Punjab and Haryana High Court Awards Rs. 5 Lakh Compensation to Retrenched Employee

Court criticizes the State for administrative delay and discrimination, mandates monetary compensation instead of reinstatement.

In a significant judgment, the Punjab and Haryana High Court, under the stewardship of Justice Harpreet Singh Brar, delivered a verdict in favor of Mohan Lal, a retrenched employee of the Anandpur Sahib Hydel Project. The court awarded a compensation of Rs. 5 lakh to Lal, emphasizing the State's obligation to act as a model employer and avoid arbitrary denial of benefits to identically situated employees.

The legal battle dates back to Mohan Lal's termination in 1985, after which he was paid retrenchment compensation under the Industrial Disputes Act, 1947. Despite a binding judgment in the case of Mehanga Ram v. State of Punjab, which directed the absorption of retrenched employees within six months, Lal remained unabsorbed, leading to prolonged litigation.

The court highlighted that the State failed to comply with judicial directions, despite an undertaking given by the Advocate General of Punjab before the Supreme Court in 1995. The undertaking assured the issuance of appointment or transfer letters to the retrenched employees from the project. However, Lal was excluded from this benefit, which was extended to other similarly situated employees, thereby violating Articles 14 and 16 of the Constitution.

The judgment underscored the principle of equality and the responsibility of the State as a welfare entity to foster justice and equity. It emphasized the need for predictability and consistency in law, urging the State to avoid actions that could lead to protracted litigation.

While the court acknowledged the hardship endured by Lal due to administrative apathy and delay, it considered the lapse of time and the petitioner's age, deciding against reinstatement with back wages. Instead, it directed the State to compensate Lal with Rs. 5 lakh, to be disbursed within three months, in line with the principle that monetary compensation may be appropriate when reinstatement is impracticable.

The judgment serves as a reminder to the State to honor judicial directions uniformly and act as a catalyst for dispute resolution rather than a cause for litigation proliferation.

Bottom Line:

State is obligated to act as a model employer and ensure uniform application of judicial directions, avoiding arbitrary denial of benefits to identically situated employees.

Statutory provision(s): Articles 14 and 16 of the Constitution of India, Industrial Disputes Act, 1947, Articles 226/227 of the Constitution of India.

Mohan Lal v. State of Punjab, (Punjab And Haryana) : Law Finder Doc Id # 2816802