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HC directs Punjab to pay Rs 5 lakh to worker retrenched from hydel project in 1985: ‘State must act as model employer’

The Punjab and Haryana High Court said the “very essence of a welfare state…is compromised when the instrumentalities of the state itself become a source of protracted litigation”.

4 min readChandigarhUpdated: Dec 3, 2025 05:41 PM IST

The ruling, delivered on November 20 by Justice Harpreet Singh Brar, comes after decades of litigation and highlights the state’s failure to absorb the employee despite earlier court orders and undertakings. (File)

The Punjab and Haryana High Court has directed the Punjab government to pay Rs 5 lakh as lump-sum compensation to a worker retrenched nearly 40 years ago from the Anandpur Sahib Hydel Project (ASHP).

In its observations, the court emphasised the need for the state to act fairly. Justice Brar stated: “This Court cannot help but observe that the very essence of a welfare state, as envisioned by our Constitution, is compromised when the instrumentalities of the state itself become a source of protracted litigation. The principle that the state must act as a model employer is not a mere platitude but a constitutional mandate that informs its dealings with its employees.”

The case pertains to Mohan Lal, the petitioner, who was appointed as an earth work mistri in the project on September 10, 1978. His services were terminated on July 31, 1985, upon the project’s completion, and he received retrenchment compensation under the Industrial Disputes Act, 1947. Lal was part of a larger group of workers who challenged their termination through writ petitions, including CWP No 5981 of 1985, which was clubbed with others.

In 1986, the high court allowed the petitions, but the state appealed. A division bench, in its January 12, 1989, judgment in State of Punjab and others vs Mehanga Ram and others, overturned the relief, but issued directions for the absorption of the retrenched employees.

Lal’s counsel, R K Gautam, argued that this direction was binding on all retrenched workers, including his client, and that the state had failed to implement it. He also pointed to an undertaking given by the Advocate General of Punjab before the Supreme Court on August 4, 1995, promising to issue appointment or transfer letters to employees terminated from the project.

“The petitioner, being a retrenched employee of the ASHP, is squarely covered by this undertaking,” Gautam contended, adding that denying the benefit to Lal while extending it to others violated the equality guaranteed under Articles 14 and 16 of the Constitution.

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State counsel Vikas Arora and counsel for other respondents, Vishal Gupta, countered that Lal was retrenched in 1985 and was not in service when a 1993 policy was framed. They noted that he was not a direct party to the Supreme Court proceedings and raised a delay objection, as the petition was filed in 1997, eight years after the Mehanga Ram judgment.

The judge, however, found that Lal’s case fell within the class of workers covered by the 1989 directions and the 1995 undertaking. He rejected the delay plea, noting the petition stemmed from liberty granted by the Supreme Court in 1996 after Lal withdrew an application there.

Considering Lal’s age and the long lapse of time, the court deemed reinstatement with back wages impracticable. Citing Supreme Court precedents like Gowramma C (Dead) By Lrs vs Manager (Personnel) Hindustan Aeronautical Ltd (2022), it observed: “The most important question is whether the employee is at fault in any manner. If the employee is not at all at fault and…was kept out of work by reasons of the decision taken by the employer, then to deny the fruits of…being vindicated at the end of the day would be unfair to the employee.”

The court disposed of the petition with the direction to release the Rs 5 lakh within three months of receiving a certified copy of the order. “This Court finds that the petitioner has endured significant hardship primarily due to the administrative apathy and recalcitrance of the respondent-State, without any fault on his own part,” Justice Brar concluded.

Manraj Grewal Sharma

Manraj Grewal Sharma is a senior journalist and the Resident Editor of The Indian Express in Chandigarh, where she leads the newspaper’s coverage of north India’s most politically and institutionally significant regions. From Punjab and Haryana to Himachal Pradesh and the Union Territory of Chandigarh, she oversees reporting at the intersection of governance, law, politics and society. She also reports on the diaspora, especially in Canada and the US. With a career spanning journalism across several countries, academia and international development, Manraj brings a rare depth of perspective to regional reporting. She is widely regarded as a leading chronicler of Punjab’s contemporary history and socio-political evolution, particularly its long shadow of militancy, federal tensions and identity politics. Her book, Dreams after Darkness, remains a definitive account of the militancy years and their enduring aftermath. Professional Background & Expertise A gold medalist in mass communication and a post-graduate in English literature, Manraj has a multifaceted career spanning journalism, academia, and international development. She was also awarded a fellowship by National Foundation of India and did several in-depth pieces on Manipur. Internationally, she has reported from Israel, US, UK, Myanmar, and Mauritius Her key focus areas include: Regional Politics, History, Agriculture, Diaspora, and Security. Of late, she has started focusing on Legal & Judicial Affairs: Much of her recent work involves reporting on high-stakes cases in the Punjab and Haryana High Court, ranging from environmental policy to civil rights. International Consulting: She previously served as a consulting editor for the Asia Pacific Adaptation Network and a publishing consultant for the Asian Development Bank (ADB) in Manila. Academia: For five years, she was the managing editor of Gender, Technology and Development, a peer-reviewed international journal at the Asian Institute of Technology, Bangkok. Recent Notable Articles (Late 2025) Her recent reportage focuses heavily on judicial interventions and regional governance: 1. Environment & Governance "‘NGT can’t test legality of policy’: HC hears challenge to Punjab’s ‘Green Habitat’ plan" (Dec 22, 2025): Covering a critical legal battle over whether the National Green Tribunal has the authority to strike down a state policy regularizing farmhouses on delisted forest land. "High court pulls up Punjab poll panel over audio clip probe" (Dec 10, 2025): Reporting on judicial concerns regarding the transparency and fairness of local body elections. 2. Legal Rights & Social Welfare "HC issues notice to Punjab, Haryana over delay in building old age homes" (Dec 22, 2025): Reporting on a contempt petition against top officials for failing to establish government-run homes for the elderly as promised in 2019. "Victims can appeal acquittals in sessions court without seeking special leave" (Dec 19, 2025): Highlighting a significant procedural shift in criminal law following a Supreme Court ruling. "HC upholds benefits for Punjab FCI officer acquitted in 20-year-old bribery case" (Dec 19, 2025): A report on the concept of "honourable acquittal" and its impact on employee benefits. 3. Human Rights & Identity "As Punjab denies parole to MP Amritpal Singh, HC asks it to submit ‘foundational material’" (Dec 1, 2025): Covering the legal proceedings regarding the radical preacher and sitting MP's request to attend Parliament. "Protecting life paramount: HC backs Muslim woman in live-in after verbal divorce" (Nov 6, 2025): Analyzing judicial protections for personal liberty in the context of traditional practices. Signature Beats Manraj is recognized for her ability to decode complex judicial rulings and relate them to the everyday lives of citizens. Whether it is a 30-year-old land battle in Fazilka or the political implications of Kangana Ranaut’s candidacy in Mandi, her writing provides deep historical and regional context. Contact @grewal_sharma on X manrajgrewalsharma on Instagram ... Read More