Supreme Court: Bihar and Jharkhand must pay Rs 1 lakh each to daily-wage staff of five defunct corporations, with interest
The question: How should the remaining, untraced employees and legal heirs be dealt with, and can the exercise be closed?
The Supreme Court on 28 September 2026 settled the last three open issues in a long-running writ petition by the employees' federation of five defunct State-owned corporations of undivided Bihar. A bench of Justices Vikram Nath and Sandeep Mehta (judgment by Justice Mehta) directed the States of Bihar and Jharkhand to pay a one-time Rs 1,00,000 to each daily-wage employee or workman, to pay simple interest on delayed dues (12 per cent a year on provident fund dues and 6 per cent on salary and other dues), and to publish particulars of all employees and the status of their claims. It also closed the identification exercise, while giving untraced claimants 12 months to come forward. The Court stressed that these reliefs rest on the peculiar facts and are not a general rule. The case goes back to the reorganisation of Bihar under the Bihar Reorganisation Act, 2000, which created Jharkhand and raised questions about the dues and service claims of the employees of five inter-State corporations: the Bihar State Construction Corporation, the Bihar State Industrial Development Corporation, the Bihar State Electronic Development Corporation, the Bihar State Forest Development Corporation and the Bihar State Panchayati Raj Financial Corporation. After years of litigation, including Kapila Hingorani v. State of Bihar, the Court set up a Committee under Justice Dinesh Maheshwari, a retired Supreme Court judge. By an order of 29 May 2026 it accepted the Committee's Final Report of 30 April 2026 to the extent indicated, and left three issues open. In August 2026 the two States filed compliance affidavits. Of 2,274 verified employees and workmen, dues had been fully paid to 2,074, and about 200 cases remained pending because the claimants were untraceable or lacked documents. The three issues left open were: identification and verification of the remaining employees and heirs; the entitlement of daily-wage workmen and the heirs of the deceased to lump-sum compensation or other support; and the entitlement to, and rate of, interest on delayed salaries, retiral dues and provident fund amounts.