Karnataka High Court Orders Jet Airways To Pay ₹13 Lakh In Back Wages To Dismissed Employee Despite Liquidation

A division bench of the High Court dismissed Jet Airways' plea challenging a 2017 Industrial Tribunal order on the grounds that the workman's right to the back wages had "crystallized on the date of the award,” long before the airline underwent  liquidation.

A Division Bench comprising Justice D K Singh and Justice Venkatesh Naik T. while refusing Jet Airways any relief, observed,

“We have not been shown anything which would demonstrate that the findings of the Tribunal are either perverse or against the record. With the efficacy of the limited jurisdiction of Judicial Review under Article 226 of the Constitution of India, we are of the considered view, that the impugned award passed by the Industrial Tribunal does not require interference by this Court so far as the challenge to the impugned award is concerned.”

The case pertains to one Prashant Rao, who joined Jet Airways as a customer service assistant in 1999 and was confirmed in 2000. He was dismissed from service on 30 August 2008 after facing disciplinary proceedings.

Rao challenged the dismissal before the Industrial Tribunal, which in its award dated 13 January 2017, found that the disciplinary proceedings violated principles of natural justice and that the alleged misconduct was not proved. The Tribunal declared the dismissal illegal and directed the airline to reinstate him with all consequential benefits and 50% back wages.

Subsequently, Jet Airways filed a writ petition challenging the award, and obtained an interim stay from a Single Judge in April 2017. The stay was granted on the condition that it deposit ₹13,00,000 (representing 50% back wages) with the High Court Registry.

The amount was deposited and kept in a fixed deposit. However, during the pendency of the case, Jet Airways underwent corporate insolvency proceedings and liquidation, and the Official Liquidator took over the company's assets.

Counsel representing liquidator argued that reinstatement was untenable since Jet Airways had ceased operations. He further argued that the deposited amount formed part of the company's liquidation estate under the Insolvency and Bankruptcy Code (IBC).

He maintained that the respondent should have pursued his dues under the IBC process like other creditors. The workman, however, informed the Court that he was willing to accept the ₹13,00,000 with accrued interest as full and final settlement.

Rejecting the arguments of the Official Liquidator, the High Court ruled that the workman's entitlement to 50% back wages had already crystallized on the date of the award i.e., January 13, 2017, well before the liquidation process began. Subsequently, it ordered for the reversal of the interim relief granted to Jet Airways.

The Court observed: “It is well settled principle in equity that the maxim Actus curiae neminem gravabit "an act of the Court shall prejudice none" shall apply where a writ petition is dismissed, in which an interim order is granted, inasmuch as the interim order merges with the final order. A party whose writ petition is dismissed, cannot take advantage of its own wrong.”

The court emphasized that once the writ petition is dismissed, any benefit gained by the petitioner due to the interim order must be reversed.

Ultimately, the High Court directed the Registry to release the ₹13,00,000 along with interest to the workman Rao upon due identification.

Case Title: M/S JET AIRWAYS (INDIA) PVT LTD V SRI PRASHANT RAO

Case Number: WRIT PETITION NO. 15526 OF 2017 (L-RES)

Appearance:

For Petitioner: Senior Advocate PP Hegde instructed by Advocate Dharma Tej

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