. 2. Last basic pay and dearness allowance thereon paid in BHALCO shall be paid. 3. No arrears shall be payable of period prior to date of joining. 4. As per requirement and scheme may be posted/appointed anywhere, in JHALCO. 5. He shall be liable to departmental action if any information found in the joining and application is found false. It is relevant to mention here that the services of the said category of employees were made effective from the date of joining in JHALCO, i.e., 20.4.2004. 43. From the aforesaid action taken by the State of Jharkhand it is clear as crystal that it took up the responsibility and the State of Bihar, as it appears, tacitly acceded to the position as a result of which the employees remained at the mercy of JHALCO. At a later stage controversy croppe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 16. 49. In Bhupendra Nath Hazarika and Anr. v. State of Assam and Ors. (2013) 2 SCC 516, while laying emphasis on the role of the State as a model employer, though in a different context, the Court observed: It should always be borne in mind that legitimate aspirations of the employees are not guillotined and a situation is not created where hopes end in despair. Hope for everyone is gloriously precious and a model employer should not convert it to be deceitful and treacherous by playing a game of chess with their seniority. A sense of calm sensibility and concerned sincerity should be reflected in every step. An atmosphere of trust has to prevail and when the employees are absolutely sure that their trust shall not be betrayed and they shall be treated with dignified fairness then only the concept of good governance can be concretized. 50. If the present factual matrix is tested on the anvil of the aforesaid principles, there can be no trace of doubt that both the States and the Corporations have conveniently ostracized the concept of "model employer". It would not be wrong to say that they have done so with Pacific calmness, sans vision, shorn of responsibility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he State of Bihar and have not been absorbed by JHALCO, they should be paid their salary from 1.1.1995 till 29.12.2001. (ii) The State of Bihar shall comply with the directions within a period of three months from today as they are aware of the names of employees who had been paid proportionally out of the deposit made earlier. (iii) The State of Jharkhand shall pay from 29.12.2001 till 13.9.2004. We have fixed the cut-off date for the State of Jharkhand as it had issued the notification on 29.12.2001 creating an erroneous impression and confusion. The date for State of Bihar has been determined regard being had to the date the Central Government took a decision asking the State of Bihar to go for liquidation. (iv) The State of Jharkhand shall pay the amount within a period of four months to those employees or their legal representatives of the employees who have received the amount in proportion from the State of Bihar. (v) The State of Bihar shall deduct the amount already paid by virtue of the order passed by this Court. However, the State of Jharkhand shall pay the entire amount of salary for the period as directed by us as it is clear from the record that it has not pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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