Jammu and Kashmir High Court Upholds Workmen’s Right to Challenge Retrenchment Order for Non-Compliance with Section 25-F of Industrial Disputes Act

Case Title: Indian Tourism Development Corporation Ltd. v. Fayaz Ahmad Sheikh

Decided on 10-03-2023…


Welcome to the official blog of the Law Offices of Kr. Vivek Tanwar Advocate and Associates, where we are dedicated to providing litigation support services for matters related to Wrongful Retrenchment. In today’s blog post, we aim to shed light on the prevailing issues surrounding Wrongful Retrenchment, the legal framework for their protection, and the steps we can take as a society to combat these acts. Join us as we explore this critical subject and empower you with the knowledge to protect your rights and safety.

In a recent decision, the Jammu and Kashmir and Ladakh High Court reaffirmed the rights of workmen to challenge their retrenchment orders, even after accepting retrenchment compensation, if their employer has not adhered to the provisions of Section 25-F of the Industrial Disputes Act, 1947. The case in question involved the Indian Tourism Development Corporation Ltd. (ITDCL) challenging a writ court’s decision regarding the reinstatement of certain retrenched workers.

Non-Compliance with Section 25-F

The Division Bench of the High Court, consisting of Rajnesh Oswal and Mohan Lal, JJ., made it clear that when an employer fails to fulfill its statutory obligations under Section 25-F of the Industrial Disputes Act, the acceptance of retrenchment compensation by the workmen does not stop them from challenging the retrenchment order.

Background of the Case

The respondents, who were retrenched by ITDCL under Section 25-F of the Industrial Disputes Act due to the closure of the establishment, raised a dispute before the Deputy Labour Commissioner, Kashmir Division. When conciliation efforts failed, the matter was referred to the Industrial Tribunal-cum-Labour Court. The Tribunal ruled in favor of the respondents, directing ITDCL to reinstate them with full back wages and other benefits.

Legal Trajectory of the Case

Upon review of the case’s facts and legal developments, the Court noted that three out of the five respondents had reached superannuation. The Writ Court had directed the Tribunal to reconsider their cases for compensation instead of reinstatement, acknowledging that the retrenchment order was legally flawed for these individuals.

Discriminatory Retrenchment

The Court emphasized that the Tribunal had found the retrenchment to be discriminatory. The respondents were not paid retrenchment compensation at the time of retrenchment, as required by Section 25-F of the Industrial Disputes Act, 1947, but at a later time.

Failure to Follow Statutory Provisions

The Court stressed the importance of adhering to statutory procedures, noting that ITDCL had paid the retrenchment compensation without complying with the conditions stipulated in Section 25-F of the 1947 Act. When a statute prescribes a particular manner for an act, that act must be performed accordingly, and benefits under that Act cannot be derived if the conditions are not met.

Legal Precedents and Remedies

Citing Supreme Court decisions, the Division Bench asserted that when a workman’s termination is deemed illegal due to procedural defects, compensation should be awarded. In cases involving unfair labor practices, reinstatement is the preferred remedy.


The Jammu and Kashmir and Ladakh High Court’s ruling emphasizes the importance of following legal requirements in layoffs. It confirms workers’ rights to challenge layoffs if their employer doesn’t comply with the Industrial Disputes Act, 1947, even if they’ve accepted compensation. This case reminds us to uphold legal procedures and protections in labor matters for workplace justice. Based on these principles, the Division Bench adjusted the writ court’s decision on the respondents’ superannuation. This case underscores the need to follow statutory rules, ensure fairness in termination, and protect workers’ rights in challenging improper layoffs, even after accepting compensation.

We are a law firm in the name and style of Law Offices of Kr. Vivek Tanwar Advocate and Associates at Gurugram and Rewari. We are providing litigation support services for matters related to Wrongful Retrenchment under the Industrial Disputes Act, 1947.

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