SC Closes Long-Pending Contempt Case Against BMC, Orders Time-Bound Audit and Final Compliance on Workers’ Benefits

The contempt petition was filed by Kachara Vahatuk Shramik Sangh, alleging non-compliance with the Supreme Court’s earlier judgment dated 07 April 2017, which had modified the Industrial Tribunal’s Award of 13 October 2014, directing the Brihanmumbai Municipal Corporation (BMC) to treat 2700 sanitation workers as permanent employees. The award, upheld by the Bombay High Court, required regularisation and grant of benefits retrospectively from the date of completion of 240 days of continuous service.

Despite several opportunities since 2018, the BMC had not fully complied with the 2017 judgment. The Supreme Court had to repeatedly summon top municipal officers, including the Municipal Commissioner, Deputy Commissioner (Solid Waste Management), and Chief Engineer, to ensure implementation. The court recorded that although partial compliance was made, disputes remained regarding wage fitment, gratuity, provident fund deposits, and alleged excess payments.

During the final hearings in 2025, both parties presented detailed compliance notes. The petitioner union highlighted errors in wage fixation, delayed payment of gratuity, and non-transfer of provident fund dues of over Rs. 228 crore. The BMC admitted substantial progress but sought more time to conclude verification and recalculation. It also agreed to appoint a retired officer to audit wage and arrear calculations for remaining workers.

Issued Raised: Whether the Brihanmumbai Municipal Corporation had complied with the Supreme Court’s 2017 directions to regularise and extend full service benefits to its sanitation workers, and what further steps were necessary to achieve complete implementation.

Supreme Court: The Apex Court closed the long-pending contempt proceedings while issuing detailed operational directions to ensure full compliance. The Court approved the appointment of Mr. Shrikant Kamble, retired Deputy Auditor of the BMC, to function as an independent auditor to verify calculations of arrears, wage fitment, and recoveries. The auditor was tasked with preparing detailed monthly charts showing amounts payable, paid, and outstanding for each employee after reviewing attendance records and bank statements.

The Court directed the BMC to act upon the Auditor’s report and clear all outstanding dues within four weeks of submission, including adjustments for any verified excess or short payments. It further ordered that delayed gratuity payments must carry statutory interest under Section 7(3A) of the Payment of Gratuity Act, 1972, once attendance verification and break-up charts are complete. As regards the Rs. 228 crore provident fund shortfall, the Court noted that the matter was already sub judice before the Bombay High Court and declined to interfere, leaving it to the High Court to decide on the union’s impleadment plea. With these detailed directions, the contempt petition was closed, but the parties were permitted to approach the Supreme Court again for clarifications if needed.

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