Delhi District Court
M. Naved Hasan vs M/S Ikea Trading (India) Ltd on 3 October, 2011
IN THE COURT OF SH MUKESH KUMAR GUPTA: ADDITIONAL
DISTRICT JUDGE-(SOUTH WEST): DWARKA: DELHI
Suit No.222/10/08
(20 old most cases)
U.I.D No. 02405C0000652008
M. Naved Hasan,
S/o Shri M. Hasan,
R/o 1-H-77B, NIT Faridabad,
Haryana-121001 ....... Plaintiff
Versus
M/s Ikea Trading (India) Ltd.,
Through its Trading Area Manager,
Mr. Peter Wisbec,
F-4, Pushpanjli Farms,Indian Oil Road,
Bijwasan, New Delhi-110019.
Also At:-
DLF Infinity, Tower A,
8th Floor, DLF Cybercity,
Gurgaon, Haryana ....... Defendant
Date of institution of suit : 22.12.2008
Date of Assignment to this court : 05.10.2010
Date of hearing final argument : 21.09.2011
Date of Judgment : 03.10.2011
SUIT FOR DECLARATION, RECOVERY, DAMAGES &
MANDATORY INJUNCTION
Appearances :Shri Sanjay Sood, Advocate, Ld. counsel for plaintiff.
Shri Shankar Mathur & Ms. Shruti Verma, Advocates,
Ld. counsels for defendant.
JUDGMENT
Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 1/37
1. By way of present judgment, I shall conscientiously adjudicate upon the present suit for declaration/recovery /damages and mandatory injunction filed by plaintiff M. Naved Hasan against defendant M/s Ikea Trading (India) Ltd.
2. Eschewing prolix reference to the pleadings crystallizing the same, the plaintiff was stated to have been working with the defendant company as a Quality Control Manager. Mr. Peter Wisbec is stated to be a Trading Area Manager of defendant and the head of the entire operation in India . Mr. Susan, Mr. Atul Sharma & Ms. Subhra Bhattarcharya are alleged to be Operation Manager, Regional Finance & Accounts Manager and the Regional (HR) Manager of the defendant company respectively. The registered office of the defendant company is allegedly situated at New Delhi from where all the activities of defendant are stated to be controlled. It is the case of the plaintiff that initially he joined the defendant company on 30.06.1999 as a 'Technician' on a monthly salary of Rs.12,000/- per month vide appointment letter dated 30.06.2008 which contained detailed terms and conditions of employment and that initially he was kept on a probation period for six months, whereafter which he was confirmed vide letter dated 05.01.2000 of the Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 2/37 defendant who has done so keeping in view the hard work, honesty and dedication of the plaintiff towards his work and the company. It is further the case of the plaintiff that the plaintiff was promoted and his salary was also increased from time to time according to the posts held from Rs. 12,000/ to Rs.1,03,500/- per month and the post of the plaintiff was qualified to be Quality Coordinator-TASA Free Range and last post held by him was Quality Manager in the defendant company. This according to plaintiff was a result of his hard work and after review of his performance during his nine years career with the defendant. It has been further alleged that during the entire career of 9 years there has not been a single occasion when any of his superiors has raised any doubt on his diligence, honesty, capacity or integrity. It has been claimed that he has never been issued any memos, show cause notice or charge sheet by any supervising officer or the management to the defendant company. It is further the case of the plaintiff that on 20.08.2008 at about 10.45 AM, the plaintiff received a call from one Iva Vassarainen, stated to be a Senior Official of the defendant company on his mobile phone conveying that the regional operation head Mr. Peter Bisbeck wanted to meet him at 11.00 A.M. and that he should remain at his desk at the aforesaid time. Mr. Bisbeck alongwith Ms. Susan allegedly came to the desk of the plaintiff and taken him to the meeting room where Mr. Atul Sharma and Ms.Subra Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 3/37 Bhattacharya were already present. In the said meeting, Mr. Bisbeck allegedly asked the plaintiff to sign some papers lying on the table without reading or going through the contents thereof to which the plaintiff refused to sign., on which the officials present threatened the plaintiff to involve him in some false cases of theft or forgery. The plaintiff has alleged to be illegally confined in the meeting room and was not allowed to go out and under such compulsion and fear was made to sign the said documents. It is further the case of the plaintiff that since plaintiff was left with no other option but to sign the documents without knowing the contents of the same. It is further the case of the plaintiff that on 17.09.2008 the plaintiff was shocked to receive an e-mail from the office of the defendant in the form of an excel sheet showing full and final settlement of his account with the defendant company in which the date of his leaving the company was mentioned as 20.08.2008. The plaintiff has alleged that on receiving the said letter, the plaintiff was surprised and shocked and thereafter the plaintiff sent a legal notice dated 17.09.2009 through his counsel to the defendant and its officials mentioning the entire series of events, asking them to revoke the contents of the e-mail dated 17.09.2008. The notice was duly replied to by the counsel for the defendant vide reply dated 01.10.2008 refuting all the allegations of the plaintiff in a routine manner and leveling false and frivolous allegations Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 4/37 against the plaintiff. The defendant is stated to have even alleged in the said reply that a termination letter was issued to the plaintiff on account of breach of rules and regulation of the company and the same was also accepted by him, however, no details of the alleged breach were given in the reply. It is further the case of the plaintiff that after receiving the legal notice, the defendant and its officials never allowed the plaintiff to attend the office nor have paid any salary from August 2008 onwards willfully. It is further the case of the the plaintiff that defendants further threatened the plaintiff to sign the final settlement documents, failing which the salary/notice pay/leave encashment/bonus or any other amount due to him would not be paid to him, and even his statutory benefits like Provident Fund, Gratuity etc. also would not be cleared. It is further the case of the plaintiff that as per final settlement made by the defendant leave encashment of 17.25 days amounting to Rs.81,153/-, bonus for Rs. 91,739/- and salary for month of the August, 2008 amounting to Rs. 87,286/-(Salary plus usual allowances) is due and payable to the plaintiff excluding the notice pay for one month. The defendant is stated to be also liable to pay for one month notice pay of Rs.1,25,017/- (Salary and usual benefits) alongwith the damages towards compensation for illegal termination, victimization, loss of reputation, loss of career opportunities and for the stigma attached with his name for the life time because of the Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 5/37 alleged illegal termination which are quantified at Rs.3,00,000/-. The cause of action is stated to have arisen on 20.09.2008 when the signatures of the plaintiff were forcibly taken under threat by the defendants on the alleged termination letter/documents and secondly is stated to have arisen on 17.09.2008 when the defendants sent to the plaintiff the e-mail in the form of statement showing full and final settlement of his accounts and asked him to accept the same. Hence the present suit for declaration seeking a declaration that the alleged termination of the plaintiff as arbitrary and illegal; recovery of Rs. 3,85,195/-( Salary plus usual allowances), damages to the tune of Rs. 3,00,000/- alongwith pendentelite and future interest @ 18% per annum and for mandatory injunction thereby directing the defendants to release the statutory dues of the plaintiff. The plaintiff has also prayed for costs of the suit.
3. The defendant contested the suit by filing a detailed Written Statement thereby taking various preliminary objections including the suit being barred under the provisions of Specific Relief Act, 1963 and the plaint being liable to be rejected as being barred u/o VII rule 11 (d) of the CPC and without any cause of action arise in favour of the plaintiff and against the defendant. The suit is also claimed to be liable to be dismissed Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 6/37 on the ground that the plaintiff was given appointment on the terms and conditions contained in the appointment letter dated 30.06.1999 and one of the condition as mentioned in clause 8 was stated to be that the defendant company may terminate the contract of service by one month's notice or payment of one month's salary in lieu of such notice or that the defendant company may also terminate the employment of the plaintiff at any time without any compensation if the plaintiff found guilty of misconduct or undertaking activities detrimental to the interest of the company and, therefore, the plaintiff was stated to have been found doing repeated and continuous breach of company Rules and Regulations which was allegedly duly informed to the plaintiff by the defendant. Dismissal of the suit on the ground that the plaintiff has not approached the court with clean hands is also prayed. In its reply on merits, the defendant has admitted the plaintiff to be employed as Quality Control Manager with it. It is also admitted by the defendant that the plaintiff joined the defendant company on 30.06.1999 and was confirmed after six months and thereafter promoted on pro-rata basis from time to time. It has been further contended by the defendants that as and when it came to the knowledge of the defendant that the plaintiff was repeatedly breaching the company rules and regulations resulting into huge losses to the defendant, the defendant was left with no alternative but to terminate his services. It Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 7/37 has been denied by the defendant that plaintiff has had an illustrious career with the defendant company and that the superiors of the plaintiff have had no occasion to doubt the diligence, honesty, capability and integrity of the plaintiff. It has further been denied by the defendants that on 20.08.2008, the plaintiff was taken to the meeting room by Mr. Peter Wisbeck and Ms. Susan when Mr. Atul Sharma and Ms. Shubhra Bhattacharya were already present and was asked to sign papers lying on the table or face dire consequences in case of his refusal. It has been further contended by the defendants that the termination was discussed with the plaintiff and served to the plaintiff by Mr. Peter Wisbeck and accepted by the plaintiff. The story of the plaintiff being given threats has also been denied. It has further been denied by the defendant that plaintiff was asked to leave the office and wait for instructions for rejoining the office as alleged. It has been further contended by the defendant that after termination, the plaintiff stopped coming to the office and thereafter the plaintiff never tried to contact Mr. Peter Wisbbeck. The allegation of shock and surprise after receipt of the termination letter has also been denied by the defendant. The receipt of legal notice dated 17.09.2008 has been admitted and the same was stated to be duly replied by the responsible person of the defendant vide reply dated 01.10.2008. It has further been denied by the defendant that the Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 8/37 plaintiff was not allowed to attend the office after 20.08.2011. It has been denied by the defendant that the plaintiff is being threatened to sign the full and final settlement. It has been denied by the defendant that the plaintiff is entitled for damages towards mental trauma or agony allegedly suffered by the plaintiff. Dismissal of the suit with exemplary costs has also been prayed by the defendant in its written statement.
4. In its replication to the written statement of the defendant, the plaintiff has reiterated his case as set out in the plaint denying the allegations leveled by the defendant specifically.
5. On the basis of the pleadings of the parties and the documents filed on record, the following issues were being framed by Ld Predecessor of this court vide order dated 24.09.2009.
ISSUES
1.Whether the service of the plaintiff have been lawfully terminated by the defendant?OPD
2.Whether the plaintiff is entitled for a decree of recovery of Rs.3,85,195/- as prayed? If yes, at what rate of interest?
OPP.
3.Whether the plaintiff is entitled to damages of Rs.3 lakhs as prayed, if yes, Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 9/37 at what rate of interest? OPP.
4.Whether the plaintiff is entitled to mandatory injunction as prayed for ? If yes, the additional court fees to be paid by plaintiff? OPP.
5.Relief.
6. Before adverting to the evidence recorded before the court, it would be pertinent to briefly discuss the proceedings as has taken place in the instant case. It may be seen that the suit was initially filed against five defendants. While defendant No. 1 was the company/employer of the plaintiff, defendants No. 2 to 5 were officials of the company who were acting in their various supervisory capacities. While the Ld. Predecessor of this Court vide order dated 07.01.2009 issued summons for settlement of issues to defendant No. 1, the same were declined in respect of defendants No. 2 to 5 and the suit, as such qua defendants No. 2 to 5 was not admitted at all by the Ld. Predecessor of this Court.
7. The defendant on its part moved an application under Order VII Rule 11 CPC on the ground that the suit seeks to enforce an agreement on personal service which was duly considered by the Ld. Predecessor of this Court and vide orders dated 02.04.2009, the same was dismissed.
Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 10/37
8. The defendant has also moved an application under Order VI Rule 17 CPC for amending para 8 of the Written Statement wherein which the question regarding enquiry/investigation as to the alleged loss suffered by defendant company was sought to be incorporated. Ld. Predecessor of this Court vide orders dated 18/11/2009 allowed the aforesaid application thereby observing that the plaintiff was given a termination letter prior to the enquiry/investigation to be carried out thereafter. However, the question regarding the determination of such loss was left open by the Ld. Predecessor of this Court thereby observing that the onus of same lies on the defendants.
9. The plaintiff has also moved an application under Order XII Rule 6 CPC for judgment on admission in respect of the outstanding amount of Rs.5,98,568/- being offered by the defendant to the plaintiff vide its e-mail dated 17/09/2008 on the ground that the same was admitted by the defendant during admission/denial of documents as P-3. However, Ld. Predecessor of this Court vide order dated 26.08.2010 dismissed the application on the ground that the admission is not sufficient enough to be called an admission within the meaning of order XII Rule 6 CPC.
10. Admission-denial of documents was conducted, wherein Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 11/37 defendant admitted certain documents and in certain other signatures were admitted by parties, contents were denied.
11. Plaintiff in support of his case got examined himself as PW1 and filed his evidence by way of affidavit on record which got exhibited as Ex.PW1/A. In the affidavit filed on record, the plaintiff has reiterated the contents of the plaint on oath and got exhibited the appointment letter dated 30.06.1999 as Ex.P-1. The witness has stated that he has joined the defendant company on 30.06.1999 as a 'Technician' on a monthly salary of Rs.12,000/- per month and the terms and conditions of employment is mentioned in appointment letter Ex.P-1. The plaintiff has also got exhibited on record the confirmation letter dated 05.01.2000 as Ex.P-2 whereby the plaintiff was confirmed. The plaintiff has further stated in his examination-in-chief that keeping in view of the hard work, sincerity and performance, the plaintiff was promoted vide promotion letter dated 17.10.2006 by the defendant to the post of "Quality Coordinator" and the pay was revised from Rs. 42,300/- to Rs.60,000/- with consequential benefits and the plaintiff got exhibited the said Promotion Letter as Ex.P-2A. The plaintiff was further promoted by the defendant vide Promotion Letter dated 02.04.2007 as "Quality Manager" and the pay of the plaintiff was again revised from Rs.60,000/- to Rs.90,000/- per Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 12/37 month and the said Promotion Letter dated 02.04.2007 got exhibited on record as Ex.P-2B. The witness has reiterated that after reviewing the performance of the plaintiff, the defendant company was pleased to increase his salary from Rs.90,000/- to Rs.1,03,500/- per month in addition to entitlement for reimbursements as per company manual and the said letter got exhibited by the plaintiff on record as Ex.P-2C. The witness has further stated that in his illustrious career of nine years with the defendant company, there has not been a single occasion when any of his superiors has raised any doubt on the diligence, honesty capability or integrity of the plaintiff and there has not been any memo, show cause notice or any charge sheet issued to the plaintiff by the company on any occasion throughout his career and in fact there was no occasion for the issuance of the same. The plaintiff has got exhibited on record the e-mail dated 17.09.2008 which was received by the plaintiff from the defendant company in the form of an excel sheet showing a full and final settlement of his account as Ex.P-3, legal notice dated 17.09.2008 as Ex.P-5, reply to the legal notice as Ex.P-4. letter dated 17.10.2008 sent by the plaintiff to the defendant's reply of legal notice as Ex.PW1/6.
Vide statement dated 09.02.2011 by the counsel for plaintiff, the evidence of the plaintiff was closed.
Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 13/37
12. The defendant company in support of its case got examined its Authorised Representative as DW1 and filed its evidence by way of affidavit on record, which got exhibited as Ex.DW1/A. In the affidavit filed on record, the defendant has reiterated the contents of the written statement on oath and got exhibited the termination letter dated 20.08.2008 as Ex.DW1/DX1 and stated that the same was accepted by the plaintiff. The defendant has also got exhibited the company service manual as Ex.DW1/2 and the witness stated that under the heading "Dismissal" in the Company Manual, the defendant reserve the right to terminate the services of an employee in the supervisory and management cadre at any time without advance notice or pay in lieu of notice if such employee in the opinion of the company is guilty of indiscipline/misconduct . The witness has deposed for dismissal of the suit.
Vide statement dated 18.03.2011 by the counsel for defendant, the evidence of the defendant was closed.
13. I have heard the Ld Counsels for the parties who have argued the matter for quite some time strenuously and perused the entire record including the pleadings, documents and evidence both oral and documentary. I have given a thoughtful consideration to the same. My issue-wise determination is as under:-
Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 14/37 ISSUE NO.1: Whether the service of the plaintiff have been lawfully terminated by the defendant?OPD
14. The onus of proving this issue was held on the defendant and this issue is pivotal to the decision of other issues in the instant matter, since the entire matter revolves around the determination as to whether the services of the plaintiff were lawfully terminated or whether the plaintiff was terminated arbitrarily, illegally and capriciously. In this regard, it may be seen that while the plaintiff has claimed an illustrious career of nine years with the defendant's company joining the company on 30.06.1999 as 'Technician' on a monthly salary of Rs.12,000/- per month and reaching the post of 'Quality Control Manager' within a span of nine years drawing the last salary of Rs.1,03,000/- besides other allowances and reimbursements as per the company's rules and regulations and the plaintiff has claimed that despite the illustrious career of nine years and regular promotions and increments, he was suddenly called on 20.08.2008 by officials of defendant and was terminated without any rhyme and reason. The defendant on the other hand has claimed that the plaintiff was terminated in terms of Clause 8(b) of the terms of employment letter dated 30.06.1999 Ex.P-1 for alleged "breach of company's rules and regulations". The stand taken by the defendant is that in such an eventuality, the Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 15/37 defendant has all the rights to terminate the plaintiff in accordance with the terms and conditions of employment. The defendant has further taken a stand that dehors the aforesaid, an oral inquiry/investigation was conducted by the defendant on 20.08.2008 itself and even the entire matter was discussed with the plaintiff before the termination letter was issued on 20.08.2008 itself. The respective stands require a careful scrutiny of not only the oral and documentary evidence of the parties but also a careful perusal of the entire facts and circumstances of the case.
15. First and foremost, the defendant has taken a stand that a contract of personal service cannot be enforced under the Specific Relief Act and has relied upon the pronouncement of law laid down in 1973(1) SCC 409 titled Sirsi Municipality Vs Cecelia Kom Francis Tellis wherein which the Hon'ble Apex Court has held that an ordinary relations of a master and servant covered properly by contract and and an unlawful termination in the form of a declaration would indirectly amount to specific performance of contract of personal service not permissible under the law of specific relief.
16. Ld Counsel for the plaintiff on the other hand has vehemently argued that the plaintiff has not been enforcing the contract of Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 16/37 personal service in the instant case but has been claiming damages for unlawful and illegal termination by the defendant from the service and it is a settled preposition of law laid down in a catena of judgments that though the contract of service cannot be enforced under law of specific relief, unlawful and illegal termination by an employer of an employee may lead to award of damages and even special damages may be awarded by the courts keeping in view the facts and circumstances of each case. Reliance on Brett Vs East India and London Shipping Co. 2H&M 404 (followed in AIR 1954 All. 74 at pg 77) and as such the contention raised by Ld Counsel for the defendant is liable to be rejected.
17. Secondly, it may be seen that the plaintiff was employed with the defendant vide letter of appointment dated 30.06.1999 Ex.P1 which contained the terms and conditions of employment. Clause 8 of the aforesaid letter deals with the termination notice and provide an option to both, the company and the employee to terminate the service by giving one month's notice or payment of one month's salary in lieu thereof under sub clause (a). Sub clause (b) provides an option to the company only, to terminate the employment of an employee without any compensation in case the employee is found guilty of misconduct or undertaking activities detrimental to the company. A careful perusal of the aforesaid clause 8 Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 17/37 shows that while the first part of the clause provides for a voluntary option in the hands of both, the employer and the employee to terminate or quit respectively on giving one month notice (or giving one month salary in lieu thereof), clause (b) provides an option & procedure for termination of an employee by the company in two eventualities: one he should be found guilty of misconduct or he should be found guilty of undertaking activities detrimental to the interest of the company. Read in its etymological meaning and the context, the clause not only provides power to the company to terminate an employee but at the same time provides safeguards to the employee thereby laying down a procedure and circumstances in which an employee can be terminated by the company without any compensation. The key word used is 'guilty'. The employee should be either guilty of misconduct or of undertaking activities detrimental to the interest of the company which ipso facto entails or pre- supposes a kind of inquiry/investigation into the allegation of misconduct or undertaking activities detrimental to the interest of the company. It is to be borne in mind that the word used is 'guilty of' and not 'alleged of', which means that the employer is under obligation to hold a kind of inquiry or investigation into the allegations thereby holding the employee guilty of such allegation though the same may not necessarily be a formal or detailed inquiry. In fine 'holding guilty' precedes termination without Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 18/37 compensation.
18. While the plaintiff has claimed that despite having an illustrious career of 9 years and a salary hike of almost ten times during the career, he was suddenly called and terminated on 20.08.2008 without assigning any reason, the defendant has claimed termination under clause 8(b) of the terms of employment Ex.P1. It may be seen that the plaintiff has claimed that he was never been informed of the alleged or repeated and continuous breach of company's rules and regulations for applying clause 8 (b) of the terms of employment to his service. Nothing has been shown on record to show that the plaintiff was ever issued any notice, memo, warning of censure or has ever been charged or subjected to any disciplinary proceedings during his entire career. Even DW-1 during his cross examination has admitted to have seen the entire employment record of the plaintiff and has admitted that there was absolutely no adverse entry in the career record of the plaintiff till June 2008. DW-1 during his cross examination has further admitted that the plaintiff was getting regular promotions and pay hikes. The plaintiff on its part has deposed by way of a clear and cogent evidence that he was suddenly called and made to sign certain papers under duress on 20.08.2008 which were later informed to be the termination letter Ex.PW1/DX1. The defendant on Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 19/37 its part has taken a stand in the written statement that the plaintiff was lawfully terminated for continuous breach of company's rules and regulations and has even improved its stand to the extent of stating that he was terminated due to corrupt malpractices but has failed to satisfy the records as to whether an inquiry of any sort, may be even a snap inquiry or a short inquiry was ever conducted against the plaintiff before his termination. The defendant has later started shifting its stand by first stating before the court that there was enough material against the plaintiff for corrupt malpractices and breach of company's rules and regulations and has even filed an affidavit on record at the instance of Ld Predecessor of this court when called upon to satisfy as to the adverse material or what breach of rules were being done by the plaintiff. The defendant has then taken a stand that plaintiff was indulging in receipt of money from other employees. In a sense, a stand was taken by the defendant that the plaintiff is regarding his integrity. However, when asked about the name of the supplier and the information, the defendant has failed to disclose the same either on record or to the plaintiff. Even during cross examination, DW-1 has stated that the name of the supplier was not disclosed because of confidentiality. Ld Counsel for the plaintiff has even given a suggestion that there exist no such supplier and that is why the name of the supplier was not there which was registered. All these Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 20/37 circumstances create a shadow of doubt as to the allegations of the defendant, more so when the defendant has started improving its case on each stage without disclosing the same at the first instance by explaining the same in the written statement.
19. Then coming to the fact as to whether any inquiry even a snap inquiry or a short inquiry was ever conducted in terms as required clause 8(b) of the terms of employment, Ex.P-1. The defendant has first taken a stand that no such inquiry is required in a private employment in contradistinction to a public or statutory employment. In this regard, though it is a settled preposition of law laid down in a catena of judgments that a full fledged inquiry following the procedure or satisfying the documents is not necessary in a private employment and the same may be covered by the terms of contract between the parties. However, it is a settled preposition of law that generally the principles of natural justice which required to be followed even in private employment before an employee is terminated. The inquiry has been held to be mandatory even in a private employment before termination in case the termination of the employee entails an stigma. The Hon'ble Apex Court in AIR 1985 SC 1128 titled Chandu Lal Vs Management of M/s Pan American World Airways & Ors. has held that holding of domestic inquiry is a condition precedent in case the termination is on account of some allegations which Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 21/37 entails stigma and warrants a disciplinary proceeding as a condition precedent to infliction of removal as a measure of punishment. The aforesaid preposition of law has been reiterated by a Division Bench of Hon'ble Apex Court in AIR 1987 SC 229 titled Kamal Kishore Laksham Vs Pan American World Airlines. where the Hon'ble Apex Court has gone to the extent that even a ground like loss of confidence of the employer in the employee amounts to a stigma and non holding of inquiry is seriously prejudicial to the interest of the employer and in such an eventuality, the termination is vitiated. It has been further held in 1993 (3) SCC 259 titled D.K. Yadav Vs JM Industry Ltd that Article 21 of the Constitution ensues the right to live which would include a right to livelihood and an order of termination of service of an employee which with civil consequences of jeopardizing not only his/her livelihood but also career and livelihood of the dependents, therefore, before taking an action putting an end to tenure of an employee fair play requires that a reasonable opportunity of being heard or to put forward his case is given and a domestic inquiry is conducted applying with the principles of natural justice and in case the same are not being applied with, the action of termination by the employer shall be illegal. The Hon'ble Court has further held that justice and fair play requires that a reasonable opportunity is being given to the employee to put forth his case to the Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 22/37 allegations so as to rebut the same and a proper inquiry is required to be held. Similar view were held in 1998 (74) DLT 455 titled Tarlochan Singh Vs Sri Ram Priston wherein our own Hon'ble Delhi High Court has held that principles of natural justice applies to all terminations whether statutory, governmental or otherwise. The Hon'ble Apex court in a recent judgment reported in 2002 (6) SCC 552 titled Laxmi Precision Screws Vs Ram Bhagat has gone to the extent that arbitrariness is antithetical to the rule of law and of equality, fair play and justice and even if there is a contract of employment, the same cannot be devoid of basic principle of concept of justice. The Hon'ble Court has held that justice so as to approach as present Indian jurisprudence shall have to be read as a requirement of basic concept of justice. In the instant case, as already discussed, the terms of employment Ex.P1 itself provides clause 8(b) that the employee should be guilty of misconduct or guilty of undertaking activities detrimental to the interest of the company. The use of the words 'guilty of' instead of 'alleged of' shows that the same was necessarily entailing an inquiry/investigation before a termination of an employee is effected by the company without any compensation. Furthermore, in the instant case, it may be seen that the testimony of the witnesses on record indicates that the employment record of the plaintiff was clean. This can also be inferred from the fact that the defendant has failed to bring on Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 23/37 record the employment record of the plaintiff despite the plaintiff giving a notice under Order 12 Rule 8 CPC to the defendant which has also been admitted by DW-1 during his cross examination. In any case, DW-1 during his cross examination has admitted that there was nothing incriminating in the records of the plaintiff till June 2008.
20. Now coming to the question of inquiry whether the same was held or not held in the instant case. It may be seen that the defendant all through the WS has failed to point out that any inquiry was ever contemplated or conducted before the termination letter Ex.PW1/DX dated 20.08.2008 was handed over to the plaintiff. However, later on, the defendant has improved its case during evidence when the defendant has stated that an oral inquiry was conducted against the plaintiff before terminating the services of the plaintiff. This also needs a careful scrutiny. As per the stand taken by the defendant, the plaintiff was confronted with the incriminating evidence by informing him of the name of the supplier and that he admitted his guilt. However, the name of the supplier was not disclosed on record. DW-1 during his cross examination has stated that the guilt was admitted orally as well as in writing and to support this, the defendant has relied upon the termination letter Ex.PW1/DX1. A careful reading of Ex.PW1/DX1 reveals the intention of the defendant to Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 24/37 terminate the services of the plaintiff due to breach of company's rules and regulations. The letter no where mentions that the plaintiff was found guilty of breach of company's rules. Ld counsel for the defendant has vehemently relied upon the fact that Ex.PW1/DX was received and accepted by the plaintiff who has signed the same at point A as acceptance of his guilt. However, during the cross examination a suggestion was given that Ex.PW1/DX1 is only an acknowledgment of receipt of the termination letter. Even otherwise, DW-1 has also admitted during his cross examination that there was nothing on record to show that the same was done in writing. No warning letter was ever given to the plaintiff and no inquiry was held in the matter. The witness has gone to say that the inquiry was not conducted at all since the plaintiff admitted his guilt. Nothing on record has been shown to show that the plaintiff has admitted his guilt. Interestingly, the witness DW-1 Shri Atul Sharma has deposed that he was not present at all at the time the plaintiff was confronted with the accusations and material against him which indicated corrupt malpractices or violation of company's rules. The witness has stated that at the relevant time he was not present in the office at all and has further showed his ignorance as to whether the plaintiff offered to resign on 20.08.2008 or and has stated that the same was informed to him by Country Manager of the defendant Mr Peter Wisbec. The aforesaid Mr Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 25/37 Peter Wisbec has failed to enter in the witness box and subject himself to the rigours of cross examination. The narration of Mr. Peter Wisbec to DW-1 who deposed the same in court as such and at best becomes a hear say evidence and the same cannot be accepted in the facts and circumstances of the case, more so, when it relates to termination of an employee with a stigma of being accused of corrupt malpractices.
21. Before parting with this issue, it would be also pertinent to mention here the circumstances under which the termination letter was given to the plaintiff. The plaintiff has always disputed and has been consistent throughout his pleadings and documents including the legal notice Ex.P-5 and Ex.P-6 that the alleged termination letter was never handed over to him on 20.08.2008 and the plaintiff even by way of Ex.P-6 has asked the defendant to hand over the copy of the termination letter referred to by the defendant in the reply to the first legal notice Ex.P-4. Ex.P-6 was never responded to by the defendant nor any explanation, possible or plausible has come on record. This fact can also be get support from the fact that the defendant has failed to file the termination letter dated 20.08.2008 Ex.PW1/DX1 even at the time of filing of the written statement or the documents and Ld Predecessor of this court even has made an observation to this effect during the earlier proceedings and the letter was finally filed on 28.05.2009 much after the admission-denial of Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 26/37 documents and framing of issues on 24.04.2009. This also creates a shadow of doubt that the copy of the termination letter was ever handed over to the plaintiff on 20.08.2008 itself at the time of his alleged termination.
22. In view of the aforesaid discussions and findings of the court, the court is of the considered opinion that the defendant has failed to discharge the onus conferred on it to the extent that services of the plaintiff were lawfully terminated by the defendant's company and on the contrary the plaintiff has been able to show that his termination was not only illegal but was contrary to the terms and conditions of the appointment letter and in violation of Principle of Natural Justice. This issue is accordingly decided against the defendant and in favour of the plaintiff.
ISSUE NO.2 Whether the plaintiff is entitled for a decree of recovery of Rs.3,85,195/- as prayed? If yes, at what rate of interest? OPP.
23. The onus of proving this issue was held on the plaintiff who has alleged an illegal termination in the hands of defendant arbitrarily and capriciously on 20.08.2008 despite having an illustrious career with adequate promotions and ten times increments during the service period Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 27/37 of nine years. The plaintiff has claimed a recovery of Rs.3,85,195/- thereby breaking the same as leave encasement of 17.25 days amounting to Rs. 81,153/-, Bonus amounting to Rs.91,739/- and outstanding salary for the month of August amount to Rs.87,286/- against the defendant. The plaintiff has stated that this amount was offered to him vide e-mail dated 17.09.2008 of the defendant which contained full and final settlement. He further stated that this amount did not contain and include the notice pay of one month as stipulated under clause 8 of the letter of appointment containing terms and conditions Ex.P-1 and has prayed for inclusion of Rs. 1,25,017/- as salary and user benefits for the aforesaid month thereby totaling a sum of Rs.3,85,195/-. The defendant on its part has stated that the plaintiff was lawfully terminated and hence is not entitled to any notice pay as prayed. The defendant has further stated that since the amount offered vide e-mail dated 7.09.2008 was not accepted by the plaintiff, the plaintiff is not entitled to the same. In this regard, the determination of issue no.1 has already shown that the plaintiff was illegally terminated in violation of terms and conditions of service Ex.P-1 and in violation of Principle of Natural Justice. The fact that the aforesaid amount remained outstanding in his account cannot be denied by the defendant more so when the same was offered to him vide e-mail dated 17.09.2008. The defendant witness DW-1 during his cross examination has stated that the Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 28/37 defendant has always been ready and willing to pay the outstanding amount to the plaintiff but was not paid also as he has refused to accept the same. However, during his cross examination, when asked about the mode of refusal, the witness has stated that the plaintiff sent an e-mail refusing to accept the offered amount. However, no such e-mail has been brought to the notice of the court. Further DW-1 when confronted with the records during cross-examination has given a vague answer about the same and the suggestion that no such e-mail exist was answered in negative. It is the settled preposition of law that lawful dues of an employee cannot be withheld by the employer without any justified or cogent reasons. Since the termination of the plaintiff is held illegal in terms of clause 8, the defendant could not have terminated him except after giving one month's notice or one month pay in lieu thereof and it is a settled preposition of law now held in 2010 (14) DRJ 475 DCM Vs Mahavir Singh Rana that in case of an alleged illegal termination, it is the duty of the Manager to ensure that notice pay is given alongwith the termination letter. Reliance also placed on (2005) 2 SCC 363 K.V. Sangathan Vs S.C. Sharma. Further in view of the aforesaid discussions, the court is of the considered opinion that the plaintiff has been able to successfully show on record his entitlement not only to the outstanding leave encasement, bonus and outstanding salary but also the notice pay of Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 29/37 one month. The plaintiff as such is entitled to the recovery of an amount of Rs.3,85,195/- as claimed against the defendant.
24. Now, coming to the quantum of interest on this amount. The defendant has failed to show on record as to why the plaintiff is not entitle to any interest on such amount, illegally withheld by the defendant. However, during testimony of DW-1, it has been stated that the plaintiff is not entitled to any interest on such amount since he himself has refused to accept the same and the defendant cannot be held guilty for the wrongs of the plaintiff. However, in view of the discussions held in the preceding paras, the defendant has failed to show on record as to how the same was refused by the plaintiff, more so, when during cross examination DW-1 has failed to show on record the alleged e-mail refusing the amount offered. As such the court is of the considered opinion that the plaintiff shall also be entitled to the interest @ 9% per annum on such amount from the date of filing of the suit till its realization. This issue is also decided in favour of the plaintiff and against the defendant.
ISSUE NO.4 Whether the plaintiff is entitled to mandatory injunction as prayed for ? If yes, the additional court fees to be paid by plaintiff? OPP.
25. The onus of proving this issue was not specified by the Ld predecessor of this court while framing the issues on 24.04.2009. Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 30/37 However, perusal of the pleadings and the documents placed on record shows that the onus of proving this issue ought to have been put on the shoulders of the plaintiff who has claimed a mandatory injunction in the form of injunction against the defendant directing them to release the statutory dues to the plaintiff. In this regard, it may be seen that the plaintiff has stated that on account of his illegal termination on 20.08.2008 by the defendant, he is entitled to not only the outstanding dues, one month pay and damages but is also entitled to a mandatory direction for release of his outstanding statutory dues. The same has been carefully considered. In view of determination of court on issues no.1 and 2 discussed above and the fact that the deposition of PW-1 in this regard is clear and categorical and the defendant has failed to put any substantial dent in the testimony of PW-1 during cross examination. The plaintiff has been able to discharge the onus conferred at least to the extent of preponderance of probabilities. Even otherwise, the defendant has already admitted vide Ex.P-3 that the plaintiff was sent with the full and final settlement notice containing the payment of gratuity for number of completed years of his service to the tune of Rs.3,50,000/-. Ld Counsel for the defendant during the course of argument and even in written arguments has very fairly submitted that the defendant is ready and agreeable to release the statutory dues towards payment of gratuity to the Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 31/37 plaintiff. The defendant is accordingly directed to pay the aforesaid amount of statutory gratuity due to the plaintiff within 60 days from passing of this judgment. This shall be, however, subject to payment of deficient court fees by the plaintiff within 30 days from today. This issue is accordingly decided in favour of the plaintiff and against the defendant. ISSUE NO.3 Whether the plaintiff is entitled to damages of Rs.3 lakhs as prayed, if yes, at what rate of interest?
26. The onus of proving this issue has also not been specified by the Ld predecessor of this court but the same is required to be proved by the plaintiff who has claimed the damages to tune of Rs.3,00,000/- towards sufferings, mental agony, loss of reputation, loss of career and the stigma attached to his name for life time. The plaintiff has contended that during the period he was terminated and till the time of filing of this suit, he has applied for various jobs but could not get the job as every time the perspective employer has asked about the reasons for leaving the earlier job and on being informed that he has been terminated, the matter comes to an end. The plaintiff has stated that the total amount of damages is conservatively quantified at Rs.3,00,000/- towards the aforesaid sufferings. In this regard, PW-1 has deposed vide Ex.PW1/A that on account of the aforesaid reasons, he is entitled to a damages to the tune of Rs.3,00,000/-. The defendant on its part has denied not only the alleged termination of Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 32/37 the plaintiff to be illegal but has also stated that the plaintiff is not entitled to any damages on account of the aforesaid reasons shown by the plaintiff since he was validly terminated. Ld Counsel for the defendant during the course of arguments has vehemently relied upon the pronouncement of law laid down in (1991) 1 SCC 533 titled Indian Oil Corporation Ltd Vs Amritsar Gas Services & Ors. wherein the Hon'ble Apex Court has held that in eventualities like illegal termination, the plaintiff is entitled to a compensation only with respect to the loss of earnings for the notice period of 30 days. Ld counsel for the defendant has further relied upon the pronouncement of law laid down by our own High Court in RFA No. 360/06 decided on 22.07.2011 titled J.K. Shah Vs M/s Birla Cotton Spine Mills Pvt Ltd and has vehemently argued that the plaintiff at best is entitled to one month's notice pay for the alleged illegal termination and no amount to the tune of Rs.3,00,000/- can be granted. However, during the course of cross examination or during his examination his witness the defendant has failed to put any substantial damage to the testimony of PW-1 on the aspect of damages. Further the court has already decided that the termination of the plaintiff was illegal and contrary to the terms of employment and as such plaintiff has been able to show at least to the extent of preponderance of probabilities that he is entitled to damages, but the quantum thereof is to be determined. In this regard, it is settled Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 33/37 preposition of law laid down in a catena of judgments that damages to be awarded but a person who has suffered by the wrongful action of the defendant has to be based on two principles; one is actual in the nature of compensation or the loss of injury actually suffered by the person and the second is punitive i.e. damages which are triggered by the conduct that may be described by epithets such as high handed, malicious, vindicative, oppressive or apprehensive. Punitive damages are awarded where the court found compensation damages will not achieve sufficient deterrence and that the defendant's action must be punished. The aim of punitive damages is not to compensate the plaintiff. It has been further held in a catena of judgment that award of damages or the calculation of quantum depends upon various factors such as nature of injury, relationship of parties, type of risk, liability and rule or liability being strict or vicarious. It has been further held that compensatory damages are to be recovered in payment of actual injury in order to indemnify the person for a particular loss detrimental or injury suffered as a result of unlawful conduct of tort feaser. This amount has to be in the form of monetary compensation necessary to replace what was the loss and nothing more. It has been held in a catena of judgment that normally measure of damages in case of illegal termination would be a salary and other allowances the employee would have drawn. Reliance has been placed on 1998 (74) DLT 455 Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 34/37 (supra). In the instant case, the plaintiff has claimed a damages of Rs. 3,00,000/- on account of mental pain and agony suffered by him. However, nothing has come on record in the evidence of the plaintiff as to how the amount of Rs.3,00,000/- has been quantified by him or as to how the aforesaid amount can be taken to be an adequate compensation for the loss and injury suffered by him in the hands of the defendant. Furthermore, during cross examination, the witness has himself stated that he is now self employed and has been doing business of handicrafts. Accordingly, applying the principles settled by the courts above, this court is of the considered opinion that plaintiff is entitled to nominal and notional damages which can otherwise be considered as grant of about one month's salary Reliance 2000 (14) DRJ 475 (supra) and as such the court is of the considered opinion that interest of justice would be met if the plaintiff is given a notional damages to the tune of Rs.1,00,000/- on account of mental agony, sufferings and trauma faced by him due to the acts and omissions of the defendant. This amount has given as damages keeping in view the status and earning of the plaintiff at the time of termination by the defendant. This issue is accordingly decided in favour of the plaintiff and against the defendant.
RELIEF:-
Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 35/37
27. In view of the findings of the court on the aforesaid issues, the court is of the considered opinion that plaintiff has been successful in establishing its case at least to the extent of preponderance of probabilities and in view of the findings of the court discussed above, the plaintiff is entitled to the following relief:
(a) The termination of the plaintiff is held as arbitrarily and illegal and in violation of terms of employment and Principles of Natural Justice;
(b) The plaintiff is entitled to recovery of Rs.3,85,000/-
against the defendant alongwith interest @ 9% per annum pendent elites and future from the date of filing of the instant suit till its actual realization;
(c ) The plaintiff shall also be entitled to damages to the tune of Rs.1,00,000/- against the defendant and
(d) The plaintiff shall also be entitled to the amount of Rs.3,50,000/- as statutory dues against the defendant which the defendant is directed to release within 60 days from today and this shall be subjected to filing of court fees within 30 days from today.
Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 36/37
28. In the specific facts and circumstances of this case, plaintiff shall also be entitled to the costs of the suit throughout. Suit of the plaintiff is accordingly decreed. Decree sheet be drawn. File be consigned to record room after due completion.
(MUKESH KUMAR GUPTA)
DATED 03.10.2011 ADJ-03/SW/DWARKA/DELHI
ANNOUNCED IN THE OPEN COURT
(DKG/ PK).
Suit No.222/10/08 M Naved Hasan Vs. M/s Ikea Trading 37/37