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Rajeshwar Mahto v. Alok Kumar Gupta, G.M., M/s Birla Corporation Ltd.

Contempt Petition (Civil) · 2018 INSC 197Decided 23 Feb 2018
Contempt Petition (Civil) No. 785 of 2018
Justice R.K. Agrawal · Justice Abhay Manohar Sapre

Background

Rajeshwar Mahto, a former employee of Birla Corporation Ltd. terminated in 1985, had successfully challenged his termination up to the Calcutta High Court, which the Corporation then appealed to the Supreme Court. While that appeal was pending, the Supreme Court in 1999 ordered the Corporation to pay Mahto his "full wages last drawn" under Section 17-B of the Industrial Disputes Act (a provision meant to tide workers over during litigation). The Corporation ultimately won its appeal in 2000, but never paid the 1999 wage order, prompting Mahto to file this contempt petition years later.

Decision Breakdown

The Supreme Court held that an order under Section 17-B for payment of wages during the pendency of litigation is an independent order that does not get wiped out even if the employer later wins the underlying appeal: the employer remains legally bound to comply with it. Since the Corporation admitted it had never paid any amount under the 1999 order, the Court worked out the amount actually due to Mahto across salary arrears, leave encashment, gratuity, bonus and interest, and fixed a final lump-sum settlement of Rs. 7,50,000, to be paid once Mahto vacated the company quarters he occupied. With these directions, the contempt petition was disposed of.

Lesson Learnt

An interim wage-payment order made during litigation under Section 17-B of the Industrial Disputes Act survives independently and must be honoured by the employer even if the employer ultimately wins the case: a worker's entitlement to interim wages is not erased by a later adverse final verdict.

Official source (sci.gov.in)View Judgment (PDF)

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