SC in the case of Maharashtra State Road Transport Corporation vs. Mahadeo Krishna Naik (Civil Appeal No. 13834 of 2024), recently clarified that in cases of wrongful dismissal, granting lump-sum compensation may, in certain circumstances, be more appropriate than reinstatement with back wages. While reinstatement is generally the preferred remedy, the Court emphasized that exceptions can be made if the employer provides sufficient justification. This ruling underscore the principle that compensation should be tailored to the specific facts of each case, ensuring that both employer and employee interests are balanced. Additionally, the Court noted that prolonged litigation and strained employer-employee relationships could render reinstatement impractical, making lump-sum compensation a viable alternative. By reaffirming judicial discretion in such matters, the judgment highlights the need for a case-specific approach to wrongful dismissal claims.
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