Inordinate delay in challenging a Labour Court award precludes enhancement of compensation to standard guideline amounts.

The respondent-workman, a daily wager from 1989 to 1994, alleged illegal termination on 31.08.1994. He approached the Labour Court in 2002.

In 2014, the Labour Court found the termination improper but, instead of reinstatement, awarded a lump-sum compensation of ₹10,000.

After a delay of 10 years, the workman challenged this award via a writ petition in 2024. A learned Single Judge enhanced the compensation to ₹3,00,000, relying on guidelines from LPA No. 908 of 2023.

The State paid the ₹3,00,000 under protest to avoid contempt proceedings while this appeal was pending.

1. Whether the State’s act of paying the enhanced compensation to avoid contempt proceedings precludes its right to challenge the order on merits.

2. Whether the learned Single Judge was justified in enhancing the compensation to ₹3,00,000 despite a 10-year delay in filing the writ petition.

The Court applied the principle of "payment under protest," holding that compliance with a judicial order to avoid contempt—specifically when accompanied by a stipulation that payment is subject to the outcome of an appeal—does not constitute an abandonment of the right to appeal.

The court considered the discretionary nature of awarding lump-sum compensation in lieu of reinstatement under the Industrial Disputes Act, noting that guidelines for compensation (such as those in LPA No. 908 of 2023) are not binding precedents in cases involving inordinate delay or differing factual matrices.

The Court first addressed the maintainability of the appeal, reasoning that the State’s payment of ₹3,00,000 was not an acceptance of the judgment but a necessity to avoid contempt while the appeal was already pending.

The workman’s own undertaking to refund the amount if the appeal succeeded further supported the State's right to prosecute.

On the merits, the Court observed that while the original ₹10,000 award was "wholly inadequate" for seven years of service, the Single Judge erred by strictly applying the LPA No. 908 of 2023 guidelines. The Court found that those guidelines apply to "normal cases" without laches; here, the workman’s 10-year delay in challenging the 2014 award necessitated a reduction in the quantum of enhanced compensation.

The Court modified the Single Judge’s order, holding that the inordinate delay justified a lower compensation than the guideline amount. The appeal was allowed in part, and the lump-sum compensation was reduced from ₹3,00,000 to ₹1,50,000.

All connected applications were disposed of accordingly.