JINDAL STEEL AND POWER LIMITED V. UMESH KUMAR CHAUHAN 2026:CGHC:10349

DATE: 27/02/2026

COURT: High Court of Chhattisgarh

BENCH: Justice Bibhu Datta Guru

FACTS:

The case originates from an industrial dispute raised by the respondent-workman, Umesh Kumar Chauhan, who claimed employment as Deputy Security with Superior Fire and Security Services (SFSS), Patrapali, Raigarh (a contractor providing services to Jindal Steel and Power Limited, now known as Jindal Power Limited) from December 27, 2008. He alleged that his services were illegally terminated on November 20, 2020, on the pretext of being underweight, without compliance with Section 25-F of the Industrial Disputes Act, 1947, despite completing 240 days of continuous service in a calendar year. He filed a reference under the ID Act before the Labour Court, Raigarh (Case No. 01/ID Act/2022/Ref.), seeking reinstatement with back wages. Notices were issued to the employer (appellants herein) by registered post, but on July 8, 2022, the Labour Court directed issuance of notice and fixed the matter for reply on August 17, 2022. On August 17, 2022, the court initially noted that the service report was awaited despite a postal track consignment report being produced, and adjourned the case to September 8, 2022. However, later the same day (around 5:00 PM), upon the workman’s counsel’s submission that the employer had knowledge and remained absent, the Labour Court proceeded ex parte against the employer and fixed the matter for ex parte evidence.

The Labour Court passed an ex parte award on December 10, 2022 (pronounced January 10, 2023), declaring the termination illegal, setting it aside, and directing reinstatement without back wages. The appellants claimed they had no knowledge of the proceedings or award until March 29, 2023, when they received a copy of the award along with the workman’s reinstatement application via registered post. Upon obtaining certified copies, they learned of the ex parte order dated August 17, 2022, and the final award. They filed miscellaneous applications (Case Nos. 09/ID Act/2023/Misc. and 10/ID Act/2023/Misc.) under Rule 10B(9) r/w Rule 24 of the Industrial Disputes (Central) Rules, 1957, Order IX Rule 13, and Section 151 CPC, seeking to set aside the ex parte award on grounds of non-service of notice and denial of hearing opportunity. The Labour Court dismissed these applications by a common order dated July 25, 2025. Aggrieved, the employer (Jindal Power Limited) and the security contractor (Superior Fire and Security Services Pvt. Ltd.) filed separate appeals (MA Nos. 179/2025 and 177/2025) under Order 43 Rule 1(d) CPC before the Chhattisgarh High Court.

ISSUES:

The principal issue in these appeals was whether the Labour Court was justified in dismissing the appellants’ applications to set aside the ex parte award dated December 10, 2022, particularly when the order sheet of August 17, 2022, showed that service of notice was not conclusively established (service report awaited), yet the employer was proceeded ex parte the same day without recording satisfaction of due service under Clause 27 of the General Clauses Act, 1897, thereby denying natural justice and opportunity of hearing. Ancillary questions included whether sufficient cause existed for the employer’s non-appearance, whether the Labour Court had jurisdiction to proceed ex parte absent proof of service, and whether the impugned dismissal order suffered from perversity and non-application of mind.

JUDGEMENT WITH REASONING:

The Chhattisgarh High Court allowed both appeals (MA Nos. 177/2025 and 179/2025), set aside the Labour Court’s common order dated July 25, 2025, and consequently allowed the appellants’ applications for setting aside the ex parte award. The matter was remitted to the Labour Court, Raigarh, for fresh consideration on merits after affording reasonable opportunity of hearing to both parties, with directions for the parties to appear on April 29, 2026, and for expeditious disposal.

The High Court found that the Labour Court’s procedure on August 17, 2022, was irregular and contrary to law. The morning order sheet explicitly recorded that notice was issued by registered post but the service report was awaited, and it was deemed appropriate to wait for confirmation before proceeding further, adjourning the case to September 8, 2022, for reply. Despite this conscious observation, the same afternoon the court proceeded ex parte based solely on the workman’s counsel’s assertion of knowledge and absence, without any formal proof of service or a categorical finding that notice was duly served as required under Clause 27 of the General Clauses Act, 1897 (which deems service effected only upon proper addressing, pre-paying, and posting by registered post, with presumption rebuttable by contrary proof). The absence of a confirmed service report or recorded satisfaction rendered the invocation of deemed service impermissible, violating principles of natural justice. The employer’s specific plea in the recall application, that no notice was ever served was not properly adjudicated, indicating non-application of mind and mechanical rejection of the application. Relying on Grindlays Bank Ltd. v. Central Government Industrial Tribunal (1980 Supp SCC 420), the Court held that ex parte proceedings under Rule 22 of the Industrial Disputes (Central) Rules, 1957, are conditional upon fulfillment of jurisdictional prerequisites, including sufficient opportunity and proof of service; where sufficient cause for non-appearance is shown (here, non-service), the tribunal lacks jurisdiction to proceed ex parte and must have power to set aside such an award to prevent miscarriage of justice.

Furthermore, adjudication under the Industrial Disputes Act, 1947, involves determination of valuable rights with civil consequences, necessitating strict adherence to natural justice principles. Proceeding ex parte without ensuring proper service and opportunity to contest, especially when the employer later demonstrated diligence upon gaining knowledge (filing recall promptly after receiving the award copy), amounted to denial of fair hearing. The High Court emphasized that the Labour Court’s failure to await or verify service confirmation, despite its own earlier direction rendered the ex parte award and the subsequent dismissal order perverse and unsustainable. Setting aside the impugned order and remitting the case ensures compliance with statutory safeguards, allowing the employer (who also raised a substantive plea of no employer-employee relationship) to contest on merits, thereby balancing expeditious justice with procedural fairness and preventing irreversible prejudice from an order passed in absence without due process.

ANALYSIS:

This judgment reinforces the sanctity of natural justice in labour adjudication under the Industrial Disputes Act, 1947, by invalidating ex parte proceedings initiated without conclusive proof of service under Clause 27 of the General Clauses Act, 1897. The Chhattisgarh High Court meticulously dissected the Labour Court’s order sheet to expose the irregularity: the tribunal’s own recording that service was awaited, followed by an abrupt same-day ex parte order based merely on a track consignment report and counsel’s assertion, bypassed the mandatory requirement of satisfaction regarding effective service. Citing Grindlays Bank Ltd. (1980), the ruling clarifies that the power to proceed ex parte is conditional and defeasible upon proof of sufficient cause for absence (here, non-service), empowering the tribunal and appellate courts, to recall such awards to avoid jurisdictional overreach and miscarriage of justice. The decision protects employers from mechanical ex parte liabilities while underscoring that recall applications cannot be dismissed perfunctorily when specific non-service pleas remain unadjudicated.

The ruling advances procedural discipline in labour courts by mandating explicit findings on service before ex parte steps, particularly in contractor disputes where principal employers may contest vicarious liability. By remitting the matter for fresh merits adjudication, it ensures the substantive issue, whether the workman was a direct employee or contractor staff, and validity of termination receives contested hearing, preventing irreversible reinstatement orders from procedural lapses. This precedent strengthens safeguards against ex parte awards in ID Act references, promotes diligence in service verification, and balances speedy resolution with fairness, serving as persuasive authority for high courts reviewing labour court orders under Order 43 CPC.