Case Name: Bihar State Rajya Path Parivahan Nigam Karamchari Sangathan vs. State of Bihar and Others
Court/Authority: Supreme Court of India, Civil Appeal No(s). of 2026 (arising out of SLP (Civil) No(s). 11007 of 2024)
Order Date: 22 May 2026 (New Delhi)
Relevant Prior Orders:
High Court Division Bench judgment dated 5 Oct 2023 (Letters Patent Appeal No. 593 of 2018)
Single Judge order dated 2 Apr 2018 (Civil Writ Jurisdiction Case No. 12436 of 2017)
Labour Commissioner, Bihar order dated 23 Sep 2016 (lump‑sum compensation under Industrial Disputes Act)
Settlement/agreement dated 11 Jul 1988 between the Corporation and the Union
Supreme Court order dated 16 Dec 1987 (Civil Appeal No. 1509 of 1987) directing regularisation
Period of Dispute: Casual/ad‑hoc employment 1980‑1985; regularisation promised from 1 Jan 1987; second phase never implemented; termination on 2 Sep 2009; litigation spanning 1987‑2026.
Parties Involved
Appellant (Petitioner): Bihar State Rajya Path Parivahan Nigam Karamchari Sangathan (registered union representing former casual workers).
Respondents: State of Bihar and the Bihar State Road Transport Corporation (the employer).
Workmen Represented: Approximately 925 workers originally; presently 330‑338 surviving members/beneficiaries.
Regulatory Authority: Labour Commissioner, Bihar (issued 2016 compensation order).
Judges: Justice Vikram Nath and Justice Sandeep Mehta (signatories of the Supreme Court order).
Issues / Allegations / Violations
Failure to implement the two‑phase regularisation scheme ordered by the Supreme Court (first phase completed, second phase omitted).
Dismissal of the remaining ~500 workmen in 2009 citing severe financial crisis of the Corporation.
Labour Commissioner’s 2016 compensation order limited payouts to Rs 10,000‑55,000 per workman, deemed arbitrary and grossly inadequate relative to ~19 years of continuous service and the 1988 settlement.
Union’s challenge that the compensation lacked nexus with length of service, legitimate expectations from the settlement, and assurances of regularisation.
Respondents’ defence based on the Corporation’s alleged inability to bear further financial liability.
Findings & Observations
The Court observed that the dispute now centres on the fairness, adequacy and reasonableness of the one‑time settlement, not merely on regularisation.
Recognised the workmen’s prolonged, continuous service and the moral‑legal obligation of the State under Article 21 (right to life) to provide just compensation.
Determined that the financial distress of the Corporation cannot defeat the workers’ equitable claims, especially given the State’s control over the public‑sector undertaking.
Concluded that a lump‑sum payment of Rs 7,50,000 per workman is “fair and reasonable” in the peculiar facts and circumstances.
Penalties / Settlements / Directions
The impugned High Court judgment and order are set aside; the appeal is allowed.
Direction: State of Bihar to pay a lump‑sum amount of Rs 7,50,000 to each of the 330‑338 members of the appellant‑Union.
Time‑frame: Payment to be completed within three months from the date of this order.
Compliance: State of Bihar must file a compliance affidavit by 31 August 2026 and submit a list on 1 September 2026 for perusal.
Corrective Actions & Future Obligations
Disbursement of the stipulated compensation to each eligible workman.
Filing of the compliance affidavit and submission of the beneficiary list as directed.
Final Ruling & Enforcement
The Supreme Court sets aside the High Court’s dismissal and allows the appeal of the Bihar State Rajya Path Parivahan Nigam Karamchari Sangathan.
The State of Bihar is legally bound to fulfil the lump‑sum payment and compliance requirements within the stipulated timelines.
All pending applications, if any, stand disposed of.
