Supreme Court Holds Payment Order For Post-Retirement Period Was Erroneous, Sets Aside High Court And Labour Commissioner Orders

A Bench of Justices Sanjay Kumar and Augustine George Masih heard an appeal by Uttar Pradesh Power Corporation Ltd. challenging an Allahabad High Court order that had confirmed a Deputy Labour Commissioner’s direction to pay two former daily-wage workers for the period 01.01.2015 to 31.05.2018. The matter arose from a Special Leave Petition against the Lucknow Bench’s judgment in Writ C. No. 14303 of 2021.

The Court allowed the appeal and set aside both the High Court’s judgment dated 20.02.2023 and the Deputy Labour Commissioner’s order dated 05.04.2021. The Supreme Court held that the authorities had erred in directing payment for the period 01.01.2015 to 31.05.2018 because the factual matrix demonstrated that the employees would have attained the normal age of superannuation well before the contested period. The Court, in its reasoning, observed: "We, therefore, hold that the Deputy Labour Commissioner, Devi Patan Division, Gonda, erred in directing payment of salary to the respondents for the period 01.01.2015 to 31.05.2018. This erroneous order ought not to have been confirmed by the High Court, ignoring the aforesaid factual aspects." The Court further noted that the High Court had "blindly acted upon the claim of the respondents" regarding their ages and eligibility.

Background The two respondents entered service with the appellant Uttar Pradesh Power Corporation Ltd. on 01.01.1971 and 26.02.1973 respectively as daily-wage employees and were reported to have been terminated in 1979. They had raised an industrial dispute (ID No. 159 of 1990) before the Labour Court, Faizabad, which by Award dated 07.12.1995 held that their disengagement was illegal and directed that they be deemed to have continued in service with entitlement to salary and other benefits. Pursuant to that award, the respondents filed an application under Section 6H(1) of the Uttar Pradesh Industrial Disputes Act before the Deputy Labour Commissioner (registered as Case No. 6(H)(1) R.C. Case No. 01 of 2014). The respondents received payments of ₹7,05,662 each on 03.05.2016, which were stated to cover service up to 31.12.2014, and they sought further payment for the period from 01.01.2015 to 31.05.2018. The Deputy Labour Commissioner directed payment of ₹6,53,302 to each respondent for that period by order dated 05.04.2021. The appellant challenged that order before the High Court by writ, but the High Court dismissed the petition and upheld the payment direction.

On appeal, the Supreme Court scrutinised the chronological facts and observed that, assuming the respondents were at least 18 when engaged in 1971 and 1973, they would have attained the age of 60 in 2013 and 2015 respectively and would have rendered approximately 40 years’ service by 2013. The Court found no material on record to support the respondents’ claimed ages that would justify continuation in service until 2023, and observed that accepting such claims would imply implausible ages at initial engagement. Consequently, the Supreme Court held the Deputy Labour Commissioner’s order to be erroneous and set aside both the Deputy Labour Commissioner’s and the High Court’s orders. The appeal was allowed, the impugned orders were set aside, and pending applications were disposed of. The Court had earlier granted leave and directed that no coercive steps be taken against the officers mentioned in the impugned order.

Case Details: Case No.: 2025 INSC 339 (SLP(C) No. 12310/2023) Case Title: U.P. Power Corporation Ltd. & Anr. v. Satya Ram & Anr. Appearances: For the Petitioner(s): Mr. Rakesh Uttamchandra Upadhyay, AOR; Ms. Aarti U. Mishra, Adv.; Mr. Harsh Som, Adv.; Mr. Ravish Chandra Pathak, Adv. For the Respondent(s): Mr. Pranaya Kumar Mohapatra, AOR; Mr. Haraprasad Sahu, Adv.