Naresh Kumar v. Hiroshi Maniwa & Ors.

(iii) Pawan Kumar Dalmia Vs. M/s. HCL Infosystems Ltd.

4. In the judgment in the case of Shri Satya Narain Garg (supra), I have referred to the recent judgment of the Supreme Court in the case of Binny Ltd. & Anr. Vs. V. Sadasivan & Ors. (2005) 6 SCC 657 and which holds that public policy principles or administrative law principles do not apply to private employment. The relevant paras in the judgment in Shri Satya Narain Garg (supra) read as under:-

9. Surely, these types of self-serving averments cannot be held as discharge of onus of proof of mitigation of damages. The statement made by the deceased plaintiff is bereft of any details as to which companies or firms or persons he applied to, and on which dates, and for what position, and for what salary and also the details as to why he could not obtain the alternative employment. I am, therefore, of the opinion that the deceased plaintiff, even assuming he was wrongly terminated from services, failed to prove that he had taken sufficient steps for mitigation of damages.”

5. In the case of GE Capital Transportation Financial (supra), I have referred to the earlier judgment in the case of Shri Satya Narain Garg (supra), and also the fact that contracts which are determinable in nature cannot be specifically enforced as per Section 14(1)(c) of the Specific Relief Act, 1963. I have also referred to the fact that if the contract of employment provides for one month’s notice, then, the maximum entitlement of damages of an employee who alleges illegal termination is one month’s pay. Paras 10 to 12 of the judgment in the case of GE Capital Transportation Financial (supra) are relevant and the same read as under:-

6. In the present case, the plaintiff himself relies upon the terms and conditions of employment issued by the original employer and then reconfirmed by the defendant No.1, in the letters dated 27.7.1970 and 30.9.1974. Defendant No.1 is the company which subsequently took over the original/erstwhile employer of the plaintiff. It could not be disputed that in terms of these letters the services after the probation period of the plaintiff can be terminated by giving one month’s notice or one month’s pay in lieu of notice. Since the letters containing the terms of employment are small letters and the terms are relevant, I seeks to reproduce the same in entirety. These letters read as under:- “Mr. L.M. Khosla, B-5/14, Model Town, Delhi-9 JS/IG 27th July, 1970. Dear Sir, With reference to your application dated the 2nd June, 1970, and your subsequent interview, we have pleasure in confirming your employment with Scandinavian Airlines System, New Delhi in the capacity of the Documentation Assistant-cum-Reservation Clerk. Your employment will commence Ist August, 1970, subject to a three month probation period and medical examination. Your salary during the probation period is fixed at Rs. 650/- (Rupees six hundred and fifty only) per month. On confirmation your salary will be Rs. 700/- (Rupees seven hundred only) per month. The above salary is inclusive of all allowance and dearness except for fixed Housing Assistance Allowance which is in your case Rs. 45/- (Rupees forty-five only) per month. If for any reason your services are terminated or you decide to terminate your employment during the probation period, either side will be entitled to give 24 hours notice and salary calculated on daily basis will be paid up to date of termination. After confirmation one month’s notice from either side. You will be entitled to eighteen working days leave per year. The time to be accepted by the Company, taking into consideration the convenience of work. You will also be entitled to join the Local Employees Provident Fund after completion of one year’s continuation service. Kindly confirm the above terms by signing and returning to us the copy hereof. Yours faithfully, SCANDINAVIAN AIRLINES

District Manager. xxxx xxxx xxxx xxxx Your ref. Your letter Our ref. Calcutta SP/IP 30 September 1974 Dear Mr. Khosla, This is to confirm that Thai International will take over from SAS the administrative responsibilities of this office as of October 01, 1974. As of same date you are thus in the employ of Thai International under the very same terms and conditions-including acquired seniority-as those now enjoyed by you during your employment with SAS. Best regards, Sven Palm Area Manager” It is not disputed before me that the defendant No.1 has given one month’s pay to the plaintiff in lieu of the notice period of one month. Therefore, the plaintiff is not entitled to any other compensation or damages or moneys from the defendant No.1.

7. In the case of Pawan Kumar Dalmia (supra) observations similar to those made by me in the case of Shri Satya Narain Garg (supra) were made. Paras 15 and 16 of the judgment in the case of Pawan Kumar Dalmia (supra) are relevant and the same read as under:-

16. The judgments cited on behalf of the appellant in the cases of Jyotsna Raina (supra) and Municipal Corporation of Delhi (supra) will not apply inasmuch as the employment in this case is a contractual employment and is not a statutory appointment or an employment under a statutory corporation or a company which is “state” under Article 12 of Constitution of India. The issue of a person being terminated by an authority inferior to the person who appointed such person is relevant in proceedings under Services Law or where there is an issue of violation of Article 14 of the Constitution, but definitely not in employments which are contractual employments and governed by contractual terms and conditions. In any case, Board of Directors is a superior authority than a Chairman of a company and hence in the present facts it is not that termination can be said to be by an inferior authority to the appointing authority. The judgment in the case of Haryana Seeds Development Corporation (supra) also has no application to the facts of the present case inasmuch as in the said case, the Court was concerned with termination of services of a Company Secretary by a Managing Director and not by the Board of Directors as has been done in the present case. In fact, a reference to the judgment in the case of Haryana Seeds Development Corporation (supra) shows that Board of Directors of a company can surely terminate the services of a Company Secretary. Trial Court has also referred to and rightly distinguished this judgment in para 26 of the impugned judgment reproduced above. The judgment relied upon in the case of Amal Kumar Mukherjee (supra) with respect to the argument that the minute book of a company ought to be bound and written in hand, is to be read in the context of the facts of the said case wherein there were disputes inter se shareholders of a company and in such circumstances, the issue had arisen with respect to manipulation of the minute book of the company. In the present case, there is no dispute inter se shareholders or inter se Directors of the Board of the company and therefore the judgment in the case of Amal Kumar Mukherjee (supra) will have no application to the facts of the present case, especially for the reasons stated above that there is no subsequent resolution of the Board of Directors or any resolution in the General Body meeting of defendant No.1/respondent No.1-company questioning or rescinding the termination of services of the appellant-Sh. Pawan Kumar Dalmia.”

8. In view of the aforesaid judgments, the following conclusions in law emerge:-

(i) A contract of private employment is not similar to the public employment and in such private employment there is no scope of applicability of the principles of administrative law/public law.

(ii) A contract of employment which provides termination of services by one month’s notice, then, at best the employee will only be entitled to one month’s pay in terms of the employment contract. An employee is not entitled to any relief of continuation in services or pay with consequential benefits for alleged remaining period of services till the date of his superannuation.

(iii) As per the provision of Section 14(1)(c) of the Specific

Relief Act, 1963, a contract which is determinable in nature cannot be specifically enforced. Since the service contract in the present case is determinable by one month’s notice there does not arise the question of giving of any reliefs which tantamount to enforcement of a determinable contract. As per Section 14(1)(b), a contract of personal service cannot be enforced when the employer is not the Government or “State” as per Article 12 of the Constitution of India. Plaintiff has in fact received one month’s pay and therefore his claim will stand satisfied in law and he is not entitled to any reliefs as prayed for in prayer clauses in the suit.” (emphasis is mine)

4. It is therefore clear that the plaintiff cannot claim illegality of termination of his employment either for continuing the employment or for claiming any monetary amount as if he had continued in employment with the defendant no.7.

5. In this suit the following are the relief clauses:-

6. In view of the above discussion pertaining to the ratio of the judgment of the Supreme Court in the case of S.S. Shetty (supra), there cannot be granted relief to the plaintiff of declaring the termination of the plaintiff as illegal and void inasmuch as even if the termination is illegal and void, then, at best the plaintiff is entitled to three months’ salary for the notice period and which can be the only maximum liability upon the defendant no.7. Thus the only relief which the plaintiff is entitled to is that he would be paid three months’ salary which was due to the plaintiff as on the date of his termination vide Letter dated 07.08.2009, and accordingly, the defendant no.7 is directed to pay three months’ salary to the plaintiff w.e.f the date of the Termination Letter dated 07.08.2009 along with interest @ 9% p.a. simple till payment. In case payment is not made within a period of three months, the rate of interest thereafter will become 18% p.a. simple.

7. Learned counsel for the plaintiff argued that reliefs in the prayer clauses of this suit are different than in the case before the Supreme Court in S.S. Shetty (supra) or even from the facts of the case decided by this Court in L.M. Khosla (supra) and therefore the suit is maintainable, however, I note that though part of the prayer clause talks of grant of damages for loss of reputation and goodwill on the ground of defamation, in the plaint there are no bundle of facts constituting a cause of action as to how plaintiff has been defamed or plaintiff has suffered loss of reputation and goodwill. Where relief is sought on the basis of the alleged defamation or loss of goodwill of the plaintiff with respect to any defamation or any alleged character assassination, there has to be entire set of facts which are required to be stated in view of Order VI Rule 4 of the Code of Civil Procedure, 1908 for claiming any damages with respect to defamation or character assassination or loss of goodwill. I asked the counsel for the plaintiff to show me that if and what was the public notice issued in the newspaper by the defendant no.7 defaming the plaintiff and as is orally argued before me, but the counsel for the plaintiff could not point out to me any averment made in the plaint that a particular notice of a particular date in a particular newspaper or other publication was issued by defendant no.7 and which amounts to defamation and character assassination of the plaintiff. A bland statement made in the plaint, including in the relief clause, of loss of goodwill and reputation thus cannot be a basis for grant of damages for alleged defamation, loss of goodwill and reputation as the plaint lacks averments to constitute such a cause of action. The plaint therefore lacks the cause of action for grant of damages on such basis and therefore damages cannot be granted to the plaintiff. It also bears note that in a suit for claiming damages by defamation, plaintiff must make averments as to how the plaintiff has been brought down in the estimation of right thinking members of the society, but even that this averment has been made in the plaint could not be pointed out to this Court on behalf of the plaintiff. Really, therefore, plaintiff has no case for claiming damages for defamation or alleged character assassination of the plaintiff. Finally, while on this aspect it is noted that if there is an illegal termination, and the remedy as per law is the three months’ salary in lieu of the period of notice, then, for such aspect there cannot be a claim in law with respect to damages on the ground of mental agony and distress inasmuch as by law the monetary benefits are limited to the notice period of termination.

8. In view of the above, there is no merit in the suit, and the same is therefore dismissed except to the extent of directions issued to the defendant no.7 to pay to the plaintiff three months’ salary due on the date of Termination Letter dated 07.08.2009 along with interest @ 9% p.a. simple within a period of three months from today and if this amount is not paid within three months from today, then, the rate of interest payable by the defendant no.7 to the plaintiff would become @ 18% p.a. simple till payment.

9. Payment can be made by the defendant no.7 either directly to the plaintiff or by giving a pay order in the name of the plaintiff to the counsel for the plaintiff who is appearing before this Court today.

10. Parties are left to bear their own costs. Pending applications are also accordingly disposed of.

NOVEMBER 05, 2015 VALMIKI J. MEHTA, J nn