Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Del) 97

IN THE HIGH COURT OF DELHI AT NEW DELHI
SHAIL JAIN, J.
The Mgmt.Of Esi Scheme - Petitioner
Versus
Raj Bala – Respondent
W.P.(C) 16809 of 2004, CM APPL. 12426 of 2004, W.P.(C) 16739 of 2004, CM APPL. 12084 of 2005, W.P.(C) 16813 of 2004, CM APPL. 12011 of 2005
Decided On : 18-02-2026

Advocates Appeared:
For the Petitioner: Ms. Sonam Anand, Mr. Yakesh Anand, Mr. Shubham Goyal, Advs. Mr. Dhuv Prasad, Assistant, AR for ESIC, Basaidarapur
For the Respondent:Mr. Chirayu Jain and Ms.Tanishqua Dhar, Advocates

Termination of casual workers constituted illegal retrenchment under Section 25F due to failure to provide notice and compensation; reinstatement replaced with monetary compensation due to the delay and nature of casual engagement.

Headnote:(A) Industrial Disputes Act, 1947 - Sections 2(oo), 25F, 25G, and 25H - Challenge to Awards by Labour Court - Termination declared illegal for non-compliance with mandatory conditions under Section 25F regarding retrenchment; no notice given or compensation paid; reinstatement with back wages replaced with monetary compensation due to prolonged delay and nature of casual employment. (Paras 1, 8, 10, 16, 21, 30, 51)

(B) Legal Framework for Reinstatement - Court ruled that reinstatement is not an automatic remedy for illegal retrenchment; reliefs must be tailored to circumstances such as duration of service and nature of employment (Paras 31, 36, 41, 48)

Facts of the case:
Petitions filed against Labour Court ruling reinstating casual workers with back wages after their termination for failing to adhere to statutory procedures. The workers engaged intermittently were found to have served over 240 days which triggered protection under the Act. (Paras 1, 16, 20)

Findings of Court:
Termination was unlawful as no retrenchment compensation was provided; reasonable relief fashioned as monetary compensation rather than reinstatement was justified, given the prolonged time since termination and status of engagement. (Paras 21, 30, 51)

Issues: The major issues revolved around the legality of the retrenchment, application of relevant sections of the Act, and suitability of reinstatement versus compensation. (Paras 9, 10)

Ratio Decidendi: The court asserted that cessation of casual employee services transgressed Section 25F's provisions due to lack of procedural compliance; reinstatement was deemed impractical after extensive delay and inappropriate given the nature of employment type. (Paras 18, 25, 30)

Result: Petitions allowed; prior directions regarding reinstatement set aside; respondents entitled to lump-sum compensation instead.

Table of Content
1. challenge to the legality of the terminations (Para 1 , 5 , 8 , 9)
2. arguments regarding retrenchment and compensation (Para 10 , 11 , 12)
3. judicial review limits on labour court decisions (Para 13 , 14 , 15 , 16)
4. requirements for valid retrenchment under section 25f (Para 20 , 21 , 22 , 24)
5. substitution of reinstatement with monetary compensation (Para 30 , 31 , 35)
6. final ruling on compensation instead of reinstatement (Para 46 , 51)

JUDGMENT :

SHAIL JAIN, J.

1. The present Petitions have been filed by the Petitioner herein under Article 226 of the Constitution of India, inter alia, challenging the Awards passed by the Presiding Officer, Central Government Industrial Tribunal- Cum-Labour Courts in different industrial disputes, whereby the learned Tribunal directed the Petitioner to reinstate the Respondents with back wages varying from 20% and 25% from their respective dates of termination.

2. W.P. (C.) No. 16809/2004, titled “ The Management of E.S.I. Scheme vs. Raj Bala ”, has been filed by the Petitioner–Management assailing the Award dated 25.05.2004 passed by the learned Presiding Officer, Central Government Industrial Tribunal-cum-Labour Court–II, New Delhi in I.D. No. 12/1996. By the said Award, the learned Labour Court held the termination of the Respondent–Workman, Smt. Raj Bala, to be illegal and directed her reinstatement with 20% back wages with effect from 24.08.1994.

3. In the same batch, W.P. (C.) No. 16739/2004, titled “The Management of E.S.I. Scheme vs. Asha Ram &Ors.”, has also been preferred by the Petitioner–Management challenging the Award dated 08.07.2004 passed by the learned Presiding Officer, Central Government Industrial Tribunal-cum-Labour Court–II, New Delhi in I.D. No. 22/1996. By the impugned Award therein, the termination of the Respondents– Workmen, namely Sh. Asha Ram and others, namely, Sh. Mukesh Kumar, Sh. Ravi Kumar, Smt. Urmila, and Smt. Sunita was held to be illegal, and reinstatement with 25% back wages, effective from 24.08.1994, was granted.

4. Likewise, W.P. (C.) No. 16813/2004, titled “ The Management of E.S.I. Scheme vs. Kamlesh ”, arises out of the Award dated 21.06.2004 passed by the learned Presiding Officer, Central Government Industrial Tribunal-cum-Labour Court–II, New Delhi in I.D. No. 60/1996, whereby the termination of the Respondent–Workman, Smt. Kamlesh was declared illegal, and reinstatement with 25% back wages with effect from 24.08.1994 was directed.

5. All the aforesaid writ petitions arise from a similar factual matrix, involve identical questions of law, and assail substantially similar findings returned by the learned Labour Court. Since detailed arguments were addressed in W.P. (C.) No. 16809/2004, titled “The Management of E.S.I. Scheme vs. Smt. Raj Bala”, the same has been treated as the lead matter in the present batch, and the decision rendered therein shall govern the remaining connected petitions as well.

6. Certain regular employees working as sweepers/helpers proceeded on leave, during which period the Respondents were engaged as a stop-gap arrangement to perform the duties of sweepers/helpers in order to meet the resulting exigency. During the course of such engagement, vacancies arose for regular posts of sweepers/helpers. The Respondents were permitted to participate in the process for appointment to the regular posts along with other candidates sponsored by the Employment Exchange. The Respondents were called to appear before the Selection Board for an interview; however, the Respondents either did not appear for the interview or were not selected for the post. Consequently, the Petitioner terminated the Respondents. Subsequently, various proceedings were initiated before the Central Government Industrial Tribunal-cum-Labour Courts. Further, Impugned Awards were passed by the learned Tribunal, which are the subject matter of challenge in the present Writ Petitions.

BRIEF FACTS

7. The brief background of facts in W.P. (C.) No. 16809/2