“The Appellants, who have given their sweat & blood, cannot seek gainful employment elsewhere at their present declining age,” the court said on June 23. “In the AI (artificial intelligence) era, we are not sure that they would be able to eke out their livelihood, having spent prime of their life blood in the menial job all these years,” the court added, rejecting SBI’s offer of Rs 5 lakh as a one-time settlement.
The judges said the bank’s offer of Rs 5 lakh to each of them was “too frugal” at a time when when “bread is costlier than blood”.
The dispute dates back to the mid-1990s when the two appellants were engaged as daily-wage sweepers. Despite multiple rounds of litigation since 1999 and earlier high court orders directing that they be continued in service subject to availability of work, and paid minimum wages, they were never regularised and were eventually retrenched in July 2025, prompting the present appeals.
Justices Krishna S Dixit and Chittaranjan Dash held that directing retrospective regularisation at this stage would impose a significant financial burden on the bank.
3 decades of litigation
The court noted that Mayadhar Nayak and Baina Nayak had been working as daily-wage sweepers since 1994 and 1995, respectively. They first approached the high court in 1999, complaining that despite years of service, SBI had neither regularised them nor extended the benefits available to temporary employees.
In July 2007, the high court directed the bank to consider their cases if appointments were made to the post of sweeper. Later, while disposing of another petition in December 2008, it directed that they should continue in service as long as work was available and be paid wages under the Minimum Wages Act. In compliance with those directions, SBI paid Rs 1,61,619 to each worker in September 2021 towards arrears of minimum wages for the period between April 2017 and June 2021.
Retrenchment after 3 decades
The workers later instituted another writ petition claiming temporary pay, bonus, arrears and other benefits available to temporary employees.
During the pendency of those proceedings, SBI sought permission to retrench them on the ground that they had become surplus workers. Acting under Section 25F of the Industrial Disputes Act, 1947, the bank retrenched both workers on July 19, 2025, paying Rs 3,30,934 each towards retrenchment compensation and salary in lieu of statutory notice. Their writ petitions were subsequently dismissed by the single judge, leading to the present appeals.
Arguments before HC
Appearing for the appellants, counsel argued that the single judge had failed to appreciate their long and spotless service spanning nearly three decades. Relying on the Supreme Court’s decisions in Jaggo vs Union of India (2024) and Shripal vs Nagar Nigam (2025), it was submitted that the workers were entitled to regularisation with all consequential service and monetary benefits.
The appellants further argued that similarly placed employees had been granted temporary status and corresponding emoluments and that, at the very least, they too should have received those benefits. It was also contended that the high court’s earlier orders of July 24, 2007, and December 5, 2008, directing the bank to consider them for appointment and continue them in service subject to availability of work, had not been properly appreciated by the single judge.
Opposing the appeals, Senior Advocate S P Mishra, appearing for SBI, defended the single judge’s decision, arguing that the earlier orders had never granted a right to regularisation. He submitted that the workers had already received statutory retrenchment compensation and that many of their claims were barred by the doctrine of res judicata.
The Latin term res judicata stands for “a matter judged.” Simply put, it means that a cause of action may not be litigated again after there has been a final judgment.
Mishra also referred to compensation awarded by the Central Government Industrial Tribunal to similarly retrenched employees in another dispute, pointing out that those awards were themselves under challenge before the high court. He further highlighted the bank’s efforts to resolve the dispute through court-directed conciliation, arguing that the workers had not come forward with a reasonable settlement proposal.
‘Rs 5 lakh frugal when bread costlier than blood’
Before deciding the appeals on merits, the division bench attempted to bring an end to the long-running dispute through negotiations. In May 2026, it directed both sides to explore the possibility of an amicable settlement on issues including regularisation, service benefits and bonus. However, the exercise failed.
The judgment records that SBI offered Rs 5 lakh each as a one-time settlement to bury the dispute. The appellants declined the proposal, telling the bench that they would happily settle the matter if paid Rs 25 lakh each.
Rejecting the bank’s offer as wholly inadequate, the bench observed, “Rupees 5 lakh offer made by the Bank as compensation is too frugal to be mentioned, when bread is costlier than blood, Rupee value now-a-days dwindling down.”
The judges noted that the workers had performed only sweeping duties, possessed limited education and social status, and had spent almost three decades in the bank’s service, making it unrealistic to expect them to secure alternative employment.
The court observed that even the Rs 10 lakh compensation awarded in an earlier case involving a cooperative bank could not serve as a proper benchmark, given the appellants’ longer service and SBI’s status as a nationalised bank. At the same time, it held that the workers’ demand for Rs 25 lakh each was on the higher side.
Why court declined regularisation
- While expressing sympathy for the workers, the high court held that it could not order their regularisation. The earlier high court orders had merely directed SBI to consider them against future vacancies and continue them only as long as work was available. Those directions did not create a legal right to permanent employment.
- The bench further noted that SBI had subsequently adopted a policy of outsourcing such work due to technological developments in the banking sector and that the policy decision had never been challenged.
- It also held that directing retrospective regularisation at this stage would impose a significant financial burden on the bank, while parts of the dispute had already attained finality because of earlier litigation.
Final directions
Having concluded that compensation was the most equitable relief, the division bench partly allowed the appeals and substituted the workers’ claim for regularisation with a substantial monetary award. “In our considered view, a lump sum award for Rs 20,00,000/- each, would do complete justice to both the sides,” the court said and set aside the single judge’s judgment. It directed SBI to pay the amount within eight weeks, taking the total compensation payable to Rs 40 lakh.
The bench further directed that any delay in making the payment would attract interest at 1 per cent per month for the first month and 2 per cent per month thereafter. Significantly, it ordered that the interest liability, if incurred due to delayed compliance, could be recovered personally from the erring bank officials after the amount is first paid to the workers.
Before parting with the case, the court clarified that the ruling had been rendered in a fact-specific scenario and was not intended to operate as a binding precedent or a rule of parity for future disputes involving regularisation or retrenchment.
The court noted that the complainants first approached it in 1999 stating that despite years of service, SBI had neither regularised them nor extended the benefits available to temporary employees. 
Justices Krishna S Dixit and Chittaranjan Dash held that directing retrospective regularisation at this stage would impose a significant financial burden on the bank.
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