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
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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.
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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:
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"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?
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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
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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
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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
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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
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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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(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
(2005) SCC (LS) 881
MANU/SC/0052/1979
MANU/SC/0431/1976
MANU/DE/7110/2011
2023 SCC Online SC 1004
MANU/SCOR/59374/2023
MANU/SC/4377/2007
8 MANU/SC/7674/2008
MANU/AP/0550/2011
MANU/SC/0080/1957
MANU/SC/0350/1991
MANU/SC/1042/1995
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(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
MANU/SC/0472/1979
MANU/SC/0016/2004
MANU/DE/1446/2012
MANU/SC/ 0515/ 2000
MANU/MH/0321/2011
MANU/SC/0237/1994
Manu/DE/2832/ 2015
Manu/HY/0420/2018
MANU/SC/0052/1979
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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
(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
(1999) 2 SCC 21
(2000) 5 SCC 152
1993 (3) SCC 25
AIR 1985 SC 1416
1985/INSC/155
2023 (2023) 9 SCC 150
(1999) 2 SCC 21
1962 SCC Online SC 47
2009 SCC Online Mad 1572
2016 SCC Online Hyd 103
(2009) 4 SCC
(1984) 3 SCC 516
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(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.
AIR 2008 SC 2594
AIR 1976 SC 888
2019 SCC Online Cal 3842
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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,
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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."
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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
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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:-
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"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
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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
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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
AIR 1958 SC 12
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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
AIR 1991 SC 1525
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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.
1998 AIR SC 2046
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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
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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
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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
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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").
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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
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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.
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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
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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
