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The Delhi High Court has partly allowed a writ petition filed by the State Bank of India (SBI), modifying an Industrial Tribunal award in a long-running labour dispute involving Umed Singh. While the Court upheld the finding that Singh's retrenchment was carried out in violation of the mandatory requirements of Section 25F of the Industrial Disputes Act, 1947, it ruled that the Tribunal could not have directed his regularisation. Instead, the Court substituted that relief with a lump sum compensation of ₹1 lakh.
Background of the Case
The dispute arose from the functioning of SBI's Ajmal Khan Road Branch in Karol Bagh, New Delhi. According to the Bank, Umed Singh supplied water to the branch between 6 July 1994 and 31 May 1995, for which he was paid on a per-bucket basis. SBI maintained that he was never appointed as an employee and was only occasionally reimbursed for delivering urgent papers and documents.
Singh, however, claimed that although payments were shown as water-supply charges, he had actually been engaged as a messenger from 6 July 1994 until 31 May 1995. He alleged that he regularly performed duties such as delivering and collecting cheques, carrying official correspondence and undertaking other outdoor assignments. He further contended that his services were terminated with effect from 1 June 1995 without notice or retrenchment compensation, contrary to the Industrial Disputes Act.
After conciliation proceedings failed, the dispute was referred to the Central Government Industrial Tribunal-cum-Labour Court. In December 2004, the Tribunal held the termination illegal and directed SBI to regularise Singh's services with continuity from 1 June 1995, though without back wages. SBI challenged that award before the High Court.
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Court's Observations
Justice Shail Jain observed that the principal question was whether Singh qualified as a "workman" under Section 2(s) of the Industrial Disputes Act. After examining the documentary evidence, including conveyance vouchers generated by the Bank itself, the Court found that Singh had been entrusted with duties ordinarily performed by a messenger.
The records showed that he delivered clearing cheques to various banks, carried urgent correspondence, visited the Reserve Bank of India and other offices, and also performed work in the branch's Record Department during specified working hours. These assignments were authorised and supervised by the Branch Manager.
The Court observed:
"The cumulative effect of the nature of duties performed, the continuity of engagement, the recurring pattern of payments and the degree of supervision exercised by the Branch Manager sufficiently establishes the existence of an implied contract of service between the parties."
Rejecting SBI's contention that Singh was merely an independent water supplier, the Court held that the Bank's own contemporaneous records demonstrated an employer-employee relationship. It also noted the absence of any vendor agreement or commercial documentation supporting SBI's version.
Completion of 240 Days and Illegal Retrenchment
The High Court also agreed with the Tribunal that Singh had completed the statutory requirement of 240 days of continuous service.
The Court noted that Singh's engagement lasted nearly eleven months, from 6 July 1994 to 31 May 1995, and was supported by recurring monthly payments, official conveyance vouchers and regular work assignments throughout the relevant period.
The Bench observed:
"The tenure of engagement extending over nearly eleven months... sufficiently establish that the Respondent is shown to have rendered service meeting the statutory requirement of 240 days."
It further held that once Singh had produced records originating from the Bank itself, the initial burden of proving continuous service stood discharged. SBI failed to produce attendance or establishment records that could rebut this evidence.
Having concluded that Singh was a workman who had rendered continuous service, the Court held that the discontinuance of his engagement amounted to retrenchment. Since no notice, retrenchment compensation or statutory compliance under Section 25F of the Industrial Disputes Act had been made before terminating his services with effect from 1 June 1995, the retrenchment was illegal.
Why the Court Refused Regularisation
While affirming the Tribunal's finding that the retrenchment violated Section 25F, the High Court disagreed with the relief granted.
Justice Jain held that completion of 240 days of service or violation of Section 25F does not automatically confer a right to regularisation or permanent absorption, particularly in a public sector institution where appointments must comply with the constitutional recruitment framework.
The Court further found that the record did not disclose the existence of a sanctioned post or any recognised recruitment process through which Singh had been engaged. It also noted that Singh had not specifically sought regularisation in the industrial dispute. Consequently, by directing regularisation, the Tribunal had exceeded the limits of its adjudicatory jurisdiction and travelled beyond the scope of the reference before it.
Decision
Considering that Singh had worked for approximately eleven months, that more than three decades had passed since his engagement ended, that the Tribunal itself had declined back wages, and that the engagement had not followed a recognised recruitment process, the High Court held that monetary compensation would be the appropriate relief.
Accordingly, the Court set aside the Tribunal's direction for regularisation and directed SBI to pay ₹1,00,000 to Umed Singh as full and final settlement of all claims arising out of the discontinuance of his engagement. The amount is to be paid within eight weeks, failing which it will carry simple interest at 8% per annum until payment. The writ petition was accordingly partly allowed.
Case Details:
Case Title: State Bank of India v. Umed Singh
Case Number: W.P.(C) 8492/2005
Judge: Justice Shail Jain
Decision Date: 07 July 2026
