BMC Making Genuine Efforts To Ensure Compliance: Supreme Court Directs Corporation To Comply With Auditor’s Calculation & Ensure Payment Of Wages

The Apex Court was considering a contempt petition filed by the respondents for non-compliance with the judgment whereby the Court had modified the award of the Industrial Tribunal.

The Division Bench of Justice Vikram Nath and Justice Sandeep Mehta observed, “The BMC shall proceed to comply with the calculation as may be determined by the Auditor and to ensure payment of the outstanding dues, if any, to each of the employees. The amount quantified shall be paid within a period of 4 weeks from the date of submissions of his reports.”

“The emoluments of the Auditor for carrying out the above exercise would be determined and be paid by the BMC without fail”, it added.

The Bench also mentioned, "A perusal of the above-mentioned orders would show that BMC has been making genuine efforts to ensure compliance with the directions, and substantial compliance has in fact been effected, as submitted by Ms. Rohini Thyagarajan, learned counsel appearing for the petitioner."

Factual Background

The Tribunal, by the aforementioned award, had directed the Municipal Corporation of Greater Mumbai (appellant) to treat 2700 employees of the said corporation as permanent employees and, accordingly, extend benefits and status retrospectively from the date of completion of 240 days from the date of joining. The Apex Court modified the award to some extent and substantially agreed with the relief granted by the Industrial Tribunal. The contempt proceedings have been pending since 2018.

When compliance was not effected despite repeated orders being passed granting time to the Brihanmumbai Municipal Corporation (BMC), the Court found that there was substantial noncompliance of the judgment and accordingly directed the personal appearance of the Municipal Commissioner, the Deputy Commissioner (SWM) and the Chief Engineer (SWM). The BMC was again directed to file a fresh compliance affidavit, and the next date of hearing was fixed as May 17, 2024. Thereafter, the matter had been taken up on several dates till September 16, 2025.

Reasoning

The Bench noted the response of the BMC to the note submitted by the petitioner. The note stated that the basic wages for numerous workers had been incorrectly fixed without considering their initial appointment dates in 2005-2006. The Corporation submitted that the fixation was done considering their initial appointment, and the notional fixation had been given till October 13, 2014 and in accordance with the relevant notification and circulars of the Corporation. It was also submitted that the appointed officer would be provided with the attendance records, which had already been provided to the Petitioner Union, so that he could resolve any discrepancy in terms of calculation, etc.

It was further submitted that the workers could also be given the opportunity to submit their bank account statements or other proof to verify work rendered during periods with missing or zero attendance records. The officer would then prepare revised break-up charts, which would include monthly overviews of all payable amounts after considering the bank statements submitted by workers, if any. The Corporation further submitted that the pension claims of workers whose claims were pending verification (due to non-submission of requisite documents), the same would be processed after considering all the excess/outstanding payments.

The Bench held, “As such it is directed that Mr. Kamble (in short referred to as the ‘Auditor’)be entrusted with the job of making the necessary calculations as required with respect to each of the employees currently working, after making due verification from the records and the material which may be placed before him and to submit his report to the corporation with a copy marked to the petitioner union.”

The Bench also held that the Auditor would examine the statements of the workers’ pay with due regard to the pay slips and other benefits, as extended to their counterpart permanent workers on a similar basis. The Bench stated that the issue of gratuity computation can be determined once the attendance records are received by the Auditor and the break-up charts are prepared.

Coming to the impleadment application of the petitioner, the Bench made it clear that the High Court itself would be competent to decide as to whether the impleadment of the petitioner is necessary or not. “Since the impleadment application is still pending consideration, we do not wish to in any way influence the said proceeding. The High Court would take an appropriate call on the merits of the application”, it said while further ordering, “With the aforesaid directions, the matter stands closed. Notices are discharged. Consign to record.”

Cause Title: Kachara Vahatuk Sharamik Sangh v. Ajoy Mehta (Neutral Citation: 2025 INSC 1227)

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