Delhi High Court Asks SBI To Pay ₹1 Lakh To Worker For Illegal Termination, Sets Aside Regularisation Order

The Delhi High Court has set aside a Labour Court award directing the State Bank of India (SBI) to regularise the services of a worker whose termination was held to be illegal. [2026 LiveLaw (Del) 639]Justice Shail Jain held that violation of the Industrial Disputes Act, 1947 does not automatically confer a right to regularisation in public employment. However, the bench directed SBI to pay the workman a lump sum compensation of ₹1 lakh towards full and final settlement of all claims arising out of the illegal termination.The dispute arose after the respondent claimed that he had been engaged by SBI as a peon from July 1994 till May 1995, but his services were camouflaged as those of a water supplier. He alleged that his services were terminated on June 1, 1995 without notice or retrenchment compensation. SBI however contended that no employer-employee relationship existed and that respondent was only supplying water to the branch and was occasionally reimbursed conveyance expenses for delivering urgent documents.Examining the records, the Court found that conveyance vouchers generated by the bank itself showed that the respondent regularly carried out duties such as delivering cheques and official correspondence, visiting the Reserve Bank of India and other institutions, and performing work in the branch's Record Department during specified working hours. These records, coupled with recurring monthly payments, the Court said, established that the respondent was working under the supervision and control of the branch manager, thereby constituting an implied contract of service.The Court further held that the respondent had rendered continuous service exceeding 240 days within the meaning of Section 25B of the Industrial Disputes Act. Since SBI had neither issued notice nor paid retrenchment compensation before discontinuing his engagement, it held that the termination violated the mandatory requirements of Section 25F and was illegal.However, relying on the Supreme Court's decision in Secretary, State of Karnataka v. Umadevi, the Court held that the Labour Court exceeded its jurisdiction in directing regularisation, particularly when the engagement had not been made through a recognised recruitment process or against a sanctioned post, and the workman had not even sought such relief in the industrial dispute. “The Tribunal erred in treating reinstatement consequent upon an illegal termination as equivalent to regularisation in service. While reinstatement restores the workman to the position held prior to termination, regularisation confers permanent status in service. The direction of regularisation, in the absence of any specific claim for such relief and beyond the scope of the reference, therefore exceeded the limits of the Tribunal's adjudicatory jurisdiction,” it said.Finally, considering that the respondent had worked for approximately eleven months and that more than three decades had elapsed since his disengagement, the Court ordered lump sum compensation within eight weeks.Appearance: Mr. Rajiv Kapur, SC with Ms. Riya Sood and Mr. Akshit Kapur, Advs. for Petitioner; Mr. Romy Chacko, Sr. Adv. with Mr. Vikrant Yadav, Advs. for RespondentCase title: SBI v. Umed SinghCitation: 2026 LiveLaw (Del) 639Case no.: W.P.(C) 8492/2005Click here to read order

Delhi High Court Asks SBI To Pay ₹1 Lakh To Worker For Illegal Termination, Sets Aside Regularisation Order

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Delhi High Court Asks SBI To Pay ₹1 Lakh To Worker For Illegal Termination, Sets Aside Regularisation Order

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