Defunct Corporations' Workers Get Interest on Decades-Old Dues, Daily-Wagers Rs 1 Lakh Each: Supreme Court

After the Bihar Reorganisation Act, 2000 created Jharkhand, the claims of employees of five inter-State corporations, including the Bihar State Construction Corporation, remained unpaid for decades (para 2). By an order of 29.05.2026 the Court accepted the report of a Committee headed by Justice Dinesh Maheshwari (Retd.), leaving three issues open: untraced claimants, the daily-wagers' entitlement and interest (paras 3-4, 8). The States reported paying 2,074 of 2,274 verified employees, with about 200 untraced or unverified (para 33). The dues of 598 daily-wagers were computed at Rs 42.50 a day from 1992 (paras 22, 38). The States opposed interest, arguing that the corporations were distinct juristic entities (paras 27-30).

The States had taken all reasonable steps to trace the remaining claimants and could not be made to continue indefinitely; the exercise was closed without extinguishing the claimants' entitlement (paras 34-35). Daily-wage status does not detract from the dignity of the work or justify arbitrary treatment (paras 36-37). A fixed Rs 42.50 a day over decades wrongly assumed that wages stood still, but instead of remitting the matter for fresh computation, which would prolong the dispute, the Court awarded a one-time Rs 1,00,000 to each daily-wager (paras 39-42). Following Arcot Textile Mills, interest under Section 7-Q is a statutory consequence of delay, not discretionary compensation, runs at 12% from the due date and is not defeated because the principal was later paid (paras 43-48). Relying on Central Bank of India v. Ravindra, interest on salary compensates the deprivation of money. Though the corporations were distinct entities, the States, as welfare States, could not let that separate personality defeat dues unpaid for decades; interest must compensate, not punish, so 6% was fixed instead of the Committee's 7.5% (paras 49-57).