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Bombay High Court

ANGAD TRIMBAKRAO NALAWADEversusM/S S R TRANSPORT

Decided
Disposal
Disposed Off

Holding

The Court held that, given the established employer‑employee relationship and illegal termination, the Labour Court’s award may be modified to award a lump‑sum compensation in lieu of reinstatement and back wages.

Summary

The High Court examined a writ petition challenging a Labour Court award that ordered the reinstatement of an employee with 50% back wages after finding an employer‑employee relationship and illegal termination. The petitioners had already deposited the awarded amount of Rs 1,28,800, which the Court held could be treated as a lump‑sum payment in lieu of reinstatement. The Court affirmed that the termination was illegal because the employer failed to follow retrenchment formalities, including notice and compensation. Considering that the employee had crossed the retirement age during the pendency of the case, the Court found it just to allow the employee to accept the deposited amount with interest as full compensation. Consequently, the award was modified to direct payment of the lump‑sum amount, and the employee was barred from claiming any further benefits. The writ petition was partly allowed and the interim application was disposed.

Issues considered

  • Whether an employer‑employee relationship existed between the parties.
  • Whether the termination was illegal due to non‑compliance with retrenchment procedures.
  • Whether reinstatement and back wages can be substituted by a lump‑sum compensation.
  • Whether the employee, having attained retirement age, may accept the lump‑sum in lieu of reinstatement.

Subjects

  • labour law
  • employer-employee relationship
  • illegal termination
  • retrenchment
  • back wages
  • reinstatement
  • lump sum compensation

Judgment

2026:BHC-AS:28557

              Renuka                                              20-IA-251-2026


                         IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                  CIVIL APPELLATE JURISDICTION
                              INTERIM APPLICATION NO. 251 OF 2026
                                                     IN
                                  WRIT PETITION NO. 238 OF 2011
              Angad Trimbakrao Nalawade                            ...Applicant

              IN THE MATTER BETWEEN

              M/S S R Transport                                    ...Petitioner
                                V/s.

              Angad T. Nalawade                                   ...Respondent
                                         ________________
              Dr. D. S. Hatle with Mr. Umesh G. Chavan for Petitioner in WP and
              Respondent in IA.
              Mr. Ramdas Hake Patil with ms. Shraddha Sagvekar for Respondent in
              WP and Applicant in IA.
                                         ________________
                                                 CORAM: SANDEEP V. MARNE, J.
                                                        DATED: 10 JULY 2026.


              P.C.:


              1)          The Petition is ;led challenging the Award dated 22
              February 2010 passed by the learned Judge 4th Labour Court, Thane in
              Reference (IDA) No. 47 of 2004. The Labour Court has directed
              reinstatement of Respondent with 50% backwages and continuity of
              service w.e.f. 14 October 2000.


              2)          The Petition has been admitted by order dated 15 March .
              2011. By order dated 24 January 2011, this Court has directed Petitioner

                                                Page No.1 of 4
                                                10 JULY 2026
Renuka                                             20-IA-251-2026


to deposit the Awarded amount. Accordingly, an amount of 1,28,800/-
has already been deposited by the Petitioner in the present case.


3)          I have heard Mr. Hatle, the learned counsel appearing for
Petitioner and Mr. Hake Patil, the learned counsel appearing for
Respondent and have considered the submissions canvassed by them.


4)              Perusal of the impugned Award would indicate that
employer-employee relationship was established by leading cogent
evidence on record. The Labour Court has recorded factual ;nding about
existence of employer-employee relationship and there is no warrant for
interference in the said ;nding. Therefore it cannot be held that there is
any perversity in the said ;nding recorded by the Labour Court.


5)          Once the employer-employee relationship got established,
the termination is automatically rendered illegal since no retrenchment
formalities were followed by the Petitioner-employer. Therefore, the
Labour Court has proceeded to treat termination as illegal on account of
failure to issue notice and failure to pay retrenchment compensation.


6)          It must also be borne in mind that the reference was made in
the year 2004 in respect of termination of the Respondent on 14 October
2000. Mr. Hake Patil, submits that during the pendency of the present
Petition, Respondent has crossed the age of retirement sometime in the
year 2012. Petitioner has already deposited the awarded 50% backwages
amounting to Rs. 1,28,800/- which amount has been invested by the
Registry   in   interest   bearing    deposits.   Considering       the   above

                                 Page No.2 of 4
                                 10 JULY 2026
Renuka                                                20-IA-251-2026


circumstances in my view ends of justice would be met if the entire
deposited amount of Rs. 1,28,800/- together with accrued interest
thereon is treated as a lumpsum amount payable to the Respondent in
lieu of reinstatement and backwages. Mr. Hake Patil fairly submits that
the Respondent is willing to accept the deposited amount with interest
as compensation in lieu of reinstatement and backwages.


7)          I accordingly proceed to pass the following order:-


             (i)     Impugned Award dated 22 February 2010 passed by
             the Labour Court in Reference (IDA) No. 47 of 2004 is
             modi;ed by directing that Petitioner shall pay to the
             Respondent     a   lumpsum           compensation     in    lieu   of
             reinstatement or backwages.


             (ii)    Amount of Rs. 1,28,800/- deposited in this Court
             alongwith    accrued     interest      thereon    shall    represent
             lumpsum compensation payable to the Respondent.
             Respondent shall be at liberty to withdraw the entire
             deposited amount alongwith accrued interest.


             (iii)   Beyond the lumpsum compensation so awarded,
             Respondent shall not be entitled to any further bene;ts
             from the Petitioner in relation to his services.


8)          With the above directions, the Writ Petition is partly
allowed. Rule is made partly absolute. There shall be no order as to costs.

                                 Page No.3 of 4
                                 10 JULY 2026
                          Renuka                                              20-IA-251-2026


                          In view of the disposal of the Petition, nothing survives in Interim
                          Application No. 251 of 2026 and the same is also disposed of.


                                                                           [SANDEEP V. MARNE, J.]




Signed by: Renuka S Thakur
                                                          Page No.4 of 4
Designation: PA To Honourable Judge                       10 JULY 2026
Date: 14/07/2026 11:15:58


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