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Informist, Tuesday, Sept. 8, 2026

 

NEW DELHI – The Delhi High Court Tuesday held that illegal termination of an employee does not, by itself, confer an automatic right to reinstatement and full back wages in every case. The Supreme Court has repeatedly held that reinstatement is not a mechanical consequence of an order of termination being held illegal and that the compensatory relief must be moulded having regard to the nature of employment, length of service, and the surrounding circumstances of the case, the high court said.

 

The high court rejected an argument from Banwari Singh Rana, a former employee of Ashoka Hotel, that once the enquiry against the worker stood vitiated, the labour court ought not to have considered the records of the said enquiry and denied the worker back wages and continuity of service. It is well crystallised that, where the facts warrant, the court is empowered to award monetary compensation in lieu of reinstatement in such cases where reinstatement is not feasible, and where such relief of compensation would better serve the ends of justice, Justice Amit Mahajan said.  

 

In the present case, the worker had been absent without authorisation for approximately 500 days and had himself admitted the charge during the enquiry, while seeking leniency on account of his personal circumstances, the high court said. At the same time, the termination founded upon the vitiated enquiry cannot be sustained against the worker. Balancing these circumstances, the court said it is of the considered view that neither reinstatement, which is no longer feasible, nor full back wages and continuity of service would constitute an appropriate relief, it said.

 

Accordingly, while affirming the finding of the labour court that the termination of the worker was illegal on account of the enquiry having been conducted in violation of Section 16(iii) of the Certified Standing Order, the relief of reinstatement granted by the labour court warrants modification, Justice Mahajan said. The ends of justice would be met by awarding a lump-sum compensation of INR 300,000 to the legal representatives of the worker, he said, adding that the amount shall be paid by the management of Ashoka Hotel in eight weeks.    

 

The high court said that according to Section 16(iii) of the Certified Standing Order, the enquiry officer must be an employee of the corporation. In the current case, the enquiry officer was engaged on a retainership basis for conducting enquiries in departmental cases, with the office order stating that it would enjoy the status of an officer on the scale of pay of INR 1,500 to INR 2,000, which was above the scale of Rana. The mere description of a person as enjoying a status equivalent to that of an officer, or the conferment of a notional scale of pay, cannot by itself make such a person an officer of the corporation, said the court. Thus, the enquiry officer's engagement was specifically for the limited purpose of conducting departmental enquiries and did not constitute an appointment to any office or post under the corporation, the court said.

 

A complaint was filed against Rana and others regarding unauthorised absence in 1993. Thereafter, Rana was removed from service for unauthorised absence for about 500 days. A labour court in 2004 observed that the enquiry in the case had been undertaken by an individual who was not an employee of Ashoka Hotel, which was in violation of Section 16(iii) and hence, the enquiry against Rana stood vitiated.  End

 

Reported by Surya Tripathi

Edited by Shubhayan Bhattacharya

 

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