The State Of Uttar Pradesh vs Krishna Murari Sharma

2025 INSC 1500 Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

Civil Appeal No. of 2025 (@ Special Leave Petition (C) No.444 of 2024)

State of Uttar Pradesh ...Appellant Versus

Krishna Murari Sharma ...Respondent

ORDER

Leave granted.

2. The State is aggrieved with the judgment of the High

Court, which upheld the order of the Labour Court, in a

reference regarding the validity of termination of the

respondent workman affirming the award, which found the

termination to be illegal and directed the employer to pay

back wages to the workman for the period from 31.05.2006

to 01.04.2015; the date of commencement being the date of

reference, since there was a 15 years delay occasioned. The Signature Not Verified Digitally signed by SAPNA BISHT question raised by the State is only on the delay occasioned, Date: 2025.12.24 15:13:53 IST Reason:

having disentitled the workman from challenging the order

of termination.

Page 1 of 9 CA @ SLP (C) No.444 of 2024

3. Mr. Rana Mukherjee, learned Senior Counsel for the

State submits that there is gross delay, which disentitles the

order of back wages, but the State is not averse to a

compensation, as declared by this Court in a series of

decisions, which the learned Senior Counsel submits, the

Advocate-on-Record has instructions to concede to a

payment of Rs.99,000/- (Rupees Ninety Nine Thousand).

4. Mr. Sukumar Patjoshi, learned Senior Counsel

appearing for the respondent vehemently opposes the

argument and submits that the back wages would come to

at least Rs.15,00,000/- (Rupees Fifteen Lakhs) and there

could be no interference caused to the award on the ground

of delay. Respondent-workman would rely on Shahaji v.

Executive Engineer, PWD1 and U.P. State Electricity Board

v. Rajesh Kumar2. Learned Senior Counsel would contend

that having not questioned the reference, there is no

question of a contention on delay being taken at this stage

or before the High Court, wherein it was first taken.

5. We have to immediately notice that though the

reference as such was not challenged, the State had raised

1 (2005) 12 SCC 141 2 CA No.1343 of 2003 decided on 18.12.2003 Page 2 of 9 CA @ SLP (C) No.444 of 2024 a contention of delay in its written submissions filed at the

first instance before the Labour Court, Bareilly as is

revealed from Annexure P2. It was specifically contended

that the respondent-workman was only engaged till

October, 1990 on a monthly honorarium and he had not

submitted a single application seeking reinstatement after

his service ceased. It was also categorically averred that

there was no justification for submitting the application

seeking reinstatement after a gap of about more than 15

years from the date of termination of service.

6. As to the legal point, we notice that there are two

distinct aspects on which there are two separate lines of

decisions insofar as the issue of delay in seeking a

reference. One of these is with respect to the challenge

against a reference order itself, before the High Court under

Article 226 of the Constitution of India and the other, the

consequences of a delay while adjudicating a reference

under the Industrial Disputes Act, 19473.

3 For brevity ‘the ID Act’ Page 3 of 9 CA @ SLP (C) No.444 of 2024

7. National Engineering Industry v. State of Rajasthan4,

held that though the Labour Court/Industrial Tribunal is not

competent to examine the validity of the reference, the High

Court under Article 226 of the Constitution of India is

competent to examine it. It was categorically held that the

High Court can entertain a writ petition challenging a

reference on the ground of non-existence of an actual or

apprehended industrial dispute. Following the said

decision in Nedungadi Bank Ltd. v. K.P. Madhavankutty

and Ors.5, it was held that when there is a stale issue

referred for adjudication, its validity can be questioned

under Article 226 of the Constitution of India on that ground.

Therein the workman was dismissed after a lawful and

proper disciplinary enquiry, his dismissal was upheld in an

appeal and his legally due benefits in its entirety were also

paid to him. Seven years after the dismissal, a dispute was

raised, which was found to be bad not only on the ground of

delay but as well as on the ground of no industrial dispute

existing. The scope of judicial review insofar as a reference,

though limited it might be, was upheld, negating the

4 (2000) 1 SCC 371 5 (2000) 2 SCC 455 Page 4 of 9 CA @ SLP (C) No.444 of 2024 contention that when a reference is made under Section 10

of the ID Act, the Labour Court has to perforce decide the

same on its merits.

8. In the instant case, admittedly no such challenge

under Article 226 of the Constitution of India was made

against the reference; which does not prevent or prohibit

the employer from raising the question before the Labour

Court itself. Before going to the series of decisions on the

consequences of a delay in seeking reference, we cannot

but observe that the mere failure, or a conscious decision

not to challenge, the reference under Article 226 of the

Constitution of India before the High Court, on the ground

of delay, can neither result in the contention being

frustrated in every manner nor can there be a ground of

acquiescence taken against such plea. This is the purport of

the decisions, which we will immediately refer to

hereunder.

9. Ajaib Singh v. Sirhind Coop. Marketing-cum-

Processing Service Society Ltd. and Ors.6 dealt with the

question of delay of 7 years in approaching the appropriate

6 (1999) 6 SCC 82 Page 5 of 9 CA @ SLP (C) No.444 of 2024 Government for a reference, which was found to be fatal by

the High Court, the Full Bench of which prescribed a

limitation period of 5 years to seek a reference under

Section 10 of the ID Act. It was held that the employer’s plea

of delay raised against adjudication of an industrial dispute

ought to be fortified with proof of real prejudice and

otherwise, a bland plea was not sufficient to deny relief to

the workman. It was also held that even in cases of proved

delay, relief can be moulded by declining whole or part of

back wages. Therein, despite the delay the employer failed

to raise the ground before the Labour Court and raised it for

the first time before the High Court. For all the above

reasons, this Court upheld the award of reinstatement and

continuity of service, but considering the delay, limited the

back wages from the date of issuance of notice of demand

till the date of the award, to 60% and thereafter full back

wages.

10. Assistant Engineer Rajasthan State Agricultural

Marketing Board v. Mohan Lal7 was concerned with a

limitation of 6 years. Ajaib Singh6 was held to be not laying

7 (2013) 14 SCC 543 Page 6 of 9 CA @ SLP (C) No.444 of 2024 down an absolute proposition of law that where plea of

delay is not raised by the employer, there would be no

justification for moulding the relief. It was held noticing a

series of decisions that the Labour Court considering the

aspect of delay, at its discretion could mould the relief, since

delay in raising an industrial dispute is definitely a

circumstance to be reckoned by the Labour Court; though

the Limitation Act, 1963 is not applicable to the references

made under the ID Act. In the said case, in lieu of

reinstatement, a compensation of Rs.1,00,000/- (Rupees

One Lakh) was directed to be paid.

11. Even Shahaji1 relied on by the respondent-workman

accepted the principle that the Labour Court, if finding the

termination to be illegal could suitably mould the relief to

be granted to the workman in view of the delay. Rajesh

Kumar2 was a case in which the ground of stale claim was

not raised before the Labour Court and was first urged

before the High Court. As we noticed at the outset, in the

present case, the failure of the State, or the conscious

decision taken not to challenge the order of reference does

not deny the employer-State the right to raise that

Page 7 of 9 CA @ SLP (C) No.444 of 2024 contention before the Labour Court. Moreover, the same

had been raised at the first instance before the Labour Court

and this is not a case where for the first time the ground of

delay was urged before the High Court or before this Court.

12. Learned Senior Counsel for the State has also fairly

submitted that he would not be averse to a lumpsum

compensation being paid in lieu of the entire back wages as

directed by the employer.

13. Taking the entire circumstances into account,

especially the fact that there was a 16 year delay in seeking

a reference, we are of the opinion that a lumpsum

compensation of Rs.2,50,000/- (Rupees Two Lakhs and fifty

thousand) would suffice. The order of the Labour Court as

affirmed by the High Court are both set aside to the extent

of reinstatement and award of back wages. While upholding

the award regarding the illegality of the termination,

reckoning the gross delay caused, a lumpsum

compensation of Rs.2,50,000/- (Rupees Two Lakhs and fifty

thousand) would be paid to the respondent-workman within

a period of two months from the date of receipt of certified

copy of this order. If the said sum is not paid within the

Page 8 of 9 CA @ SLP (C) No.444 of 2024 period stipulated, the State shall be liable to pay interest at

the rate of 7% per annum from the date of expiry of the two-

month period.

14. The appeal stands allowed with the above directions

and pending application(s), if any, shall stand disposed of.

……...…….……………………. J.

(AHSANUDDIN AMANULLAH)

...………….……………………. J.

(K. VINOD CHANDRAN)

NEW DELHI;

December 17, 2025.

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