State’s Obligation to Provide Financial Assistance for Payment of Salaries Based on Human and Fundamental Rights

In brief

The question

1. Whether the State Government is obligated to provide financial assistance to Development Authorities for the payment of employee salaries and benefits under the Assam Town and Country Planning Act, 1959

The court held

The Court directed the petitioner's association to file a fresh representation before the Principal Secretary, Urban Development Department

It also directed

The respondent authorities were directed to: (i) consider providing grants under Section 50 to cover salary arrears; (ii) frame service rules and regulations regarding service conditions without delay; and (iii) formulate policy decisions to provide financial assistance until such regulations are finalized

The petition was disposed of with these observations

01Facts

The petitioners, representing employees of various Development Authorities in Assam, sought a writ of mandamus for the regular payment of monthly salaries, provincialization of services, and retirement benefits

p. 7

The authorities were established under Section 8A of the Assam Town and Country Planning Act, 1959.

p. 7

Despite a 2015 Court order in WP(C) No. 6773/2010 directing the State to frame service rules and address grievances, the government maintained that these authorities must generate their own revenue for salaries

pp. 7-8

Evidence submitted showed that employees in 14 districts remained unpaid for several months as of May 2026

p. 9

02Issues

i.1. Whether the State Government is obligated to provide financial assistance to Development Authorities for the payment of employee salaries and benefits under the Assam Town and Country Planning Act, 1959

p. 8

ii.2. Whether the non-payment of regular salaries to employees of statutory authorities constitutes a violation of fundamental rights under Article 21 of the Constitution of India

pp. 9-10

03Law Applied

Section 8G(2) of the Assam Town and Country Planning Act, 1959, which vests the power to fix salaries and service conditions in the respective Development Authorities

p. 9

Section 48 regarding the creation of development funds and Section 50, which empowers the Government to provide grants, advances, and loans for the performance of the authority's functions

pp. 8-9

Kapila Hingorani v. State of Bihar (2005) 2 SCC 262, establishing that the State has a duty to protect the human and fundamental rights of employees of public undertakings under Article 21, regardless of strict legal liability for salary payments

pp. 8-10

Provisions in the judgment · 2 · Linked ones open on LawLens

Assam Town and Country Planning Act, 1959 Section 48 Section 50

04Reasoning

The Court observed that while Development Authorities are technically responsible for their own finances, they are currently incapable of raising sufficient funds to pay salaries

p. 10

The Court reasoned that the "performance of functions" mentioned in Section 50 of the Act must implicitly include the payment of staff salaries to ensure operationality

p. 10

Even in the absence of a direct statutory mandate for the State to pay these salaries, the Court held that as a "model employer," the State cannot ignore the violation of Article 21 rights caused by prolonged non-payment

p. 10

The Court found the State's failure to frame service rules—despite prior judicial directions—to be a significant lapse in its regulatory duty

p. 10