Express assumption of liability under a rehabilitation scheme limits responsibility to specified dues; untransferred salary arrears remain with the State.

Liability under a rehabilitation scheme and memorandum of understanding is confined to liabilities expressly assumed. The scheme placed certain identified obligations, including labour dues, on the State Government, while the memorandum limited the appellant's liability to the liabilities specifically mentioned in the agreed letters and clause 3. As the materials did not show that the arrears of salary due to the fourth respondent had been transferred to or assumed by the appellant, that obligation remained with the State of Orissa. The direction against the appellant was therefore set aside to that extent.

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Issues: Whether the appellant had taken over liability to pay the arrears of salary due to the fourth respondent, or whether that liability remained with the State of Orissa.

Analysis: The liability question had to be determined from the sanctioned rehabilitation scheme, the correspondence exchanged between the parties, and the memorandum of understanding. The scheme expressly provided that the State Government would pay certain identified liabilities, including labour dues, while the memorandum of understanding confined the appellant's liabilities to those specifically mentioned in the agreed letters and in clause 3. The materials did not show that the arrears of salary payable to the fourth respondent had been transferred to or assumed by the appellant. The Court also noted that the appellant's undertaking covered only the quantified workmen's dues and other specified liabilities, whereas the respondent's claim was separate and additional.

Conclusion: The appellant was not liable for the fourth respondent's arrears of salary; that liability remained with the State of Orissa. The direction against the appellant was set aside to that extent.

Final Conclusion: Liability for the respondent's arrears of salary was held to rest with the State of Orissa, and the appeal succeeded to the extent of absolving the appellant from that monetary burden.

Ratio Decidendi: Liability under a rehabilitation scheme or memorandum of understanding is confined to liabilities expressly assumed; liabilities not specifically transferred remain with the original obligor.

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