TMI Blog2009 (3) TMI 992X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Assam Co-operative Societies Act, 1949 (`Act' for short). Respondent, a Trade Union representing the workers of CAMUL, filed the said writ petition (Civil Rule No.2996/1995) contending that the state government formed and registered CAMUL as a co-operative society to run its cattle development project; that its Board of Directors including the Managing Director (always a government servant, on deputation) were appointed by the state government; that the post of the Managing Director of CAMUL was declared to be a post equivalent to a Head of Department under the state government; that initially the entire staff of CAMUL were drawn on deputation from the Veterinary, Agriculture Co-operative Departments of the state government; that in a phased manner, those employees were reverted back to their Parent Departments and replaced by the staff appointed by CAMUL, through a Selection Board set up by the state government with representatives from the Central Government and National Dairy Development Board; that state government sanctioned the staffing pattern of CAMUL; that from the year 1982-83 onwards the Government was extending financial assistance by way of grants to CAMUL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no relationship of employer and employee between the state government and the employees of CAMUL, it was not responsible to bear or pay any amount towards the salaries of the employees of CAMUL. 4. The learned Single Judge allowed the writ petition. He held that the State Government through its Veterinary Department undertook the Integrated Cattle Development Projects (ICDP) in various districts of Assam; and as a part of the said project, an ICDP block was created at Ghungoor, Silchar in Cachar district; that 32 cooperative societies of Milk Producers were established and CAMUL was formed as an Apex Body of those co-operative societies; that the Dairy Development Department of the state government had been providing grant-in-aid earmarked in the state budget every year to CAMUL; that the state government failed to offer any explanation or reason for stopping the grant-in-aid from 1994; that the Dairy Development Project at Silchar was purely a state government scheme and as that Project has not been discontinued and as there was no decision to barring CAMUL from receiving grant-in-aid which was being granted from 1982-83 till 1994, the state government could not deny the grant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notwithstanding anything contained in any law for the time being in force, the State Government may grant loans or give financial assistance in any form to any registered society. Therefore, the fact that the state government had given financial assistance in the form of grant-in-aid to CAMUL continuously for some years, either to meet its development activities or for even meeting the salaries, does not mean that state government is responsible to bear and pay the salaries and emoluments of the employees of CAMUL or other liabilities of CAMUL. Nor can the state government be made liable for extension of financial assistance for all times to come, to cover the payment of salaries of employees of CAMUL. If the salaries are not paid, the remedy of the employees of CAMUL is to proceed against CAMUL, in accordance with law, by approaching the forum under the appropriate labour legislation or the Co-operative Societies Act. But a trade union representing the employees of a co-operative society cannot, by filing a writ petition, require the Government to bear and pay the salaries of the employees of the co- operative society, howsoever pervasive, the control of the state government, ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in respect of the employees is fully safeguarded. The Government of the State of Bihar, thus, 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. 33. 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 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. Concept of accountability arises out of the power conferred on an authority. 34. 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 relation thereto lie the State's constitutional obligations. The State acts in a fiduciary capacity. The failure on the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hasten to add that we do not intend to lay down a law, as at present advised, that the State id directly or vicariously liable to pay salaries/remunerations of the employees of the public sector undertakings or 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 undertakings for such a long time. This order shall be subject to any order that may be passed subsequently or finally. The position is further made clear in Kapila Hingorani (II) as under : We make it clear that we have not issued the aforementioned directions to the States of Bihar and Jharkahand 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, ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem an allowance for meeting food, shelter, clothing, salary, medical treatment, and education, if not more. Surely that was not the intention of Kapila Hingorani (I) and (II). 11. What clearly holds the field at present is the principle laid down and reiterated by the Constitution bench of this Court in Steel Authority of India v. National Union Waterfront Workers 2001 (7) SCC 1 wherein this Court categorically held : We wish to clear the air that the principle, while discharging public functions and duties the government companies/corporations/societies 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 government for all purposes so as to bind such government for all their acts, liabilities and obligations under various Central and/or State Acts or under private law. [emphasis supplied] 12. We, therefore, reject the interpretation put forth by the respondent, on the tentative observations in Kapila Hingorani(I) and (II), to contend that the governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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