Supreme Court Orders Compensation for Wrongfully Denied Salary in UP-Uttarakhand Employee Transfer Dispute

The case of State of Uttar Pradesh & Anr. vs. Baleshwar Singh & Ors. involves an employment dispute following the bifurcation of Uttar Pradesh and Uttarakhand under the U.P. Reorganization Act, 2000. The Supreme Court examined whether an employee, Baleshwar Singh, who was transferred to Uttarakhand and later denied salary and benefits, was entitled to compensation from the State of Uttar Pradesh. The Court ruled in favor of the employee, directing the Uttar Pradesh government to release the unpaid salary, retiral benefits, and compensation.

Background of the Case

Following the formation of Uttarakhand on November 9, 2000, employees of the undivided Uttar Pradesh were given the option to opt for transfer to the newly created state. Baleshwar Singh, an Assistant Conservator of Forest, gave written consent for posting in Uttarakhand, while Mahendra Pratap Singh, another officer, opted to remain in Uttar Pradesh.

A mutual transfer order was issued on August 6, 2008, allocating Baleshwar Singh to Uttarakhand and Mahendra Pratap Singh to Uttar Pradesh. Both states relieved the officers in September 2008, and Baleshwar Singh joined duty in Uttarakhand on September 30, 2008.

Legal Dispute Over Transfer Validity

In July 2010, the Uttarakhand High Court invalidated the mutual transfer policy. As a result, Baleshwar Singh sought repatriation to Uttar Pradesh. On April 5, 2011, the Uttarakhand government directed him to resume duty in Uttar Pradesh, but the Uttar Pradesh government refused to allow him to rejoin. Meanwhile, Mahendra Pratap Singh challenged his transfer to Uttarakhand in the Allahabad High Court and obtained a stay order on April 15, 2011.

Consequently, Baleshwar Singh was left in a legal limbo, deprived of salary and service benefits. He filed a writ petition in the Allahabad High Court, which ruled in his favor and directed Uttar Pradesh to pay his salary and arrears. The State of Uttar Pradesh challenged this order in the Supreme Court.

Petitioner’s Arguments

The appellants, the State of Uttar Pradesh, argued:

The mutual transfer policy was invalidated by the Uttarakhand High Court, making Baleshwar Singh’s transfer void.
The Uttar Pradesh government had already absorbed another officer in his place.
The High Court’s direction to pay salary despite non-performance of duty created an unfair financial burden on the state.

Respondent’s Arguments

The respondent, Baleshwar Singh, contended:

He was relieved by the Uttarakhand government and directed to report to Uttar Pradesh, but the latter refused to accept him.
The Allahabad High Court had specifically ordered Uttar Pradesh to allow him to rejoin, which was not complied with.
He had no fault in the administrative dispute and was unlawfully deprived of his salary and benefits.

Key Legal Issues Considered

1. Whether the State of Uttar Pradesh Was Obligated to Pay Salary

The Court analyzed whether Uttar Pradesh was liable to compensate an employee wrongfully denied reinstatement despite a valid transfer order.

2. Whether the High Court’s Direction to Reinstate Was Binding

The Court examined the non-compliance by Uttar Pradesh with the High Court’s order directing the reinstatement of Baleshwar Singh.

3. The Impact of Administrative Errors on Employee Rights

The Court considered the broader impact of bureaucratic disputes on employee livelihoods.

Supreme Court’s Verdict

The Supreme Court ruled against Uttar Pradesh, stating:

The state had violated the Allahabad High Court’s order to reinstate Baleshwar Singh.
Baleshwar Singh suffered due to bureaucratic inefficiency and non-compliance.
The Uttar Pradesh government was directed to:

Release all unpaid salary from April 9, 2011, until retirement.
Pay retiral benefits calculated as per his superannuation on June 30, 2016.
Provide compensation at an interest rate of 6% per annum on the delayed payments.
If payments were not made within three months, the interest rate would increase to 9% per annum.

Key Takeaways from the Judgment

State Governments Must Honor Employee Rights: Bureaucratic inefficiencies cannot justify the denial of salary and service benefits.
Judicial Orders Must Be Respected: Uttar Pradesh’s failure to comply with the High Court’s direction led to liability for compensation.
Employee Protections Against Administrative Disputes: Employees cannot be penalized for government errors.
Financial Compensation for Wrongful Denial of Salary: The Court ensured monetary relief, including interest, for the affected employee.

The ruling serves as a precedent for similar cases where employees suffer due to administrative lapses and reaffirms the principle that employees cannot be left in limbo due to state inaction.

Petitioner Name: State of Uttar Pradesh & Anr..
Respondent Name: Baleshwar Singh & Ors..
Judgment By: Justice Abhay S. Oka, Justice Pankaj Mithal.
Place Of Incident: Uttar Pradesh, India.
Judgment Date: 09-11-2023.

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