Supreme Court Directs Disbursement of Employees' Dues in Sugar Factory Liquidation Case

In a significant ruling, the Supreme Court of India has issued an order directing the disbursement of employees' dues in a case related to the liquidation of a sugar factory. The court, comprising Justices M.R. Shah and Krishna Murari, emphasized the bank's liability to pay salary/wage dues while assigning the responsibility of other statutory dues to the subsequent purchaser. The order aims to ensure the rightful distribution of funds to the concerned employees or their legal heirs, providing much-needed relief after a long legal battle.

The apex court stated, "The amount due and payable towards the wages/salaries of the concerned employees of the sugar factory in liquidation shall have to be paid to them and/or to their legal heirs out of the deposited amount." It further stressed the importance of thorough verification and identification of the claims to ensure the funds reach the rightful recipients. Additionally, the court set a deadline of December 31, 2023, for the disbursement process to be completed.

The judgment also highlighted the bank's request to transfer the deposited amount, along with accrued interest, to the account of the Collector, Bhandara. This move will enable the Collector to oversee the distribution of funds to the employees or their legal heirs on a proportional basis. The court further directed the Collector to disburse the respective employees' dues directly into their bank accounts, along with 7.5% interest.

Justice M.R. Shah, in the ruling, emphasized the transparency and integrity of the process, stating, "The disbursement to the concerned employees/legal heirs of the employees of the sugar factory in liquidation shall be done in the utmost transparent manner and with proper identification and verification of the claims."

The Supreme Court's decision brings hope to the employees of the sugar factory, who have been awaiting their rightful dues for a considerable period. The order ensures that the bank fulfills its obligation to pay salary/wage dues, while any remaining balance after disbursement will be utilized towards settling the bank's dues.

This ruling marks a significant step towards justice for the employees, providing a fair resolution in the complex matter of the sugar factory liquidation. With the Supreme Court's intervention, the affected employees can finally see the light at the end of the tunnel as they await the disbursement of their long-overdue dues.

DECISION: March 24, 2023

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