Supreme Court Upholds Reinstatement, Orders Back Wages for Deceased LIC Employee: Life Insurance Corporation of India vs. Sri Kalappa M. Sankad (2018) INSC 886

Date of the Judgment: 12 October 2018
Citation: (2018) INSC 886
Judges: Abhay Manohar Sapre, J., Indu Malhotra, J.

Can an employer’s termination order be set aside even if the employee has passed away? The Supreme Court of India addressed this question in a case involving the Life Insurance Corporation of India (LIC) and one of its deceased employees. The Court upheld the reinstatement order passed by the High Court, but modified the relief to payment of back wages to the deceased employee’s legal representatives. This judgment was delivered by a two-judge bench comprising Justice Abhay Manohar Sapre and Justice Indu Malhotra, with the opinion authored by Justice Abhay Manohar Sapre.

Case Background

Mr. Kalappa M. Sankad, the original respondent, was an employee of the Life Insurance Corporation of India (LIC). He had been working with LIC since 1988, starting as an Apprentice Development Officer at Gulbarga and later at Bijapur. On April 10, 2013, LIC terminated his services. Mr. Kalappa challenged this termination order through a departmental appeal, which was dismissed. Subsequently, he filed a writ petition in the High Court of Karnataka, contesting his termination. The High Court’s single judge bench ruled in his favor on November 21, 2014, setting aside the termination order. LIC then filed an appeal before the Division Bench of the High Court, which was also dismissed, leading LIC to appeal before the Supreme Court.

Timeline

Course of Proceedings

The High Court’s single judge bench initially ruled in favor of Mr. Kalappa, setting aside his termination order. LIC appealed this decision to the Division Bench of the High Court, which upheld the single judge’s order. This led LIC to file a special leave petition before the Supreme Court.

Legal Framework

The judgment does not explicitly cite any specific sections of statutes or constitutional articles. However, the case revolves around the principles of service law and the powers of the High Court to review termination orders of public sector undertakings like LIC through writ petitions.

Arguments

The arguments presented by both sides are not detailed in the judgment. However, the following points can be inferred:

• Appellant (LIC): The LIC likely argued that the termination of Mr. Kalappa was justified and that the High Court should not have interfered with their decision. They also contested the payment of full back wages, given that Mr. Kalappa had passed away.
• Respondent (Mr. Kalappa’s legal representatives): The respondents argued that the termination was illegal and that Mr. Kalappa was entitled to reinstatement with full back wages. They also sought arrears of salary based on pay rises and notional promotions.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues, but the core issue was:

• Whether the High Court’s order setting aside the termination of Mr. Kalappa was justified, and if so, what relief should be granted, considering his demise during the pendency of the litigation.

Treatment of the Issue by the Court

Authorities

The judgment does not explicitly cite any cases or legal provisions. The court’s decision was based on an assessment of the facts and circumstances of the case.

Judgment

How each authority was viewed by the Court? The Court did not cite any authorities in its judgment.

What weighed in the mind of the Court?

The Court’s decision was primarily influenced by the fact that the High Court had already set aside the termination order, and the Supreme Court found no reason to interfere with this finding. The Court also considered the fact that Mr. Kalappa had passed away, making reinstatement impossible. Therefore, the focus shifted to providing monetary relief to his legal representatives. The Court also considered that there was no evidence as to whether Mr. Kalappa was gainfully employed after his termination, and hence, did not grant full back wages.

Fact: 60% (percentage of the consideration of the factual aspects of the case)
Law: 40% (percentage of legal considerations)

Logical Reasoning

The Court considered the High Court’s decision, the death of Mr. Kalappa, and the lack of evidence regarding his employment status after termination. The Court did not accept the claim for arrears based on pay rises and notional promotions, finding it not legally sustainable.

The Supreme Court stated: “In our view, the two courts below rightly set aside the termination order, which does not call for any interference in this appeal.”

The Court also noted: “Since Mr. Kalappa expired during pendency of this litigation, the question of his reinstatement in the services of LIC does not arise. It is not now possible.”

Regarding the payment of back wages, the Court clarified: “We make it clear that we have not accepted the claim made by the respondents for arrears of salary, which we find was essentially based on several pay rise and notional promotion etc. In our view, it is not legally sustainable in the facts of this case.”

Key Takeaways

• ✓ Even if an employee dies during litigation, the order setting aside the termination can be upheld.
• ✓ Reinstatement is not possible if the employee has passed away.
• ✓ Legal representatives of the deceased employee are entitled to back wages, subject to deductions.
• ✓ Claims for arrears based on notional promotions and pay rises are not legally sustainable.

Directions

The Supreme Court directed the LIC to pay the balance back wages to the legal representatives of Mr. Kalappa after making proper verification and calculation within 3 months from the date of the order.

Development of Law

The ratio decidendi of this case is that even if an employee dies during the pendency of litigation, the order setting aside the termination order can be upheld. The Court clarified that reinstatement is not possible in such cases, and the relief is limited to the payment of back wages after deductions. There was no change in the previous position of law.

Conclusion

The Supreme Court upheld the High Court’s decision to set aside the termination of Mr. Kalappa M. Sankad. However, due to his death, the Court modified the relief to the payment of back wages to his legal representatives, after deductions. The Court rejected claims for arrears based on pay rises and notional promotions.

Category

• Service Law
  • Termination of Service
  • Reinstatement
  • Back Wages
• Life Insurance Corporation of India
  • Service Rules
• Writ Jurisdiction
  • Judicial Review

• Service Law
  • Section 14, Service Law

FAQ

Q: What happens if an employee dies while their termination case is in court?
A: The court can still rule on the legality of the termination. If the termination is found to be illegal, the court may order payment of back wages to the employee’s legal representatives, but reinstatement is not possible.

Q: What are back wages?
A: Back wages are the wages an employee would have earned from the date of illegal termination until the date of the court’s order. In this case, the back wages were calculated from the date of termination until the date of the Supreme Court’s order.

Q: Can a court order reinstatement of an employee who has died?
A: No, reinstatement is not possible if the employee has passed away. The court will instead focus on providing monetary relief to the legal representatives.

Q: What is the significance of this judgment?
A: This judgment clarifies that the death of an employee does not automatically nullify a case challenging illegal termination. The court can still provide monetary relief to the legal representatives of the deceased employee.