In a long-pending industrial dispute stretching back nearly four decades, the Supreme Court has taken a close look at the affairs of Jaipur Udyog Ltd. (JUL), focusing on unpaid worker dues, disputed asset sales, and the role of its promoter, Gannon Dunkerley & Co. Ltd. (GDCL).
The case, filed by labour unions including Bhartiya Mazdoor Sangh, revolves around non-payment of wages and implementation of an earlier award determining workers’ dues.
Background of the Case
JUL, once operating cement and jute units, was declared a “sick industry” in 1987. Over the years, multiple attempts were made to revive it under schemes approved by the Board for Industrial and Financial Reconstruction (BIFR).
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However, the rehabilitation efforts failed. By November 2000, BIFR recommended winding up the company, citing mounting losses, closure of operations, and inability to meet financial obligations.
Despite this, disputes continued over control of the company, payment of wages, and management decisions taken by GDCL, which had stepped in as a promoter under an earlier scheme.
The workers’ unions told the Court that thousands of employees had not been paid their lawful dues for decades.
An earlier award by Justice N.N. Mathur (Retd.) laid down the principles for calculating wages, while a later mediation report estimated dues of around ₹115 crore for the Rajasthan unit alone, excluding interest and provident fund.
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Counsel for the unions argued that even partial settlements remained unpaid, and some payments made by GDCL came from selling company assets rather than its own funds.
During the hearing, serious questions were raised about GDCL’s actions. The Court examined allegations that:
- Company assets were sold without permission
- Shareholding patterns of a subsidiary were altered without authority
- Settlements were entered into despite unclear legal standing
The bench noted the complexity of the case, observing that it had a “checkered history” involving multiple proceedings, schemes, and failed attempts at revival.
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It also took note of claims that certain asset sales were carried out at undervalued prices and without court approval.
A key issue before the Court was whether GDCL had any legal right to deal with JUL’s assets.
Labour unions argued that once the winding-up recommendation was made, GDCL had no authority to act as owner. They maintained that it was, at best, a caretaker.
On the other hand, GDCL contended that it had been managing the company under valid orders and had invested substantial amounts over time.
The proceedings also saw new developments, with third parties submitting proposals to revive the company and clear workers’ dues.
One such proposal promised to pay over ₹230 crore and provide additional benefits to workers, including housing plots. However, GDCL opposed these interventions, arguing that the original petition was limited to wage payments and should not be expanded.
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The Supreme Court identified three core questions requiring resolution:
- Full payment of workers’ dues
- Legality of GDCL’s control over assets
- Validity of asset sales conducted during litigation
The Court also noted that proceedings relating to the company’s winding up remain pending before the Rajasthan High Court.
After hearing all parties and reviewing the extensive record, the Supreme Court proceeded to examine the matter in detail, setting the stage for determining the rights of workers, the status of company assets, and the legality of actions taken during the prolonged dispute.
Case Details
Case Title: Bhartiya Mazdoor Sangh, U.P. & Anr. vs State of U.P. & Others
Case Number: Writ Petition (Civil) No. 392 of 2015
Judge: Justice Rajesh Bindal and Justice Vijay Bishnoi
Decision Date: April 15, 2026.
