The government cannot be compelled to provide salaries to defunct PSUs as a matter of right, the SC said in a ruling that must come as a jolt to the PSUs.
The government cannot be compelled to provide salaries to defunct public sector undertakings (PSUs) as a matter of right, the Supreme Court said in a ruling that must come as a jolt to the PSUs.
"If courts start giving directions to the government on such pleas it would lead to a situation where every disadvantaged section of society would start knocking the doors of the court to obtain relief," a bench of justices RV Raveendran and Markandey Katju said.
The Supreme Court (SC) quashed a Gauhati high court judgment directing the Assam government to provide grant-in-aid to Cachar and Karimganj district milk producers' cooperative union limited (CAMUL) to pay salaries to the employees after the society folded up operations in 1994.
The state government moved the apex court, contending that the cooperative society was not a government department and hence it could not be compelled to pay salaries to its employees.
However, CAMUL referred to the apex court's 2003 judgment in the Kapila Hingorani case, where the Bihar government was directed to sanction Rs51 crore for payment of salaries to employees of several PSUs that folded up during 1980-90. In the said interim direction, the apex court had asked the government to ensure payment of salaries and other benefits to the aggrieved employees on humanitarian ground until it decided the legality of closure of PSU units.
Rejecting Camul's contention, the SC said the 2003 direction was an interim measure and could not be cited as a precedent or law. The directions were not based on the employees' legal rights.
They were made to meet a human rights problem involving starvation deaths and suicides by unpaid employees or their families.
“This may lead to every disadvantaged group approaching this court or the high court alleging human right violations and seeking a mandamus requiring the state to provide them an allowance,” the apex court said.
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