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The Maharashtra State Co-operative Bank Ltd. vs. Babulal Lade & Ors.

Diary No. · 2023 INSC 295Decided 24 Mar 2023
Diary No. 1755 of 2021
M.R. Shah · Krishna Murari

Background

In an earlier 2019 judgment in the same case, the Supreme Court had held that employees of a sugar factory (which had gone into liquidation) were entitled to receive their unpaid wages from money that the appellant bank was required to deposit, out of the sale proceeds of the factory's auctioned property. Following that ruling, the bank filed applications asking the Court to release the amount it had deposited (around Rs. 3.52 crore, since grown with interest to about Rs. 4.96 crore) so it could be distributed to the employees, and also sought directions for employees to submit proper documentation to verify their claims.

Decision Breakdown

The Court directed that the bank's deposited amount, along with a separate sum of about Rs. 13.9 crore already lying with the Industrial Court, Bhandara, be transferred to the Collector, Bhandara, who was tasked with verifying each employee's identity and dues before disbursing payments directly into their bank accounts (or those of their legal heirs, where an employee had since died). The Collector was directed to complete this disbursement, with 7.5% interest on the amounts due, by 31 December 2023, in a transparent manner. Any balance remaining after paying all verified employee dues was to be returned to the bank.

Lesson Learnt

When a court secures workers' unpaid wages through a deposit mechanism, it will also put in place a clear verification and disbursement process (often through a government official) to ensure the money actually reaches the intended employees or their legal heirs, rather than leaving distribution informal or open-ended.

Official source (sci.gov.in)View Judgment (PDF)

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