Delhi District Court
Capt. Rahul Panchal vs Air India Ltd on 23 August, 2025
IN THE COURT OF MS. MEENU KAUSHIK
DJ - 03: NEW DELHI DISTRICT
PATIALA HOUSE COURTS : NEW DELHI
CS No. 250/2021
CNR No. DLND010044642021
In the matter of:
Captain Rahul Panchal,
E-170/172, B.K. Dutt Colony,
Lodhi Road,
New Delhi 110003
...Plaintiff
Versus
Air India Pvt. Ltd.
Airlines House, 113,
Gurudwara Rakab Ganj Road,
New Delhi 110 001
...Defendant
Date of institution : 08.07.2021
Date on which reserved for judgment : 08.08.2025
Date of decision : 23.08.2025
Decision : Suit Dismissed
JUDGMENT
1. The present suit for declaration and permanent injunction for declaring the termination letter dated 27.05.2021 as null and void and restraining the defendant from recovering liquidated damages as per Clause VI of the Employment Agreement dated 20.06.2016 has been filed by plaintiff against the defendant.
CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 1/18
Digitally
signed by
MEENU
MEENU KAUSHIK
KAUSHIK Date:
2025.08.23
16:20:42
+0530
Plaint/Plaintiffs' version
2. It is stated that plaintiff was employed as First Officer with Air India since June 2016 and plaintiff's contract of service was renewed in April 2021. It is pleaded that the defendant is a Statutory enterprise of the Government of India and operates the National carrier of India known as "Air India". The Employment Agreement dated 20.06.2016 stipulated that a sum of Rs. 50,00,000/- (Fifty Lakhs Rupees Only) would be payable as liquidated damages in the event of the plaintiff leaving the service of Air India prior to a period of 10 years and such damages being recoverable from plaintiff or his surety. It is stated that the aforesaid Liquidated Damages Clause is a textbook example of "unequal bargaining power resulting in contractual anomalies". It is stated that thereafter the plaintiff was terminated vide letter dated 27.05.21 for alleged breach of contract of service. It is stated that the plaintiff's Uncle was infected with the novel Corona virus on April 14th and unfortunately passed away on the 24th of April 2021. The plaintiff was the primary care-giver for his uncle and had been at his bedside continuously ever since his uncle was diagnosed with the novel Corona virus hence, due to high risk of exposure and the extremely contagious nature of this pathogen applied extensive sanitizer on his face and throat and was also taking various drugs recommended protocol for Covid. It is stated that on 22.04.2021 plaintiff was scheduled to operate flight No. AI-401 and before the flight a random Breath Analyzer test was done which came positive. It is stated that plaintiff had even informed the airline personnel about his peculiar circumstances and had insisted for a blood alcohol test. It is stated that when the first Breath Analyzer test came positive, plaintiff as required CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 2/18 Digitally signed by MEENU MEENU KAUSHIK Date: KAUSHIK 2025.08.23 16:20:50 +0530 under the relevant Civil Aviation Requirement had repeatedly insisted for confirmatory test done by an alternative instrument and in the presence of a witness, but none of these requests were accepted by the personnel of the airline and he was unilaterally terminated vide letter dated 27.05.2021 without issuance of any show-cause notice. It is further stated that the surety of the plaintiff have been issued notice to pay the Liquidated Damages on behalf of plaintiff. It is stated that the termination of the plaintiff was illegal since the primary principle of "audi alterum partem" was willfully and maliciously violated by the defendant. It is stated that a "Breath Analyzer Test" is not conclusive evidence of the presence of alcohol in the human body and it is a blood test which presents conclusive evidence of the level of the alcohol in the human body which was never conducted on the plaintiff. It is stated that the actions of the defendant in holding the plaintiff guilty of breach of contract amounts to usurping of judicial functions, as the question whether the plaintiff is guilty of breach of contract or not can only be dealt by an independent adjudicatory forum, and not by the defendant. It is stated that Liquidated Damages cannot be claimed straightaway without showing loss to the defendant. It is stated that Liquidated Damages cannot be claimed straightaway without the requirement of showing loss to which the Defendant was put to due to the alleged breach of contract by the Plaintiff. It is stated that defendant with malafide and arbitrary motives had taken steps to enforce the liquidated damages clause by serving notices upon the surety of the plaintiff by calling upon them to pay the wholly untenable sum of Rs. 50 lakhs. It is stated that the cost of training that forms part of the liquidated damages has already been recovered by the defendant. On the basis of his averments, CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 3/18 Digitally signed by MEENU MEENU KAUSHIK KAUSHIK Date:
2025.08.23 16:20:59 +0530 plaintiff has prayed for a decree of permanent injunction restraining the defendant from recovering liquidated damages in terms of termination letter dated 27.05.2011 and further prayed for a decree of declaration of termination letter dated 27.05.2021 as null and void.
Defendant's status
3. In written statement, defendant has denied allegations of the plaintiff. It is stated that prior to the present incident, petitioner was found BA positive on 19.02.2018 pursuant to which his license was suspended for a period of three months. It is stated that the writ petition preferred by plaintiff in respect of the present cause of action was also dismissed by Hon'ble High Court of Delhi vide judgment dated 15.07.2021. It is stated that since Hon'ble High Court of Delhi has already declared the termination letter to be valid and correct, plaintiff is liable to pay an amount of Rs. 50 lakhs in liquidated damages to the defendant. It is further stated that the Employment Agreement, Service Agreement and surety bonds clearly stated that in case the plaintiff abandons, leaves the service of the defendant company before the expiry of 10 years, does not fulfill stipulations or violates any terms and conditions of the above contract, agreement or surety bonds, plaintiff will be liable to pay sum of Rs. 50 lakhs as liquidated damages to the defendant. It is stated that plaintiff was aware that upon his abandonment or termination of service, he was liable to not only reimburse the defendant for having imparted the requisite training but additionally he was liable to pay liquidated damages of Rs. 50 lakhs.
CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 4/18 Digitally signed by MEENU KAUSHIK MEENU Date: KAUSHIK 2025.08.23 16:21:09 +0530
4. In replication, plaintiff reiterated and reaffirmed the averments made in the plaint and denied the allegations made in the written statement.
5. After completion of pleadings of the parties, following issues were framed:
(i) Whether the plaintiff is entitled to the decree of declaration as prayed? OPP
(ii) Whether the plaintiff is entitled to the decree of permanent injunction for restraining the defendant from recovering the liquidated damages in terms of termination letter dated 27.05.2021? OPP.
(iii) Relief.
Plaintiff's evidence
6. Plaintiff has examined himself as PW-1 and tendered his evidence by way of affidavit Ex. PW-1/A and relied upon the following documents:-
i) Original Employment Agreement dated 20.06.2016 as Ex.
PW-1/1.
ii) Termination letter dated 27.05.2021as Mark-A.
iii) Notice dated 21.06.2021 as Mark-B.
7. During course of cross examination PW-1 admitted that he was tested positive for BA test on 22.04.2021. Witness after going through the surety bond admitted that he and his sureties will be liable to pay for any breach, act, omissions, default, negligence, failure of resumption of duties or of the terms of the contract. After going through the recruitment letter dated 10.06.2016, witness denied that in case of any act of omissions or CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 5/18 Digitally signed by MEENU KAUSHIK MEENU Date:
KAUSHIK 2025.08.23 16:21:18 +0530 commissions amount misconduct, he will be liable to pay defendant a sum of Rs. 50 lakhs as liquidated damages. Plaintiff/Witness denied the suggestion that in the event of his abandon/leaving the service of defendant before expiry of 10 years including extended fixed terms contract, he will be liable to pay to defendant sum of Rs. 50 lakhs as liquidated damages apart from invocation of bank guarantee. Witness admitted that he had not made any written representation for challenging the Breath Analyzer test which was conducted on him. He further deposed that the first representation was made by him on 22.04.2021 orally to the Air India Doctor and the personnel. Witness admitted that his license had been suspended twice and his suspension is still going on. He further deposed that he had requested for a second Breath Analyzer test in the year 2018 but defendant had not allowed him for second Breath Analyzer test as there is a time period for second Breath Analyzer test. Witness stated that he did not challenge the suspension order in 2018 and filed the present suit on 08.07.2021. He stated that he had not disclosed the fact of filing of the present suit in Writ Petition No. W.P. (C) 6604/2021.
8. Defendant has examined Mr. Satish Kumar Meena, Dy.
General Manager (Personnel), Northern Region, Air India being its Authorized Representative as DW-1. He tendered his evidence by way of affidavit Ex. DW-1/A and relied upon the following documents:-
i) Copy of letter stating the terms and conditions of fixed term contract of recruitment of Sr. Trainee Pilot issued to the plaintiff by defendant as Ex. DW1/2.
CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 6/18 Digitally signed by MEENU MEENU KAUSHIK KAUSHIK Date:
2025.08.23 16:21:30 +0530
ii) Copy of Service Agreement dated 14.06.2016 executed between the parties as Ex. DW1/3.
iii) Copy of surety bond dated 20.06.2016 executed between plaintiff, Mr. Ranbir Singh, Mr. Moinuddin Khan in favour of defendant as Ex. DW-1/5.
iv) Copy of show cause notice dated 19.02.2018 issued to plaintiff by defendant as Ex. DW-1/6.
v) Copy of authorization letter dated 04.10.2021 in his favour as Ex. DW1/1.
vi) Copy of bank guarantee dated 18.06.2016 executed in favour of defendant as Ex. DW-1/4.
vii) Printout of email dated 19.02.2018 by the plaintiff to defendant as Ex. DW1/7.
viii) Copy of letter dated 07.06.2021 issued by defendant to plaintiff advising deposit of liquidated damages of Rs. 50 lakhs as Ex. DW1/8.
ix) Copy of appeal dated 15.06.2021 filed by plaintiff against the termination notice dated 27.05.2021 addressed to the Chairman/Moradabad Depot of defendant as Ex. DW1/9.
x) Copy of WP(C ) No.6604 of 2021 titled Captain Rahul Panchal V Air India Ltd. & Anr. As Ex. DW1/10.
xi) Copy of registration and listing details of WP(C ) 6604 of 2021 available on the website of Delhi High Court as Ex. DW1/11.
xii) Copy of order dated 15.07.2021 passed by Hon'ble High Court of Delhi in WP (C ) 6604/2021 as Ex. DW1/12.
xiii) Affidavit/certificate u/S 65B of Indian Evidence Act dated 27.03.2023 as Ex. DW1/B. CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 7/18 Digitally signed by MEENU MEENU KAUSHIK KAUSHIK Date:
2025.08.23 16:21:39 +0530
9. During course of cross examination witness admitted that the relief prayed in the present suit and WP(C) No.6604/2021 are totally different. DW-1 further admitted that total cost of training of plaintiff is Rs.7,98,559/- and same has already been recovered by the defendant. DW-1 submitted that liquidated damages are totally distinct from the training cost. It is further submitted by DW-1 that the only reason Air India is seeking to recover Rs. 50 lakhs from plaintiff was that plaintiff did not complete the mandatory years of service. DW-1 denied the suggestion that Air India has not suffered any loss due to plaintiff.
Findings
10. I have heard arguments and considered the record carefully.
Issue No.1 :Whether the plaintiff is entitled to the decree of declaration as prayed? OPP
11. Onus to prove present issue is upon the plaintiff. Plaintiff by way of present suit has sought that the termination letter issued by the defendant on 27.05.2021 be declared as null and void. Plaintiff has examined himself as PW-1 to prove his case. It is contention of the plaintiff that he was working as airline pilot with the defendant's airlines and at the time of joining he was made to sign wholly one-sided Employment Agreement dated 20.06.2021. It is further stated that in April, 2021, Uncle of the plaintiff was suffering from Corona virus and plaintiff was the primary care giver to his Uncle who eventually passed away on 24th of April 2021. It is further stated that because of virulent nature of the Corona virus, plaintiff had applied high amount of sanitizer all over his body and when he was scheduled to operate CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 8/18 Digitally signed by MEENU MEENU KAUSHIK KAUSHIK Date:
2025.08.23 16:21:52 +0530 AI 401 between Delhi and Kolkata on 22.04.2021, under random Breath Analyzer test, he was found positive. It is further the contention of plaintiff that he had apprised regarding application of sanitizer to the defendant company and that he is apprehensive of Breath Analyzer test but the plaintiff was not heard and he was served a termination notice dated 27.05.2021 without issuing any show cause notice or any opportunity given to present his version.
12. Per contra, it is stated on behalf of defendant that the plaintiff has not come to the court with clean hands and has willfully and intentionally suppressed the fact that plaintiff had preferred a writ petition No. 6604/2001 titled Captain Rahul Panchal v. Air India Ltd. challenging his termination from the position of Senior Trainee Pilot by defendant vide termination letter dated 27.05.2021. It is further stated that vakalatnama for the writ petition as well as for the present suit were signed by plaintiff on the same day i.e. on 02.07.2021 and hence, the plaintiff was aware that two petitions were filed by him for same cause of action and on the same grounds but in the present suit the plaintiff has not disclosed about the writ petition. It is further stated that even at the time of re-filing of writ petition on 14.07.2021 before Hon'ble Delhi High Court, plaintiff had given undertaking to the effect that he had not filed any other case on the same ground/same cause of action in any other court. It is contended that only on the basis of this ground itself present suit is liable to be dismissed. It is further stated that services of the plaintiff were terminated as plaintiff was found positive in Breath Analyzer test on 22.04.2021 while scheduled to operate a flight CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 9/18 Digitally signed by MEENU MEENU KAUSHIK Date: KAUSHIK 2025.08.23 16:22:03 +0530 No. AI 401 and this was not the first infraction committed by the plaintiff as he had been found BA positive on another occasion in the year 2018 and at that time his license was suspended for a period of three months. It is further stated that services of the plaintiff were terminated in terms of Clause XII of the Employment Agreement due to his aforesaid acts/misconduct and this way plaintiff cannot challenge his termination on the ground of violation of principle of natural justice and audi alterum partem. It is also argued that plaintiff was informed about the Breath Analyzer test on 22.04.2021 however he had not challenged the same till his termination and this in itself proves the misconduct of the plaintiff and the plaintiff cannot claim that he was terminated violating the principles of natural justice. It is further stated that plaintiff was governed by the terms of Employment Agreement and Clause XII of the agreement mentions the grounds on which services of the plaintiff could be terminated and that Hon'ble Delhi High Court has already declared the termination letter to be valid and correct vide its order dated 15.07.2021.
13. Clause VI and Clause XII of the Employment Agreement Ex. PW-1/1 are reproduced hereunder for reference:
Clause VI: SERVICE AGREEMENT & SURETY BOND FOR SERVICE AGREEMENT You have executed Service Agreement and Surety Bond for Service Agreement to serve the Company as a Pilot on Fixed Term Contract for a minimum period of ten years (including extended Fixed Term Contract) after completion of training and release as Second Officer and subsequently as First Officer. Pleased note that extension of your CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 10/18 Digitally signed by MEENU KAUSHIK MEENU Date:
KAUSHIK 2025.08.23 16:22:13 +0530 initial Fixed Term Contract will be subject to your satisfactory performance. In the event you abandon or leave the service of the Company before expiry of 10 years (including extended Fixed Term Contract) or your non-fulfillment of the stipulations or you violate any terms and condition of your Fixed Term Engagement or as indicated in the Service Agreement & Surety Bond for Service Agreement you will be liable to pay to the Company a sum of Rs. 50 Lakhs (Rupees Fifty Lakhs only) as liquidated damages apart from invocation of the Bank Guarantee (If valid).
Clause XII: TERMINATION OF FIXED TERM CONTRACT You will maintain strict discipline, integrity and good behavior during the course of your Fixed Term Contractual engagement and shall be governed by the terms and conditions of this Fixed Term Contract and applicable Rules and Regulations of the Company as framed and amended from time to time in this regard.
The Management reserves the right to terminate your Fixed Term Contract by giving one months' notice or an amount equivalent to one months' salary (excluding Flying related allowances) in lieu thereof for unsatisfactory conduct, dishonesty, fraud or any other act which in view of the Company is contrary to its interest.
Your performance, conduct, flying techniques etc, will be adjudged for a minimum period of one year from the date of your release as First Officer. If during this period of one year, your work, conduct or progress with regard to your performance, flying techniques is not found satisfactory or if you fail to qualify in any Refresher Course/Test at C.T.E. and/or at any Base, your Fixed Term Contractual engagement are liable to be terminated CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 11/18 Digitally signed by MEENU KAUSHIK MEENU Date:
KAUSHIK 2025.08.23 16:22:23 +0530 without any notice and such termination of Fixed Term Contractual engagement will be considered as final.
In the event of your unsatisfactory progress or behaviour or due to any act of omission or commission on your part which in the estimation of the Company, amounts to a misconduct, your Fixed Term Contractual engagement will be terminated.
In the event you abandon or leave the Fixed Term Contractual engagement of the Company before expiry of this Fixed Term Contract or extended contract, you will be liable to pay to the Company the amount of training spent by the Company apart from liquidated damages as indicated in the Service Agreement & Surety Bond for Service Agreement.
14. The plaintiff in his cross examination has admitted that he was tested positive for BA test on 22.04.2021. He further admitted that he had not made any written representation for challenging the Breath Analyzer test which was conducted on him and deposed that the first representation was made by him on 22.04.2021 orally to the Air India Doctor and the personnel. He also admitted that his license had been suspended twice and his suspension is still going on. He has also stated that the second Breath Analyzer test in the year 2018 was not allowed to him as there is a time period for second Breath Analyzer test. He also stated that he did not challenge the suspension order in 2018 and filed the present suit on 08.07.2021. He also stated that he had not disclosed the fact of filing of the present suit in Writ Petition No. W.P. (C) 6604/2021. Considering the fact that the plaintiff in the year 2018 had not challenged the Breadth Analyzer test within requisite period and that he did not even challenge his CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 12/18 Digitally signed by MEENU KAUSHIK MEENU Date:
KAUSHIK 2025.08.23 16:22:32 +0530 suspension in the year 2018 and that he did not give any written representation to challenge the BA Test of 22.04.2021 and also that the present suit is filed only after issuance of termination letter by the defendant, it cannot be said that the plaintiff was terminated without granting him opportunity being heard. Admittedly the plaintiff was informed about the BA Test result on the same day and no written representation was given by him in this regard. This in itself shows that the plaintiff had sufficient notice of his misconduct and despite that he did not challenge the same before the concerned authorities in writing. The execution of Employment Agreement is admitted on part of plaintiff. In view of above discussion, the grounds put forward by the plaintiff to challenge his termination under clause XII of the Employment Agreement are not found tenable. Accordingly in the light of above discussed facts, the present issue is decided against the plaintiff and in favour of the defendant.
Issue No. 2: Whether the plaintiff is entitled to the decree of permanent injunction for restraining the defendant from recovering the liquidated damages in terms of termination letter dated 27.05.2021? OPP.
15. Onus to prove present issue is upon the plaintiff. It is stated by plaintiff that he was employed with the defendant Airline as airline pilot and he was made to sign a whole one sided Employment Agreement dated 20.06.2016 wherein it was mentioned that sum of Rs.50,00,000/-(Fifty Lakhs Rupees Only) would be payable as liquidated damages in the event of the plaintiff leaving the service of Air India prior to a period of 10 years and such damages being recoverable from plaintiff or his surety. It is argued on behalf of plaintiff that the Clause is a CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 13/18 Digitally signed by MEENU MEENU KAUSHIK KAUSHIK Date:
2025.08.23 16:22:41 +0530 textbook example of on sided contract and unequal bargaining power. It is further argued that in terms of Section 73 of the Indian Contract Act if a party has broken the contract, then the party who has suffered damages by said breach is entitled to receive compensation from the party who has broken the contract covering losses that naturally arose in the usual course of things from such breach. However, the loss should not be remote. It is further stated that in the instant case the defendant has failed to substantiate in any manner the loss allegedly suffered by it for which they are claiming Rs. 50 lakhs as liquidated damages from the plaintiff. It is further argued that in the Employment Agreement, there is no mention as to for which nature of loss the defendant company will be put in the event of breach of terms of engagement and the said clause pertaining to liquidated damages is in the nature of penalties and therefore damages are unforeseeable in the present case. It is further argued that DW-1 in his cross examination has admitted that total cost of training of plaintiff has already been recovered by the defendant. It is contended that in view of the cross examination of DW-1, defendant is not entitled to claim any liquidated damages. Ld. Counsel for plaintiff has relied upon judgment of Hadley v. Baxendale (1854 ALL ER) wherein it was held that unforeseeable losses cannot be granted. Reliance is also placed upon Kailash Nath Associates v. DDA wherein earnest money was forfeited and Hon'ble Apex Court has stated that "since no loss was suffered by the DDA, the DDA was not entitled to forfeit the said money in any manner whatsoever". Further reliance is placed on Maula Bux v. Union of India (1970 AIR 1955) wherein it was held that evidence should be adduced to prove the losses.
CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 14/18
Digitally
signed by
MEENU
MEENU KAUSHIK
KAUSHIK Date:
2025.08.23
16:22:52
+0530
16. Per contra, it is argued by the defendant that Hon'ble High Court of Delhi has already declared the termination letter issued by the defendant to the plaintiff to be valid and correct and this way the plaintiff is liable to pay amount of Rs. 50 lakhs in the form of liquidated damages to the defendant as per terms of the Employment Agreement, service agreement and the surety bonds signed and executed by the plaintiff. It is further argued that the Employment Agreement, service agreement and surety bonds all clearly states that in case the plaintiff abandons, leaves the services of the company before the expiry of 10 years, does not fulfill stipulations or violates any terms and conditions of the fixed term contract or service agreement or surety bonds, the plaintiff will be liable to pay to the defendant a sum of Rs.
50,00,000/- (Rupees Fifty lakhs Only) as liquidated damages. It is also clear that the recovery of the said liquidated damages is independent of the right of the defendant to invoke the bank guarantee of the plaintiff submitted to cover the cost of training incurred by the defendant in training the plaintiff.
17. It is further argued that the plaintiff was fully aware that upon his abandonment or termination by the answering defendant, he was liable to not only reimburse the answering defendant for having imparted the requisite training to him but additionally pay liquidated damages to the tune of Rs. 50,00,000/- (Rupees Fifty lakhs Only) to the answering defendant. Therefore, there is no ambiguity in respect of the amount liable to be paid by the plaintiff since the plaintiff's services have been terminated on disciplinary grounds within a period of 3 years of signing the Employment Agreement as the CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 15/18 Digitally signed by MEENU KAUSHIK MEENU Date:
KAUSHIK 2025.08.23 16:23:02 +0530 plaintiff having been found BA+ve i.e. the plaintiff had consumed alcohol while scheduled to operate the flight on 2 separate occasions on 19.02.2018 and then on 22.04.2021.
18. Reliance is placed upon Deepak Gupta V Pawan Hans Helicopters Ltd. (RFA/268/2018) wherein it was held as under:
"I completely agree with the aforesaid reasoning, discussion and conclusion of the trial court because admittedly the bond had been executed and the bond was breached by the appellant/defendant No. 1 by leaving services prior to five years' service period of the bond. When a pilot like the appellant/defendant No. 1 leaves suddenly then lots of schedules are thrown haywires with consequential loss of business opportunities, expenses of training of new pilot, other expenses and losses suffered on account of disruption of the business of the respondent No. 1/plaintiff which was in the business of providing transportation services, etc through its helicopters.
Loss on account of such services therefore cannot be accurately calculated and the bond was thus in the nature of contract which falls under Section 74 of the Indian Contract Act entitling the respondent No. 1/plaintiff for liquidated damages specified in the bond amount."
19. The court is in agreement with the contention made on behalf of the defendant that in the present case the actual damages cannot be quantified and that is why there is clause of liquidated damages in the employee agreement. In M/s Sicpa India Limited v. Shri Manas Pratim Deb (in RFA No. 596/2002) CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 16/18 Digitally signed by MEENU MEENU KAUSHIK KAUSHIK Date:
2025.08.23 16:23:13 +0530 it was observed that when losses cannot be proved, then, of course the liquidated damages specified can always be recovered. In the present case execution of the Employment Agreement Ex. PW-1/1 is not disputed by the plaintiff. As per Clause XII of the Employee Agreement, the plaintiff was supposed to maintain strict discipline, integrity and good behavior during the course of his employment and the rules and regulations of the company were applicable upon him and the management of the defendant company has the right to terminate the services of the plaintiff for the reason of his unsatisfactory conduct/dishonesty/fraud/any other conduct which is in view of the company is contrary to its interest. It is also mentioned in Clause XII that in case plaintiff abandon or leave the fixed term contractual agreement of the company before expiring of his fixed term contract, he shall be liable to pay to the company the liquidated damages as mentioned in the service agreement and surety bond for service agreement. As per Clause VI of the Employment Agreement in case the plaintiff abandon or leave the services before the expiry of fixed term contract, he shall be liable to pay to the company a sum of Rs. 50 lakhs as liquidated damages. In view of the contents of Clause VI and Clause XII of the Employment Agrement, Section 74 of the Contract Act squarely applies herein. It has already been proved that the services of the plaintiff were terminated owing to his fault being found BA positive on two occasions. The BA test of 22.04.2021 is no where challenged by the plaintiff in writing and even on previous occasion, the BA test was not challenged within the appropriate time. The termination of the plaintiff is not found in violation of the employee agreement. Accordingly, no ground is made out for the plaintiff to escape the liability to pay the liquidated damages as CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 17/18 Digitally signed by MEENU MEENU KAUSHIK KAUSHIK Date:
2025.08.23 16:23:22 +0530 specified in Clause XII of the employee agreement. Thus, the present issue is decided against the plaintiff and in favour of the defendant.
Relief
20. In view of the above discussion, the suit of the plaintiff is dismissed. Parties to bear their own cost.
21. Decree sheet be prepared accordingly.
22. File be consigned to the Record Room after due compliance.
(Announced in the open Court on 23.08.2025) (Meenu Kaushik) District Judge-03 Patiala House Courts, New Delhi District New Delhi CS No. 250/2021 Captain Rahul Panchal v. Air India Ltd. Pages No. 18/18 Digitally signed by MEENU MEENU KAUSHIK KAUSHIK Date:
2025.08.23 16:23:35 +0530