Awadh Kishore Sharma vs Shri Chandra Mohan Jha Agriculture Production Commissioner, Department of Agriculture and Others

Radha Mohan Prasad, J.—The present application has been filed for initiating a contempt proceeding against the opposite parties for their deliberate and wilful flouting of the order dated 19.4.1994 (Annexure 1) passed by this Court in C.W.J.C. No. 11754 of 1992.

The Petitioner filed the connected writ petition in a representative capacity claiming to be the General Secretary of Bihar State Agro Industries Development Corporation (hereinafter referred to as ''the Corporation'') Karmchari Union for issuance of an appropriate writ order or direction commanding the Respondents opposite parties to refund the clearness allowance deducted from the salaries of the employees from 1.1.1979 to 28.2.1990 to pay the group saving general life insurance policy monthly premiums from 1990, the group gratuity premiums of L.I.C. from 1990 to up-to-date, the interim relief from 1.1.1986 in place of 1.1.1988 the enhanced allowances of house rent from 1.12.1986 in place of 30.6.1992 and further arrears on the basis of the 5th Pay Revision from 1.3.1989 in place of 30.11.1990 and the dearness allowance from July, 1991 instead of April, 1992 which, according to the Petitioner had been arbitrarily withheld by the Corporation despite repeated requests made through representation by the Union as well as by individual employee of the Corporation.

While praying for grant of interim relief it was alleged that due to non-payment of salary and other due emoluments of the employees of the Corporation they had not been able to discharge their obligations towards their family members so much so that they were not even in a position to extend medical care in case of illness of anybody in their family and/or to impart proper education to their children. It was also stated in the said petition that Rajendra Prasad and Ramsuchin Mandal employees of the Corporation died without proper medical care in absence of the availability of fund due to non-payment of due amount payable to them by the Corporation. Further the Petitioner stated in the said petition that the wife of Peyare Dubey one of the employees of the Corporation also died without proper medical care due to the same reason.

A counter affidavit had been filed on behalf of the Chairman and the Managing Director of the Corporation but no counter affidavit was filed on behalf of the State Government and/or the Agriculture Production Commissioner or the Finance Commissioner who were Respondents No. 1,2 and 5, respectively despite seeking instructions and requesting them to file affidavit as was stated by the State Counsel appearing for them.

In the counter affidavit filed on behalf of the Chairman and the Managing Director of the Corporation the claims regarding payment of salary up-to-date deferred dearness allowance from 1.3.1979 to 28.2.1990 and group savings linked insurance from 1990 onwards were not disputed. Other claims, such as enhanced house rent allowance dearness allowance and interim relief were also not disputed. The only dispute in regard to the aforesaid claim was in respect of their date of implementation. It was also not disputed that no salary had been paid from November, 1992 till date.

The only plea taken by the Corporation for non-payment of the lawful dues to the employees of the Corporation was non availability of funds. It was urged on behalf of the Corporation that the Corporation has been moving the State Government and apprising it of the liability of the Corporation by series of correspondences but no solution has been found out.

The Court, in the circumstances aforementioned, with all constraints observed that the situation prevailing in the Corporation as well as in the State Government was really unfortunate. Works are being taken from the employees but they are kept deprived of the payment of their lawful dues for long time. This action of the Corporation was condemned and strictures were also passed against the State Government especially because nobody had bothered to even respond and place the facts before this Court as to why the funds had not been released by them to the Corporation so that the lawful dues are paid to its employees. Further in the facts and circumstances and considering the pathetic condition of the employees of the Corporation this Court by its judgment dated 19th April, 1994, directed the State of Bihar the Agriculture Production Commissioner and the Finance Commissioner Respondents No. 1, 2 and 5 respectively to forthwith release the fund if there is any liability of the State for the same, to the Corporation so that the lawful dues payable to the employees of the Corporation are made. Further the Chairman and the Managing Director of the Corporation (Respondents No. 3 and 4 respectively) were directed to pay all the lawful dues payable to the employees of the Corporation within one month from the date of the judgment/order which was passed in presence of the learned Counsel appearing for the Corporation as well as the State Counsel who were directed to communicate about the same to their respective clients. The writ application was accordingly disposed of.

It appears that the Petitioner also thereafter filed a representation along with a copy of the aforesaid judgment/order of this Court for its implementation and the same was forwarded to the Agriculture Production Commissioner and the Finance Commissioner of the Government of Bihar who were opposite parties No. 1 and 2 respectively in the present proceeding, for information and necessary action on 27th April, 1994. It is alleged that despite this, the opposite parties have knowingly deliberately and wilfully flouted the direction of this Court for which they besides being liable to be punished for contempt of this Court are also liable to pay adequate compensation on account of death of many employees of the Corporation for want of proper medical care and for taking loans from various sources for filing of the writ application as well as the present application and for which they have to pay interest. It is also alleged that the Corporation makes necessary deductions from the salaries of the employees for the purpose of payments towards the general group insurance premium etc. but it has not insured its employees with any Insurance Company and by this conduct the opposite parties have committed various illegalities and irregularities and are also liable to be prosecuted for violation of the relevant rules under the Act. Further, it is contended that the action of the Corporation in taking work from the employees regularly without paying salary amounts to begar which is prohibited and violation thereof is an offence punishable under Article 23 of the Constitution of India.

A counter affidavit has been filed on behalf of opposite party No. 3 in which it is stated that on receipt of the order of this Court the Corporation has taken all possible measures and made sincere efforts for complying with the order of this Court. Further, it is stated that the Corporation is passing through financial crisis beyond its control and the full payment could not be made to the employees due to non availability of fund in spite of all endeavors. Besides this, the other plea taken in the counter affidavit in regard to non-payment of the dues of its employees is closure of certain projects etc. about Why this Court is not concerned in the present contempt application as it is beyond its scope.

In the counter affidavit filed on behalf of the Managing Director of the Corporation (opposite party No. 4) who is holding the additional charge of the said office besides being Additional Director of Agriculture (Extension) similar plea has been taken. However in paragraph 5 it is admitted that the order could not be fully complied in spite of his best efforts on account of unsurmountable financial crisis prevailing in the Corporation which was beyond the control and reach of opposite party No. 4. It is also stated that he immediately after receipt of the copy of the judgment wrote letter to various authorities in the Government, including the Agriculture Production Commissioner and the Additional Secretary to the Government in the Agriculture Department for grant of money for compliance of the order and direction but the Government in the Agriculture Department vide letter No. 3746/AgriculturG. dated 9.5.1994 intimated the Corporation that the payment of salary of the employees of the Corporation is not the liability of the Government rather it is for the Corporation to mobilise fund for making payment of current and arrear salary of its employees. Thereafter opposite party No. 4 requested the Government for grant of loan but he failed to get any amount from the Government either by way of grant or loan and in spite of all his good intentions and best efforts he could not succeed in mobilising fund. He however further stated that by diverting a part of the fund received by the Corporation for purchase and supply of tool kits for different districts he made certain payments prior to as well as after receipt of the order of this Court. Lastly he has also taken the similar plea of financial crisis beyond its control for non-payment of the dues of the employees of the Corporation.

It is most surprising that in such a serious matter initially a counter affidavit was filed on behalf of the State of Bihar and its Agriculture Production Commissioner sworn by the Registrar of the Department.. Later when the Court took strong exception to this a supplementary show cause sworn by the Agriculture Production Commissioner was filed.

In the said counter affidavit as well as the show cause it is stated that the State Government invested a huge amount in the Corporation of the public money but the Corporation failed to achieve its object due to mismanagement and maladministration of the Managing Directors or other officials of the Corporation. Further it is stated that so long the State Government has sufficient fund it used to give grants to different Corporations but since the State Government is facing financial crisis it is not in a position to do the benevolent work by way of giving grant to the Corporation and, lastly, it is stated that the State Government is not liable to make payment of the salary to the employees of the Corporation nor it is incumbent for it to give money by way of grant for the said purpose. As such it is stated that opposite party No. 1 had not committed any contempt as alleged by the Petitioner and has further sought for a direction for liquidation of the Corporation for clearing its dues.

In the supplementary show cause the deponent besides tendering unqualified apology has taken the same idea that the State Government is not liable for such payment of salary to the employees of the Corporation and that it is the responsibility of the Corporation. At the same time it is also stated that the Department of Agriculture after due consideration of the facts and circumstances of the matter and with the approval of the Minister decided that the matter relating to revival of the Corporation be placed for consideration before the High Level Committee consisting of the Development Commissioner the Finance Commissioner the Agriculture Development Commissioner the Managing Director Bihar State Agriculture Industries Development Corporation and the Director of Agriculture under the Chairmanship of the Minister Agriculture and accordingly the Managing Director of the Corporation vide letters dated 12.7.1994 and 9.8.1994, was requested to furnish the detailed draft plan along with a draft memorandum immediately. In paragraph 13 it is stated that the matter regarding payment of salary to the employees of the Corporation as well as for the revival of the Corporation was examined by the Director of Agriculture who in his detailed note suggested for liquidation of the Corporation for which after taking opinion of the Minister l/C Agriculture and the Finance Commissioner has endorsed the file to the Chief Secretary with a request to obtain the approval of the Chief Minister on the proposal for liquidation of the Corporation.

Further show cause has been filed on behalf of opposite party No. 4 to which certain correspondences made by him with the Government have been annexed in order to show his bonafide for securing and mobilising fund for compliance of the order of this Court.

A counter affidavit it has also been filed on behalf of the Finance Commissioner (opposite party No. 2) in which besides taking the similar plea that the Corporation is an autonomous body and has power to raise the money and that the Finance Department is not under any obligation to meet the expenses of the Corporation nor the Corporation can claim any grant from the Finance Department as a matter of right it is also stated that the Agriculture Department is the Administrative Department of the Corporation.

Reply to the counter affidavit and the show cause has also been filed on behalf of the Petitioner and further show cause and counter affidavit have also been filed on behalf of opposite parties No. 1, 2 and 5 which have only led to making the brief of the contempt application bulky consisting of 261 pages and no new fact has been brought on the record. However the facts that the Petitioner and its members are in the employment of the Corporation and that the Corporation is taking work from them are not in dispute. The liability to pay their dues is also not disputed by the Corporation. But the only plea taken in various affidavits filed by them is the financial crisis. The State which was party and did not dispute the liability by filing affidavits in the writ case has however attempted to dispute this liability in the present contempt proceeding besides taking the plea that it is itself facing financial crisis and is not In a position to do the so-called benevolent work by way of giving grant to the Corporation.

Despite repeated asking the counsel as well as the contemner who were present in Court as to whether they want to file any further affidavit or document to defend in this matter they did not express any desire for the same. It was stated that all the materials upon which they want to place reliance have been filed and no further opportunity is needed by them.

Mr. Umesh Prasad Singh, learned Counsel for the Petitioner contended that as hundred per cent share of the Corporation is held by the Governor of Bihar and all executive actions of the State Government are to be expressed in the name of the Governor under Article 166 of the Constitution of India. The Corporation is a Government Company as defined u/s 617 of the Companies Act, 1956 and the State Government is the owner of the Corporation. Section 26 of the Companies Act provides for framing of articles prescribing regulations to regulate the functioning of the Company and the Articles of Association signed by the subscribers of the memorandum bind them. It was submitted that various clauses of the Articles of Association, such as, Sub-clause (ii) of Article 4 and Articles 40, 42, 64, 67 and 95 of the Articles of Association of the Corporation clearly demonstrate that the complete managerial control vests in the Board of Directors who were nominees or appointees of the Governor. Further the managerial as well as financial powers are also exclusively within the control of the Governor. The Additional Director Agriculture (Extension) of the Agriculture Department is holding the additional charge of the Managing Director of the Corporation under Articles 121 and 122 of the Articles of Association and revenues and all appointments are under the control of the State Government. Thus according to the learned Counsel various provisions of the Articles of Association leave no room for doubt that overall liability and control of the Corporation is of the State Government. It was further contended by the learned Counsel for the Petitioner that the State Government being party in the writ petition and having not contested the liability in the said writ petition they cannot now be heard to take this plea that they are not liable for the dues of the Corporation. Moreover according to the learned Counsel if there is right claim by an individual then they cannot shirk from the liability and/or responsibility.

In this case Mr. J.P. Shukla learned Counsel appeared for the Agriculture Production Commissioner (opposite party No. 1) and the learned Advocate Genera! for the State (opposite party No. 5). Mr. Shukla contended that the opposite party No. 1, who is an I.A.S. Officer and an employee of the State Government cannot take any decision on his own. Even under Article 96 of the Articles of Association the State Government has been vested with the power to issue such directives or instructions as it may think fit in regard to the finances and the conduct of the business and affairs of the Company or Directors thereof and in like manner vary and annul any such directives and instructions and the Directors shall duly comply with and give immediate effect to such directives or instructions.

Learned Advocate General on behalf of the State contended that the State Government has no liability to pay the dues including the salaries of the employees of the Corporation which is registered under the Companies Act. In support of this he placed reliance on the decision of the Supreme Court in the case of A.P. State R.T. Corpn. v. I.T. Officer AIR 19G4 SC 1486-Paragraph 17. According to him the liability of the State is only to the extent the State holds share and has no other liability. In support of this he relied upon Section 34 of the Companies Act which deals with the effect of registration and provides that the liability on the part of the members to contribute to the assets of the Company in the event of being wound up is mentioned in the Act. According to the learned Advocate General if the employees of the Corporation could not be held to be servants of the State, then there cannot be any liability fastened upon the State inasmuch as the property of the Company is not the property of the share-holder.

Before dealing with the aspect regarding legal liability and obligation of the State Government, I wish to deal with the obligations of the State Government under the Directive Principles of State Policy. Article 43 of the Constitution of India provides that the State shall endeavor to secure by suitable legislation or economic organization or in any other way to all workers agricultural industrial or otherwise work a living wage conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities and in particular the State shall endeavor to promote cottage industries on an individual or co-operative basis in rural are-and Article 21 of the Constitution of India guarantees that no person shall be deprived of his life and personal property except according to procedure established by law. Life as has been held is not an inner concept confined to a clinical life or death but embracing all activities that any free human being subject to the laws of the land may carry on. Under Article 23 of the Constitution of India traffic in human being and begar and other similar forms of forced labour are prohibited and any contravention thereof has been made an offence punishable in accordance with law.

The Supreme Court in the case of People''s Union for Democratic Rights and Others Vs. Union of India (UOI) and Others, while dealing with the complaint of non-observance of the provisions of the Contract Labour (Regulation and Abolition) Act 1970 and the Inter-. State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, held such complaints to be violative of Article 21 inasmuch as it has been held that the right to life guaranteed under the said Article is not confined merely to physical existence or to the use of any faculty or limb through which life is enjoyed or the soul communicates with outside world but it also includes within its scope and ambit the right to live with basic human dignity and the State cannot deprive any one of this precious and invaluable right because no procedure by which such deprivation be effected can ever be regarded as reasonable, fair and just. Further, it has been held that non-payment of minimum wages to the workmen violates the fundamental rights enshrined in Article 23 of the Constitution.

Further, the Supreme Court has in its judgment, dealt with the scope of Articles 21 and 23 of the Constitution and the reason for enacting the said provision in the Chapter of fundamental rights and also considering the question as to what is the true scope and meaning of "traffic in human beings and begar and other similar forms of forced labour" in Article 23 and what are the forms of "forced labour" prohibited by it and what kind of labour provided by a person can be regarded as "forced labour" so as to fall, within this prohibition. In the case cf People''s Union for Democratic Rights and Ors. v. Union of India and Ors. (supra), the Supreme Court has rejected any stifling role of Article 23 of the Constitution and said as follows:

It is difficult to imagine that the Constitution-makers should have intended to strike only at certain forms of forced labour leaving it open to the socially or economically powerful sections of the community to exploit the poor and weaker sections by resorting to other forms of forced labour. Could there be any logic or reason in enacting that if a person is forced to give labour or service to another without receiving any remuneration at all it should be regarded as a pernicious practice sufficient to attract the condemnation of Article 23 but if some remuneration is paid for it, then it should be outside the inhibition of the Article? If this were the true interpretation, Article 23 would be reduced to a mere rope of sand for it would then be the easiest thing in an exploitative society for a person belonging to a socially or economically dominant class to exact labour or service from a person belonging to the deprived and vulnerable section of the community by .paying a negligible amount of remuneration and thus escape the rigour of Article 23. We do not think it would be right to place on the language of Article 23 an interpretation which would emasculate its beneficent provisions and defeat the very purpose of enacting them. We are clearly of the view that Article 23 is intended to abolish every form of forced labour. The words "other similar forms of forced labour" are used in Article 23 not with a view to importing the particular characteristic of ''begar'' that labour or service should be exacted without payment of any remuneration but with a view to bringing within the scope and ambit of that Article all others forms of forced labour and since ''begar'' is one form of forced labour the Constitution-makers used the words "other similar forms of forced labour" are used in Article 23 not with a view to importing the particular characteristic of �begar� that labour or service should be exacted without payment of any remuneration but with a view to bringing within the scope and ambit� of that Article all others forms of forced labour and since be gar� is one form of forced labour, the Constitution-makers used the words �other similar forms of forced labour�. If the requirement that labour or work should be exacted without any remuneration were imported in other form of forced labour, they would straightaway come within the moaning of the word ''begar'' and in that event there would be no need to have the additional words "other similar forms of forced labour". These words would be rendered futile and meaningless and it is a well recognized rule of interpretation that the Court should avoid a construction which has the effect of rendering any words used by the legislature superfluous or redundant. The object of adding those words was clearly to expand the reach and content of Article 23 by including, in addition to ''begar'' other forms of forced labour within the prohibition of that Article. Every from of forced labour, ''begar'' or otherwise, is within the inhibition of Article 23 and it makes no difference whether the person who is forced to give his labour or service to another is remunerated or not. Even if remuneration is paid, labour supplied by a person would be hit by this Article if is forced labour, that is, labour supplied not willingly but as a result of force or compulsion.

In C.W.J.C. No. 2159 of 1988 disposed of on 1st September, 1989, a Bench of this Court held that Articles 21 and 23 of the Constitution take care of the socio-economic structure of the country and bring about socio-economic regeneration with view to reaching social and economic justice to the common man.

In the case of Purnea Zila Mazdoor Union Vs. State of Bihar and Others, after quoting Article 43 of the Constitution a Bench of this Court held as follows:

The said provision although occurs in Part IV of the Constitution but when-read in conjunction with Articles 14, 21 and 23 of the Constitution the same must be held to be one of the fundamental rights of a citizen of India.

The opposite parties who are all State under Article 12 of the Constitution cannot justify their existence unless strictly complied with the obligations and requirements as enshrined in Articles 14, 21, 23, and 43 of "the Constitution of India.

The facts and circumstances of the present case do not invite application of laws that governs the workmen or the employer-employee relationship beyond what has already been noticed. The reason is obvious. It is not in dispute that the work has been taken from its employees by the Corporation but have not been paid their wages and other allowances since long. It is also not in dispute that as per Clause (ii) of Article 4 of the Articles of Association the Corporation is a Government Company as defined in Section 617 of the Companies Act. Articles 46 of the Articles of Association empowers the Board of Directors of the Corporation to raise or borrow or secure any sum or sums for the purpose of the Company by a resolution passed at a meeting of the Board but this exercise of the power is subject to the approval of the Government. Articles 72 to 75 deal with constitution of the Board of Directors and the provisions contained therein exclusively vest power in the Governor to decide the number of Directors and to appoint them. It is true that the general power of the Company is vested in the Board of Directors under Article 76 of the Articles of Association but the said provision under Article 95 is subject to the provisions of the Act and the directives or instructions if any as the Governor may issue from time to time.

As already stated above Article 95 of the Articles of Association fully empowers the Governor to issue such directives or instructions as he may think fit in regard to the finances and the conduct of the business and affairs of the Company or Directors thereof and in like manner vary and annul any such directives and instructions and the Directors shall duly comply with and give immediate effect to such directives or instructions.

Thus from reading of the aforesaid provisions, there cannot be any doubt that the State Government controls the entire activities of the Corporation and that it is an instrumentality of the State. Rights under Articles 21 and 23 are such that can be enforced against any person even against a person who is not a State or an author equivalent to a State. The fact that the Corporation is entirely under the Control of the State Government is also borne out from the statements made in paragraph 23 of the counter affidavit filed on behalf of the opposite parties No. 1 and 5 wherein it is alleged that the then Managing Director filed counter affidavit in the connected case by making uncalled for averments as well as without approval of the Department of Agriculture ignoring the direction issued by the Director (Annexure B) wherein he was directed to take approval of the Department before filing of the counter affidavit in the connected writ.

In the instant matter the Petitioner sought enforcement of his rights in the connected writ petition against the Corporation as well as against the State of Bihar.

Before dealing with various questions raised by the parties, I, wish to remind that the ends of justice are higher than the mere law though justice has got to be administered according to the laws made by the legislature and it is meant to serve the living and does not beat its abstract wings in the jural void. A reference in this connection may be made to a decision of the Supreme Court in the case of State of Karnataka Vs. L. Muniswamy and Others, Us functional fulfillment as ''social engineering'' depends upon its scrutinized response to situation, subject- matter and the complex of realities which require ordered control. A holistic understanding is simple justice to the meaning of all legislations. Fragmentary grasp of rules can misfire or even backfire. In this connection a reference may be made to a decision of the Supreme Court in the case of The Chairman, Board of Mining Examination and Chief Inspector of Mines and Another Vs. Ramjee, There is no fault of the Petitioner in joining the service of the Corporation and discharging their duties as required by the Corporation. They got emoluments till 1992 but have not been paid thereafter. There is one basic law which governs every contract of service, i.e., "that employer must pay living wages to the employee". If wages are paid but are less than minimum prescribed wages it is a form of forced labour and if no wages are paid it is ''begar''. In the case of the employees of the Corporation since they have alleged and not denied by the opposite parties that their living condition has deteriorated on account of employer not paying to them their wages not discharging their obligations for their health'' care and not contributing to the Employees State Insurance the opposite parties have completely failed to make any successful endeavor to secure a living wage and conditions of work ensuring decent standard of life and full enjoyment of leisure and social and cultural opportunities and thereby have acted in violation of Articles 43 and 21 of the Constitution of India.

Reliance placed by the learned Advocate General on the decision of the Supreme Court in the case of A.P. State R.T. Corpn. v. I.T. Officer (supra) is wholly misplaced. In the said case the Supreme Court was dealing with the scope of Article 289 of the Constitution which deals with exemption of property and income of a State from Union taxation. There cannot be any doubt that the Corporation cannot claim exemption under Article 289 in respect of the property and income from taxation. In the said case the Supreme Court has not dealt with the situation arising out of a case similar to the present case. In the said decision nowhere it has been held that if the Corporation of which hundred percent share-holder is the State and is a purely Government Company will have no duty and/or liability towards its employees specially when the absolute control under its. Articles of Association vests in the State Government. The other case relied on by the learned Advocate General i.e., Heavy Engineering Mazdoor Union Vs. State of Bihar and Others, also will have no application to the facts of the present case. It is true that in the said case the Supreme Court held that the Company and the share-holders being district entities the fact that the President of India and certain officers held all its shares does not make the Company an agent either of the President or the Central Government. But in the said case the question involved was as to whether the appropriate Government to make reference u/s 10 of the Industrial Disputes Act, 1947 was the Central Government or the State Government. The Supreme Court repelled the contention that the appropriate Government to" make the reference was the State Government and not the Central Government.

None of the decisions cited by the learned Advocate General deals with the question as to whether the State Government has any duties/liabilities/responsibilities towards the employees of its Company registered under the Companies Act having its entire control over the affairs of the Company, including the finances. There cannot be any doubt to the proposition that a Company registered under the Companies Act is a legal person separate and distinct from its individual members. Property of the Company is not the property of the share-holders. A share-holder has a mere interest in the property arising under its Articles of Association measured by a sum of money for the purpose of liability and by a share in the property but keeping in mind the provisions contained in Articles 14, 21, 23 and 43 of the Constitution, I am unable to hold that the State Government has no duty/liability to discharge towards the employees of its Company. Moreover in my opinion such pleas are not available to the Respondent-State and its officers in the present proceeding when they did not raise this objection and contest this aspect in the connected writ petition. On the one hand the State is trying to wash up its hand by taking shelter under the Companies Act and on the other hand by its actions under the provisions of the Articles of Association has always exercised its absolute control over the affairs and finances of the Corporation. This action of the State cannot be held to be fair and justified. The Corporation acting as instrumentality or agency of the Government would be subject to some limitations in the field of constitutional and administrative law though Government itself in the eye of law may be distinct and independent legal entity. If the Government acting through its officers seeking to other public law limitation it must follow a forturiori that Government acting through the instrumentality or agency of the Corporation is equally subject to same limitation. The Supreme Court in the case of Som Prakash Rekhi v. Union of India and Anr. AIR 1981 SC 212 while considering the status of an instrumentality or agency of the Government vis-a-vis the cherished rights of the people entrenched in Part III of the Constitution of India, held as follows:

The constitutional philosophy of a democratic socialist Republic mandated to undertake a multitude of socio- economic operations inspires Part IV and so we must envision the State entering the vast territory of industrial and commercial activity competitively or monopolistically for ensuring the welfare of the people. This expansive role of the State under Part IV is not played at the expense of the cherished rights of the people entrenched in Part III since both the sets of imperatives are complementary and co-exist harmoniously. Wherever the Constitution has felt the need to subordinate Part 111 to Part IV it has specificated it and absent such express provisions both the Parts must and can flourish happily together given benign judicial comprehension a la State of Kerala and Another Vs. N.M. Thomas and Others,

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It is well known, and surely within the erudite and experienced ken of our ''founding fathers'' that Government embarks on myriad modern commercial activities by resort to the jurisprudential gift of personification through incorporation. This contrivance of carrying on business activities by the State through statutory corporations, government companies and other bodies with legal personality, simplifies and facilitates transactions and operations beyond the traditional and tardy processes of governmental desks and cells noted for their red tape exercise and drowsy dharma. But to use the corporate methodology is not to liberate the State from its basic obligation to obey Part III. To don the mantle of company is to free the State from the inevitable constraints of governmental slow motion not to play truant with the great rights. Otherwise a cunning plurality of corporations taking over almost every State business-the post and the rail road the T.V. the radio every economic ministry''s activity why even social welfare work will cheat the people of Part III rights by the easy plea: "No admission for the bill of rights no State here.

Mr. Laleshwar Prasad Sinha learned Counsel appearing for the opposite party No. 4 contended that the Corporation is under the control of the Administrative Department and all schemes which the Corporation is to perform has got to be approved by the Administrative Department. According to the learned Counsel the Corporation has no authority to act independently especially in the matter of finances as is also evident from the fact that the Tractor Project located at Fatuha was running in loss for the last few years yet the Government vide letter No. 12894 dated 30th September 1986 (Annexure F of the show cause filed on behalf of opposite party No. 4) took decision that the workmen employed in the Tractor Project shall not be retrenched rather they will be absorbed in the Agriculture Department or in any other department. It was submitted by the learned Counsel for opposite party No. 4 that the Company lost the management of the whole affairs such as right to transfer share of the company or raise or borrow or secure the payment of any sum or sums of money for the purpose of company as this power was always retained by the State Government.

There may be some substance in the aforesaid submission of the learned Counsel for opposite party No. 4 but mobilising resources is the look out of the Corporation and/or the State Government and the employees have nothing to do with it. However the facts and circumstances of the present case go to show that the liabilities of the Corporation are the liabilities of the State Government inasmuch the State Government is responsible for creating the liabilities on account of its interference with the management of the Corporation and thus it is under obligation to discharge the same for which they are under all obligations under the provisions contained in the Articles of Association which vests entire financial powers to be dealt with by the Governor who is to act on the advice of the State Government. Thus I find that the State authorities in the present case have not acted fairly and their intention has been not to comply with the direction of this Court given to C.W.J.C. No. 11754 of 1992 which amounts in gross contempt.

However in the peculiar facts1 and circumstances of this case as a last chance Shri Chandra Mohan Jha Agriculture Production Commissioner Department of Agriculture Government of Bihar Patna (opposite party No. 1) Shri Sachchida Nand Sinha Finance Commissioner Government of Bihar Patna (opposite party No. 2) Shri Vishwa Nath Singh Chairman Bihar State Agro-Industries Development Corporation Patna (opposite party No. 3) and Shri Madan Bihari Sharan Managing Director Bihar State Agro-industries Development Corporation Patna (opposite party No. 4) are given opportunity to purge the contempt by complying with the said direction of this Court and report to this Court within a week from today failing which necessary order imposing punishment shall be passed against them.

List this matter for orders on 18th July, 1995 when all the contemners are directed to appear in person in Court.