SC Restores Back Wages to Illegally Terminated Worker

Case Details: Balaji Madhukar Konkanwar vs. Maharashtra State Road Transport Corporattion [2026] 185 taxmann.com 717 (SC)

Judiciary and Counsel Details

Sanjay Karol & Nongmeikapam Kotiswar Singh, JJ.
Varinder Kumar Sharma, Aor, Shantanu Sharma & Ms Deeksha Gaur, Advs. for the Petitioner.
Ms Mayuri Raghuvanshi, Aor, Vyom Raghuvanshi & Ms Akanksha Rathore, Advs. for the Respondent.

Facts of the Case

In the instant case, the appellant-employee was engaged as a Cleaner with the respondent-State Transport Corporation on a daily wage basis. He was orally terminated from service. The Labour Court held the termination to be illegal and directed reinstatement with continuity of service and payment of back wages.

The respondent filed a writ petition before the High Court, wherein interim relief against reinstatement was declined and the respondent was directed to deposit the back wages. Consequently, the appellant was taken back into service as a daily wager.

Thereafter, the appellant approached the Industrial Court seeking regularisation upon completion of 180 days of service. The Industrial Court directed regularisation from the date on which the appellant completed 180 days of service. However, despite the said direction, the respondent failed to comply with the order until 2011, when the appellant was finally regularised in service.

Subsequently, in IDA Case No. 10 of 2016, the Labour Court granted back wages for the period from October 1993 to 20 January 2011 along with interest at the rate of 12% per annum. The High Court, however, set aside the award passed by the Labour Court.

Supreme Court Held

The Supreme Court observed that the appellant had already completed 180 days of service prior to being unceremoniously relieved from employment and had continuously pursued legal remedies to secure what was rightfully due to him. Therefore, the doctrine of estoppel could not be invoked by the respondent to avoid payment of the appellant’s legitimate dues, which represented compensation for services rendered and not a gratuitous payment.

Accordingly, the Supreme Court held that the High Court erred in setting aside the order of the Industrial Court granting compensation of Rs. 8,09,218/- towards back wages for the period from October 1993 till 20 January 2011. However, considering the financial implications arising from grant of interest at 12% per annum from October 1993 onwards, the Supreme Court reduced the rate of interest from 12% to 8% per annum.