Bangalore District Court
Brigadier vs Readiminds Systems on 12 August, 2017
IN THE COURT OF THE XXIX ADDL. CITY CIVIL
& SESSIONS JUDGE AT BANGALORE CITY. (CCH30)
DATED THIS THE 12th DAY OF AUGUST 2017.
PRESENT; SMT.NAGAJYOTHI.K.A., LL.M.,
XXIX ADDL CITY CIVIL & SESSIONS JUDGE,
BANGALORE.
O.S.NO. 1301-2013
PLAINTIFF: Brigadier
(Retd)G.S.Julka, Aged
58 years, S/o.
S.Mohinder Singh Julka,
Plaintiff-236, Mahander
Vihar (AWHO)
Sector 4, Manasa Devi
Complex, Panckula-
134109, Haryana
(By Sri. Pradeep Singh
Advocate)
Vs.
DEFENDANT/S: 1. Readiminds Systems
& Services(India)
Pvt. Ltd., A-38m,
Defence Colony,
New Delhi-110024
and also at 589, 2nd
Floor, 3rd Block,
Koramangala,
Sarjapur Main Road,
Bangalore-560 034.
2. Naren Nagpal
Company Director
Readiminds Systems
& Services (India)
Pvt. Ltd., 589, 2nd
Floor, 3rd Block,
Koramangala,
Sarjapur Main Road,
2 O.S.No. 1301-2013
Bangalore-560 034.
(By Sri. D.R.S.,
Advocate.)
Date of institution of the suit 15/02/2013
Nature of the suit (suit on Recovery of money
pronote. Suit for declaration
and possession suit for
injunction, etc.)
Date of the commencement of 29.11.2013
recording of the evidence.
Date on which the judgment 12.08.2017
was pronounced
Total duration Year/s Month/s Day/s
04 05 28
JUDG M ENT
This suit is filed for recovery of amount of Rs.
3,22,261.14 with interest at the rate of 18% p.a. till actual
payment.
2. It is averred in the plaint that, under an
appointment letter dated February 19, 2008 the defendant
No.2 in the capacity as Company Director appointed the
plaintiff as Vice President(Operations) and joined as the
Associate Vice-President(operations vide appointment letter
dated February 19, 2008. The plaintiff from the date of
joining and through the period of two years with the
3 O.S.No. 1301-2013
Company, the plaintiff worked hard, diligently and loyally,
with the sole intention of building a strong team and also
the Company. In April 2009, after having completed a year
of service, on 19th February 2009, plaintiff approached the
defendant No.2 and requested for the release of the sum of
Rs. 85,000/- which is the loyalty bonus, due and payable to
the plaintiff, as agreed to and mentioned in the
employment contract. In September, 2009, Defendant
No.2 sent an email to the plaintiff wherein a number of
serious and false allegations were made against the
plaintiff. On receipt of the said email, the plaintiff verbally
responded to the allegations and also sent a written reply
by email on 15th September 2009 and voluntarily resigned
on 19/1/2010 after completing two years as specified in the
employment agreement. Plaintiff was relieved from his job
by the defendants on 22/02/2010. As the date of
resignation the defendant No.2 had to pay to the plaintiff
Loyalty bonus for two years, LT.A., uncleared expense and
salary for 31 days in January 2010, 18 days in February
2010 and 2 days EL. Professional Tax at Rs. 200/- p.m. for
4 O.S.No. 1301-2013
January and February 2010 in total Rs. 3,22,261.14.
Hence, files this suit.
3. The defendants appeared through their counsel
and submitted in the written statement that the defendants
appointed the plaintiff as Vice President(Operations) as per
the appointment letter dated 19/02/2008. In fact the
plaintiff is aware of the financial status of the 1st defendant
Company and was a party to the decision making of the
first defendant Company in not granting/disbursing loyalty
bonus in view of various factors narrated in the subsequent
paragraphs. The plaintiff had apologized and had requested
that his contract should not be terminated, and he should
be allowed to continue in the job on humanitarian grounds
of personal challenges that he was facing at that time. The
plaintiff resigned and the same was accepted by the
defendants are correct. The plaintiff had no experience in
the private sector and approached the defendants to
accommodate him. Having regarded to the military
background of the plaintiff the defendants agreed to
accommodate him with a contract job and the employment
agreement was signed between the parties on 19/02/2008.
5 O.S.No. 1301-2013
The plaintiff was below par as much as his attendance. The
plaintiff was warned many times about his below par
performance. However, the plaintiff continued his callous
attitude towards work. Plaintiff was very well aware and
part of the decision making of the Board of Management in
not providing loyalty bonus in view of the global recession
and the bad financial of the 1st defendant Company which
clearly evidences that the plaintiff was aware of non-
payment of loyalty bonus due to the economic crises the
situation, continued to work for the 2nd year without
insisting for the loyalty bonus. Had the plaintiff insisted for
payment of loyalty bonus, the defendants would not have
permitted thim to continue his tenure in the office of the 1st
defendant given company's financial constraints. It is also
pertinent to state that it is very well within the knowledge
of the plaintiff that other staffs too were not given any
bonus during the stay of plaintiff in 1st defendant Company.
The loyalty bonus is a benefit that is to be given by the
Company to its employees and not an entitlement by the
employee. The bonus is paid based on the performance of
the individual. The claim of the plaintiff for LTA expense
6 O.S.No. 1301-2013
claims and bonus are not maintainable even for the reason
that as per Company policy, the employee has to be on the
rolls at the time of payment. Hence prays to dismiss the
suit with exemplary costs.
4. In proof of their case, the plaintiff has got examined
himself as PW.1 and relied upon the documents Ex.P.1 to
Ex.P.14. The defendant has got examined as D.W.1 and
also D.W.2 examined. Ex.D 1 to D.26 was marked.
5. Heard arguments.
6. Considering the facts and circumstances and the
material available in the matter, framed the following
issues as under -
ISSUES
1. Whether the plaintiff proves that he was
appointed as Vice President of the defendant
Company and defendant Company is liable to
pay loyalty bonus of Rs.1,70,000/- LTA
amount of Rs.4,000/-, uncleared expense of
Rs.10,433/- and salary for 31 days to the
tune of Rs.1,-1,428/- totally to the tune of
Rs.3,22,261/-?
2. Whether plaintiff further proves that the
defendant is liable to pay interest @ 18% per
7 O.S.No. 1301-2013
annum on said amount from the date of suit
till the date of realization?
3. Whether defendant proves that he was not
paying loyalty bonus in view of global
recession?
4. Whether plaintiff is entitled for suit claim
amount?
5. What decree or order?
7. My findings to the above issues are as under:-
Issue No.1: Partly in the affirmative;
Issue No.2 : Partly in the affirmative.
Issue No.3 : In the Negative,
Issue No.4 : Partly in the Affirmative,
Issue No.5 : As per final order for the
following-
REASONS
8. ISSUE No. 1 and 3: These two issues are
taken up together for discussion as they are inter-linked
with each other.
8 O.S.No. 1301-2013
This suit is filed for recovery of the amount of Rs.
3,22,261.14 with interest. The plaintiff is the employee of
1st defendant Company. He was joined the 1st defendant
Firm on 19/02/2008, but due to the difference with the
management, he resigned on 19/01/2010. The same was
accepted on 22/02/2010. As per the terms and conditions
of the appointment letter, the defendant No.2 is to pay
loyalty bonus, L.T.A, unclear expense, salary for the month
of January 2010 till February 2010 and for 2 days E.L and
Professional tax @ Rs.200/- per month for January and
February 2010.
9. The defendant case is the plaintiff is not entitled
for the amount of loyalty bonus as the same was not paid
to other employees also because of global recession and
plaintiff has received salary for the month of January and
February 2010 and no arrears by the defendant. To prove
the case P.W.1 produced appointment letter on the basis of
which plaintiff claims the liability. Ex.P. 1 is the letter of
Employment Agreement, on contract basis dated
19/02/2008. In the 1st para it was mentioned it is two
years contract basis. Thereafter there it may be renewed
9 O.S.No. 1301-2013
annually on a mutual consent basis. He was designated as
Vice President-Operations, on completion of probation
period and it is subject to satisfactory character and
performance reference. He is to do work including
Administration, Office facilities, HR., Quality and Processes
etc., and some additional work as assigned to him from
time to time. Initially six months period considered as
probationary period. Considering the work service will be
confirmed or probationary period will be extended for 12
months. The Annexure 1 contains particulars of salary i.e.
Basic Pay, H.R.A and monthly reimbursements against
bills, Prof. Development expenses, Fuel and vehicle
maintenance, Telephone and internet. It is the employer
P.F. contribution, employer gratuity, annual benefits
includes loyalty bonus and L.T.A. Loyalty bonus will be Rs.
85,000/-p.a., performance Bonus Rs. 1,65,000/- i.e.
referred as variable. L.T.A. is Rs. 40,000/-p.a., so total
gross salary Rs. 1,10,037/-.
10. In the cross examination P.W.1 replied that he
was retired from Army in January 2008 and joined
defendant Company in February 2008. It is the first
10 O.S.No. 1301-2013
assignment after the retirement. He denied email
communication letters Ex.D1 to D3 marked for the purpose
of identification. He was not corresponded with his co-
employees stating that the bonus has been frozen. His
email ID is [email protected] He denied all the
suggestions relating that he had temperamental issues with
defendant No.1 and other co-employees and also denied
the suggestions that he himself settle the matters of other
co-employees in respect of loyalty bonus for the reason of
global recession. However the defendant produced some
email correspondence address of the plaintiff.
11. On behalf of the defendant the defendant
Company representative one of the Director Narendra
Nagpal deposed as D.W.1 and denied that plaintiff is
appointed based on the vast experience of management
acquired by plaintiff. It is admitted that Ex.P. 1 agreed to
give loyalty bonus to the plaintiff but considering the same
after completion of 1 year service it is decided on the basis
of profit, performance of the Company and individual. But
there is no such specification made in the said salary
particulars. He was not received any complaint against the
11 O.S.No. 1301-2013
plaintiff from the colleagues or public. Plaintiff was taking
decision in the board management. But in the suggestion
he denied that he was not a member of Management Board
and only an employee. Ex.P. 1 shows he is the Country
Manager. The plaintiff is responsible for everything of the
company in India. It is denied that the plaintiff was
responsible only for the operations of the Company and this
witness voluntarily says he was also responsible for sales
and they have agreed to pay the salary. Except that they
disputed all the other claim made in the plaint. It is
pertinent to note that being a Director of the Company he
was not aware of the contents of Ex.D.1 to Ex.D.4. He
denied the suggestion that plaintiff was sufficient
performance duty in the Company and for that he refers
Ex.D.14. It was a reference email message dated
06/05/2009. It is only shows that he went for lunch and
not in office for 1 hour 15 minutes. However it does not
shows avoiding duty or avoiding the work of management
but admitted further that Ex.D23 is achievement letter of
plaintiff. Ex.D 23 email dated 7/11/2009. It is in respect of
recruitment of some of the best MBA students. It
12 O.S.No. 1301-2013
strengthens the companies business, development and
product management functions effectively. The operation
costs brought down by instituting highly effective cost
cutting measures, without adverse effects on the operations
and leading the business development team. He admitted
that the plaintiff was given salary for 31 days for which he
gave explanation that he was not worked on those days.
To corroborate the same they will not produced attendance
register for supporting documents. It is also admitted
further that the relieving letter Ex.P. 5 does not mentioned
about the bad performance and also that he was not entitle
for the loyalty bonus and other benefits instead he says on
full and final settlement and their contention is a loyalty
bonus was not paid to other employees.
12. The defendant also took defence that because of
the global recession they were not paid the loyalty bonus,
L.T.A. and performance bonus. To corroborate the same
instead of producing any documents it has examined one
Prafulla K.Knangondhi, who is the Director of Stellar
Outsource India Pvt. Ltd and her Company is doing
accounting out sourcing of various other Companies. In the
13 O.S.No. 1301-2013
cross examination she produced one document Ex.D.26. It
is a report of status of the defendant Company. Whereas it
is pertinent to note that on perusal of this document it does
not corroborate anything of the document concerning profit
and loss account of defendant Company. Ex.D26 is a letter
typed on the letter Head of the Stellar Company. It is
dated 23/07/2014 and heading given as "To whom So ever
it may concern" mentioned the defendant Company
incurred loss whereas there is no particular about the points
referred in the letter Ex.D.26. Six points mentioned as 1.
Company has incurred significant accumulated losses (2)
Technically "bankrupt" (3) No employee (4) No client and
no sales revenue(5) no assets (6) Company is non
operational. To corroborate the same there is no single
piece of evidence. The Defendant Company is established
Company, there is no material whether it is wind up. There
is no profit-loss account. There is no details about the
other employees, whether they also resigned or Company is
not running. So Ex.D.26 is not a reliable one. D.W.2
replied in the cross examination that there are about 8-9
persons working in the said Company at the time of
14 O.S.No. 1301-2013
transaction. She admits clearly that all the contentions of
Ex.D26 she has not produced any corroborative documents.
She has not even produced document to show that she is
the Director of the Stellar Company. So I conclude that the
evidence of D.W.2 is no significant for the adjudication of
the suit. It is pertinent to note that Ex.D.1 to 3 is the
performance review. These documents were not admitted
by the plaintiff. Even D.W.1 in his evidence has not
submitted any authenticated document of the Company on
his decision of denying bonus to the employee. Ex.D.4, D.5
speaks about the employee. It refers no loyalty bonus to
some of employees. Ex.D.6 is another email. It announces
monthly variability of the monthly expenses by plaintiff.
Ex.D.7 is another email by D.W.1 to the plaintiff dated
29/01/2009. It is about many people lost their job.
13. The plaintiff entered into employment agreement
on 19/02/2008. He was relieved on 22/2/2010. However
earlier 6 months period are probationary period i.e. till
August 2008 he was on probation. Thereafter from
20/08/2008 to 22/02/2010 he was entitled for benefits. He
has issued the legal notice Ex.P. 6 dated 17/02/201. The
15 O.S.No. 1301-2013
defendant in his letter dated 23/06/2011, 30/06/2011
respectively Ex.P. 11 to Ex.P. 13. Ex.D.4 to Ex.D18 are
emails communicated between the plaintiff and defendant
Company. Ex.D.20 is the salary particulars. First of all it is
alleged plaintiff has a temperamental issue, the same is not
proved. Further it was contended that global re-cession
and Company is in loss and the same is not proved. The
defendant relied upon emails, messages where as the
defendant Company is an established Company and it must
have the documents. Ex.P. 2 and 3 refers about emotional
outbursts of plaintiff. But in respect of the same the
defendant not issued any notice to the plaintiff. So email
messages cannot be relied safely. Ex.P. 11 is the letter of
defendant's advocate it refers that due to recession in world
economy not paid the bonus for the year 2008-2009,
whereas for this recession the defendant not produced any
corroborative documents. It also alleges that plaintiff
performance is not upto their expectation. In support of
the same also there are no documents. It also further
alleges that in respect of Ex.P. 2, Ex.P. 3 letters plaintiff has
sent many emails denying the allegations and he met
16 O.S.No. 1301-2013
officers personally and apologized. The plaintiff is not
entitled for gratuity because the gratuity only after
completion of 5 years of service. Since the plaintiff is not
completed three years continuously he is not entitled for
gratuity. The bonus is always paid subject to performance
of the Company because of the economic recession it was
not considered. The defendant company provided full and
final calculation sheet and subsequently confirmed that in
addition to Rs. 109,901.14. Their Company provided L.T.A.
of Rs. 40,000/- after deducting T.D.S. Bonus is always paid
subject to employee performance and Company's
performance and he was not entitled for gratuity of
Rs.92,308/-. So they were not liable to pay
Rs.4,52,009.14. Further it refers the huge dues from their
side. Ex.D1 letter written by the plaintiff to Anita Pande
appreciating her work and intimating likewise was forced to
freeze bonuses and increments and reducing the manpower
and said Anita was promoted as Software Engineer.
However it is not specified that the defendant Company
also freeze bonuses and increments of plaintiff. It referred
the word as follows:-
17 O.S.No. 1301-2013
"Market challenges have been so severe that most of
the IT industry across the world, likewise, was forced to
freeze bonuses and increments. In fact, in most cases,
manpower was also reduced." But it is pertinent to note
that the salary particulars of this letter Anita had given the
Loyalty bonus. Accordingly Ex.D2 is another letter written
to Nutan S.Kalbhairav. Ex.D3 is letter written to
N.Deepashree. So in these letters also mentioned the
loyalty bonus amount. So considering the loyalty bonus
amount freeze cannot be accepted. On perusal of the other
email messages Ex.D3 loyalty bonus till July 2008 is given
to other employees also. Ex.D 6 is in respect of monthly
expenses claim. It promised that he will get monthly
expenses after deducting relevant taxes in the financial
year of 2008 onwards. Again in this letter it reads
"however it would only be applicable to staff members who
are on our rolls and not serving notices on the date of
payment". So appreciating all these documents it clearly
shows there is no resolution copy on cancellation of bonus.
However in respect of other expenses the plaint is not in
18 O.S.No. 1301-2013
detail. Hence, I hold the issue No.1 partly in the
affirmative and issue No.3 in the negative.
14. Issue No. 2 & 4 :- These two issues are taken
up together for discussion as they are inter-linked with
each other.
On perusal of the evidence of D.W.1 in the cross
examination he replied that the plaintiff designation is
Country Manager. The plaintiff is responsible for
everything of the Company in India. So for canceling
loyalty bonus to the plaintiff there must be some
resolution of the Company. D.W.1 further replied that
the dispute in the loyalty bonus, L.T.A. and other
expenses claimed and professional tax for January and
February and salary for 31 days Rs. 1,01,428.14 also
dispute. In respect of loyalty bonus even D.W.1
replied that he was not aware, whether the Company
issued notice to the plaintiff intimating he is not
entitled for loyalty bonus. In respect of loyalty bonus I
elaborately discussed above and appreciating the same
I conclude that he is entitled for loyalty bonus. In
19 O.S.No. 1301-2013
respect of L.T.A. it is not disclosed when he availed the
vacation period. Even D.W.1 replied that they are not
produced the attendance register extract of the plaintiff
and denied the suggestion that they deliberately
suppressing the reply given to Ex.D.12 to 14. He
represents Ex.D.14 shows plaintiff was not put
sufficiently performance improvement program. In
the year 2009 they have not given promotion and
increment to the employees of their Company. In
respect of salaries for 31 days he represents they have
proof that plaintiff has not worked on those days. But
he was not produced any documents and denied the
suggestion that they have not paid him the other
expenses of Rs. 10,433/-. Plaintiff was not claimed the
L.T.A. as per Rules of the Company. But he deny the
same the plaintiff also not produced any documents in
support of LTA and availing the vacation. So I consider
that plaintiff is not entitle for L.T.A. of Rs. 40,000/-.
Although it represents uncleared expenses of
Rs.10,433/- he was not submitted any details. So I
considere that the plaintiff is not entitled for the
20 O.S.No. 1301-2013
uncleared expenses. In respect of Professional Tax
even Ex.P. 1 does not give any detail. But as well as
tax will be deducted from the salary of the person. It
cannot be considered along with the salary as separate
Head. Hence I cannot consider the professional Tax.
Hence appreciating all these plaintiff is entitled for
Bonus and Salary i.e. Rs. 2,71,428.14 for future
interest I refer
2013(1) KCCR 131, KARN., between Govind Traders,
Bijapur Vs Amrutlal Shantilal Shah, Bijapur, wherein it
is held that
"In the absence of any contract the interest
could be only at 6% p.a., and not more.
Hence I hold the issue No. 2 and 4 in partly affirmative.
Issue No.5: In view of the reasons stated supra, I
proceed to pass the following ;
ORDER
The suit is partly decreed with costs.
21 O.S.No. 1301-2013The defendant is hereby directed to pay the amount of Rs. 2,71,428.14 to the plaintiff within 2 months of this order. In default defendant has to pay interest at the rate of 6% p.a. Draw decree accordingly. (Dictated to the Judgmentwriter, typed by him, corrected and then pronounced by my in the open court, this the 12th day of August, 2017.) (NAGAJYOTHI.K.A) XXIX Addl. City Civil Judge, Bangalore City.
ANNEXURE LIST OF WITNESSES EXAMIEND FOR PLAINTIFF :
PW.1. Brigadier (Retd) G.S. Julka LIST OF DOCUMENTS EXHIBITED FOR PLAINTIFF :
Ex.P.
1) Appointment letter, two emails dt.15/09/2009, Resignation letter sent through email, Reliving letter, office copy of the legal notice, Two postal Receipts, Two postal cover which were returned unserved, Reply given by defendant dt. 23/06/2011, letter dt.
30/03/2011, Another letter dt. 31/5/2011, Employees 22 O.S.No. 1301-2013 clearance Form (Ex.P. 1 to Ex.P. 14) (Ex.P. 2 to Ex.P. 4 being computer generated emails.) Ex.P. 9(a) and Ex.P. 10(a) opened postal covers. LIST OF WITNESES EXAMINED FOR DEFENDANTS:
D.W1 : Narendra Nagpal.
D.W.2 : Prafulla Kangondhi LIST OF DOCUMENTS EXHIBITED FOR DEFENDANTS:
Ex.D.
1) letter
2) letter
3) letter
4) email
5) email
6) Email
7) Correspondence document
8) to Ex.D 25( letters and emails.)
26) Report of status.
(NAGAJYOTHI.K.A) XXIX Addl. City Civil Judge, Bangalore City.
23 O.S.No. 1301-201324 O.S.No. 1301-2013 Judgment pronounced in open Court vide separate judgment.
ORDER The suit is partly decreed with costs.
The defendant is hereby directed to pay the amount of Rs. 2,71,428.14 to the plaintiff within 2 months of this order. In default defendant has to pay interest at the rate of 6% p.a. Draw decree accordingly. XXIX Addl. City Civil Judge, Bangalore City.
25 O.S.No. 1301-2013