Dheeraj Rastogi v. Dnata International Pvt. Ltd.

All disputes relating to this Employment Contract shall be settled through arbitration in accordance with the Arbitration and Conciliation Act, 1996 and conducted by a single arbitrator appointed by the Company. Arbitration will take place in Delhi and in the English language. The award will be binding on the Employee and the Company. The Company however shall be entitled (without limitation to other rights and remedies available under law) to obtain injunctive relief or equitable relief from any court of competent jurisdiction.”1 Clause 7.[1] of the Employment Regulation Manual, which has been referred to in the impugned award, reads as follows:

6. Mr. Chaudhary submits that the genesis of the dispute between the parties arises out of misconduct of three other employees of the Inbound Travel Department of the respondent-company, who were indulging in fraudulent activities, including diversion of funds into their own account which they opened under the name of “Crreative”. Although no such allegation was made against the petitioner, the respondent suspended the petitioner on 12.12.2019 and conducted an “internal investigation”. The respondent thereafter terminated the employment of the petitioner on Emphasis supplied. 07.02.2020, stating that the internal investigation had come to the conclusion that he failed to disclose the fraud in the company to the finance team in the Dnata head office and that he failed to take corrective action.

7. Mr. Chaudhary submits that the findings of the learned arbitrator, upholding the aforesaid termination, are directly contrary to the evidence on record, which shows that the petitioner is the one who lodged an FIR in July 2019 against the concerned employees. It is submitted that the petitioner also informed the head of the respondent-company in India, i.e. the India head of Dnata’s business, with regard to the facts of which he was aware. He contends that the award incorrectly ascribes an admission to him with regard to failure to take preventive steps. While attributing responsibility for approval of vouchers to the petitioner, Mr. Chaudhary submits, the award fails to take into account that the vouchers approved by the petitioner had in fact already been checked at three levels within the respondent-company. He submits that the finding of the learned arbitrator that the Registrar of Companies was not informed is misconceived, inasmuch as the petitioner was not required to inform the He similarly submits that the learned arbitrator has erred in holding that the petitioner was aware of the investigation by the Registrar of Companies, which started only in November 2021, long after the termination of the petitioner’s employment.

8. Mr. Chaudhary’s final ground of challenge is that the learned arbitrator had committed a manifest error in rejecting the entirety of the petitioner’s monetary claims on the ground that the termination itself had been upheld. He contends that at least part of the claim for compensation ought to have been adjudicated even though the termination had been held to be valid, inasmuch as it was based upon the illegal use of the petitioner’s digital signature and authorisation even after his termination.

9. No other ground of challenge is pressed by Mr. Chaudhary.

10. As far as the validity of termination notice is concerned, it may be noticed that Clause O(1) of the Contract gave either party the right to terminate the Contract with two months’ notice, or payment of remuneration in lieu of notice. Clause O(3) specified the grounds upon which the respondent had the right to terminate the employment without notice or compensation. The learned arbitrator has found in favour of the respondent in terms of Sub-Clauses (b), (c) and (g) of Clause O(3) read with Clause 7.[1] of the Employment Regulation Manual.

11. The learned arbitrator noticed the contention of the claimant that Clause O(3) could have been invoked only after a finding that the claimant was guilty of any of the acts specified therein by taking recourse to arbitration proceedings and not on a mere “internal investigation”. However, he also noticed the contention of the respondent that the allegations of fraud against employees in India office were not communicated to its head office in Dubai by the petitioner, who was the CFO of the respondent-company, but by other whistle blowers.

12. The learned arbitrator has found that Clauses O(3)(b), (c) and (g) did not require a prior domestic inquiry which, at best, may be required under Clause O(3)(a). He has relied inter alia upon paragraph 3.[1] of the report of the investigating team, which concluded that the petitioner had committed misconduct by concealing the fraudulent activity from Dnata’s head office and executive management, with the intention of covering up his lack of control[3]. Referring to the petitioner’s affidavit of evidence and cross-examination[4], the learned arbitrator analysed the evidence as follows:-

13. These factual determinations are based entirely upon assessment of the evidence placed by the parties before the learned arbitrator and his interpretation of the contractual clauses, particularly Clause O(3). Interference with such interpretation and findings under Section 34 of the Act is permissible, only if found to be perverse in the sense that no reasonable arbitral tribunal could have come to the same conclusion[8]. On both counts, I do not find any such deficiency in the approach of the learned arbitrator so as to cross this high threshold. Dyna Technologies (P) Ltd. vs. Crompton Greaves Ltd. [(2019) 20 SCC 1], Associate Builders vs. Delhi Development Authority [(2015) 3 SCC 49] and McDermott International Inc. vs. Burn Standard Co. Ltd., [(2006) 11 SCC 181].

14. Mr. Chaudhary raises alleged factual discrepancies in the analysis of the learned arbitrator relating to quantum of the alleged fraud[9], dates of the inquiry by the Registrar of Companies and the observation, that the FIR had not been pursued further10. However, I am of the view that the award is not liable to be overturned on this basis. The approach of the Court, while scrutinising an arbitral award, is one of caution and circumspection. An award is liable to be interdicted only if the deficiencies pointed out in the challenge go to the root of the matter. The aforesaid approach has been summed up in the judgment of the Supreme Court in Dyna Technologies (P) Ltd. vs. Crompton Greaves Ltd.11 in the following terms:-

15. Viewed from this perspective, the arbitral award is not susceptible to challenge. The petitioner was admittedly the CFO of the respondentcompany and served on its Board of Directors. He was thus part of its key managerial personnel and owed a fiduciary duty to the company. These are positions of responsibility which require a high degree of trust. Although the petitioner was an employee of the respondent-company, an Indian entity, the relationship between the Indian entity and the global management is admitted. In fact, in the legal notice dated 26.03.2020, the petitioner contends that he advised the Managing Director of respondentcompany to inform the matter to the Dubai head office, but the advice was rejected and the Managing Director directed all other employees not to discuss the matter with the head office. It is also stated therein that the petitioner followed these directions, despite the fact that senior management of the respondent-company were regularly in touch with their counter parts in Dubai for day-to-day activities.

16. I am therefore unable to accept Mr. Chaudhary’s submissions with regard to the learned arbitrator’s finding on the validity of the termination.

17. The only surviving issue concerns the petitioner’s claim for damages on account of alleged misuse of his digital signatures and authorisations by the respondent-company even after his termination. The petitioner’s allegations in this regard are contained in paragraphs 17 and 18 of the statement of claim, wherein the petitioner states that he has filed a criminal complaint in the Court in Noida in this regard. However, I do not find any support in the statement of claim for Mr. Chaudhary’s submission that the petitioner’s claim for damages arose even partially on this account. In claim No. 2, the petitioner sought damages of ₹2.57 crores on account of employment benefits from the date of termination, until the filing of the petition. The claim for damages and compensation amounting to ₹7.14 crores is contained in Claim No. 3 which the petitioner has summarised as follows:- Loss of Savings and Income (a separate sheet for said Calculation is enclosed.) Rs. 2,28,55,419 Damages/ compensation because of mental harassment, mental torture, physical discomfort, loss of prestige in the society, loss of reputation in the professional circle and humiliation, harassment, on professional and personal front, Rs. 4,85,76,811 (The same is calculated on the basis of the Equivalent to the loss of employment benefit since 07.02.2020 till the date of filing of the claim application and loss of savings and income) Total Rs. 7,14,32,230

18. In the pleadings relating to this claim13, the petitioner has elaborated upon these aspects, but there is no mention at all of any damages arising out of such wrongful use of the petitioner’s digital signatures or other authorisation. The damages claimed in fact arise only out of the alleged wrongful termination and not out of any actions of the respondent thereafter. Mr. Chaudhary’s submissions in this regard are wholly misconceived.

19. For the aforesaid reasons, I do not find any grounds for interference with the impugned award in exercise of jurisdiction under Section 34 of the Act.

20. The petition is therefore dismissed. The pending application also stands disposed of.