Court rules Bihar State not liable for salaries of employees in various entities; directs Rs. 10 crore disbursement.

The court dismissed the Letters Patent Appeals, affirming that the State of Bihar is not liable to pay the salaries and allowances of employees of Boards, Corporations, and Companies. The court directed that the Rs. 10 crores allocated by the State to address financial emergencies be disbursed by a committee constituted by Hon'ble Mr. Justice Udai Sinha.

---

---

Issues Involved:
1. Liability of the State of Bihar to pay salary and allowances to employees of Boards, Corporations, and Companies.
2. Finality of interim orders in Kapila Hingorani (I) and Kapila Hingorani (II).
3. Addressing humane problems in judgments.
4. Financial burden on the State of Bihar due to policy decisions.

Detailed Analysis:

Issue 1: Liability of the State of Bihar to Pay Salary and Allowances
The court examined whether the State of Bihar, as the sole shareholder of certain Boards, Corporations, and Companies, is responsible for paying the salaries and allowances of their employees. The court highlighted that these entities are separate juristic persons governed by their statutes. Employees' wages are secured debts under Section 529A of the Companies Act, 1956, and the State's liability does not extend to paying these wages. The court emphasized that the distinction between the State and these entities must be maintained, and the employees cannot claim to be State employees. The court referenced several precedents, including State of Himachal Pradesh v. Rajesh Chander Sood and Steel Authority of India Ltd. v. National Union Waterfront Workers, which support the notion that the State is not liable for the financial obligations of these separate entities.

Issue 2: Finality of Interim Orders in Kapila Hingorani (I) and Kapila Hingorani (II)
The court noted that the observations and directions in Kapila Hingorani (I) and Kapila Hingorani (II) were interim measures to address immediate humane problems and do not serve as precedents. The Supreme Court's directions were based on the extraordinary circumstances of human rights violations due to non-payment of salaries, and these directions were not intended to establish a legal obligation for the State to pay salaries in all situations. The court cited Barak Upatyaka D.U. Karmachari Sanstha to emphasize that these interim directions were not final conclusions.

Issue 3: Addressing Humane Problems in Judgments
The court recognized that the Supreme Court's intervention in Kapila Hingorani (I) and Kapila Hingorani (II) was to address humane problems arising from financial stringency faced by employees. The court noted that the Supreme Court left the question of the State's liability open, focusing instead on immediate relief for the affected employees. This approach was also evident in Harihar Yadav's case, where the issue was addressed as a humane problem rather than establishing a legal precedent.

Issue 4: Financial Burden on the State of Bihar Due to Policy Decisions
The court discussed the implications of imposing financial burdens on the State due to the financial difficulties of Boards, Corporations, and Companies. The court referenced A.K. Bindal v. Union of India and State of Himachal Pradesh v. Rajesh Chander Sood, which highlight that budgetary allocations and financial support are policy decisions. The court concluded that the State cannot be required to bear the financial burden of these entities, as it would undermine the purpose of establishing separate companies for focused growth and flexibility in decision-making.

Conclusion:
The court dismissed the Letters Patent Appeals, affirming that the State of Bihar is not liable to pay the salaries and allowances of employees of Boards, Corporations, and Companies. The court directed that the Rs. 10 crores allocated by the State to address financial emergencies be disbursed by a committee constituted by Hon'ble Mr. Justice Udai Sinha.

---