2026 Supreme(Online)(Del) 13816

IN THE HIGH COURT OF DELHI AT NEW DELHI
Shail Jain, J
State Bank Of India – Appellant
Versus
Umed Singh – Respondent
W.P.(C) 8492/2005

While a tribunal's factual findings regarding employment status and section 25-F non-compliance are generally binding, a court cannot direct the regularisation or permanent absorption of an employee whose initial appointment violated constitutional recruitment norms, even if the termination of service was found to be legally improper.

Headnote:(A) Industrial Disputes Act, 1947 - Sections 2(s), 2(oo), 25-B and 25-F - Termination of services of workman - Protection under labour welfare legislation - Need for strict adherence to retrenchment procedures - Jurisdiction of tribunal - Writ jurisdiction under Articles 226 and 227 of the Constitution - Extraordinary jurisdiction not to be used to re-appreciate evidence or sit as a court of appeal - Interference justified only in case of patent illegality or perversity. (Paras 10, 13, 37)

(B) Master-Servant Relationship - Determination of - The test for determining the relationship is the existence of the employer’s right to supervise and control the work, not merely in directing what work is to be done but also the manner in which it is to be done - Nomenclature or absence of formal appointment orders is not conclusive where material discloses employment - Payment on a piece-rate basis does not negate the existence of an employer-employee relationship. (Paras 14, 16)

(C) Continuous Service and 240 days requirement - Section 25-B - Deeming fiction - Must receive a broad, purposive interpretation - Does not require strict proof of each individual working day - Focus is on whether material signifies sustained and regular engagement under the employer - Burden of proof initially lies on the workman, but if records of employer are not produced, initial burden is discharged. (Paras 20, 21, 24, 31)

(D) Regularisation of Service - Illegal termination does not imply an automatic right to regularisation or permanent absorption - Courts cannot direct regularisation of persons engaged outside constitutional schemes or without following prescribed recruitment procedures - Reinstatement to previous status is distinct from permanent status. (Paras 39, 40)

Facts of the case:
The respondent challenged the termination of his services, claiming he had been performing duties as a helper/messenger for approximately eleven months. The management challenged this, asserting the respondent was an independent vendor for water supply and not a regular employee. The industrial tribunal found the termination to be illegal for non-compliance with statutory provisions and directed reinstatement and regularisation. The management challenged the award in the High Court.

Findings of Court:
The court found that the nature of work performed, the degree of supervision exercised by the branch management, and the contemporaneous records of conveyance and service payments established a master-servant relationship and completion of 240 days of continuous service. However, the order of regularisation was set aside as it was beyond the scope of the reference and contrary to established law against regularising irregular appointments.

Issues: Whether the industrial tribunal erred in classifying the individual as a workman, whether the requirements of 240 days of continuous service for invoking retrenchment protection were met, and whether the direction for regularisation was sustainable.

Ratio Decidendi: The establishment of an employer-employee relationship is based on the substance of the relationship and control, not nomenclature. While the termination was illegal due to non-compliance with procedural retrenchment safeguards, the court cannot mandate permanent employment in the absence of a sanctioned post or valid recruitment, thus awarding monetary compensation in lieu of reinstatement is appropriate.

Result: Writ petition partly allowed; the order for regularisation set aside and substituted with lump sum monetary compensation.