Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | CONMT.PET.(C) No.-001264 – 2018 |
| Diary Number | 14565/2018 |
| Judge Name | HON’BLE MR. JUSTICE VIKRAM NATH |
| Bench |
|
| Precedent Value | Binding |
| Overrules / Affirms | Affirms Supreme Court’s inherent contempt jurisdiction; does not overrule prior precedent |
| Type of Law | Contempt of Court / Procedural |
| Questions of Law | Whether the Supreme Court, in exercising contempt powers, can appoint an independent auditor and issue detailed directions to secure compliance with its prior decree. |
| Ratio Decidendi | The Court held that where there is substantial non-compliance of its decree, it may in contempt proceedings issue further directions—including appointment of a qualified auditor—to verify records, calculate dues, and oversee payment within fixed time-frames; refusal to interfere with parallel high-court proceedings was affirmed. |
| Logic / Jurisprudence / Authorities Relied Upon | The Court invoked its inherent contempt powers and supervisory jurisdiction; no external precedents were cited. |
| Facts as Summarised by the Court | Respondents filed contempt petition for non-compliance of SC’s 07.04.2017 order modifying an industrial award in favour of 2700 employees. BMC’s partial compliance over several years led to repeated hearings. The petitioner-union’s detailed note identified calculation and payment discrepancies. BMC filed its response. SC then appointed an auditor and issued compliance directions. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | Municipal Corporation of Greater Mumbai and similar public bodies subject to Supreme Court decrees |
| Persuasive For | Supreme Court benches and High Courts in future contempt and compliance-supervision proceedings |
| Follows | Established inherent contempt jurisdiction and supervisory powers of the Supreme Court |
What’s New / What Lawyers Should Note
- Supreme Court can appoint an independent auditor in contempt proceedings to verify compliance with its earlier decree.
- Detailed scope for the auditor: review attendance records, pay slips, wage scales, notifications, bank statements, and prepare break-up charts.
- Time-bound directions: auditor’s report within four weeks of appointment; payment of quantified dues within four weeks of report.
- SC refused to intervene in parallel high-court writ concerning Provident Fund dues, leaving impleadment and challenge to that court’s discretion.
- Courts may cite this for supervisory measures in prolonged non-compliance cases, beyond mere admonitions.
Summary of Legal Reasoning
- Noted repeated non-compliance of SC’s 07.04.2017 order modifying industrial award in favour of municipal workers.
- Recognised inherent power under contempt jurisdiction to ensure effective enforcement of its decrees.
- Accepted both parties’ agreement to nominate Mr Shrikant Kamble, former BMC Deputy Auditor, as independent auditor.
- Defined auditor’s scope: verify attendance and pay records; compare with counterpart permanent employees; prepare detailed break-up charts covering amounts payable, paid, differences, arrears and recoveries.
- Directed BMC to act on auditor’s calculations and pay outstanding dues within fixed timelines; determine and pay auditor’s emoluments.
- Addressed gratuity delay: noted entitlement to interest under Section 7(3A) of Payment of Gratuity Act, 1972, to be fixed post-audit.
- Declined to grant any direction on Provident Fund issue pending before Bombay High Court, leaving impleadment and relief to that court.
Arguments by the Parties
Petitioner (Union / Respondents to Civil Appeal No. 4929/2017)
- BMC failed to comply with SC’s 07.04.2017 order for regularisation relief and monetary benefits.
- Identified incorrect wage-fixation, discrepancies in break-up charts, and improper recoveries.
- Proposed appointment of a retired Class-I auditor to resolve calculations, fix timelines, and oversee implementation.
- Sought interest on delayed gratuity under Section 7(3A) of the Payment of Gratuity Act.
- Requested intervention to secure impleadment in pending EPF writ before Bombay High Court.
Respondent (BMC)
- Acknowledged partial compliance and ongoing verification of worker-records.
- Agreed to appointment of Mr Shrikant Kamble as auditor, clarifying his non-adjudicatory role.
- Committed to providing attendance records and facilitating audit process.
- Relied on prior SC order dated 27.09.2024 for any recovery of excess payments, to be routed through the union.
- Submitted delays in gratuity and pension calculations due to document submission issues and attendance verifications.
- Noted EPF dues are subject of a pending writ in the Bombay High Court; undertook to comply with that court’s final decision.
Factual Background
In April 2017, the Supreme Court modified an industrial award directing the Municipal Corporation of Greater Mumbai to regularise 2700 workers and grant monetary relief. Despite orders and timelines, BMC’s compliance lagged. In 2018, the union filed a contempt petition. Over multiple hearings through 2025, BMC submitted affidavits and partially complied. The union then filed a detailed note highlighting calculation errors, payment discrepancies, and procedural gaps. BMC responded, and the Court, finding substantial non-compliance, appointed an auditor and issued fresh compliance directions.
Statutory Analysis
- Payment of Gratuity Act, 1972, Section 7(3A): entitlement to interest on delayed gratuity from due date until payment.
- Employees’ Provident Fund & Miscellaneous Provisions Act, 1952: employer’s statutory liability to deposit both employee and employer contributions; noted order of EPF Officer dated 21.12.2023 directing deposit of approx. ₹228 crore and pending writ petition in Bombay High Court.
Procedural Innovations
- Use of contempt jurisdiction to appoint an independent auditor with defined investigative and reporting roles.
- Time-bound compliance framework: auditor’s report in four weeks, payment within four weeks thereafter.
- Detailed supervisory directions rather than mere admonitions or monetary coercion.
- Coordination with parties for auditor nomination and scope definition.
- Reservation of parallel writ matters to respective high court’s competence.
Alert Indicators
- ✔ Precedent Followed: reaffirms Supreme Court’s inherent power in contempt to secure execution of its orders and supervise compliance.