High Court Holds Section 17(B) Payments Cease on Superannuation; Directs Payment Only Up to Month of Retirement

A single-judge bench of Justice Renu Bhatnagar heard a petition by Life Insurance Corporation of India challenging the operation of an earlier interim order directing payment of wages under Section 17(B) of the Industrial Disputes Act, 1947 to an employee who had obtained an award of reinstatement but subsequently attained superannuation during the pendency of litigation.

The Court allowed the limited modification sought by the petitioner and clarified that the statutory obligation to pay wages under Section 17(B) did not survive the employee’s attainment of superannuation. The Court noted that orders under Section 17(B) were “operative only so long as the respondent continued to be entitled to remain in service of the petitioner” and relied on earlier Division Bench precedents holding that Section 17(B) benefits could not extend beyond retirement. The Court, in its reasoning, observed: “The consistent view which emerges from the aforesaid decisions is that Section 17(B) operates in the context of reinstatement and presupposes an entitlement to continue in service. Once a workman attains the age of superannuation and ceases to be entitled to reinstatement, the statutory obligation under Section 17(B) does not survive beyond that point.” The Court further recorded that “considerations of hardship, howsoever compelling, cannot extend the operation of Section 17(B) beyond what the law permits.”

Background: The respondent joined LIC in June 1984 and later challenged a domestic enquiry before the Central Government Industrial Tribunal-cum-Labour Court No.1, which found the enquiry invalid and awarded reinstatement with full back wages on 21 June 2016. LIC filed W.P.(C) No. 163/2017 against the award. During the writ petition, the respondent applied under Section 17(B) for payment of last drawn wages; by order dated 17 November 2017 the High Court directed the petitioner to pay “last drawn wages or minimum wages, whichever is higher” from the date of the award until disposal of the writ petition, with arrears and litigation costs. LIC complied with payments up to 7 April 2024.

The petitioner then moved under Section 151 CPC read with Section 17(B) ID Act to modify the 2017 order on the ground that the respondent had attained superannuation on 11 April 2024 under LIC’s superannuation rules and therefore ceased to be an employee. LIC relied on Division Bench authorities including Delhi Transport Corporation v. Ramesh Chander and D.T.C. v. Prem Singh to submit that Section 17(B) liability could not extend beyond the date of superannuation. The respondent relied on earlier single-judge authority (Management of Centaur Hotel v. P.S. Mohan Nair) and argued that Section 17(B) operated during the pendency of proceedings irrespective of retirement.

After hearing both sides and reviewing precedents from Delhi and other High Courts (including Essar Projects v. N.D. Jagdishwara), the Court concluded that later Division Bench decisions constituted binding precedent and that Section 17(B) must be read in the context of an employer–employee relationship and reinstatement. The Court observed that while it acknowledged the respondent’s financial hardship, “the entitlement under Section 17(B) is statutory in nature and must be governed by the parameters laid down by binding precedents.”

Result: The application was allowed to the limited extent that the 17 November 2017 order would operate only up to the date the respondent attained superannuation. The Court held that the respondent had superannuated on 11 April 2024 and directed the petitioner to make payments under Section 17(B) up to 30 April 2024 (the month of superannuation) and to release the differential amount within four weeks. No payments under Section 17(B) were to be made beyond 30 April 2024. The writ petition was listed before the Regular Roster Bench on 23 February 2026.

Case No.: W.P.(C) 163/2017, CM Appls. 768/2017, 27186/2017; CM Appl. 27794/2024 Case Title: Life Insurance Corporation of India v. G.K. Nijhawan Appearances: For the Petitioner(s): Mr. Atul K. Bandhu; Ms. Kusum, Advocates For the Respondent(s): Mr. Lakshay Sawhney, Advocate