Legacy of Advocate Kapila Hingorani's public interest litigation and self-immolation of Chandan Bhattacharya
In Bihar State Ardh Sarkari Arajpati Karamchari Maha Sangh & Ors. v. State of Bihar & Ors. 2026 INSC 1061, Supreme Court's Division Bench of Justice Vikram Nath and Justice Sandeep Mehta delivered a 46-page long judgement dated September 28, 2026, wherein, it concluded: "59.....we deem it appropriate to summarise the directions issued hereinabove as follows:- a. Though the States of Bihar and Jharkhand have substantially issued by this Court in paragraph 37 of the order dated 29th May, 2026, as per their compliance affidavits, certain aspects of such implementation continue to remain pending. The respective States shall, therefore, take all necessary steps to complete the implementation of the aforesaid directions in respect of the cases which remain pending and bring the same to its logical conclusion, in accordance with law. b. The exercise for identification and verification of the remaining employees/workmen shall stand closed. The untraced/unverified employees/workmen or their legal heirs, as the case may be, upon being traced or upon otherwise gaining knowledge of these proceedings would be at liberty to approach the concerned Nodal Officer appointed for the respective Corporation, within a period of 12 months from the date of this order, with the requisite documents for verification, whereupon their claims shall be duly processed and the amounts found payable shall be disbursed in accordance with law. c. With a view to ensuring transparency and facilitating verification of the claims of the employees/workmen of the erstwhile defunct Corporations, the States of Bihar and Jharkhand shall: (i) compile and publish, in the public domain, updated particulars of all employees/workmen, including those whose dues have been paid or whose liability has otherwise been discharged and those whose claims remain pending; (ii) in respect of employees/workmen whose dues have been paid or liability discharged, publish their name, designation, period of service, amount payable, amount disbursed, date of disbursement and such other particulars as may be relevant for identification and verification of the claim; (iii) in respect of employees/workmen whose claims remain pending on account of their being untraced, unverified or for want of requisite documents, indicate the present status of the claim, the reason for pendency and the documents or steps required for its processing, together with the contact particulars of the concerned Nodal Officer; (iv) post the aforesaid information on the official websites of the Information and Public Relations Department of the States, as also on the website of the concerned parent Administrative Department of the erstwhile Corporations; and (v) complete the aforesaid publication within four weeks from the date of this order and thereafter update the information periodically to reflect any subsequent verification, payment or discharge of liability. d. The States of Bihar and Jharkhand are directed to pay a one-time sum of Rs.1,00,000/- to each of the concerned daily-wage employees/workmen who were engaged during the relevant period. e. The States of Bihar and Jharkhand shall ensure payment of simple interest at the rate of 12% per annum on the delayed EPF dues, and at the rate of 6% per annum on the delayed salary, wages and other monetary entitlements, for the period commencing from the date on which the respective amounts became due and payable until the date of their actual payment. f. The liability of the respective State shall be determined in accordance with the mechanism already approved by this Court vide its order dated 29th May, 2026."
The proceedings had their genesis in the reorganisation of the erstwhile State of Bihar pursuant to the Bihar Reorganisation Act, 2000. The reorganisation of the erstwhile State of Bihar, pursuant to which the State of Jharkhand came to be constituted, gave rise, inter alia, to questions concerning the apportionment and discharge of liabilities, dues and service-related claims of the employees/workmen of five State-owned inter-State corporations, namely, Bihar State Construction Corporation Ltd. 1; Bihar State Industrial Development Corporation Ltd. 2; Bihar State Electronic Development Corporation Ltd.3; Bihar State Forest Development Corporation Ltd. 4; and Bihar State Panchayati Raj Financial Corporation Ltd. 5. The controversy, which has its roots in the statutory reorganisation, has since traversed a long and chequered course, necessitating successive rounds of judicial intervention and administrative consideration.
The history of the litigation, including the proceedings in Kapila Hingorani vs. State of Bihar (2003) 6 SCC 1, the subsequent adjudication in relation to the inter-State liabilities, and the constitution and functioning of the Committee under the Chairmanship of Justice Dinesh Maheshwari, Judge (Retd.), Supreme Court of India,7 has been noticed and dealt with in extenso by the Supreme Court in its order dated May 29, 2026. In view of the detailed consideration already undertaken therein, we do not deem it necessary to once again recapitulate the entire course of the litigation. The said order constitutes the backdrop against which the issues presently arising for consideration are required to be examined. By the order dated May 29, 2026, the Supreme Court considered the Final Report dated April 30, 2026 submitted by the Committee, and accepted its recommendations to the extent indicated in paragraph 37 of the said order. The effect of the said order was to bring finality to the matters in respect of which the recommendations of the Committee were accepted, leaving no room for those issues to be reopened in future. Pursuant to the order dated May 29, 2026, the States of Bihar and Jharkhand filed their respective compliance affidavits in August, 2026, reporting compliance with the directions issued by the Supreme Court and the disbursement of the principal dues to the identified and verified employees/workmen of the five Corporations. The affidavits set out the corporation-wise position of payments made by the respective States, while also identifying the cases which remain pending on account of the claimants being untraceable, absence of requisite documentation or other verification formalities.
The respective compliance affidavits filed by the States of Bihar and Jharkhand disclose the following position with regard to the implementation of the directions issued by this Court in paragraph 37 of the order dated May 29, 2026:-The apportionment and fixation of the inter-se liability of the respective States 1. Bihar State Construction Corporation Ltd.: Against the assessed liability of Rs.97.50 crore in respect of all 1,256 employees/workmen, the State of Bihar has disbursed Rs.84.10 crore to 1,054 employees/workmen, comprising 587 regular and 467 daily-wage employees/workmen. The State of Jharkhand has transferred Rs.36.01 crore out of its allotted liability of Rs.38.41 crore to the State of Bihar for disbursement to the verified employees/workmen.
2. Bihar State Industrial Development Corporation Ltd.: The State of Bihar has paid Rs.25.67 crore towards the principal dues of 403 employees/workmen of Bihar Spun Silk Mill, Bhagalpur and Bihar Scooters Ltd., Fatuha. The State of Jharkhand has disbursed Rs.5.30 crore in respect of 163 allotted employees/workmen of its units, of whom 136 have been paid, while 25 were found to have no outstanding dues.
3. Bihar State Electronic Development Corporation Ltd.: The State of Bihar has disbursed the salary arrears payable to 67 employees/workmen out of the total 70 employees/workmen of Beltron Video Systems Ltd.8, Hajipur. The State of Jharkhand has transferred Rs.7.22 crore to BSEDC towards its liability in respect of 61 out of 63 employees/workmen allotted to it from BVSL, Ranchi and Beltron Mining Systems Ltd., Dhanbad.
4. Bihar State Forest Development Corporation Ltd.: The State of Bihar has paid the outstanding dues of 201 out of 203 employees/workmen. The State of Jharkhand has discharged its liability towards 36 allotted employees/workmen of the subsidiary units of Bihar Solvents Chemicals Ltd. and Bihar State Tanin Extract Ltd.
5. Bihar State Panchayati Raj Financial Corporation Ltd.: The State of Bihar has paid the principal dues of 90 out of 103 employees/workmen. The State of Jharkhand has disbursed Rs.3.65 crore in respect of 21 out of 26 allotted employees/workmen, while three employees/workmen have been absorbed into regular pensionable service
Earlier, in Bihar State Ardh Sarkari Arajpati Karam vs The State Of Bihar & Ors. (2017), Patna High Court's Division bench of Justices Dinesh Kumar Singh and Hemant Gupta, the Acting Chief Justice delivered 1 37-page long judgement on 8 February, 2017, wherein it had adjudicated on the following four questions:-(1). Whether the State of Bihar being a sole shareholder of the Boards, Corporations or the Companies incorporated under the Companies Act, 1956 have the responsibility to pay salary and allowances of the employees of the Boards, Corporations and Companies who are unable to pay salary on account of financial constraints.
(2). Whether there is any final direction on the basis of interim orders passed in Kapila Hingorani (I) and Kapila Hingorani (II), when the matter was remitted back to this Court to examine the legal issues.
(3). Whether the observations made in Kapila Hingorani (I) and (II) are to address the humane problems faced by certain employees of the Boards and Corporations alone.
(4). Whether the judgment in Harihar Yadav‟s case mandates the State of Bihar to pay salary of the employees of all Boards, Corporations and Companies having huge financial burden and whether such financial burden can be passed on to the State of Bihar when the financial allocation towards the salary and allowances of the Boards, Corporations and Companies is a policy decision in economic matters.
With regard to Question No. 1, Justice Gupta who authored the judgement, concluded:"25. The resume of the precedents on the issue of the liability of the State Government to pay salary and allowances of the employees of the Boards, Corporations and the Companies of which State is a shareholder and are State within the meaning of Article 12, that there is unanimity that the State Government is not liable to pay salary and allowances as they are separate juristic entity. Therefore, neither in law, as the companies are separate and distinct juristic entity than the State Government, the State cannot be directed to pay salary and wages of the employees of such juristic entity. 26. The judgments in Kapila Hingorani (I) and Kapila Hingorani (II) have left the question of liability of the State Government to pay salary and allowances open. The intervention of the Supreme Court was to address humane problem of financial stringency suffered by such employees. Therefore, neither the Kapila Hingorani (I) nor Kapila Hingorni (II) or Harihar Yadav‟s case unequivocally holds the State Government responsible for payment of salary and allowances to the employees of the Boards, Corporations and the Companies, if such Boards, Corporations and the Companies are not able to pay salary and allowances due to financial stringency on any ground whatsoever." He referred decisions Kapila Hingorani (I)(2003)6 SCC 1 and Kapila Hingorani (II)(2005) 2 SCC 262.
With regard to Question No. 2, Justice Gupta noted: "27. In Barak Upatyaka's case (supra), the Supreme Court has observed that the observations and directions in Kapila Hingorani (I) and Kapila Hingorani (II) are the interim directions based on tentative reasons and have no value as precedent. Such interim directions were given in extraordinary power under Article 142 of the Constitution." He referred to to the decision in State of Assam vs. Barak Upatyaka D.U. Karmachari Sanstha, (2009) 5 SCC 694. He added:"28. The final order of the Supreme Court is a direction to the High Court to examine the legal issues and that the legal issue requires to be examined by this Court is as to whether the State can be called upon to pay salary and allowances to the workers of the Boards, Corporations and Companies incorporated at one stage by the State Government. Therefore, the issue as to whether the State Government is liable for payment of salary and allowance has been left open by the Supreme Court for appropriate decision by this Court."
With regard to Question No. 3, Justice Gupta observed:"29. The observations in Kapila Hingorani (I) and Kapila Hingorani (II) are in fact to address the humane problem as it left the question of liability of the State open. Reference may be made to Paragraph 74 in Kapila Hingorani (I) and Paragraph 37 of Kapila Hingorani (II). 30. Even in Harihar Yadav's case, the dispute was on account of bifurcation of the State and consequently, the liability of the State of Bihar and Jharkhand but again the problem was addressed as a humane problem." He referred to the decision in State of Jharkhand & Anr vs. Harihar Yadav and others, (2014) 2 SCC 114.
With regard to Question No. 4, Justice Gupta observed:"31. In view thereof, we do not find any merit in the Letters Patent Appeal filed by the writ-applicants bearing L.P.A. No. 1940 of 2015. The learned Single Bench has ordered the State to deposit Rs. 10 crores to meet any financial emergency required by any of the employees is without any mechanism as to how any claim of any of the employees can be examined and paid. We do not find that such direction warrants any interference in the present Letters Patent Appeals as it is to address the humane problem but we direct that Hon‟ble Mr. Justice Udai Sinha shall constitute one member Committee to disburse the said the procedure to be devised by him. 32. With the aforesaid direction, both the Letters Patent Appeals are dismissed."
Subsequent to this judgement by Justice Gupta, in The State of Bihar through the Chief Secretary, Government of Bihar & Ors. vs. Bihar State Ardh Sarkari Arajpatrit Karamchari Maha Sangh & Ors. (2018), a 6-page judgement was delivered by the Division Bench of Justices Dr Ravi Ranjan and Madhuresh Prasad on October 3, 2018, wherein, it recorded: "It is jointly submitted at the Bar that the issue, which is involved in these appeals as well as the writ petitions from which the appeals have arisen, has already been set at rest by the Hon’ble Supreme Court vide SLA (Civil) No 16159 of 2017. The Supreme Court has held that in view of Resolution of the State of Bihar dated 14.03.2018 with respect to the employees of various Corporations, nothing further would be required to be done in the SLP. Such observation of Hon’ble Supreme Court has been made with respect to the Resolution dated 14.03.2018 under which the mechanism and procedure have been set up for dealing with the issue for payment of the arrears of the employees of the various Corporations. A copy of order of Hon’ble Supreme Court and Resolution dated 14.03.2018 of the State of Bihar have been produced by the learned counsel for the appellants. Let them be kept on record. 3 In our view, these appeals have, thus, become infructuous and, as such, the same stand disposed of."
It may be recalled that the Court had passed judgement dated May 9, 2003, judgement dated January 13, 2005 and judgement dated July 8, 2008. In its 2003 judgement in Kapila Hingorani case, it was recorded:"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. 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". In its counter affidavit, the State of Bihar does not deny about the factual statement made in the said writ petition...."
Later, a 3-Judge Bench of the Court had passed an order dated August 9, 2010, wherein, it had concluded:"The issues involved in these cases basically are legal issues. They will have to be gone into by the concerned High Courts. This Court has so far monitored the matter to its best possible ability. In the circumstances, we request the High Court to examine these matters in the PIL and pass appropriate orders in these PILs as expeditiously as possible. The Registry is directed to forward copy of this order to the Registrar General of the High Court. The attention of the Hon’ble Chief Justice of the High Court may be drawn to this Order. We request the High Court to consider the orders passed by this Court giving appropriate directions from time to time in these cases. We also direct the High Court to consider making interim payments to the affected persons including medical treatment. The writ petitions are disposed of accordingly. In view of the order passed in the writ petition, no orders are required to be passed on the interlocutory applications."
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