Shivam Mega Structures Pvt Ltd Through Its Directors vs Vinod Gunag Chougale

CNR No : HCBM020292922026

2026:BHC-OS:23478
Neeta Sawant WPL-29291 OF 2026

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L). NO 29291 OF 2026
Shivam Mega Structures Pvt. Ltd. ...Petitioner
: Versus :
Vinod Gunag Chougale ...Respondent
Mr. Vijay P. Vaidya with Mr. Mahendra M. Agavekar & Ms. Shraddha
Chavan, for the Petitioner.
Mr. Jayesh R. Hemrajani with Mr. Ashish R. Vishwakarma, for the
Respondent.
CORAM: SANDEEP V. MARNE, J.
Reserved On: 19 OCTOBER 2026.
Pronounced On: 29 OCTOBER 2026.
JUDGMENT:
1)
The petition is filed by the employer challenging the award
th
dated 30 May 2026 passed by the Presiding Officer, 10 Labour Court,
Mumbai answering Reference (IDA) No. 58-D of 2022 partly in the
affirmative and holding that Respondent is entitled for reinstatement
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with continuity of service and 50% backwages w.e.f. 3 May 2020 till his
reinstatement.
2) Petitioner is engaged in the business of real estate.
Respondent was employed with the Petitioner from 22 July 2019 as
Manager in the Accounts and Finance department. By letter dated 4
February 2020 he was confirmed in service as Manager Accounts and
Finance w.e.f 1 February 2020. By letter dated 3 May 2020, services of the
Respondent were terminated by levelling certain allegations of
misconduct against him. At the instance of the Respondent, dispute
relating to his termination was referred by the appropriate Government
th
to 10 Labour Court, Mumbai which was registered as Reference (IDA)
No. 58-D of 2022. Respondent filed his Statement of Claim demanding
reinstatement and full back wages from the date of his termination.
Petitioner filed its written statement resisting the claim of the
Respondent. The Labour Court framed issues. Respondent examined
himself and filed several documents. Petitioner examined Mr. Kirti
Sanghavi and Ms. Daksha Popat as its witnesses and relied upon several
documents. After considering the pleadings, documentary and oral
evidence, the Labour Court proceeded to partly allow the Reference by
Award dated 30 May 2026. The Labour Court has held that termination of
Respondent was illegal and has directed Petitioner to reinstate him in
service without continuity and 50% backwages w.e.f. 3 May 2020 till the
date of his actual reinstatement. Aggrieved by the Award dated 30 May
2026, the Petitioner has filed the present petition.
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3)
Mr. Vaidya, the learned counsel appearing for the Petitioner
submits that Respondent is not a workman within the meaning of
Section 2(s) of the Industrial Disputed Act, 1947 (ID Act) . That he was
appointed on the position of Manager, Accounts and Finance. That in his
bio-data, he had described himself as Vice President in the previous
employment. That he drew CTC of Rs.12,00,000/-. That he supervised the
work of other employees posted under him. That the nature of his work
was not clerical. He takes me through the affidavit of evidence of the
Respondent to demonstrate that he did not perform clerical work. That
he had authority to taken independent decisions. That the Labour Court
has erroneously held that the three persons working in Accounts and
Finance Department were not reporting to the Respondent. That
Respondent therefore cannot be treated as a workman and on that count,
the impugned Award deserves to be set aside.
4) Per contra , Mr. Hemrajani, the learned counsel appearing for
the Respondent opposes the petition submitting that the Labour Court
has rightly appreciated the evidence on record for arriving at the
conclusion that the Respondent is a workman within the meaning of
Section 2(s) of the ID Act. He takes me through the evidence on record to
demonstrate as to how several admissions are given by Petitioner’s
witness about other employees reporting directly to Chief Finance
Officer and not to the Respondent. He takes me through the nature of
duties and responsibilities performed by the Respondent in support of
his contention that the same were merely clerical in nature without
involving any decision-making power. He submits that mere quantum of
salary paid to the Respondent cannot be determined as a status. That
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Respondent did not carry designation of Vice President in the previous
employment and was merely reporting to the Vice President. That
Respondent was unceremoniously thrown out of service during Covid-19
pandemic by levelling false allegation of misconduct. That in such
circumstances, no interference is warranted in the impugned Award. He
prays for dismissal of the Petition.
5) Rival contentions urged on behalf of the parties now fall for
my consideration.
6)
The Petitioner-employer is aggrieved by the impugned
Award of the Labour Court which sets aside the termination of the
Respondent and directs its reinstatement with 50% backwages from the
date of termination i.e. 3 May 2020. The only point urged before me on
behalf of the Petitioner-employer is that Respondent did not carry status
as a workman and that therefore the provisions of the ID Act do not
apply to him. Therefore, the narrow controversy involved in the petition
is about the status of the Respondent.
7) The Respondent was appointed by the Petitioner vide
appointment letter dated 22 July 2019 and was offered the position of
Manager, Accounts and Finance. At the time of his appointment,
Respondent had submitted his Curriculum Vitae which indicated that he
had held various positions such as Assistant Manager-Finance, Accounts
Executive, Accountant, Accounts Assistant, etc. The last position held by
him was that of Assistant Manager, Finance from July 2009 with HOH
Group of Companies. It appears that Respondent was required to fill up
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employee data form of the Petitioner in which he was required to
disclose employment history in which he disclosed that he worked for
HOH Hiranandani Realtors Pvt. Ltd. in the areas of Banking, Finance and
Accounts. He was also required to disclose the person to whom he was
reporting and apparently, he disclosed that he reported to the Vice
President. Though Mr. Vaidya has sought to suggest that the position
held by the Respondent with the previous employer was that of Vice
President, the same does not appear to be factually correct. He was
merely reporting to the Vice President but held the position of Assistant
Manager, Finance with the previous employer where he apparently
worked for a long time i.e. from July 2009 till he was appointed with the
Petitioner.
8) As observed above, the designation offered to the Petitioner
was that of Manager, Accounts and Finance. As per the appointment
order, he was to be paid CTC salary of Rs.12 lakhs p.a. inclusive of all
perks and benefits. He was confirmed in service by letter dated 4
February 2020.
9)
By now it is well settled position that mere designation of
the employee cannot decide his/her status as workman within the
meaning of Section 2(s) of the ID Act. Therefore, one cannot go merely
by designation of Manager, Accounts and Finance for holding that the
Respondent was not a workman. So far as salary paid to the Respondent
is concerned, the same assumes relevance only if it is proved that the
employee was employed in a supervisory capacity and draws wages in
excess of Rs.10,000/- per month. If employment in supervisory capacity
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is not established, the quantum of salary paid to a person becomes
irrelevant for the purpose of determining his status. It would be apt to
reproduce definition of the term ‘workman’ under Section 2(s) of the ID
Act which is as under:
(s) “workman” means any person (including an apprentice) employed
in any industry to do any manual, unskilled, skilled, technical,
operational, clerical or supervisory work for hire or reward, whether the
terms of employment be express or implied, and for the purposes of any
proceeding under this Act in relation to an industrial dispute, includes
any such person who has been dismissed, discharged or retrenched in
connection with, or as a consequence of, that dispute, or whose
dismissal, discharge or retrenchment has led to that dispute, but does
not include any such person—
(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army
Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or
(ii) who is employed in the police service or as an officer or other
employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity;
or
(iv) who, being employed in a supervisory capacity, draws wages
exceeding ten thousand rupees] per mensem or exercises, either by the
nature of the duties attached to the office or by reason of the powers
vested in him, functions mainly of a managerial nature.
10) Thus, every person who is employed to do any manual,
unskilled, skilled, technical, operational, clerical or supervisory work for
hire or reward becomes a workman within the meaning of Section 2(s) of
the ID Act unless it is proved that he falls in one of the four enumerated
exceptions. Respondent filed pleadings and led evidence to demonstrate
that he was merely doing routine accounting work and that he was
obeying the instructions given to him by his superiors. He led evidence to
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prove that he had no power to appoint, remove or give instructions to
other employees. The relevant part of his examination reads thus:
I have not given any separate letter to first party that I am cous
accepting the offer letter. It is true to say that I have not produced
salary slip alongwith my affidavit. My salary was Rs.1,00,000/- per
month. I was appointed on the post of Manager in the first party
company in Account Department. 3 persons were working other than
me in the said department. It is not true to say that I was head in the
said department. It is not true to say that I was giving instruction as
Manager in the said department. It is not true to say that I was giving
instruction to said 3 persons. As a Manager, I was having duties of data
entry, bank reconciliation and followup of all the massages and
instructions. Vice President was superior to me in my department. It is
not true to say that there was separate Manager in all departments.
xxx
6) It is true to say that I was working in Hiranandani Realturs Pvt. Ltd.
before joining first party. I was having Rs.1 Lakh salary in said company.
It is true to say that I have attached salary slip of Hiranandani company
in my CV at the time of joining of first party company. It is true to say
that in the said salary slip my post was Assistant Manager Finance and I
had said post in said company. One Peon was working in said Finance
Department in Hiranandani company. It is true to say that in the said
company Manager used to give instructions to me. It is true to say that I
was on executive post in Hiranandani company and in the first party
company. It is true to say that I was on executive post in all the
companies, where I was serving since 1994. It is not true to say that I
told at the time of interview in the first party company that I was
directly answering to Superior Director in Hiranandani Company. My
superior was Kirti Sangavi Vice President or General Manager in first
party company. It is not true to say that Assistant Accountant was under
me. It is not true to say that as per my suggestion one person viz. Navin
R. Dave was appointed as Assistant under me. I do not know his CTC
was Rs.3,36,000/- per annum. It is true to say that my CTC was Rs.12
Lakhs per annum. It is not true to say that as per my say Priyanka S.
Poojari was appointed in my department. I do not know whether her
CTC was Rs.4,20,000/- per annum.
11) Respondent filed additional Affidavit of Evidence, in which
he has stated in paragraph 2 as under:
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2. I say that I was doing routine accounting and clerical work of the
First Party. This included bank reconciliation, sales reconciliation -
debtors, payment entry - creditor; co-ordination with GST Consultant;
Prepare TDS working Monthly basis for Payment and sending it to Mr.
Kirti for Payment, Preparing MIS as per instruction given by Mr. Amit
Shah - Director Accounts and Mr. Kirti Sanghvi - General Manager,
ledger scrutiny, co-ordination with Statutory Auditor, preparing balance
sheet as per instruction and requirement, preparing cheques of
creditors.
12) The Respondent has discharged the burden of providing that
he was doing routine accounting work. The onus therefore shifted on the
Petitioner to prove that Respondent was employed in managerial,
administrative or supervisory capacity. Respondent was subjected to
extensive cross examination in which he admitted that three more
persons were working with him in the Accounts Department. However, in
the cross-examination, Petitioner was unable to establish that any
employee was posted under the Respondent or that he had any authority
to take any decision qua them. On the other hand, Mr. Kirti Sanghavi,
Chief Finance Officer of the Petitioner gave emphatic admission that the
three persons working in the Accounts Department reported to him. No
evidence was led to establish that any of the said three persons reported
to the Respondent. That Petitioner's witness stated that he was ready to
produce documents to indicate that Ms. Priyanka Poojari reported to the
Respondent, no such evidence was produced. Even the evidence of Ms.
Daksha Popat does not assist the case of the Petitioner as there is
nothing in her evidence which can establish performance of managerial,
administrative or supervisory functions by the Respondent.
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13)
Thus, perusal of the entire evidence on record would
indicate that Petitioner was unable to establish that Respondent had
authority to assign work to any person in the organisation or that any
person worked under him or that he could take any service-related
decisions by himself. He had no authority to sanction leave to any
person. He did not have any authority to take disciplinary action against
any other employee of the Petitioner. Apart from absence of authority to
decide service-related matters of other employees, Respondent also did
not have any independent authority to take any decisions qua the
operations of the organisation. He could not take any decision which
would bind the Petitioner. He did not have any independent authority
even in relation to finalizing the Accounts as he was reporting to other
higher officers. He did not have any authority to make the purchases. He
also did not have any authority to give directions to any other employees
in relation to the accounting work. In my view therefore, there is no
evidence on record from which the Labour Court could have drawn an
inference of Respondent’s employment in managerial, administrative or
supervisory capacity. I therefore find no valid reason to interfere with the
findings recorded by the Labour Court, which has concluded that the
Respondent answered the description of a ‘workman’ under Section 2(s)
of the ID Act.
14)
Coming to the merits of the case, Mr. Vaidya has fairly not
canvassed any submissions with regard to validity of termination order.
Respondent has been terminated without following due process of law.
He was terminated right in the middle of Covid-19 pandemic on 3 May
2020. In the termination letter, various allegations were levelled against
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the Respondent about rough/unprofessional behaviour, rude tone and
arrogance with the directors. Apart from the fact that no enquiry was
held to prove the alleged misconduct, Petitioner itself had confirmed the
services of Respondent by letter dated 4 February 2020. Covid-19
lockdown restrictions were imposed from 15 March 2020. Thus, the
Respondent worked with the Petitioner barely for a month after his
confirmation. However, termination email dated 3 May 2020 talks of rude
behaviors ‘ for the last few months '. If he was fit to be confirmed in service
on 4 February 2020, it is difficult to believe that he would have behaved
in rude manner with the directors while working in the office till 15
March 2020. The allegations in the termination letter therefore are
clearly unbelievable. It appears that the Petitioner got rid of the
Respondent on account of Covid-19 pandemic slowdown. Instated of
holding hands of its employees in difficult times, the Petitioner
terminated his serves by levelling false allegations. On account of
stigmatic termination, Respondent must have found it difficult to scout
for another job. I am therefore in agreement with the view taken by the
Labour Court that Respondent’s termination is clearly illegal and
unsustainable.
15)
The Labour Court has directed reinstatement of Respondent
with 50% backwages from the date of his termination. Respondent was
terminated on 3 May 2020. Even if the last drawn monthly salary of Rs.
1,00,000/- is taken into account for computing the backwages (without
yearly increments), the burden of backwages would be to the tune of
approximately Rs. 40 lakhs in addition to liability to reinstate him in
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service. If increments and wage rise during last 6 years is considered, the
amount would go higher.
16) The Respondent was appointed in the service of the
Petitioner vide appointment letter dated 22 July 2019. Thus, he worked
for less than one year with the Petitioner and out of that period, period
of about 2 months was covered by Covid-19 pandemic restrictions. Thus,
effectively, Respondent worked with the Petitioner for just about 10
months. From the affidavit of evidence of the Respondent dated 25 June
2024, it appears that he disclosed his age as 52 years. This would mean
that Respondent is now at an advanced age of 56 years and can otherwise
work with the Petitioner only for couple of more years from now.
Considering the fact that Respondent worked with the Petitioner for less
than a year and is left with only few years of service, in my view, it would
not be appropriate to uphold the directions of his reinstatement. Also,
the relationship between the parties has soured due to the litigation.
Therefore, it would not be in the interest of either of the parties that
Respondent rejoins the office of the Petitioner. Instead, a lump-sum
compensation can be directed to be paid to him in lieu of reinstatement
and backwages. Considering the factors of monthly salary of Rs.
1,00,000/- drawn by Respondent at the time of his termination, length of
service rendered by him and also the length of left over service, in my
view, ends of justice would meet if a lump-sum compensation of Rs. 25
lakhs is awarded to the Respondent in lieu of reinstatement and
backwages.
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17)
I accordingly proceed to pass the following order:
i. Award dated 30 May 2026 passed by the Labour Court
is modified by directing that Respondent shall be entitled to
lump-sum compensation of Rs. 25,00,000/- in lieu of
reinstatement and backwages.
ii. Lump-sum compensation of Rs. 25,00,000/- shall be
paid by the Petitioner to the Respondent within a period of 2
months, failing which the compensation amount shall carry
interest @ 8% p.a. from the date of expiry of period of 2
months.
iii. Beyond the lump-sum compensation so awarded,
Respondent shall be not entitled to any other service-related
benefits from the Petitioner.
18) With the above directions, the petition is partly allowed
and disposed of. There shall be no order as to cost.
NEETA
SHAILESH
SAWANT
[SANDEEP V. MARNE , J.]
Digitally signed by
NEETA SHAILESH
SAWANT
Date: 2026.10.29
18:53:22 +0530
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