Delhi District Court
Mr. K. S. Ganapathy vs Mccann Ericksson (India) Ltd on 31 August, 2017
1
IN THE COURT OF MS.VEENA RANI :ADDL. DISTRICT JUDGE, PATIALA
HOUSE COURTS,NEW DELHI
Civil Suit No.380/2017
Mr. K. S. Ganapathy
93B, Kendriya Vihar,
Sector 51, NOIDA, Uttar Pradesh .....Plaintiff
Versus
1. McCann Ericksson (India) Ltd.
Through its Associate Vice President,
Mr. Rajul Kulshreshtha, Having registered office
at 204206, Tolstoy House, 15 Tolstoy Marg,
New Delhi110019
And also having office at
8, Balaji Estae, Guru Ravidass Marg,
Kalkaji, New Delhi110019
2. Mr. Rajul Kulshreshtha,
Associate Vice President,
Universal McCann,
A Divisiion of McCann Ericksson (India) Ltd.
8, Balaji Estae, Guru Ravidass Marg,
Kalkaji, New Delhi110019
3. Mr. Chintamani Rao,
Associate Vice President,
Universal McCann,
A Divisiion of McCann Ericksson (India) Ltd.
8, Balaji Estae, Guru Ravidass Marg,
Kalkaji, New Delhi110019 .....Defendants
CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.
2
SUIT FOR DECLARATION OF DISMISSAL AS WRONGFUL AND FOR AWARD
OF DAMAGES FOR WRONGFUL DISMISSAL UNDER ORDER VII RULE 1 OF
THE CODE OF CIVIL PROCEDURE, 1908
DATE OF FILING OF THE SUIT
:09082002
DATE OF FINAL HEARING
:18082017
DATE OF FINAL ORDER/JUDGMENT :31
082017
JUDGMENT
1) Plaintiff has filed the present suit for declaration of dismissal as wrongful and for award of damages for wrongful dismissal under order VII rule 1 of the Code of Civil Procedure, 1908 and prayed as under:
(a) declare the dismissal of the plaintiff services by the 1st defendant company as wrongful, illegal and arbitrary; and
(b) consequently award damages in the sum of Rs.25,00,000/ with interest at 18% per annum from the date of dismissal till date of plaint and further interest at 18% per annum from date of plaint till date of realization; and
(c) Directing the defendant to pay the cost of the suit; and
(d) pass such further or other orders as this court may deem fit and proper in the circumstances of the case.
2) The facts of the case arise from the employment of the plaintiff-herein with the defendant. The plaintiff was the employee of the defendant no.1 and was discharging his duties as the Media Controller and was entrusted with the duties of CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.
3managing the media slots of the clients which included accurate raising of the estimates to the clients, ensuring that the activities happened as per plan etc. The plaintiff had joined the services of the defendant no.1 in the year 1986 as Media Typist and was promoted to the post of Media Controller in the year 2000. It is the case of the plaintiff that he was promoted from time to time due to his sincerity, good work etc. The services of the plaintiff was terminated vide the terminating letter dated 30.10.2001 when his salary was Rs.31,800/-. According to the plaintiff his services were terminated wrongfully. By way of the present suit the plaintiff has sought a decree for declaration that his dismissal by the defendant no.1 be declared as wrongful, illegal and arbitrary. The plaintiff has also sought damages of Rs.25 Lakhs with interest @ 18%.
3) The defendant filed written statement. It is stated that the plaintiff was employed with the defendant no:1 untill 30-10-2001 and thereafter the defendant no:1 was constrained to terminate the services of the plakintiff for gross acts of insubordination and dereliction of duty committed by him. It is further stated that prior to 30-10-2001 the plaintiff was working with the defendant no:1 on the terms of employment mutually accepted by the plaintiff and the defendant no:1. It is submitted that the plaintiff has alleged that his t ermination was wrongful while concealing the causes that triggered the termination. It is further submitted that services of the plaintiff was terminated on account of his lackadaisical attitude towards work, which can not be said to be either wrongful or illegal. It is submitted that plaintiff was not vigilant enough in carrying out the tasks assigned to him and his professional conduct was not found to be up to the mark on several occasions. The version of the defendant is that the plaintiff who had worked efficiently till the year 2000 was given promotions etc. However, when the plaintiff was promoted to the post of Media Manager, he could not cope up with the work and also caused losses to the company.
4) The following issues were framed on 24.04.2006:
CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.
4(i) Whether the termination of the plaintiff by the 1st defendant company was illegal / wrongful?
(ii) Whether the termination of the services of the plaintiff has caused a stigma to the plaintiff as alleged by him?
(iii) Whether the plaintiff is entitled to damages on account of wrongful termination ? If yes how much?
(iv) Relief.
5) Issue No.1 : Whether the termination of the plaintiff by the 1st defendant company was illegal / wrongful ?
The plaintiff had received the letter of termination dated 30.10.2001 (Ex. P-26) which states that the service of the plaintiff were being terminated due to certain reasons such as :
i. Continued slack in the plaintiff's control over operations;
ii. Repeated violation of standard operating procedure;
iii. Putting companies interests at risks;
iv. Consequently causing financial loss to the company;
v. Continues indifference The defendant No.1 has argues that the plaintiff-herein cannot be treated as 'workman' under the Industrial dispute Act. I find some force in the said contention. In Ved Prakash Gupta vs. m/s Delton Cable India (p) ltd., AIR 1984 SC 914 it was held that a person employed in managerial capacity or administrative capacity is not a workman. The Hon'ble Apex Court, after considering the relevant provisions under the Industrial Disputes Act, 1947 viz., Section 2(k), 2(p), etc., has CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.5
summed up the principles applicable to the jurisdiction of the Civil Court in relation to an Industrial Dispute with the following manner:-
"(1) If the dispute is not an industrial dispute, nor does it relate to enforcement of any other right under the Act the remedy lies only in the civil court.
(2) If the dispute is an industrial dispute arising out of a right or liability under the general or common law and not under the Act, the jurisdiction of the civil court is alternative, leaving it to the election of the suitor concerned to choose his remedy for the relief which is competent to be granted in a particular remedy.
(3) If the industrial dispute relates to the enforcement of a right oran obligation created under the Act, then the only remedy available to the suitor is to get an adjudication under the Act.
(4) If the right which is sought to be enforced is a right created under the Act such as Chapter V-A then the remedy for its enforcement is either Section 33-
C or the raising of an industrial dispute, as the case may be. "
The plaintiff has cited two example of the employees wherein 'show cause' notice was first served upon the employee and the employee had approached the Labour Court under the Industrial Disputes Act. Subsequently, award came to be passed in favour of the said employees. The plaintiff has asserted that a show cause notice ought to have been first served upon him as had been a normal practice with some previous employees. The plaintiff has examined two witnesses PW-2 and PW-3 who have reiterated that some employees had approached the labour court. However, the defendant has been able to show that the case of the plaintiff-herein being at the Managerial level cannot be compared to the other employees who may have been 'workmen' under the Industrial dispute Act.
CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.6
As far as the aspect of 'show cause' notice is concerned the plaintiff has admitted various aspects during his cross-examination such as the followings :
b. The plaintiff had accepted the revised terms of appointment vide letter dated 22.06.1999 (Ex. P9) and that the said letter mentioned that his service could be terminated by the company with one month notice.
c. There was no term or condition that he would be entitled to any compensation for the termination of his services.
d. The plaintiff's salary and allowances were increased vide letter dated 10/07/2000 (Ex.P1) and that the terms & conditions were to remain the same as contained in 22.06.1999 (Ex. P9).
e. Apart from the employment-relationship created through the documents / letters from Ex.P1 to Ex. P25 there was no other contract between him and the company.
f. The plaintiff had applied for job before many companies and had received phone calls and the matter went up to the 5 th level and finalization in the various companies that the plaintiff had applied for.
g. Plaintiff had placed no documents on record to suggest / show that his non-
selection was essentially due to his termination of service with the defendant-company.
h. The financial crises in the defendant-company occurred due to the cancellation of certain contracts with the client and some of such contracts were handled by the plaintiff. However, the plaintiff volunteered that he was not the whole and sole responsible though he was the media controller as there was a complete hierarchy in the department. The attention of the witness was drawn to towards para 17 portion A to A. After seeing the same CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.7
the plaintiff stated : " my deposition mention in portion A to A is correct and not my earlier statement where I said that there was a complete hierarchy in the media department".
i. If at all there was any loss in the contracts pertaining to LG and Lintas it was not more that of Rs.50,000/-
j. It is correct that if the budget were not utilized on the advertisements, the company would not have earned any commission.
6) The witness examined by the defendant-side Ms. Anamika Mehta has confirmed during her cross-examination that the e-mails dated 16.04.2001, 22.06.2001, 10.07.2001, 13.07.2001, 16.07.2001, 17.09.2001 and 07.11.2001 (all part of Ex. DW-1/5) were specific warnings stating that the plaintiff was not able to cope up with the job. The witness DW-1 further deposed that the lapses irregularities mentioned in the chart Sx.DW-1/4 were exclusively attributable to the plaintiff not to be seen jointly with someone else. Passing of the bills was domain of the media controller which was the post held by the plaintiff. According to DW- 1 the plaintiff had worked efficiently prior to 01.07.2000.
7) The perusal of the evidence establishes the case of the defendant that the plaintiff's performance had declined after he was promoted to the level of Media Controller. The defendant has been able to show that there had been occasions when the defendant-company had suffered financial losses. In the present case, the plaintiff has not sought re-instatement. All that is sought is a compensation for the alleged wrongful removal from his service.
8) It was held by the Supreme Court in Vaish Degree College, Shamli & Ors. v.
Lakshmi Narain & Ors. AIR 1976 SC 888 that a contract for personal service cannot be specifically enforced and a court normally would not give a declaration that the contract subsists. In Pearlite Liners (P) Ltd. v. Manorama Sirsi (2004) 3 CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.
8SCC 172, the Hon'ble Supreme Court observed that a case of private employment would normally be governed by the terms of the contract between the parties.
9) Courts in India have at various instances examined the requirement of an internal (departmental) inquiry prior to termination of employment. This judgment helps clarify the fact that an inquiry need not be conducted in cases of long unexplained absence from employment. The Supreme Court of India has also previously observed that long unauthorized absence may reasonably give rise to an inference that the employment is intended to be abandoned by the employee.
10) In Tejinder Kaur v. State of Punjab and another (CWP No.8120 of 2016
-- Date of Decision: 04.10.2016) reiterates the position that the requirement of departmental enquiry and audi alteram partem can be dispensed with in certain exceptional circumstances. Therefore it can be concluded that a regular departmental enquiry is not a 'must' before termination of contract of employment in all cases and in all situations.
11) A Show-cause notice is generally issued in the matters relating to misconduct on part of the employee where the employee is expected to explain. In the present case the defendant-employer had clearly stated the reason of its dissatisfaction with the plaintiff-employee through various e-mails. The plaintiff has not put questions on 'show cause' notice to the defence witnesses indicating thereby that the aspect of 'show cause' notice was not the essential cause of action against the defendants. The plaintiff has raised this aspect only to compare himself with others whose services were terminated by the defendants. It will not be out of place to mention that the plaintiff could have explained and circumstances orally or in writing whenever warnings and alerts were given to him by his employer.
12) Binny Ltd. & Anr. Vs. V. Sadasivan & Ors. (2005) 6 SCC 657 holds that public policy principles or administrative law principles do not apply to private employment.
CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.
913) In Shri Satya Narain Garg through his legal heirs Vs. DCM Limited and Ors. in RFA No.556/2002 decided on 5.12.2011 it has been held by the Hon'ble Delhi High Court:
"In case of private employment, the employers are fully justified in taking steps for termination of services, if it finds that the employee is not upto the mark. Principles applicable in public law domain do not apply with respect to employees in private employment. Employment in private sector is governed by the terms and conditions of employment, and unless the termination is shown to be violation of the terms and conditions of employment, it cannot be said that the termination is illegal."
14) The Hon'ble High Court in a judgment authored by the Hon'ble MR. JUSTICE VALMIKI J.MEHTA in CS(OS) No. 393/2010 entitled SHRI NARESH KUMAR v. SHRI HIROSHI MANIWA & ORS has summed up :
"8. In view of the aforesaid judgments, the following conclusions in law emerge:-
(i) A contract of private employment is not similar to the public employment and in such private employment there is no scope of applicability of the principles of administrative law/public law.
(ii) A contract of employment which provides termination of services by one month's notice, then, at best the employee will only be entitled to one month's pay in terms of the employment contract. An employee is not entitled to any relief of continuation in services or pay with consequential benefits for alleged remaining period of services till the date of his superannuation.
CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.
10(iii) As per the provision of Section 14(1)(c) of the Specific Relief Act, 1963, a contract which is determinable in nature cannot be specifically enforced. Since the service contract in the present case is determinable by one month's notice there does not arise the question of giving of any reliefs which tantamount to enforcement of a determinable contract. As per Section 14(1)(b), a contract of personal service cannot be enforced when the employer is not the Government or "State" as per Article 12 of the Constitution of India.
Plaintiff has in fact received one month's pay and therefore his claim will stand satisfied in law and he is not entitled to any reliefs as prayed for in prayer clauses in the suit." (emphasis is mine)
15) In the above-referred judgment the Hon'ble Delhi High Court further held that
4.It is therefore clear that the plaintiff cannot claim illegality of termination of his employment either for continuing the employment or for claiming any monetary amount as if he had continued in employment with the defendant no.7"
16) Losing business / contracts is the worst nightmare of a commercial entity. The plaintiff in the present case has admitted that on one occasion the CD / material but a wrong advertisement was aired by the channel. The plaintiff-herein is not challenging the rules and regulations of the company. Rather, the case of the plaintiff happens only to be that the defendant-company had not followed their own rules. On the hand the defendant-company has asserted that the rules were indeed followed and that the plaintiff was given one month salary on his termination as per rule.
CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.
1117) The plaintiff has mentioned in his plaint that the action of the defendant no.2 was vindictive and wanted to cover up his mistakes and omissions. The plaintiff asserted that he was made a scape-goat. It has been averred in the plaint that the first defendant company had embarked upon an overhaul of certain systems by reason of lacunae and defects. Further there were very many differences between the divisions accentuating the problems. To cover up these and the other such errors, the defendants ventured to make plaintiff the scapegoat. It is noteworthy to mention here that the plaintiff has not substantiated the above-said averments. Thus the averments lack specificity. The plaintiff has not been able to establish vindictiveness on part of the defendant.
18) The appropriate standard against which the Employee must prove its case is proof on a balance of probabilities. In applying this standard, the seriousness of the allegations are taken into account. The burden of proof lies on the person who first asserts the fact, and not on the one who denies that fact to be true. The responsibility of the defendant to prove a fact to be true would start only when the authenticity of the fact is proved by the plaintiff. According to Section 101 of the Indian Evidence Act, 1872 defines `burden of proof' which clearly lays down that whosoever desires any court to give judgment as to any legal right or law dependent on the existence of facts which he asserts, must prove that those facts exist. According to Black's Law Dictionary, "Burden of Proof" in the context of law of evidence can be defined as the necessity or duty of affirmatively proving a fact on an issue raised between of the parties in a cause. Webster Dictionary defines the same as the duty of proving a particular position in a court of law, a failure in the performance of which duty calls for judgment against the party on whom the duty is imposed.
19) In the present case the plaintiff has not been able to prove that the defendant had not followed their own policy on termination of service. The plaintiff had received his one month salary and had also received the gratuity benefits. The CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.
12Issue no.1 is accordingly decided against the plaintiff and in favour of the defendants.
20) Issue no.2: Whether the termination of the services of the plaintiff has caused a stigma to the plaintiff as alleged by him?
21) It will be very relevant to point out that the plaintiff has admitted in his cross-examination that he had applied to certain companies for his employment and had cleared up to five levels but falling short of obtaining an employment. It is not the case of the plaintiff that post-termination the defendant-company had played any foul game vis-à-vis the future perspective of the plaintiff. It is also not the case of the plaintiff that the defendant-company had levelled serious allegations of misconduct which could deter his future employments. As far as the issue of stigma is concerned the plaintiff ought to have proved that it was the termination letter dated 30.10.2001 which solely jeopardised his future perspectives. The defendants have specifically averred that they have not sought any counter-claim from the plaintiff on account of losses caused to the defendant-company due to the in- efficiency of the plaintiff.
22) The grounds of inefficiency is not something that would cause a social stigma equivalent to that of other serious allegations such as official turpitude or misconduct - had the defendant-company alleged something grievous of that sort, the plaintiff would have been justified in stating that he carried any stigma. Inefficiency is something that can be improved upon. It is the case of the defendant that the plaintiff was efficient till the year 2000 when he was promoted to Media Controller and it was only thereafter that the plaintiff was 'unable to cope up' with the work. Thus the only reason of termination is inability to cope up. Coping up with work is something that an employee learns with time and there is no stigma attached to it. Just because the plaintiff was not able to secure a job after his previous termination of service, it would not necessarily follow - in the absence of any substantial evidence - that the termination was a stigma.
CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.
1323) The plaintiff has not been able to establish any stigma. Thus the issue no.2 is also decided against the plaintiff and in favour of the defendants.
24) Issue no.3 -- Whether the plaintiff is entitled to damages on account of wrongful termination ? If yes how much?
There is a catena of judgments where the Hon'ble High Courts and the Hon'ble Supreme Courts have held that if re-instatement was not possible a compensation to the workman would be enough in cases of wrongful termination of service. In the present case the plaintiff has not been able to prove that termination of his service was wrongful. In that eventuality, no damages are made out in favour of the plaintiff-herein.
Before parting with this issue relating damages it would be appropriate to shed light on the plea pf the plaintiff which essentially points towards damages and not compensation. It will also be appropriate to indicate that the defendant had paid one month salary to the plaintiff as per the rules of the defendant company. Such a payment is in itself a 'compensation' and is often given to the employees so that they are able to sustain reasonably till a new employment is secured. In the present case the plaintiff has already received his compensation from the defendant-company. However, even if the terms compensation and damages are treated the same there are a catena of judgment wherein the Hon'ble High Court and the Hon'ble Supreme Court have held that the one month salary given at the time of the termination of services was a 'reasonable damages' for the terminated employee.
In view of ratio of the judgment of the Supreme Court in the case of S.S. Shetty Vs. Bharat Nidhi Ltd., AIR 1958 SC 12 it is clear that even if there is an illegal termination of an employee by a private employer, at best the employee is entitled to the salary for the notice period.
CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.
14Further, even if there is illegal termination of services, it is not possible to grant damages as claimed inasmuch as the principle of mitigation of damages squarely applies. As per this principle of mitigation of damages enshrined in Section 73 of the Contract Act, 1872 even if an employee is illegally terminated from services, he cannot sit at home and he must take sufficient steps to procure alternative employment. The law in this regard is contained in the judgment of the Supreme Court reported as S.S. Shetty v. Bharat Nidhi Ltd., AIR 1958 SC
12. Paras 12 and 13 of this judgment are relevant and the same read as under:
"12. The position as it obtains in the ordinary law of master and servant is quite clear. The master who wrongfully dismisses his servant is bound to pay him such damages as will compensate him for the wrong that he has sustained. "They are to be assessed by reference to the amount earned in the service wrongfully terminated and the time likely to elapse before the servant obtains another post for which he fitted. If the contract expressly provides that it is terminable upon, e.g., a month's notice, the damages will ordinarily be a month's wages... ... ... No compensation can be claimed in respect of the injury done to the servant's feelings by the circumstances of his dismissal, nor in respect of extra difficulty of finding work resulting from those circumstances. A servant who has been wrongfully dismissed must use diligence to seek another employment, and the fact that he has been offered a suitable post may be taken into account in assessing the damages."
(Chitty on Contracts, 21st Edition, Vol (2), p. 559 para. 1040).
13. If the contract of employment is for a specific term, the servant would in that event be entitled to damages the amount of which would be measured prima facie and subject to the rule of mitigation in the salary of which the master had deprived him. (Vide Collier v. Sunday Referee Publishing Co. Ltd., 1940-4 ALL. E.R. 234 at p.237 (A). The servant would then be entitled to the whole of the salary, benefits, etc., which he would have earned had he CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.
15continued in the employ of the master for the full term of the contract, subject of course to mitigation of damages by way of seeking alternative employment."
In GE Capital Transportation Financial Services Ltd. Vs. Shri Tarun Bhargava (RFA No.294/2004 decided on 20.3.2012. An S.L.P. against this judgment has been dismissed by the Supreme Court on 3.8.2012 in S.L.P. No.21723/2012.) it has been held :
"12. I have already stated above that even presuming there was breach of contract, at best reasonable damages can be granted and once there is a clause for termination of services by one month's notice, it can only be one month's notice which can be treated as reasonable damages inasmuch as parties understood the period for obtaining of an alternative employment as a one month's notice period-vide SS Shetty's case (supra)"
The Issue No. 3 is also decided against the plaintiff and in favour of the defendant.
25) As far as the issue no. 4 of RELIEF is concerned, the plaintiff is not entitled to any relief. In view of the facts & circumstances of the case - particularly in view of the legal principles as laid down by the Hon'ble High Courts and the Hon'ble Supreme Court as cited and discussed herein-above - the suit of the plaintiff is dismissed. Decree sheet be prepared accordingly. File be consigned to record room.
Announced in the open court.
( VEENA RANI ) Additional District Judge04 PHC, New Delhi/Dt.31082017 Judge Code No:DL0271 CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.
16IN THE COURT OF MS.VEENA RANI :ADDL. DISTRICT JUDGE, PATIALA HOUSE COURTS,NEW DELHI Civil Suit No.380/2017 Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd. & anrs.
31082017
Present : Ld. Counsel for the plaintiff.
Ld. Counsel for the defendant.
Final argument heard.
Vide my separate judgment the suit of the plaintiff is dismissed. Decree sheet be prepared accordingly. File be consigned to record room.
Announced in the open court.
( VEENA RANI ) Additional District Judge04 PHC, New Delhi/Dt.31082017 Judge Code No:DL0271 CS No.380/2017, Mr. K. S. Ganapathy Vs. McCann Ericksson (India) Ltd.