Case Note & Summary
The writ petition was filed by a public-spirited citizen, Kapila Hingorani, against the State of Bihar regarding the non-payment of salaries to employees of various state-owned corporations and public sector undertakings. The petitioner highlighted the dire consequences of this non-payment, including starvation deaths and suicides among employees. The court noted that numerous employees had not received their salaries for extended periods, with some cases dating back several years. The State of Bihar, in its counter affidavit, acknowledged the non-payment but claimed that salaries were being paid by certain statutory authorities. However, the court found the State's assertions inconsistent and lacking credibility. The petitioner argued that the State could not evade its responsibility for the welfare of its employees, even if they were technically employed by corporations. The court appointed an amicus curiae to assist in the investigation of the claims made by the petitioner. The amicus curiae reported that the allegations of starvation deaths were substantiated. The court deliberated on whether the corporate veil could be lifted to hold the State accountable for the actions of its corporations. Ultimately, the court concluded that the State of Bihar had a constitutional obligation to protect the rights of its employees under Articles 21 and 23 of the Constitution, emphasizing that the State's pervasive control over these corporations rendered it liable for ensuring the payment of salaries. The court directed that the State must take immediate action to address the salary arrears and safeguard the rights of the employees.
Headnote
A) Constitutional Law - Right to Life - State's Liability for Salaries - Constitution of India, 1950, Articles 21, 23 - The State of Bihar was held constitutionally obligated to ensure payment of salaries to employees of state-owned corporations, as non-payment led to starvation deaths, violating their right to life. The court emphasized that the State's deep control over these corporations necessitated accountability for the welfare of employees (Paras 1-10).
Issue of Consideration
Extent of the Government of Bihar's vicarious liability for payment of salaries to employees of state-owned corporations and public sector undertakings
Final Decision
The Supreme Court held that the State of Bihar had a constitutional obligation to ensure payment of salaries to employees of state-owned corporations, emphasizing that the State's deep control over these corporations rendered it liable for safeguarding the rights of employees under Articles 21 and 23 of the Constitution. The court directed the State to take immediate action to address the salary arrears and protect the rights of the employees.
Law Points
- Vicarious liability
- constitutional obligations
- corporate veil
- human rights
- starvation deaths
