R.Maheswari vs Y.92, Manavalakurichy Primar

WA(MD) No. 571 of 2026
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 15-10-2026
CORAM
THE HON'BLE MR JUSTICE P.VELMURUGAN
AND
THE HON'BLE DR.JUSTICE P.MURUGAN
WA(MD) No. 571 of 2026
CNR:{HCMD010253122026}
R.Maheswari
..Petitioner(s)
Vs.
Y.92, Manavalakurichy Primary Agricultural
Co. operative Credit Society,
Rep. by its President,
Manavalakurichy Post,
Kalkulam Taluk,
Kanyakumari District.
..Respondent(s)
PRAYER: Writ Appeal filed under Clause 15 of Letters Patent, against
the order dated 13.10.2025 made in W.P.(MD)No.13891 of 2019.
For Petitioner(s): Mr.G.Balakrishnan
For Respondent(s): Mr.R.Maheswaran
JUDGMENT
(Judgment of the Court was delivered by P.VELMURUGAN J.)
The present writ appeal is directed against the order dated
13.10.2025 passed by the learned Single Judge in W.P.(MD)No.13891 of
2019.
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WA(MD) No. 571 of 2026
2. The facts leading to the filing of the present writ appeal are as
follows:
The respondent Society filed the said writ petition challenging the
award dated 29.09.2015 passed by the Labour Court in I.D.No.57 of
2014. The case of the appellant, who was the respondent in the writ
petition, is that she was initially engaged as a Saleswoman by the
respondent Society in the year 1997 and was made permanent on
08.01.2008. Subsequently, she was promoted as a Clerk. She went on
medical leave from 03.06.2013 to 03.10.2013. However, when she
reported for duty on 04.10.2013, she was not permitted to rejoin duty.
Aggrieved by the action of the respondent Society, the appellant raised an
industrial dispute before the Labour Court in I.D.No.57 of 2014. The
Labour Court, upon consideration of the materials placed before it, found
that the respondent Society had orally terminated the services of the
appellant without conducting any enquiry. Accordingly, the Labour Court
passed an award directing the reinstatement of the appellant in the post of
Clerk with backwages. Challenging the award passed in I.D.No.57 of
2014, the respondent Society filed W.P(MD)No.13891 of 2019. The
learned Single Judge, by order dated 13.10.2025, partly allowed the writ
petition and modified the relief of reinstatement with backwages into
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WA(MD) No. 571 of 2026
compensation. Paragraph 13 of the order passed by the learned Single
Judge reads as follows:
“13.The learned counsel for the petitioner submits
that the petitioner society is in financial constraints
and proposal has been made for liquidation of the
society. Considering the present status of the society,
this court modifies the award as that of a
compensation instead of back wages and
reinstatement. The compensation shall be 50% of the
award amount, which has already been deposited by
the petitioner society before the Labour Court. The
respondent is entitled to withdraw the amount
deposited by the petitioner society before the Labour
in the Industrial Dispute.”
3. Aggrieved by the modification of the award by the learned
Single Judge, the employee has preferred the present writ appeal.
4. We have heard the learned counsel appearing for the parties and
perused the materials available on record.
5. The question that arises for consideration in this case is whether
the learned Single Judge was justified in modifying the award of
reinstatement with backwages into compensation, equivalent to 50% of
the amount deposited before the Labour Court, on the ground that the
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WA(MD) No. 571 of 2026
respondent Society was facing financial constraints and a proposal had
been made for its liquidation.
6. It is well settled that the financial difficulties of an employer, by
themselves, cannot be a ground to deprive an employee of the benefits
flowing from an award passed by the competent Labour Court. The mere
fact that a proposal has been made for the liquidation of a society or
establishment would not, by itself, justify the modification of an award of
reinstatement with backwages into one of compensation. Even in cases
where a company or society is under liquidation or winding up, the
claims of workmen and employees have to be settled first from the assets
of the company/society as the case may be. No doubt, the financial
condition of the employer and the consequences arising out of liquidation
have to be addressed in accordance with law. Such circumstances, by
themselves, cannot constitute sufficient justification for modifying an
award passed by the Labour Court. In the present case, the Labour Court
found that the services of the appellant had been terminated orally
without conducting an enquiry and consequently directed her
reinstatement with backwages. However, the learned Single Judge
modified the said award by substituting the relief of reinstatement with
backwages with compensation equivalent to 50% of the amount deposited
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WA(MD) No. 571 of 2026
before the Labour Court, primarily on the ground that the respondent
Society was facing financial constraints and that a proposal for
liquidation had been made. In our considered view, the aforesaid ground,
by itself, would not justify the modification of the award in the manner
adopted by the learned Single Judge. The rights of the appellant arising
out of the award passed by the Labour Court cannot be curtailed solely on
the basis of the financial difficulties pleaded by the respondent Society.
7. In view of the foregoing discussion, we are unable to sustain the
order passed by the learned Single Judge modifying the award of
reinstatement with backwages into compensation. The impugned order,
therefore, warrants interference by this Court.
8. Accordingly, the order dated 13.10.2025 passed by the learned
Single Judge in W.P.(MD)No.13891 of 2019 is set aside. Consequently,
the award dated 29.09.2015 passed by the Labour Court in I.D.No.57 of
2014 is restored. It is, however, open to the parties to work out their
remedies, in respect of the enforcement of the award and settlement of the
amounts due, in the manner known to law.
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WA(MD) No. 571 of 2026
9. In the result, the writ appeal is allowed. There shall be no order
as to costs.
(P.V.,J.) (P.M.N.,J.)
15-10-2026
Index: Yes/No
Speaking/Non-speaking order
Neutral Citation: Yes/No
bala
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WA(MD) No. 571 of 2026
P.VELMURUGAN, J.
AND
DR.P.MURUGAN, J.
bala
WA(MD) No. 571 of 2026
15-10-2026
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