Supreme Court Directs Payment of ₹115 Crore Decades-Old Dues to Workers, Raps GDCL for Illegal Asset Sales [Read Order]
The Court also set aside the sale of scrap machinery, directing GDCL to refund the proceeds with interest, but did not interfere with prior asset sales like the Kanpur Jute Mill
![Supreme Court Directs Payment of ₹115 Crore Decades-Old Dues to Workers, Raps GDCL for Illegal Asset Sales [Read Order]](https://images.taxscan.in/h-upload/2026/04/18/2133555-supreme-court-directs-payment-of-115-crore-decades-old-dues-to-workersjpg.webp "Supreme Court Directs Payment of ₹115 Crore Decades-Old Dues to Workers, Raps GDCL for Illegal Asset Sales [Read Order]")
In a recent ruling, the Supreme Court of India has directed the verification and payment of approximately ₹115 crores in long-standing dues to the workers of Jaipur Udyog Ltd. within four months, while strongly criticising the management, GDCL, for the illegal sale of the company's assets without court permission. The case involved the non-functional Jaipur Udyog Ltd....
In a recent ruling, the Supreme Court of India has directed the verification and payment of approximately ₹115 crores in long-standing dues to the workers of Jaipur Udyog Ltd. within four months, while strongly criticising the management, GDCL, for the illegal sale of the company's assets without court permission.
The case involved the non-functional Jaipur Udyog Ltd. (JUL), declared a sick company in 1987, and its subsidiary, Jai Agro Industries Ltd. (JAIL). Worker unions,Bharatiya Mazdoor Sangh approached the Supreme Court seeking the payment of wages and dues that had remained unpaid for decades, based on calculations by Justice N.N. Mathur (Retd.) and Justice Aftab Alam (Retd.) amounting to around ₹115 crores plus interest.
The Supreme Court found that GDCL had lost its legal authority to manage the company following the repeal of the Sick Industrial Companies (SICA) Act and the enactment of the Insolvency and Bankruptcy Code (IBC) in 2016. Despite this, GDCL sold substantial assets, including the Kanpur Jute Mill and agricultural land, without seeking the necessary permissions from the Court.
The bench of Justice G.S. Kulkarni and Justice Aarti Sathe dismissed GDCL's plea to condone these illegalities under Article142 of the Constitution, stating that an illegality cannot be condoned, especially when the unit was effectively non-operational. The Court also rejected the argument of "legitimate expectation," holding that GDCL could not claim ownership rights after its winding up recommendation was revived.
Prioritizing the welfare of the workers, the Court appointed Justice (Retd.) Manindra Mohan Shrivastava as Administrator to oversee the verification of worker claims and asset management. While rejecting revival proposals from investors like M/s Frost Realty LLP, the Court ordered that the company's remaining assets be sold to clear the ₹115 crore dues and reimburse GDCL for legitimate expenses.
The Court also set aside the sale of scrap machinery, directing GDCL to refund the proceeds with interest, but did not interfere with prior asset sales like the Kanpur Jute Mill.
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