Supreme Court Directs BMC to Ensure Full Implementation of Regularisation and Wage Benefits for Contract Workers.

Headnote:

The Supreme Court of India, in Kachara Vahatuk Shramik Sangh v. Ajoy Mehta & Ors., addressed a long-pending contempt petition concerning non-compliance with its 2017 judgment upholding the Industrial Tribunal’s award to regularize 2,700 contract sanitation workers of the Municipal Corporation of Greater Mumbai (BMC). Despite several extensions, the implementation remained incomplete. The Court observed discrepancies in wage fixation, arrear computation, and payment of retirement benefits. To ensure justice, it appointed an independent auditor to verify records and compute dues accurately, directing BMC to clear payments within four weeks of the report’s submission. The Court stopped short of imposing contempt penalties but ensured strict compliance through a structured audit mechanism.

Background:

• The Industrial Tribunal’s 2014 award directed BMC to treat 2,700 contract workers as permanent employees and extend retrospective service and monetary benefits.

• In 2017, the Supreme Court modified but upheld the award, ordering full compliance.

• However, repeated non-implementation led to the filing of Contempt Petition (C) No. 1264 of 2018 by Kachara Vahatuk Shramik Sangh.

• The petitioners alleged irregularities such as:

1. Incorrect pay fixation ignoring actual joining dates.
2. Non-payment of arrears and pending retirement dues.
3. Recovery notices for alleged overpayments.
4. Failure to transfer provident fund (PF) contributions worth ₹228 crore.
5. The BMC contended substantial compliance and sought time for reconciliation due to document verification and record discrepancies.

Court’s Observations:

• The Bench noted that despite the lapse of several years, complete compliance had not been achieved.

• It found inconsistencies in attendance verification, arrear calculation, and application of wage scales.

• While refraining from imposing punitive contempt sanctions, the Court emphasized the need for a neutral mechanism to verify dues and finalize payments.

• To that effect, the Court appointed an independent auditor and fixed a strict timeline for completion.

Directions Issued:

• Mr. Shrikant Kamble, retired Deputy Auditor, BMC, was appointed as Independent Auditor to verify records, attendance, and wage calculations.

• The Auditor shall prepare an employee-wise computation report and submit it to BMC, with a copy to the petitioner-union.

• BMC shall release all outstanding dues within 4 weeks of receiving the report.

• The Auditor’s remuneration shall be borne by BMC.

• The Auditor’s mandate includes:

1. Verification of attendance and pay fixation.
2. Reconciliation of arrears and comparison with similarly placed permanent workers.
3. Consideration of circulars, settlements, and wage agreements.
4. Allowance for workers to produce personal bank or wage records in disputed cases.
5. The Court retained liberty to the petitioners to approach again in case of non-compliance.

Legal Provisions:

• Article 129 & 142, Constitution of India – Contempt and enforcement powers of the Supreme Court.

• Payment of Gratuity Act, 1972 – Section 7(3A) (Interest on delayed payment).

• Industrial Disputes Act, 1947 – Regularisation and parity in employment benefits.

• Precedent: Municipal Corporation of Greater Mumbai v. Kachara Vahatuk Shramik Sangh, Civil Appeal No. 4929 of 2017 – Original judgment on regularisation.

Citation: 2025 INSC 1227

Case: Kachara Vahatuk Shramik Sangh v. Ajoy Mehta & Ors.

Court: Supreme Court of India

Coram: Hon’ble Justice Vikram Nath

Contempt Petition (Civil): No. 1264 of 2018 in Civil Appeal No. 4929 of 2017