Unequal bargaining power prevents estoppel against employees claiming back wages from the judicially mandated date of regularization.

The appellant was appointed as a daily-wage Cleaner by the respondent (MSRTC) in April 1993 and was orally terminated in May 1994

The Labour Court subsequently ruled the termination illegal, ordering reinstatement with back wages

Though the appellant was reinstated as a daily wager in 2003 following High Court interim orders, he sought regularization

In 2007, the Industrial Court directed his regularization effective from the date he completed 180 days of service, as per Clause 19(1) of the Settlement, 1985

The respondent did not challenge this order but only regularized the appellant in 2011, imposing a fresh condition that he would be regularized only after five additional years of service

In 2020, the Labour Court granted the appellant back wages from October 1993 to January 2011 (the period from eligibility to actual regularization) with 12% interest

The High Court of Bombay (Nagpur Bench) set aside this order in 2022, leading to the present appeal

1. Whether the appellant is entitled to back wages from the date of eligibility for regularization (October 1993) or from the date of actual regularization (January 2011)

2. Whether an employee is estopped from claiming prior benefits after signing an appointment letter that specifies a later date for the commencement of regular service

The Court applied the principle of finality of judicial orders, noting that the 2007 Industrial Court order directing regularization from 1993 remained unchallenged

It further invoked the doctrine against the "use of unequal bargaining power" by employers, particularly State instrumentalities, to impose unfair conditions on employees

The Court also clarified that the doctrine of estoppel cannot be used as a "shield" to deny an employee hard-earned dues or compensation for services rendered when the delay was caused by the employer’s non-compliance with court orders

The Supreme Court observed that the appellant had been engaged in a continuous legal struggle for nearly two decades to secure his rights

The Court rejected the respondent's argument that the appellant’s acceptance of the 2011 appointment letter created an estoppel against claiming back wages from 1993

The Court reasoned that since the 2007 Industrial Court order—which mandated regularization from the 180th day of service—had attained finality, the respondent had no legal authority to unilaterally impose a new five-year probationary condition in 2011

The Court characterized this imposition as an exploitation of unequal bargaining power

Consequently, the High Court was found to have erred by ignoring the finality of the 2007 order and the fact that the appellant had rendered continuous service since 2003

It held that the appellant is entitled to back wages for the period between October 1993 and January 2011

The Court reinstated the Labour Court’s compensation award of ₹8,09,218 but modified the interest rate from 12% to 8% per annum, provided payment is made within eight weeks

If the respondent fails to pay within this period, the 12% interest rate will stand revived

Additionally, the Court awarded the appellant ₹1,00,000 as litigation costs