Delhi High Court
S.P. Bhatnagar vs Indian Oil Corporation on 12 July, 1994
Equivalent citations: 1994IIIAD(DELHI)898, 1994(30)DRJ374
Author: D.K. Jain
Bench: D.P. Wadhwa, D.K. Jain
JUDGMENT D.K. Jain, J.
(1) The appetent (hereinafter referred to as the plaintiff) holding a Civil Engineering Degree from the Stanford university in the Usa got employed as Installation Engineer with the respondent - Indian Oil Corporation Ltd. (hereinafter referred to as the defendant) in April 1960 and became the Head of the Engineering Department. On some charges he was put under suspension on 29 September 1967 and in consequence of a departmental enquiry held against hm by the defendant he was dismissed form service on 24 December 1973 with immediate effect. Alleging that his dismissal was bad in law the plaintiff filed a Suit for a declaration that he continued to be in the service of the defendant and was entitled to all the emoluments, benefits of service and for rendition of accounts in respect of the emoluments and benefits from the date of suspension till reinstatement; or in the alternative for recovery of Rs.5(),()()().00 as damages for wrongful dismissal.
(2) The suit was contested by the defendant and on the pleadings of the parties, the learned Trial Court framed the following issues : "1. Whether this court has got territorial jurisdiction to try this suit? 2. Whether the suit is barred by limitation? 3. Whether the suit for declaration is maintainable? 4. Whether the relief of rendition of account can be claimed by the plaintiff? 5. Whether this court is competent to go behind the finding of the inquiry? 6. If issue No.5 is decided in favor of the plaintiff, whether the inquiry is vitiated for the reasons mentioned in the plaint? 7. If issue No..3 is held in favor of the plaintiff, whether the plaintiff is entitled to the relief of declaration prayed f? 8. To what amount on account of damages, if any, is the plaintiff entitled? 9. Relief. The learned Additional District Judge, hearing the matter, held issues No.1 & 2 in favor of the plaintiff and issues No.3 to 7 against him. On issue No.8 he held that the plaintiff was entitled to Rs.2,250.00 , as one month's salary in lieu of notice, by way of damages and accordingly granted a decree for Rs.2,250.00 in favor of the plaintiff and against the defendant leaving the parties to bear their own costs.
(3) The plaintiff filed an appeal against that decision in this Court. During the pendency of the appeal, an application under Order 41 Rule 27 Civil Procedure Code, being Cm No.794/86 dated 21 July 1986, was filed by the plaintiff, escalating his claim for damages to Rs.25,32,750.00 instead of Rs.50,000.00 claimed in the plaint, with permission to lead evidence to prove it. After notice of the application no reply was filed by the defendant. The application was dismissed by the High Court in appeal on the ground that allowing it would necessitate recording of evidence. The Division Bench disposing of the appeal came to the conclusion that the enquiry held against the plaintiff was bad in law and the finding arrived at therein was based on no evidence and was perverse. The Court held that the plaintiff was entitled to declaration that he continued in service of the defendant till he at- tained the age of superannuation on 28 July 1984 and to full back wages and other benefits on that fooling from the date of dismissal and directed the defendant to compute them Along with ail the retirement benefits including pension etc., and pay it all to the plaintiff within six months. A decree on these terms was passed accordingly. The said decree and order was assailed by the defendant by filing an appeal in the Supreme Court, being Civil Appeal No. 3559/89, wherein, on a statement of counsel for the plaintiff that the plaintiff was agreeable to the disposal of the appeal on the footing that the plaintiff was not entitled to reinstatement or any relief on that basis but that he was entitled to get damages on the ground of wrongful dismissal, in view of the fact that the plaintiff had already attained the age of superannuation, which fact the plaintiff had highlighted in his application, Cm 794/86, seeking permission to lead additional evidence, on the question of damages, which as noticed above, was rejected, the judgment of the High Court was set aside. The Supreme Court, by permitting the parties to lead further evidence on the question of damages, virtually allowed the said application and set aside the decree and order passed by this Court to the extent it directed reinstatement and conferred benefits. The Supreme Court, vide its order dated 18 January 1990, remanded the matter to this Court for determination of the quantum of damages to which the plaintiff was entitled on the ground that his dismissal by the defendant was wrongful and bad in law. While doing so, the Supreme Court made the following observations : "WE may make it clear that, although the learned Additional District Judge has determined the amount of damages at Rs.2250 only, that shall not be treated as binding in any manner and the High Court will determine the quantum of damages in its own discretion and according to law. Parties will be at liberty to lead such evidence on the question of damages as open to them in law before the High Court."
The Supreme Court further directed the defendant to pay a sum of Rs.75,000.00 to the plaintiff which payment was made subject to adjustment against the amount which may be held to be payable by the defendant to the plaintiff.
(4) The sum total is that except for affirming the High Court's finding that the plaintiff's dismissal was had in law, the Supreme Court has, superseded all its findings including dismissal of plaintiff's application Cm 794/86 by the High Court on the ground that allowing it would necessitate recording of evidence. The Supreme Court has further set aside Trial Court's order assessing the damages at Rs.2,250.00 and has further directed the High Court to determine the quantum of damages "in its own discretion and according to law". All this indicates that by implication the Supreme Court has allowed plaintiff's Cm 794/86 filed in the High Court. If not, considering the facts of the case, we would ourselves allow it. In this view of the matter, the plaint stands amended accordingly and the application (CM 794/86) forms part of the pleadings.
(5) Shortly after the remand, the plaintiff filed an application (CM 209/90 dated 29 January 1990) under Order 11 Rule 12 and 14 Civil Procedure Code for a direction to the defendant for discovery, inspection and production of Xi heads of documents stating that the entire relevant authentic documentary material necessary to calculate the damages payable to him was in the possession of the defendant. After notice, some adjournments were sought for and granted to the defendant for reply and thereafter, on request, to see if the, matter could be amicably settled. Compromise talks between the parties started for which, on 12 October 1991, the matter was adjourned sine die with liberty to the parties to move a joint application if there was a compromise. The compromise talks took quite some time but failed. Reporting failure of the talks, the plaintiff later filed an application, under Section 151 Civil Procedure Code being Cm No. 557 of 1992 (dated 27 April 1992) pleading that as he had been supplied facts and figures for the first time by the defendant he is enumerating his claims for damages in supersession of those filed earlier and prayed that the proceedings in his earlier application (CM 209/90) setting out his claims in pursuance of the judgment of the Supreme Court, be revived. The plaintiff filed yet another application (CM No. 1111/92 dated 12 October 1992) under 11 Rules 1,2,4 & 5 Civil Procedure Code seeking leave to deliver interrogatories to Mr Bk Bakshi, Director Marketing of the defendant with a direction to file reply on affidavit. Another application (CM No.1203/92) was also filed by the plaintiff under Section 151 Civil Procedure Code, praying for taking on record the interrogatories filed Along with it. Notice of these was issued. Filing of reply was delayed by the defendant who later filed an application (CM 329/93) under Section 151 Cpc seeking extension of time to collect information, peruse the records and take instruction for drafting reply in plaintiff's application under Order 11 Civil Procedure Code (CM 1111/92) on which further time for reply was granted. Cm 1111/92 was ultimately heard on 16 April 1993. While disposing of the application the Court observed that the interrogatories, annexed with the application, were relevant and accordingly directed these to be delivered and served on the head of the Personnel Department of the defendant, for him to file an answer to the interrogators on affidavit within eight weeks. The defendant, was permitted to file reply-affidavit by its General Manager(Personnel) instead of Mr. B.K.Bakshi. Ultimately an affdiavit of one Mr. A.N.Sinha, General Manager(Personnel) by way of reply to the interrogatories was filed by the defendant. Apart from claim statement in his Cm 794/86 dated 21 July 1986, revaluating his claim at Rs.9,93,250.00 besides Rs.15,39.500.00 as interest @ 15-1/2% p.a. thereon, after remand by the Supreme Court, the plaintiff also filed two statements of claim in the matter (1) with his application dated 8 May 1990. laving claim and seeking decree for Rs.70,09,700.00 (detailed in Annexure A.I) plus interest at 18% p.a. from the dale of decree till realisation and (2) in Cm 557/92, dated 27 April 1992 wherein the plaintiff modified the nomenclature of the heads of claims set up earlier and enhanced he claim amount to Rs.71,46,268.00 with the remark that the claims set out in it vere in supersession of claim for damages filed earlier.
(6) On the above statements of claims two rival contentions have been raised: 1) by the defendant that the plaintiff having initially, in the plaint, limited his claim for damages to Rs.50,000.00 , it is not open to him to escalate the said quantum in his statements filed with various applications and (2) by the plaintiff - that the enumeration of claims and their quantification in his last application (CM 557/92) is by way of supplement to and not in supersession of the claims set up by him in his initial application (CM 794/86), filed under Order 41 rule 27 CPC) and his later application (CM 209/90). These cross contentions in the matter of claims for damages have to be noticed to be rejected: of the defendant in that the whole matter was before the Supreme Courl, (where, on agreement between the parties), the scope and quantum of damages claimed in the plaint was enlarged and Rs. 25,000.00 by way of interim order at the time of grant of special leave to appeal and Rs.75,000.00 in the final order were directed to be paid by the defendant to the plaintiff,' adjustable against the award of damages, for quantification of which the matter was remanded to this Court. Similarly the contention raised by the plaintiff that the statement of claim filed last was by way of supplement and not in supersession to earlier claims in view of categorical statement in Cm 557/92 makes little sense. Both the claim statements have been filed with applications (CM No.209/90 and 557/92) under Section 151 Civil Procedure Code in which no amendment of claim in the original plaint or as modified in terms of Cm 794/86, allowed as above, is sought for. These cannot be entertained and are dismissed. Even otherwise, the major heads of claim in these statements are those in Cm 794/86), though the nomenclatures of some heads of claims and the claim amounts have been changed and escalated. It would be just and proper to quantify the damages on the basis of claims in Schedule 'A' to Cm 794/86, which are set down below: "(1) From Oct. 1967 to Dec 1973. Average basic salary I would have drawn Rs.2,700 p.m. i.e. R.S.1200 x 75 months = Rs.90,000.00 (2) From Jan. 1974 to July 1984 - 127 months@ average emoluments of Rs.5,000.00 pm in the capacity of M.D i.e. Rs.5000 x 127 months = Rs.6,3.S,01)U.00 (3) From May 1960 to July l984-290 months. For every one year of service, privilege leave due in 24 years. (I was not allowed to take privilege leave during 7-1/2 years of service because of heavy load and urgency of projects, as I was handling the ' functions of two Heads of the Departments) 24 months @ average salary of Rs. 4000 p.m. i.e. Rs.4000.00 x 24 months = Rs.96,000.00 (4) Leave Travel Concession for self and family during 24 years of service, once in 2 years @ average of Rs.4,000.00 i.e.Rs.4,000.00 x 12 =Rs.48,000.00 Medical expenses for self and family from Jan. 1974 to July 1984 @ average Rs.4000.00 per year x 10 = Rs.40,000.00 (6) Employers contribution to Provident Fund on average salary of Rs.3,000.00 from Jan.74 to July 84. i.e.250 x l27 =Rs.31,750.00 (7) Gratuity : 24 years of service @ salary of Rs.3,500.00 p.m. i.e.Rs.3,500/ - x l5 =Rs.52,500.00 Sum total of above (1) to (7) i.e. Rs.9,93,250.00 (8) Inters @ 15-1/2% on the amount retained by Indian Oil for the period of 19 years would work out to about : i.e. Rs.9,93,250.00 x 15.5% x 10 years average = Rs.l 5,39,500.00 Hence total claim: = Rs.9,93,250.00 + Rs.l5,39,500.00 = Rs.25,32,751.00 " Itadds: "THE above claim does not include legal expenses incurred in court cases, which were proven absolutely false by the law courts. The above claim also does not include compensation for loss of prestige, mental agony, loss of health and social life during the past 19 years of my life. The stigma of dismissal from service on account of false charges deprived me of all opportunities of getting suitable employment in India and abroad. With my Engineering qualifications from Stanford University and two years of practical training in Usa and 15 years of experience in private and public sector companies-in India would certainly have enabled me to procure a suitable job."
(7) The short question for consideration thus is to what damages is the plaintiff entitled to for his wrongful dismissal, in the circumstances.
(8) Evidence on the matter of damages was directed to be and was recorded by a Deputy Registrar of this Court. The plaintiff, in support of his case, besides himself has examined five witnesses, vi/." his brother (P.W.I-Dr. Madan Mohan Bhatnagar), his one time subordinate (P.W.2- Ravi Airy), his two neighbours (P.W.3-Dr. Ranjit Majoomdar and Public Witness . 4-R.G. Keshwani) and a Cardiologist (P.W.5 - Dr. P.Tandon of Aiims, New Delhi). No witness was, however, produced by the defendant.
(9) It would be useful at this stage to notice the connotation of the word "damage" and "damages" and the broad and common categories of the latter term. The term 'damage' means the harm for loss suffered or presumed to be suffered by a person as a result of some wrongful act of another and in common parlance, the sum of money awarded by the Court to compensate damage is called 'damages'. Damages are pecuniary compensation recoverable by a person Who has suffered loss, detriment or injury to his person, property or rights, consequent to'any wrongful act or omission or negligence of another. These may be compensatory or punitive, depending upon whether these are awarded for actual loss suffered or as punishment lor outrageous conduct and to deter future transgression. Damages fall in various categories. These may be nominal, actual or compensatory, consequential or exemplary. Nominal-damages are awarded merely to vindicate a right. Actual or compensatory damages are awarded to compensate the loss or injury actually suffered. In a way it is a re-compose to loss or injury suffered by a person at the hands of another. In extent and quantum these are calculated to equate the loss or injury actually suffered. Compensatory or actual damages consist of both general and special damages. General damages are the natural, necessary or the usual result of the wrongful act or occurrence in question, which the law implies in every breach of contract or violation of legal rights. Special damages are compensation for special damage which is presumed by law to be natural but not necessary and inevitable result of the wrongful act, to be proved strictly and are not too remole. Consequential damages do not flow directly or immediately from the act of the party, but only from some of the consequences or results of such acts. Exemplary damages are punitive in nature, increased in scale, awardable over and above what will barely compensate the injured party where the wrong done to him was aggravated by circumstance of violence, oppression, malice, fraud or wanton or wicked conduct of the wrong doer. These are intended to solace the plaintiff for mental anguish etc. If it is proved that a defendant has acted willfully, maliciously or fraudulently, the plaintiff may be awarded such damages.
(10) We may now proceed to examine the damages claimed by the plaintiff in his Cm 794/86, enumerated above. These are for salary and perks for the period from October 1967 to july 1984, for the post he held at the lime of suspension/dismissal and in the capacity of Managing Director of the defendant lo which post, on the plea of legitimate expectations, he lays his claim with effect from January 1974. He also claims for the entire period compensation for privilege leave, L.T.C., Medical expenses, employer's contribution to Provident Fund and gratuity. In support of his claim for back wages, which for the plaintiff include salary and perks, stated above, for the entire period of his balance service from the date of his suspension till the dale of his superannuation, reliance was placed by Mr. N.K. Kaul, learned counsel for the plaintiff on a number of judgments of the Supreme Court to the effect that on the order of termination or dismissal of an employee being found to be illegal and bad in law, the employee is entitled to reinstatement with full back wages. If, however, reinstatement is not considered desirable, he will be awarded full back wages plus future wages till he attains his superannuation, as if his service had remained un-interrupted. This is settled proposition of law and it is unnecessary to notice all the authorities cited in support. In the instant case the plaintiff has already attained superannuation on 28 July 1984. All that he is entitled in this category is what he would have been paid by the defendant as if he had continued in their service all through till the date of his superannuation. The entire period till the last mentioned date would thus fall in the category of back wages.
(11) Dwaling with the question of awarding relief of back wages to an employee, in Hindustan Tin Works Vs. Its Employees, , the Supreme Court, relying on Susannah Sharp Vs. Wakefield, 1891 Ac 173 at page 179) observed as follows : "IN the very nature of things there cannot be a strait-jacket formula for awarding relief of back wages. All relevant considerations wilt enter the verdict. More or less, it would be a motion addressed to the discretion of the Tribunal. Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure. At that stage the Tribunal will exercise its discretion keeping in view all the relevant circumstances. But the discretion must be exercised in a judicial and judicious manner,"
(12) To prove the quantam of back wages, the plaintiff as his own witness has stated that due to his wrongful dismissal he has been deprived of his salary, including increments and promotions till his superannuation in July 1984 and is thus entitled to back wages to the tune of Rs. 8,26 lakhs. He stated that the above calculation is based on Annexures B1 to B4, filed with Cm 557/92, which annexures, he claims to have been made by the defendant and supplied to him. In cross-examination, he stated that the aforesaid annexures had been given to him by the Committee which was constituted to negotiate the settlement during 8 to 10 meetings which he had with them. He admitted that the annexures did not bear any signatures of the members of the negotiating Commities Further asked, if the defendant had at any stage (during negotiations) admitted the said annexures being correct, the plaintiff stated that he saw no reason for such an admission by the officers, who attended the negotiation meetings with him. He denied the suggestion that the offer of Rs.2 lakhs towards settlement was accepted by him. As noticed above, the plaintiff after discovery and inspection proceedings, also got interrogatories issued to the defendant under Order 11, Cpc, to state on oath what amount from the dale of plaintiff's suspension to the date of his superannuation was payable by the defendant to him towards his remuneration and perquisites etc. A xerox copy of the statement of remuneration prepared by one Mr. B.K.Bakshi of the defendant, based on past records, during plaintiff's meetings with three General Managers of the defendant over compromise talks, was appended by the plaintiff with the application. According to the reply-affidavit of Mr. A.N.Sinha, General Manager (Personnel) at the Headquarters of the defendant, filed by the defendant, the plaintiff was due the following amounts: Basic Salary i) Balance amount due for the suspension period from Sept., 1967 to Dec., 1973 Rs. 87,250.00 ii) From Jan'1974 to July'84 -Basic Pay of Rs.2250.00 in the pay-scale of Rs.1800-100-2000-125-2250 having been revised twice on 1.8.74 and 1.8.82, as stated, the total amount due as basic pay for the above period Rs.3,37,430.00 4,24,680.00 2. Allowances (for the aforesaid period) i) Dearness Allowance Rs.29,420 ii) House Rent Allowance Rs.19,^50 iii) Reimbursement of Car Maintenance Expenses. Rs.24,975 iv) Bonus Rs. 4,054 v) Leave Travel Concession Rs. 5,408 vi) Tea/Coffee Allowance Rs. 1,114 84,321.00 3. Terminal Benefits i) Provident Fund (For the period from Sept.1967 to July'84) Rs.42,500.84 ii) Gratuity Rs-36,000.00 iii) Leave Encashment Rs. 17.640.43 96141.27 6,05,142.27 Except for privilege leave, the above details in the reply affidavit cover all the heads of claims in plaintiff's application Cm 794/86. There is no evidence on record as to what amount, if any, the plaintiff was entitled to as compensation for the claim for privilege leave, set up in the said claim statement. The claim as to it is rejected accordingly.
(13) Thus, as per the defendant's own version a sum of Rs.6,05,142.27 was payable to the plaintiff by way of back wages on the footing that he would have continued in the same post. The finding aforesaid is based on official record maintained by the defendant. It was, however, contended by Ms. Pallavi Shroff, learned counsel for the defendant that: (1) it was obligatory for the plaintiff to have taken 'steps to mitigate the loss and disclose what he had earned thereby to which extent the damages payable were deductible; and (ii) that in view of the judgment of the Supreme Court in O.P. Bhandari Vs. I.T.D.C. Ltd. , the plaintiff should not be paid full back wages and allowances etc. (14) Taking the second objection first, O.P.Bhandari's case, is distinguishable on facts. In that case the plaintiff held a managerial post of a public sector undertaking, to which Article 12 of the Constitution of India is attracted. His dismissal was set aside before his superannuation, which was eight years away. He was due back wages and was also to be paid future wages for the rest of his service period. In view of the peculiar fads of the case, it was held that though the plaintiff-employee ought to have been awarded full salary and allowances, which would have accrued to him till the date of superannuation, which was more than 8 years away, it would be un-reasonable to award 8 years salary and allowances as lump sum compensation in lieu of re-instatement, because : "(I)To do so would tantamount to paying to the appellant every month 20 percent over and above what he would have earned if he was continued in service without doing any work as the lump sum payment of 8 years' salary invested at 15 per cent interest (it being the current rate of interest) would yield a monthly recurring amount equivalent to his current monthly salary 'plus' 20 percent. (ii) To do so would be tantamount to paying to him his present salary etc. plus 20 per cent more every month not only till his date of retirement but till his death(if he lives longer) and also to his heirs thereafter, in perpetuily. (iii) Besides, the corpus of the lump sum amount so paid as compensation would remain with him intact."
(15) The authority is clearly distinguishable as in that case the plaintiff employee had not superannuated, as in the case in hand, and besides back wages he was also to be paid future wages for the period till he attained the age of superannuation. Here the plaintiff has already superannuated and is to be paid wages already due. As noticed above, wages for the period already run out do not include any element of future wages. The ratio of the decision in O.P. Bhandari's case would thus, not apply and the formula applied in that case cannot be applied in the present case, (16) The second objection to the award of damages equivalent to the full back wages is that the plaintiff had made no effort to mitigate the loss which might have been occasioned to him on account of his dismissal from service. Reliance for it is placed on a number of judgments and in particular on a majority view of Diplock and Russell L.H in Lava rack Vs. Woods of Colchester Ltd., 1966 (3) All B R 683 and Dhulipudi Namayya Vs.Union of India, Air 1958 Ap 533.
(17) There is no quarrel with the settled position in Law that it is the duty of the plaintiff to mitigate the damage/loss caused by the defendant's wrong action and while assessing the damages, the principle of mitigation has to be borne in mind but it is equally well settled that the obligation placed on the plaintiff in this behalf is to the extent that he should act reasonably not only in his own interest but also in the interest of the defendant and make a reasonable and proper effort to keep down the damages. He is not required to lake such steps even at the cost of embarrassment or injury to himself or to reputation. Whether he has done so or not is a question of fact in each case.
(18) On this point, the plaintiff's brother, PW.1, in his cross-examination, stated that the plaintiff had been doing some consultancy work after his dismissal but in the absence of No objection Certificate from the defendant Corporation, he could not get any big consultancy work. The plaintiff, when cross-examined, stated that alter his dismissal, he floated a company by the name of M/s Abha Engineering Company and did some business with a total turn over of Rs. 4 lakhs in 10 years. Out of the said amount he could not recover Rs.2 lakhs from a contractor, vi/z.., Vijay Tank despite his request to the defendant Corporation to help him in Realizing the said amount and had ultimately written it off as bad debt. Obviously expenses must have been incurred for undertaking and executing the contracted work. No suggestion to the contrary was put. The veracity of the statements on the point of steps for mitigating loss has not been assailed. No evidence in rebuttal has been produced by the defendant either. There was no suggestion in cross-examination as to what amount, if any, was earned by him in the transactions. The conclusion thus is that the plaintiff as a prudent man did take steps to mitigate the loss but with no tangible result.
(19) We are, therefore, of the view that the plaintiff is entitled to Rs.6,05,142.27p. as full back wages, perks and pensionary benefits till the date of his superannuation on 28July 1984, as computed by the defendant in its reply-affidavit in answer to the interrogatories. Exception was, however, taken to reference to this reply-affidavit on the plea that the interrogatories have not been used by the plaintiff in terms of Order 11 Rule 22 CPC. The objection is untenable. As noted above, the reply-affidavit was filed after notice and a mandatory direction by the Court in its order dated 16 April 1983 to file it. During the course of arguments umpteen references were made to the interrogatories and the reply-affidavit by the parties. It cannot, therefore, be said that the reply- affidavit on interrogatories has not been used in evidence. We are of the opinion that the objection that the reply-affidavit has not been formally tendered in evidence is in the circumstances of the case hyper-technical and a strict adherence thereto would impinge the ends of justice. The objections raised against payment of full back wages, thus, fail and we are of the opinion that the plaintiff is entitled to Rs.6,05,142.27 p. by way of back wages.
(20) PLAINTIFF'S case is that his junior Mr. S.B. Budhiraja was promoted and appointed as the Managing Director of the defendant Corporation and that by his clean and meritorious track record and performance, duly recognised as such, but for the criminal proceedings initiated against him by the defendant at the instance of Mr. N.N. Kashyap, its Chairman, he legitimately expected to have been promoted to the post of Managing Director in the year 1974 and thus he is entitled to all the benefits of that post, including higher pay and allowances etc. It is common ground that the plaintiff's junior, Mr. S.B. Budhiraja was promoted and appointed Managing Director in the year 1974. The claim on this account is, however, denied by the defendant on the plea that the post of Managing Director is a selection post, always made by the Public Enterprises Selection Board and no person can claim it as of a right. It is not disputed that the post of Managing Director is not a mere promotional post but selection to it is made on the basis of merit-cu-seniority and appointment is made by the President of India. An employee has no right to promotion. He has only a right to be considered for promotion. The promotion to a post, particularly to a selection post, depends upon several factors. The plaintiff's contention is that he was not considered for the higher post due to his involvement in the three criminal cases in which he has either been discharged or acquitted or the proceedings dropped.
(21) The point for consideration, therefore, is whether an acquittal of an employee in a criminal case parse entitles him to appointment to a higher selection post. In Union of India & Ors. Vs. K.V. Janki Raman & Others, , it has been held that the rule that when an employee is completely exonerated meaning thereby that he is not found blameworthy in the least and is not visited with the penalty even of censure, he has to be given the benefit of the salary of the higher post Along with other benefits from the date on which he would have normally been promoted but for the disciplinary/criminal proceedings, is not an inflexible one and the authorities must be vested with the power to decide whether the employee deserves any salary for the intervening period and if he does, the extent to which he deserves. It is further held that it is not possible to enumerate exhaustively all the circumstances under which such considerations may become necessary and to hold that in every case when an employee is exonerated in disciplinary/ criminal proceedings he should be entitled to all salary for the intervening period is to undermine discipline in the administration and jeopardise public interest. In that view of the matter it cannot be said that plaintiff's mere acquittal from a criminal charge entitles him to claim the higher post of Managing Director as of right.
(22) It was strenuously urged by Mr. N.K. Kaul, learned counsel for the plaintiff that the plaintiff had a clean record of .service, his performance in the post held by him having been appreciated in the form of advanced increments etc., he having been acquitted of the charges levelled against him. he had a reasonable and legitimate expectation of being selected for the higher post, he is entitled to the salary and perks of the post of Managing Director from the date in the year 1974, when his junior was appointed, to the date of his superannuation, viz.., 28 July 1984.
(23) The question of reasonable and legitimate expectation came up for consideration of the Supreme Court in the case of Food Corporation of India Vs. Kumdhhenu Cattle field Industries (1993) 1 Sco 77 and it was held that every legitimate expectation is a relevant factor requiring due consideration in a fair decision making process. Whether the expectation of the claimant is reasonable or legitimate in the context is a question of fact in each case. Whenever the question arises, it is to be determined not according to the claimant's perception but in the larger public interest where more important considerations may outweigh what would otherwise have been the legitimate expectation of the claimant. These factors are to be considered by the Selection Committee which may and should examine if in the event of his acquittal it would be desirable in public interest to select him for higher responsibility. Several factors, which cannot be exhaustively enumerated, may fall for consideration of the Selection Board: like the nature of charges of which the plaintiff has been acquitted, the grounds of his acquittal as to whether the acquittal is on merit or for want of production of vital possible/ available evidence and the responsibilities of the higher post requiring higher standards of performance and integrity etc. All this is for the consideration of the Selection Board which obviously is not possible in the present case at this stage. In the present case, the plaintiff was convicted in the rock cutting case, his conviction was upheld by the High Court and his appeal to the Supreme Court (since reported as S.P. Bhatnagar & Anr. Vs. State of Maharashtra, ) was allowed , inter alia, on the ground of "non-examination by the prosecution of Ramrao, Joshi, Vora and Patel who were material witnesses for the un-folding of its case", leaving some yawning gaps in the evidence which the Court found very difficult to bridge.
(24) This shows that the case against the plaintiff failed, inter alia, for want of production of evidence, which acquittal cannot be said to be a certification of innocence or complete exoneration of the plaintiff. There were, thus, circumstances which perhaps would reasonably have deferred the Selection Board frormselecting the plaintiff to the higher post.
(25) Under this head the plaintiff has claimed an additional amount of Rs. 8 lakhs as difference between the emoluments payable as Manager(Engineering), the post he held at the time of his dismissal and that of the Managing Director of the defendant, to which pos he expected to be appointed. There is no empirical data or proof, much less cogent, on record to quantity the difference. It has not been shown from the record to what additional amount and how the plaintiff was entitled to.
(26) We are thus of the opinion that the plaintiff is not entitled to any amount under this head.
(27) The plaintiff also claims an amount of Rs.40,000.00 as medical expenses for self and family from January 1974 to July 1984 at an average of Rs.4,000.00 per year. There is no evidence on record to support plaintiff's aforesaid claim. It was, however, argued that the plaintiff was innocent; his dismissal was unwarranted, and arbitrary, which caused him mental torture, loss of reputation and health for about 10 years of the balance period of his service, for which he was entitled to Rs.44 lacs, claimed by him in his Cm 557/90. We have dismissed Cm 557/90 and the above contention raised is untenable. Since we have been addressed on this claim at length by Counsel for the parties, we propose to deal with it.
(28) The plaintiff has attempted to show that after his suspension and dismissal he suffered from angina due to stress. On the point of ailment he relies on the testimony of his brother (P.W.I) and Dr. P. Tandon (P.W.5) who have deposed about it. Public Witness .1, cross-examined, admitted that their father also suffered from heart ailment. Public Witness .5 Dr. Tandon, a colleague of plaintiff's brother (P.W.1) in Aiims, stated that the angina is a multi-factorial disease and the major causes of the said disease are high blood pressure, smoking, high cholesterol, diabetes and stress and that 'stress' could be the major factor of the disease of the plaintiff. He states having formed this opinion on the basis of some previous prescriptions, issued by one Dr. K.K. Datey, based at Bombay, who has not been produced to prove the actual Cause of angina in the case of the plaintiff. Plaintiff also claims to have consulted a number of Doctors'at Bombay and to have been admited in the hospitals there. He has led no evidence to prove his said assertion. Questioned about the expenses incurred on consultation and treatment for the ailment, he stated that though he was issued some receipts for payments made, he never thought it necessary to make a claim for that. There is thus no proof of what amount, if any, the plaintiff expended on his said ailment.
(29) As regards his plea of harassment and mental torlure, it is stated that the proceedings against him continued for a pretty long lime causing harassment and pain; he was finally acquitted therein and is entitled to damages as such. But the fact remains that in the rock cutting case he was convicted which conviction was upheld by the High Court and it was only in the Supreme Court that he succeeded, inter alia, on ground of prosecution's failure to produce material evidence. It cannot, therefore, be said precisely or with certainty that the proceedings initiated against him were false and malicious, resulting in his harassment and mental lorlure. The circumstance of dismissal, resulting in hurt feelings parse furnishes no cause for damages on this score.
(30) It has been held in S.S. Shetty Vs. Bharat Nidhi Ltd, that the Master who wrongfully dismisses his servant is bound to pay such damages as will compensate him for the wrong that he has sustained. No compensation can be claimed in respect of the injury done to the servant's feelings by the circumstance of his dismissal.
(31) On the plea of loss of reputation, the plaintiff has produced two neighbours at Bombay, Public Witness . 3 and Public Witness .4 who have merely staled that on his suspension they wondered what could be the cause for it and their visits to each other became less frequent and after his dismissal they avoided him. His brother Public Witness , stated that after his dismissal the plaintiff avoided meeting people. Plaintiff also stated likewise. Their testimony on the point inspires little confidence. Even otherwise no damages could be awarded for the alleged humiliation, embarrassment and loss of reputation. In a case based on breach of contract, as in this case, a plaintiff is entitled to such damages as would compensate him for the loss suffered through the breach and no more.
(32) From the above resume of evidence we are not satisfied that the plaintiff is entitled to any damages for claims under this head.
(33) The plaintiff in his application Cm 794/86, has claimed Rs. 15,39,500.00 by way of interest at 15-1 /2% p.a. for a period of 19 years. As noted above, the application was filed on 21 July 1986. The plaint was presented on 20 December 1976. Thus, the plaintiff claims pre-suit and pendente lite interest. Prior to the commencement of the Interest Act, 1978, with effect from 19 August 1981, for grant of pre-suit interest, the Interest Act, 1839 would apply. In Thawardas Vs. Union of India, , the Supreme Court held that the following, among others, conditions must be fulfillled before interest under the said Act could be awarded: "(1) there must be a debt or a sum certain; (2) it must be payable at a certain time or otherwise; (3) these debts or sums must be payable by virtue of some written contract at a certain lime; (4) there must have been a demand in writing stating that interest will be determined from the date of the demand."
(34) Thus, to claim pre-suit interest, a notice in writing staling that interest will be demanded from the dale of the demand was necessary. There is no material on record to indicate that there was any demand in writing by the plaintiff for interest. The legal position remains the same even after the commencement of the new Act of 1978. No notice in terms of Section 3 of the Interest Act, 1978 having been alleged or proved as served on the defendant, the plaintiff is not entitled to pursuit interest even after the commencement of the said new Act.
(35) However, as regards pandemic lite and future interest, we feel that the plaintiff is entitled to it. The suit was instituted in December 1976. The emoluments comprising basic salary and allowances etc. claimed and due to the plaintiff for the purpose of pandemic lite interest fall in two broad categories: (i) the part that fell due prior to the institution of the suit in December 1976 and (ii) that which became due after the institution of the suit at different points of lime as salary etc. fell due every month. The basic salary for the period from September 1967 to December 1973, amounting to Rs.87,250.00 relates to the period prior to the institution of the suit. For the period from January 1974 to July 1984, the basic salary shown as due @ Rs2,250.00 p.m. is Rs.3,37,430.00 Out of this, salary for three years became due prior to the institution of the suit. .This works out to Rs.81,000.00 . Thus, the basic salary accruing to the plaintiff prior to the institution of the suit comes to Rs.1,68,250.00 (Rs.87,250.00 + Rs.81,000.00 ). The allowances payable on the defendant's own showing for the period from September 1967 to July 1984 are to the tune of Rs.84,321.00 . There is no bifurcation to indicate what amount out of it became due before the institution of the suit. The year of the institution of the suit almost falls midway. Considering the facts and circumstances of the case, on a rough estimate, we think, that half of it should be taken as having become due prior to the institution of the suit. Thus, the total amount due and payable to the plaintiff, regarding basic salary and allowances, before the institution of the suit comes to Rs. 2,00,310.00 On this amount the plaintiff would be entitled to interest @6% p.a. from the date of institution of the suit on 20 December 1976 to 18 August 1981. The Interest Act, 1978, came into force with effect from 19 August 1981 when the rate of interest was increased to the highest of the maximum rates at which interest may be paid on different classes of deposits by the scheduled banks. During the relevant period the rates of interest have been fluctuating, it is not possible to specify the rate of interest for different periods. Taking an overall view of the mailer, we direct that with effect from 19 August 1981 to the date of realisation the plaintiff will be entitled to interest at the rate of 11% p.a. on the aforesaid amount.
(36) Apart from it,'as noted above, basic salary and allowances also became due for the second period viz.., from January 1977 to July 1984. After excluding the basic salary and allowances for the period from September l967 to December 1976, as above, the balance salary and allowances, which became due to the plaintiff up to the date of superannuation work out to Rs.3,08,691.00 (Rs.5,09,001.00 - Rs.2,00,310.00 ), on which amount the plaintiff will be entitled to pendente lite and future interest. During this period salary and allowances became due each month but there is no bifurcation as to what amount precisely became due every month. Considering the total period involved, being over seven years, we feel that on a rough estimate the plaintiff should be allowed pendente lite interest on the aforesaid amount of Rs.3,08,691.00 for a total period of four years @ 11@ p.a. Besides, on the said amount of Rs.3,08,691.00 , the plaintiff will also be entitled to interest @ 11% p.a. from the date of superannuation till payment or realisation whichever is earlier. Similarly on the balance amount of Rs.96,141.00 , representing the terminal benefits, he will be entitled to interest @ 11% p.a. from 29 July 1984 to the dale of realisation. We hold accordingly.
(37) Before parting with the judgment, we may also deal with the claim of the plaintiff for exemplary costs amounting to Rs. 11,20,000.00 as set out in his Cm 557/90, which also was argued before us by both the counsel. It was urged by the plaintiff that he was entitled to exemplary costs and vindictive damages as malicious and deliberate false cases and enquiries were initiated against him and Cbi raids were conducted at the instance of the said Mr. N.N.Kashyap (later Chairman of the defendant) but nothing incriminating was found. According to him, it was at the instance of Mr. N.N.Kashyap that the Cbi raid was conducted and he was prosecuted, and it was on Mr. Kashyap's instance that he was falsely implicated in them and humiliated. To prove that Mr. Kashyap was inimical to him and had threatened to involve him in false cases the plaintiff has deposed that Mr. Kashyap called him on or about 15 October 1966: threatened to teach him a lesson and have his house searched. Cross-examined, he stated that the said threat was given orally about which he made a mention the same day to his junior colleagues, viz.., Mr. K. Doraiswamy, Mr. R.H. Vohra and others. For reasons best known to the plaintiff, which are not indicated on the record, the plaintiff chose not to produce them. Thus there is no corroboration to the threats being held out by Mr. Kashyap to the plaintiff. The evidence on record does not establish that Mr. Kashyap had any ill-will or malice against the plaintiff, the plaintiff claims to have visited Delhi 60 times for attending to the cases. It is possible that he must have visited Delhi many a times but this by itself, and the evidence stated above, would not entitle him to claim exemplary costs.
(38) Exemplary damages are punitive in nature, awardable beyond the bare compensation to a plaintiff, where the wrong done to him is aggravated by malicious and fraudulent conduct of the wrong doer. In an action for malicious prosecution, the plaintiff must prove that: (i) he was prosecuted by the defendant; (ii) the proceedings complained of terminated in his favor, (iii) the prosecution was initiated against him without any reasonable or probable cause and (iv) the prosecution was instituted with a malicious intention.
(39) In the present case, the plaintiff was prosecuted and acquitted but it cannot be said that he was prosecuted without any reasonable or probable cause. Reasonable and probable cause is an honest belief in the guilt of the accused. The burden to prove that there was want of reasonable or probable cause is on the plaintiff. It is nol for the defendant to establish that there was a reasonable and probable cause. No evidence has been led by the plaintiff to show that he was prosecuted without reasonable or probable cause. The fact that the plaintiff has been acquitted is not prima facie evidence that the charge against him was unreasonable or improbable. The third ingredient is thus, nol established. As already noticed, it is further not proved that the plaintiff was prosecuted with a malicious intention.
(40) The fact that one of the criminal proceedings initialed against the plaintiff by the defendant in rock cutting case resulted in his conviction, which was upheld by the High Court, makes it difficult to believe that the proceedings initiated against him were false and malicious. It was also held in Addis Vs. Gramophone Company Ltd. (1908-10) All Er at page I that exemplary damages could not be awarded for wrongful dismissal, 'We are, therefore, of the view that it is not a fit case where exemplary damages should be awarded to the plaintiff. In the result, though it is very difficult to compute the damages awardable to the plaintiff with mathematical exactitude but keeping in view all the facts and circumstances of the case, we are of the opinion that the plaintiff is entitled to a sum of Rs.6,05,142.27p as damages on account of his wrongful dismissal with interest, calculated for the amounts, periods and at the rates as aforesaid. Accordingly, we pass a decree for Rs.6,05,142.27 p. with interest aforesaid and costs in favor of the plaintiff and against the defendant. The decree sheet shall be prepared on making good the deficiency in the Court Fee by the plaintiff within four weeks from today. The defendant shall be entitled to deduct form the decretal amount the amount(s) paid by it to the plaintiff pursuant to the directions issued by the Supreme Court.