Lok Nath Dutt vs Siva Electronica And Ors.
2001 Latest Caselaw 1226 Del

JUDGMENT

V.S. Aggarwal, J.

1. Lok Nath Dutt, plaintiff has filed the present suit for the recovery of Rs. 150,000/- against the defendants. The wife of the plaintiff is the sister of defendant No. 2. Despite their close relationship there is a prolonged litigation.

2. The facts alleged are that plaintiff was appointed as General Manger by defendant No. 2 who was the then proprietor of business Shiva Electronics. This was with effect from 7th March, 1973. The monthly salary fixed was Rs. 2,000/- together with Rs. 300/- and Rs. 200/- per month towards house rent and conveyance allowance. Plaintiff contends that he was entitled to increment of Rs. 200/- per annum subject to maximum salary of Rs. 3400/- per month. Subsequently it was converted into a partnership business and plaintiff continued to serve the said partnership. During the course of the civil suit it transpired that on 28th October, 1978 the partnership concern had been taken over by Shiva Electornica India (Pvt.) Ltd, a company incorporated under the Companies Act, 1956 and it was also arrayed as defendant No. 3.

3. It is further asserted that plaintiff had been assured that he would continue in service till he completes the age of 60 years. In course of the dealings between the parties defendants paid to the plaintiff bonus as was done to the other employees which is generally 20% of the amount. He was also granted the increments. The grievance of the plaintiff has been that by a letter of 15th June, 1978 the defendants wrongfully and in breach of the said agreement terminated the services of the plaintiff and in all offered Rs. 9200/- in full and final settlement of the dues. The plaintiff contended that because of the wrongful acts of the defendant and by depriving him of his salary and other benefits, he has suffered a loss of Rs. 3,04,120/- but he confirmed his relief to Rs. 1,50,000/-. In this amount so claimed, the plaintiff has asserted that he is entitled to annual increments which have not been paid. Salary, bonus and further salary up to the age of 60 years because his services have been terminated wrongly besides gratuity.

4. Civil suit had been contested by defendants 1 and 2. Preliminary objections have been taken that suit is not maintainable. Under the provisions of Section 14 of the Specific Relief Act it was pleaded that plaintiff's services were terminable at will, contract of service by its nature was terminable and plaintiff had no right to continue in service against the wishes of the master. He is not entitled as of right to claim anything from the defendants for pay and allowance, bonus, gratuity, traveling allowance etc. He is also stated to be not entitled to any damages. If at all he could be given one months salary for the notice period. It is denied that plaintiff was entitled to continue up to the age of 60 years as claimed by him. It is not denied that when services of the plaintiff were terminated he was offered Rs. 9200/- which he refused to accept and that the defendant is still willing to make payment of the same.

5. Plaintiff had filed a rejoinder. The assertions of the defendants were controverter reiterating those of the plaint.

6. From these pleadings the following issues had been framed:-

1. whether the plaint discloses any cause of action?

2. Whether the plaintiff has any cause of action against defendant No. 3?

3. Whether the plaintiff's suit is maintainable in law?

4. Whether termination of the plaintiff's service is wrongful?

5. Whether plaintiff can claim any right to continue in service and claim pay, allowance and other privileges or service for any period after its termination.

6. Whether plaintiff is entitled to be paid on termination of his service any sum over and above the sum of Rs. 9200/- offered to him on the date of termination?

7. Whether plaintiff was entitled to any bonus? If so, at what rate and up to what period?

8. Whether the plaintiff was entitled to any increment and if so, at what rate and up to what period?

9. Whether the plaintiff was a member of Provident Fund under Employees Provident fund Act with his previous employer? If so, whether plaintiff informed the defendant of this fact?

10. Whether the plaintiff has suffered any loss or damage due to termination of his service?

11. Whether the plaintiff is entitled to claim any damages or losses against defendants or any of them?

12. Whether there was any outstanding liability on account of plaintiff against defendant No. 2 at the time of its take over by defendant No. 3.

13. Whether plaintiff can claim employment under defendant No. 3 after taking over of defendant No. 3 the undertaking of defendant No. 2?

14. Whether the court has jurisdiction?

15. To what relief is the plaintiff entitled and against whom?

7. During the pendency of the suit, plaintiff had died and his legal representatives have since been imp leaded.

8. Issues 4, 5, 6, 7, 8, 9, and 10 - All these issues are inter connected. This is for the reason that if the services of the plaintiff have rightly been terminated necessarily he had no right to continue and would not also be entitled to the increments etc. Therefore they can be taken up together.

9. The first and foremost question that comes up for consideration is as to how the plaintiff as such had been appointed. It is admitted by the plaintiff Lok Nath Dutt when the appeared as PW 1 that before joining the services of the defendant on 7th March, 1973 he was employed as Accounts Officer (Costs) in the organisation Rehabilitation Industries Corporation Ltd. Its a Government of India undertaking. Defendant No. 2 is his brother's wife. Though the plaintiff wanted the court to believe that it was defendant No. 2 who approached him for joining the concern defendant No. 1 as General Manager. As would be noticed hereinafter it is not true. Plaintiff went on to add that he had been told that he would be paid Rs. 2000/- as salary with annual increment of Rs. 200/- up to Rs. 3400/- per month. He was to be given gratuity and bonus amount of 20%. The wife of the plaintiff Mrs. Gitanjali made similar statement. As against this, A B Sankar, DW1 who had been arrayed as defendant No. 2 had deposed that the plaintiff was having some difficulty in this employment with Rehabilitation and Industrial Corporation, some disciplinary proceedings were pending against him. He was trying for another job but was not able to find any such job. He had taken pity because his sister had been married to him and appointed him as the Manager.

10. The correspondence on the record shows that indeed it was plaintiff who had applied for job rather than defendant No. 2 requesting him. The letter of the plaintiff of which the signatures have been admitted is Ex. P1 dated 19th January 1973 addressed to M/s Shiv Electronica. It reads:

"Sir,

Understanding that you are going to appoint a General Manager under you kind disposal I beg to offer myself as a Candidate for the same.

As regards my qualification and fitness for the post I beg to state that I am a Commerce Graduate of the Calcutta University and I am a qualified Cost Accountant being an Associate Member of the Institute of Cost and Works Accountants of India, Calcutta, I have a service career for more than least 25 years in different offices in Government, Semi-Government and Private Sectors. For the last 10 years I have been serving in Managerial Position to the entire satisfaction of my superior authority.

My minimum expectation is Rs. 2500.00 per month plus free conveyance.

Should you graciously be pleased to favor me with the Post I shall, I assure you, do my best to prove worthy of your choice.

An early reply is solicited.

Your faithfully

(L N DUTT)           

11. Defendant No. 2 had replied vide letter which is Ex. P1 dated 25th January 1973. The same is also being reproduced for sake of facility.

"Dear Sir,

This is reference to your application dated 19/1/73 and subsequent discussion the undersigned had with you.

We are pleased to offer you the post of General Manager at a salary of Rs. 2,00/- PM plus Rs. 300/- PM as House Rent Allowance and Rs. 200/- PM as Conveyance Allowance along with other benefits as may be applicable in your case as per company's rules.

Your signatures on the copy of this letter which should be returned to us will constitute formal acceptance of this offer.

Also please inform as to when you can report at your assignment at the earliest.

Yours faithfully

for M/S SHIVA ELECTRONICA

(A B SARKAR)

Proprietor"

12. This clearly reveals that it was not the request of defendant No. 2 but it was the plaintiff who wanted job to serve in Shiva Electronica. The said offer was accepted. This fact finds further support from the evidence on the record because the plaintiff admits during cross-examination that there were some departmental proceedings pending against him. Obviously he was keen to look for an another avenue. He also admitted that he had been applying with some other concerns in this regard. The cast is out of bag and it must therefore be held in clear terms that it was the plaintiff who was in the need of the job because of certain departmental problems where he was earlier serving.

13. As regards the terms and conditions of the service the offer of appointment letter is P1 which has been reproduced above. There is no other letter on the record to spell out as to what was settled between the parties. The offer had been accepted. It shows that plaintiff was to get a salary of Rs. 2000/- per month besides Rs. 300/- per month as house rent allowance and Rs. 200/- per month as conveyance allowance. Other benefits were as were applicable in terms of the rules of the company. Thus, the contention of the plaintiff that he was to get an increment of Rs. 200/- per month till he reaches the salary of Rs. 3400/- is therefore misconceived. There is nothing else on the record to establish and prove the same. There are no rules of the company even shown so as to establish that he was entitled to gratuity which is being claimed by the plaintiff besides the above said increment.

14. As already pointed above, plaintiff is the brother in law of defendant No. 2. They are closely related. when there are no other terms that are being established the bald statement of the plaintiff in this regard that he was entitled to the increment cannot be accepted. This self-serving statement has no basis or material on the record particularly when plaintiff had been offered the job by defendant No. 2 when plaintiff was in trouble and wanted to change the company from where he was serving.

15. Another aspect of the plea raised has been that plaintiff could continue up to to the age of 60 and therefore his services have wrongly been terminated. It has been pointed above that Ex. P1 is the only letter form where the terms of the appointment can be seen. Plaintiff in its statement, of course, asserts that defendant No. 1 had told him that he will continue in the employment up to the age of 60. but once again the record does not support this fact. The letter of appointment by virtue of which the offer of the plaintiff was accepted is conspicuously silent in this regard. There are no rules to indicate that an employee would continue up to the age of 60. Necessarily it must be taken that the plaintiff was only employed like any other employee in a private concern and he had no right in this regard so established to urge that he could continue up to the age of 60.

16. A plea has further been raised that plaintiff is entitled to some bonus as well as gratuity. But the different principles of law govern four kinds of services. In case of workmen under Industrial law, the services are governed by broad principles of industrial peace and social economic consideration. The Industrial Disputes Act and co related labour legislations provide the guide-lines. Plaintiff does not fall in that category. Secondly, under the Civil Services under the State, the matter is generally governed by the rules framed under Article 309 of the Constitution. The services under the State are protected by Article 311(2) of the Constitution. It gives a status to permanent government employees and their services cannot be terminated except in accordance with rules governing the service. Thirdly, there are employees of statutory corporation or government undertakings. Most of the government undertakings are governed by statutory rules or they have adopted the civil services regulations and fundamental rules. Others have framed therein rules. They are mostly 'State' as defined under Article 12 of the Constitution. Once they are so they are governed by relevant rules. Once again they are a class apart.

17. Fourthly are the persons whose services do not fall in either of these categories. They are high salary managerial employees in private business. They are either governed by contract or certain regulation, if any, that have been framed. Generally there are no statutory rules. In this case the law recognised that master can at any time terminate the services of the servant. If the services have been terminated wrongly and the servant has suffered some damages then the only remedy is to claim damages. They can be computed in accordance with settled principles in calculation of the damages. In normal circumstances power to appoint permits the power to terminate the services of the employees.

18. The letters addressed by defendant No. 2 to his sister, namely the wife of the plaintiff does not indicate any service contract. They are basic letters of love and affection between a brother and sister and thus Ex. P2 and P3 do not reflect much in this regard. Further correspondence on the record also indicates that the performance of the plaintiff did not come up to the expectation or liking of defendant No. 2 and the services of the plaintiff were terminated, Rs. 9200/0 were admittedly offered to the plaintiff which includes a salary for up to 15th June, 1973, one month salary was also offered, one month leave salary and bonus for the year 1997 was also offered with provisional bonus in all amounting to Rs. 9200/-

19. Learned counsel for the plaintiff urged that one month's notice was served was inadequate. In the facts of the case, and therefore, the services of the plaintiff cannot be held to have been validly terminated. it has already been held above that there was no specific contract that a particular period was prescribed for terminating the services. With that background necessarily one has to see whether the plaintiff was entitled to one month's notice or more.

20. In the case of Jupiter General Insurance Co. Ltd. v. Ardeshir Bomanji Shroff (1937) 3 All E.R. 67 the Manger of a Life Insurance Department of an insurance company recommended the issue of an endowment policy upon a life which the Managing Governor had refused a few days earlier. he was thereupon dismissed after giving a month's notice. One of the question that came up for consideration before the Privy Council was as to if more than more month's notice was required or not. In the peculiar facts it was held that Manager was entitled to more than one month's notice and dismissal must be taken as summary dismissal.

21. Reference with advantage can also be made to the decision in the case of Adams v. Union Cinemas Ltd. (1939) 3 All. E.R. 136. In the peculiar facts of that case it was held that six months notice was reasonable. Same was the view expressed in the case of James v. Thomas H. Kent & Co. Ltd. (1951) 1 K.B. 551.

22. It is abundantly clear from the aforesaid that facts of each case has to be gone into and thereupon it has to be established and looked as to if the notice served was reasonable or not.

23. In the present case the plaintiff had not served for such a long time that month's notice must be taken to be unreasonable. He had recently joined defendant No. 1 and served there for not very long. It appears from the correspondence that he was working well or at least his work was not up to the expectation of defendants. Once his service was not for such a long time that have been so rendered, a month's notice must be taken to be reasonable. The same had been given. Therefore, the services of the plaintiff must be held to have been validly terminated.

24. As regards the damages, the evidence of the plaintiff itself does not establish that even if it be taken that service was not validly terminated he had suffered any specific damage. The damage has to be established in terms that plaintiff has suffered a specific loss but for wrongful termination of the service. It has already been held in the preceding paragraph that services of the plaintiff had not wrongfully been terminated. But as noted above it is not even shown that he has suffered any such damage. It has been recorded above already that plaintiff had no right to continue till the age of 60. Therefore, he is not entitled to any damages.

25. However defendants admit that plaintiff was entitled to Rs. 9200/-. Since it is an admitted amount which had been offered, the suit as such indeed can be decreed for the said amount. Accordingly, these issues are decided against the plaintiff.

26. Issues Nos 1,2,3,11,12,13,14,15 - Keeping in view the findings on the issues above, indeed it is patent that plaintiff is not entitled to any amount except Rs. 9200/-, it becomes unnecessary to go into the same.

27. For these reasons the suit of the plaintiff is only decreed to a sum of Rs.9200/- with proportionate costs.