Sigachi Industries disaster: Telangana High Court flags compensation gap, seeks answers
HYDERABAD: The Telangana High Court, addressing the compensation issues following the Sigachi Industries disaster, has ordered the inclusion of key central agencies and directed legal aid for victims’ families on Thrusday. The court also questioned the company and the state regarding unresolved discrepancies in compensation payouts.
A Division Bench comprising Chief Justice Aparesh Kumar Singh and Justice G.M. Mohiuddin heard a Public Interest Litigation (PIL) concerning the July 2025 incident, which resulted in multiple worker deaths and disappearances. On 25 July 2025, Dr. K. Baburao of Scientists for People (SFP) filed the PIL seeking urgent judicial intervention for the victims. Advocate Vasudha Nagaraj represents the petitioners.
The hearing highlighted ongoing confusion regarding the compensation structure. The court-appointed Amicus Curiae identified significant concerns. Sigachi Industries initially announced Rs 1 crore compensation per victim in a stock exchange filing but later limited its liability to Rs 25 lakh, including statutory payouts under the Employees’ Compensation Act and ESI within this ex-gratia amount.
“The company has said it will not pay more than 25 lakhs,” the Amicus Curiae told the court, noting this was less than what was first promised. He also noticed differences in the payment lists from the state and the company, especially that they did not mention insurance linked to the Employees’ Provident Fund, which gives extra money if a worker dies.
The Chief Justice said that Rs 6.73 crore had not been given to the families yet, and was only promised through cheques dated for the future. “Rs 6.7 crore is not paid it is just lying deposited somewhere and hence, not ultimately disbursed,” the bench observed.
Following the disaster, on 1 July 2025, Chief Minister Revanth Reddy visited the site and announced that each family of a deceased worker would receive Rs 1 crore. He also promised Rs 10 lakhs to each worker with serious injuries and Rs 5 lakhs to those with minor injuries. Despite these commitments from senior government officials, most promises remain unfulfilled and no one has accepted responsibility.
EPFO, ESI added as respondents
To address the statutory compensation issues, the court ordered the impleadment of three authorities as new respondents: The Regional Commissioner, Employees’ Provident Fund Organisation (EPFO), Hyderabad; The Regional Director, Employees’ State Insurance (ESI) Corporation, Hyderabad; and The Controller of Drugs, Government of Telangana.
The Member Secretaries of the Telangana State Legal Services Authority (TSLSA) and the District Legal Services Authority (DLSA), Sangareddy, were directed to provide legal assistance to the families during the claims process. A compliance report is required by the next hearing, the court ordered.
The Advocate General informed the court that chargesheets have been filed in two related FIRs, with seven accused named. Two remain absconding, while others have sought anticipatory bail. The Amicus’s report, submitted as Volume I, included a damning note from an Expert Committee alleging that Sigachi Industries was not cooperating during the investigation and had pre-existing violations of the Factories Act concerning combustible dust.
The court directed the company’s counsel to explain the compensation discrepancies and asked the state to obtain clear instructions on the anomalies. The Amicus also highlighted that 5 deceased workers were not eligible for PF, a point the company must answer.
The case has been postponed for four weeks, until March 12, 2026. The new agencies have time to respond. The main goal is to ensure all proper payments, both required by law and extra, go to every family of the 46 people who died and the 7 missing people now considered dead. Many of these workers were temporary or daily wage earners.
