The Supreme Court has addressed a decades-old industrial dispute involving workmen of Jaipur Udyog Ltd. (JUL) and its associated units, including the Kanpur Jute Mill and Sawai Madhopur Cement Unit. The case, filed by labour unions led by Bhartiya Mazdoor Sangh, sought payment of long-pending wages and enforcement of an earlier arbitral award.
The bench of Justice Rajesh Bindal and Justice Vijay Bishnoi traced the matter back to 1987, when JUL was declared a “sick industry” under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). Over the years, multiple rehabilitation schemes were proposed, particularly by Gannon Dunkerley & Co. Ltd. (GDCL), but none were successfully implemented. Eventually, in 2000, the Board for Industrial and Financial Reconstruction (BIFR) recommended winding up of the company, a process that has remained pending before the Rajasthan High Court.
At the heart of the dispute were unpaid wages and benefits of thousands of workers, many of whom had been awaiting relief for over three decades. The Supreme Court had earlier appointed Justice N.N. Mathur (Retd.) to determine the principles for calculating dues, and later appointed Justice Aftab Alam (Retd.) as mediator to quantify the actual liabilities. The mediation process estimated dues for the Rajasthan unit workers at approximately ₹115 crore, excluding provident fund liabilities and interest, which were also directed to be paid.
The Court took serious note of the conduct of GDCL, which had assumed control over JUL’s management under earlier rehabilitation schemes. It was alleged that GDCL, without proper authority, altered shareholding structures of subsidiary companies, transferred assets, and executed sale transactions—some at undervalued rates—without seeking judicial approval. Notably, the sale of properties, including the Kanpur unit for ₹51 crore, was carried out during the pendency of proceedings, prompting the Court to intervene and direct deposit of sale proceeds.
A key legal issue before the Court was whether GDCL retained any authority after the failure of rehabilitation schemes and the repeal of SICA in 2016. The Court observed that with the abatement of proceedings before BIFR/AAIFR and absence of fresh action under the Insolvency and Bankruptcy Code, 2016, the earlier recommendation for winding up attained finality, subject to High Court approval. This raised serious questions about GDCL’s locus in dealing with JUL’s assets and entering into settlements.
The Court also examined competing proposals for resolution of the dispute, including schemes submitted by private investors such as Frost Realty LLP and Dickey Asset Management Pvt. Ltd., both offering to clear worker dues and revive operations. However, it noted that the original writ petition was limited to enforcement of wages and cautioned against expanding the scope into a bidding war for corporate revival at the cost of workers’ interests.
Invoking its extraordinary powers under Article 142 of the Constitution, the Supreme Court sought to balance competing equities—ensuring payment of long-pending dues to workers while addressing irregularities in asset management and safeguarding remaining properties. The judgment lays down a framework for disbursement of dues, oversight of asset sales, and potential future course for liquidation or revival.
Importantly, the Court emphasized that workers’ rights cannot be indefinitely delayed due to corporate restructuring disputes, and that judicial intervention was necessary to bring finality to a matter that had lingered for decades.
Case Details
Case Title: Bhartiya Mazdoor Sangh, U.P. & Anr. Versus State Of U.P. & Others
Citation: JURISHOUR-787-SC-2026
Case No.: Writ Petition (Civil) No. 392 Of 2015
Date: 15/04/2026
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