The Supreme Court has directed the governments of Bihar and Jharkhand to pay a one-time amount of Rs 1 lakh to each eligible daily-wage employee or workman of five erstwhile state-owned corporations. The direction came in a long-running dispute over unpaid salaries, wages, provident fund contributions and other service-related dues following the reorganisation of Bihar and the creation of Jharkhand in 2000. The court said the relief was based on the exceptional circumstances and prolonged delay involved in resolving the claims.

A bench of Justices Vikram Nath and Sandeep Mehta issued the directions while disposing of a writ petition concerning employees and workmen of the former corporations. The organisations involved include the Bihar State Construction Corporation, Bihar State Industrial Development Corporation, Bihar State Electronic Development Corporation, Bihar State Forest Development Corporation and Bihar State Panchayati Raj Financial Corporation. The court's order followed earlier proceedings aimed at determining how the liabilities should be divided between the two states.

The court also ordered the states to provide simple interest on delayed payments. Delayed Employees' Provident Fund dues will carry interest at 12 per cent per annum, while delayed salary, wages and other monetary entitlements will attract interest at 6 per cent per annum. The interest is to be calculated from the date the respective amounts became due until the date of actual payment, with the responsibility of each state determined under the mechanism previously approved by the court.

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The proceedings stem from the administrative and financial complications that followed the Bihar Reorganisation Act, 2000. The division of the erstwhile state's liabilities created disputes over the dues owed to employees and workmen of the five corporations. The Supreme Court had earlier considered a committee report and issued directions in May 2026 to facilitate identification of eligible claimants, determine liabilities and disburse the amounts found payable.

In its latest judgment, the court directed Bihar and Jharkhand to publish updated information concerning employees and workmen whose claims have been settled as well as those whose cases remain pending. The states have also been directed to provide relevant details and contact information for pending claims to facilitate verification. Employees or legal heirs whose claims could not previously be verified will have an opportunity to approach the designated authorities with the required documents within the period specified by the court.

The Supreme Court clarified that the additional one-time payment and other reliefs were granted in view of the particular facts of the case, including the unusually long period for which the claims remained unresolved. The court said the directions should not be treated as a general principle applicable to unrelated cases. With the latest directions, the court has sought to bring the longstanding dispute over the employees' dues to a conclusion while providing a mechanism for dealing with claims that remain unresolved.

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