Karnataka High Court
Goetze (India) Ltd. Rep. By Chief ... vs Sri H.R. Thimappa Gowda S/O H. Ramaiah ... on 24 July, 2006
Equivalent citations: 2007(4)KARLJ654, 2007 (1) AJHAR (NOC) 205 (KAR.) = 2006 (5) AIR KAR R 337 (DB), 2006 (5) AIR KAR R 337
Bench: S.R. Bannurmath, A.S. Bopanna
JUDGMENT
1. The appellants are before this Court assailing the judgment and decree dated 17.1.2004 passed by the Court of the XXXV Addl. City Civil Judge, Bangalore city in O.S. No. 7383/1999. By the judgment impugned in this appeal, the Civil Judge, apart from allowing IA-VI permitting the plaintiff to amend the plaint to include the claim for damages, has declared the order of termination dated 30.6.1999 marked as Ex.P13 in the suit as illegal, unjust arbitrary and the same is null and void and not binding on the plaintiff. The learned Civil Judge has further directed reinstatement of the plaintiff to the same post which be was holding on the date of termination and damages of Rs. 7,65,216/- has been awarded to the plaintiff. By the said Judgment, the Civil Judge has further directed that the Court fee of Rs. 56,665/- payable by the plaintiff shall be paid by defendant Nos. 1 and 2. The appellants are therefore aggrieved by the said judgment and decree passed by the learned Civil Judge. While examining the correctness or otherwise of the judgment, we propose to refer to the parties in the same rank as referred to before the Civil Court for the sake of convenience.
2. The brief facts leading to the suit before the Civil Court are, The plaintiff, who is a diploma holder in Metallurgy, joined the defendant/organisation as a Junior Engineer on 10.01.1980 and thereafter worked in different sections in the defendant/Management as referred to in the plaint The plaintiff contends that due to his sincere work, he was promoted as Engineer (JME) and further promotions were earned by him and accordingly he was working as Assistant Manager (foundry production) at the point of his termination. In support of the contention of the plaintiff that his efficient services have been recognised by the defendant/management, the plaintiff has referred to the promotions, increments and the certificates issued to him in this regard both for his individual performance as well as being a member of the team to which certificates were issued. The plaintiff has thus contended that he had rendered meritorious service for a period of 19 years and 5 months and at this point on 2.7.1999 to his shock and surprise, he was served with the order of termination of his service and the order of termination bearing reference No. PERS/DGMP/46395/BIL/99 dated 30.6.1999 was enclosed along with the communication dated 2.7.1999. The said order was accompanied by notice pay in respect of the said termination. The plaintiff therefore contends that the order of termination issued to him casts stigma since the same indicates that he has been terminated for unsatisfactory work. At that point, he was aged 50 years, his chance of getting an alternate employment elsewhere was remote and he had a family consisting of his wife and daughters who were attending school and college. In attacking the said order of termination the plaintiff contended that the said order of termination was malafide inasmuch as the same had been issued as a counter blast since the plaintiff had initiated criminal proceedings against senior officers on the charge of misappropriation/embezzlement of the funds of the housing co-operative society which was formed for the benefit of the employees working in the defendant-management The plaintiff who was a member of housing society had initiated the said criminal cases against the office bearers of the society who were the said senior officers, which was registered in CC No. 8296/1998 before the Court of IV CMM, Bangalore. The plaintiff farther contended that the third defendant viz., Sri B.V.S.S. Sastry, the then Deputy General Manager (Mfg) in the defendant/management along with other officers had indulged in threatening the plaintiff to withdraw the said complaint and as such the plaintiff was constrained to file another criminal miscellaneous petition in No. 184/1999. The plaintiff therefore alleges that at the first instance, the defendant/management led by the said Deputy General Manager summoned the plaintiff to his chamber on 19.3.1999 at about 2.30 p.m. and directed the plaintiff to sit there everyday in the chair provided in the room next to his chamber and the plaintiff further contends that he has been harassed further only as a sequell to pressurise the plaintiff to withdraw the criminal complaints. When all the said pressure tactics had failed, the defendants issued the termination order dated 30.6.1999.
3. The contention of the plaintiff therefore is that the said order of termination though claimed to have been issued by the defendants exercising the power under Clause 15(a & e) of the Service Rules and as per the terms and conditions of his appointment order, the same is not an order of termination simplicitor but is a punitive one made in retaliation. The plaintiff has further attacked the said Clause 15(a & e) as also being opposed to public policy and being contrary to Section 23 of the Indian Contract Act.
4. On service of notice, the defendants appeared and on behalf of the first defendant/management a detailed written statement was filed. Apart from contending with reference to the legal position that the decree of mandatory injunction for reinstatement etc cannot be granted since the first defendant is a public limited company incorporated under the provisions of the companies Act, 1956, the defendants also denied that the order of termination is actuated by malafides. They have further attempted to justify that they have merely terminated the services of the plaintiff in accordance with the service rules governing the defendant as well as the plaintiff and in this regard the defendants contended that the services of the plaintiff were terminated as his performance was not found satisfactory. Since the same is not for any misconduct, what was required under the service Rules was only payment of notice pay in lieu of notice along with the letter of termination. The defendants therefore contended that the order of termination does not suffer from any infirmity and therefore did not call for interference by the Court. These were the pleadings of the parties before the Civil Court on the merits of the case which were put forward by either side.
5. At this stage, it is necessary to notice that the plaintiff on the said pleadings had prayed for declaration that the order of termination dated 30.6.1999 is illegal, unjust, arbitrary and the same is null and void and not binding on the plaintiff. As a consequential relief, the plaintiff had sought mandatory injunction directing the defendants 1 and 2 to forthwith reinstate the plaintiff to the post which he was holding at the time of termination of his services along with all service and monetary benefits. The plaintiff had also prayed for issue of permanent injunction not to disturb his services otherwise than in due course of law. Lastly, the plaintiff had prayed for an order for costs of the suit and exemplary damages in his favour under the circumstances of the case.
6. Based on the said pleadings and the prayer sought, the Civil Judge framed as many as four issues, i.e.,
i) Whether suit brought in the present from is barred by the provisions of the Specific Relief Act, 1963 as contended by 1st defendant ? ii) If not, does plaintiff prove order of termination dated 30.6.1999 issued by the 2nd defendant is illegal, unjust, arbitrary, null and void and not binding on him ?
iii) If so, plaintiff entitled for the relief of declaration and relief of mandatory and permanent injunction as prayed for ?
iv) What decree or order ?
7. In order to prove their respective case, the plaintiff examined, himself as PW.1 and marked Exhs. P1 to P17. The defendants though did not mark any documents examined one witness viz., Sri V.T. Narayan. Based on the evidence adduced before the Court, the learned Civil Judge proceeded to assess the same with reference to the relief claimed. At this stage, it is required to notice that in view of the contention taken by the defendant/management that an order of reinstatement cannot he granted in the facts and circumstances of the present case, the plaintiff filed an application on 12.12.2002 praying to amend the prayer in the suit seeking for payment of damages as a consequential relief to the main relief sought for declaration of the termination order as null and void. Specific reference to the said amendment application along with date is made since the said application which was numbered as IA-VI has been allowed on 17.1.2004 when the suit was disposed of and the amendment is said to have been carried out on 28.1.2004 and the defendant/management who is the appellant in this appeal has contended extensively with regard to this aspect By the said amendment, the plaintiff inserted the prayer to pass judgment and decree for damages and to hold separate enquiry to assess the damages.
8. In this appeal, the defendant/management while assailing the judgment and decree dated 17.1.2004 attacked the same with regard to all the reliefs granted ie., declaration of termination order as null and void and reinstatement of the plaintiff and also the grant of damages.
9. Sri Gowrishankar, learned Counsel appearing for the appellant strenuously contended that in the first instance, the learned Civil Judge had erred in declaring the termination order as null and void. It is his contention that the terms of employment between plaintiff and defendants was contractual in nature and as such the respondents had the right to terminate such employment by issue of one month's notice or one month's pay in lieu thereof in accordance with the Service Rules governing them. Since the defendant/management is neither a statutory body nor a public sector undertaking, it was merely the termination of the contract between the plaintiff and the defendant management and there was no violation of any statutory rights. He further urged that the right of the management to terminate the services of the plaintiff for any reason whatsoever contemplated under the rules is absolute in nature and as such it was open for the defendant management to terminate the services even without assigning any reason whatsoever. Even otherwise, the termination order impugned in the suit indicates that the services of the plaintiff was unsatisfactory and therefore the defendant management did not deem it proper to continue his services. He contended that the mere indication in the order of termination that his services are unsatisfactory would not attach any stigma and therefore even on this ground the learned Civil Judge ought not to have interfered with the order of termination. The learned Counsel further contended that even assuming for a moment that the learned Civil Judge had the jurisdiction to interfere with an order of termination of such nature, the same can only be by way of declaration and damages, if any, and it cannot in any event be in the nature of enforcing a contract of personal service. In this regard, the learned Counsel submitted that the Civil Judge ought not to have granted an order of reinstatement since granting reinstatement or even a declaration to the effect that the employee is deemed to be in service is in the nature of enforcing contract of personal service and therefore the order impugned is not sustainable. With regard to the grant of damages, the learned Counsel argued that even though the established position of law is that on declaration of an order of termination as null and void, the Court has the power to award damages, in the instant case, the plaintiff had not prayed for award of such damages and therefore the learned Civil Judge ought not to have awarded the damages. In this regard, the learned Counsel stated that the very fact that the plaintiff subsequently sought for amendment of the prayer made in the suit to seek for damages would indicate that the plaintiff had not at the first instance sought for damages but had sought to introduce the said prayer by making an application on 12.12.2002. The said application came to be allowed only on 17.1.2004 when the suit was disposed of and the amendment was subsequently carried out on 28.1.2004. By referring to the said dates, the learned Counsel submitted that even assuming for a moment that the amendment could be allowed at any stage the prayer sought to be introduced by such amendment would indicate that the prayer for damages was time barred, since the termination was on 30.6.1999 and the prayer made for damages was only on 12.12.2002. The learned Counsel also argued that the relevant Article of the Limitation Act which applies to the present case is Article 78 and as such even assuming damages is to be granted, the limitation would be one year and therefore the learned Counsel contended that even the amendment allowed and the damages granted pursuant thereof by the Civil Judge is opposed to law.
10. On the contention that when the service rule permits termination simplicitor by issue of notice, the said rule is valid and the termination made thereunder cannot be interfered and such rule can be held to be bad only in respect of a public sector undertaking which answers the definition of 'State' as contemplated under Article 12 of the Constitution of India, the learned Counsel refers to the decision in the case of O.P. Bhandari v. Indian Tourism Development Corporation Limited and Ors. (1986)II LLJ 509. In the present case, the defendant/management is not a public sector as already stated and therefore the learned Counsel contended that the termination could not be held to be bad. Learned Counsel also referred to the decision in the case of Indian Airlines Corporation v. Sukhdeo Rai to indicate that in a relationship of master and servant, termination could be made even without providing the opportunity of hearing. The learned Counsel with regard to the alternative contention that even assuming that such termination is held to be bad, the contract of personal service cannot be enforced, relied upon the following decisions.
i) Executive Committee of Vaish Degree College, Shamli and Ors. v. Lakshmi Narain and Ors. (1976)2 SCC 58
ii) Jitendra Nath Biswas v. Empire of India and Ceylone Tea Co. and Anr. (1989) 3 SCC 582
iii) Dr. Bool Chand v. Chancellor, Kurukshetra University
iv) Kusum Gupta v. Haryana State Small Industries And Export Coporation, Chandigarh
v) Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Ors. v. V.R. Rudani and Ors. AIR
vi) Karnataka Bank v. T. Gopalakrishna Rao ILR 1994 KAR 230
vii) Dipak Kumar Biswas v. Director of Public Instruction and Ors.
viii) Nandganj Sihori Sugar Co. Ltd. Rae Bareli and Anr. v. Badrinath Dixit and Ors. 1991 AIR SCW 1280
ix) Integrated Rural Development Agency v. Ram Pyare Pandey 1995 Suppl.(2) SCC 495
x) Executive Committee of Uttar Pradesh State Warehousing Corporation Lucknow v. Chandra Kiran Tyagi
xi) Pearlite Liners Pvt. Ltd. v. Manorama Sirsi 2004(100) FLR 797 (SC) Sri Gowri Shankar, learned Counsel after referring to the same also contended that even though the legal position is that the employee could he compensated by way of damages, the plaintiff not having sought for the damages initially had only thereafter made belated application on 12.12.2002 which was in fact barred by time and on the proposition that the time barred amendment should not be allowed, the learned Counsel places reliance on the following decisions:
i) Vijendra Kumar Goel v. Kusum Bhuwania
ii) Pirgonda Hongonda Patil v. Kalgonda Shigonda Patil and Ors.
iii) Vineet Kumar v. Mangal Sain Wadhera
iv) Modi Spinning & Weaving Mills Co. Ltd. v. Ladha Ram & Co.
Further, the learned Counsel placed reliance on the case of Sampat Kumar v. Ayyakannu and Anr. to contend that even if such amendment is allowed, the same should not relate back to the date of the suit but should only be from the date of the application. In the present case, he contended that even if it is to be allowed, the same should be made applicable from the date the amendment is sought and in such event the plaintiff would not be entitled to the quantum of damages which is presently awarded in the impugned judgment.
11. On the contrary, Sri C.M. Poonacha, learned Counsel appearing for the plaintiff/respondent in his effort to sustain the impugned judgment and decree passed by the Civil Court argued at the outset that the learned Civil Judge was justified in declaring the order of termination as null and void. In this regard, the learned Counsel submitted that the order of termination dated 30.6.1999 would smack of arbitrariness since the plaintiff who had served the first defendant/management as a permanent employee for a period of 19 years 5 months has been unceremoniously removed by the order of termination without any basis to indicate bow the work of the plaintiff was unsatisfactory. The learned Counsel argued that the use of the word 'unsatisfactory work' in respect of an employee who had rendered such length of blemish free service would definitely cast stigma and would disentitle him for future employment elsewhere and as such the said order of termination, on the face of it, is not sustainable. Even otherwise, the said order has been passed with a malafide intention which could be clearly gathered from the surrounding circumstances. To demonstrate this aspect of the matter, learned Counsel referred to various certificates which have been issued by the management and marked as Exhs.P1 to P9 to indicate that the management itself has accepted that the services of the plaintiff was much more than satisfactory and the first defendant/management has come up with the story that the services are not satisfactory due to the fact that the plaintiff had initiated criminal complaints against the senior Officers of the first defendant management, one of them being the third defendant The said criminal complaint was with regard to the irregularities alleged to have been committed by the said Officers in the discharge of their functions as the executive committee members of the House Building Cooperative Society which has been formed for the benefit of the employees of the first defendant/ management Learned Counsel after taking us through the plaint averments, the evidence of PW. 1 and also the cross examination of DW1 and further with reference to the copies of the complaints which are marked as Exhs.P10, 11, 14 to 16 would indicate that after the first complaint was filed by the plaintiff; he was called and pressurised by the management to withdraw the said complaint and in this regard had also harassed the plaintiff by not providing work in the company and was forced to sit idle. Ultimately since the plaintiff did not yield to such pressure tactics and threat and when he initiated the second complaint in this regard, the first defendant/management had issued the order of termination and as such even if the said order of termination had been issued invoking the service rules of the company, the said order is due to malafide intention. Therefore, the said order cannot be sustained. Learned Counsel therefore contended that the findings and the conclusion of the learned Civil Judge in so far as declaring the said order of termination as null and void does not call for interference. With regard to the consequential relief that should follow on such declaration, the learned Counsel however realising the established position of law, did not labour much in attempting to sustain the order for reinstatement of the plaintiff. However, the learned Counsel strenuously contended that once there is a declaration with regard to the illegality committed by the management in passing the order of termination, it is incumbent on the Court to award damages to the plaintiff to mitigate the damage suffered by the plaintiff due to such illegal termination. in this regard, the learned Counsel, in rebuttal of the contention put forward by the learned Counsel for the defendant/appellant that the claim for damages was barred by time and that such amendment ought not to have been allowed, at the outset, contended that the claim for damages was not made for the first time by filing an application for amendment Learned Counsel referred to the prayer made in the plaint wherein apart from the other consequential prayer for mandatory injunction etc the plaintiff has sought for award of exemplary damages. The learned Counsel thereafter referred to the amended prayer which has been made in the plaint as an alternative consequential relief seeking for judgment and decree for damages and in this regard to hold a separate enquiry to assess the damages, and therefore contended that the damages had been already sought for and it is for the quantification of the same, the plaintiff had sought for further enquiry by way of amendment Further the learned Counsel argued that in any event, the prayer made by the plaintiff seeking damages cannot be said to be barred by time. In this regard, he submitted that the decisions referred to by the learned Counsel for the defendant/management would not be relevant since the damages is to be granted as a consequential relief and the same is provided for in Section 40 of the Specific Relief Act (the Act for short). The learned Counsel made specific reference to the proviso to Sub-section 2 of Section 40 of the Act which clearly indicates that the application can be allowed at any stage. Learned Counsel also stated that the grant of damages is a power which is inherent in the Court and once the Court comes to the conclusion that the termination is bad, the consequential relief of damages is almost automatic. In support of the said contention, the learned Counsel referred to the decisions in the case of Leach and Company Ltd v. Jardine Skinner and Co. (1937 SCR 438), V.R. Nathan v. Mac Laboratories (P) Ltd , Rau v. Corporation, City of Bangalore , M/s. Hoysala Blow Moulders (India) Limited v. M/s. Surath Goods Transport Service 1997 (1) KAR. L.J. 303.
12. Learned Counsel for the plaintiff also relied on the decision in the case of S.S. Shety v. Bharat Nidhi Ltd. with regard to the aspect of assessment and quantification of damages. The learned Counsel argued that since it is the established legal position that the damages could be awarded, in fact the plaintiff should be aggrieved for the reason that the damages awarded is on the lower side and the plaintiff was entitled to higher damages. The learned Counsel contended that as a consequence of the illegal termination, the plaintiff is unemployed even as of now and therefore he is entitled to a larger compensation, which can be claimed by the plaintiff without even filing a separate appeal or cross objection as held by the Supreme Court in the case of Ravinder Kumar Sharma v. State of Assam AIR 1999 SC 3571.
13. Learned Counsel concluded by contending that the only remedy for the plaintiff was to approach the Civil Court seeking for declaration and to seek for damages and the Civil Court has rightly granted such declaration and damages, The damages awarded is on the lower side and if he is not entitled to reinstatement, the plaintiff can establish that he would he entitled for higher amount as damages.
14. In view of the contentions raised, pleadings referred and the evidence adduced before the Civil Court by both the parties, the following questions arise for our consideration:
i) Whether the learned Civil Judge was justified in declaring the termination order dated 30.6.1999 which was impugned in the suit as null and void ?
ii) If the learned Civil Judge was justified in that regard does the law empower the learned Civil Judge to order reinstatement of the plaintiff into service?
iii) If the legal position is that, no such reinstatement or declaration for continuance in service could be issued, could the amendment be permitted and the damages as quantified in the suit be justified ?
iv) Whether the relief seeking for quantification of damages by way of amendment in the present case is barred by limitation ?
v) If not, the relevant date on which the relief sought by way of amendment should take effect?
15. Since the questions raised above are interrelated they are considered together.
To consider the question as to whether the order of termination dated 30.6.1999 issued by the first defendant management to the plaintiff is sustainable and as to whether the learned Civil Judge was justified in declaring the same as null and void, the perusal of the relevant portion of the judgment passed by the learned Civil Judge with regard to the second issue framed in the suit made it apparent that the learned Civil Judge has extensively referred to the pleadings of both the parties, the oral evidence adduced on behalf of the parties and also the documents which were marked and were relevant to the said issue. We have also referred to the said materials and while doing so, it is seen that the plaintiff has extensively pleaded with regard to the length of service rendered by him in the first defendant/company, the promotions and increments which have been accorded to him and also the appreciation certificates issued to him during the tenure of service. That apart the plaintiff has also pleaded with regard to the criminal proceedings initiated by him which according to the plaintiff led to the termination order being issued to him. These pleadings have been substantiated by the plaintiff while he was examined as PW.1. The plaintiff has also got marked Exhs.P1 to P16 to demonstrate that the defendant management at this point, all of a sudden could not have stated that his services are unsatisfactory and also to indicate that what actually led to the order of termination by fitting it into the service Rules is the initiation of the criminal complaint against the senior Officers. Though he has been cross examined at length, the same does not in any way dislodge the evidence rendered by the plaintiff. In fact the cross examination does not even extract any answer from the plaintiff with regard to the alleged unsatisfactory work nor is there any suggestion to the plaintiff so as to indicate that the termination was for unsatisfactory work. In fact the first defendant/management in the cross examination has not laid any foundation for their case as to what is the actual dissatisfaction that they had noticed with regard to the performance of his work. Therefore, the learned Civil Judge was justified in relying on the said unimpeached evidence and we also find that the evidence rendered by the plaintiff indicates that the motive for termination was with malafides as stated by him. Further, the evidence of DW.1 also does not disclose sufficient evidence on behalf of the management to justify the termination of the plaintiff for unsatisfactory work. In fact there is hardly anything in the examination in chief of Sri V.T. Narayana, who was examined as DW.1. In the cross examination of the said witness, the plaintiff has made several suggestions to the said witness to demonstrate what actually led to his order of termination. By this the plaintiff has clearly indicated that the reason for termination was by way of victimisation and not due to unsatisfactory work. According to us, the said witness who was working as a General Manager in the first defendant/company was not the competent witness to be examined by the management considering the issue that was involved. The said witness was the General Manager Personnel and Industrial Relations at the relevant point Therefore, he can at best speak with regard to the following of the procedural aspects. But when the said order of termination was under challenge and since the said order was passed due to the alleged unsatisfactory work of the plaintiff, the competent person would have been the person who could certify that his work was unsatisfactory. In the examination in chief of DW.1 itself, the witness states that the plaintiff was working as Manager Production and was accountable to the departmental heads. If this statement in the evidence is read along with the suggestion made to the plaintiff in his cross examination that a show cause notice was served on the plaintiff with adverse remarks and to show cause with regard to the high rate of scrap being derived in the foundry, the proper person to indicate this was the Departmental head to show who was the person responsible for high rate of scrap. However, there is nothing to suggest that the plaintiff was responsible for the same.
16. Further in the cross examination of the plaintiff, the management had directed itself more about the criminal cases filed and not regarding justifying the termination based on unsatisfactory work. This would indicate that the management had not proved the allegation of unsatisfactory work on which he was terminated. That apart, the communication dated 20.8.1998 which is at Ex.P5 apart from the other certificates marked in evidence would indicate that even as on 20.8.1998, the management has appreciated the achievements of the plaintiff during the appraisal period 1997-98 and has upgraded the plaintiff to Grade M5 with effect from April 1998 and an increment has been granted. Hence when the management has appreciated the performance of the plaintiff as late as 20.8.1998, it is hard to believe that the work of the plaintiff had become so unsatisfactory so as to be tenninated on 30.6.1999 i.e., within less then one year, when more particularly the plaintiff had worked for nearly 20 years without any blemish. Further the emphasis laid by the management with regard to the criminal cases filed by the plaintiff against the other Officers while cross examining the plaintiff would clearly indicate in fact what had actually prompted the management to issue the order of termination is the initiation of the complaints. Even DW.1 in his cross examination only says that the services of the plaintiff was not required and no attempt is made to justify the alleged unsatisfactory work which is indicated in the order of termination. Accordingly, the evidence on record would clearly indicate that the termination of the plaintiff is only as a retaliatory measure and not a bonafide order of termination simplicitor. Therefore, the learned Civil Judge was justified in coming to the conclusion that the said order is not sustainable in the facts of this case, and we also subscribe to this view.
17. Further, the learned Counsel for the defendant/management placing reliance on the decision of the Hon'ble Supreme Court in the case of Dipti Prakash Banerjee v. Satvenra Nath Boss National Centre for Basic Sciences, Calcutta 1999 AIR SCW 605 contended that even the mentioning of the word 'unsatisfactory' in the order of termination does not attach stigma or become punitive in nature and therefore the Courts are not required to examine the correctness or otherwise of such orders even wherein such word is mentioned in the termination order. On examining the said question, at the outset, we are of the opinion that the said decision cited by the learned Counsel is not applicable to the facts of the case on hand for the reason that in the said decision, the Hon'ble Supreme Court was considering the case of a probationer and as such it is needless to say that a person is put on probation only to find out whether his work is satisfactory or not and therefore discharging by indicating that his work is unsatisfactory would not attach stigma but the same yardstick cannot be applied to an employee who has attained the permanent status and has rendered king length of service. Even otherwise in the cited decision, the Hon'ble Supreme Court had trained a question viz,. can the stigma be gathered by referring back to the proceedings referred to in the order of termination? Having framed such a question the Hon'ble Supreme Court in para 38 of the judgment has indicated that the Court can look back into the circumstances under which the order has been passed. In the case on hand as already stated, the termination is of a permanent employee who has rendered long unblemished service and therefore the Court can definitely look back and examine as to on what basis the management has come to the conclusion that his services are not satisfactory and if there is no justifiable reason, the Court can interfere with the order of termination. In that view of the matter, we do not accede to this contention of the learned Counsel for the defendants. We therefore are of the opinion that the learned Civil Judge even on this count was justified in examining the matter on merits.
18. On the facts involved in this case, since we are also of the opinion that the order of termination is not sustainable, we will now examine the other contention of Sri Gowrishankar, learned Counsel for the defendant/management that once the service rule permits that the services of an employee could be terminated by issue of notice as contemplated therein or by paying salary in lieu of such notice, the Court cannot go behind such an order by examining the facts involved, since the relationship of the plaintiff and the defendant/management is of master and servant and is purely contractual in nature and such contract can be terminated. In this regard the learned Counsel by placing reliance on the decision of the Hon'ble Supreme Court in the case of O.P. Bhandari v. Indian Tourism Corporation Ltd. and Ors. 1986(2) LLJ 509 sought to contend that such rule is held to be in violation of Article 14 and 16 of the Constitution of India only in case of public sector undertaking and a private management can have such rule and exercise the same. The learned Counsel sought to contend that since the first defendant management is only a company registered under the provisions of the Companies Act, 1956, it can terminate the services of an Officer by issue of such notice, A perusal of the said judgment would indicate that the Hon'ble Supreme Court was examining the provision in Rule 31(v) of the ITDC Rules which provides for termination of services of the employee by giving 90 days notice or by payment of salary in lieu thereof and the Hon'ble Court after examining as to whether such a rule can co-exist with Article 14 and 16(1) of the Constitution of India struck down such rule, No doubt, while examining the same, the Hon'ble Supreme Court has made a passing reference that in the private sector the managerial cadre of employees altogether is excluded from the purview of the Industrial Disputes Act and similar labour legislation and the private sector can cut the deadwood and can get rid of the managerial cadre employee incase he is considered to be wanting in performance or in integrity. We are of the view that the said observation cannot be taken as a licence for a private employer to terminate the services of a permanent employee in an arbitrary manner, and even such power exercised is to be justified before a Court of law when such action is challenged. All that the Hon'ble Supreme Court has indicated is that a private management need not undertake the laborious pre-termination procedure of the managerial cadre but that does not mean immunity from legal scrutiny. Since it is a contract, the Court can always examine a compliant of breach of contract, and remedy the same.
19. In the instant case, Clause 15(e) of the service rules of the defendant company indicates that if the employee is permanent, reasons for termination is to be given unless the disclosure is not expedient for any reason. It is in this context, one among the reasons contemplated in Clause 15(a) namely l5(a)(X) has been invoked as the reason for termination. Once an order of termination is passed for any such reason the same would visit the employee concerned with civil consequences and as such when such action is challenged the employer is bound to justify the order and cannot take shelter under the observation in the cited decision, the facts of which are not similar to the facts on hand. The defendant company which is not a public sector undertaking, though may escape the consequences when such action is examined from the touchstone of Article 14 and 16 of the Constitution of India cannot be allowed to act arbitrarily to terminate the service of a permanent employee without valid and legally justifiable reason when examined from the touchstone of Article 21 of the Constitution of India, whereby not only the livelihood of the employee but his entire dependents would be effected, and as such it is incumbent on the Court to examine the correctness or otherwise of such order of termination. That being so, the contention of the learned Counsel for the appellant cannot be acceded to by us. We are therefore of the firm view that the learned Civil Judge in any event was justified in examining the validity of the order and setting aside the same.
20, Having held the termination order as null and void, the next question that would arise is as to the consequential relief that requires to be granted. White considering the same, the undisputed aspects to be borne in mind are:
The first defendant is a public limited company registered under the provisions of the Companies Act 1956 and is not a statutory body or a public sector undertaking and therefore not a 'State' as defined under Article 12 of the Constitution of India. Though the first defendant is an industry, the plaintiff does not answer the definition of 'workman'. The terms of employment is not regulated under any statute or statutory regulations and therefore the personal contract of service is regulated by the service rules of the first defendant.
21. In this background if the decisions cited by Sri Gowrishankar, learned Counsel is perused, the legal position is well established that the contract of personal service cannot be enforced and as such even if the order of termination is declared to be arbitrary, illegal and null and void, the plaintiff cannot be reinstated into service nor there can be a declaration deeming him to be in service so as to impose him on the unwilling employer. The learned Counsel for the plaintiff fairly did not depute the well settled legal position. But the very decisions cited by the learned Counsel for the defendant/appellant would indicate that the natural consequence of declaration of the termination order as null and void would be for damages. Since there is not much of a dispute on this aspect and as we are clear in our mind about the settled legal position, we do not propose to dwell much into this aspect and we would straight away conclude that the learned Civil Judge has erred in granting the plaintiff an order of reinstatement into service in the same post We therefore set aside the findings and conclusion reached in this regard.
22. Having done so, the next question is regarding the appropriate consequential relief to be granted to the plaintiff. As already indicated the decisions cited by the learned Counsel for the defendant to dislodge reinstatement would also provide for damages, more particularly the case of
i) Kayastha Pathshala, Allahabad and Anr. v. Rajendra Prasad and Anr. (1989) Suppl. 2 SCC 732
ii) Karnataka Bank v. T. Gopalakrishna Rao ILR 1994 KAR 230
iii) Dipak Kumar Biswas v. Director of Public Instruction and Ors.
iv) Nandganj Sihori Sugar Co. Ltd. Rae Bareli v. Badrinath 1991 AIR SCW 1280
v) Integrated Rural Development Agency v. Ram Pyare Pandey 1995 Suppl. (2) SCC 495 Further, the decision in the case of S.S. Shetty v. Bharat Nidhi, Ltd. referred to by the learned Counsel for the plaintiff would indicate that the consequential relief to be granted is to compensate by awarding damages and the said decision also provides the manner for awarding such damages. That being so, we have no hesitation to come to the conclusion that the consequential relief to be granted when the termination order is set at naught is to award appropriate damages.
23. But in view of the vehement contention of Sri Gowrishankar, learned Counsel for the defendant that in the instant case even damages could not have been awarded by the Civil Court as the prayer for the same was time barred, we propose to examine as to whether the plaintiffs prayer for damages is sustainable and if so whether the quantum of damages awarded is in order. In this regard, since it is a contentious issue for which both the learned Counsel have relied on several pronouncements, the same requires detailed examination.
24. Sri Gowri Shankar, learned Counsel for defendant in order to canvas the point that the amendment sought for by the plaintiff was at a belated stage and the same ought not to have been allowed, has referred to the decision in the case of Vijendra Kumar Goel v. Kusum Bhuwania and contended that the amendment for the relief which is barred by time cannot be permitted. On the same point the learned Counsel has also referred to the case of Pirgonda Hongonda Path v. Kalgonda Shidgonda Patil and Ors. . The examination of the said decision indicates that the Hon'ble Supreme Court though has held that a relief barred by limitation should not be allowed, has also indicated that the ultimate test is to consider as to whether the amendment can be allowed without injustice to the other side. In the instant case no other relief except damages could be awarded and as such if the amendment is not allowed, injustice would be caused to such employee and in so far as management is concerned, to compensate the employee is imperative when the termination order cannot be sustained. Therefore, the said decision is of no assistance to the defendants. The other decision cited by the learned Counsel in the case of Vineet Kumar v. Mangal Sain Wadhera in fact would assist the case of the plaintiff since the said decision also lays down that if no reinstatement can foe given, the other relief the plaintiff would be entitled to is only damages and therefore such amendment cannot be disallowed. One another decision referred to by the learned Counsel is in the case of Modi Spinning & Weaving Mills Co. Ltd. v. Ladha Ram & Co. which relates to a case wherein the amendment of written statement is the subject matter and the facts involved therein are entirely different and the same is not material to the case on hand.
25. Apart from the said authorities, the learned Counsel for the defendant placed heavy reliance on the decision of the Hon'ble Supreme Court in the case of Sampath Kumar v. Ayyakannu and Anr. and sought to contend that even assuming for a moment that the amendment is to be allowed, the same should not relate back to the date of the suit but can only be from the date of amendment Since the amendment sought for is on 12.12.2002 and the same was allowed subsequently at the time of final judgment and as such the relief of damages cannot he related hack to the date of the suit. A perusal of the said judgment would indicate that in para 10 of the decision, all that the Hon'ble Supreme Court has observed is; whether the amendment relates hack is not of universal application and in appropriate cases, the Court can say that the amendment allowed would not relate back to the date of the case. By the said observation, the Hon'ble Supreme Court has left it to the discretion of the Court, allowing such amendment to decide as to whether the amendment allowed should relate hack or not. If this is kept in mind what is seen in the case on hand is that in the original plaint itself, the plaintiff had made a prayer seeking for exemplary damages. However, by the amendment sought, the plaintiff had only sought to introduce an alternative prayer to pass a judgment and decree for damages after holding a separate enquiry with regard to the same. As such the amendment sought is to make the earlier prayer more explicit. Therefore, in the instant case, when the Court decided to allow the application for amendment, it is quite natural that the same is to relate it hack to the date of the suit.
26. On the said issue relating to damages Sri Poonacha, learned Counsel appearing for the plaintiff, in rebuttal of the contentions raised by the learned Counsel for the defendants, at the outset, indicated the nature of the prayers made with regard to the damages in the original plaint as well as the amended plaint. After referring to the same, the learned Counsel contended that the contention advanced by the learned Counsel for the defendant that the claim for damages is time barred and as such the amendment application filed under Order 6 Rule 17 of CPC ought not to have been allowed is without substance for the reason that the grant of damages a consequential relief as provided for in Sub-Section (2) of Section 40 of the Specific Relief Act and the proviso to Sub-section (2) would clearly indicate that where no such damages have been claimed in the plaint, the Court shall at any stage of the proceeding allow the plaintiff to amend the plaint on such terms as may be just for including such claim. The learned Counsel therefore emphasised that not only the plaintiff had sought for such assessment of damages but also the provision referred to by him would clearly indicate that even if such prayer was not made, it is the duty of the Court to permit such amendment at any stage, The learned Counsel placed reliance on the decision in the case of Leach and Company Ltd v. Jardine Skinner and Co. 1957 SCR 438, V.R. Nathan v. Mac Laboratories (P) Ltd. AIR 1975 Madras 1891, M.R.K. Rau v. Corporation, City of Bangalore , Hoysala Blow Moulders (India) Limited v. Surath Goods Transport Service 1997(1) KAR.LJ.303 and contended that the said decisions rendered in interpretation of Section 40 of the Specific Relief Act would clearly mandate that such power to allow amendment for grant of damages is a power which is inherent in the Court and such a right cannot be denied to the plaintiff by relying on the provisions of Order 6 Rule 17 CPC or Limitation Act to indicate that the amendment could not be allowed on the ground that the relief is time barred.
27. In the first of the decisions cited supra, the Hon'ble Supreme Court has thought it fit to allow the application for amendment of the plaint seeking for alternative relief of damages in the appeal before the Supreme Court and it has been observed that when all the necessary allegations for sustaining the claim for damages for breach of contract were already present in the plaint, such damages can be sought for by way of amendment The said pronouncement has been relied upon by the Division Bench of the Madras High Court in the case of V.R. Nathan (cited supra) and the Hon'ble Court has held that the amendment of the plaint seeking relief of damages cannot be refused. In the case of M.R.K. Rau, the Division Bench of this Court after considering the provisions of Section 40 of the Specific Relief Act has held that the right to claim damages is inherent and the amendment claiming damages should be allowed even if it is in the stage of appeal. The Court has further held, the plea that the claim is barred by limitation on the date of application would not be sustainable. In the instant case, all the ingredients are available in the plaint since as already noticed, if the reinstatement is disallowed, the only other alternative would be to grant damages and therefore the said decisions would squarely apply to the facts and circumstances of this case. Further, on perusal of the provision in Order 6 Rule 17 of CPC and Section 40(2) of the Specific Relief Act, we notice that the word 'may' is used in Rule 17 in so for as allowing amendment whereas Section 40 of the Specific Relief Act uses the word 'shall' and as such the permission to amend and grant the relief of damages is more clearly spelt out in the provision of the Specific Relief Act since the same is a consequential relief pursuant to the relief of declaration and therefore, the application under Order 6 Rule 17 of CPC is only procedural. We are therefore of the firm view that since we have concluded that there cannot be reinstatement or declaration to deem the plaintiff to be in service, the only other alternative is to compensate the plaintiff by way of damages and as such the prayer which was initially made by the plaintiff and thereafter elaborated by way of amendment in the nature of damages is required to be granted. In this regard we cannot find fault with the order passed by the learned Civil Judge permitting the plaintiff to amend the plaint Further we also hold that in view of the proviso to Sub-section (2) of Section 40 of the Specific Relief Act and the judgment relied on by the learned Counsel for the plaintiff the grant of damages would relate back to the date of the suit and the plaintiff would be entitled to be awarded just and proper damages to be determined by the Court.
28. Having held so, the next question that requires to be considered is whether the Civil Court was justified in straight away quantifying the damages at Rs. 7,65,216/- and awarding the same to the plaintiff and also further directing the defendant to pay the Court fee payable in respect of the same. In this regard Sri Gowri Shankar, learned Counsel appealing for the defendant contended that before awarding damages, opportunity should have been given to the defendants to put forward their case even assuming for a moment that the order of termination is held to be bad. According to the learned Counsel, the plaintiff had not suffered any damages since he had secured alternate employment and the damages had been mitigated to that extent The learned Counsel in this regard placed reliance on the decision in the case of Kayastha Pathshala, Allahabad and Anr. v. Rajendra Prasad and Anr which is already referred supra to indicate that even if the termination is said to be illegal, the plaintiff is obliged to place his services in the open market to mitigate the damages and taking this into account the Hon'ble Supreme Court had awarded minimum damages in the said case.
29. Per contra Sri Poonacha, learned Counsel though sought to justify the award of damages also contended that the damages is by way of compensation to mitigate the sufferings of the plaintiff in view of the illegal order of termination. In this regard, learned Counsel places reliance on the decision in the case of S.S. Sheety v. Bharat Nidhi, Ltd. AIR 1958 SC 12 where the Hon'ble Supreme Court after referring to the provisions of the Contract Act had laid down the norms regarding assessment and quantification of damages. The learned Counsel therefore contended that the plaintiff was entitled to a higher amount as damages than what is awarded, since going by the record of the plaintiff in the earlier part of his services, he would have achieved regular promotions and increments which had been cut short prematurely by the order of illegal termination and even that was required to be quantified by the learned Civil Judge while awarding the damages and the damages could not have been only by way of last drawn salary which has been taken into account
30. In the light of the contentions advanced by the learned Counsel appearing for the respective parties and also perusal of the impugned judgment passed by the learned Civil Judge, it would be clear that the application seeking for amendment of the plaint to hold a separate proceedings to assess the damages to be granted was allowed on 17.1.2004 at the time of disposal of the main suit even though the application had remained pending from 12.12.2002. This fact would only make it obvious that after the said prayer had been allowed, neither an issue with regard to the quantum of damages to be awarded or a point for consideration in that regard had been framed by the learned Civil Judge and neither the plaintiff had the opportunity of putting forward his case indicating the extent of damages suffered in view of the illegal termination nor was there an opportunity to the defendant to controvert such claim for damages and to indicate that damage if any suffered had been mitigated by alternate employment, if any. It is only after such assessment the appropriate damages could have been awarded and that too the decree for damages could have been drawn only after the plaintiff pays the requisite Court fee with regard to the same. But contrary to the said position the impugned judgment passed by the learned Civil Judge has merely taken the last drawn salary as Rs. 15,932/- as on the date of termination of his services and multiplied the same by 48 months and has arrived at the figure of Rs. 7,65,216/- to be awarded as damages. The method adapted would almost indicate as if the learned Civil Judge has granted backwages in view of the reinstatement which had been ordered by him. Therefore the quantum of damages awarded and the manner adapted for such calculation cannot be sustained and the same requires to be set aside.
31. However, it is made clear that the plaintiff would be entitled to damages from the date of suit subject to evidence being adduced by the plaintiff in that regard since we do not accede to the contention of the learned Counsel for the defendant that the damages, if any, could be granted only for a period of one year. Having come to the conclusion that the plaintiff is entitled to damages and also having indicated that the quantum of damages and the manner in which it has been awarded by the trial Court cannot be sustained, the only natural course would be, to direct the learned Civil Judge to redo the process in so for as assessment and awarding of the damages to the plaintiff is concerned within a time frame to be fixed by us. It is also to be noticed that at the time of admission of the appeal, this Court had directed the appellant/defendant to deposit 50% of the amount awarded as damages. The said amount is said to have been deposited and the same is also withdrawn by the plaintiff, Since we have decided to set aside the order relating to damages and remit the matter to the Civil Court for reassessment of the damages, the amount withdrawn by the plaintiff shall be retained by the plaintiff and shall be subject to adjustment at the time of disposal of the suit.
31. In the result, the appeal is allowed in part on the following terms:
i) The judgment and decree dated 17.1.2004 passed by the XXXV Addl City Civil Judge in O.S. No. 7383/1999 in so far as declaring the order of termination dated 30.6.1999 as illegal, unjust, arbitrary, null and void is upheld.
ii) The judgment and decree to the extent of reinstating the plaintiff into service in the same post which he was holding on the date of termination order along with injunction and further awarding damages at Rs. 7,65,216/- is set aside.
iii) The order allowing IA-VI and permitting the plaintiff to amend the prayer in the plaint is upheld and such amendment is held to be effective from the date of the suit
iv) The matter is remitted back to the XXXV Addl. City Civil Judge, Bangalore City to restore the suit in O.S. No. 7383/1999 on file for limited purpose of quantification of damages and we direct the trial Court to frame an issue with regard to quantification of damages and determine the damages awardable to the plaintiff after affording opportunity to both the plaintiff as well as the defendants to lead evidence in this regard. Since the suit and appeal were pending for long time, we direct the trial Court to complete the exercise within a period of six months from 01-08-2006 on which date the parties shall appear before the XXXV Addl. City Civil Judge, Bangalore city.
v) Since we have remanded the matter, in so far as assessment of damages is concerned, the appellants/defendants shall be entitled for refund of the Court fee paid by valuing the damages portion while preferring this appeal.
vi) Except for the refund of Court fee as stated above the parties shall bear their own costs in this appeal.