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State of Uttar Pradesh vs. Krishna Murari Sharma

Not available · 2025 INSC 1500Decided 17 Dec 2025
Not available
Justice Ahsanuddin Amanullah · Justice K. Vinod Chandran

Background

The respondent, engaged on a monthly honorarium until October 1990, sought reinstatement only about 15-16 years after his service ended. The Labour Court at Bareilly found his termination illegal and awarded back wages from 2006 (the date of reference) to 2015, and the Allahabad High Court upheld this award. The State of Uttar Pradesh appealed to the Supreme Court, arguing that the gross, unexplained 15-16 year delay before the workman sought a reference should disentitle him from back wages, though it was willing to pay a modest lump-sum compensation instead.

Decision Breakdown

The Supreme Court clarified that an employer's failure to challenge the reference itself under Article 226 does not bar it from separately raising delay as a ground before the Labour Court, and since the State had in fact raised delay at the first instance before the Labour Court, it was entitled to press the point. Surveying its precedents (Ajaib Singh, Assistant Engineer RSAMB v. Mohan Lal, Shahaji), the Court reaffirmed that while the Limitation Act does not technically apply to ID Act references, prolonged delay is a relevant circumstance that a court can use to mould relief, even reducing reinstatement/back wages to a lump-sum compensation instead. Given the 16-year delay here, the Court upheld the finding that the termination was illegal but set aside the reinstatement and back-wages award, substituting a lump-sum payment of Rs. 2,50,000 to be paid within two months (with 7% annual interest on delay).

Lesson Learnt

Even where a court finds an employee's termination was illegal, an extremely long, unexplained delay in seeking redress can lead the court to substitute a one-time lump-sum payment for reinstatement and years of back wages, so workers should raise employment disputes without significant delay to preserve their full range of remedies.

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

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