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2026 Supreme(SC) 373

SANJAY KAROL, AUGUSTINE GEORGE MASIH
IPCA Laboratories Limited – Appellant
Versus
Laghu Udyog Mazdoor Union (CITU) – Respondent


Advocates appeared:
For the Petitioner(s): Mr. J P Cama, Sr. Adv. Mr. Nitin Tambwekar, Adv. Mr. Dharmendra Sharma, Adv. Mr. Shashank Sharma, Adv. Mr. Seshatalpa Sai Bandaru, AOR
For the Respondent(s): Mr. Kailash Prashad Pandey, AOR Mr. Amit Kumar Chawla, Adv. Mr. Lakhan Singh Chandel, Adv. Mr. Hitesh Kumar Sharma, Adv. Mr. Mahi Pal Singh, Adv. Ms. Sheetal Valskar, Adv. Ms. Archna Kalmodia, Adv. Mr. Akhileshwar Jha, Adv. Mr. D.P.singh, Adv. Ms. Shreya Jha, Adv. Mr. Ankit Chaturvedi, AOR Mr. Prakhar Karpe, Adv. Mr. Shrey Chandak, Adv. Mr. Shubham Agarwal, Adv. Mr. Sumeet Singh, Adv. Ms. Anvi Kumar, Adv.

Judgement Key Points

What is the permissible settlement framework between an employer and employees in cases of illegal retrenchment, as an alternative to reinstatement or back wages?

What are the specific monetary and statutory benefits payable to respondent-employees upon settlement, and the timelines for payment and deductions (e.g., Section 17B adjustments)?

What are the implications and authority of the High Court and Supreme Court in directing settlements and disbursing statutory benefits in cases of established illegal retrenchment?


ORDER :

SANJAY KAROL J.

1. Leave Granted.

2. These appeals arise out of common judgment and order dated 18th December 2024 in WP No.5469 of 2016 and other connected matters as also RP No.12 of 2025 dated 16th May 2025 passed by the High Court of Madhya Pradesh at Indore. In essence, the dispute pertains to reinstatement of the respondent-employees and payment of back-wages by the appellant-employer.

3. The appellant-employer is a bulk drugs manufacturer located at Indore. The respondent-employees were ‘for many years’ under their employment but were shown the door as of 1st April 2006, allegedly at the end of the contract on the basis of which they had been employed. Aggrieved by thus being shunted out, the respondent-employees took recourse to the law. Multiple rounds of litigation ensued first with the Labour Court, Indore in terms of C. No. 55/05 M.P.I.R. which came to be dismissed as per order dated 10th September 2009. An appeal thereagainst was filed before the Industrial Court, Indore in C.A. No. 169 of 2009 and connected matters. The Industrial Court observed that the appellant-employer herein, upon having submitted that the respondent-employees were hired by it through a contr

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