Delhi High Court
M/S O-Zone Networks Private ... vs Lt. Col. Pawan S. Yadav (Retired) on 23 April, 2018
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No. 335/2018
% 23rd April, 2018
M/S O-ZONE NETWORKS PRIVATE LIMITED & ANR.
..... Appellants
Through: Mr. Piyush Sharma, Advocate.
versus
LT. COL. PAWAN S. YADAV (RETIRED) ..... Respondent
Through: Mr. P. Bashista and Mr.
Mukesh Kumar, Advocates.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
Caveat No. 345/2018
Counsel appears for the caveator. Caveat accordingly stands
discharged.
RFA No. 335/2018 & CM Nos. 15673/2018 (stay) & 15674-77/2018
(Exemption)
1. This Regular First Appeal under Section 96 of the Code
of Civil Procedure,1908 (CPC) is filed by the defendant nos. 1 and 2
against the impugned order of the trial court dated 15.2.2018 by which
the trial court has decreed the suit filed by the respondent/plaintiff
under Order XXXVII CPC on account of non-compliance by the
appellants/defendants of a conditional order of grant of leave to defend
which was passed on 15.11.2016. By the conditional order granting
leave to defend the appellants/defendants were directed to deposit in
Court a sum of Rs.35,71,854/- within three weeks and since this
condition was not complied with, the impugned order has been passed
decreeing the suit under Order XXXVII Rule 3 Sub-Rule 6 CPC.
2. It is not disputed by the appellants/defendants before this
Court that the appellants/defendants not only have not complied with
the order dated 15.11.2016 granting conditional leave to defend, but
that even a review application filed by the appellants/defendants for
reviewing of the order dated 15.11.2016 has been dismissed. A
challenge laid by CM(M) petition under Article 227 of the
Constitution of India was filed by the appellants/defendants to this
Court against the order dated 4.12.2017 dismissing the review petition,
and this petition, counsel for the appellants/defendants states, stands
disposed of as not pressed.
3. I may note that there is an additional issue of the
appellants/defendants filing an application under Section 8 of the
Arbitration and Conciliation Act, 1996 however, that was also the
subject matter of the order dated 15.11.2016, and a challenge to which
filed by the CM (Main) petition also stands withdrawn.
4. In view of the aforesaid discussion, ordinarily there was
no reason why the impugned order should be set aside, however there
is one issue which arises is that liability towards an employee can only
be of the employer only and not of any CEO of the company viz the
appellant no.1/defendant no.1 would only be liable and the CEO of
appellant no.1/defendant no.1/company being the appellant
no.2/defendant no.2, can only be liable in case he stands as a personal
guarantor. In this regard, appellant no.2/defendant no.2 stood as a
personal guarantor in terms of a letter dated 4.9.2013 issued in favour
of the respondent/plaintiff and this letter reads as under:-
"Pawan S. Yadav
Chief Operating officer
House number 914, Sector-4, Urban Estate
Gurgaon-122001
4th September 2013
Dear Pawan,
Salary Payment Due From March 2013-Personal Commitment.
As you and I have discussed, I recognize the significant effort and loyalty
you have shown to O-Zone during the last 9 months. You have
voluntarily forgone salary from 1st March 2013, and continued to strive to
grow the company. I would like to ensure I recognize the faith you have
shown to O-zone and compensate accordingly.
As discussed the company can only pay you back dated salary due at the
pay scale when you stopped drawing a salary. Therefore, I will personally
make voluntary one-time payment to you to compensate you for these
months of forgone salary (up to the point where we receive new funding).
The payment will be based on half of the rate of your original monthly
salary when you joined O-zone. This will be subject to receiving second
round of funding from investors, and I will make the staged payments
from my salary to you. There will be a payment schedule made from a
date I mutually agree with you after funding closes.
Personally, once again thanks for your efforts, faith and loyalty to O-zone.
I hope this personal commitment, which I am only making to you is sign
of good faith in you and your long term future in O-zone.
Yours Sincerely
sd/-
Bobby Sarin."
5. It is clear from the aforesaid letter dated 4.9.2013 that
appellant no.2/defendant no.2 is only liable for 50% of the salary dues
and liability of the appellants/defendants will arise only when the
funding is received by the appellant no.1/defendant no.1/company
from the proposed investors.
6. Learned counsel for the respondent/plaintiff does not
dispute the contents of the aforesaid letter dated 4.9.2013 and agrees
that the decree against the appellant no.2/defendant no.2 as passed by
the impugned order can be modified as per the contents of this letter
dated 4.9.2013.
7. In view of the aforesaid discussion, while the impugned
order dated 15.2.2018 is sustained and a money decree will stand
passed against the appellants/defendants, however the money decree
against the appellant no.2/defendant no.2 will not be for the entire suit
amount but will be only for 50% of the total salary dues which total
are an amount of Rs.35,71,854/-, of course with further interest as
stated in the impugned order.
8. The appeal is accordingly dismissed so far as appellant
no.1/defendant no.1 is concerned, but so far as appellant
no.2/defendant no.2 is concerned, the same is modified for the liability
of the appellant no.2/defendant no.2 to be for the principal amount
being 50% of Rs.35,71,854/-, with the further interest thereon in terms
of the impugned order.
9. The appeal is disposed of in accordance with law, leaving
the parties to bear their own costs.
APRIL 23, 2018/ib VALMIKI J. MEHTA, J
