Satpal Yadav vs M/S. Cambata Aviation Pvt. Ltd.
2013 Latest Caselaw 2709 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                           Date of Decision: 2 nd July, 2013

+      RFA 622/2004

       SATPAL YADAV                                          ..... Appellant
                   Through:             Mr. Arun Bhardwaj, Adv.

                                 Versus

       M/S. CAMBATA AVIATION PVT. LTD.             ...Respondent
                    Through: Mr. Davinder Singh, Sr. Adv. with
                             Mr. Saurabh Tiwari, Advocate.
       CORAM:
       HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

                              JUDGMENT

% 02.07.2013

1. The appeal impugns the judgment dated 20th August, 2004 of the

learned Additional District Judge dismissing the suit filed by the appellant,

(i) for declaration that the letter dated 8 th October, 1991 of the then

respondent No.2 Mr. K.K. Aggarwal, General Manager of the respondent

No.1 Company terminating the services of the appellant is illegal, mala fide,

wrongful, arbitrary, unconstitutional, unreasonable, without authority and in

violation of the terms of employment and against the principles of natural

justice and thus null and void; (ii) for recovery of Rs.16 lakhs as damages

for wrongful termination of services of the appellant; and, (iii) for interest.

2. Notice of the appeal was issued and the Trial Court record

requisitioned. The appeal was admitted for hearing vide order dated 6 th

July, 2006. Vide subsequent order dated 21 st November, 2007, the name of

the then respondent No.2 Mr. K.K. Aggarwal was struck off from the array

of parties. The counsels have been heard and the records perused.

3. The appellant had filed the suit pleading that the respondent Company

was engaged in the business of Ground Handling Agent of airlines at the

Airport; that the appellant was appointed in the respondent No.1 Company

as an Office Boy with effect from 1 st October, 1973 initially on probation

and his services were confirmed with effect from 30th November, 1973; that

the appellant was promoted and given increments from time to time; that the

appellant was promoted with effect from 28 th May, 1974 as Office Clerk,

with effect from 21 st September, 1981 as Supervisor, with effect from 8 th

September, 1990 as Duty Officer and with effect from 30 th November, 1990

as Assistant Airport Manager; that there is no age of superannuation in the

respondent No.1 Company and employees have continued till the age of 70

years; that the respondent No.1 Company vide letter dated 8th October,

1991, with reference to para 3 of the appointment letter dated 1 st October,

1973 terminated the services of the appellant with immediate effect. It was

the plea of the appellant that para 3 of the appointment letter under which

his services had been terminated was not applicable to this kind of arbitrary,

illegal, mala fide and wrongful termination that the power thereunder could

be used only in exceptional circumstances against misconduct.

Alternatively, it was the plea of the appellant that the said paragraph was to

be applicable only as long as the appellant was an Office Boy and after

confirmation and promotion from the post of Office Boy to a higher post,

the terms of the said appointment letter would not be applicable and the

appellant would have to be governed by the general, reasonable and fair

common employment conditions which would include termination of

employment only on good grounds, after due notice and charge sheet

followed by enquiry. The appellant thus contended that the termination

without charge sheet and enquiry was illegal. It was further the plea of the

appellant that his appointment was by the Director, Delhi Operations of the

respondent Company, the termination was affected by the then respondent

No.2 Mr. K.K. Aggarwal who was only a General Manager and not a

Director and the termination was illegal for this reason also. The amount of

Rs.16 lakhs was claimed as damages on the basis of the amount which the

appellant would have earned by serving in the respondent Company till

December, 2015.

4. The respondent and Mr. K.K. Aggarwal aforesaid contested the suit

by filing a written statement pleading that the contract of the respondent

Company with the appellant was a contract of personal service which was

not specifically enforceable and qua which no declaration was maintainable;

that there was information available with the respondent which implicated

the appellant and owing whereto the respondent Company lost faith in the

appellant; however, since imputing misconduct of the appellant would have

affected the future prospects of the appellant, the respondent Company as

per its policy resorted to discharge simpliciter of the services of the

appellant; that the respondent Company is not required to justify its action

of terminating the services of the appellant.

5. On the pleadings of the parties, the following issues were framed by

the suit Court:

"i) Whether the termination of the services of the plaintiff is illegal and wrongful?

ii) Whether the suit is not maintainable?

iii) To what relief the plaintiff is entitled?"

6. The suit Court after recording of evidence held, (a) that the

appointment letter dated 1 st October, 1973 issued by the respondent

Company to the appellant and proved as Ex.DW1/3 empowered the

respondent Company to terminate the services of the appellant at any time

without assigning any reason and without giving any notice and merely by

giving one month‟s salary in lieu of notice; (b) that in the termination letter

dated 8th October, 1991 proved as Ex. CW/15, there was no whisper of any

charge of misconduct or otherwise against the appellant and it was a case of

termination simpliciter; (c) that there was thus no breach of the terms and

conditions of appointment and the termination was valid. The plea of the

appellant that the appointment after completion of probation and promotion

was not governed by the appointment letter dated 1 st October, 1973 was

rejected and it was held that it was not necessary that after every promotion

a fresh appointment letter has to be issued and that the terms of appointment

would remain the same, even if the employee is promoted subsequently. It

was yet further held that the respondent Company had given valid

explanation for not terminating the services of the appellant on the ground

of misconduct. Accordingly, the termination of the services of the appellant

was held to be legal and valid and in accordance with the service agreement

Ex.DW1/3. Qua Issue No.2, the suit court held that the respondent

Company is not a State and the relief of declaration cannot be granted

against a company which is neither a Government, Government Company,

Government Instrumentality, Statutory Corporation nor an authority within

the meaning of Article 12 of the Constitution of India and that the status of

the appellant was different from that of employees working with

Government or Government Bodies within the meaning of Article 12 of the

Constitution on India. It was yet further held that in the case of illegal

termination of a contractual relationship of master and servant, since such a

contract is not specifically enforceable, damages if any and not declaration

is the remedy. Accordingly, the suit filed by the appellant was held to be

not maintainable; axiomatically the suit was dismissed.

7. The counsel for the appellant has drawn attention to some of the

clauses of the appointment letter dated 1 st October, 1973 Ex.DW1/3 and the

senior counsel for the respondent to others. The relevant clauses of the

appointment letter are as under:

"You will be on probation for three months. On the completion of the same and if your service are found satisfactory, of which the Management will be the sole judge, you will be confirmed. Your services are liable to be terminated at any time, even before the expiry of the probationary period without assigning any reason, and without giving any notice.

The Management may however, extend the period of probation for a further specified period and thereby offer further opportunity of satisfy the Management as to your usefulness to the Company. On confirmation, your services can

be terminated on giving one month's notice or one month's pay in lieu of notice and without assigning any reason.

If any act of misconduct is alleged against you the management shall take such action against you as it might find necessary. The Management may in the case of serious misconducts hold an inquiry and even suspend you, pending inquiry. You shall not claim any payment for the suspension period.

In case the Management finds that you are surplus to requirements, the Management shall terminate your service on payment to you of such compensation as provided under law. Management in that event shall not be obliged to follow the rule of Last come First go.

In the event of your wishing to terminate your service with the Company, you shall given the Company at least 30 days notice in writing."

It may be mentioned that though the paragraphs of the appointment

letter are not numbered but the first of the clauses reproduced above is para

2 of the appointment letter and the second clause reproduced above is para 3

of the letter. It may further be mentioned that the impugned judgment has

referred only to para 2 of the letter and has not made any reference to para 3

aforesaid, though the termination vide letter dated 8th October, 1991

Ex.CW/15 has been affected thereunder.

8. The contention of the counsel for the appellant is that the services of

the appellant could be terminated "at any time ....without assigning any

reason" under para No.2 aforesaid (which as aforesaid is the only paragraph

of the appointment letter referred to in the judgment) only during the period

of probation and, after the completion of probation and especially after 18

years of service, the services of the appellant could be terminated only under

the other two clauses aforesaid i.e. on the ground of misconduct or on the

ground of the appellant being surplus to the requirement of the respondent

Company. It is further contended that though the respondent Company in

the termination letter did not assign any reason but subsequently in the

written statement in the suit took the plea of having lost confidence in the

appellant and which demonstrates that the termination of the appellant was

for the reason of misconduct but the respondent Company neither served

any charge-sheet nor held any enquiry nor gave an opportunity to the

appellant to defend himself. It is thus contended that the judgment of the

Trial Court is erroneous.

9. Before noticing the argument of the respondent Company, it may be

highlighted that the argument of the appellant before the Suit Court was to

the contrary. There the contention of the appellant was that his services

were no longer governed by the terms and conditions of the appointment

letter dated 1st October, 1973 Ex.DW1/3 but by "general, reasonable and fair

common employment conditions" as specifically recorded in the impugned

judgment under Issue No.1 in para 6. On enquiry the counsel for the

appellant informs that it is not the plea of the appellant in the memorandum

of appeal that the said argument of the counsel for the appellant has been

wrongfully recorded. It has also been enquired from the counsel for the

appellant whether the appellant has proved any "general, reasonable and fair

common employment conditions" of the respondent Company. The answer

again is in the negative. What emerges therefor is that save for the

appointment letter on the basis whereof the argument before this Court has

been addressed, there are no other terms and conditions pleaded of the

employment of the appellant with the respondent Company.

10. The senior counsel for the respondent Company on the other hand has

argued that the services of the appellant were terminated in 1991 and the suit

was filed only in March, 1992; that the claim of Rs.16 lakhs for emoluments

to be earned upto December 2015 was in any case not maintainable; that the

respondent Company terminated the services of the appellant in exercise of

its contractual right to terminate the services without assigning any reason.

11. The counsel for the appellant in rejoinder has raised the argument of

the termination of services being by an officer junior in rank to the officer of

the respondent Company, who had appointed the appellant.

12. As far as the contention of the appellant of termination having been

effected by an officer junior in rank to the officer appointing the appellant is

concerned, on enquiry, it is stated that the Suit Court has not rendered any

finding on the plea of the appellant. However, on further enquiry whether

the appellant in the memorandum of appeal has pleaded that the said ground

was urged and not decided, the counsel for the appellant fairly states that no

such pleading has been made. The senior counsel for the respondent

Company has responded to the said contention by drawing attention to the

resolution dated 7th March, 1990 of the Board of Directors of the respondent

Company proved as DW1/2 authorising the then respondent No.2, General

Manager to exercise the power of termination qua the employees. In view

of the same, no merit is found in the said contention.

13. I am unable to accept the contention of the appellant, of para 2 supra

of the appointment letter making the services of the appellant „liable to

termination at any time even before the expiry of probationary period,

without assigning any reason and without giving any notice‟ being

applicable only during the period of probation and not thereafter. Merely

because the words "even before the expiry of probationary period" are used

would not limit the right conferred by the respondent Company thereunder

unto itself to terminate the services without assigning any reason and

without giving any notice, to the period of probation.

14. Be that as it may, the termination affected by the respondent

Company was under para 3 as aforesaid and not under para 2 and which

para 3 has escaped the attention of the Suit Court. Even if there were to be

any ambiguity in para 2, the same is unequivocally removed in para 3 by

observing that "on confirmation, your services can be terminated on giving

one month‟s notice or one month‟s pay in lieu of notice and without

assigning any reason".

15. Thus post probation, the services of the appellant were terminable

under three clauses; firstly, by one month‟s notice or paying salary in lieu

thereof and without assigning any reason; secondly, if misconduct was

alleged against the appellant by holding enquiry; and, thirdly, if the services

of the appellant were to become surplus to the requirements of the

respondent Company, by payment of compensation. I have repeatedly

enquired from the counsel for the appellant as to how such multifarious

contractual rights of the respondent Company could be limited and as to

how the respondent Company inspite thereof can be said to be entitled to

only to terminate the services if the appellant was guilty of misconduct or if

his services become surplus and which interpretation would have the effect

of making para 3 of the appointment letter entitling the respondent Company

to terminate the services with one month‟s notice or one month‟s pay in lieu

thereof without assigning any reason, redundant. The accepted rule of

interpretation of deeds and documents is to first attempt to give a

harmonious construction thereto and even if the same is not possible, the

earlier clause prevails over the latter. Even if it were to be so, para 3

entitling the respondent Company to terminate the services without

assigning any reason with one month‟s notice or one month‟s pay in lieu

thereof would prevail over the latter paragraph permitting termination on the

ground of misconduct or on the ground of services of the appellant

becoming surplus.

16. Faced therewith, the counsel for the appellant has urged that the

respondent Company in the written statement to the suit having averred the

termination to be owing to misconduct, contractually was bound to hold an

enquiry and having not done so, the termination is bad and stigmatic.

17. I am unable to agree. The Supreme Court in Krishna Devaraya

Education Trust Vs. L.A. Balakrishna AIR 2001 SC 625 and Pavanendra

Narayan Verma Vs. Sanjay Gandhi P.G.I. Of Medical Sciences AIR 2002

SC 23, though relating to cases of probation, has held that if the dispensation

is simpliciter, merely because the employer, upon such dispensation being

challenged before the Court, explains the reason for such dispensation,

cannot turn the dispensation from being simpliciter to stigmatic for it to be

held that dispensation without holding enquiry is bad. It was further held

that in order to amount to a stigma, the termination order must be in a

language which imputes something and allegations made against the

terminated employee in the counter affidavit by way of defence to a

challenge to termination made by the terminated employee do not change

the nature and character of the order of termination.

18. In the present case, even in the written statement, the respondent has

not elaborated or imputed any misconduct on the appellant and has merely

pleaded that on the basis of the information received, it was not possible for

the respondent No.1 Company to continue to repose confidence in the

appellant who was employed at a sensitive position at the Airport and since

any punitive action against the appellant would have had adverse

consequence for the appellant and may have affected his future prospects,

the respondent Company as per its policy decided to exercise its right of

simpliciter termination of the services. The said explanation has been given

merely in defence to the plea taken by the appellant in the plaint of the

termination being attributable to the change of hands in the management

from Sindhis to Parsis and with motive and attempt to employ a Parsi in the

place of the appellant.

19. It is worth mentioning that in any case it is not the case of the

appellant that the appellant suffered any adverse consequence owing to the

said plea taken by the respondent Company in the written statement or that

the respondent Company has in any manner published having lost

confidence in the appellant. The termination, therefore, remains a

simpliciter one.

20. Before parting with this case, I may record that when during the

course of hearing it was brought to the notice of the counsel for the

appellant that there was no security of tenure in private employment (as

observed by the Supreme Court in para 14 of Union Public Service

Commission Vs. Girish Jayanti Lal Vaghela (2006) 2 SCC 482) as that of

the appellant with the respondent was and it was not the case of the

appellant that the appellant was a workman, the counsel for the appellant

had sought to urge that the promotion of the appellant from Office Boy to

Assistant Manager was only nominal; however the counsel fairly admits that

there is no foundation for such a case in the pleadings or in the evidence.

Rather, the case built up by the appellant is to the contrary.

21. I am therefore of the view that the termination of the services of the

appellant was in accordance with the contract of employment of the

appellant with the respondent Company and the grounds urged to impugn

the said employment are not available to the appellant. Once it is held that

the termination is not illegal, the question of the appellant being entitled to

any damages does not arise.

22. There is no merit in the appeal; the same is dismissed; however in the

facts and circumstances, with no order as to costs.

Decree sheet be drawn up.

RAJIV SAHAI ENDLAW, J JULY 02, 2013/bs..