State Cannot Deny Retiral Benefits Citing Its Own Failure In Regularising Employee As Per Judicial Order : Supreme Court

The Supreme Court recently overturned the findings of the division bench of the Madhya Pradesh High Court and upheld the observations made by the single judge of the High Court directing pensionary benefits to be granted to a Mason in accordance with the findings of the Labour Court declaring the Appellant (Madanlal) as a permanent employee. 

A bench of Justices Dipankar Datta and Prashant Kumar Mishra made these observations in an appeal against the division bench's order which failed to consider three previous orders of the Court including the Supreme Court directing Madanlal to be regularised in a permanent post. 

The division bench went on to embark on an inquiry into whether Madanlal was inducted into the services properly and came to a conclusion that since there was no order of the State to regularise his post, he could not be declared as a permanent employee and therefore, no benefit of pension. 

The Court observed: "If no post was available then, Madanlal was required to be placed on a supernumerary post till such time a sanctioned post became available where he could be accommodated. The neglect/failure/omission of the respondents in not conferring permanent status to Madanlal cannot afford any justification or good reason for them to take advantage of their own wrong in depriving Madanlal of his pensionary benefits."

Since Madanlal has expired, the Court ordered that retiral benefits, as well as benefits on account of family pension, shall be granted to his legal heirs with 6 percent interest from the date of his retirement within 3 months.

Facts of the case

As per brief facts, Madanlal Sharma (now deceased) approached the High Court of Madhya Pradesh under Article 226 (Power of the High Courts to issue certain writs) of the Indian Constitution, which ordered that he is entitled to pension. 

The single judge of the High Court directed that the Madhya Pradesh Government extend the benefit of pension to him within 3 months.

However, in an appeal, the division bench of the High Court overturned the findings in 2019. It held that Madanlal was not entitled to a pension.

Before the single judge, Madanlal had argued that he was appointed as a Mason in 1974. In 1999, the Labour Court directed the Respondent-State of Madhya Pradesh to classify him as permanent and pay him the arrears of the salary with effect from June 4, 1996.

This was challenged by the State however, the appeal was dismissed as time-barred. Respondents' Article 277 petition filed subsequently also came to be dismissed before the High Court. 

While dismissing the Article 277 petition, the High Court via order dated July 5, 2001, also observed on merits and found that the evidence led before the Labour Court substantiated the contention of Madanlal.

What did the Supreme Court observe?

The Supreme Court observed that the State failed to reverse the findings of the Labour Court on classifying Madanlal as a permanent employee, which also came before the Supreme Court but was dismissed.

It held: "The respondents having been unsuccessful in having the findings of the Labour Court reversed even after litigation travelled to this Court for the first time, it was highly improper on the part of the Hon'ble Division Bench to embark on an inquiry as to whether Madanlal had been inducted in service as per rules or as to whether he had been granted the status of a permanent employee. However, to be fair to the Hon'ble Division Bench, we ought to record once again that it might not have been aware of dismissal of the special leave petition."

Advocate Dushyant Parashar appeared for the petitioner.

Case Details: MADANLAL SHARMA (DEAD) THROUGH LRS v. THE STATE OF MADHYA PRADESH & ORS., Special Leave to Appeal (C) No(s).18981/2021

Citation : 2024 LiveLaw (SC) 1053

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