Allahabad High Court
I.C.I.C.Bank Ltd.Through Its Managing ... vs Krishna Kumar Gujrati on 3 December, 2020
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Court No. - 5 AFR Case :- FIRST APPEAL FROM ORDER No. - 60 of 2018 Appellant :- I.C.I.C.Bank Ltd.Through Its Managing Director And Ors. Respondent :- Krishna Kumar Gujrati Counsel for Appellant :- Prashant Kumar Counsel for Respondent :- K.K.Gujrati [In person] Hon'ble Attau Rahman Masoodi,J.
The checkered history which this case carries over a period of last about ten years may be briefly stated as under.
The sole respondent-plaintiff who was an employee of ICICI Bank Limited, while holding the post of Chief Manager, Band-I, was transferred from Lucknow to Hyderabad vide order dated 10.5.2011. This order was issued from the regional office (north) of the Bank at Delhi and served upon the respondent-plaintiff at Lucknow.
The respondent-plaintiff feeling aggrieved against the order of transfer approached this Court by filing Writ Petition No. 964 of 2011 but on the strength of a preliminary objection that the ICICI Bank was not a State within the meanings of Article 12 of the Constitution of India, therefore, challenge to the transfer order within the scope of writ jurisdiction failed and while dismissing the writ petition on 26.5.2011, this Court left it open for the respondent-plaintiff to raise his grievance before the appropriate forum.
The respondent-plaintiff chose to institute a suit i.e. R.S. No. 166/2011 against the order of transfer passed by the appellant-defendant on 10.5.2011 before the Civil Judge, Senior Division, Mohanlalganj, Lucknow. The suit was subsequently transferred from the court of Civil Judge, Senior Division, Mohanlalganj, Lucknow to the court of Civil Judge, Senior Division, Lucknow where it was renumbered as Regular Suit No. 971 of 2011. Later on, the appellant/employer proceeded to terminate the services of the respondent by order dated 7.6.2011 giving him two months' salary in lieu of notice. This part of the cause was also incorporated in the plaint by filing an amendment application which was allowed. The record reveals that an application under Order VII Rule 11 CPC was filed by the appellant Bank whereby the very maintainability of the suit in the light of Section 14 read with Section 41(e) and (h) of the Specific Relief Act was questioned. The application was allowed and the suit was dismissed by judgement/decree dated 2.12.2016.
The judgement/decree rendered by the court of Civil Judge, Senior Division, Lucknow in Regular Suit No. 971 of 2011 on 2.12.2016 came to be challenged in the first appeal under Section 96 CPC before the District Judge, Lucknow where it was registered as Regular Civil Appeal No. 17 of 2017. The first appeal so filed by the respondent-plaintiff was allowed and the proceedings were remitted back to the trial court for adjudication of the suit on merit.
This judgement passed by the first appellate court remitting the matter back to the trial court on 17.8.2017 was assailed before this Court in FAFO No. 306 of 2017. The FAFO filed by the Bank was allowed on 19.9.2017 remanding the matter back to the first appellate court for deciding the Regular Civil Appeal in consonance with the mandate of Order XLI Rule 31 CPC. The first appellate court below keeping in view the judgement rendered by this Court on 19.9.2017 has finally decided the first appeal by means of the impugned judgement dated 22.11.2017, whereby, the matter is remitted back to the trial court again for decision of the civil suit on merit.
The present FAFO under Section 104 read with Order XLIII Rule 1(u) CPC has questioned the remand order inter alia on the ground that the suit instituted by the respondent-plaintiff is barred by law.
In the context of challenge as above, It may be noted that the amended plaint prayed for the relief as under:
(i) That a decree be passed in favour of the plaintiff declaring the transfer order dated 10.5.2011 transferring the plaintiff from Lucknow to Hyderabad and the impugned order dated 7.6.2011 terminating the services of the plaintiff be declared as non est and illegal and the plaintiff be declared to be deemed in service w.e.f 1.6.2011;
(ii) That a decree of permanent injunction be passed in favour of plaintiff restraining the defendants from transferring the plaintiff from Lucknow and proceeding in furtherance of the impugned order dated 7.6.2011;
(ii-a) A decree of recovery of the unpaid salary for the months June 2011 to the completed month of September 2011 less the amount paid as two months basic salary towards notice period besides the pendente lite salary and future salary with all the promotional and annual increments and other benefits on being declared to be deemed in service by this Hon'ble Court."
Heard Sri N.K. Seth, learned Senior Counsel assisted by Sri Prashant Kumar, Advocate and the respondent-plaintiff who appeared in person at length.
Sri N.K. Seth would contend that the relief sought in the plaint essentially seeks to enforce a right emerging out of a personal contract which is clearly unenforceable under the provisions of Section 14 read with Section 41(e) and (h) of the Specific Relief Act, hence the suit was rightly dismissed. The submission in nutshell is that a contract of service which essentially is personal contract, is not enforceable under the provisions of Specific Relief Act and for the termination of such a contract, the remedy for damages alone would lie before the competent civil court. The position of law, according to learned counsel, is well settled by the apex court in the following cases:
Sl Particulars Citation
1.
Executive Committee of Vaish Degree College v. Laxmi Narain & others (1976) 2 SCC 58
2. Nandganj Sihori Sugar Co. Ltd. v. Badri Nath Dixit & others (1991) 3 SCC 54
3. Integrated Rural Development Agency v. Ram Pyare Pandey (1995) Supp. 2 SCC 494
4. M/s Pearlite Liner Pvt. Ltd. v. Manorama Sirsi (2004) 3 SCC 172
5. State Bank of India v. S.N. Goyal (2008) 8 SCC 92 The second submission urged by learned counsel for the appellant is that the ICICI Bank being a private body has already been held not to be a State within the meaning of Article 12 of the Constitution of India, therefore, the respondent-plaintiff is not entitled to the protection of three exceptions propounded by the apex court in the case of State Bank of India v. S.N. Goyal. To impress upon the Court that ICICI Bank is not a State within the scope of Article-12 of the Constitution of India, the following decisions were cited:
Sl Particulars Citation
1.
Nandganj Sihori Sugar Co. Ltd. v. Badri Nath Dixit & others (1991) 3 SCC 54
2. Integrated Rural Development Agency v. Ram Pyare Pandey (1995) Supp. 2 SCC 494
3. Federal Bank Ltd. v. Sagar Thomas & others (2003) 10 SCC 733
4. Indian Airlines Corporation v. Sukhdeo Rai (1971) 2 SCC 192
5. ICICI Bank v. Lakshmi Narayan 2008 (3) LNN 320 Manu/TN/0056/2003
6. Krishna Kumar Gujrati v. ICICI Bank Decided on 26.5.2011 [Writ Petition No. 964 (SB) of 2011] Allahabad High Court The third submission which revolves the same point is that the application filed under Order VII Rule 11 CPC has wrongly been rejected by the appellate court below once the suit was legally non-maintainable for the relief sought therein.
In support of this submission, the following case laws have been cited:
Sl Particulars Citation
1.
T. Avrivandandam v. T.V. Satyapal (1977) 4 SCC 467
2. Dhartipakar Madan Lal Agarwal v. Rajiv Gandhi AIR 1987 SC 157
3. Saleem Bhai v. State of Maharastra (2003) 1 SCC 557 The respondent-plaintiff who appears in person has ably argued his case by referring to a large number of cases needless to mention but in substance the argument put forth may be noted as under.
The respondent-plaintiff has made a serious effort to impress upon the Court that he being a regular employee in the Bank ought to have been understood differently by the trial court as compared to those who are appointed for a fixed period, therefore, the appellate court below has rightly appreciated the fine distinction in the nature of employment calling for remedial protection. According to the respondent-plaintiff, an employee who is not protected within the three-fold exceptions carved out by the apex court in Goyal's case (supra) is nevertheless entitled to maintain a suit for revival of the contract of employment once his appointment is regular but not for a fixed period.
The respondent-plaintiff argued vehemently that this material distinction alters the very essence of express contract termination whereof by a juristic person, in violation of the principles of natural justice, would entitle him for reinstatement in service. The action against a regular employee taken in violation of the principles of natural justice, it is strongly contended, deserves protection within the ambit of Article 21 of the Constitution of India, therefore, the relief sought in the suit is maintainable for decision of the suit on merit.
For the sake of clarity it may be relevant to extract the relevant passage of S.N. Goyal's judgement on the aspect of personal contract. Para-11 is thus extracted below:
"11. Where the relationship of master and servant is purely contractual, it is well settled that a contract of personal service is not specifically enforceable, having regard to the bar contained in section 14 of the Specific Relief Act, 1963. Even if the termination of the contract of employment (by dismissal or otherwise) is found to be illegal or in breach, the remedy of the employee is only to seek damages and not specific performance. Courts will neither declare such termination to be a nullity nor declare that the contract of employment subsists nor grant the consequential relief of reinstatement. The three well recognized exceptions to this rule are:
(i) where a civil servant is removed from service in contravention of the provisions of Article 311 of the Constitution of India (or any law made under Article 309);
(ii) where a workman having the protection of Industrial Disputes Act, 1947 is wrongly terminated from service; and
(iii) where an employee of a statutory body is terminated from service in breach or violation of any mandatory provision of a statute or statutory rules.
There is thus a clear distinction between public employment governed by statutory rules and private employment governed purely by contract. The test for deciding the nature of relief damages or reinstatement with consequential reliefs is whether the employment is governed purely by contract or by a statute or statutory rules. Even where the employer is a statutory body, where the relationship is purely governed by contract with no element of statutory governance, the contract of personal service will not be specifically enforceable. Conversely, where the employer is a non-statutory body, but the employment is governed by a statute or statutory rules, a declaration that the termination is null and void and that the employee should be reinstated can be granted by courts. (Vide : Dr. S. Dutt vs. University of Delhi AIR 1958 SC 1050; Executive Committee of UP State Warehousing Corporation Ltd. Vs. Chandra Kiran Tyagi 1970 (2) SCR 250; Sirsi Municipality vs. Cecelia Kom Francies Tellis 1973 (3) SCR 348; Executive Committee of Vaish Degree College vs. Lakshmi Narain 1976 (2) SCR 1006; Smt. J. Tiwari vs. Smt. Jawala Devi Vidya Mandir AIR 1981 SC 122; and Dipak Kumar Biswas vs. Director of Public Instruction AIR 1987 SC 1422)."
Interestingly, the resting of authority to transfer an employee from one place to another or his termination from service by the appellant-employer is not in dispute. It is only when the authority is exercised by way of disciplinary action, the rule of opportunity becomes significant. The essence of master and servant relationship is that of personal contract in both the situations and it is immaterial whether the employment is regular or for a fixed period.
As is evident from the relief clause extracted hereinabove, the respondent-plaintiff has assailed both the orders passed by the appellant-defendant viz the order of transfer from Lucknow to Hyderabad passed on 10.5.2011 as well as the order of termination from service issued on 7.6.2011. This Court may note that as per the express service contract, the respondent-plaintiff was holding a transferable post, therefore, the transfer order passed by the employer was not a cause classified under any of the disciplinary measures defined in the rules applicable to the employees of the ICICI Bank.
The disciplinary action comprises of three types of measures viz cautionary action, deterrent action and capital action. The order of transfer from Lucknow to Hyderabad is not covered under any of the three measures mentioned above. Even if the action of transfer is arbitrary or mala fide, whether an employee of the Bank would have a remedy against the transfer of his services from one place to another, a question does arise. The answer as per the plain reading of the rules is in negative.
An employee who freely accepts the employment inclusive of a clause contemplating transfer of services from one place to another, looses his right to question such a cause. There was equally no impediment pleaded in the plaint subject to which the employer was bound to exercise the power of transfer. Therefore, respondent-plaintiff did not have a cause of action at all, insofar as the order of transfer passed on 10.5.2011 is concerned. In the circumstances of the case, the objection under Order VII Rule 11 CPC raised on the strength of the express bar envisaged under Section 14 read with Section 41 (e) and (h) of the Specific Relief Act coupled with the lack of cause of action, was rightly allowed. An employee whether regular or for a fixed period can not be subjected to servitude against his will and it is for this reason that the relief for reinstatement consequent upon the termination of master and servant relationship would not lie. The remedy for damages available, if any, was not prayed in the plaint.
It is also relevant to note that termination from service is a measure classified as capital action. Any order passed by the disciplinary authority by way of a disciplinary action is amenable to appeal within the period of limitation. The hierarchy of authorities before which the appeal lies is specified in the rules. The appellate authority is under a bounden duty to decide such appeals by a detailed and speaking order. Finality is attached to the reasoning recorded by the appellate authority.
In the present case, the termination of employment by order dated 7.6.2011 was not taken up in appeal on any grounds whatsoever, therefore, the infringement of procedure or the action amounting to punishment in the given set of circumstances was never raised. The respondent-plaintiff at his own risk had chosen to challenge the order of transfer from Lucknow to Hyderabad by filing a civil suit for which neither there was a cause nor a remedy. A whistle-blower employee was as helpless as any other employee on transfer of his services and had no right to challenge such an order on the ground of mala fides or otherwise. The authority to transfer the employees from one place to another by a competent authority was absolute. It is for this reason that the appellant-defendant decided to dispense with the services of the respondent-plaintiff on payment of two months' salary in lieu of notice. The action taken, according to the Bank, is not punitive. Even if the order of termination from service was punitive, the respondent-plaintiff never questioned the same on any ground before the appellate authority. According to the appellant Bank, the matter understood as capital action, unless taken up in appeal by the respondent, the entitlement for damages on any ground whatsoever, perished by the self inflicted injury of the respondent-plaintiff.
Insofar as the termination of master and servant relationship is concerned, undoubtedly the power was vested in the appellant Bank and so long as the same was questioned through a notice or appeal, a cause for claiming damages would be doubtful. The amendment application even if allowed by the trial court prior to the disposal of application under Order VII Rule 11 was inconsequential and the objection as to the maintainability of suit raised by the appellant Bank was rightly dealt with by the learned trial court.
The appellate court below while dealing with the three-fold question has firstly misdirected itself to frame the points of determination and secondly the distinction drawn on the aspect of regular employee and contractual employee is superfluous. The nature of contract in either of the situations remains one and the same. The cause of action was bound to be considered in the light of the master and servant relationship and the conditions of service which the first appellate court has failed to appreciate. To opine that ICICI Bank was a State within the meaning of Article 12 of the Constitution of India is clearly in the teeth of judgements rendered by the apex court as well as by this Court. Maintainability of the application filed under Order VII Rule 11 CPC rightly concluded by the trial court has erroneously been set naught by the first appellate court below. Thus, the judgement rendered by the first appellate court impugned herein being erroneous deserves to be set aside and the judgement/decree passed by the trial court dismissing the suit calls for revival.
Even if it is assumed that the action of termination from service was punitive and resorted to without following the principles of natural justice, this by itself was a relevant consideration for the award of damages which the respondent has failed to claim but revival of service contract on that account and his reinstatement with all consequential benefits as prayed for in the plaint is misconceived. The trial court had rightly appreciated the position of law but for the reasons put on record, the first appellate court clearly fell in error to upset the trial court judgement. In my considered opinion, the impugned judgement passed by the first appellate court below deserves to be set aside and is accordingly set aside. The judgement passed by the trial court is upheld.
The operative part of this judgement was pronounced in the open court for the reasons to follow, hence the benefit of limitation would be available to the parties up to the date when this judgement stands uploaded on the official website of the High Court.
The FAFO stands allowed. Parties to bear their own cost.
Order Date :- 3.12.2020 Fahim/-