ORDER If at all and to what extent the Government of the State of Bihar is vicariously liable for payment of arrears of salaries to the employees of the State owned corporations, public sector undertakings or the statutory bodies is the core question involved in this writ petition. 2. It appears from the records that various Government companies/public sector undertakings, details whereof are stated hereunder have not paid salaries to their workmen and other employees for a long time resulting in death of several persons and miseries brought to a large number of families as would appear from the following : Sl. Name of Public No. of Date from which Nos. of Death No. Undertaking Employee salary is due of Employees 1. Bihar State Agro Industries 630 May-93 70 Development Corporation 2. Bihar State Medicine & 265 Aug-93 11 Chemical Development Corporation 3. Bihar State Handloom & 429 In Headquarter from 3 Handicraft Corpn. May 1996 in Unit from 1993 4. Bihar State Small Scale 141 In Headquarter from 36 Industrial Development April 1995. In Unit Corporation from April 1993 5. Bihar State Sugar 9240 From January 2000 in 467 Corporation Headquarter. In Unit from April 1992 6. Bihar State Leather 471 From March 1993 13 Development Corpn. 6a. Bihar Finished Leathers 35 7. Bihar State Industrial 1551 1551 In Headquarters from 125 Development Corporation July 2001 in Unit from Feb. 1993 8. Bihar State Electronic 157 In Headquarter upto 5 Corporation date. In Unit from April 1998 9. Bihar State Vastraya 50 Nov.-96. Nil Corporation 10. Bihar State Film 8 Aug.-02 Nil Development & Financial Corporation 11. Bihar State Fruit & 16 From Aug.-94 1 Vegetable Development Corporation 12. Bihar State Seed 137 From May 1999 5 Development Corporation 13. Bihar State Fishries 42 Before May 2000 5 Development Corporation due of 32 to 40 months 14. Bihar State Food & Civil 1716 Pending from till 325 Supplies Corpn. 40 months 15. Bihar State Panchayati 130 From March 1996 7 Raj Financial Corpn. 16. Bihar State Construction 657 In Headquarter 55 Corpn. from January 1995. In Unit from January 1992 17. Bihar State Road Transport 5580 Headquarter + In 205 Corporation sum units from Nov. 1998 Balance in from December 1993 Note: 18. Bihar State Khadi 75 Payment of Salaries NA Gramdhoyog Board 71 Staff in non-plan (upto date) due from April 94 Staff Salaries 19. from January 1995. In Unit from January 1992 17. Bihar State Road Transport 5580 Headquarter + In 205 Corporation sum units from Nov. 1998 Balance in from December 1993 Note: 18. Bihar State Khadi 75 Payment of Salaries NA Gramdhoyog Board 71 Staff in non-plan (upto date) due from April 94 Staff Salaries 19. Bihar Hill Area Lift 684 NA Irrigation Corpn. 3. A newspaper report as regard non-payment of salary for a long time resulting in starvation highlighted the case of one Chandan Bhattacharya, son of an employee of the Bihar State Agro-Industries Development Corporation who tried to immolate himself. The incident was widely reported, inter alia, in The Hindustan Times , Delhi Edition, on 19.9.2002 under the caption "Empty coffers drive staff to self-immolation bids". The said Chandan Bhattacharya later on succumbed to the burn injuries suffered by him. 4. In this writ petition, the writ petitioner, a public spirited citizen and a Supreme Court lawyer, alleged that apart from plight of the employees of the public sector undertakings or the statutory authorities, even the teaching and non-teaching staff of Aided and Unaided Schools, Madrassas and Colleges have been facing a similar fate. We, however, as at present advised do not intend to deal with the same. According to the petitioner, from a newspaper report it would appear that about 250 employees died due to starvation or committed suicide owing to acute financial crisis resulting from non-payment of remunerations to them for a long time. The report further goes on to say that the leader of the opposition in the Bihar Assembly had alleged that over 1000 employees died "due to lack of salary for a period ranging from four months to 94 months". 5. In its counter affidavit, the State of Bihar does not deny about the factual statement made in the said writ petition. Its stand, however, is that salaries are being paid by the statutory authorities, the details whereof are in the following terms : "In the following 26 undertakings, salary payments are upto date (as on 30.9.2002) and are continuing on a regular basis as per reports from the Corporation :- 5. Bihar State Financial Corporation Ltd. 6. Bihar State Credit & Investment Corporation 7. Bihar State Agriculture Marketing Board 8. Bihar State Forest Development Corporation 9. Bihar State Pollution Control Board 10. Bihar State Warehousing Corporation 11. Bihar State Tourism Development Corporation 12. Bihar State Financial Corporation Ltd. 6. Bihar State Credit & Investment Corporation 7. Bihar State Agriculture Marketing Board 8. Bihar State Forest Development Corporation 9. Bihar State Pollution Control Board 10. Bihar State Warehousing Corporation 11. Bihar State Tourism Development Corporation 12. Bihar State Text Book Corporation 13. Bihar State Minerals Development Corporation 14. Bihar State Housing Board 15. Bihar State Police Building Construction Corporation 16. Bihar State Bridge Construction Corporation 17. Bihar State Electricity Board 18. Bihar State Hydro-electric Power Corporation 19. Patna Industrial Area Development Authority 20. North Bihar Industrial Area Development Authority 21. Darbhanga Industrial Area Development Authority 22. Patna Regional Development Authority 23. Muzaffarpur Regional Development Authority 24. Darbhanga Regional Development Authority 25. Gaya Regional Development Authority 26. Bhagalpur Regional Development Authority 27. Bihar State Water & Sewerage Board 28. Bihar State Minorities Finance Corporation 29. Bihar State Export Corporation, and 30. Tenughat Vidyut Corporation." 6. As regards the Bihar State Road Transport Corporation, it is contended that 50 of salary was paid to the employees as directed by this Court in Civil Appeal No. 7290 of 1994. The State contends that with a view to clear the dues, the Corporation would require approximately a sum of Rs.160.35 crores. 7. However, in relation to the 16 Undertakings, according the State, the financial implication would be as under: Sl. Name of No. of Salaray Approximate Deaths Cause of No. Undertaking employees Due Since Amount reported death as involved by Corpn. reported 33. Bihar State 471 + 259 March Rs. 62.45 Nil Not Leather in Bihar 1993 crores Applicable i Industries Furnished Development Leather Corpn. 34. Bihar State 265 Aug. 93 Rs. 9.46 Nil -do- ``1 Pharmaceuticals crores & Chemicals Development Corpn. 35. Bihar State 429 Hqrs Rs. 18 23 5 from ill- ` Handloom May crores ness, Rest ` Powerloom & 1996 not ` Handicrafts Units reported ` Dev. Corpn. 1993 36. Bihar State 141 HQ Apr. Rs. 18 Nil NA Small Ind. 94 Units crores Corporation April, 93 37. Bihar State 9240 HQ Jan. Rs. 130 4 Illness Sugar Corpn. 00 Units crores April 92 38. Bihar State 630 May 93 Rs. 60.73 1 As in para Agro Ind. crores III above Dev. Corpn. 39. Bihar State 1551 HQ-July Rs. 61.72 Nil NA Industrial 01 Units crores Development Feb. 93 Corpn. 40. Bihar State 157 HQ up Rs. 2.51 Nil -do- Electronics Date crores Dev. Corpn. 00 Units crores April 92 38. Bihar State 630 May 93 Rs. 60.73 1 As in para Agro Ind. crores III above Dev. Corpn. 39. Bihar State 1551 HQ-July Rs. 61.72 Nil NA Industrial 01 Units crores Development Feb. 93 Corpn. 40. Bihar State 157 HQ up Rs. 2.51 Nil -do- Electronics Date crores Dev. Corpn. Units April, 98 41. Bihar State 50 Nov., 96 Rs. 0.70 Nil - do- Textile Corpn. crores 42. Bihar State 08 Aug., 02 Rs. 55,000/- Nil -do- Film Dev. & Per month Fin. Corpn. 43. Bihar State 16 Aug., 94 Rs. 1.8056 Nil -do- Fruits & Crores Vegetable Dev. Corpn. 44. Bihar State 137 May, 99 Rs. 4.53 5 Inadequate Seeds Dev. crores Medical Corpn. Treatment 45. Bihar State 42 32-40 Rs. 1 crore Nil NA Fisheries months Development upto Corpn. March, 00 Update from March, 00 46. Bihar State 1716 Upto 40 Rs. 16.56 Nil -do- Food And Months crores Civil Supplies Corporation 47. Bihar State 130 Mar. 96 Rs. 3.75 Nil -do- Panchyati Raj crores Finance Corporation 48. Bihar State 657 HQ Jan., Rs.37.50 Nil -do- Construction 1995 crores Corporation Unit 'Jan., 1992 49. Bihar Hill 684 Being Being Nil -do- Area Lift collected collected rrigation Corpn. 8. The State accepts that although the Managing Director of the Bihar State Small Industries Corporation had initially reported that 14 of its employees died in harness and 9 after retirement, but in the subsequent report the Managing Director stated that there is no report regarding suicide or death due to starvation of any of the employees of the Corporation. It is averred : ". ..The Managing Director of the Bihar Panchayati Raj Finance Corporation had initially reported that 3 employees of the Corporation had died, but had not given any details about the date and cause of their deaths. In his subsequent report the Managing Director reported that there was no report regarding the suicide or death due to starvation of any employee of the corporation. The Managing Director of the Bihar State sugar Corporation had initially reported that 4 employees of the Corporation had died for want of proper treatment. In this subsequent report the Managing Director has reported that the employees' Union has submitted a list of 241 employees who have died or become disabled. The Managing Director of the Bihar State sugar Corporation had initially reported that 4 employees of the Corporation had died for want of proper treatment. In this subsequent report the Managing Director has reported that the employees' Union has submitted a list of 241 employees who have died or become disabled. Similarly, the Company Secretary of the Bihar State Seeds Corporation had initially reported that 4 employees of the Corporation have died during the period when salary was not paid. Subsequently, the Company Secretary has reported that 5 employees of the Corporation have died for want of proper treatment. However, in view of the discrepancy in the two reports of these corporations, the concerned Managing Directors have been asked to make a thorough investigation into the causes of these deaths and to submit detailed reports in the matter. I say that the employees Union of the Bihar Handloom, Powerloom and Handicrafts Development Corporation has submitted to the Managing Director of the Corporation a list of 7 employees and 2 wives of employees who have died. The cause of death of 4 employees has not been specified, while 3 employees and 2 wives of employees are stated to have died due to financial hardship. The Managing Director of the corporation has reported that no case of suicide or starvation death by employees of their dependents have been reported to the Corporation but the submissions of the employees union is being verified. The Managing Director has been asked to make a thorough investigation into the causes of these deaths and to submit a detailed report in the matter." 9. The records of this case bear out that deaths had occurred owing to starvation or malnutrition. The fact that the employees have not been paid their salaries for a long time; in some cases for a decade or more; stands admitted. 10. The Affidavit of the State of Bihar, purported to have been based on reports of the Managing Director of same Undertaking does not inspire confidence. The statements made therein are self-contradictory and inconsistent. It smacks of lack of bona fide and is full of afterthoughts. 11. 10. The Affidavit of the State of Bihar, purported to have been based on reports of the Managing Director of same Undertaking does not inspire confidence. The statements made therein are self-contradictory and inconsistent. It smacks of lack of bona fide and is full of afterthoughts. 11. The stand of the State of Bihar on law is that having regard to the fact that most of the undertakings or companies are registered or incorporated under the Indian Companies Act 1956, the rights and liabilities of the shareholders would be governed by the provisions of the said Act and the liability of the said companies cannot be passed on to the State by taking recourse to the doctrine of 'lifting the veil' or otherwise. 12. Keeping in view the complexity of the matter, this Court appointed Shri P.S. Mishra, a senior counsel of this Court, as amicus curiae. Shri Amarendra Sharan also assisted the court. 13. The learned amicus curiae has, inter alia, submitted that the independent investigation revealed that the head offices of the Government companies are situated in rented premises. It was contended that all shares are owned by the State and in some of the cases only one share had been allotted in the name of the nominee of the Government of the State of Bihar. The allegations of the writ petitioner to the effect that there had been starvation deaths and/or suicide by the employees of the public sector undertakings are correct. 14. Mr. Shanti Bhushan, learned senior counsel appearing on behalf of the State of Bihar, would submit that having regard to the magnitude of the problem, it would be just and proper if liability is directed to be met to the extent of 80 per cent by the Union of India and that the State Government will bear the burden to the extent of 10 per cent thereof and the remaining may be realised from the sale of properties belonging to the respective companies. The learned counsel would submit that pursuant to or in furtherance of a decision of the Full Bench of the Patna High Court in C.W.J.C. No.5015 of 1996, liquidation proceedings of the Government companies have been initiated and they are pending before the Company Judge of the Patna High Court. Mr. The learned counsel would submit that pursuant to or in furtherance of a decision of the Full Bench of the Patna High Court in C.W.J.C. No.5015 of 1996, liquidation proceedings of the Government companies have been initiated and they are pending before the Company Judge of the Patna High Court. Mr. Shanti Bhushan would urge that having regard to the well-settled principle of law that a company registered under the Indian Companies Act is a juristic person, its rights find liabilities must be determined in terms thereof and not de hors the same. Strong reliance, in this behalf was placed on Steel Authority of India Ltd. and Others vs. National Union Waterfront Workers and Others [ (2001) 7 SCC 1 ] and Electronics Corporation of India Ltd. and Others vs. Secretary, Revenue Department, Govt. of Andhra Pradesh and Others [ (1999) 4 SCC 458 ]. 15. Mr. Soli J. Sorabjee, the learned Attorney General appearing on behalf of Union of India submitted that neither in law nor in equity the Union of India can be fastened with any liability of the State. The learned counsel would contend that this Court, with a view to do justice to the parties, may direct that an official liquidator be appointed in respect of all the companies and the learned company judge may further be directed to dispose of the winding up applications as expeditiously as possible wherein having regard to the provision contained in Section 598A of the Companies Act the dues of employees will have primacy. Mr. Sorabjee would urge that the learned Company Judge may also be directed to look into the Human Right aspect of the matter. 16. Mr. Mishra, learned amicus curiae, would submit that there is no reason as to why the burden of the State should be shifted to the Union of India and having regard to the provisions of Articles 21 and 23 of the Constitution of India, this Court is entitled to pierce the corporate veil of the Government companies which are 'States' within the meaning of Article 12 of the Constitution of India. According to Mr. According to Mr. Mishra, it is beyond any cavil of doubt that the State for all intent and purport was the sole shareholder of those companies and as such it cannot escape its liability having regard to the fact that it had deep and pervasive control including financial control over the affairs of the said companies. Mr. Mishra would urge that as indisputably the corporations owned and controlled by the State of Bihar are 'State' within the meaning of Article 12 of the Constitution of India, neither they nor the State of Bihar can escape their liability from enforcing the rights of the citizens of India under Articles 21 and 23 of the Constitution of India. 17. Mr. Mishra would submit that the Full Bench of the Patna High Court has referred to certain decisions of this Court which did not deal with an issue of this nature nor it took notice of different facets of Article 21 of the Constitution of India which would include a right to food, shelter and other basic amenities. Non-payment of lawful salary to the employees, Mr. Mishra would submit, would fall within the definition of 'forced labour' which is prohibited by Article 23 of the Constitution of India. In support of his contentions, Mr. Mishra placed strong reliance on People's Union for Democratic Rights and Others vs. Union of India and Others [ (1982) 3 SCC 235 ], Board of Trustees of the Port of Bombay vs. Dilipkumar Raghvendranath Nadkarni and Others [ (1983) 1 SCC 124 ] and Olga Tellis and Others vs. Bombay Municipal Corporation and Others [ (1985) 3 SCC 545 ]. 18. Ms. Hingorani, the petitioner appearing in person, would contend that the State cannot escape its liability in the matter of payment of salaries to its own employees; although ostensibly they are working in the companies incorporated under the Indian Companies Act. 19. According to the petitioner starvation deaths and/or commission of suicide by the employees of the State owned corporation being admitted, this Court should issue interim directions for payment of salaries to the employees. Ms. Hingorani would contend that the Government companies or corporations will have to discharge their constitutional obligations in terms of Article 21 of the Constitution of India. In support of the said contention, reliance has been placed on Andhra Pradesh State Road Transport Corporation vs. The Income Tax Officer and Anr. Ms. Hingorani would contend that the Government companies or corporations will have to discharge their constitutional obligations in terms of Article 21 of the Constitution of India. In support of the said contention, reliance has been placed on Andhra Pradesh State Road Transport Corporation vs. The Income Tax Officer and Anr. [ (1964) 7 SCR 17 ], Western Coalfields Ltd. vs. Special Area Development Authority, Korba and Anr. [ (1982) 2 SCR 1 ], Hem Chand etc. vs. The Delhi Cloth & General Mills Co. Ltd. and Another etc. [ (1977) 3 SCC 483 ] and Som Prakash Rekhi vs. Union of India and Another [ (1981) 2 SCR 111 ]. 20. The case at hand poses a large number of complex questions such as :- 1. Whether in a case of this nature, the Court would take a sheer legalistic approach in holding that the corporate veil would not be lifted although its conscience stands satisfied that there has been violations of citizens' right to life and liberty as adumbrated under Article 21 of the Constitution of India? 2. Whether having regard to the admitted position that the Government Companies or Corporations referred to hereinbefore are States within the meaning of Article 12 of the Constitution of India, the State of Bihar having deep and pervasive control over the affairs thereof can be held to be liable to render all assistance to the said companies so as to fulfill its own and/or the corporations' obligations to comply with the citizens' right under Articles 21 and 23 of the Constitution of India?; 3. Whether the State of Bihar can escape its liability having regard to the human rights problem involved in the matter ? 4. Whether in a case of this nature the liability of the State of Bihar, if any, can be shifted to the Union of India? 21. A Company incorporated under the Companies Act is a juristic person. A company indisputably has a distinct and separate entity vis-a-vis its shareholders. 22. This Court in Electronics Corporation of India Ltd.'s case (supra) opined: "A clear distinction must be drawn between a company and its shareholder, even through that shareholder may be only one and that the Central or a State Government. A company indisputably has a distinct and separate entity vis-a-vis its shareholders. 22. This Court in Electronics Corporation of India Ltd.'s case (supra) opined: "A clear distinction must be drawn between a company and its shareholder, even through that shareholder may be only one and that the Central or a State Government. In the eye of the law, a company registered under the Companies Act is a distinct legal entity other than the legal entity or entities that hold its shares." 23. Yet again, a Constitution Bench of this Court in Steel Authority of India's case (supra) noticed the following decisions to hold that a company incorporated under the Companies Act being a juristic person would be governed by the Companies Act. : "In Ramana Dayaram Shetty v. International Airport of India (Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489 : (1979) 3 SCR 1014 ) a three-Judge Bench of this Court laid down that corporations created by the Government for setting up and management of public enterprises and carrying out public functions, act as instrumentalities of the Government; they would be subject to the same limitations in the field of constitutional and administrative laws as the Government itself, though in the eye of the law they would be distinct and independent legal entities. There, this Court was enforcing the mandate of Article 14 of the Constitution against the respondent - a Central Government Corporation. Managing Director, U.P. Warehousing Corpn. v. Vijay Narayan Vajpayee ( (1980) 3 SCC 459 : 1980 SCC (L&S) 453 : (1980) 2 SCR 773 ) dealt with a case of dismissal of the respondent employee of the appellant Corporation in violation of the principles of natural justice. There also the Court held the Corporation to be an instrumentality of the State and extended protection of Articles 14 and 16 of the Constitution to the employee taking the view that when the Government is bound to observe the equality clause in the matter of employment the corporations set up and owned by the Government are equally bound by the same discipline. In Ajay Hasia v. Khalid Mujib Sehravardi (Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722 : 1981 SCC (L&S) 258 : (1981) 2 SCR 79 ) the question decided by a Constitution Bench of this Court was : whether Jammu and Kashmir Regional Engineering College, Srinagar, registered as a society under the Jammu and Kashmir Registration of Societies Act, 1898, was "State" within the meaning of Article 12 of the Constitution so as to be amenable to writ jurisdiction of the High Court. Having examined the memorandum of association and the Rules of the Society, the Court decided that the control of the State and the Central Government was deep and pervasive and the Society was a mere projection of the State and the Central Government and it was, therefore, an instrumentality or agency of the State and the Central Government and as such an authority-State within the meaning of Article 12. The principle laid down in the aforementioned cases that if the Government acting through its officers was subject to certain constitutional limitations, a fortiori the Government acting through the instrumentality or agency of a corporation should equally be subject to the same limitations, was approved by the Constitution Bench and it was pointed out that otherwise it would lead to considerable erosion of the efficiency of the fundamental rights, for in that event the Government would be enabled to override the fundamental rights by adopting the stratagem of carrying out its function through the instrumentality or agency of a corporation while retaining control over it. That principle has been consistently followed and reiterated in all subsequent cases - see Delhi Transport Corpn. v. D.T.C. Mazdoor Congress (1991 Supp (1) SCC 600 : 1991 SCC (L&S) 1213), Som Prakash Rekhi v. Union of India ( (1981) 1 SCC 449 : 1981 SCC (L&S) 200), Manmohan Singh Jaitla v. Commr., Union Territory of Chandigarh (1984 Supp SCC 540 : 1985 SCC (L&S) 269), P.K. Ramachandra Iyer v. Union of India ( (1984) 2 SCC 141 : 1984 SCC (L&S) 214), A.L. Kalra v. Project and Equipment Corpn. of India Ltd. [ (1984) 3 SCC 316 : 1984 SCC (L&S) 497), Central Inland Water Transport Corpn. Ltd. v. Brojo Nath Ganguly (Central Inland Water Transport Corpn. of India Ltd. [ (1984) 3 SCC 316 : 1984 SCC (L&S) 497), Central Inland Water Transport Corpn. Ltd. v. Brojo Nath Ganguly (Central Inland Water Transport Corpn. Ltd. v. Brojo Nath Ganguly, (1986) 3 SCC 156 : 1986 SCC (L&S) 429 : (1986) 1 ATC 103), C.V. Raman v. Bank of India (C.V. Raman v. Bank of India, (1988) 3 SCC 105 : 1988 SCC (L&S) 687), Lucknow Development Authority v. M.K. Gupta [ (1994) 1 SCC 243 ], Star Enterprises v. City and Industrial Development Corpn. of Maharashtra Ltd. [ (1990) 3 SCC 280 ], LIC of India v. Consumer Education & Research Centre [ (1995) 5 SCC 482 ] and G.B. Mahajan v. Jalgaon Municipal Council ( (1991) 3 SCC 91 ). We do not propose to burden this judgment by adding to the list and referring to each case separately. 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) 24. Thus, the law as stated therein is not of universal application. The ratio of the said decisions must be applied having regard to the fact situation obtaining therein [See Bhavnagar University vs. Palitana Sugar Mill (P) Ltd. and others [ (2003) 2 SCC 111 - (Para 59)]. It has its limitations in its applications, as exceptions exist in several areas. 25. It is now well-settled that the corporate veil can in certain situations be pierced or lifted. The principles behind the doctrine is a changing concept and it is expanding its horizon as was held in the State of U.P. and Others vs. Renusagar Power Company & Others [ (1988) 4 SCC 59 ]. The ratio of the said decision clearly suggests that whenever a corporate entity is abused for an unjust and inequitable purpose, the court would not hesitate to lift the veil and took into the realities so as to identify the persons who are guilty and liable therefor. 26. The ratio of the said decision clearly suggests that whenever a corporate entity is abused for an unjust and inequitable purpose, the court would not hesitate to lift the veil and took into the realities so as to identify the persons who are guilty and liable therefor. 26. The proposition that a company although may have only one shareholder will be distinct juristic person as adumbrated in Salomon vs. Salomon and Co. [1897 AC 22], has time and again been visited the application of doctrine of lifting the corporate veil in revenue and taxation matters. [See Dal Chand and Others vs. Commissioner of Income Tax, Punjab (1944) 12 ITR 458 and Juggilal Kamlapat vs. Commissioner of Income Tax, U.P. (1969) 1 SCR 988 = [1969 (73) ITR 702]. 27. The corporate veil indisputably can be pierced when the corporate personality is found to be opposed to justice, convenience and interest of the revenue or workman or against public interest. [See C.I.T., Madras vs. The Meenakshi Mills Ltd. & Ors. [ (1967) 1 SCR 934 ]; Workmen Employed in Assn. Rubber Industry Ltd., Bhavnagar vs. Associated Rubber Industry Ltd., Bhavnagar & Another, [(1985) 4 SCC 11]; New Horizons Ltd. & Another vs. Union of India and Others [ (1995) 1 SCC 478 ]; State of U.P. and Others vs. Renusagar Power Co. and Others [ (1988) 4 SCC 59 ]; Hussainbhai, Calicut vs. The Alath Factory Thezhilali Union, Kozhikode and Others [ (1978) 4 SCC 257 ]; and Secretary H.S.E.B. vs. Suresh and Others, [ (1999) 3 SCC 601 ]. 28. The test that a public sector undertaking or Government company can be a 'State' within the meaning of Article 12 of the Constitution, only when it discharges some sovereign functions, has been given a go-bye by this Court in a recent decision in Pradeep Kumar Biswas vs. Indian Institute of Chemical Biology and Others [ (2002) 5 SCC 111 ]. Disagreeing with the decision of this Court in Sabhajit Tewary vs. Union of India and Others [ (1975) 1 SCC 485 ], it was held that the premises whereupon the ratio of the said decision was based was not correct and followed the precedents like Sukhdev Singh and Others Vs. Bhagatram Sardar Singh Raghuvanshi and another [ AIR 1975 SC 1331 ] and Ajay Hasia and Others vs. Khalid Mujib Sehravardi and Others [ (1981) 1 SCC 722 ]. Bhagatram Sardar Singh Raghuvanshi and another [ AIR 1975 SC 1331 ] and Ajay Hasia and Others vs. Khalid Mujib Sehravardi and Others [ (1981) 1 SCC 722 ]. This Court further held that the decision in Chander Mohan Khanna vs. National Council of Educational Research and Training and Others [ (1991) 4 SCC 578 ] does not lay down the correct law. 29. We are not oblivious of the legal proposition as enunciated in Ramana Dayaram Shetty and SAIL (supra) that even if a Government company is a State within the meaning of Article 12 of the Constitution of India as an agency or instrumentality of the State, there does not exist a relationship of principal or an agent and only the action of the said authorities would be State action. 30. The Government companies/public sector undertakings being 'States' would be constitutionally liable to respect life and liberty of all persons in terms of Article 21 of the Constitution of India. They, therefore, must do so in cases of their own employees. The Government of the State of Bihar for all intent and purport is the sole shareholder. Although in law, its liability towards the debtors of the Company may be confined to the shares held by it but having regard to the deep and pervasive control it exercises over the Government companies; in the matter of enforcement of human rights and/or rights of the citizen of life and liberty, the State has also an additional duty to see that the rights of employees of such corporations are not infringed. 31. The right to exercise deep and pervasive control would in its turn make the Government of Bihar liable to see that the life and liberty clause in respect of the employees is fully safeguarded. The Government of the State of Bihar, thus, had a constitutional obligation to protect 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. 32. In relation to statutory authority, the State had also the requisite power to issue necessary directions which were binding upon them, as for example, Section 79(c) of Electricity (Supply) Act. 33. It had an additional liability having regard to its right of extensive supervision over the affairs of the company. 32. In relation to statutory authority, the State had also the requisite power to issue necessary directions which were binding upon them, as for example, Section 79(c) of Electricity (Supply) Act. 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 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 the State's constitutional obligations. The State acts in a fiduciary capacity. The failure on the part of the State in a case of this nature must also be viewed from the angle that the statutory authorities have failed and/or neglected to enforce the social welfare legislations enacted in this behalf e.g. Payment of Wages Act, Minimum Wages Act etc. Such welfare activities as adumbrated in Part IV of the Constitution of India indisputably would cast a duty upon the State being a welfare State and its statutory authorities to do all things which they are statutorily obligated to perform. 35. In "The constitution, social rights and liberal political justification", Frank I. Michelman published in International Journal of Constitutional Law, Volume I, page 13, it is stated: "Whatever else it may also be, a country's written constitutional bill of rights is a high-ranking regulatory law, a "statute" fraught with direct legal consequences. Granted, the constitution may not be "simply'' that. No doubt it may figure as something beyond positive law: "a 'mirror reflecting the national soul'," perhaps; an expression of national ideals, aspirations, and values expected, as such, to "preside and permeate the processes of judicial interpretation and judicial discretion" throughout the length and breadth of the national legal order. Granted, the constitution may not be "simply'' that. No doubt it may figure as something beyond positive law: "a 'mirror reflecting the national soul'," perhaps; an expression of national ideals, aspirations, and values expected, as such, to "preside and permeate the processes of judicial interpretation and judicial discretion" throughout the length and breadth of the national legal order. But had bills of rights not also and always registered as direct, regulatory legislation - as laws to be enforced like other laws - jurists and scholars the world over would not have conducted their debates over the constitutionalization of social rights in the terms that we have grown used to. Constitutions, to be sure, are regulatory laws of a special kind, setting terms and conditions for the making and execution of all other laws. Typically, although not necessarily, some of the terms and conditions are cast in the form of a bill of rights; a list of certain interests of persons, upon whom are conferred what are considered to be legal rights, not just background moral claims, to have these interests at least negatively respected, and may be positively secured and redeemed, by the state's legislature and other actions yet to come." 36. The power of the State in the sphere of exercise of its constitutional power including those contained in Article 298 of the Constitution of India inheres in it a duty towards public, whose money is being invested. Article 298 of the Constitution of India confers a prerogative upon the State to carry on trade or business. While doing so the State must fulfil its constitutional obligations. It must oversee protection and preservation of the rights as adumbrated in Articles 14, 19, 21 and 300-A of the Constitution of India. 37. Even before India became independent, our leaders started thinking in terms of eradication of poverty and discrimination as well as uplift of down-trodden. At the time of framing of the Constitution, the Constitution makers had before them the harrowing tales of starvation deaths and particularly the infamous Bengal famine. 38. If it is considered to be the duty of the citizen to remind himself of the aspirations of the Constitution makers, the State, in our opinion, cannot be permitted to say that it has no such duty towards its own citizens. 39. 38. If it is considered to be the duty of the citizen to remind himself of the aspirations of the Constitution makers, the State, in our opinion, cannot be permitted to say that it has no such duty towards its own citizens. 39. Clauses (a) (b) and (h) of Article 51-A of the Constitution of India read as under: "Art. 51 A. It shall be the duty of every citizen of India- (a) to abide by the Constitution and respect its ideals and institutions, the National Flag and the National Anthem; (b) to cherish and follow the noble ideals which inspire our national struggle for freedom; (c) to promote harmony and the spirit of common brotherhood amongst all the people of India transcending religious; linguistic and regional or sectional diversities; to renounce practices derogatory to the dignity of women;" 40. In its attempt to interpret a statute in the light of the constitutional scheme, this Court has time and again interpreted a statute particularly in the light thereof. [See A.I.I.M.S. Students Union Vs. A.I.I.M.S. and others - (2002) 1 SCC 428 ]. 41. The Universal Declaration of Human Rights, 1948 enumerates at least 27 broad rights including the right to life, freedom from slavery and forced labour. The Protection of Human Rights Act, 1993 defines Human Rights to mean the rights relating to life, liberty, equality and dignity of the individual guaranteed by the Constitution or embodied in International Covenant on civil and political rights and International Covenant on Economic, Social and Cultural Rights which were adopted by the General Assembly of United Nations on 16.12.1966. The said Act was made by the Parliament "having regard to the changing social realities and growing concern in India and brought about issues relating to Human Rights with a view to bring about greater accountability and transparency in enforcement of laws of the nation." 42. Parts III and IV of the Constitution of India contain a large number of rights which guarantee human rights, some of which are akin to the rights enumerated in International Treaties and Chapters. Article 11 of International Covenant in Economic, Social and Cultural Rights, 1966 reads thus: "1. The States Parties to the present Covenant recognize the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions. Article 11 of International Covenant in Economic, Social and Cultural Rights, 1966 reads thus: "1. The States Parties to the present Covenant recognize the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions. The States Parties will take appropriate steps to ensure the realization of this right, recognizing to this effect the essential importance of international co-operation based on free consent. 2. The States Parties to the present Covenant, recognizing the fundamental right of everyone to be free from hunger, shall take, individually and through international co-operation, the measures, including specific programmes, which are needed: (a) To improve methods of production, conservation and distribution of food by making full use of technical and scientific knowledge, by disseminating knowledge of the principles of nutrition and by developing or reforming agrarian systems in such a way as to achieve the most efficient development and utilization of natural resources." 43. This Court in Chameli Singh and Others vs. State of U.P. and Another [ (1996) 2 SCC 549 ] referring to Article 11 of the International Covenant on Economic, Social and Cultural Rights, 1966 held that the State parties recognize "the right to everyone to an adequate standard of living for himself and for his family including food, clothing, housing and to the continuous improvement of living conditions". Indisputably, the State parties were to take appropriate steps to ensure realization of this thought. 44. Justice Holmes expressed the following view in Missouri vs. Holland [252 US 416 (433)]: "When we are dealing with words that also are a constituent act, like the Constitution of the United States, we must realise that they have called into life a being the development of which could not have been foreseen completely by the most gifted of its begetters. It was enough for them to realise or to hope that they had created an organism, it has taken a century and has cost their successors must sweat and blood to prove that they created a nation. The case before us must be considered in the light of our whole experience and not merely in that of what was said a hundred years ago." 45. The case before us must be considered in the light of our whole experience and not merely in that of what was said a hundred years ago." 45. Justice Frankfurter elucidated the interpretive role in "Some Reflections on the Reading of Statutes" : "There are varying shades of compulsion for judges behind different words, differences that are due to the words themselves, their setting in a text, their setting in history. In short, judges are not unfettered glossators. They are under a special duty not to overemphasize the episodic aspects of life and not to undervalue its organic processes - its continuities and relationships." 46. In Jagdish Saran and Others Vs. Union of India [ (1980) 2 SCC 768 ], it is stated: "Law, constitutional law, is not an omnipotent abstraction or distant idealization but a principled, yet pragmatic, value-laden and result-oriented, set of propositions applicable to and conditioned by a concrete stage of social development of the nation and aspirational imperatives of the people. India Today - that is the inarticulate major premise of our constitutional law and life." 47. It is also well-settled that a statute should be interpreted in the light of the International Treaties and Conventions. In Chairman, Railway and others Vs. Mrs. Chandrima Das and others [ AIR 2000 SC 988 = (2000) 2 SCC 465 ] this Court stated the law thus :- "24. The International Covenants and Declarations as adopted by the United Nations have to be respected by all signatory States and the meaning given to the above words in those Declarations and Covenants have to be such as would help in effective implementation of those rights. The applicability of the Universal Declaration of Human Rights and the principles thereof may have to be read, if need be, into the domestic jurisprudence." 48. In 'Human Rights and Indian Values' Justice M. Rama Jois noticed the Ancient Indian Texts in the following words : SAMANI PRAPA SAHA VONNBHAGA SAMANE YOKTRAY SAHA WO YUNISM ARAH NABHIMIVABHITE: "All have equal rights in articles of food and water. The yoke of the chariot of life is placed equally on the shoulders of all. All should live together with harmony supporting one another like the spokes of a wheel of the chariot connecting its rim and the hub. (Atharvanaveda-Samjnana Sukta)". The yoke of the chariot of life is placed equally on the shoulders of all. All should live together with harmony supporting one another like the spokes of a wheel of the chariot connecting its rim and the hub. (Atharvanaveda-Samjnana Sukta)". Thus, the right to equality of all human beings has been declared in the Vedas, which are regarded as inviolable. In order to emphasize the dignity of the individual, it was said that all are brothers as all are the children of God. No one is inferior or superior. Similarly, the Atharbvanaveda stressed that all have equal right over natural resources and all were equally important like spokes in a wheel. Both the Rigveda and Atharvanaveda declared that co-operation between individuals is necessary for happiness and progress. It is also of utmost importance to note that right to equality was made a part of "Dharma" long before the State came to be established. It is equally interesting to refer to the contents of Articles 1 and 7 of the Universal Declaration of Human Rights (1948), which read : "All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood." "All are equal before law and are entitled without any discrimination to equal protection of the law. All are entitled to equal protection against any discrimination in violation of this Declaration and against any incitement to such discrimination". This declaration is similar to the declaration of equality made in the Rigveda. After the establishment of the State, the obligation to protect the right to equality was cast on the Rulers. It was made a part of the Rules of Raja Dharma, the Constitutional Law. YATHA SWARIN BHUTANI DHARA DHARYATE SAMAM TATHA SWARIN BHUTANI BIBHARTE PARTHIVMVARTAM "Just as the mother earth gives equal support to all the living beings, a king should give support to all without any discrimination'' (Manu IX 31). This also meant that the kings were required to afford equal treatment to all the citizens in the same manner in which a mother treats all her children." 49. Prof. Upendra Baxi in his book entitled 'The Future of Human Rights' stated : "The processes of globalization, thriving upon the heavily critiqued ideologies of developmentalism and its eventual demise, seek to reproduce the soft state. Prof. Upendra Baxi in his book entitled 'The Future of Human Rights' stated : "The processes of globalization, thriving upon the heavily critiqued ideologies of developmentalism and its eventual demise, seek to reproduce the soft state. That notion is, however, now reconstructed in several important ways. The 'progressive state', at least in, and for, the South, is now conceived not as a state in its internal relations with its own people but in relation to the global community of foreign investors. A progressive state is one that is a good host state for global capital. A progressive state is one that protects global capital against political instability and market failures. A progressive state is one that represents accountability not so much directly to its peoples, but to the World Bank and International Monetary Fund. A progressive state is one that instead of promoting world visions of a just international order learns the virtues of debt repayment on schedule. Finally, a progressive state is one that gleans conceptions of good governance neither from the histories of struggles against colonization and imperialism nor from its internal social and human rights movements but from the global institutional gurus of globalisation. The construction of 'progress' is animated by a post-Fukuyama world in which there is no Other to Capitalism, writ globally large. Of course, the contradictions between democracy and capitalism are once again, recognized, but these two are reconstructed, for example, as follows : * War against hunger gets transformed in the 1998 Rome Declaration on the Right to Food into the free market oriented state and international management of food security system; * The struggle against homelessness and for shelter, in the 1998 United Nations Social Summit at Istanbul, becomes a series of mandates for the construction industries and urban developers; * 'Sustainable development', becomes an instrument of policy for the promotion and protection of corporate governance practices of 'greenwashing'; * The UNDP inspired 'mainstreaming' of human rights 'mission' envisaging the raising of a billion dollars for the Global Sustainable Development Facility has already been subscribed to by way of seed money by some of the most egregious multinational enterprise corporate human rights offenders." 50. In the 12 Misconceptions About the Right to Food (FIAN) it is inter alia stated: "What does the Right to Food mean? Can the existence of this Right cause laziness among people? In the 12 Misconceptions About the Right to Food (FIAN) it is inter alia stated: "What does the Right to Food mean? Can the existence of this Right cause laziness among people? The Right to Food is about respecting, protecting and fulfilling access to food producing resources and work. Therefore, the Right to Food doesn't make people lazy but busy, enabling them to feed themselves. Would the Right to Food be asking for too much from the government, and advocating for big government? The Right to Food in the context of Human Rights doesn't mean that the state is a super-entrepreneur determining and carrying out economic activities according to its own wisdom. It means the Right to Feed Oneself, which emphasizes dignity and self-reliance, very different from command economics of big government. Does the Right to Food require a moral revolution of society, allowing human rights to become the foundation of interpersonal ethics? The Right to Food does require a moral revolution. However, this moral revolution does not concern interpersonal ethics, but the duty to operationalize the state's obligations under Economic and Social Human Rights. Is hunger a violation of Human Rights? Lack of access to food can have many reason. If the state fails to respect, protect or fulfill this access, unless for lack of resources in a society, this must be termed a violation of the human right to food. Very often, the obligations of states vis-a-vis the vulnerable groups and persons are obvious and so is the availability of resources in society. Is the Right to Food about good governance? Good governance is negotiable. Human Rights are not. The central concept for Human Rights is the concept of "violation", referring to the suppression of vulnerable groups and individuals, whereas the concepts of good governance all too often deal with political theory and statistical indicators. It a country has the resources, but people get marginalized or continue in deprivation, this is not bad government, but oppression, intentional or not. Is the Right to Food realized if nobody is hungry anymore? Not necessarily. The Right to Food not only means that hunger and malnutrition are eradicated, but that future malnutrition can be eradicated by court action or other comparable mechanisms holding the state accountable on its obligations under the Right to Food." 51. In Kishen Pattnayak and Another vs. State of Orissa [(1989) Supp. Not necessarily. The Right to Food not only means that hunger and malnutrition are eradicated, but that future malnutrition can be eradicated by court action or other comparable mechanisms holding the state accountable on its obligations under the Right to Food." 51. In Kishen Pattnayak and Another vs. State of Orissa [(1989) Supp. (1) SCC 258], a Division Bench of this Court while considering poverty and starvation deaths in drought prone districts of Kalahandi and Koraput in the State of Orissa having regard to the report of the District Judge of Kalahandi noticed that Natural Calamities Committee had been constituted at the districts level of Kalahandi and Koraput directed the Government of Orissa to recommend at least five persons belonging to the recognized voluntary organizations like Sarvodaya Gandhi Peace Foundation, Ramakrishna Mission, Bharat Sewa Sangha and registered voluntary agencies as members of the said Natural Calamities Committee. This Court monitored for a long time the measures taken by the State for the purpose of mitigating hunger, poverty, starvation deaths etc. of the people of Kalahandi and Koraput. It opined that if such measures are taken, there can be no doubt that it will alleviate to a great extent the miseries of the people of Kalahandi. It was directed : "...The Natural Calamities Committee shall also keep a watch over the working of the social welfare measures which are being taken and may be taken in future. Shri Pattnayak also does not dispute that if such measures are continued to be taken, it will be a great relief to the people of Kalahandi and Koraput. We hope and trust that in view of the prompt action that has been taken by the government, soon the miseries of the people of these two districts will be over." For Citation : 20003(4) Supreme 1 = 2003(44) SCL 429 = 2003 LLR 428 = 2003(5) JT 1 = (2003) 116 Comp. Cas. 133 = 2003 (38) FLR = 329 = (2003) 6 SCC 1 = 2003(103) FJR 369 = 2003 (4) SLR 541 = 2003(3) LLJ 31 = 2003(3) LLM 789 =2003(2) SCSLJ 205 = 2003(5) ACE 519 = 2003(5-6) SBR 574