Karnataka High Court Orders Jet Airways to Release ₹13 Lakh Back Wages with Interest to Dismissed Employee Despite Liquidation
Safiya Malik
The High Court of Karnataka, Division Bench of Justice D.K. Singh and Justice Venkatesh Naik T directed liquidation-bound Jet Airways to release ₹13,00,000, along with accrued interest, to a former employee who had been dismissed from service. The Court dismissed the airline’s writ petition challenging a 2017 Industrial Tribunal award that had ordered reinstatement with 50% back wages, holding that the employee’s entitlement to those wages had crystallized as of the award date, preceding the company’s liquidation. The Bench held that while reinstatement could not be implemented due to the company’s liquidation, the back wages must be duly disbursed.
The case originated from disciplinary proceedings initiated by Jet Airways against Mr. Prashant Rao, who was appointed as a Customer Service Assistant on 23 October 1999 and confirmed on 23 July 2000. Following allegations of misconduct, he was dismissed from service on 30 August 2008. Mr. Rao challenged the dismissal before the Central Government Industrial Tribunal-cum-Labour Court in Case No. C.R.35/2009. The Tribunal found that the disciplinary proceedings violated the principles of natural justice and held that the alleged misconduct was not proven. Accordingly, it directed reinstatement of the workman with continuity of service and 50% back wages.
Jet Airways subsequently filed a writ petition in 2017 seeking to quash the award. The Single Judge of the High Court granted an interim stay on 20 April 2017, subject to the company depositing Rs. 13,00,000, which it complied with. This deposit remained with the Court throughout the pendency of the proceedings. The respondent appealed against the interim order, leading to Writ Appeal No. 6108/2017, where a Division Bench directed Jet Airways to pay 30% of his last drawn wages until the final disposal of the case.
During the pendency of the petition, Jet Airways entered liquidation pursuant to a Supreme Court judgment in State Bank of India and others v. Consortium of Murari Lal Jalan and Florian Fritsch (2025 (4) SCC 354). Consequently, the official liquidator assumed control of the company’s assets. The liquidation raised questions about the enforceability of the Tribunal’s reinstatement order and the fate of the Rs. 13,00,000 deposited by the company.
The Bench examined the Tribunal’s findings and observed that "the disciplinary proceedings were conducted in violation of the principles of natural justice" and that "the employer could not prove the alleged misconduct committed by the respondent." The Court noted that the Industrial Tribunal had thoroughly reviewed all materials and witness testimonies before concluding that the charges against the respondent were unsubstantiated. The judges found no perversity or illegality in the Tribunal’s reasoning and stated that, "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."
Addressing the issue of liquidation, the Bench acknowledged that reinstatement could not be granted as Jet Airways was no longer a functioning entity. The Court therefore confined its consideration to the disbursal of the amount already deposited pursuant to the interim order. The respondent expressed his willingness to accept Rs. 13,00,000 with accrued interest as full and final settlement of his claims, a statement recorded in the Court’s proceedings on 23 July 2025.
The official liquidator argued that the amount formed part of the company’s liquidation assets under Section 36 of the Insolvency and Bankruptcy Code, 2016, and thus could not be released to the respondent. Reliance was placed on Siti Networks Limited v. Rajiv Suri (2024 SCC OnLine Bom 3550) to contend that post-liquidation, enforcement of any award or decree was barred under Section 14(1) of the IBC.
Rejecting this contention, the Bench observed that "the pendency of the writ petition cannot act to the prejudice of the respondent." It applied the equitable maxim "Actus curiae neminem gravabit" (an act of the Court shall prejudice none), reasoning that the interim order had delayed the respondent’s entitlement. The judges recorded that "once we dismiss the writ petition, we hold that the rights got crystallized on the date of the award, i.e., 13.01.2017, for payment of 50% of the back wages and those back wages were already deposited." The Court cited the Supreme Court’s judgement in Amarjeet Singh v. Devi Ratan (2010 (1) SCC 417) and subsequent authorities, reaffirming that no party could benefit from its own wrongful act or the mere pendency of litigation.
The Bench stated: "The parties should be placed at the same position in which they would have been, had the Court not intervened by its interim order. The injury, if any, caused by the act of the Court, shall be undone, and the gain which the party would have earned unless interdicted by the Court’s order, would be restored or conferred on the party." The Court further held that since the award predated the commencement of liquidation proceedings, the official liquidator’s reliance on the IBC was misplaced.
The Court rejected the liquidator’s argument that the deposited amount was part of liquidation assets, noting that "on the date of the award, the company was not under liquidation and the CIRP had not commenced." Therefore, the principles cited in Siti Networks Limited v. Rajiv Suri were held inapplicable.
In its final order, the Karnataka High Court dismissed the writ petition and upheld the Industrial Tribunal’s award. "We, therefore, direct the Registry to release a sum of Rs. 13,00,000/- along with accrued interest to the respondent - Workman after due identification."
Advocates Representing the Parties:
For the Petitioner: Sri P.P. Hegde, Senior Counsel for Sri Dharma Tej, Advocate.
For the Respondent: Sri Prashanth Rao, Party-in-Person.
Case Title: M/s Jet Airways (India) Pvt. Ltd. v. Sri Prashant Rao
Case Number: WP No. 15526 of 2017
Bench: Justice D.K. Singh and Justice Venkatesh Naik T
