Ashok Mehra vs Siddharth Shriram And Ors.
2000 Latest Caselaw 340 Del

JUDGMENT

K.S. Gupta, J.

1. This order will govern the disposal of IA No. 4087/99.

2. Suit has been filed by the Plaintiff seeking the following reliefs:-

"A. Pass a decree for recovery in the sum of Rs.3,26,21,099/- alongwith interest @ 24 per annum pendente lite and future in favour of the Plaintiff and against Defendants 1 & 2 jointly and Severally.

B. Pass a decree of mandatory injunction directing, Defendants 1 & 2 to continue to pay until the Plaintiffs' 60th birthday i.e. until 11.6.2003, the rent and other charges for the enjoyment and occupation by the Plaintiff of property and premises bearing No.A-218, New Friends Colony, New Delhi to the landlord continuously and uninterruptedly.

C. Pass a decree of mandatory injunction against the Defendants 1 & 2 directing, Commanding and requiring the Defendants 1 & 2 to pay to Tata Finance Ltd.(Defendant No. 3) all outstanding dues in respect of the Cielo car bearing registration No.DL-3CJ 6267 and continue to pay month to month hereafter all dues in respect thereof until all amounts stand paid under agreement of hire purchase with Tata Finance Ltd. In respect thereof.

D. Pass a decree of mandatory injunction directing, commanding and requiring the Defendants 1 & 2 to pay to Tata Finance Ltd. (Defendant No. 3) all outstanding and dues in respect of vehicle being Tata Safari registered at No.MR-26G 3407 and continue to pay month to month hereafter all dues in respect thereof until all amounts stand paid under agreements between the Defendants and Tata Finance Ltd.

E. Pass a decree of permanent prohibitory injunction restraining the Defendants 1 & 2 from in any manner dispossessing the Plaintiff from House No.A-218, New Friends Colony, New Delhi, and/or causing dispossession from the said house and/or interfering with the Plaintiff's peaceful use, occupation and enjoyment of the said house until 11.06.2003.

F. Pass a decree of permanent prohibitory injunction restraining the Defendants from in any manner dispossessing the Plaintiff from a Cielo car bearing No.DL-3CJ 6267 and Tata Safari car bearing No.HR-26G 3407 and/or ink any manner interfering with the Plaintiffs peaceful use, occupation and enjoyment of said cars.

G. Pass such other or further order(s) as this Hon'ble Court deems fit and appropriate in the facts and circumstances of the present case."

3. It is, inter-alia , alleged in the plaint that Defendant No. 1 and the Plaintiff were together at the Doon School, Dehradun during 1954-59 and were friends. In or about February, 1997 when Defendant No. 1 met the Plaintiff in Bangkok, Thailand where he was in full time employment with Thai Baroda Industries Ltd. on a total package of about Thai Baht 70 lacs (Rs.93 lacs) per annum, he (Defendant No. 1) expressed his concern about single handedly managing his huge business empire. Thereafter, by the letter dated June 6,|997 written by Defendant No. 1 to the Plaintiff, the Defendant No. 1 invited the Plaintiff to come on the Board of Directors of Siel Limited, Defendant No. 2 and becoming an Advisor thereof. By December,1997, the Defendant No. 1 insisted the Plaintiff to join as UK Chief Executive Officer of Defendant No. 2 company at Delhi. In response the Plaintiff reminded the Defendant No. 1 that his services were costly and reiterated the details of his remuneration given in writing about 7 months back in Bangkok. The Plaintiff further told the Defendant No. 1 that it would not be possible for him to get emoluments less than Rs.68 lacs per annum and that a fixed term appointment would also be a condition precedent to joining full time as he was nearing retirement age and was not willing to take risk with regard to assured employment till his 60th birthday in Thailand in the said company. It is further alleged that thereafter the Plaintiff received a letter dated 5th December, 1997 from Defendant No.1 assuring that in that even of termination of the services of the Plaintiff for any reason other than financial impropriety on his part, the Defendant No. 2-company will fulfilll its monetary and other related compensation to him until the date of his 60th birthday. Plaintiff was also asked to confirm the date of his final joining the Defendant No. 2 at Delhi. It is stated that the Plaintiff accepted the offer made in terms of the said letter and confirmed in writing by the letter dated 12th December ,1997 sent to Defendants 1 & 2 by fax that he will actually join Defendant No. 2 as Chief Executive Officer on 5th January, 1998. On joining, the Defendant No. 2 provided to the Plaintiff a house bearing No.A-218, New Friends Colony, New Delhi in addition to a Cielo car. For internal accounting, the car was got financed through Defendant No. 3 but it was registered in the name of Plaintiff. Instalments of the car were being paid by Defendant No. 2 to Defendant No. 3. Company also provided to the Plaintiff a Tata Safari vehicle which was purchased in the name of Defendant No. 2 arid financed by Defendant No. 3. Instalment for this vehicle too were/are being paid by Defendant No. 2. It is further alleged that although the Plaintiff had worked with Defendants 1 & 2 for about three months upto April, 1998 but the break up of emoluments had still not been drawn by Defendant No. 1. Whenever the Plaintiff raised the issue, defendant No. 1 replied by saying that breakup was being worked out for the benefit of the Plaintiff so that he takes home the maximum amount. On 8th July,1998 while the Plaintiff and Defendant No. 1 were attending a conference at Kathmandu, the Plaintiff received from Defendant No.1 a letter with remuneration break up. stating that the Board members have approved for the Plaintiff a total sum of Rs.65 lacs per annum. This letter did not correctly record the agreement between the Plaintiff and Defendants 1 & 2. Accordingly, on 10th July, 1998 during personal meeting at Kathmandu, the Plaintiff objected to the contents of the said letter. After recording his protest in writing on the said letter the Plaintiff sent it back to Defendant No. 1 for issuing a fresh letter regularizing the remuneration. Thereafter, on 21st August, 1998 the Plaintiff received from the Defendants a letter regularising his appointment as Chief Executive Officer of the company effective from 5th January, 1998 also enclosing therewith the statement of details of the facilities. That statement, however, did not give the basic salary and special allowances and on Plaintiffs pointing out that inaccuracy, the Defendant No. 1 issued a fresh statement giving amongst others the basic salary and the special allowances on 9th September, 1998.

4. It is pleaded that when the Defendant No. 1 returned on or about 12th September, 1998 the Plaintiff went to see him and at that time the Defendant No. 1 told the Plaintiff that they are to part ways without giving any reason therefor". The Plaintiff reminded the Defendant No. 1 that as per the separation provision incorporated in the said letter dated 5th December, 1997, compensation would be due to him to which the Defendant No. 1 responded that he was fully aware and all financial dues would be settled in a few days. By the letter dated 26th September,1998, the Plaintiff gave a statement of his dues amounting ,to Rs.3,17,51,066/-. A day or so later, the Plaintiff received from Defendant No. 1 a separation memo dated 28th September,1998 stating that M/s. P.K. Bhalla and Sumant Jain from his office will sit with the Plaintiff over the next two days for handing over the charge by him. The Plaintiff Responded by the letter of even date that he has no difficulty in handing over the charge and reiterated that the consequences of separation should follow immediately. It is stated that the Plaintiff has been continuously pursuing with Defendants 1 & 2 to settle his dues but they have failed to do so. It is further alleged that said House No.A-218, New Friend Colony, had been taken on lease by Defendants 1 & 2 from one Sh. Marwah on a rental of Rs. 1,10,000/- per month and they have failed to pay the rent of the house after September,1998. Defendants 1 & 2 have also not paid the finance charges to Defendants No. 3 in respect of the said two cars. It is claimed that the Plaintiff is entitled to retain the said house and the two cars until 11th June,2003 when he would complete the age of 60 years and Defendants 1 & 2 arc liable to pay the rent of the said tenanted house and also the finance charges to Defendant No. 3 until the said period.

5. In the suit said 1A No.4087/99 under Order 39 Rules 1 & 2 read with Section 151 CPC has been filed by the Plaintiff seeking direction to Defendants 1 & 2 to, forthwith pay a sum of Rs.31,68,533/- (Rs.8,70,033/- + Rs.22,98,500/-) and Rs.5,66,000/- on month to month basis, to him. Said Defendants are further sought to be restrained from dispossessing the Plaintiff from said house No.A-218, New Friends Colony and the two ears bearing No.DL 3CJ 6267 an HR-26 G3407. Said amount of Rs.8,70,033/-covers the emoluments upto the period 30th September, 1998 while amount of Rs.22,98,500/- is for the period from 1st October, 1998 until the date of the filing of suit.

6. Although the written statement is yet to be filed by Defendants 1 & 2 but they have contested the said IA by filing a joint reply. It is, inter-alia, alleged in the reply that the entire case of the Plaintiff is based on the letter dated 5th December,1997 written by Defendant No. 1 to the Plaintiff on the dale this letter was written, no terms and conditions were settled between the parties and the same were to be settled and appointment letter issued at a latter date. On 8th July, 1998, the Defendant No. 1 wrote to the Plaintiff that the Senior Directors had finally approved a cost to company of Rs.65 lacs maximum as detailed in para No. 3 of the preliminary submissions of the reply. After taking into account all the earlier discussions, agreements, understandings whether oral or in writing, appointment letter dated 21st August, 1998 effective from 5th January, 1998 was issued to the Plaintiff containing all the terms and conditions agreed to between the parties. Accordingly, aforesaid letter dated 5th December, 1997 got superseded and merged into the said letter dated 21st, August, 1.998. It is alleged that the letter dated 21sl August, 1998 does not contain any provision or clause which entitles the Plaintiff to the compensation as claimed by him. It is denied that the Plain-tiff who has worked only about 8 months with Defendant No. 2, is entitled to the compensation as claimed. It is stated that property No.A-218, New Friends Colony is a leased accommodation and if any injunction qua that property is granted, it will severally prejudice the owner thereof who is not a party to the suit. It is stated that as as per the terms of appointment the Plaintiff was entitled to only one car from Defendants No. 2 and Defendant No. 2 provided Tata Safari bearing No.HR-26G 3407 to the Plaintiff for use is the course of his employment with Defendant No. .2 Cielo car No.DL 3CJ 6267 was purchased by the Plaintiff directly from Defendant No. 3 under a hire purchase agreement and the answering Defendants have nothing to do with it. Defendant No. 2 paid the hire purchase instalments for and on behalf of the Plaintiff and all such instalments are to be adjusted against the remuneration payable by Defendant No. 2 to the Plaintiff. It is emphatically denied that the Plaintiff is entitled to monetary and other benefits upto June 11,2003 as alleged.

7. In the reply filed by Defendant No. 3 it is, inter-alia, stated that the Plaintiff is liable to pay hire purchases instalments against Cielo car No.DL-3CJ 6267 and. the same have not been paid by him since October, 1998.

8. Controversy between the Plaintiff and Defendants 1 & 2 mainly centres around the correspondence exchanged between them. Letter dated 5th December, 1997 written by the Defendant No. 1 to the Plaintiff (at page 16 of the part-III file) which is the basis of suit, is reproduced below:-

"I am writing to confirm to you that you and I have had conclusive discussions on your joining as the Chief Executive Officer of Siel Limited. We have also concluded, more or less, the levels of compensation. These are as per the paper you have given me and I have attempted to recast this into the Indian mode.

The area of concern which is quite natural, is the compensation in the event of termination of service. Kindly note that in the event, there is termination from the company's side for reasons of financial impropriety, there will be no compensation payable to you. However in the event that for any other reasons, a separation of service is desirable, then the company will fulfilll its monetary and other related compensation to you until the date of your 60th birthday. Kindly confirm to me the date of your final joining in Delhi."

9. In response to the said letter, by the letter dated 12th December, 1997 (at page 17), the Plaintiff intimated the Defendant No. 1 that he will join on 5th January, 1998. Letter dated 8th July, 1998 (at page 19) written by the Defendant No. 1 to the Plaintiff which is relevant, runs as under :-

"I have been going round and round on balancing your compensation based o the following:

1. Your statement (enclosed)

2. Company rules (new/old)

3. What you want

4. What the Board members have approved.

10. The Senior Directors have finally approved a COST TO COMPANY OF Rs.65 lacs maximum. Great reluctance was shown because.

11. Unproven track reward in a senior position in a company our size.

12. Could he get a similar salary anywhere else in Indian (overseas the values are always higher)

13. No remarkable skills demonstrated to date.

14. Accordingly, I encloses the suggested remuneration. It cannot be more. There's always next year and if your performance is truly outstanding, nobody will mind how much you earn.

15. All taxes are to your account.

16. In addition the company will reimburse cost of security guard upto Rs.1.00 lac per year.

17. Company will provide only one car (the Cielo already purchased in your name, will continue to be paid by our, suitably already grossed up).

18. Company wide rules as applicable to others will also be applicable to you.

19. Reward will be partly on personal performance and mainly on group performance. In later years this aspect may be merged with stock option.

20. Please compare with your original statement and others (copies of same enclosed). We can discuss this but, in all cases it must be finalized before July end."

21. Said letter was returned in original by the Plaintiff to Defendant No. 1 after making she following endorsement dated 10th August, 1998 thereon:-

"The attached terms were discussed at Kathmandu on 10th July, 1998 and it was agreed that you would issue a letter immediately in regularisation. It seems this has been overlooked. It was also agreed that the appraisal, remarks would be expunged from the record.

May I, therefore, please request you to issue the letter in regularisation"

22. Letter dated 21st August,1998 (at page 24) was sent by the Defendant No. 1 to the Plaintiff appointing him as Chief Executive Officer in Defendant No. 2-company w.e.f. 5th January, 1998 also enclosing therewith a statement containing the details of facilities to be extended to the Plaintiff which statement, came to be modified by Defendant No. 1 on 9th September, 1998 (copy at page 27). In this amended statement, the details of facilities/entitlements pertain to basic salary, special allowances, housing, car, car expenses, driver expenses, telephone expenses, recouperation, medical, house furnishing, club membership and reward. Yet another letter dated 26th September, 1998 sent by the Plaintiff to defendant No.1 (at page 28) which is relevant runs thus:-

"It has been agreed that a separation is desirable, and therefore you have asked me to let you know the compensation due to me to enable the separation formalities to proceed.

In accordance with the separation commitment, if the separation is effective from 30th September'98,then upto my 60th Birthday it will be exactly 56 months and 11 days. If we round this off to 56 months, then I am entitled to a sum of Rs.3,17,51,066/- as separation compensation as per the computation statement attached.

Since it will be extremely difficult to make a clean break from 1st October, 1998 it is requested that status quo in respect of the remuneration package be maintained till 31st December, 1998 and the pro-rated amount adjusted against the above dues on this basis there will be a deduction of Rs. 17,00,950/- from the above sum as I will continue to receive full remuneration and facilities till 31st December, 1998.

23. Accordingly, the settlement as per the separation compensation commitment would work out as follows:-

a) For 56 months to be still served calculated as per attached computation Rs.3,17,51,066.00

b) Less for three months on full remuneration package (pro-rated basis) Rs. 17,00,950.00

-----------------

Rs.3,00,50,116.00

I now await your response regard/Eg further modalities as will as an indication as to when the due amount would be paid to me."

24. In the computation statement attached to the said letter (at page 30) the entitlements have been worked out under the sub-heads as noted in the amended statement of details of facilities/entitlements dated 9th September, 1998 at said page No. 27. Letter dated 3rd March, 1999 sent by Defendant No. 2-company to the Plaintiff in response to his letter dated 18th February, 1999 written to all the Directors of company (at page 38), is the last material letter to be taken note of. This letter, inter-alia, notices that appointment of the Plaintiff in the company was subject to the rules and regulations of the company. As a well established rule in the company, the separation between an employee and the company can be effected by giving one month notice for each completed year of service subject to a maximum of three months or salary in lieu thereof by either side. Since the petitioner had not completed even one year of service, no notice or any salary in lieu thereof was, therefore, payable to him.

25. In support of the IA, the thrust of argument advanced by Sh. R.K. Anand, Sr. Advocate appearing for the Plaintiff was that the offer made by Defendant No. 1 as chairman and managing director of Defendant No. 2-company through the letter dated 5th December, 1997 that the Plaintiff, amongst others, would continue to be in the employment of Defendant No. 2-company until the age of 60 years, was accepted by the Plaintiff by the letter dated 12th December, 1997 and as the separation of the Plaintiff from Defendant No. 2-company w.e.f. 30th September, 1998 was on a ground other than financial impropriety, pending suit the Plaintiff is entitled to the reliefs claimed in the IA. On the other hand, the contention advanced by Sh. Raj Birbal, Sr. Advocate appearing for Defendants 1 & 2 was that the Plaintiff is entitled only to compensation as per the rules of Defendant No. 2-company and in support of the contention he invited my attention to the letter dated 8th July, 1998, endorsement appearing there on in the hand of the Plaintiff and the amended statement indicating the details of facilities/entitlements dated 9th September, 1998. As noticed earlier, in the IA under disposal the Plaintiff has sought direction to Defendants 1 & 2 to forthwith pay Rs.31,68,533/- calculated until the date of institution of suit in addition to month to month payment @ Rs.5,66,000/-, to him. He has further sought to restrain the Defendants from in any way dispossessing him from tenanted house No.A-218, New Friends Colony and the two cars bearing Nos.DL 3CJ 6267 and HR 26G 3407. From the aforementioned letter dated 5th December,1997 on which heavy reliance was placed on behalf of the Plaintiff, it is manifest that the terms and conditions of employment of the Plaintiff were not finally settled by the lime it was issued. Those came to be settled later on and conveyed to the Plaintiff through the aforesaid letter dated 8th July, 1998/21sl August, 1998 coupled with the amended statement dated 9th September, 1998. Letter dated 8th July, 1998 also notices that Defendant No. 2-company's rules as applicable to others, will be applicable to the Plaintiff. This clause, obviously, refers to the subjects not covered by the said letter. Admittedly, said letter is conspicuously silent that the employment of Plaintiff, would continue till he attains the age of 60 years. In terms of the endorsement dated 10th August, 1998 appearing at the foot of the said letter admittedly in the hand of the Plaintiff, the Plaintiff had requested Defendant No. 1 to issues a letter in regularisation immediately. Aforesaid letter dated 21st August, 1998 regularising the appointment of the Plaintiff w.e.f. 5th January, 1998 as Chief Executive Officer in Defendant No. 2-company and the amended statement indicating the details of facilities/entitlements extended to the Plaintiff by the company, too are silent on the point of duration of employment of the Plaintiff in Defendant No. 2-company. Therefore the dispute if the Plaintiff is entitled to continue in service with Defendant No. 2-company upto the age of 60 years in terms of the said letter dated 5th December, 1997 can only be decided after the conclusion of evidence of the parties in the suit. That apart, it is now settled law that performance of a contract for service can neither be specifically enforced nor an injunction granted to prevent the breach of such a contract and the remedy available in such a case would be only to claim compensation/damages. Thus, looking from both the said angles, the Plaintiff must be held to have failed to make out a prima facie case for grant of the first relief referred to above at the stage. Moreover, balance of convenience also does not lie in favour of the Plaintiff as he can recover the amount from Defendants 1 & 2 if the suit is ultimately decreed against them. Further, in the event of relief to the said effect being granted at this stage, it may not be possible for the said Defendants to recover the huge amount paid to Plaintiff if the suit is ultimately dismissed by the Court.

26. As regards the latter part of the reliefs, the Plaintiff was permitted to use the said tenanted house which is on lease with Defendant No. 2-company and also Tata Safari vehicle bearing No.HR 26G 3407 by virtue of his employment with Defendant No. 2-company and after ceasation of that relationship between the two w.e.f. 30th September, 1998, ad interim injunction claimed in respect thereto cannot be granted against the said company. Further, as is manifest from the replies filed by both the sets of Defendants, Cielo car No.DL 3CJ 6267 was bought by the Plaintiff on hire purchase from Defendant No. 3 and the instalments thereof were being paid by Defendant No. 2-company to Defendant No. 3 on behalf of the Plaintiff which amount was to be adjusted against the emoluments payable by Defendant No. 2 to the Plaintiff. Plaintiff being a defaulter in making payments of hire purchase instalments since October 1998, cannot be permitted to use the said car without making payments to Defendant No. 3. Obviously, in respect of the tenanted house and the two cars, the Plaintiff has neither been able to make out a prima facie case nor the balance of convenience lies in his favour.

27. Decision relied on behalf of the Plaintiff having been rendered only the facts of those cases, have no applicability to the facts of the present cases. Said IA thus deserves to be dismissed being without merit.

28. Consequently, IA No. 4087/99 is dismissed. No order as to costs.