Telangana High Court
M/S Dell International Services India ... vs Mr. Raj Endran Chingaravelu on 29 April, 2024
HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY
SECOND APPEAL No.227 of 2021
JUDGMENT:
The present Second Appeal is filed questioning the judgment and decree, dated 23.04.2021, passed by the VI Additional District Judge (FTC), Ranga Reddy District at Kukatpally, in AS.No.217 of 2017, whereunder and whereby the judgment and decree dated 15.12.2016 passed by the Additional Junior Civil Judge, Kukatpally at Miyapur, Ranga Reddy District, in O.S.No.116 of 2013 was set aside.
2. The appellants are the defendants and the respondent is the plaintiff in the suit. For convenience, hereinafter the parties are referred to as they are arrayed in the suit.
3. The factual matrix of the case in nut-shell, which led to filing of the present Second Appeal, is that the plaintiff was an employee of the defendant company and he joined duty on 06.07.2009 basing on the letter of appointment dated 30.06.2009. It was stated that as per the terms and conditions of the employment, probation period was fixed for a period of six months from the date of joining and it may be extended for a further period of six months by the company. It was further stated that unless explicitly 2 LNA, J S.A.No.227 of 2021 informed about the extension of probation period, the plaintiff shall be deemed to be confirmed and treated as regular Director IT of the defendant company and accordingly, the services of the plaintiff got confirmed on 05.01.2010.
4. It was further stated that the plaintiff received letter dated 28.12.2009 suspending him from service pending enquiry into the incident that occurred on 28.12.2009 at 10.25 am on public road, outside the compound of the defendant company near Exit Gate No.1. Though he reported the same to the officers of the defendant company, they neither looked into the issue nor allowed him to give police complaint. The plaintiff received a show-cause notice dated 31.12.2009 stating that he has violated DELL's Code of Conduct Policy, to which he gave reply on 01.01.2010 denying the allegations levelled therein. Thereafter, without conducting any enquiry, the defendant company handed over letter dated 06.01.2010 at 9.00 pm to the plaintiff terminating his services. Hence, the suit was filed seeking to declare the termination notice dated 06.01.2010 as illegal, arbitrary, unconstitutional and in violation of principles of natural justice. 3
LNA, J S.A.No.227 of 2021
5. Defendant Nos.1 and 2 filed written statement, through their authorized representative, inter alia denying the averments in the plaint and it is contended that on the basis of the complaint lodged by the security guard regarding an incident that occurred on 28.12.2009, the plaintiff was placed under suspension on the same date and in that connection, he was also issued a show cause notice on 31.12.2009, to which the plaintiff gave a reply dated 01.01.2010. The defendant company, after conducting a detailed enquiry and after affording opportunity to the plaintiff, terminated the services of the plaintiff on 06.01.2010 for violation of the Code of Conduct policy of the defendant No.1-company. 5.1. It was further stated that during the period of probation, the plaintiff was suspended from service on 28.12.2009, therefore, the suit is not maintainable as it is settled law that the contract of employment is not capable of specific performance and breach of contract of employment is not capable of founding a declaratory judgment of subsistence of an employment and prayed the court to dismiss the suit.
6. Basing on the pleadings of both the parties, the following issues were framed by the trial Court for trial: 4
LNA, J S.A.No.227 of 2021 "1. Whether the suit filed before this court, by the plaintiff seeking declaration is maintainable or not?
2. Whether this court has jurisdiction to entertain the present suit?
3. Whether the plaintiff is entitled to the declaration as prayed for?
4. To what relief the plaintiff is entitled for?"
7. During the course of trial, the plaintiff got himself examined as P.W.1 and got marked Exs.A1 to Ex.A-12. On behalf of the defendants, D.Ws.1 and 2 were examined and Exs.B.1 to B.6 were marked.
8. The trial Court without going into the merits of the case, held that in view of the decision of the Hon'ble Supreme Court in Vinod Pathak Vs. American Express Bank Limited, reported in Manu/DE/2832/2015, the suit is not maintainable and accordingly, dismissed the suit, vide judgment dated 15.12.2016.
9. On appeal, the first Appellate Court framed the following points for consideration:-
"1. Whether the suit for declaratory decree in the present form is maintainable before the Civil Court?
2. Whether termination notice dt.06.01.2010 has been issued in violation of the principles of natural justice?5
LNA, J S.A.No.227 of 2021
3. Whether the appellant/plaintiff is entitled to decree for declaration that the termination notice dated 06.01.2010 is non est?
4. To what relief?"
10. The first Appellate Court re-appreciated the entire oral and documentary evidence on record and as regards Point No.1, observed as under:-
"This Court is guided by the subsequent judicial dictum of the Hon'ble Supreme Court of India in Ashok Kumar Srivastav Vs. National Insurance Company Limited and others for deciding the present lis.
Accordingly, in view of the foregoing discussion, this Court on the basis of the precedents relied upon by the learned counsel for the appellant/plaintiff holds that the present suit filed for declaring Ex.A5 as non est is maintainable and a Civil Court is having jurisdiction to adjudicate the suit in the present form under Sec.34 of the Specific Relief Act, 1963."
11. As regards Point Nos.2 and 3, the first Appellate Court observed as under:-
"Ex.A6/B3 is the notice dated 07.01.2010 given by appellant/plaintiff to respondent No.2/defendant No.2 in connection with Ex.A4. Ex.B4 is the show cause notice dated 11.01.2010 issued by appellant/plaintiff to respondent No.1 defendant No.1 company. Even the 6 LNA, J S.A.No.227 of 2021 contents of Ex.A6/B3 as well as the contents of Ex.B4 discloses that appellant/plaintiff had admitted therein that respondent No.1/defendant No.1 company had formed one man enquiry committee to enquiry about the incident occurred on 28.12.2009.
Thus, on the basis of categorical admissions made by appellant/plaintiff during the course of his cross examination before the learned trial Court and also on the basis of the contents of Ex.A6/B3 and Ex.B4 this Court has no hesitation to hold that before termination of service of appellant/plaintiff under respondent No.1/defendant No.1 company had appointed an enquiry officer to enquire into the allegations levelled against appellant/plaintiff by the security guard in respect of the incident occurred on 28.12.2009.
There is no recital in Ex.A-5 to indicate that report of DW2 under Ex.B-5/A-11 was placed before the Regional Ethics Office and appellant/plaintiff was afforded an opportunity to represent his stand before the Regional Ethics Office prior to issuance of Ex.A-5 by respondent No.2/defendant No.2 terminating employment of appellant/plaintiff. Had respondents/ defendants provided a copy of Ex.B5/A11 to appellant/plaintiff prior to termination of his employment, appellant/plaintiff would have represented before the Regional Ethics Office that due to non- furnishing of the copy of complaint (Ex.A11) and the statements of the witnesses, he was completely defenceless during the course of enquiry, and his 7 LNA, J S.A.No.227 of 2021 termination is not in accordance with the Code of Conduct policy under Ex.A12 of respondent no.1/defendant no.1 as the report of DW2 under Ex.B- 5/A-11 was not also placed before the Regional Ethics Office for consideration at any point of time, there is possibility that the same would have not only made bearing on the ultimate finding of DW2 recorded in Ex.B-5/A-11, but also on the notice of termination under Ex.A5. Therefore, for the said reason, the termination notice under Ex.A5 is liable to be declared as non est."
12. Thus, by observing as above, the first Appellate Court set aside the judgment of the trial Court and declared the notice of termination of employment of appellant/plaintiff as non est for violation of principle of natural justice viz., audi alteram partem. Aggrieved by the judgment of the first Appellate Court, the present Second Appeal is filed by the defendant-company.
13. This Court, on hearing the learned counsel for the appellants/defendants and learned counsel for the respondent/plaintiff, admitted the Second Appeal on the following substantial questions of law:-
(1) In the absence of a specific consequential prayer for reinstatement or damages, whether a suit for mere declaration of termination by a private company of a 8 LNA, J S.A.No.227 of 2021 determinable contract of employment, as being illegal and arbitrary, is maintainable?
(2) Whether the doctrine of non-est factum be invoked where the signing party does not plead fraud or lack of jurisdiction and the termination notice be declared non est in the absence of a prayer seeking setting aside of the termination notice?
(3) Whether a suit for mere declaration of termination notice as being illegal, arbitrary without seeking setting aside of the same and without seeking any consequential relief of reinstatement, maintainable?
(4) Whether on the facts and circumstances of the case and in law, the Hon'ble First Appellate Court is justified in setting aside the 1st Appellant's termination notice dated 06.01.2010 as non-est under Section 34 of the Specific Relief Act, 1963?
14. Learned counsel for the appellants contended that the first Appellate Court erred in holding that the suit filed by the respondent herein/plaintiff is maintainable under Section 34 of the Specific Relief Act; that the first Appellate Court ought to have seen that in the absence of specific prayer for consequential relief of reinstatement or damages, a suit for mere declaration of notice 9 LNA, J S.A.No.227 of 2021 of termination as null and void is not maintainable; and that the first Appellate Court further erred in holding the notice of termination as non est in the eye of law as the plaintiff never pleaded that the same was issued by the defendant company fraudulently or without power or jurisdiction. Learned counsel further contended that the plaintiff was terminated from service within the period of probation, as per the terms and conditions of employment mentioned in Annexure-2, and not on the basis of the enquiry said to have been conducted with regard to the alleged incident that occurred on 28.12.2009 and therefore, the first Appellate Court erred in declaring the notice of termination as non est on the ground of violation of principle of natural justice i.e., audi alteram partem. Learned counsel further contended that the first appellate court has not properly appreciated the evidence, the ratio laid down by the Hon'ble Apex Court in Ashok Kumar Srivastav's case and the material placed on record and allowed the appeal on erroneous observations and conclusions. He, therefore, prayed this Court to allow the Second Appeal.
15. Learned counsel for the appellants relied upon the following judgments:-
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LNA, J S.A.No.227 of 2021 (1) Binny Ltd. & Ors. v. V. Sadasivan & Ors 1 (2) Executive Committee of Vaish Degree College Shamli & Ors. v.
Lakshmi Narain & Ors 2 (3) Arya Vidya Sabha, Kashi & Ors.v. Krishna Kumarr Srivatsava & Ors 3 (4) Satya Narain Garg v. DCM Limited & Ors 4 (5) Secunderabad Club etc. v. CIT etc 5 (6) Career Institute Educational Society v. Om Shree Thakurji Educational Society 6 (7) Oriental Insurance Co. Ltd. v. Raj Kumari & Ors 7 (8) Dadu Dayalu Mahasabha, Jaipur (Trust) v. Ram Niwas & Ors 8 (9) Nalini Narain & Ors. v. Prabhavathi Reddy Ravi and Ors. 9 (10) SS Shetty v. Bharat Nidhi Limited 10 (11) Nandganj Sihori Sugar Co. Limtied, Rae Bareli & Ors. v. Badri Nath Dixit & Ors. 11 (12) Integrated Rural Development Agency v. Ram Pyare Pandey 12 1 (2005) SCC (LS) 881 2 MANU/SC/0052/1979 3 MANU/SC/0431/1976 4 MANU/DE/7110/2011 5 2023 SCC Online SC 1004 6 MANU/SCOR/59374/2023 7 MANU/SC/4377/2007 8 MANU/SC/7674/2008 9 MANU/AP/0550/2011 10 MANU/SC/0080/1957 11 MANU/SC/0350/1991 12 MANU/SC/1042/1995 11 LNA, J S.A.No.227 of 2021 (13) Sitaram Kashiram Konda v. Pigment Cakes and Chemicals Manufacturing Co. 13 (14) Pearlite Liners (P) Ltd.v. Manorama Sirsi 14 (15) Ge Capital Transportation Financial Services Ltd. v. Tarun Bhargava 15, (16) Delhi Administration v. Gurdip Singh Uban & Ors 16 (17) Samarjit Datta v. PMT Machine Tools Automatics Private Ltd. & Ors. 17 (18) Managing Director, ECIL, Hyderabad Vs. Karunakar and others 18 (19) Vinod Pathak v. American Express Bank Ltd 19 (20) K. Manjusree v. The High Court of Judicature at Hyderabad for the State of Telangana and the State of A.P. & Ors 20 (21) Executive Committee of Vaish Degree College, Shamli & Ors. v.Lakshmi Narain & Ors 21
16. Learned counsel for the respondent herein/plaintiff contended that without conducting proper enquiry into the alleged 13 MANU/SC/0472/1979 14 MANU/SC/0016/2004 15 MANU/DE/1446/2012 16 MANU/SC/ 0515/ 2000 17 MANU/MH/0321/2011 18 MANU/SC/0237/1994 19 Manu/DE/2832/ 2015 20 Manu/HY/0420/2018 21 MANU/SC/0052/1979 12 LNA, J S.A.No.227 of 2021 incident that occurred on 28.12.2009, and without affording any opportunity to the plaintiff to putforth his defence, his services were terminated and therefore, the notice of termination is bad and non est. He also relied upon the written statement filed by the defendant company wherein it is stated on the basis of the complaint lodged by the security guard regarding an incident that occurred on 28.12.2009, the plaintiff was placed under suspension on the same date and in that connection, he was also issued a show cause notice on 31.12.2009, to which the plaintiff gave a reply dated 01.01.2010 and that the defendant company, after conducting a detailed enquiry and after affording opportunity to the plaintiff, terminated the services of the plaintiff on 06.01.2010 for violation of the Code of Conduct policy of the defendant No.1-company. Learned counsel for the respondent further contended that pleadings in the written statement filed by the defendant-company amounts to admission of the allegations made in the plaint. He cited various judgments of the Hon'ble Supreme Court, wherein it is held that an employee can be removed from service only after conducting proper enquiry.
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17. To buttress his submissions, learned counsel for the respondent relied upon the following decisions:-
(1) Radhe Shyam Gupta v. U.P. State Agro Industries Corporation Ltd. & Anr 22 (2) Chandra Prakash Shahi v. State of U.P. & Ors 23 (3) D.K. Yadav v. J.M.A. Industries Ltd 24 (4) Uptron India Limited v. Shammi Bhan & Anr 25 (5) Union of India (UOI) & Ors. v. Tulsiram Patel & Ors 26 (6) State of Punjab v. Jaswant Singh 27 (7) Radhe Shyam Gupta v. U.P. State Agro Industries 28 (8) P. Daver v. Lodge Victoria 29 (9)Ootacamund Club v. H.S. Mehta 30 (10)M/. Zee Tele-Films Limited v. Syed Inam Ur Rahaman 31 (11)Rajasthan State Road Transport Corporation (SRTC) v. Bal Mukund Bhairwa 32 (12) Kalra v. Project & Equipment Corporation of India Ltd 33 22 (1999) 2 SCC 21 23 (2000) 5 SCC 152 24 1993 (3) SCC 25 25 AIR 1985 SC 1416 26 1985/INSC/155 27 2023 (2023) 9 SCC 150 28 (1999) 2 SCC 21 29 1962 SCC Online SC 47 30 2009 SCC Online Mad 1572 31 2016 SCC Online Hyd 103 32 (2009) 4 SCC 33 (1984) 3 SCC 516 14 LNA, J S.A.No.227 of 2021 (13)State Bank of India & Ors. v. S.N. Goyal 34 (14)K.Pratap Reddy v. Institute of Rural Management & Ors.
Executive Committee of Vaish Degree College V. Laxmi Narain and other 35 (15) Church of North India v. Rt. Revernd Ashoke Biswas 36
18. During the course of arguments, learned counsel for the appellants/defendants stated that the judgments relied upon by the learned counsel for the respondent pertains to Public Sector Undertakings, wherein the Public Sector Undertakings have set of Service Rules and the services of the employees are regulated as per the said Service Rules.
19. In the present case, the appellant is a private company and except entering into contract of appointment, subject to certain terms and conditions of employment specified in the Annexure to the letter of appointment, there are no Service Rules and thus, the judgments cited by the learned counsel for the respondent/plaintiff are neither relevant nor applicable to the present case. 34 AIR 2008 SC 2594 35 AIR 1976 SC 888 36 2019 SCC Online Cal 3842 15 LNA, J S.A.No.227 of 2021
20. In the light of the judgment of the Hon'ble Apex Court in Binny Limited's case (cites supra), it is clear that the service rules and regulations which are applicable to government employees of public sector undertaking stand on a different footing and they cannot be tested on the same touchstone or enforced in the same manner. Since all the judgments relied upon by the learned counsel for the respondent-plaintiff are in respect of the employees of Government or Public Sector Undertaking, the same are not applicable to the present case and are of no help to the respondent- plaintiff.
Consideration:-
21. The factual matrix of the case is that the plaintiff was appointed in the defendant company vide letter of appointment dated 30.06.2009 and he joined the defendant-company on 06.07.2009. As per the terms of appointment letter, a period of six months from the date of appointment was fixed as probation period, which may be extended for a further period of six months by the defendant company. The services of the plaintiff were suspended by the defendant company vide letter dated 28.12.2009 pending enquiry into the event that occurred on 28.12.2009. Later, 16 LNA, J S.A.No.227 of 2021 the services of the plaintiff were terminated vide order dated 06.01.2010.
22. Aggrieved by the notice of termination, the respondent herein filed O.S.No.116 of 2013 before the Court of Additional Junior Civil Judge, Kukatpally at Miyapur, Ranga Reddy District and the said suit was dismissed. Aggrieved by the same, the plaintiff filed AS.No.217 of 2017 before the Court of VI Additional District Judge (FTC), Ranga Reddy District at Kukatpally, which stood allowed. Challenging the same, the present Second Appeal is preferred by the defendant company. Substantial Question of law Nos.1 & 3:-
23. To decide these substantial questions, it is relevant to refer to the relief sought for by the plaintiff in the suit, which reads as under:-
"1. To declare that the termination notice dated 06.01.2010 as illegal and arbitrary and unconstitutional and violation of principles of natural justice.
2. To justify the present plaintiff status by declaring the defendants proceedings as null and void.
3. To award the costs of the suit."17
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24. Thus, admittedly, the plaintiff did not seek consequential relief for reinstatement or damages in the suit filed by him while challenging the notice of termination dated 06.01.2010. The trial Court while adjudicating the issues framed by it, referred to the judgment of the High Court of Delhi in Vinod Pathak Vs. American Express Bank Ltd decided on 23.09.2015 in CS(OS).No.936 of 2004, wherein it was held that
(i) a contract of private employment is not similar to the public employment and in such private employment, there is no scope of applicability of the principles of administrative law/public law.
(ii) A contract of employment which provides termination of services by one month's notice, then, at best, the employee will only be entitled to one month's pay in terms of the employment contract. An employee is not entitled to any relief of continuation in services or pay with consequential benefits for alleged remaining period of services till the date of his superannuation.
(iii) As per the provision of Section 14(1)(c) of the Specific Relief Act, 1963, a contract which is determinable in nature cannot be specifically enforced. Since the service contract in the present case is determinable by one month's notice, there does not arise the question of giving of any reliefs which tantamount to enforcement of a determinable contract. As per Section 14(1)(b), a contract of personal service cannot be enforced when the employer 18 LNA, J S.A.No.227 of 2021 is not the Government or "State" as per Article 12 of the Constitution of India.
25. Thus, by referring to the ratio laid down by the High Court of Delhi, the trial Court has come to a conclusion that the suit is not maintainable and further, held that since the suit is not maintainable, no relief can be granted.
26. In this context, it is relevant to refer to the judgment of the High Court of Delhi in Ge Capital Transportation Financial Services Limited's case (cited supra), wherein it is held as under:-
"As per Section 14 (1) (b) of Specific Relief Act, 1963, a contract for personal service cannot be enforced.:" It was further held in Para 9 that "infact, the subject matter was barred by Section 14 (1) (b) of Specific Relief Act, 1963, which provides the contract which is in its nature determinable, cannot be specifically enforced."
Furthermore, it was held that "what cannot be done indirectly i.e., if there cannot be specific performance of the contract, there cannot be declaration and injunction to continue such a service contract. Section 41 ( e) of the Specific Relief Act, 1963 provides that injunction will not be granted to prevent breach of the contract, performance of which could not be specifically enforced."
27. Also, the High Court of Bombay in Samarjit Datta's case (cited supra), at para 30 of the judgment, held as under:- 19
LNA, J S.A.No.227 of 2021 "The appellate having omitted to pray for further reliefs either by way of reinstatement, compensation or other, is not entitled for a mere declaration in view of the proviso to Section 34 of the Specific Relief Act. It is not in dispute that such a relief is discretionary relief and nothing extra ordinary shown in the case to depart from the normal rule that a court should not ordinarily enforce a contract for personal services and give a declaration that contract subsists. That the employee, even after having been removed from service can be deemed to be in service against the will and consent of the employer. In any case, I am of the view that having regard to the observations of Supreme court in Mangilal's Case such a declaration would be inexecutable. It is well settled that discretion may not be exercised in a case where it would be futile."
28. From the above cited judgments, it is explicit that the settled principle of law is that a contract of personal services cannot ordinarily be enforced and a court normally would not give a declaration that the contract subsists and the employee is deemed to be in service against the will and consent of the employer, even after he was removed from service.
29. As per the terms and conditions of employment mentioned in Annexure-2, which is annexed to the letter of appointment, dated 30.06.2009, the defendant company is entitled to terminate the 20 LNA, J S.A.No.227 of 2021 services of the employee during the period of probation without assigning any reason. Admittedly, the plaintiff joined the defendant company on 06.07.2009 and he was placed under suspension vide letter dated 28.12.2009 by referring to the alleged incident that occurred on 28.12.2009. In other words, the plaintiff was not in the services of the defendant company from 28.12.2009. Subsequently, on 06.01.2010 the notice of termination was issued. Thus, from the above, it is discernible that the services of the plaintiff were terminated within the period of probation of six months.
30. Therefore, in the light of the settled legal position and the right/discretion of the defendant company i.e., employer, this Court is of the considered view that the termination notice dated 06.01.2010 cannot be declared as illegal and arbitrary.
31. In the instant case, Annexure-2, which contains the terms and conditions of employment, is annexed to the letter of appointment and therefore, it acquires the character of determinable contract. Thus, following the ratio laid down by the Hon'ble Supreme Court in Vinod Pathak's case (cited supra), wherein it was held that as per Section 14(1)(b) of the Specific 21 LNA, J S.A.No.227 of 2021 Relief Act, a contract of personal service when the employer is not the Government or "State", as defined under Article 12 of the Constitution of India and also as per Section 14(1)(c) of the Specific Relief Act, 1963, a contract which is determinable in nature cannot be specifically enforced, therefore, this Court holds that the present case being in the nature of determinable contract cannot be specifically enforced against the defendant-company.
32. Further, since the service contract in the present case is determinable by 15 days notice during the period of probation and one month's notice after regularization, there does not arise the question of giving of any relief which tantamounts to enforcement of a determinable contract.
33. Further, in the present case, the plaintiff did not seek consequential relief of reinstatement or damages. Therefore, the suit is not maintainable and the trial Court had rightly dismissed the suit.
34. The first Appellate Court referred to the judgments of the Hon'ble Apex Court in S.S.Shetty Vs. Bharat Nidhi Limited 37 and 37 AIR 1958 SC 12 22 LNA, J S.A.No.227 of 2021 Nandganj Sihori Sugar Co. Ltd. Vs. Badri Nath Dixit 38, which were relied upon by the learned counsel for the appellants/defendants and observed that in S.S.Shetty's case, the question before the Hon'ble Supreme Court was computation of monetary benefit of reinstatement of the discharged employee within the meaning of Section 20(2) of the Industrial Disputes (Appellant Tribunal) Act, 1950 and further, observed that in Nandganj Sihori Sugar Company Limited's case, the Hon'ble Supreme Court in the given suit filed for mandatory injunction to enforce contract of employment entered between the plaintiff and defendant Nos.1 to 3 for the post of Instrumentation Foreman and also for consequential reliefs, however, no relief for declaration of his termination from service as illegal was prayed for by the plaintiff, held that the contract of employment cannot ordinarily be enforced by or against an employer and the remedy is to sue for damages. The first Appellate Court, however, held that the facts of the case in the aforesaid judgments of the Hon'ble Supreme Court are clearly distinguishable from the facts of the present case and 38 AIR 1991 SC 1525 23 LNA, J S.A.No.227 of 2021 therefore, came to conclusion that the ratio laid down in the said judgments is not applicable to the facts of the present case.
35. This Court upon scrupulously going through the judgments of the Hon'ble Supreme Court in the aforesaid cases, finds that the first Appellate Court has lost sight of the observation of the Hon'ble Supreme Court in Nandganj Sihori Sugar Company Limited's case (cited supra), wherein it is held that the contract of employment cannot ordinarily be enforced by or against an employer and the remedy is to sue for damages. The first Appellate Court has misconstrued the said observation of the Hon'ble Apex Court and wrongly observed that the said judgment is not applicable to the present case.
36. The first Appellate Court relied upon the judgment of the Hon'ble Apex Court in Ashok Kumar Srivastav Vs. National Insurance Company Limited and others 39 and observed that the Hon'ble Supreme Court did not make any distinction between public and private employment for the purpose of maintaining declaratory suits challenging notice terminating employment as null and void.
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1998 AIR SC 2046 24 LNA, J S.A.No.227 of 2021
37. This Court has meticulously gone through the judgment of the Hon'ble Supreme Court in Ashok Kumar Srivastav's case (cited supra), wherein the dispute is between an employee and National Insurance Company Limited, which is a public sector undertaking i.e., a State or Government owned entity. In the case on hand, the plaintiff is an employee of defendant-company, which is a private company and in such private employment, there is no scope of applicability of the principles of administrative law/public law. Therefore, this Court is of the considered opinion that the first Appellate Court misconstrued the judgment of Hon'ble Supreme Court in Ashok Kumar Srivastav's case (cited supra) and came to a wrong conclusion that the said judgment is applicable to the present case with an observation that the Hon'ble Supreme Court did not make any distinction between the public and private employment for the purpose of maintaining declaratory suits challenging notice terminating employment as null and void. It is settled law that principles in public law domain do not apply with respect to employees in private employment.
38. In the light of foregoing discussion, substantial question of law Nos.1 and 3 are answered accordingly, holding that in the 25 LNA, J S.A.No.227 of 2021 absence of specific consequential prayer for reinstatement or damages, a suit for mere declaration of notice of termination as illegal is not maintainable. This Court further hold that the employment of plaintiff being a contract which is determinable in nature cannot be enforced specifically and is squarely covered under Section 14(1)(c) of the Specific Relief Act, 1963. Substantial Question of Law No.2:-
39. It is admitted fact that the plaintiff was appointed as Director-IT in the defendant company vide letter of appointment dated 30.06.2009 and Annexure-2 is enclosed therewith. In the said Annexure-2, the terms and conditions of employment are given, wherein the clauses as regards 'Probation' and 'Notice Period/Pay' read as under:-
"Probation:- You will be on probation for a period of six (6) months from the date of joining. The period of probation may be extended for a maximum period of six (6) months by the company at its sole discretion. Upon completion of 6 months from the date of joining, unless explicitly informed about extension of probation period, you shall be deemed confirmed."
Notice Period/Pay:- During the period of probation, your services may be terminated by either party giving the other fifteen (15) days notice or Base Salary in lieu 26 LNA, J S.A.No.227 of 2021 thereof. After confirmation and thereafter, your services may be terminated by either party giving the one (1) month's notice or Base Salary in lieu thereof......"
40. Thus, as per the clauses regarding 'Probation' and 'Notice Period/Pay' mentioned in Annexure-2, which is annexed to the letter of appointment, the defendant company had issued the notice of termination to the plaintiff, who is its employee, within the period of probation of six months, without assigning any reason therefor.
41. The plaintiff did not plead fraud or lack of jurisdiction on the part of defendant-company in issuing notice of termination dated 06.01.2010. The plaintiff contended that the notice of termination was issued only due to the incident that had taken place on 28.12.2009 and without conducting proper enquiry as regards the said incident and without following the principles of natural justice, the defendant company terminated the services of the plaintiff. However, perusal of record would disclose that the notice of termination dated 06.01.2010 was issued, as per the terms and conditions of employments of letter of appointment, which is within the period of probation. It is pertinent to note that in the 27 LNA, J S.A.No.227 of 2021 notice of termination there is no reference to the incident that occurred on 28.12.2009, enquiry report, etc. Therefore, it is to be construed that the defendant company in its discretion issued the notice of termination within the period of probation which was in accordance with the terms and conditions of employment mentioned in letter of appointment.
42. In the light of the above, this Court is of the considered view that the first Appellate Court grossly erred in declaring the notice of termination as non est. Substantial Question of Law No.4:-
43. The services of the plaintiff were terminated within the period of probation. Further, it is pertinent to note that in the letter of termination dated 06.01.2010, there is no reference to the alleged misconduct of the respondent-employee or enquiry conducted against him.
44. For better appreciation, the notice of termination is reproduced as hereunder:-
"This has reference to your Appointment Contract ("Offer Letter") dated 30-June-2009 whereby you were appointed on probation with effect from 06-July-2009 at Dell International Services India Private Limited ("Dell").28
LNA, J S.A.No.227 of 2021 Please take notice that as per annexure 2, point 1, of your Offer Letter relating to termination, your service is hereby terminated with effect from today, 06-January- 2010. Consequently you also stand relieved from the services of the Company, with effect from today.
Please contact the payroll department within 30 days for the full & final settlement of your dues.
Please further acknowledge receipt of this letter."
45. From a scrutiny of the notice of termination, it is to be noted that the defendant company terminated the services of the plaintiff as per Annexure-2, point 1 of his Offer letter and not as a consequence or result of the enquiry alleged to have been conducted with regard to the incident that occurred on 28.12.2009. Thus, it cannot be inferred that the defendant-company at its discretion terminated the services of the plaintiff in accordance with the terms and conditions of the employment. The averment made in the written statement that basing on the complaint lodged by the security guard regarding an incident that occurred on 28.12.2009, the plaintiff was placed under suspension on the same date and in that connection, he was also issued a show cause notice on 31.12.2009, to which the plaintiff gave a reply dated 01.01.2010 and that the defendant company, after conducting a detailed 29 LNA, J S.A.No.227 of 2021 enquiry and after affording opportunity to the plaintiff, terminated the services of the plaintiff on 06.01.2010 for violation of the Code of Conduct policy of the defendant No.1-company are subsequent improvements and are inconsistent pleas on the part of the defendant-company. The said ground/plea does not form part of termination notice dated 06.01.2010 and therefore, cannot be looked into/considered.
Therefore, this court is not inclined to go into the rival contentions of learned counsel for the parties as to whether the enquiry was valid or not, and whether proper and fair opportunity was afforded to the plaintiff to defend himself.
46. In the light of the above, this Court is of the considered opinion that the finding of the first Appellate Court that there is violation of principle of natural justice viz., audi alteram partem and as such, the notice of termination of employment of the plaintiff is non est, is unsustainable.
47. Thus, this substantial question of law is answered holding that the first Appellate Court is not justified in declaring the notice of termination of employment of the plaintiff as non est. 30 LNA, J S.A.No.227 of 2021
48. Further, it is not out of place to note that though in substantial question of law No.2, the applicability of doctrine of non-est factum is raised, neither the learned counsel for the appellants nor the learned counsel for the respondent advanced any submissions in that regard. Therefore, this Court does not deem it necessary or appropriate to go into the said aspect.
49. In the light of the facts and circumstances of the case, the legal position and the foregoing reasons and discussion on substantial question Nos.1 to 4, this Court is of the considered view that the first Appellate Court is not justified and committed error in relying upon the judgment of the Hon'ble Apex Court in Ashok Kumar Srivastav's case (cited supra) and holding that the suit filed by the plaintiff is maintainable and hence, the same warrants interference by this Court.
50. For the foregoing reasons, the Second Appeal is allowed and the judgment and decree, dated 23.04.2021, passed by the VI Additional District Judge (FTC), Ranga Reddy District at Kukatpally, in AS.No.217 of 2017 is hereby set aside and the judgment and decree dated 15.12.2016 passed by the Additional 31 LNA, J S.A.No.227 of 2021 Junior Civil Judge, Kukatpally at Miyapur, Ranga Reddy District, in O.S.No.116 of 2013 is confirmed. No costs.
51. Pending miscellaneous applications, if any, shall stand closed.
__________________________________ JUSTICE LAXMI NARAYANA ALISHETTY Date:29.04.2024 dr