Supreme Court: Bihar and Jharkhand must pay Rs 1 lakh each to daily-wage staff of five defunct corporations, with interest

On the untraced employees, the Court noted that the States had made extensive and repeated efforts, including newspaper notices, which the Committee had also acknowledged, and were not required to continue indefinitely. It put a quietus on the exercise, but said this does not extinguish the underlying entitlement. The untraced employees or their legal heirs may, within 12 months of the order, approach the Nodal Officer of the concerned corporation with documents for verification, and their claims will then be processed and paid. To bring transparency, the two States must compile and publish, on the websites of their Information and Public Relations Departments and of the parent departments, the particulars of all employees, including those paid and those whose claims are pending, with the reason for pendency, the documents needed and the Nodal Officer's contact details. This must be completed within four weeks and updated periodically.

On the daily-wagers, the Court said the label 'daily-wage' cannot detract from the dignity of the work done or justify arbitrary treatment, though the rights of such workers differ from those of regular employees. Of 598 daily-wage workmen of the Construction Corporation, 467 had been paid Rs 14.21 crore, computed at Rs 42.50 a day from 1992 until retirement, death or cessation of service. The Court held that a fixed Rs 42.50 a day over decades is not a fair and reasonable measure, since it assumes the value of labour was static despite changes in the cost of living and in the statutory wage structure. It did not send the matter back for refixation, as that would prolong a dispute pending for decades. To balance the equities, it directed the two States to pay, in addition to what has been paid, a one-time sum of Rs 1,00,000 to each daily-wage employee or workman employed by the concerned corporation during the relevant period.

On interest, the Court held that Section 7-Q of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 mandates simple interest at 12 per cent a year on amounts due from the date they fell due until actual payment, a statutory consequence of delay that does not depend on contract or discretion, citing Arcot Textile Mills v. Regional Provident Fund Commissioner. The States must pay it on the provident fund dues, and it forms part of the final amounts. For salary and other dues there is no uniform statutory rate. Citing the Constitution Bench in Central Bank of India v. Ravindra on interest as compensation for being kept out of money, the Court said the separate legal personality of the defunct corporations cannot deprive the workmen of dues unpaid for decades, since the States, as welfare States under whose exclusive domain the corporations functioned, must ensure their employees' rights are not rendered illusory. But interest in the Court's equitable or constitutional jurisdiction must not be a punitive levy on the exchequer. Taking account of the Committee's recommendation of 7.5 per cent, it fixed simple interest at 6 per cent a year on salary, wages and other dues, other than provident fund dues, from the date they fell due until payment.

The States' liability follows the mechanism already approved by the order of 29 May 2026, and the interest, along with the principal, must be disbursed within three months. The Court expected the States to complete implementation of the earlier directions in the pending cases. It recorded its appreciation of the Committee headed by Justice Dinesh Maheshwari and of counsel, and disposed of the writ petition. It clarified that the reliefs are based on the peculiar facts, including the extraordinary period for which the claims remained unresolved, and do not lay down any general principle on entitlement to, or computation of, similar reliefs elsewhere.