Holding

The State of Bihar is constitutionally liable to mitigate the suffering of employees of its public sector undertakings and cannot escape liability by invoking the Companies Act or financial stringency, though the liability is not absolute in all situations.

Summary

The Supreme Court entertained a public‑interest writ petition alleging that numerous Bihar‑owned public sector undertakings had failed to pay salaries for years, leading to starvation deaths and suicides of employees and their families. The petition sought directions for payment of arrears and held the State of Bihar liable for the hardship. The Court examined whether a government‑owned company is a "State" within Article 12 and whether the State could escape liability by invoking the Companies Act or financial constraints. Relying on precedents that allow piercing the corporate veil when the State exercises deep and pervasive control, the Court held that the State of Bihar cannot evade its constitutional duty to protect life under Article 21 and to prevent forced labour under Article 23. While refusing to declare the State directly liable in all circumstances, the Court issued interim directions ordering liquidation of the sick companies, appointment of a committee to assess assets and liabilities, and a deposit of Rs 50 crore for salary disbursement, also directing the Centre on asset division under the Bihar Reorganisation Act.

Issues considered

The extent of the State of Bihar's liability for payment of salary arrears of its wholly‑owned public sector undertakings.
Whether a company incorporated under the Companies Act can be treated as a 'State' for purposes of Articles 12, 21 and 23 of the Constitution.
Whether the liability of the State can be shifted to the Union of India or to the newly formed State of Jharkhand.
Whether the corporate veil of a government company may be pierced to enforce fundamental rights of its employees.

Legislation cited

Bihar Reorganisation Act, 2000s. s.65
Companies Act, 1956s. s.529-A
Constitution of Indias. Art.12, s. Art.14, s. Art.19, s. Art.21, s. Art.23, s. Art.298, s. Art.300A, s. Art.32, s. Art.51A
Electricity (Supply) Act, 1948s. s.79(c)
Minimum Wages Act
Payment of Wages Act
Protection of Human Rights Act, 1993
Sick Industrial Companies (Special Provisions) Act, 1985

Subjects

State liabilityPublic sector undertakingsCorporate veilFundamental rightsArticle 21Article 23Wage arrearsStarvation deathsHuman rightsBihar Reorganisation ActCompanies Act 1956Interim relief

Judgment

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 ofGovernment 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 offinancial 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. ofAndhra 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; Hussainbhai Calicut v. The Alath Factory Thezhilali Union,
G Kozhikode and Ors., 119781 4 sec 257; Secretary, H.S.E.B. v. Suresh and
Ors., 1199913 SCC 601; Pradeep Kumar Biswas v. Indian Institute ofChemical
Biology and Ors., (2002) 5 SC 111; Sukhdev Singh and Ors. v. Bhagatram
Sardar Singh Rghuvanshi and Anr., AIR (1975) SC 1331; Ajay Hasia and
Ors. v. Khalid Mujib Sehravardi and Ors., 119811 1 SCC 722 and Chander
H Mohan Khanna v. National Council of Educational Research and Training
KAPILA HINGORANI v. STATE 177

and Ors., 119911 4 SCC 578, relied on. A
Sabhajit Tewary v. Union of India and Ors., 1197511 SCC 485; stood
overruled. Bhavnagar University v. Palitana Sugar Mill (P) ltd. and Ors.,
120031 2 SCC 111; Dal Chand and Ors. v. Commissioner of Income Tax.
Punjab, (1944) 12 ITR 458 and Juggilal Kamlapat v. Commissioner of Income
Tax. UP., (19691 1 SCR 988 = (1969) 73 ITR 702, referred to. B
Solomon v. Solomon and Co., (1897) AC 22, referred to.

Article 12 - The term 'life' used in Article 21 of the Constitution of India
has a wide and far reaching concept - It includes livelihood and so many
other facets thereof C
Board of Trustees of the Port ofBombay v. Dilipkumar Raghavendranath
Nadkarni and Ors., 11983J 1 SCC 124; Olga Tellis and Ors. v. Bombay
Municipal Corporation and Ors., 119851 3 SCC 545; Maneka Gandhi v.
Union of India, AIR (1978) SC 597; Satwant Singh v. A.P.O., New Delhi, D
AIR 1967 SC 1836; Kharak Singh v. State of UP., AIR (1963) SC 1295;
Sharda v. Dharampal, JT (2003) 3 SC 399; Common Cause, a Registeed
Society v. Union of India, AIR (1997) SC 1539; Prabha Dutt v. Union of
India, AIR (1982) SC 6; Police Commissioner, Delhi v. Registrar, Delhi High
Court, AIR (1997) SC 95; D.K. Basu v. State of West Bengal, AIR (1997) SC
10; State of Maharashtra v. M.P. Vashi, AIR 1996 SC 1; Unnikrishnan v. E
State ofA.P., 1199311 SCC 645; T.M.A. Pai Foundation v. State of Karnataka,
(2002] 8 SCC 481; CERC v. Union of India, AIR (1995) SC 922; State of
Punjab v. M.S. Chawla, AIR (1997) SC 125; M.C. Mehta v. Union of India,
AIR (1987) SC 965; APPCB v. M.V. Naidu, AIR (1999) SC 822; Visakha
v. State of Rajasthan, AIR (1997) SC 3011; AEPC v. A.K. Chopra, 119991 2
SCC 34; Hinch Lal Tiwari v. Kamala Devi and Ors., 120011 6 SCC 496; S.K. F
Mastan Bee v. General Manager South Central Railway, 120031 1 SCC 184;
People's Union for Democratic Rights and Ors. v. Union of India and Ors.,
1198213 SCC 235; State of Gujarat v. Hon 'ble High Court of Gujarat, 119981
7 SCC 392 and S.M.D. Kiran Pasha v. Government of Andhra Pradesh and
Ors., 119901 l sec 328, referred to. G
Andhra Pradesh State Road Transport Corporation v. The Income Tax
Officer and Anr., 119641 7 SCR 17; Western Coalfield.~ ltd. v. Special Area
Development Authority Korba and Anr., 119821 2 SCR 1, Hem Chand etc. v.
The Delhi Cloth and General Mills Co. Ltd. and Anr. etc., 119771 3 SCC 483
and Som Prakash Rekhi v. Union of India and Anr., !198112 SCR 111, cited. H
178 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A Article 298 r/w. Articles 14,19,21and300A-A liability can be fastened
both upon the owner as also the operator of the company under certain
situations-Concept of accountability arises out of the power conferred on an
authority-The Government of the State of Bihar for all intent and purport is
the sole share holder of the Companies concerned Although in law its liability
B towards the debtors of the Company may be confined to the shares held by it,
but having regard to the deep and pervasive control it exercises over the
Government companies in the matter of enforcement of human rights and/or
rights of the citizen of life and liberty, the State has also an additional duty
to see that the rights of employees of such corporations are not infringed-
In relation to statutory authority, the State had also the requisite power to
C issue necessary directions which were binding upon them, as for example,
Section 79 (c) of Electricity (Supply)Act, ./948 - The power of the State in
the sphere of exercise of its constitutional power including those contained in
Article 298 of the Constitution inheres in it a duty towards public, whose
money is being invested-Article 298 confers a prerogative upon the State to
carry on trade or business-While doing so the State must fulfill its
D constitutional obligations-It must oversee protection and preservation of the
rights as adumbrated in Articles 14, I 9,2 I and 300-A of the Constitution .

United States v. Fleet Factors Corp., 20 ELR 20832=(1990) 901 F 2d
1550; referred to.

E Directive Principles of the State Policy and the Fundamental Duties-
The States ofIndia are welfare States-They having regard to the constitutional
provisions adumbrated in the Constitution and in particular Part IV thereof
laying down the Directive Principles of the State Policy and Part IV-A laying
down the Fundamental Duties are bound to preserve the practice la maintain
p the human dignity-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 have failed
and/or neglected to enforce the social welfare legislations enacted in this
behalf e.g. Payment of Wages Act, Minimum Wages Act etc.-Such welfare
activities as adumbrated in Part IV ofthe Constitution indisputably would cast
a duty upon the State being a welfare State and its statutory authorities to do
G all things which they are statutorily obligated to perform.

Human Rights: Public Sector Undertakings-Employees-Non-payment
of salary-The State cannot escape its liability when a human right problem
of such magnitude involving the starvation deaths and/or suicide by the
H employees have taken place by reason of non-payment of salary to the
KAP ILA HINGORANI v. STA TE 179

employees of public sector undertakings for such a long time-The right to A
development in the developing countries is itself a human right--The same
has been made a part of WTO and GATT-The Universal Declaration of
Human Rights, 1948-The Protection ofHuman Rights Act, 1993-lnternational
Covenant in Economic, Social and Cultural Rights, I 966.

Chameli Singh and Ors. v. State o UP. and Anr., (1996( 2 SCC 549; B
Kishen Pattnayak and Anr. v. State of Orissa, (1989) Supp. 1 SCC 258;
Mis. Shantisar Builders v. Naryan Khimalal Totame and Ors., (1990( 1 SCC
520; P.G. Gupta v. State of Gujarat and Ors., (1995( Supp. 2 SCC 182 and
Ahmedabad Municip!ll Corporation v. Nawab Khan Guiab Khan and Ors.,
(1997( 11 sec 121, referred to.
c
"Human Rights and Indian Values" by Justice M. Rama Jois; "The
Future of Human Rights" by Prof Upendra Baxi; The World Trade
Organization law, Practice and Policy (Oxford) by Matusushita Schoenbaum
and Mauroidis; referred to.

Interpretation of Constitution: Interpretation of the Constitution or D
statutes would change from time to time-Being a living organ, it is ongoing
and with the passage of time, law must change-New rights may have to be
found out within the constitutional scheme-Horizons of constitutional law
are expanding-A statute should be interpreted in the light of the International
Treaties and Conventions-Interpretation of Statutes.
E
Chairman, Railway Board and Ors. v. Mrs. Chandrima Das and Ors.,
AIR (2000) SC 988, relied on.

Al/MS Students Union v. Al/MS and Ors., (2002( 1 SCC 428; Jagdish
Saran and Ors. v. Union of India, (1980( 2 SCC 768 and The State of
Maharashtra v. Dr. Praful B. Desai, JT (2003) 3 SC 382, referred to. F
Missouri v. Hoffan, 252 US 416, referred to.

"Some Reflections on the Reading ofStatutes" by Justice Frankfurther,
referred to.

CIVIL ORIGINAL JURISDICTION : Writ Petition (C) No. 488 of G
2002.

Soli J. Sorabjee, Attorney General, P.S. Mishra, Shanti Bhushan, Rakesh
Dwivedi, Amarendra Sharan, Tathagat Harsh Vardhan, Vishnu Sharma, Ms.
Swarupa Reddy, Aman Hingorani, Ms. Priya Hingorani, Ms. Kapila Hingorani,
B.B. Singh, Saket Singh, Prateek Jalan, Ms. Sushma Suri, Amit Kumar, M.P. H
180 SUPREME COURT REPORTS [2003) SUPP. I S.C.R.

A Jha, Ram Ekbal Roy and Anil K. Chopra for the appearing parties.
In-person for Petitioner

The following Order of the Court was delivered:

If at all and to what extent the Government of the State of Bihar is
B 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.

It appears from the records that various Government companies/public
C sector undertakings, details whereof are stated hereunder have not paid salaries
to their workmen and other employees for a long time resulting in death of
several persons and miseries brought to a large number of families as would
appear from the following:

Statement As of 12.3.2003
D No. of Date from Nos. of Death
S. Name of Public
No. Undertaking Employee which salary of Employees
is due
I. Bihar State Agro Industries 630 May-93 70
Development Corporation
E
2. Bihar State Medicine & 265 Aug-93 II
Chemical Development
Corporation

F 3. Bihar State Handloom & 429 In Headquarter from May 3
Handicraft Corpn. 1996 in Unit from 1993

4. Bihar State Small Scale 141 In Headquarter from 36
Industrial Development April 1995. In Unit from
Corporation April 1993

G 5. Bihar State Sugar Corpora- 9240 From January 2000 in 467
tion Headquarter. In Unit from
April 1992
6. Bihar State Leather 471 From March 1993 13
Development Corpn.
H
KAPILA HINGORANI v. STATE 181

6a. Bihar Finished Leathers 35 A
7. Bihar State Industrial 1551 In Headquarters from July 125
Development Corporation 200 l in Unit from Feb.
1993
8. Bihar State Electronic 157 In Headquarter upto date. 5
Corporation In Unit from April 1998 B
9. Bihar State Vastraya 50 Nov.-96.
Nil
Corporation

10. Bihar State Film 8 Aug.-02 Nil
Development & Financial c
Corporation

11. Bihar State Fruit & 16 From Aug.-94
Vegetable Development
Corporation
D
12. Bihar State Seed 137 From May 1999 5
Development Corpn.

13. Bihar State Fishries 42 Before May 2000 due of32 5
Development Corporation to 40 months
14. Bihar State Food & Civil 1716 Pending from till 40 325 E
Supplies Corpn. months

15. Bihar State Panchayati Raj 130 From March 1996 7
Financial Corpn.

16. Bihar State Construction 657 In Headquarter from 55 F
Corpn. January 1995. In Unit from
January 1992

17. Bihar State Road Transport 5580 Headquarter+ In sum units 205
Corporation from Nov. 1998 Balance in G
from December 1993 Note:

18. Bihar State Khadi 75 Payment of Salaries 71 NA
Gramdhyog Board Staff in non-plan (upto
H
182 SUPREME COURT REPORTS [2003] SUPP. 1 S.C.R.

A date) due from April 94
Staff Salaries

19. Bihar Hill Area Lift 684 NA
Irrigation Corpn.
B
A newspaper report as regard non-payment of salary for a long time
resulting in starvation highlighted the case of one Chandan Bhattacharya, son
of an employee of the Bihar State Agro-Industries Development Corporation
who tried to immolate himself. The incident was widely reported, inter alia,
C in 'The Hindustan Times', Delhi Edition, on 19.9.2002 under the caption
"Empty coffers drive staff to self-immolation bids". The said Chandan
Bhattacharya later on succumbed to the bum injuries suffered by him.

Jn this writ petition, the writ petitioner, a public spirited citizen and a
Supreme Court lawyer, alleged that apart from plight of the employees of the
D public sector undertakings or the statutory authorities, even the teaching and
non-teaching staff of Aided and Unaided Schools, Madrassas and Colleges
have been facing a similar fate. We, however, as at present advised do not
intend to deal with the same. According to the petitioner, from a newspaper
report it would appear that about 250 employees died due to starvation or
E committed suicide owing to acute financial crisis resulting from non-payment
of remunerations to them for a long time. The report further goes on to say
that the leader of the opposition in the Bihar Assembly had alleged that over
I000 employees died "due to lack of salary for a period ranging from four
months to 94 months".

p In its counter affidavit, the State of Bihar does not deny about the
factual statement made in the said writ petition. Its stand, however, is that
salaries are being paid by the statutory authorities, the details whereof are in
the following terms:

"In the following 26 undertakings, salary payments are upto date
G (as on 30.9.2002) and are continuing on a regular basis as per reports
from the Corporation:-
5. Bihar State Financial Corporation Ltd.
6. Bihar State Credit & Investment Corporation
H 7. Bihar State Agriculture Marketing Board
KAPILA HINGORANI v. STATE 183

8. Bihar State Forest Development Corporation A
9. Bihar State Pollution Control Board
10. Bihar State Warehousing Corporation
11. Bihar State Tourism Development Corporation
12. Bihar State Text Book Corporation B
13. Bihar State Minerals Development Corporation
14. Bihar State Housing Board
15. Bihar State Police Building Construction Corporation
16. Bihar State Bridge Construction Corporation
c
17. Bihar State Electricity Board
18. Bihar State Hydro-electric Power Corporation
19. Patna Industrial Area Development Authority
D
20. North Bihar Industrial Area Development Authority
21. Darbhanga Industrial Area Development Authority
22. Patna Regional Development Authority
23. Muzaffarpur Regional Development Authority E
24. Darbhanga Regional Development Authority
25. Gaya Regional Development Authority
26. Bhagalpur Regional Development Authority
27. Bihar State Water & Sewerage Board F
28. Bihar State Minorities Finance Corporation
29. Bihar State Export Corporation, and
30. Tenughat Vidyut Corporation."
As regards the Bihar State Road Transport Corporation, it is contended G
that 50% of salary was paid to the employees as directed by this Court in
Civil Appeal No. 7290 of 1994. The State contends that with a view to clear
the dues, the Corporation would require approximately a sum of Rs.160.35
crores.
However, in relation to the 16 Undertakings, according to the State, the H
184 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A financial implication would be as under:
s. Name of No. of Salary Approxi- Deaths Cause
No. Undertaking employees Due mate reported of death
Since Amount by corpn. as
involved reported
B .>" .>. Bihar State 471+259 March 1993 Rs.62.45 Nil Not
Leather in Bihar Crores Applicable
Industries Finished
Development Leather
Corpn
c 34. Bihar State 265 Aug. 93. Rs.9.46 Nil -do-
Pharmaceuticals crores
& Chemicals
Development
Corpn.
D Hqrs-May Rs.18 23 5 from
35. Bihar State 429
Handloom 1996, Units crores illness,
Powerloom & 1993 Rest not
Handicrafts Dev. reported
Corpn.
E
36. Bihar State 141 HQ Apr. 94 Rs.18 Nil NA
Small Ind. Units April, crores
Corporation 93

37. Bihar State 9240 HQ Jan, 00 Rs.130 4 Illness
F Sugar Corpn. Units April crores
92
38. Bihar State Agro 630 May '93 Rs. 60.73 As in para
Ind. Dev. Corpn. crores III above

39. Bihar State 1551 HQ-July, 01 Rs.61.72 Nil NA
G Industrial Units Feb., crores
Development 93
Corpn.

40. Bihar State 157 HQ up Date Rs. 2.51 Nil -do-

H Electronics Dev. Units April, crores
KAPILA HINGORANI v. STATE 185

Corpn. '98 A
41. Bihar State 50 Nov.,96 Rs.0.70 Nil -do-
Textile crore
Corporation

42. Bihar State Film 08 Aug.,02 Rs. 55,000 Nil -do- B
Dev. & Fin. Per month
Corpn.

43. Bihar State 16 Aug., 94 Rs.1.8056 Nil -do-
Fn1its & Crores
Vegetable Dev. c
Corpn.

44. Bihar State 137 May, 99 Rs. 4.53 5 Inadequate
Seeds Dev. crores Medical
Treatment
Corpn.
D
45. Bihar State 42 32-40 months Rs. I crore Nil NA
Fisheries upto March,
Development 00 Update
Corpn. from
March,00
E
46. Bihar State Food 1716 Upto 40 Rs.16.56 Nil -do-
and Civil Months crores
Supplies
Corporation

47. Bihar State 130 Mar '96 Rs.3.75 Nil -do- F
Panchayati Raj crores
Finance
Corporation

48. Bihar State 657 HQ Jan, 1995 Rs.37.50 Nil -do-
G
Construction Unit 'Jan, crores
Corpn. 1992

49. Bihar Hill Area 684 Being Being Nil -do-
Lift Irrigation Collected collected
Corpn. H
186 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A The State accepts that although the Managing Director of the Bihar
State Small Industries Corporation had initially reported that 14 of its
employees died in harness and 9 after retirement, but in the subsequent report
the Managing Director stated that there is no report regarding suicide or
death due to starvation of any of the employees of the Corporation. It is
averred:
B
" ... The Managing Director of the Bihar Panchayati Raj Finance
Corporation had initially reported that 3 employees of the Corporation
had died, but had not given any details about the date and cause of
their deaths. In his subsequent report the Managing Director reported
that there was no report regarding the suicide or death due to starvation
c of any employee of the corporation. The Managing Director of the
Bihar State Sugar Corporation had initially reported that 4 employees
of the Corporation had died for want of proper treatment. In this
subsequent report the Managing Director has reported that the
employees' Union has submitted a list of 241 employees who have
D died or become disabled. Similarly, the Company Secretary of the
Bihar State Seeds Corporation had initially reported that 4 employees
of the Corporation have died during the period when salary was not
paid. Subsequently, the Company Secretary has reported that 5
employees of the Corporation have died for want of proper treatment.
However, in view of the discrepancy in the two reports of these
E corporations, the concerned Managing Directors have been asked to
make a thorough investigation into the causes of these deaths and to
submit detailed reports in the matter.

I say that the employees Union of the Bihar Hand loom, Powerioom
and Handicrafts Development Corporation has submitted to the
F
Managing Director of the Corporation a list of 7 employees and 2
wives of employees who have died. The cause of death of 4 employees
has not been specified, while 3 employees and 2 wives of employees
are stated to have died due to financial hardship. The Managing
Director of the corporation has reported that no case of suicide or
G starvation death by employees of their dependents have been reported
to the Corporation but the submissions of the employees union is
being verified. The Managing Director has been asked to make a
thorough investigation into the causes of these deaths and to submit
a detailed report in the matter."

H
KAPJLA HINGORANI v. STA TE 187
The records of this case bear out that deaths had occurred owing to A
starvation or malnutrition. The fact that the employees have not been paid
their salaries for a long time; in some cases for a decade or more; stands
admitted.

The Affidavit of the State of Bihar, purported to have been based on
reports of the Managing Director of same Undertaking does not inspire B
confidence. The statements made therein are self-contradictory and
inconsistent. It smacks of lack of bona fide and is full of ~fterthoughts.

The stand of the State of Bihar on law is that having regard to the fact
that most of the undertakings or companies are registered or incorporated C
under the Indian Companies Act, 1956, the rights and liabilities of the
shareholders would be governed by the provisions of the said Act and the
liability of the said companies cannot be passed on to the State by taking
recourse to the doctrine of 'lifting the veil' or otherwise.

Keeping in view the complexity of the matter, this Court appointed D
Shri P.S. Mishra, a senior counsel of this Court, as amicus curiae. Shri
Amarendra Sharan also assisted the court.

The learned amicus curiae has, inter alia, submitted that the independent
investigation revealed that the head offices of the Government companies are
situated in rented premises. It was contended that all shares are owned by the E
State and in some of the cases only one share had been allotted in the name
of the nominee of the Government of the State of Bihar. The allegations of
the writ petitioner to the effect that there had been starvation deaths and/or
suicide by the employees of the public sector undertakings are correct.

Mr. Shanti Bhushan, learned senior counsel appearing on behalf of the F
State of Bihar, would submit that having regard to the magnitude of the
problem, it would be just and proper if liability is directed to be met to the
extent of 80 per cent by the Union of India and that the State Government
will bear the burden to the extent of I 0 per cent thereof and the remaining
may be realised from the sale of properties belonging to the respective G
companies. The learned counsel would submit that pursuant to or in furtherance
ofa decision of the Full Bench of the Patna High Court in C.W.J.C. No.5015
of 1996, liquidation proceedings of the Government companies have been
initiated and they are pending before the Company Judge of the Patna High
Court. Mr. Shanti Bhushan would urge that having regard to the well-settled
principle of law that a company registered under the Indian Companies Act H
188 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A is a juristic person, its rights and liabilities must be determined in terms
thereof and not de 'hors the same. Strong reliance, in this behalf, was placed
on Steel Authority of India Ltd and Ors. v. National Union Water.front Workers
and Ors., [200 I) 7 SCC I and Electronics Corporation of India Ltd and Ors.
v. Secretary, Revenue Department, Govt. ofAndhra Pradesh and Ors., [ 1999)
B 4 sec 458.

Mr. Soli J. Sorabjee, the learned Attorney General appearing on behalf
of Union of India submitted that neither in law nor in equity the Union of
India can be fastened with any liability of the State. The learned counsel
would contend that this Court, with a view to do justice to the parties, may
C direct that an official liquidator be appointed in respect of all the companies
and the learned company judge may further be directed to dispose of the
winding up applications as expeditiously as possible wherein having regard
to the provision contained in Section 598A of the Companies Act the dues
of employees will have primacy. Mr. Sorabjee would urge that the learned
Company Judge may also be directed to look into the Human Right aspect
D of the matter.
Mr. Mishra, learned amicus curiae, would submit that there is no reason
as to why the burden of the State should be shifted to the Union of India and
having regard to the provisions of Articles 21 and 23 of the Constitution of
India, this Court is entitled to pierce the corporate veil of the Government
E companies which are 'States' within the meaning of Article 12 of the
Constitution of India. According to Mr. Mishra, it is beyond any cavil of
doubt that the State for all intent and purport was the sole shareholder of
those companies and as such it cannot escape its liability having regard to the
fact that it had deep and pervasive control including financial control over
F the affairs of the said companies. Mr. Mishra would urge that as indisputably
the corporations owned and controlled by the State of Bihar are 'State' within
the meaning of Article 12 of the Constitution of India, neither they nor the
State of Bihar can escape their liability from enforcing the rights of the
citizens of India under Articles 21 and 23 of the Constitution of India.

G Mr. Mishra would submit that the Full Bench of the Patna High Court
has referred to certain decisions of this Court which did not deal with an
issue of this nature nor it took notice of different facets of Article 21 of the
Constitution of India which would include a right to food, shelter and other
basic amenities. Non-payment of lawful salary to the employees, Mr. Mishra
H would submit, would fall within the definition of 'forced labour' which is
KAPILA HlNGORANl v. STATE 189
prohibited by Article 23 of the Constitution of India. In support of his A
contentions, Mr. Mishra placed strong reliance on People's Union for
Democratic Rights and Ors. v. Union of India and Ors., [ 1982] 3 SCC 235,
Board of Trustees of the Port of Bombay v. Dilipkwnar Raghvendranath
Nadke>rni and Ors., [ 1983] I SCC \24 and Olga Tellis and Ors. v. Bombay
Municipal Corporation and Ors., [I 985] 3 SCC 545.
B
Ms. Hingorani, the petitioner appearing in person, would contend that
the State cannot escape its liability in the matter of payment of salaries to its
own employees; although ostensibly they are working in the companies
incorporated under the Indian Companies Act.

According to the petitioner starvation deaths and/or commission of C
suicide by the employees of the State owned corporation being admitted, this
Court should issue interim directions for payment of salaries to the employees.
Ms. Hingorani would contend that the Government companies or corporations
will have to discharge their constitutional obligations in terms of Article 21
of the Constitution of India. In support of the said contention, reliance has D
been placed on Andhra Pradesh State Road Transport Corporation v. The
Income Tax Officer and Anr., [1964] 7 SCR 17, Western Coalfields ltd v.
Special Area Development Authority, Korba and Anr., [1982] 2 SCR 1, Hem
Chand etc. v. The Delhi Cloth & General Mills Co. ltd and Anr. etc., [1977]
3 SCC 483 and Som Prakash Rekhi v. Union of India and Anr., [ 1981] 2 SCR
111. E

The case at hand poses a large number of complex questions such as:-

I. Whether in a case of this nature, the Court would take a sheer
legalistic approach in holding that the corporate veil would not
be lifted although its conscience stands satisfied that there has F
been violations of citizens' right to life and liberty as adumbrated
under Article 21 of the Constitution of India?;
2. Whether having regard to the admitted position that the
Government Companies or Corporations referred to hereinbefore
are States within the meaning of Article 12 of the Constitution G
of India, the State of Bihar having deep and pervasive control
over the affairs thereof can be held to be liable to render all
assistance to the said companies so as to fulfill its own and/or the
corporations' obligations to comply with the citizens' right under
Articles 2 l and 23 of the Constitution of India?;
H
190 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A 3. Whether the State of Bihar can escape its liability having regard
to the human rights problem involved in the matter?
4. Whether in a case of this nature the liability of the State ofBihar,
if any, can be shifted to the Union of India?

A Company incorporated under the Companies Act is a juristic
B person. A company indisputably has a distinct and separate entity vis-
a-vis its shareholders.

This Court in Electronics Corporation of India ltd 's case (supra) opined:

"A clear distinction must be drawn between a company and its
c shareholder, even through that shareholder may be only one a11d that
the Central or a State Government. In the eye of the law, a company
registered under the Companies Act is a distinct legal entity other
than the legal entity or entities that hold its shares."

Yet again, a Constitution Bench of this Court in Steel Authority of
D India's case (supra) noticed the following decisions to hold that a company
incorporated under the Companies Act being a juristic person would be
governed by the Companies Act.:

"Jn Ramana Dayaram Shetty v. International Airport ofIndia (Ramana
Dayaram Shetty v. International Airport Authority of India, [1979] 3
E
SCC 489 : [1979] 3 SCR 1014) a three-Judge Bench of this Court
laid down that corporations created by the Government for setting up
and management of public enterprises and carrying out public
functions, act as instrumentalities of the Government; they would be
subject to the same limitations in the field of constitutional and
F administrative laws as the Government itself, though in the eye of the
law they would be distinct and independent legal entities. There, this
Court was enforcing the mandate of Article 14 of the Constitution
against the respondent - a Central Government corporation.

Managing Director, U.P. Warehousing Corpn. v. Vijay Narayan
G Vajpayee, ([1980] 3 SCC 459 : [1980] SCC (L&S) 453 : [1980] 2
SCR 773) dealt with a case of dismissal of the respondent employee
of the appellant Corporation in violation of the principles of natural
justice. There also the Court held the Corporation to be an instru-
mentality of the State and extended protection of Articles 14 and 16
of the Constitution to the employee taking the view that when the
H
KAPILA HINGORANI v. STATE 191

Government is bound to observe the equality clause in the matter of A
employment the corporations set up and owned by the Government
are equally bound by the same discipline.

In Ajay Hasia v. Khalid Mujib Sehravardi, Ajay Hasia v. Khalid
Mujib Sehravardi, ([I 98 I] I SCC 722 : [ 1981] SCC (L&S) 258 :
(1981] 2 SCR 79) the question decided by a Constitution Bench of B
this Court was : whether Jam mu and Kashmir Regional Engineering
College, Srinagar, registered as a society under the Jammu and
Kashmir Registration of Societies Act, 1898, was 'State' within the
meaning of Article 12 of the Constitution so as to be amenable to writ
jurisdiction of the High Court. Having examined the memorandum of C
association and the Rules of the Society, the Court decided that the
control of the State and the Central Government was deep and
pervasive and the Society was a mere projection of the State and the
Central Government and it was, therefore, an ins_trumentality or agency
of the State and the Central Government and as such an authority-
State within the meaning of Article 12. D
The principle laid down in the aforementioned cases that if the
Government acting through its officers was subject to certain
constitutional limitations, a fortiori the Government acting through
the instrumentality or agency of a corporation should equally be subject
to the same limitations, was approved by the Constitution Bench and E
it was pointed out that otherwise it would lead to considerable erosion
of the efficiency of the fundamental rights, for in that event the
Government would be enabled to override the fundamental rights by
adopting the stratagem of carrying out its function through the
instrumentality or agency of a corporation while retaining control F
over it. That principle has been consistently followed and reiterated
in ail subsequent cases - see Delhi Transport Corpn. v. D. TC. Mazdoor
Congress, [1991] Supp I SCC 600: (1991] SCC (L&S) 1213, Som
Prakash Rekhi v. Union of India, (1981] 1 SCC 449: [1981] SCC
(L&S) 200, Manmohan Singh Jail/a v. Commr., Union Territory of
Chandigarh, (1984] Supp SCC 540 : [1985] SCC (L&S) 269, P.K. G
Ramachandra Iyer v. Union of India, [1984] 2 SCC 141 : [1984]
SCC (L&S) 214, A.l. Katra v. Project and Equipment Co17m. of
India ltd., [1984] 3 SCC 316: [1984] SCC (L&S) 497, Central
Inland Water Transport Corpn. Ltd v. Brojo Nath Ganguly (Central
Inland Water Transport Corpn. Ltd v. Brojo Nath Ganjuly, [i 986) 3
H
192 SUPREME COURT REPORTS (2003] SUPP. I S.C.R.

A SCC 156 : (1986] SCC (L&S) 429 : (1986) I ATC I03, CV Raman
V. Bank of India, c v Raman V. Bank of India, [ 1988] 3 sec I 05 :

(1988] SCC (L&S) 687, Lucknow Development Authority v. M.K.
Gupta. (1994] I SCC 243, Star Enterprises v. City and Industrial
Development Corpn. of Maharashtra ltd., (1990] 3 SCC 280, l/C of
India v. Consumer Education & Research Centre, (1995] 5 SCC 482)
B and G.B. Mahajan v. Jalgaon Municipal Co11ncil, (1991) 3 SCC 91.
We do not propose to burden this judgment by adding to the list and
referring to each case separately.

We wish to clear the air that the principle, while discharging public
functions and duties the government companies/corporations/societies
c which are instrumentalities or agencies of the Government must be
subjected to the same limitations in the field of public law -
constitutional or administrative law - as the Government itself, does
not lead to the inference that they become agents of the Centre/State
Governmentjor all purposes so as to bind such Government for all
D their acts, liabilities and obligations under various Central and/or
State Acts or under private law.

(Emphasis supplied)
Thus, the law as stated therein is not of uriversal application. The ratio
E of the said decisions must be applied having regard to the fact situation
obtaining therein See Bhavnagar University v. Palitana Sugar Mill (P) Ltd.
and Ors., (2003) 2 SCC 111 - (Para 59). It has its limitations in its applications,
as exceptions exist in several areas.
It is now well-settled that the corporate veil can "in certain situations be
pierced or lifted. The principles behind the doctrine is a changing concept
F and it is expanding its horizon as was held in the State of UP. and Ors. v.
Renusagar Power Company and Ors., (1988] 4 SCC 59. The ratio of the said
decision clearly suggests that whenever a corporate entity is abused for an
unjust and inequitable purpose, the court would not hesitate to lift the veil
and look into the realities so as to identify the persons who are guilty and
G liable therefor.
The proposition that a company although may have only one shareholder
will be distinct juristic person as adumbrated in Salomon v. Salomon and
Co., ( 1897) AC 22, has time and again been visited the application of doctrine
of lifting the corporate veil in revenue and taxation matters. See Dal Chand
H and Ors. v. Commissioner of Income Tax, Punjab, (1944] 12 ITR 458 and
KAPILA HINGORANI v. STATE 193
Juggilal Kamlapat v. Commissioner of Income Tax, U.P., [1969) 1 SCR 988 A
= (1969) 73 !TR 702.

The corporate veil indisputably can be pierced when the corporate
personality is found to be opposed to justice, convenience and interest of the
revenue or workman or against public interest. See C./. T. Madras v. The
Meenakshi Mills ltd and Ors., [1967) 1 SCR 934; Workmen Employed in B
Assn. Rubber Industry Ltd., Bhavnagar v. Associated Rubber Industry ltd.,
Bhavnagar and Anr. (1985) 4 SCC 11; New Horizons Ltd. and Anr. v. Union
of India and Ors., (1995) 1 SCC 478; State of U.P. and Ors. v. Renusagar
Power Co. and Ors., [1988) 4 SCC 59; Hussainbhai, Calicut v. The Alath
Factory Thezhilali Union, Kozhikode and Ors., (1978) 4 SCC 257; and C
Secretary H.S.E.B. v. Suresh and Ors., (1999) 3 SCC 601.

The test that a public sector undertaking or Government company can
be a 'State' within the meaning of Article 12 of the Constitution, only when
it discharges some sovereign functions, has been given a go-bye by this
Court in a recent decision in Pradeep Kumar Biswas v. Indian Institute of D
Chemical Biology and Ors., (2002) 5 SCC 111. Disagreeing with the decision
of this Court in Sabhajit Tewary v. Union of India and Ors., (1975] I SCC
485, it was held that the premises whereupon the ratio of the said decision
was based was not correct and followed the precedents like Sukhdev Singh
and Ors. v. Bhagatram Sardar Singh Raghuvanshi and Anr., AIR (1975) SC
1331 and Ajay Hasia and Ors. v. Khalid Mujib Sehravardi and Ors., (1981] E
I SCC 722. This Court further held that the decision in Chander Mohan
Khanna v. National Council of Educational Research and Training and Ors.,
(1991] 4 sec 578 does not lay down the correct law.

We are not oblivious of the legal proposition as enunciated in Ramana F
Dayaram Shetty and SAIL (supra) that even if a Government company is a
State within the meaning of Article 12 of the Constitution of India as an
agency or instrumentality of the State, there does not exist a relationship of
principal or an agent and only the action of the said authorities would be
State action.
G
The Government companies/public sector undertakings being 'State'
would be constitutionally liable to respect life and liberty of all persons in
terms of Article 21 of the Constitution of India. They, therefore, must do so
in cases of their own employees. The Government of the State of Bihar for
all intent and purport is the sole shareholder. Although in law, its liability
H
194 SUPREME COURT REPORTS [2003] SUPP. 1 S.C.R.

A towards the debtors of the Company may be confined to the shares held by
it but having regard to the deep and pervasive control it exercises over the
Government companies; in the matter of enforcement of human rights and/
or rights of the citizen of life and liberty, the State has also an additional duty
to see that the rights of employees of such corporations are not infringed.

B The right to exercise deep and pervasive control would in its turn make
the Government of Bihar liable to see that the life and liberty clause in
respect of the employees is fully safeguarded. The Government of the State
of Bihar, thus, had a constitutional obligation to protect life and liberty of the
employees of the Government owned companies/corporations who are the
C citizens of India. It had an additional liability having regard to its right of
extensive supervision over the affairs of the company.

In relation to statutory authority, the State had also the requisite power
to issue necessary directions which were binding upon them, as for example,
Section 79(c) of Electricity (Supply) Act.
D
The State having regard to its right of supervision and/or deep and
pervasive control, cannot 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
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
E employees. Concept of accountability arises out of the power conferred on an
authority.

The State may not be liable in relation to the day to day functioning of
the Companies, but its liability would arise on its failure to perform the
constitutional duties and functions by the public sector undertakings, as in
F relation thereto the State's constitutional obligations. The State acts in a
fiduciary capacity. 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 have failed
and/or neglected to enforce the social welfare legislations enacted in this
behalf e.g. Payment of Wages Act, Minimum Wages Act etc. Such welfare
G activities as adumbrated in Part IV of the Constitution of India indisputably
would cast a duty upon the State being a welfare State and its statutory
authorities to do all things which they are statutorily obligated to perform.

In 'The constitution, social rights and liberal political justification',
Frank I. Michelman published in International Journal of Constitutional Law,
H Volume I, page 13, it is stated:
,_
•-
KAPILAHINGORANI v. STATE 195
"Whatever else it may also be, a country's written constitutional bill A
of rights is a high-ranking regulatory law, a "statute" fraught with
direct legal consequences. Granted, the constitution may not be
"simply" that. No doubt it may figure as something beyond positive
law: 'a "mirror reflecting the national soul'," perhaps; an expression
of national ideals, aspirations, and values expected, as such, to "preside B
and permeate the processes of judicial interpretation and judicial
discretion" throughout the length and breadth of the national legal
order. But had bills of rights not also and always registered as direct,
regulatory legislation - as laws to be enforced like other laws - jurists
and scholars the world over would not have conducted their debates
over the constitutionalization of social rights in the terms that we C
have grown used to.

Constitutions, to be sure, are regulatory laws of a special kind, setting
terms and conditions for the making and execution of all other laws.
Typically, although not necessarily, some of the. terms and conditions
are cast in the form of a bill of rights; a list of certain interests of D
' persons, upon whom are conferred what are considered to be legal
rights, not just background moral claims, to have these interests at
least negatively respected, and maybe positively secured and redeemed,
by the state's legislature and other actions yet to come.'

The power of the State in the sphere of exercise of its constitutional E
power including those contained in Article 298 of the Constitution of India
inheres in it a duty towards public, whose money is being invested. Article
298 of the Constitution of India confers a prerogative upon the State to carry
on trade or business While so the State must fulfil its constitutional obligations.
It must oversee protection and preservation of the rights as adumbrated in F
Articles 14, 19, 21 and 300-A of the Constitution of India.

Even before India became independent, our leaders started thinking in
terms of eradication of poverty and discrimination as well as uplift of
downtrodden. At the time of framing of the Constitution, the Constitution
makers had before them the harrowing tales of starvation deaths and G
particularly the infamous Bengal famine.

If it is considered to be the duty of the citizen to remind himself of the
aspirations of the Constitution makers, the State, in our opinion, cannot be
permitted to say that it has no such duty towards its own citizens.
H
196 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A Clauses (a)(b) and (e) of Article 51-A of the Constitution of India read
as under:

"Art. 5 IA. It shall be the duty of every citizen of India -

(a) to abide by the Constitution and respect its ideals and institutions,
B the National Flag and the National Anthem;
(b) to cherish and follow the noble ideals which inspire our national
struggle for freedom;
(e) to promote harmony and the spirit of common brotherhood
amongst all the people of India transcending religious; linguistic
c and regional or sectional diversities; to renounce practices
derogatory to the dignity of women;"

In its attempt to interpret a statute in the light of the constitutional
scheme, this Court has time and again interpreted a statute particularly in the
light thereof. See A.1.1.M.S. Students Union v. A.I.I.MS. and Ors., (2002] I
D sec 428. r

The Universal Declaration of Human Rights, 1948 enumerates at least
27 broad rights including the right to life, freedom from slavery and forced
labour. The Protection of Human Rights Act, 1993 defines Human Rights to
E mean the rights relating to life, liberty, equality and dignity of the individual
guaranteed by the Constitution or embodied in International Covenant on
civil and political rights and International Covenant on Economic, Social and
Cultural Rights which were adopted by the General Assembly of United
Nations on 16.12.1966. The said Act was made by the Parliament "having
regard to the changing social realities and growing concern in India and
F brought about issues relating to Human Rights with a view to bring about
greater accountability and transparency in enforcement of laws of the nation."

Parts Ill and IV of the Constitution of India contain a large number of
rights which guarantee human rights, some of which are akin to the rights
enumerated in International Treaties and Chapters. Article 11 of International
G Covenant in Economic, Social and Cultural Rights, 1966 reads thus:
"I. The States Parties to the present Covenant recognize the right of
everyone to an adequate standard of living for himself and his family,
including adequate food, clothing and housing, and to the continuous
improvement of living conditions. The States Parties will take
H
KAPILAHINGORANI v. STATE 197
appropriate steps to ensure the realization of this right, recognizing to A
this effect the essential importance of international co-operation based
on free consent.

2. The States Parties to the present Covenant, recognizing the
fundamental right of everyone to be free from hunger, shall take,
individually and through international co-operation, the measures, B
including specific programmes, which are needed:

(a) To improve methods of production, conservation and distribution
of food by making full use of technical and scientific knowledge, by
disseminating knowledge of the principles of nutrition and by C
developing or reforming agrarian systems in such a way as to achieve
the most efficient development and utilization of natural resources;"

This Court in Chameli Singh and Ors. v. State of U.P. and Anr., [1996]
2 SCC 549 referring to Article 11 of the International Covenant on Economic,
Social and Cultural Rights, 1966 held that the State parties recognize "the D
right to everyone to an adequate standard of living for himself and for his
family including food, clothing, housing and to the continuous improvement
of living conditions". Indisputably, the State parties were to take appropriate
steps to ensure realization of this thought.

Justice Holmes expressed the following view in Missouri v. Holland E
252 us 416 (433):

"When we are dealing with words that also are a constituent act, like
the Constitution of the United States, we must realize that they have
called into life a being the development of which could not havr been F
foreseen completely by the most gifted or its begetters. It was enough
for them to realize or to hope that they had created an organism, it
has taken a century and has cost their successors must sweat and
blood to prove that they created a nation. The case before us must be
considered in the light of our whole experience and not merely in that
of what was said a hundred years ago." G
Justice Frankfurter elucidated the interpretive role in "Some Reflections
of the Reading of Statutes':

"There are varying shades of compulsion for judges behind different
words, differences that are due to the words themselves, their setting H
198 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A in a text, their setting in history. In short, judges are not unfettered
glossators. They are under a special duty not to overemphasize the
episodic aspects of life and not to undervalue its organic processes -
its continuities and relationships."

In Jugdish Saran and Ors. v. Union of India, [1980) 2 SCC 768, it is
B stated:
'Law, constitutional law, is not an omnipotent abstraction or distant
idealization but a principled, yet pragmatic, value-laden and result-
oriented, set of propositions applicable to and conditioned by a concrete
stage of social develo,Pment of the nation and aspirational imperatives
c of the people. India Today - that is the inarticulate major premise of
our constitutional law and life."

It is also well-settled that a statute should be interpreted in the light of
the International Treaties and Conventions. In Chairman, Railway Board and
D Ors. v. Mrs. Chandrima Das and Ors, AIR (2000) SC 988 = [2000) 2 SCC
465 this Court stated the law thus:-

"24. The International Covenants and Declarations as adopted by the
United Nations have to be respected by all signatory States and the
meaning given to the above words in those Declarations and Covenants
E have to be such as would help in effective implementation of those
rights. The applicability of the Universal Declaration of Human Rights
and the principles thereof may have to be read, if need be, into the
domestic jurisprudence."

F In 'Human Rights and Indian Values' Justice M. Rama Jois noticed the
Ancient Indian Texts in the following words:

SAMANI PRAPA SAHA VONNBHAGA

SAMA NE YOKTRA Y SAHA WO YUNISM
G ARAH NAB HIM IVABHITE:

"All have equal rights in articles of food and water. The yoke of the
chariot of life is placed equally on the shoulders of all. All should
live together with harmony supporting one another like the spokes of
H a wheel of the chariot connecting its rim and the hub. (Atharvanaveda-
KAPILA HINGORANI v. STATE 199

Samjnana Sukta)". A
Thus, the right to equality of all human beings has been declared
in the Vedas, which are regarded as inviolable. In order to emphasize
the dignity of the individual, it was said that all are brothers as all are
the children of God. No one is inferior or superior. Similarly, the
Atharbvanaveda stressed that all have equal right over natural resources B
and all were equally important like spokes in a wheel. Both the Rigveda
and Atharvanaveda declared that co-operation between individuals is
necessary for happiness and progress. It is also of utmost importance
to note that right to equality was made a part of "Dharma" long
before the State came to be established.
c
It is equally interesting to refer to the contents of Articles 1 and
7 of the Universal Declaration of Human Rights (1948), which read:
"All human beings are born free and equal in dignity and rights.
They are endowed with reason and conscience and should act
towards one another in a spirit of brotherhood." D
"All are equal before law and are entitled without any
discrimination to equal protection of the law. All are entitled to
equal protection against any discrimination in violation of this
Declaration and against any incitement to such discrimination".
E
This declaration is similar to the declaration of equality made in
the Rigveda.

After the establishment of the State, the obligation to protect the
right to equality was cast on the Rulers. It was made a part of the
Rules of Raja Dharma, the Constitutional Law. p
YATHA SWARIN BHUTAN! OHARA DHARYATE SAMAM
TATHA SWARIN BHUTAN! BIBHARTE PARTHIVM VARTAM

"Just as the mother earth gives equal support to all the living
beings, a king should give support to all without any
discrimination" (Manu IX 31 ). G
This also meant that the kings were required to afford equal
treatment to all the citizens in the same manner in which a mother
treats all her children."

Prof. Upendra Baxi in his book entitled 'The Future of Human Rights' H
200 SUPREME COURT REPORTS (2003] SUPP. I S.C.R.

A stated:
"The processes of globalization, thriving upon the heavily critiqued
ideologies of developmentalism and its eventual demise, seek to
reproduce the soft state. That notion is, however, now reconstructed
in several important ways. The 'progressive state', at least in, and for,
B the South, is now conceived not as a state in its internal relations with
its own people but in relation to the global community of foreign
investors. A progressive state is one that is a good host state for
global capital. A progressive state is one that protects global capital
against political instability and market failures. A progressive state is
one that represents accountability not so much directly to its peoples,
c but to the World Bank and International Monetary Fund. A progressive
state is one that instead of promoting would visions of a just
international order learns the virtues of debt repayment on schedule.
Finally, a progressive state is one that gleans conceptions of good
governance neither from the histories of struggles against colonization
D and imperialism nor from its internal social and human rights
movements but from the global institutional gurus of globalization.

The construction of 'progress' is animated by a post-Fukuyama
world in which there is not Other to Capitalism, writ globally large.
Of course, the contradictions between democracy and capitalism are
E once again, recognized, but these two are reconstructed, for example
as follows :
War against hunger gets transformed in the 1998 Rome
Declaration on the Right to Food into the free market oriented
state and international management of food security system;
F
The struggle against homelessness and for shelter, in the 1998
United Nations Social Summit at Istanbul, becomes a series of
mandates for the construction industries and urban developers;
'Sustainable development', becomes an instrument of policy for
the promotion and protection of corporate governance practices
G of 'greenwashing';
The UNDP inspired 'mainstreaming' of human rights 'mission'
envisaging the raising of the billion dollars for the Global
Sustainable Development Facility has already been subscribed to
by way of seed money by some of the most egregious
H
KAPILAHINGORANI v. STATE 201

multinational enterprise corporate human rights offenders." A
In the 12 Misconceptions About the Right to Food (FIAN) it is inter
.' alia stated:

"What does the Right to food mean? Can the existence of this Right
cause laziness among people? The Right to Food is about respecting, B
protecting and fulfilling access to food producing resources and work.
Therefore, the Right to Food doesn't make people lazy but busy,
enabling them to feed themselves.

Would the Right to Food be asking for too much from the government,
and advocating for big government? The Right to Food in the context C
of Human Rights doesn't mean that the state is a super-entrepreneur
detennining and carrying out economic activities according to its
own wisdom. It means the Right to Feed Oneself, which emphasizes
dignity and self-reliance, very different from command economics of
big government.
D
Does the Right to Food require a moral revolution of society, allowing
human rights to become the foundation of interpersonal ethics? The
Right to Food does require a moral revolution. However, this moral
revolution does not concern interpersonal ethics, but the duty to
operationalize the state's obligations under Economic and Social
Human Rights. E
Is hunger a violation of Human Rights? Lack of access to food can
have many reason. If the state fails to respect, protect or fulfill this
access, unless for lack of resources in a society, this must be termed
a violation of the human right to food. Very often, the obligations of F
states vis-a-vis the vulnerable groups and persons are obvious and so
is the availability of resources in society.

Is the Right to Food about good governance? Good governance is
negotiable, Human Rights are not. The central concept for Human
Rights is the concept of "violation", referring to the suppression of G
vulnerable groups and individuals, whereas the concepts of good
governance all too often deal with political theory and statistical
indicators. If a country has the resources, but people get marginalized
or continue in deprivation, this is not bad government, but oppression,
intentional or not.
H
202 SUPREME COURT REPORTS !2003] SUPP. I S.C.R.

A Is the Right to Food realized if nobody is hungry anymore? Not
necessarily. The Right to Food not only means that hunger and
malnutrition are eradicated, but that future malnutrition can be
eradicated by court action or other comparable mechanisms holding
the state accountable on its obligations under the Right to Food."

B In Kishen Pattnayak and Anr. v. State of Orissa, [ 1989] Supp. I SCC
258, a Division Bench of this Court while considering poverty and starvation
deaths in drought prone districts of Kalahandi and Koraput in the State of
Orissa having regard to the report of the District Judge of Kalahandi noticed
that Natural Calamities Committee had been constituted at the districts level
C of Kalahandi and Koraput directed the Government of Orissa to recommend
at least five persons belonging to the recognized voluntary 0rganizations like
Sarvodaya Gandhi Peace Foundation, Ramakrishna Mission, Bharat Sewa
Sangha and registered voluntary agencies as members of the said Natural
Calamities Committee. This Court monitored for a long time the measures
taken by the State for the purpose of mitigating hunger, poverty, starvation
D deaths etc. of the people of Kalahandi and Koraput. It opined that if such
measures are taken, there can be no doubt that it will alleviate to a great
extent the miseries of the people of Kalahandi. It was directed :

" .........The Natural Calamities Committee shall also keep a watch
over the working of the social welfare measures which are being
E taken and may be taken in future. Shri Pattnayak also does not dispute
that if such measures are continued to be taken, it will be a great
relief to the people of Kalahandi and Koraput. We hope and trust that
in view of the prompt action that has been taken by the government,
soon the miseries of the people of these two districts will be over."
F Yet again in Mis. Shantistar Builders v. Naryan Khimalal Totame and
Ors .. [ 1990] I SCC 520, this Court observed :-

"Basic needs of man have traditionally been accepted to be three -
food, clothing and shelter. The right to life is guaranteed in any
civilized society. That would take within its sweep the right to food,
G the right to clothing, the right to decent environment and a reasonable
accommodation to live in .... "

This Court upheld the right to shelter in P.G. Gupta v. Stale of Gujarat
and Ors., [1995] Supp. 2 SCC 182, Chameli Singh (supra) and Ahmedabad
H Municipal Corporation v. Nawab Khan Guiab Khan and Ors., [1997] 11
KAPILA HlNGORANl v. STATE 203
sec 121. A

In Chame/i Singh 's case (supra), this Court held:

"In any organized society, right to live as a human being is not
ensured by meeting only the animal needs of man. It is secured only
when he is assured of all facilities to develop himself and is freed B
from restrictions which inhibit his growth. All human rights are
designed to achieve this object. Right to live guaranteed in any civilized
society implies the right to food, water, decent environment, education,
medical care and shelter. These are basic human ;ights known to any
civilized society.......... "
c
It proceeded to held :

"Right to shelter when used as an essential requisite to the right to
live should be deemed to have been guaranteed as fundamental right.
As is enjoined in the Directive Principles, the State should be deemed
to be under an obligation to secure it for its citizens, of course subject D
to its economic budgeting. In a democratic society as a member of
the organized civic community one should have permanent shelter so
as to physically, mentally and intellectually equip oneself to improve
his excellence as a useful citizen as enjoined in the Fundamental
Duties and to be a useful citizen and equal participant in democracy. E
The ultimate object of making a man equipped with a right to dignity
of person and equality of status is to enable him to develop himself
into a cultured being ...."

The term 'life' used in Article 21 of the Constitution of India has a
wide and far reaching concept. It includes livelihood and so many other F
facets thereof. 'Life', as observed by Field, J. In Munn v. Illinois, (I877) 94
US I 13 means something more than mere animal existence and the inhibition
against the deprivation of life extends to all those limits and faculties by
which life is enjoyed. See Board of Trustees of the Port of Bombay v.
Dilipkumar Raghavendranath Nadkarni and Ors., (1983] I SCC 124 and
Olga Tellis and Ors v. Bombay Municipal Corporation and Ors., [I 985] 3 G
sec 545.
In Nadkarni 's case (supra), this Court was dealing with the right of a
workman.
H
204 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A Expansion of the right to life and personal liberty under Article 21 of
the Constitution has been made by implicating :

(i) Right to travel - Maneka Gandhi v. Union of India, AIR (1978)
SC 597 and SatwantSingh v. A.P.O., New Delhi, AIR (1967) SC
1836.
B
(ii) Rightto privacy - Kharak Singh v. State of U.P., AIR ( 1963) SC
1295; Sharda v. Dharampa/, JT (2003) 3 SC 399

(iii) Right to speedy trial - Common Cause a Registered Society v.
Union of India, AIR (1997) SC 1539.
c
(iv) Right to prisoners to interview - Prabha Dutt v. Union of India,
AIR (1982) SC 6.

(v) Right to a fair trial - Police Commissioner, Delhi v. Registrar,
Delhi High Court, AIR (1997) SC 95.
D
(vi) Right against torture and custodial violence - D.K. Basu v. State
of West Bengal, AIR (1997) SC IO

(vii) Right to free legal aid -State of Maharashtra v. MP. Vashi, AIR
(1996) SC I.
E (viii)Right to primary education - Unnikrishnan v. State ofA.P., [1993]
I SCC 645 and T.MA. Pai Foundation v. State of Karnataka,
r20021 8 sec 48 I.

(ix) Right to health and medical care - CERC v. Union of India, AIR
F (1995) SC 922 and State of Punjab v. MS. Chawla, AIR (1997)
SC 125

(x) Right to pollution-free environment - MC. Mehla v. Union of
India, AIR (1987) SC 965.

(xi) Right to Safe drinking water - APPCB v. M. V. Naidu, AIR (1999)
G SC 822

(xii) Sexual harassment of working women - Visakha v. State of
Rajasthan, AIR (1997) SC 3011 and AEPC v. A.K. Chopra,
[ 1999] 2 sec 34.

H
KAPILA HINGORANl v. ST ATE 205
(xiii)Right to a quality life - Hinch Lal Tiwari v. Kamala Devi and A
Ors., [2001] 6 SCC 496.

(xiv) Right to Family Pension - SK. Mas/an Bee v. General Manager
South Central Railway, [2003] I SCC 184

- While dealing with the right of the workmen, again this Court in People's
Union for Democratic Rights and Ors. v. Union of India and Ors., [1982] 3
SCC 235 and in State of Gujarat v. Hon'ble High Court of Gujarat, [1998]
7 sec 392 held that constitutional provisions must be so interpreted so as to
B

advance its socio economic objectives. In no uncertain terms, this Court held
that exaction of labour and services against payment of less than the minimum
wages amounts to forced labour within the meaning of Article 23 of the C
Constitution of India.

Explaining the rights of a citizen under Article 21 of the Constitution
of India, this Court in S.MD. Kiran Pasha v. Government of Andhra Pradesh
and Ors., [1990] I sec 328 observed that Article 226 of the Constitution of D
India would be maintainable also when a right is threatened as contra
distinguished from the right when infringed. This Court held :

"In the language of Kelsen the right of an individual is either a
mere reflex right - the reflex of a legal obligation existing towards
this individual; or a private right in the technical sense - the legal E
power bestowed upon an individual to bring about by legal action the
enforcement of the fulfillment of an obligation existing towards him,
that is, the legal power. From the above analysis it is clear that in the
instant case the appellant's fundamental right to liberty is the reflex
ofa legal obligation of the rest of the society, including the State, and
it is the appellant's legal power bestowed upon him to bring about by F
a legal action the enforcement of the fulfillment of that obligation
existing towards him. Denial of the legal actfon would, therefore,
amount to denial of his right of enforcement of his right to liberty .... "

It is also well-settled that interpretation of the Constitution of India or
statutes would change from time to time. Being a living organ, it is ongoing G
and with the passage of time, law must change. New rights may have to be
found out within the constitutional scheme. Horizons of constitutional law
are expanding. The necessity to take recourse to such interpretative changes
has recently found favour with the Division Bench of this Court in The State
of Maharashtra v. Dr. Praful B. Desai, JT (2003) 3 SC 382:
H
206 SUPREME COURT REPORTS (2003] SUPP. I S.C.R.

A "13. One needs to set out the approach which a court must adopt in
deciding such questions. It must be remembered that the first duty of
the court is to do justice. As has been held by this Court in the case
of Sri Krishna Gabe V. State of Maharashtra, [ 1973) 4 sec 23 courts
must endeavour to find the truth. It has been held that there would be
failure of justice not only by an unjust conviction but also by acquittal
B of the guilty for unjustified failure to produce available evidence. Of
course the rights of the accused have to be kept in mind and
safeguarded, but they should not be over emphasized to the extent of
forgetting that the victims also have rights.

14. It must also be remembered that the Criminal Procedure Code is
c an ongoing statute. The principles of interpreting an ongoing statute
have been very succinctly set out by the leading jurist Francis Bennion
in his commentaries titled "Statutory Interpretation', 2nd Edition page
617:

"It is presumed the Parliament intends the court to apply to an
D ongoing Act a construction that continuously updates its wordings
to allow for changes since the Act was initially framed. While it
remains law, it has to be treated as always speaking. This means
that in its application on any day, the language of the Act though
necessarily embedded in its own time, is nevertheless to be
E construed in accordance with the need to treat it as a current law.

In construing an ongoing Act, the interpreter is to presume that
Parliament intended the Act to be applied at any future time in
such a way as to give effect to the original intention. Accordingly,
F the interpreter is to make allowances for any relevant charges
that have occurred since the Act's passing, in law, in social
conditions, technology, the meaning of words and other matters ..
That today's construction involves the supposition that Parliament
was catering long ago for a state of affairs that did not then exist
G is no argument against that construction. Parliament, in the
wording of an enactment, is expected to anticipate temporal
developments. The drafter will foresee the future and allow for
it in the wording.

H
KAPILA lllNGORANI v. ST ATE 207
An enactment of former days is thus to be read today, in the A
light of dynamic processing received over the years, with such
modification of the current meaning of its language as will now
give effect to the original legislative intention. The reality and
effect of dynamic processing provides the gradual adjustment. It
is constituted by judicial interpretation, year in and year out. It B
also comprises processing by executive officials."

15. At1h:is s1aJe thew o:tds of JJS±e Bha;Jw atiil the G3."B ofNational
Textile Workers' Union v. P.R. Ramakrishnan, [1983] l SCR 922 at
page 956, need to be set out. They are:

"We cannot allow the dead hand of the past to stifle the growth C
of the living present. Law cannot stand still: it must change with
the changing social concepts and values. lfthe bark that protects
the tree fails to grow and expand along with the tree, it will
either choke the tree or if it is a living tree, it will shed that bark
and grow a new living bark for itself. Similarly, if the law fails
to respond to the needs of changing society, then either it will D
stifle the growth of the society and choke its progress or if the
society is vigorous enough, it will cast away the law which
stands in the way of its growth. Law must therefore constantly
be on the move adapting itself to the fast changing society and
not lag behind." E
The liability of the shareholders or even a third party in a given case
would depend upon the nature of the situation and the extent of the statute
covering the same. Participation in the functioning of a company has led to
an independent liability by the secured creditors under the Comprehensive
Environment Response Compensation and Liability Act, if its involvement F
with the management of the facility is sufficiently broad to support the
inference that it could affect hazardous waste disposal decisions; although it
was not currently an owner or operation of the facility within the meaning
thereo( in United States v. Fleet Factors Corp., 20 ELR 20832: (1990) 901
F 2d 1550. Thus a liability can be fastened both upon the owner as also the G
operator of the company under certain situations.

The right to development in the developing countries is itself a human
right. The same has been made a part of WTO and GA TT. In 'The World
Trade Organisation, Law. Practice, and Policy (Oxford) by Matusushita
Schoenbaum and Mauroidis at page 389, it is stated : H
208 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A 'The United Nations has proclaimed the existence of a human
right to development. This right refers not only to economic growth
but also to human welfare, including health, education, employment,
social security, and a wide-range of other human needs. This human
right to development is vaguely defined as a so-called third-generation
human right that cannot be implemented in the same way as civil and
B political human rights. Rather, it is the obligation of states and
f
•
ir.lergovernmental organizations to work within the scope of their
authority to combat poverty and misery in disadvantaged countries.

[Emphasis supplied]

C The matter may be considered from another angle. While the Slate
expects the industrial houses and multi-national companies to take such
measures which would provide a decent life to the persons living in the
society in general and to their employees in particular and in that premise it
is too much to ask the State to practice what it preaches? This gives rise to
D another question. Can the State be so insensitive to the plight of its own
citizens in general and the employee of the public sector undertakings in
particular?

The court in a situation of this nature is obligated to issue necessary
directions to mitigate the extreme hardship of the employees involving
E violation of human rights of the citizens of India at the hands of the State of
Bihar and the government companies and corporations fully owned or
controlled by it. A right to carry on business is subject to compliance of
constitutional obligations as also limitations provided for in the Constitution.

Financial stringency may not be a ground for not issuing requisite
F directions when a question of violation of fundamental right arises. This
Court has been highlighting this aspect in the matters concerning fundamental
rights and maintenance of ecology. See Rural Litigation and Entitlement
Kendra and Ors. v. State of Uttar Pradesh and Ors., AIR (1987) SC 359 =
[1986] Supp. SCC 517, Rat/am Municipality v. Vardi Chand, [1980] 4 SCC
162 and B.L. Wadhera v. Union of India, AIR (I 996) SC 2969. In All India
G
Imam Organization and Ors. v. Union of India and Ors., [1993] 3 SCC 584,
this Court held:

"6 ..... Much was argued on behalf of the Union and the Wakf Boards
that their financial position was not such that they can meet the
H obligations of paying the Imams as they are being paid in the State
KAPILA HINGORANI v. STATE 209
of Punjab. It was also urged that the number of mosques is so large A
that it would entail heavy expenditure which the Boards of different
States would not be able to bear. We do not find any correlation
between the two. Financial difficulties of the institution cannot be
above fundamental right of a citizen. If the Boards have been entrusted
with the responsibility of supervising and administering the Wakf B
then it is their duty to harness resources to pay those persons who
pe;fonn the most important duty namely of leading community prayer
in a mosque the very purpose for which it is created."

[Emphasis supplied]

In State of H.P. v. H.P. State Recognised and Aided Schools Managing C
Committees and Ors., [ 1995] 4 SCC 507, it was opined:

"I 6. The constitutional mandate to the State, as upheld by this Court
in Unni Krishnan case - to provide free education to the childre'l up
to the age of fourteen - cannot be permitted to be circumvented on D
the ground of lack of economic capacity or financial incapacity."

However, before we issue any direction, we may state that by no stretch
of imagination, the liability of the State of Bihar can be shifted to the Union
of India. Only because the Union of India allegedly is repository of funds
raised by it through Central excise and other levies and impost, the same by E
itself would not mean that it is indirectly or vicariously liable for the failings
on the part of the State Public Sector Undertakings. Either precedentially or
jurisprudentially the Union of India cannot be held liable and no such direction
can be issued as has been submitted by Mr. Shanti Bhushan.

The investments made by the State in the public sector undertakings in F
pursuit of social justice is from public account. It 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 to the State of Jharkhand.

The matter might have been different, had such financial assistance was G
required by the State due to a natural calamity or cause beyond its control.

The State must thank itself for having placed itself in such a state of
affairs. If at an appropriate stage, having regard to its right of deep and
pervasive control over the Public Sector Undertakings it had properly
H
210 SUPREME COURT Rf:PORTS [2003] SUPP. I S.C.R.

A supervised the functioning of the Government Companies and take necessary
steps to refer the sick companies to BIFR in terms of the provisions of the
Sick Industrial Companies (Special Provisions) Act, 1985, the position might
have been different. It even failed to take any positive action even after
coming to know the starvation deaths and immense human sufferings.

B The States of India are welfare States. They having regard to the
constitutional provisions adumbrated in the Constitution of India and in
particular Part IV thereof laying down the Directive Principles of the State
Policy and Part IV A laying down the Fundamental Duties are bound to
preserve the practice to maintain the human dignity.
c We are of the opinion that the State, thus, has made itself liable to
mitigate the sufferings of the employees of the public sector undertakings or
the government companies.

While passing an interim order, however, it is our duty to take into
D consideration the immediate hardship. which may be faced by the State of
Bihar having regard to the alleged financial stringency.

We, however, hasten to add that we do not intend to lay down a law,
as at present advised, that the State is directly or vicariously liable to pay
salaries/remunerations of the employees of the public sector undertakings or
E the Government companies in all situations. We, as explained hereinbefore,
only say that the State cannot escape its liability when a human rights problem
of such magnitude involving the starvation deaths and/or suicide by the
employees has taken place by reason of non-payment of salary to the
employees of Public Sector Undertaking for such a long time. We are not
issuing any direction as against the State of Jharkhand as no step had
F admittedly been taken by the Central Government in terms of Section 65 of
the Bihar Reorganisation Act and furthermore as only four public sector
undertakings have been transferred to the State of Jharkhand in respect whereof
the petitioner does not make any grievance.

G In the peculiar facts and circumstance of this case in our opinon, interest
of justice shall be met, if the following interim directions are issued for the
present:

I. The High Court may strive to dispose of all liquidation
proceedings in respect of the Government companies owned and
H controlled by the State of Bihar as expeditiously as possible. For
KAPILA HINGORANI v. STATE 211

the said purpose and/or purposes ancillary to or incidental A
therewith, it may pass an interim order and/or orders by way of
sale and/or disposal of the properties belonging to such public
sector undertaking and/or Government companies or to take such
measure or measures as it may deem fit and proper.
2. For the aforementioned purposes a committee not consisting of B
more than three members chaired by a retired High Court Judge
or a sitting District Judge may be appointed who may scrutinize
the assets and liabilities of the companies and submit a report to
the High Court as expeditiously as possible preferably within
three months from the date of constitution of the committee. The
.
terms and conditions for appointment of the said Committee may c
be determined by the High Court. All expenses in this behalf
shall be borne by the State of Bihar.
3. The High Court shall be entitled to issue requisite direction/
directions to the said committee from time to time as and when
it ,deems fit and proper. D
4. The State for the present shall deposit a sum of Rs.SO crores
before the High Court for disbursement of salaries to the
employees of corporations. The amount of Rs.50 crores be
deposited in two instalments. Haif of the amount shall be payable
within one month and the balance amount within a month E
thereafter. The High Court shall see to 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 concerned employee
wherefor, the parties may file their claims before it. p
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 G
529-A 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
H
212 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A of the Bihar Reorganisation Act, 2000.
8. The State of Jharkhand is hereby impleaded as a respondent. Let
notice be issued to the newly added respondent.

This order shall be subject to any order that may he passed subsequently
B or finally.
Let the matter be placed again after six months.

R.P. Matter is pending