Delhi District Court
Rahul Saxena vs Rhiti Sports Management Pvt Ltd And ... on 15 October, 2025
DLND010109892022
IN THE COURT OF DISTRICT JUDGE- 01,
NEW DELHI DISTRICT, PATIALA HOUSE COURTS,
NEW DELHI
Presided over by :- SH. DHARMENDER RANA (DHJS)
CS 518/2022
Rahul Saxena
Aged 36 years
S/o Virender Nath Saxena,
R/o Flat No. B-3, Plot No. 336,
Sai Apartment, Opposite Dashmesh School,
Shalimar Garden Ext. 1, Sahibabad, Ghaziabad,
Uttar Pradesh-201005
.....Plaintiff
Vs.
1. Rhiti Sports Management Private Limited,
Through its Managing Director,
24A, Green Avenue, Church Road,
Vasant Kunj, New Delhi-110070
[email protected]
+91-9810729994
2. Arun Pandey-Managing Director,
Rhiti Sports Management Private Limited,
24A, Green Avenue, Churth Road,
Vasant Kunj, New Delhi-110070
[email protected]
+91-9987413338
3. Pratima Pandey-Director,
Rhiti Sports Management Private Limited,
24A, Green Avenue, Churth Road,
CS No. 518/2022
Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 1 of 33
Vasant Kunj, New Delhi-110070
[email protected]
+91-9987413338
4. Piyush Saran-HR-Head,
Rhiti Sports Management Private Limited,
Through its Managing Director,
24A, Green Avenue, Churth Road,
Vasant Kunj, New Delhi-110070
[email protected]
[email protected]
+91-9953032737
(Defendant No. 4 was deleted from the array of partied vide order dated 05.01.2023.)
Also at:
Registered office,
Rhiti Sports Management Private Limited,
Through its Managing Director,
Flat No. 7514, Sector-D, PKT-7, Ground Floor,
Vasant Kunj, South Delhi, DL-110070 IN
[email protected]
+91-9810729994
.....Defendants
Suit presented On : 16.12.2022
Arguments Concluded On : 09.10.2025
Judgment Pronounced On : 15.10.2025
JUDGMENT
1 By way of the instant judgment, I propose to dispose of the suit for recovery and declaration.
CS No. 518/2022Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 2 of 33 Plaintiff's case:
2 Shorn of all unnecessary details: The plaintiff claims to be employed with Rhiti Sports Management Pvt Ltd (hereinafter referred to defendant no. 1) as senior manager, Digital Marketing w.e.f. 16.08.2021. The terms of employment were incorporated in the appointment letter dated 09.09.2021 (Ex. PW-1/2). As per clause no. 3 of the letter of appointment dated 09.09.2021 (Ex. PW-1/2), it was agreed between the parties that the plaintiff shall be paid Rs.10,00,000/- per annum as remuneration and Rs.3,00,000/- per annum as performance based variable pay. Clause no. 3 of the appointment letter (Ex. PW-1/2) is reproduced herein as under for ready reference:
"3. Your remuneration would be fixed Rs. 10.0 Lakh /- per annum with Additionally you will be eligible for performance-based Variable pay of Rs 3.0 Lakh (Rupees Three lac Only) annually. Which will be disburse in two parts on Six month basis subject to your performance and target achievement as per company Policy".
3 In accordance with the terms of the employment, a sum of Rs.1,35,000/-, after deduction of Rs.15,000/- towards TDS, was paid by the defendant to the plaintiff on 16.02.2022 for his extra ordinary performance with defendant no. 1. Upon successful completion of 3 months' probation period, the plaintiff eventually CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 3 of 33 completed his one year of employment with the defendant no. 1 on 16.08.2022. It is averred that during his tenure of employment with the defendant no. 1, his performance was not only excellent but was even appreciated by the defendant through email dated 16.08.2022 (Ex. PW-1/4). It is averred that the plaintiff was concerned about the non-payment of his salary for the month of July and August 2022, as well as the over due performance based variable pay. It is further averred that neither the HR department nor the accounts department of defendant no. 1 addressed the outstanding payment concerns of the plaintiff and subsequently the plaintiff came to know that even other employees were facing similar issues. The condition of the plaintiff became more distressful on account of his bedridden paralytic mother. The plaintiff accordingly reached out Sh. Arun Pandey (defendant no.
2) ; Managing Director of defendant no. 1, through phone and WhatsApp on 17.08.2022, 27.08.2022, 30.08.2022, 01.09.2022 and 17.09.2022 demanding his two months over due salary. It is averred that defendant no. 2 ignored all the above said messages except message dated 17.08.2022, which was curtly replied by defendant no. 2 "Next Week".
4 It is averred that on 02.09.2022, the plaintiff received an email from Sh. Piyush Saran (HR Head) terminating the services of the plaintiff with immediate effect on the so called ground of 'performance was not up to the mark and unsatisfactory' and 'mis- behaviour with the chairman'. It is averred the genesis of the email dated 02.09.2022 lies in a meeting of the plaintiff with defendant CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 4 of 33 no. 2 on 01.09.2022 wherein plaintiff has requested defendant no. 2 to instruct the concerned officials to release the remuneration for the month July, 2022 to August 2022 and the outstanding performance based variable pay. It is averred that in the said meeting dated 01.09.2022, defendant no. 2 has assured the plaintiff that the matter shall be sorted out very soon. It is averred that in the meeting dated 01.09.2022, defendant no. 2 abused, insulted and shunted out the plaintiff from the office in the most humiliating way in the presence of other employees. It is further averred that the despicable conduct of defendant no. 2 was actuated with an oblique intent to threaten the employees so that they do not ask for their salaries and other dues. The plaintiff claims to have audio recorded the proceedings of the meeting dated 01.09.2022 and the audio recording has been placed on record in a pendrive along with its transcript. It is averred that the defendant no. 2 in the said meeting abused his employees in the presence of other female employees and treated them with utter contempt as 'personal slaves'. It is averred that the meeting dated 01.09.2022 was in fact a ruse to avoid payment of the outstanding salary dues and the outstanding performance based variable pay of Rs.1,50,000/-.
5 It is averred that as per the service agreement dated 09.09.2021, the defendants are liable to pay one month basic salary for the notice period. It is further averred that the defendants are also liable to pay Rs.1,50,000/- as over due payment towards performance based variable pay.
CS No. 518/2022Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 5 of 33 6 Aggrieved by the termination of his employment without payment of the outstanding dues, the plaintiff has now instituted the present suit against the employer (i) Rhiti Sports Pvt Ltd (defendant no. 1),
(ii) Sh. Arun Pandey; Managing Director of defendant no. 1 (defendnat no. 2), (iii) Ms. P. Pandey; Director of defendant no. 1 (defendant no. 3) and (iv) Sh. Piyush Saran (HR Head) seeking the following reliefs:
"1. Pass a decree of declaration declaring the termination order/e-mail dated 02.09.2022 passed / sent by the defendant No. 1, 2 & 3 being illegal, unlawful and void ab initio without any force of law and as such null and void and grant consequential relief of compensation for mental agony and harassment caused due to unlawful termination and withholding pending dues till date and vindication of the position of plaintiff that his termination is an unfair act by the defendant no.1, 2 & 3;
2. Pass a money decree for recovery and compensation/damages of Rs.4,33,333/- Lakhs (Rupees Four Lakhs Thirty Three Thousand and Three Hundred Thirty Three Only) which is inclusive of Rs.1,50,000/- Lakhs (Rupees One Lakh Fifty Thousand Only) of performance-based variable along with one month's salary of Rs.83,333/- (Rupees Eighty Three Thousand Three Hundred and Thirty Three Only) in lieu of one month's notice period and compensation/damages of Rs.2,00,000/- Lakhs (Rupees Two Lakhs Only) for causing mental agony and CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 6 of 33 harassment caused due to unlawful termination and withholding pending dues till date in favour of the plaintiff and against the defendant no.1, 2 & 3 together with pendent-lite and future interest @24% p.a. from the date of institution of the suit till realisation of the decretal amount;
3. Pass an award of compensation/damages of Rs.2,00,000/- Lakhs (Rupees Two Lakhs Only) which is inclusive of the aforesaid total recovery amount of Rs.4,33,333/- Lakhs (Rupees Four Lakhs Thirty Three Thousand and Three Hundred Thirty Three Only) for causing mental agony and harassment caused due to unlawful termination and withholding pending dues till date in favour of plaintiff and against the defendant no.1, 2 & 3;
4. Pass an award for payment of litigation costs in favour of the plaintiff and against the defendant no. 1, 2 & 3;
5. Pass such further orders or directions as this Hon'ble Court may deem fit, appropriate, and proper in the facts and circumstances of the present civil suit in favour of the plaintiff and against the defendant no.1, 2 & 3."
7 Summons of the suit were duly served upon the defendants. It would be pertinent to mention here that besides defendant no. 1 and its managing director (defendant no. 2) and director (defendant no.
3) Sh. Piyush Saran (HR-Head) was also arrayed as defendant by the plaintiff, however, vide order dated 05.01.2023, Sh. Piyush CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 7 of 33 Saran (arrayed as defendant no. 4) was dropped from the array of parties and thereafter the suit continued only against defendant no. 1 to 3.
Joint written statements of the defendants:
8 The engagement of the plaintiff with the defendants as Senior Manager, Digital Marketing w.e.f. 16.08.2021 is not disputed. The terms of employment vide appointment letter dated 09.09.2021 is also not disputed. It is also admitted that first installment of Rs.1,35,000/-, after deduction of Rs.15,000/- as TDS, of the performance based variable pay, in terms of appointment letter dated 09.09.2021, was duly paid to the plaintiff on 16.02.2022.
However, it is disputed that the same was paid on account of plaintiff's extra ordinary performance.
9 It is averred that after initial satisfactory performance, with the passage of time, the performance of the plaintiff drastically deteriorated. It is averred that on account of plaintiff's carelessness, the defendant company sustained huge financial losses. It is averred that on numerous occasion niece of defendant no. 2 had to redo the entire work of the plaintiff as he was unprofessional and had no knowledge of digital marketing.
10 It is averred that in order to review the work of the employees and to apprise them about the losses sustained by the defendant company on account of poor quality of work, a meeting was CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 8 of 33 convened by the defendants on 01.09.2022. It is averred that in the said meeting, when the plaintiff was informed about his poor work and its reperformance by the niece of the defendant no. 2, he started shouting in front of other employees that 'his work was insulted'. Defendant no. 2 asked the plaintiff to leave the meeting a number of times but the plaintiff refused to leave the meeting and created a ruckus. Plaintiff misbehaved with defendant no. 2 in front of other employees and thus the defendants were constrained to initiate disciplinary action against the plaintiff. Resultantly, the services of the plaintiff were terminated vide email dated 02.09.2022 with immediate effect on account of unsatisfactory performance and misbehaviour. The plaintiff was further informed that upon termination, all the benefits associated with the plaintiff's position shall no longer be valid. The plaintiff was further requested to return back the company's laptop and other property, however, instead of returning the same, plaintiff started making an illegal demand of Rs.1,50,000/- on the pretext of performance based variable pay. It is specifically averred that the payment of performance based variable pay was contingent upon the performance and achievement of targets and since the performance of plaintiff was not up to the mark he is not entitled for any payments on this account. It is averred that the appreciation email dated 16.08.2022 was a formal email sent by the defendant company to its employees after the completion of one year service so as to boost their confidence. It is claimed that the said email was sent by one Mehak Mangi and not addressed by defendant no. 2 CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 9 of 33 and 3. It is further claimed that the plaintiff requested for advance of Rs.60,000/- whereupon defendant no. 2 replied 'Next Week'.
11 The defendants have admitted that the original audio recording of the meeting held on 01.09.2022 is with the plaintiff. With respect to the one month's notice period of the salary, it is claimed that since the plaintiff is in the breach of the terms of employment, therefore, he is not entitled for any payment on this count. It is claimed that as per the clause no. 19 of the letter of appointment (Ex. PW-1/2), the plaintiff was required to maintain confidentiality about his salary, however, in breach of his contractual obligations, he continued to share his salary details with other employees. It is averred that he created an atmosphere of hostility amongst the employees and is guilty of gross indiscipline and insubordination. It is averred that the salary dues towards the month of July, 2022 and August, 2022 have already been paid and nothing remains unpaid. It is further averred that the dispute between the plaintiff and the defendants is in the nature of Industrial dispute and thus not amenable to the jurisdiction of the Civil Court.
12 The remaining averments in the plaint have been denied and disputed by the defendants and they have accordingly prayed for dismissal of the suit.
CS No. 518/2022Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 10 of 33 Replication:
13 The plaintiff has filed a detailed replication reiterating the averments of the plaint and disputing the contentions of the defendants agitated in the written statement.
Issues:
14 Upon completion of the pleadings, vide order dated 20.02.2024, following issues have been framed:
i) Whether this Court does not have the subject matter jurisdiction? OPD
ii) Whether the plaintiff is entitled to a decree of declaration that termination order/e-mail dated 02.09.2022 is void ab- initio? OPP
iii) Whether the plaintiff is entitled to a decree for recovery of Rs.4,33,333/- towards compensation/damages? OPP
iv) If yes, whether the plaintiff is entitled to interest thereupon, if yes, at what rate? OPP v. Relief.
Plaintiff's Evidence:
15 PW-1, Sh. Rahul Saxena (Plaintiff herein), has tendered his affidavit in evidence. He has been elaborately cross-examined by the defendants. He has relied upon following documents :
CS No. 518/2022Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 11 of 33
Sl Documents Exhibited
No. as
1. Affidavit u/s 65B of Indian Evidence Ex. PW1/1
Act, 1872
2. Copy of appointment letter dated Ex. PW1/2
09.09.2021 (OSR)
3. Copy of termination email / order Ex. PW1/3
dated 02.09.2022
4. Copy of email dated 16.08.2022 Ex. PW1/4
5. Copy of email sent by the plaintiff to Ex. PW1/5 the defendants for release of pending (colly) payments
6. Copy of whatsapp messages by the Ex. PW1/6 plaintiff to defendant no.2 (colly)
7. Copy of bank statements Ex. PW1/7 (colly)
8. Copy of the transcript of the audio Mark recording dated 01.09.2022 PW1/8
9. Copy of notice dated 07.11.2022 Ex. PW1/9
10. Copy of company master data of Ex.
defendants no. 1, 2 and 3 from PW1/10
Ministry of Corporate affairs
11. Copy of Aadhar card Ex.
PW1/11
12. Pen drive containing audio recording Ex.
of meeting dated 01.09.2022 PW1/12
13. Copy of reply dated 16.12.2022 by Ex.
the defendants to notice dated PW1/13
07.11.2022
CS No. 518/2022
Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 12 of 33 Defendant's Evidence:
16 DW-1, Sh. Ashutosh Kumar Pandey, has tendered his affidavit in evidence (Ex. DW-1/A). He has also proved on record the board resolution dated 10.02.2025 (Ex. DW-1/1) authorising him to testify in the instant matter. He has been cross-examined by the plaintiff.
17 I have heard the submissions made at bar and I have carefully perused the record.
18 My issue wise finding is herein as under:
19 Issue No. 1: Whether this Court does not have the subject matter jurisdiction? OPD The onus to prove this issue was on the defendants. It is argued by the counsel for the defendant that this Court lacks the jurisdiction to entertain the instant dispute as the dispute at hand is between the employer and the employee. It is argued that the dispute being an industrial dispute, the same could have been entertained only by a Labour Court and the jurisdiction of the Civil Court to entertain an industrial dispute is specifically barred as per the provisions of Industrial Dispute Act.
CS No. 518/2022Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 13 of 33 20 Admittedly, the plaintiff herein was employed by the defendant as a 'Senior Manager: Digital Marketing'. As per section 2 (S) (iii) of the Industrial Dispute Act, a person who is employed in managerial capacity is specifically excluded from the statutory definition of workman. Since the plaintiff herein was engaged as a senior manager, the dispute is not amenable to the jurisdiction of labour Court and is entertainable by a Civil Court. Reliance in this regard can be placed upon S.K. Maini Vs. Corona Sahu Co Ltd 1994 3 SCC 510.
20.1 The issue is accordingly decided in favour of the plaintiff and against the defendant.
21 Issue No. 2: Whether the plaintiff is entitled to a decree of declaration that termination order/e-mail dated 02.09.2022 is void ab-initio?OPP It would be pertinent to mention herein that vide order dated 09.10.2025, the plaintiff was permitted to abandon the relief of declaration and thus issue no. 2 was directed to be deleted as redundant. Therefore, no finding is required to be returned qua the above said issue.
22 Issue No. 3: Whether the plaintiff is entitled to a decree for recovery of Rs. 4,33,333/- towards compensation/damages? OPP CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 14 of 33 Claim of the plaintiff can be trifurcated under the following heads (I) Notice Period Salary, (II) Dues on account of Performance Based Variable Pay and (III) Damages.
23 Let us deal with rival contentions of the litigating parties with respect to the above said three heads separately.
(I) Notice Period Salary:
24 The plaintiff has drawn my attention to clause no. 7 of the letter of appointment dated 09.09.2021 (Ex. PW-1/2) which is reproduced herein as under for ready reference:
"7. After successful completion of probation period (no PIP communication during probation), the Contract of Employment can be terminated by giving one months' Notice or Basic Salary in lieu thereof by the company, and in case of employee, by giving one months' notice period, out of which the employee has to serve at least One Months (uninterrupted without any leave) and payment of remaining period's Basic Salary in lieu thereof."
25 It is established on record that the plaintiff was engaged by defendant no. 1 at an annual salary of Rs.10,00,000/-. It is also established on record that the services of the plaintiff was terminated by the defendants vide email dated 02.09.2022 (Ex. PW-1/3) with immediate effect, without any notice. The CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 15 of 33 termination of the plaintiff's services with the defendants after successful completion of the probation period is beyond the pale of any controversy. Neither in the written statement it is pleaded nor it is proved in the testimony of Sh. Ashutosh Kumar Pandey (DW-1) that the notice period salary, in accordance with clause 7 of the appointment letter (Ex. PW-1/2), was paid by the defendants to the plaintiff.
26 Defendants have attempted to avoid their liability by pointing out that the plaintiff in his cross-examination has himself admitted that there is no outstanding dues on account of salary recoverable from the defendant. However, when we meticulously examine the testimony of the plaintiff it is evident that he was merely referring to the regular monthly salary due on account of the services rendered by the plaintiff with the defendant. The plaintiff has clarified in the same breath that salary of July and August 2022 was due, which was paid in September, 2022 end. Consequently, an off the cuff statement of the plaintiff regarding 'no outstanding dues on account of salary' cannot be read out of context. The plaintiff has simply admitted the payment of salary till July and August 2022. The service of the plaintiff was terminated by the defendant on 02.09.2022, vide email of the even date (Ex. PW-1/3). Neither the termination mail dated 02.09.2022 (Ex. PW-1/3), nor the written statement or for that matter the testimony of DW-1, makes any mention of the payment of the notice period salary. As per the clause 7 of the terms of employment (Ex. PW-1/2), it was incumbent upon the defendant to either serve one month's notice or CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 16 of 33 in the alternative to pay one month's basic salary, while terminating the services of the plaintiff. The termination email (Ex. PW-1/3) terminated the services of the plaintiff with immediate effect and thus the defendants cannot evade their liability to pay one month's basic salary to the plaintiff.
26.1 The defendants have feebly attempted to argue that in the termination email (Ex. PW-1/3) it was clarified to the plaintiff that upon termination of the services, benefits associated with the position of the plaintiff shall no longer be valid. However, in my considered opinion, defendants cannot unilaterally walk out of their contractual obligations in accordance with clause 7 of the terms of employment (Ex. PW-1/2). Therefore, in my considered opinion, the plaintiff has successfully proved its case with respect to the recovery of one month's basis salary to the tune of the Rs.83,333/- (Rs.10,00,000/-÷12 months = Rs.83,333.33).
(II) Dues on account of performance based variable pay:
27 Counsel for the plaintiff has drawn my attention to clause no. 3 of the terms of employment (Ex. PW-1/2) to contend that defendants are liable to pay Rs.1,50,000/-. Counsel for the plaintiff has further drawn my attention to the email dated 16.08.2022 (Ex. PW-1/4) wherein the performance of the plaintiff with the defendant company has been duly acknowledged and appreciated.
CS No. 518/2022Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 17 of 33 28 The payment of Rs.1,35,000/- (Rs.1,50,000/- minus Rs.15,000/-
deducted as TDS) towards performance based variable pay is not disputed by either of the sides. The plaintiff is claiming the balance amount of Rs.1,50,000/- which is resisted by the defendant on the ground that this performance based variable pay is subject to satisfactory performance and target achievement as per the company's policy. It is forcefully argued by the counsel for the defendant that the plaintiff cannot claim the performance based variable pay as a matter of right and the payment of this amount is discretionary. It is further argued that not only the performance of plaintiff was not up to the mark but he was also in the breach of clause no. 19 of the terms of employment Ex.PW-1/2 whereby the plaintiff was duty bound to maintain confidentiality about his salary. It is argued that in the breach of said contractual obligation, the plaintiff disclosed his salary to the other employees and disturbed the office harmony. It is further argued that in the meeting dated 01.09.2022, the plaintiff misbehaved with the defendant no. 2 and the grossly indisciplined conduct of the plaintiff disentitles him from claiming any benefits from the defendants. It is further argued that it was never agreed between the parties that performance based variable pay is required to be paid in two installments. It is submitted that as long as the performance of the plaintiff was up to the mark he was paid performance based variable pay and when his performance deteriorated he was not entitled for any performance based variable pay. With respect to the appreciation email dated 16.08.2022 (Ex. PW-1/4), it is argued that the same was written by Mehak Mangi and not by the CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 18 of 33 defendants. It is thus argued that the plaintiff is not entitled for any performance based variable pay.
29 In order to appreciate the rival claims it would be apt to reproduce herein relevant clause 3 of the terms of employment (Ex. PW-1/2) herein as under:
"3. Your remuneration would be fixed Rs. 10.0 Lakh per annum with Additionally you will be eligible for performance-based Variable pay of Rs 3.0 Lakh (Rupees Three lac Only) annually. Which will be disburse in two parts on Six month basis subject to your performance and target achievement as per company policy."
30 Evidently, as per clause no. 3, it was agreed between the parties that the performance based variable pay shall be disbursed in two parts on six months basis. It was further agreed that the performance based variable pay shall be Rs.3,00,000/- per annum, subject to performance and target achievement as per the company's policies. The plaintiff has successfully discharged his onus by placing on record the appreciation email dated 16.08.2022 (Ex. PW-1/4). The contents of the said email are reproduced herein for ready reference:
"Dear Rahul Saxena.
How time flies when you're having fun.CS No. 518/2022
Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 19 of 33 You may not have noticed, but we at Rhiti Group have had much pleasure working with you for the last 1 Year.
We really appreciate the long hours, the persistence, the attention to detail, and your usual cooperative attitude about anything we've assigned you in these past years. You've shown commitment to whatever the goal set in front of you.
Thanks & Regards Mehak Mangi 9716208020"
31 Evidently, the defendant company was happy and satisfied with the performance of the plaintiff, at least till 16.08.2022. Consequently, the liability to pay for the period w.e.f. 16.08.2021 till 16.08.2022 with respect to the performance based variable pay stood crystallized and his performance, if at all deteriorated, the same may have deteriorated only after 16.08.2022. There is nothing on record to suggest that the plaintiff has not performed up to the mark or has failed to achieve the pre-determined target, as per the company's policy for the period w.e.f. 16.08.2021 till 16.08.2022. Rather to the contrary, the attempt to evade liability stands thoroughly discredited in light of the appreciation email (Ex. PW-1/4). In my considered opinion, except for bald and bare assertions, there is nothing on record which justifies the non- payment of the balance performance based variable pay to the plaintiff herein for the period w.e.f. 16.08.2021 till 16.08.2022. As far as the breach of terms of employment regarding disclosure of salary is concerned, there is no credible evidence led on behalf of the defendants to justify the breach of confidentiality agreement.
CS No. 518/2022Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 20 of 33 Neither necessary particulars have been provided nor any employee to whom the plaintiff disclosed about his salary has been examined on behalf of the defendant. Accordingly, the contention is taken on record to be rejected. As far as the doubts regarding the authority of author of the appreciation email dated 16.08.2022 (Ex. PW-1/4) is concerned, the same also seems to be flimsy and superfluous. The contents of the said email would reveal that the author Mehak Mangi was writing the email from his official ID i.e. [email protected]. The defendants have admitted in the written statement that the said mail was sent by the company in routine to boost the morale of the plaintiff upon the successful completion of one year service. The address bar of the said email would further reveal that a copy thereof was also served upon the office of the defendant no. 2. No evidence has been led on record to prove that similar mails were sent to other employees also. It is not the case of the defendant that Mehak Mangi exceeded his authority or was acting in collusion with plaintiff herein thus it cannot be contended that the appreciation email dated 16.08.2022 (Ex.PW-1/4) ought not be relied upon. There is nothing on record to suggest that the performance of the plaintiff was not up to the mark or he failed to meet any predetermined targets.
31.1 The defendants have further attempted to resist the liability to pay on the ground that the plaintiff is guilty of indiscipline and insubordination as he misbehaved with the defendant no. 2 in the meeting dated 01.09.2022. Even this leg of arguments lacks any merit. Except for bald and bare assertions, there is no evidence led CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 21 of 33 on behalf of the defendant to justify its allegation of indiscipline and insubordination. The sole witness examined on behalf of the defendants i.e. DW-1 has himself admitted that he was not aware as to what happened in the meeting dated 01.09.2022. He, however, claims that he was informed by Mr. Arun Pandey (defendant no. 2) that there was an argument between the plaintiff and the defendant no. 2. Sh. Aashutosh Kumar Pandey (DW-1) has himself admitted that he is not aware about the actual reason for termination of the service of the plaintiff. Once the testimony of Sh. Ashutosh Kumar Pandey (DW-1) with respect to the meeting dated 01.09.2022 is discarded being hearsay, there is no evidence worth its salt justifying the allegations of indiscipline and in-subordination. Defendant no. 2 has opted not to appear in the witness box and thus adverse inference needs to be drawn against the defendants. It would also be apt to point out here that the audio recording transcript (Ex. PW-1/8) would reveal that Sh. Arun Pandey (defendant no. 2) was not only indecent in his behavior with the employees but was also abusive against them. The transcript would further reveal that the various other employees demanded salary from the defendant no. 2. The conversation further reveals that defendant no. 2 lost his cool and directed the plaintiff to be thrown out of the meeting. Needless to say that an employer who demands respect ought to respect his employee.
32 Considering the totality of circumstances, I do not find any justification for denying the payment of balance outstanding dues of Rs.1,50,000/- on account of performance based variable pay.
CS No. 518/2022Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 22 of 33 (III) Compensation for damages:
33 Besides the payment of outstanding notice period salary and performance based variable pay the plaintiff is also claiming damages to the tune of Rs.2,00,000/- as damages on account of mental agony and harassment due to unlawful termination and withholding of pending dues.
34 However, during the course of arguments, counsel for the plaintiff, has fairly conceded that there is no evidence led by the plaintiff justifying the quantum of damages. However, one cannot loose sight of the fact that the service of the plaintiff was abruptly terminated by the defendants, therefore, the plaintiff must have undergone considerable trauma and pain. The defendants have breached the contractual obligation of serving the one month's notice with impunity. Consequently, I am of the opinion that the plaintiff deserves to be compensated for all the mental agony and harassment attributable to the defendants. Accordingly, a nominal sum of Rs.50,000/- ought to be awarded to the plaintiff under this head also.
35 The issue is accordingly decided in favour of the plaintiff and against the defendants.
36 Issue No. 4: If yes, whether the plaintiff is entitled to interest thereupon, if yes, at what rate? OPP CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 23 of 33 Admittedly, no contractual stipulation for payment of any interest has been brought to my notice. However, the plaintiff has been wrongfully denied of his dues by the defendants and the sum earned could have been gainfully employed by the plaintiff. Thus acting under section 3 of the Interest Act, 1978 read with section 34 of the CPC, the plaintiff is held entitled for payment of interest at the above adjudged sum w.e.f. 02.09.2022 till the date of decree @ 7% per annum and future interest @ 4% per annum from the date of decree till the date of realisation.
The issue is accordingly decided in favour of the plaintiff and against the defendants.
37 Having decided all the above mentioned issues, there is an important aspect regarding the liability to pay which requires attention of this Court.
38 It is an admitted case of the plaintiff that he was an employee of defendant no. 1 and the liability to pay to its employees was of the defendant company. It is not in dispute that the defendant no. 1 is a private limited company and thus a juristic person having an independent legal personality distinct from its Directors. The Directors of the company cannot be held liable for the independent and distinct liabilities of the private limited company. Reliance in this regard can be placed upon the judgment of the Hon'ble Delhi High Court in the matter of Sanuj Bathla & Anr. vs Manu Maheshwari & Anr., C.R.P. 166/2018 & CM APPL. 32378/2018 & CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 24 of 33 10441/2021 decided on 12/04/2021 appreciated the following passages and law laid in the case of Mukesh Hans & Anr. vs Smt. Uma Bhasin & Ors., 2010 SCC OnLine Del 2776:- and observed as under:
"28. Learned counsel for the Petitioner has rightly relied on the judgment of the Co-ordinate Bench in Mukesh Hans (supra), which, in my view, squarely covers the present case and fortifies the view taken by this Court. Relevant passages from the judgment are as follows :-
"10. The short question which arises for consideration in the present appeal is as to whether the appellants as erstwhile Directors of the Company, M/s. Dawson Leasing Limited (In Liquidation) can be made liable in a suit for recovery of money when the Directors have not made themselves personally liable by extending any guarantee, indemnity, etc.
11. Indubitably, a company incorporated under the Companies Act, whether as a private limited company or a public limited company, is a juristic entity. The decisions of the Company are taken by the Board of Directors of a Company. The Company acts through its Board of Directors, and an individual Director cannot don the mantle of the Company by acting on its behalf, unless he is so authorized to act by a special resolution passed by the Board or unless the Articles of Association so warrant. It is equally well settled that a Director of a Company though he owes a fiduciary duty to the Company, he owes no contractual duty qua third parties. There are, however, two exceptions to this rule. The first is where the Director or Directors make themselves personally liable, i.e., by execution of personal guarantees, indemnities, etc. The second is where a Director induces a third party to act to his detriment by advancing a loan or money to the Company. On the third party proving such fraudulent misrepresentation, a Director may be held personally CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 25 of 33 liable to the said third party. It is, however, well settled that this liability would not flow from a contract, but would flow in an action at tort, the tort being of misrepresentation and of inducing the third party to act to his detriment and to part with money.
12. This is the settled position ever since 1897 when the House of Lords decided the case of Salomon vs. Salomon & Co. Ltd. 1897 AC 22, and Lord Macnaghten, observed as under: -
"the company is at law a different person altogether from the subscribers to the memorandum; and, though it may be that after incorporation the business is precisely the same as it was before, the same persons are managers, and the same hands receive the profits, the company is not in law the agent of the subscribers or trustee for them. Nor are the subscribers as members liable, in any shape or form, except to the extent and in the manner provided by that Act."
13. However, with the passage of time inroads have been made into the aforesaid legal principle that the company is a legal entity distinct from its shareholders and directors and certain exceptions have been carved out. One such inroad is commonly described as lifting or piercing of the corporate veil. This has been succinctly put by the Supreme Court in Tata Engineering and Locomotive Co. Ltd. v. State of Bihar [1964]6SCR885 as follows:
"24. The true legal position in regard to the character of a corporation or a company which owes its incorporation to a statutory authority, is not in doubt or dispute. The Corporation in law is equal to a natural person and has a legal entity of its own. The entity of the Corporation is entirely separate from that of its shareholders; it bears its own name and has a seal of its CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 26 of 33 own; its assets are separate and distinct from those of its members; it can sue and be sued exclusively for its own purpose; its creditors cannot obtain satisfaction from the assets of its members; the liability of the members or shareholders is limited to the capital invested by them; similarly, the creditors of the members have no right to the assets of the Corporation. This position has been well established ever since the decision in the case of Salomon v. Salomon and Co. was pronounced in 1897; and indeed, it has always been the well-recognised principle of common law. However, in the course of time, the doctrine that the Corporation or a Company has a legal and separate entity of its own has been subjected to certain exceptions by the application of the fiction that the veil of the Corporation can be lifted and its face examined in substance. The doctrine of the lifting of the veil thus marks a change in the attitude that law had originally adopted towards the concept of the separate entity or personality of the Corporation. As a result of the impact of the complexity of economic factors, judicial decisions have sometimes recognised exceptions to the rule about the juristic personality of the corporation. It may be that in course of time these exceptions may grow in number and to meet the requirements of different economic problems, the theory about the personality of the corporation may be confined more and more."
14. Similar observations were made by the Supreme Court in the case of New Horizons Ltd. v. Union of India:
(1995)1SCC478 :
"27. The conclusion would not be different even if the matter is approached purely from the legal standpoint. It cannot be disputed that, in law, a company is a legal entity distinct from its members. It was so laid down by the House of Lords in 1897 in the leading case of Salomon v. Salomon & Co. Ever since this decision has been followed by the CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 27 of 33 courts in England as well as in this country. But there have been inroads in the doctrine of corporate personality propounded in the said decision by statutory provisions as well as by judicial pronouncements. By the process, commonly described as "lifting the veil", the law either goes behind the corporate personality to the individual members or ignores the separate personality of each company in favor of the economic entity constituted by a group of associated companies. This course is adopted when it is found that the principle of corporate personality is too flagrantly opposed to justice, convenience or the interest of the Revenue. (See : Gower's Principles of Modern Company Law, 4th Edn., p.112.) This concept, which is described as "piercing the veil" in the United States, has been thus put by Sanborn, J. in US v. Milwaukee Refrigerator Transit Co.4:
'When the notion of legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime, the law will regard the corporation as an association of persons.'
15. The question therefore in the instant case is - Can the corporate veil be lifted in the present case to reveal the identity of the person or persons behind it? The respondents in their plaint have not made out any such case to justify the piercing of the corporate veil. Therefore, this matter is not required to be dwelt upon by this Court any longer.
16. The next question which arises for consideration is whether the appellants as Directors made themselves personally liable for the dues of the Company. Reference in this context may be made to the judgment of this Court in Tristar Consultants vs. Customer Services India Pvt. Ltd. And Anr., 139 (2007) DLT 688. Paragraphs 28 to 30 of the said judgment, which are apposite, read as under:-
CS No. 518/2022Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 28 of 33 "28. To interpret the law as is sought to be projected by the petitioner would mean negation of the concept of a company being limited by its liability as per the memorandum and articles of association of the company. Other than where directors have made themselves personally liable i.e. by way of guarantee, indemnity, etc. liabilities of directors of a company, under common law, are confined to cases of malfeasance and misfeasance i.e. where they have been guilty of tort towards those to whom they owe a duty of care i.e. discharge fiduciary obligations.
Additionally, qua third parties, where directors have committed tort. To the third party, they may be personally liable.
29. For example by making false representations about a company, a director induces a third party to advance a loan to the company. On proof of fraudulent misrepresentation, a director may be personally liable to the third party.
30. But this liability would not flow from a contract but would flow in an action at tort. The tort being of misrepresentation of inducement and causing injury to the third party having induced the third party to part with money."
17. In the case reported as Space Enterprises vs. M/s. Srinivasa Enterprises Ltd. 72 (1998) DLT 666, this Court while dealing with the liability of the Directors of a company for the dishonor of cheques of the company, in a suit filed under Order XXXVII of the Code of Civil Procedure, made the following observations: -
"11. In so far as the liability of defendant No. 2 is concerned, the effect of the registration of a company under Section 34 of the Companies Act is that it is a distinct and independent person in law and is endowed with special rights and privileges; a person distinct from its members. Consequently, the company is enabled to contract with its shareholders also, to use CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 29 of 33 common seal and acquire and hold property in its corporate name. The company is distinct from its shareholders and its directors. Neither the shareholders nor the director can treat the companies assets as their own. Directors of a company are liable for misappropriation of company's funds and other misfeasance, but not for an ordinary contractual liability of the company. The liability of the members or the shareholders or the directors is limited to the capital invested by them. So long the liability is not unlimited under Sections 322 and 323 of the Companies Act and no special resolution of the limited company making liability of the directors or the managing directors unlimited is alleged. The doctrine of lifting of the corporate veil could be applied in cases of tax evasion, or to circumvent tax obligation or to perpetuate fraud or trading with an enemy are concerned. It is not alleged that the director has lost the privilege of limited liability and has become directly liable to the plaintiff i.e. creditor of the company on the ground that with his knowledge the company carries on business six months after the number of its members was reduced below the legal minimum number. In absence of such a case it would be totally inappropriate and improper to say that defendant No. 2 is patently covered under Order 37 CPC.
12. There is no contract between the plaintiff and defendant No. 2. therefore, case against defendant No. 2 is not based on any contract nor there is any such liability on defendant No.2. Consequently, there is no cause of action against defendant No. 2. Since there is no cause of action against defendant No. 2, the plaint is liable to be rejected so far as defendant No. 2 is concerned."
18. In the instant case, there is admittedly no assertion in the plaint that the appellants had extended any contract of guarantee or had even undertaken to make payment to the CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 30 of 33 respondents of the loan amount on behalf of the company, M/s. Dawson Leasing Limited. No case of joint and several liability is, therefore, made out and the liability, if any, is the sole liability of the Company, which is stated to be under liquidation. There is also no denial to the fact that the respondent No.4 himself was one of the Directors of the Company and therefore part and parcel of the Company. When the decision to invite secured non- convertible debentures was taken by the Board, the names of the respondent No.4 and his brother appeared in the offer document issued on behalf of the Company. In such circumstances, merely because the respondent No.4 subsequently resigned as a Director, it is not open to the respondents to allege that they have been deceived and defrauded.
19. It is also well settled that fraud, if alleged, must be pleaded meticulously and in detail and proved to the hilt. A mere assertion that fraud has been committed is neither here nor there. Precisely and in what manner fraud has been committed is required to be delineated by the party alleging the same if the plea of fraud is to be made the basis of a decree against the other party. Bald assertions and vague allegations will not be countenanced by the Courts. Rule 4 of Order VI specifically lays down that the particulars of the fraud alleged (with dates and items, if necessary) shall be stated in the plaint.
20. To conclude, the instant case is not one in which the appellants could have been held jointly and severally liable as Directors to pay the amount invested by the respondents in the Company. The appellants are not even alleged to be guarantors or indemnifiers for payment of the amount due from the Company nor it is pleaded in the plaint that the respondents had undertaken to make payment on behalf of the Company. As stated above, no particulars of fraud are set out, presumably for the reason that the respondent No.4 himself was a functional Director of the Company responsible for the day-today affairs of the Company. In such circumstances, in my CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 31 of 33 considered opinion, it is the Company and the Company alone upon whom the liability can be fixed at all.""
39 In the case at hand, it is neither pleaded nor proved that defendant no. 2 and 3 furnished any personal guaranties or induced the plaintiff in any manner by making any misrepresentations. Consequently, defendant no. 2 and 3 cannot be made personally liable for the sum owed by defendant no. 1.
Relief:
40 As a cumulative effect of the aforesaid discussion, the suit of the plaintiff stands decreed against defendant no. 1 to the following effect:
(I) Defendant no. 1 is liable to pay a sum of Rs.83,333/- to the plaintiff on account of notice period salary.
(II) Defendant no. 1 is also liable to pay a sum of Rs.1,50,000/- to the plaintiff on account of outstanding performance based variable pay.
(III) Defendant no. 1 is liable to pay a sum of Rs.50,000/- to the plaintiff on account of damages.
(IV) The plaintiff is also entitled for interest upon the above said sum of Rs.2,83,333/- @ 7% per annum w.e.f. 02.09.2022 till the CS No. 518/2022 Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
Page no. 32 of 33 date of decree and future interest @ 4% per annum w.e.f. date of decree till the date of realisation.
(V) Cost of the suit is also awarded in favour of the plaintiff.
41 Decree sheet be prepared accordingly.
Digitally signed by DHARMENDER DHARMENDER RANA RANA Date: 2025.10.15 16:20:23 +0530 (Dharmender Rana) District Judge - 01 PHC/New Delhi/15.10.2025 CS No. 518/2022
Rahul Saxena Vs. Rhiti Sports Management Pvt Ltd.
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