Restoration after an 18-year delay may be granted for procedural injustice, subject to substantial costs.

The petitioner-employee challenged the order dated 23 December 2019 passed by the Industrial Tribunal/Labour Court (3), Vadodara, in Misc. Application No. 32 of 2019 arising from Reference (LCV) No. 537 of 1997 and Recovery Application No. 307 of 2014.

The employee’s termination reference had been partly allowed on 10 August 2001, with directions for reinstatement and payment of 50% back wages.

The employer subsequently filed restoration applications in 2005 and 2015, both of which were dismissed for default on 21 February 2005 and 22 August 2015 respectively.

In 2019, the employer filed a third restoration application seeking condonation of approximately 18 years’ delay.

The Labour Court condoned the delay but imposed costs of only Rs. 27,000.

Whether the Labour Court was justified in condoning the employer’s delay of approximately 18 years in seeking restoration of the reference proceedings, in the circumstances of the case.

Whether the costs imposed by the Labour Court for condoning the delay were inadequate and liable to be enhanced.

Whether appropriate directions should be issued for expeditious disposal of the restored reference proceedings.

The Court applied Rule 26-A of the Industrial Disputes (Gujarat) Rules, 1966, governing applications for setting aside an ex parte award or restoration of proceedings.

The governing principle is that a litigant seeking relief after substantial delay must establish “sufficient cause”; although the expression is not exhaustively defined, it must be assessed on the facts and circumstances of each case.

Where proceedings are concluded without formally closing the relevant stages of cross-examination or evidence, and without giving the affected party proper notice, the resulting award may be treated as ex parte and restoration may be justified.

Delay may nevertheless be balanced by imposing compensatory or deterrent costs, particularly where the opposing workman has been subjected to prolonged and repeated litigation.

The High Court accepted that the employer had been negligent, having failed to prosecute its restoration applications filed in 2005 and 2015, and that the delay of 18 years was “huge”.

The record disclosed a procedural defect in the original adjudication: the Labour Court had neither closed the employee’s further cross-examination nor the employer’s evidence, and had not issued notice before deciding the reference.

These circumstances constituted sufficient cause for restoration despite the delay.

At the same time, the employee had been compelled to contest repeated restoration proceedings and was also facing separate litigation concerning a subsequent termination.

The cost of Rs. 27,000 was therefore disproportionate to the prejudice caused and was considered too meagre.

The Court balanced the employer’s right to an opportunity to contest the reference against the employee’s right to compensation for prolonged litigation by enhancing the costs to Rs. 1,00,000.

The High Court upheld the restoration of the reference but modified the order dated 23 December 2019 by increasing the costs payable by the employer from Rs. 27,000 to Rs. 1,00,000.

The employer was directed to deposit the amount within four weeks, failing which the benefit of restoration would not operate.

Upon deposit, the restored reference was to be completed by the Labour Court within two months, with both parties directed to cooperate and avoid unnecessary adjournments.

The deposited amount was directed to be disbursed to the employee after following due process.

The Labour Court was directed to decide the reference independently and without being influenced by the earlier award dated 10 August 2001.