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The Life Insurance Corporation of India v. Sri Kalappa M. Sankad (D) Thr. LRs.

Civil Appeal · 2018 INSC 966Decided 12 Oct 2018
Civil Appeal No. 10574 of 2018
Justice Abhay Manohar Sapre · Justice Indu Malhotra

Background

Kalappa M. Sankad, an LIC Development Officer since 1988, had his service terminated by LIC in 2013. After his departmental appeal failed, a High Court Single Judge quashed the termination and ordered his reinstatement, and a Division Bench upheld that order on LIC's intra-court appeal. LIC then appealed to the Supreme Court, but Kalappa died while the appeal was pending, making his actual reinstatement impossible.

Decision Breakdown

The Supreme Court agreed with both lower courts that the termination order was rightly set aside and found no good ground to interfere, but since reinstatement was no longer possible due to Kalappa's death, the only live issue was the quantum of back wages owed to his legal heirs. Noting that the case had arisen from a writ petition (not a labour tribunal) and so no evidence existed on whether Kalappa was gainfully employed elsewhere after termination, the Court itself worked out the back-wages calculation from the figures submitted by both sides, gross arrears of roughly Rs. 20.57 lakh, less permissible recoveries (provident fund, income tax, loan dues) of about Rs. 12.59 lakh, arriving at a net balance payable to the heirs. It rejected the heirs' claim for a higher amount based on notional promotions and pay revisions as legally unsustainable, and directed LIC to pay the net balance within three months, finally disposing of the appeal.

Lesson Learnt

Even where reinstatement becomes impossible due to an employee's death during litigation, a wrongfully terminated employee's legal heirs remain entitled to the back wages that would have accrued, calculated on actual proven dues rather than speculative future promotions or pay rises.

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

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