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Issues: (i) whether the States of Bihar and Jharkhand could be directed to make interim deposits for payment of arrears of salaries to employees of public sector undertakings and corporations affected by the bifurcation of the State, and (ii) whether the clarification sought could be used to shift or deny responsibility for payment in relation to BHALCO and allied corporations.
Issue (i): Whether the States of Bihar and Jharkhand could be directed to make interim deposits for payment of arrears of salaries to employees of public sector undertakings and corporations affected by the bifurcation of the State.
Analysis: The Court reiterated that its earlier directions were founded not on a general declaration that the States were always legally liable for the debts of public sector undertakings, but on the need to protect the employees' human rights and fundamental right to life under Article 21. It noted that salaries had remained unpaid for long periods, that lives had been lost, and that the States had sufficient statutory and administrative control to act. In these circumstances, the Court directed further deposits to be made to enable immediate relief to the employees.
Conclusion: The States of Bihar and Jharkhand were directed to deposit Rs. 50 crores and Rs. 25 crores respectively, and the interim relief was granted in favour of the employees.
Issue (ii): Whether the clarification sought could be used to shift or deny responsibility for payment in relation to BHALCO and allied corporations.
Analysis: The Court declined to permit the State of Bihar to reopen matters already rejected in the earlier order through an application for clarification. It also noted that, while the successor corporation JHALCO had been formed and employee options had been extended, the question of final liability for salary and emoluments of BHALCO employees would have to be decided in appropriate proceedings. The Court therefore confined itself to immediate protective directions without determining ultimate inter se liability.
Conclusion: The request to use clarification to avoid the earlier directions was rejected, and the employees' claims were left to be adjudicated in appropriate proceedings.
Final Conclusion: The applications were disposed of by issuing continuing protective directions for interim payment to employees while leaving the ultimate legal liability and salary entitlement to be decided separately in the proper proceedings.
Ratio Decidendi: Where employees of State-controlled public sector undertakings face prolonged non-payment of wages causing grave hardship, the Court may issue interim protective directions on the basis of Article 21 and the State's constitutional obligation, without finally deciding the underlying civil liability for salary arrears.
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