Delhi District Court
Sh. Gajendra Gupta vs M/S. Karvat Cover More Assist Pvt. Ltd on 20 November, 2019
Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
IN THE COURT OF SH. ARUN SUKHIJA,
ADDITIONAL DISTRICT JUDGE - 07, (CENTRAL DISTRICT)
TIS HAZARI COURTS, DELHI.
SUIT NO.: 122/2018
UNIQUE CASE ID NO.: 2206/2018
IN THE MATTER OF :
Sh. Gajendra Gupta
S/o Sh. Kanti Prasad Gupta
R/o 41/1410, First Floor,
Madangir, DDA,
Dr. Ambedkar Nagar,
New Delhi110062. ....Plaintiff
VERSUS
M/s. Karvat Cover More Assist Pvt. Ltd.
(Earlier namely Karvat Travel Services Pvt. Ltd.
Karvat Insurance Services Pvt. Ltd.)
of Karvat Group, at:
703704, 7th Floor,
Aggarwal Corporate Tower,
Building No.23, Rajindra Places,
New Delhi110008.
& Having and Regd. office at:
Suit No. 122/2018 Page 1 of 30
Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
72/73, 7th Floor,
Free Press House,
Nariman Point,
Mumbai400021. ....Defendant
CIVIL SUIT FOR RECOVERY OF DAMAGES &
COMPENSATION IN THE SUM OF RS.40,00,000/ (RUPEES
FORTY LAKHS ONLY) AND INTER ALIA ALSO FOR
DECLARATION THAT THE TERMINATION FROM
EMPLOYMENT OF THE PLAINTIFF BY THE DEFENDANT IS
BAD IN LAW AND CONSEQUENTLY FOR DECLARATION
THAT PLAINTIFF BE REINSTATED WITH CONTINUITY OF
SERVICES AND BACK WAGES.
Date of institution of the Suit : 17/07/2018
Date on which Judgment was reserved : 20/11/2019
Date of Judgment : 20/11/2019
:: J U D G M E N T ::
By way of present judgment, this court shall adjudicate
upon suit for recovery of damages and compensation in the sum of
Rs.40,00,000/ only and inter alia also for declaration that the
termination from employment of the plaintiff by the defendant is
bad in law and consequently for declaration that plaintiff be
reinstated with continuity of services and back wages filed by the
plaintiff against the defendant.
CASE OF THE PLAINTIFF AS PER PLAINT
Succinctly, the necessary facts for just adjudication of
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
the present suit, as stated in the plaint, are as under:
(A) The defendant is a private limited company duly incorporated
and registered under the provisions of Indian Companies Act
having its registered office and principal office at the aforesaid
addresses.
(B) The plaintiff was absorbed and employed in services by the
defendant company as a permanent employee in defendant
and working since July 2005 and he was lastly working and
reporting at Rajendra Place, New Delhi office of defendant.
The services of plaintiff continued regularly without any brake
and remained continuous and regular. The name of the
defendant company, however, remained changing from time to
time. The plaintiff earned increments for his exceptional
devoted services from time to time and there was no dispute,
anguish or discontent noticed or reported.
(C) On 25.07.2005, an appointment letter was issued to the
plaintiff by the defendant company. Under the clause under
the Head "Probation", it was spelt out that the plaintiff shall
be on probation for a period of first 3 months and
subsequently, depending upon performance, the plaintiff will
be given confirmation letter. Vide letter dated 01.11.2005, the
defendant company issued Confirmation Letter. Impliedly the
services of the plaintiff were found satisfactory that the service
confirmation had been accorded.
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
(D) Pursuant to the plaintiff having been absorbed as a
permanent employee, vide subsequent letter dated
01.04.2006, the defendant company was later even pleased to
issue Letter of Appreciation/ Increment upgrading the plaintiff
to the portfolio of Assistant Manager (Sales).
(E) Thereafter, on account of certain changes having taken place
in the concept of defendant company, vide its letter dated
01.06.2006, the plaintiff was communicated that he has been
transferred to the new incorporated company of the defendant
namely M/s. Karvat Travel Services Pvt. Ltd. The plaintiff,
however, was ensured that all other rules and regulations of
the Organization would remain the same. The plaintiff
continued carrying out his duties diligently, honestly and
sincerely. In terms of a letter dated 16.11.2006 received from
the defendant company, the plaintiff was transferred to its
Jaipur Branch as Branch Manager. On 30.04.2007, the
defendant company had issued a letter of increment
2007/2008 revising and enhancing salary of the plaintiff
w.e.f. 01.04.2007.
(F) The defendant no.1 company continued changing and revising
the conditions of services and pay scales from time to time
frequently. The Jaipur Office of the defendant company
issued Annual Review 2009 informing that w.e.f. 01.04.2009,
the terms of employment have been revised and the plaintiff
was allocated Trades & Marketing Division holding portfolio of
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
Branch Manager. Thereafter, vide letter dated 16.02.2011,
the plaintiff was transferred from Jaipur Branch to Nehru
Place Branch as Branch Manager w.e.f. 17.02.2011. The
plaintiff being a devoted sincere employee never questioned
the transfer, which was otherwise made so rapidly. Vide letter
dated 01.04.2014, the plaintiff was informed that the Revised
Compensation Package has been customized taking into
consideration the Excellent Performance Company Policy and
other related matters. The defendant company finding the
performance of the plaintiff applaudable had issued an
increment letter dated 25.11.2015 informing the plaintiff that
the revised CTC is Rs.7,23,360/ per annum. Thus, till the
end of 2015, everything continued sailing smoothly and the
performance of the plaintiff was applauded as commendable
by the defendant. There was no dispute or different of any
nature.
(G) On 23.11.2016, a promotion letter was issued whereby the
Revised CTC was revised to Rs.8,10,360/ per annum w.e.f.
01.07.2016 till June 2017. The plaintiff could not apprehend
the ulterior motives and malicious designs of defendant no.1.
Vide letter dated 03.04.2017, the plaintiff was informed by the
defendant that the salary has been revised and he will get the
revised salary w.e.f. 31.03.2017. The plaintiff was highly
perturbed over the revision carriedout and opted to send a
message in retaliation that the plaintiff is not in agreement
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
with the revised salary. Thereafter, the plaintiff was running
from pillar to post agitating his legitimate grievances and
lately an increment letter dated 31.07.2017 was issued by the
defendant to the plaintiff.
(H) On 07.08.2017, which was a holiday, suddenly an email was
received from the defendant wherein, besides other things, a
target was fixed under which, it was directed for plaintiff and
made incumbent to generate a minimum business for the
defendant. It was a harsh and unreasonable condition
imposed. The plaintiff had earlier been put in the Health
Project and was preoccupied in the said Project. Under the
Health Project, the plaintiff was dealing with the complaints of
multiple agents, who were feeling antagonized and perturbed
over the discontinuation of Health Project Policy, which was
earlier undertaken by the defendant. Agents like Dharmender
Jain & ors were creating problems and the plaintiff was busy
in sorting out the grievances of such agents, fixing targets
simultaneously was basically thrusting an assignment, which
was incapable of performance. The defendant was indulging
in all such malpractices for oblique reasons. The plaintiff at
the relevant time could not make out the evil intentions of the
defendant. The plaintiff loudly agitated his grievances and
resentment in the defendant's unfairly fixing the oppressive
target clause. It was an impossible assignment thrust on
him, simultaneously with the Health Portfolio. The plaintiff
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
received a mail from his duty officer on 17.08.2017 in which
the defendant had raised frivolous objections and issued false,
untenable and unjustified warning letter, wrongly levelling
absenteeism allegation against him.
(I) In JanuaryFebruary, 2017, while the plaintiff was drawing a
gross salary of about Rs.65,730/, the salary was slashed to
Rs.43,200/ per month in March 2017 without any reason or
rhyme. After the increment, the salary was slightly enhanced
to Rs.45,750/ in July 2017 and the defendant continued
paying the salary of Rs.45,750/ till the date of unlawful
termination.
(J) The intentions of the defendant have been hostile and
incriminate for the last 67 months and under a hatched
conspiracy, they ousted the plaintiff. The defendant has been
somehow contemplating ways and illegal means to do so. In
this regard, reference is made to the fact that in January
February, 2017, while the plaintiff was drawing a gross salary
of about Rs.65,730/, the salary was slashed to Rs.43,200/
per month in March 2017 without any reason or rhyme. After
according increment, the salary was slightly enhanced to
Rs.45,750/ in July, 2017 and the defendant continued
paying the salary of Rs.45,750/ till the date of unlawful
termination. The plaintiff vehemently agitated the deduction.
The plaintiff was then assured and consoled that the
deduction made will be reimbursed shortly but instead of
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
reimbursing the plaintiff, the services were terminated illegally
subsequently.
(K) On 31.10.2017, the plaintiff shockingly & disturbingly
received an email message from the defendant no.1 around
12.00 noon that the services of the plaintiff have been
terminated with immediate effect and similar message was
equally conveyed on phone. The plaintiff raised a usual query
as to how, for what reason and why the services of the
plaintiff have been terminated without any reason or rhyme.
The plaintiff conveyed its concern, agony and anguish over the
unilateral illegal action of the defendant, though, got realized
the partpayment sent, under protest & without prejudice to
his rights, pleas & entitlements qua balance amounts, besides
entitlement for reinstatement and get consequential benefits
and emoluments, etc.
(L) On 02.11.2017, the plaintiff served the defendant with a legal
notice through his counsel to which the defendant sent a
reply dated 14.11.2017 through their advocate. The plaintiff
sent a rejoinder reply on 16.11.2017 through his counsel.
The defendant sent another communication dated
22.11.2017. Out of sheer depression and vengeance of
defendant, the plaintiff received a Legal Notice from the
counsel for the defendant dated 21.12.2017 mentioning
therein that no communication was ever made by the
defendant on 22.11.2017 and the last communication made
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
was on 15.11.2017. The plaintiff sent a letter dated
29.12.2017 to the defendant through his counsel.
EXPARTE PROCEEDINGS
Summons for settlement of issues were issued to the
defendant. Despite service of summons, the defendant has failed to
appear in the court. On 13/03/2019, none has appeared on behalf
of the defendant and defendant was proceeded exparte vide order
dated 13/03/2019.
EVIDENCE OF THE PLAINTIFF
The Plaintiff, in order to prove his case, has led plaintiff
evidence and examined himself as PW1. PW1 has filed his
evidence by way of affidavit, wherein he reiterated and reaffirmed
the contents of the plaint. PW1 in his testimony has relied upon
the following documents:
1. Plaint is Ex.PW1/A (22 pages).
2. Photocopy of appointment letter dated 25.07.2005 is Ex.PW
1/1 (OSR) (2 pages).
3. Photocopy of confirmation letter dated 01.11.2005 is Ex.PW
1/2 (OSR).
4. Photocopy of letter of appreciation/ increment dated
01.04.2006 is Ex.PW1/3 (OSR).
5. Photocopy of transfer letter dated 01.06.2006 is Ex.PW1/4
(OSR).
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
6. Photocopy of another transfer letter dated 16.11.2006 is
Ex.PW1/5 (OSR).
7. Photocopy of letter of increment dated 30.04.2007 is Ex.PW
1/6 (OSR).
8. Photocopy of another letter dated 30.04.2008 is Ex.PW1/7
(OSR) (2 pages).
9. Photocopy of letter with respect to Annual Review2009 is
Ex.PW1/8 (OSR) (2 pages).
10. Photocopy of letter dated 16.02.2011 is Ex.PW1/9 (OSR).
11. Photocopy of intimation dated 01.04.2014 is Ex.PW1/10
(OSR) (3 pages).
12. Photocopy of letter dated 25.11.2015 is Ex.PW1/11 (OSR) (2
pages).
13. Photocopy of promotion letter dated 23.11.2016 is MarkA (2
pages).
14. Photocopy of mail dated 03.04.2017 is MarkB (2 pages).
15. Photocopy of letter dated 31.07.2017 is MarkC (2 pages).
16. Photocopy of mail dated 07.08.2017 is MarkD (3 pages).
17. Photocopy of mail dated 17.08.2017 is MarkE (2 pages).
18. Photocopy of mail dated 31.10.2017 is MarkF (3 pages).
19. Legal Notice dated 02.11.2017 is Ex.PW1/18 (OSR) (4
pages).
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
20. Photocopy of reply dated 14.11.2017 is Ex.PW1/19 (OSR) (4
pages).
21. Photocopy of rejoinder reply dated 16.11.2017 is Ex.PW1/20
(OSR) (3 pages).
22. Photocopy of full & final settlement is MarkG (5 pages).
23. Photocopy of acknowledgement letter dated 12.12.2017 is
Ex.PW1/22 (OSR).
24. Photocopy of notice dated 21.12.2017 is Ex.PW1/23 (OSR)
(2 pages).
25. Photocopy of letter dated 29.12.2017 is Ex.PW1/24 (OSR).
26. Photocopy of old Handbook is MarkH (11 pages).
27. Photocopy of new Handbook is MarkI (41 pages).
28. Photocopies of 6 salary slips and TDS Projection Statement
are MarkJ (Colly. 9 pages).
29. Certificate under Section 65B of the Indian Evidence Act with
respect to the emails exchanged is Ex.PW1/28 (3 pages).
FINDINGS & CONCLUSIONS OF THE COURT
This Court heard the exparte final arguments advanced
by Ld. counsel for the plaintiff. I have perused the material
available on record. In the present case, the defendant was
proceeded exparte, despite this fact, the plaintiff has to prove its
case on merits and satisfy the court that the plaintiff is entitled for
the relief claimed.
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
The appointment letter dated 25.07.2005 (Ex.PW1/1)
reveals that as per the said appointment letter, the defendant has a
right to terminate the services of the plaintiff by giving one month's
notice or one month's salary, as liquidated damages, in case where
no notice is served. The plaintiff was appointed as a Marketing
Executive for Delhi Branch by the said appointment letter Ex.PW
1/1. The confirmation letter dated 01.11.2005 is Ex.PW1/2. The
plaintiff was confirmed by the said letter and it was informed to the
plaintiff that the plaintiff will be confirmed from 01.11.2005. The
Plaintiff has himself relied upon the said appointment letter dated
25.07.2005 which provides for termination clause.
The plaintiff has claimed the damages and
compensation to the tune of Rs.40,00,000/ on account of his
termination from the services by the defendant vide email dated
31.10.2017. As per the said email, the plaintiff was informed that
the services of the plaintiff have been terminated with one month's
notice pay and gratuity, as per terms of the company. It is also
recorded that the plaintiff was requested to complete the formalities
in order to enable/ process the full & final settlement of dues.
Thereafter, on 02.11.2017, the plaintiff had given the notice Ex.PW
1/18 to the defendant. The said notice was duly replied by the
defendant vide Ex.PW1/19.
The document MarkG reflects the full & final settlement
and as per the said document, the amount of Rs.1,69,283/ was
prepared as full & final settlement of the plaintiff by the defendant.
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
The said full & final settlement includes the salary (which was lastly
paid) of one month's notice as exgratia amount and also other
amount, which includes the gratuity. The said document also
reflects that copy of the Cheque no. 016691, dated 21.11.2017 for
an amount of Rs.1,69,283/, drawn on Kotak Mahindra Bank in
the name of plaintiff of the aforesaid amount was also issued by the
defendant to the plaintiff. The plaintiff has clarified to the Court on
19.11.2019 that the said amount has been encashed by the plaintiff
towards his part claim and without prejudice and under protest.
It appears from the record that the defendant has
decided to terminate the services of the Plaintiff and therefore, first
of all, by the letter MarkB, the defendant has reduced the gross
salary. The perusal of MarkA reveals that the net take home
monthly salary of the plaintiff was Rs.63,930/ and the gross
monthly cost to company (CTC) was Rs.67,530/. The said salary
was reduced by the letter dated 03.04.2017 (MarkB) and statement
attached to said letter reveals that the total gross monthly CTC was
Rs.45,000/ and monthly take home salary was Rs.41,400/. The
said salary of the plaintiff was increased vide letter dated
31.07.2017 (MarkC) and as per the statement attached with the
said letter, the gross monthly CTC was Rs.49,550/ and the net
taken home monthly salary was Rs.45,950/. The said revision was
done w.e.f. 01.07.2017.
On account of victimization at the behest of the
defendant, the plaintiff had suffered a loss of Rs.22,530/ per
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
month for a period from 01.04.2017 to 30.06.2017, the total of the
same comes out to Rs.67,590/. The plaintiff has also suffered a
loss of Rs. 17,980/ per month for a period from 01.07.2017 to
31.10.2017 till his termination, the total of the same comes out to
Rs.71,920/. The defendant had taken into account the last paid
salary for the exgratia amount given for one month's notice period
and the gratuity amount is also accordingly reduced taking into
account the last paid salary. However, the salary has been illegally
reduced by the defendant company without any reason or rhyme
whatsoever. The defendant has suffered a loss of Rs.17,980/ on
account of exgratia amount i.e. one month's notice period. The
Plaintiff has clarified on 20.11.2019 that in case, the gratuity was
calculated on the basis of the CTC of Rs.67,530/, then the gratuity
amount comes to Rs.1,66,853/ and the defendant has only paid
an amount of Rs.1,25,781/ towards the gratuity amount taking
into consideration the CTC of Rs.49,550/. Accordingly, the Plaintiff
has suffered the loss of Rs.41,072/ on account of gratuity as the
defendant has unilaterally and without any basis had reduced the
salary. The victimization of the plaintiff was clearly borne out from
the record and the Plaintiff has suffered the said loss during his
period of employment and accordingly, the Plaintiff has suffered the
following the losses:
1. Loss of CTC for three months i.e. Rs.67,590/
w.e.f. 01.04.2017 to 30.06.2017
2. Loss of CTC for four months i.e. Rs.71,920/
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
w.e.f. 01.07.2017 to 31.10.2017
3. Loss of Exgratia amount i.e. towards Rs.17,980/
one month's notice period
4. Loss of gratuity amount as the same Rs.41,072/
was calculated on the basis of reduced
salary by the defendant company
Total Rs.1,98,562/
There is no dispute that the Plaintiff was in private
employment of the defendant company. As per terms and
conditions of appointment letter his services was terminable by
giving one month's notice or one month's salary in lieu of the notice
period. It is well settled law that even if the termination done by the
employer is illegal and unlawful yet the employee cannot claim
beyond the terms of appointment letter and in this respect I have
profit to refer the Judgment of Hon'ble High Court passed in CS
(OS) No. 673/1997 titled as Shri L.M. Khosla Versus Thai
Airways International Public Company Limited And Anr.
decided on 01.08.2012. The relevant portions of paras no.2 to 8
are reproduced herein for apt understanding:
"2. The plaintiff was an employee of the
defendant No.1company and he was terminated
from the services of the defendant No.1company
by giving a one month‟s pay in lieu of one
month‟s notice for termination of services. The
plaintiff has filed the suit challenging his
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
termination and has claimed various reliefs
which are as under:
"(A) To pass a decree for money awarding
compensation to plaintiff and against
defendants liable jointly and
severally in the sum of ₹
71,81,306/ as claimed in para 26 above
(detailed and digested in Annexure 'H'
(COLLY) or such other amount as
adjudged by Hon'ble Court together with
interest pendentelite and future at a rate
of 24% per annum or such rate as allowed
by Hon'ble Court.
(B) To award such further amount of
compensation ordered/evaluated in terms
of enquiry ordered by Hon'ble Court
relating to plaintiff's entitlement for salary
level as prayed for in para 25 above.
IN ALTERNATIVE TO ABOVE:
To declare that plaintiff's employment as
Manager Liaison and Customer Services
with defendant company was not validly
terminated by defendants under
defendant No.2's letter dated 12.9.1995
(annexed as part of ANNEXURE 'G') and
the same is illegal, invalid, void and a
nullity alongwith declaring that the
plaintiff‟s employment with defendant
company is determinable only upon
plaintiff attaining the age of
superannuation viz. 58 years i.e. on the
ending of 30.4.2004 with all
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
benefits/entitlements in tact/attached
thereto.
(C) To award costs of the suit in favour of
plaintiff and against the defendants 1 and
2 liable jointly and severally.
(D) To pass such other or further orders as
deemed just, fit and proper in the
circumstances of the case."
3. The issues with respect to whether an
employee under a private employment can file a
suit seeking continuation of services with
consequential benefits of pay etc and dis
entitlement of the employer to terminate the
services have been decided by me in three
judgments as under:
(i) Shri Satya Narain Garg through his
legal heirs Vs. DCM Limited and Ors.
in RFA No.556/2002 decided on
5.12.2011.
(ii) GE Capital Transportation
Financial Services Ltd. Vs. Shri Tarun
Bhargava in RFA No.294/2004 decided
on 20.3.2012. An S.L.P. against this
judgment has been dismissed by the
Supreme Court on 3.8.2012 in S.L.P.
No.21723/2012.
(iii) Pawan Kumar Dalmia Vs. M/s. HCL
Infosystems Ltd. and Ors. in RFA
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
Nos.180/2004, 235/2004 and 239/2004
decided on 13.3.2012.
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:
"7. Merely because two views are
possible, this Court will not interfere with
the conclusion arrived at by the Trial
Court, unless the conclusion is illegal or
perverse or causes grave injustice. In case
of private employment, the employers are
fully justified in taking steps for
termination of services, if it finds that the
employee is not upto the mark. Principles
applicable in public law domain do not
apply with respect to employees in private
employment. Employment in private sector
is governed by the terms and conditions of
employment, and unless the termination is
shown to be violation of the terms and
conditions of employment, it cannot be
said that the termination is illegal. In the
present case, in my opinion, since there
was no fixed period of employment so far
as the deceased plaintiff is concerned, the
deceased plaintiff could have been
terminated from services even by a
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
simplicitor notice, assuming even if the
services of the deceased plaintiff were
upto the mark. Further, even if there is
illegal termination of services, it is not
possible to grant damages as claimed
inasmuch as the principle of mitigation of
damages squarely applies. As per this
principle of mitigation of damages
enshrined in Section 73 of the Contract
Act, 1872 even if an employee is illegally
terminated from services, he cannot sit at
home and he must take sufficient steps to
procure alternative employment. The law
in this regard is contained in the judgment
of the Supreme Court reported as S.S.
Shetty v. Bharat Nidhi Ltd., AIR 1958
SC 12. Paras 12 and 13 of this judgment
are relevant and the same read as under:
12. The position as it obtains in the
ordinary law of master and servant is
quite clear. The master who
wrongfully dismisses his servant is
bound to pay him such damages as
will compensate him for the wrong
that he has sustained. "They are to be
assessed by reference to the amount
earned in the service wrongfully
terminated and the time likely to
elapse before the servant obtains
another post for which he fitted. If the
contract expressly provides that it is
terminable upon, e.g., a month's
notice, the damages will ordinarily be
a month's wages... ... ... No
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
compensation can be claimed in
respect of the injury done to the
servant's feelings by the
circumstances of his dismissal, nor in
respect of extra difficulty of finding
work resulting from those
circumstances. A servant who has
been wrongfully dismissed must use
diligence to seek another employment,
and the fact that he has been offered
a suitable post may be taken into
account in assessing the damages."
(Chitty on Contracts, 21st Edition, Vol
(2), p. 559 para. 1040).
13. If the contract of employment is
for a specific term, the servant would
in that event be entitled to damages
the amount of which would be
measured prima facie and subject to
the rule of mitigation in the salary of
which the master had deprived him.
(Vide Collier v. Sunday Referee
Publishing Co. Ltd., 19404 ALL. E.R.
234 at p.237 (A). The servant would
then be entitled to the whole of the
salary, benefits, etc., which he would
have earned had he continued in the
employ of the master for the full term
of the contract, subject of course to
mitigation of damages by way of
seeking alternative employment."
xxxx xxxx xxxx xxxx 9. Surely, these
types of selfserving averments
cannot be held as discharge of onus
of proof of mitigation of damages. The
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
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:
"10. In fact, the subject suit was also
barred by Section 14(1)(c) of the Specific
Relief Act, 1963 which provides that the
contract which is in its nature
determinable, cannot be specifically
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Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
enforced. I have referred to the fact that
the contract was determinable by a one
month‟s notice as per clause 7 of the
terms and conditions of the letter dated
21.4.1998 and therefore the contract
which was determinable by one month‟s
notice cannot be specifically enforced.
What cannot be done directly cannot be
done indirectly i.e. if there cannot be
specific performance of the contract, there
cannot be declaration and injunction to
continue such a service contract. Section
41(e) of the Specific Relief Act, 1963
provides that injunction will not be
granted to prevent breach of the contract,
performance of which could not be
specifically enforced.
11. Therefore, looking at the matter from
the point of view of the contract of
personal service not being enforceable
under Section 14(1)(b) of the Specific Relief
Act, 1963, the contract being determinable
in nature and hence cannot be enforced as
per Section 14(1)(c) of the Specific Relief
Act, 1963 or that injunction could not be
granted to prevent breach of a contract
which cannot be specifically enforced, the
suit was clearly barred and not
maintainable. The judgment of the trial
Court does not refer to the binding
provisions of Sections 14(1)(b), (c) and
41(e) of the Specific Relief Act, 1963. To
complete the discussion on this aspect, I
would once again refer to the recent
judgment of the Supreme Court in the case
Suit No. 122/2018 Page 22 of 30
Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
of Binny Ltd. (supra) and which
specifically provides that in private
contracts i.e. in strict contractual matters,
there does not arise the issue of
applicability of Administrative Law
principles.
12. I have already stated above that even
presuming there was breach of contract,
at best reasonable damages can be
granted and once there is a clause for
termination of services by one month‟s
notice, it can only be one month‟s notice
which can be treated as reasonable
damages inasmuch as parties understood
the period for obtaining of an alternative
employment as a one month‟s notice
periodvide SS shetty's case (supra)."
As already stated above, an S.L.P. filed
against this judgment has been
dismissed.
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
Suit No. 122/2018 Page 23 of 30
Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
pay in lieu of notice........................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:
"15. Finally, I must add that even at best
if the termination of services of Sh. Pawan
Kumar Dalmia was a breach of contract,
parties admittedly being governed by
contractual relations, the maximum effect
of the so called illegal termination would
have been an entitlement to salary of two
months and admittedly the appellantSh.
Pawan Kumar Dalmia on his own showing
has received salary till May, 1999. In any
case, the complete statement of account
with respect to full and final settlement
was given vide Ex.DW1/4 dated
15.7.1999. I cannot agree with the
arguments as raised on behalf of the
appellant that this letter dated 15.7.1999
was not served on the appellant/plaintiff
inasmuch as this letter is accompanied by
the AD card which shows receipt of the
postal article by a person one "Sarita". It
Suit No. 122/2018 Page 24 of 30
Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
is not disputed that the letter dated
15.7.1999 has been sent to the correct
address by the postal department, and
therefore, defendant No.1/respondent
No.1 discharged the onus of proof by filing the AD card. If the appellant wanted to dispute the receipt of the letter dated 15.7.1999, onus of proof was upon him to summon the record from the post office to show that there was no delivery of article at the stated address, however, the appellant did not do so, and would not have done so inasmuch as the stand that the registered letter dated 15.7.1999 was not received was a stand which was false to his knowledge inasmuch as the letter dated 15.7.1999 has been sent to the admitted address of the appellant, and which is also the address being the self leased premises. In view of the aforesaid, the judgments in the case of Green View Radio Service (supra) and Dinanath Shantaram (supra) therefore do not have application to the facts of the present case. Merely denying by the appellant/plaintiff that he has no family member of the name of „Sarita‟ is neither here nor there as such a person „Sarita‟ could have been a servant or any other person found or otherwise living at the address which is admittedly the address of the appellant/plaintiff.
16. The judgments cited on behalf of the appellant in the cases of Jyotsna Raina Suit No. 122/2018 Page 25 of 30 Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
(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 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 Suit No. 122/2018 Page 26 of 30 Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
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.1company questioning or rescinding the termination of services of the appellantSh. Pawan Kumar Dalmia."
8. In view of the aforesaid judgments, the following conclusions in law emerge: A contract of private employment is not similar to the public employment and in such private Suit No. 122/2018 Page 27 of 30 Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
employment there is no scope of applicability of the principles of administrative law/public law.
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.
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 Suit No. 122/2018 Page 28 of 30 Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
claim will stand satisfied in law and he is not entitled to any reliefs as prayed for in prayer clauses in the suit."
(Portions bolded in order to highlight) The aforesaid principles and Judgments were also referred by the Hon'ble High Court in the case of CS (OS) No. 393/2010 titled Shri Naresh Kumar Versus Shri Hiroshi Maniwa & Ors. decided on 05.11.2015.
The Plaintiff is not entitled to any damages for the alleged illegal and unlawful termination but the Plaintiff is entitled to recover the aforesaid loss which was suffered and sustained by the Plaintiff on account of illegal and unlawful reduction of salary. The said reduction of salary was without any reason or rhyme whatsoever. The defendant suffered the aforesaid loss during the period when the Plaintiff remained in services of the defendant and which also includes the exgratia amount i.e. gross salary of one month's notice period and gratuity. RELIEF From the discussions, as adumbrated hereinabove, I hereby pass the following FINAL ORDER
(a) a decree of Rs.1,98,562/ is passed in favour of the plaintiff and against the defendant alongwith pendentelite and future Suit No. 122/2018 Page 29 of 30 Gajendra Gupta V. Karvat Cover More Assist Pvt. Ltd.
simple rate of interest @ 9% per annum till its realization.
(b) The cost of the suit is also awarded in favour of the plaintiff and against the defendant.
(c) The other reliefs, in view of law, as passed by the Hon'ble High Court, based upon the Hon'ble Supreme Court judgments, are not maintainable and the same are rejected accordingly.
Decreesheet be prepared accordingly. File be consigned to Record Room after due compliance. Announced in the open court on this 20th day of November, 2019.
(ARUN SUKHIJA) ADJ07 (Central) Tis Hazari Courts, Delhi Suit No. 122/2018 Page 30 of 30