ORDER
S. Thangaraj, J.
1. The plaintiff in O.S.No. 250 of 1980 on the file of the District Munsif, Madurai Taluk at Madurai who was the appellant in A.S.No. 131 of 1981 on the file of the Subordinate Judge, Madurai has preferred this second appeal challenging the judgment and decree passed by the courts below.
2. The appellant herein was employed by the defendant company in various capacities and he has filed the suit challenging the termination of his services by an Order dated 23.11..1973 passed by the defendant/respondent as null and void and deemed to be in service, of the respondent. The suit was filed for declaration and for damages. As the courts below have elaborately dealt with the facts of the case and arrived at a concurrent finding and the said facts have not been very much challenged before this Court and argument was advanced on the question of law, it is not necessary to state the averments in the plaint and written statement.
3. this Court while admitting the second appeal has framed the following substantial question of law which arises for consideration :
1. Whether the suit instituted by the appellant is maintainable?
4. The courts below have held that the declaration sought for by the appellant herein to enforce specific performance of personal service, cannot be granted and the suit as framed is not maintainable and thereby dismissed the suit. The courts below have stated reasonings on the maintainability of the suit by basing reliance on two decisions of the Supreme Court and two decisions of this Court reported in
1. U.P State Warehousing Corporation, Lucknow v. Chandra Kiran Tyagi ; 2. Indian Airlines Corporation v. Sukhdeo Rai (1971)1 L.L.J. 496; 3. Vaishnaw College for Women v. Aleyamma Thomas, 84 L.W. 197; and 4. Smt. Lena Ratnam v. Indian Red Cross Society .
As those decisions are properly applied to the instant case by the courts below, they need not be stated once again.
5. this Court in The Central Co-operative Bank Ltd., Kumbakonam, rep. by (Board of Management), Special Officer, Kumbakonam, v. M. Parthasarathi (1988)1 L.W. 479 considered Section 14(1)(b) of Specific Relief Act elaborately and in para 8 held :
When the clause refers to the fact that the contract is so dependent on the personal qualification or volition of the parties, it means that the contract is of such a nature that it can be given effect to only if the parties thereto are willing to do so. If any one of the parties is not willing to give effect to that contract, the other party cannot enforce the same because of the nature of the contract. The remedy of the other party will only be in damages, where rendering of personal services under a contract is dependent upon the volition of the parties or where the act stipulated required special knowledge, skill, ability, experience or the exercise of judgment, discretion, integrity and like personal qualities.
While discussing the question, this Court placed reliance upon the observation of the Apex Court in Executive Committee of Vaish Degree College Shamli and Ors. v. G. Lakshminarain and Ors. A.I.R. 1976 S.C. 888, wherein His Lordships has observed thus :
Where, in a country like ours, large numbers of people are unemployed and it is extremely difficult to find employment, an employee who is discharged from service may have to remain without means of subsistence for a long period of time. Damages equivalent to one or two months’ wages would be poor consolation to him. They would be wholly insufficient to sustain him during the period of unemployment following upon his discharge. The provision for damages for wrongful termination of service was adequate at a time when an employee could without difficulty find other employment within the period of reasonable notice for which damages were given to him. But in conditions prevailing in our country, damages are a poor substitute for reinstatement; they fall far short of the redress which the situation requires. To deny reinstatement to an employee by refusing specific performance in such a case would be to throw him to the mercy of the employer; it would enshrine the power of wealth by recognising the right of the employer to fire an employee by paying him damages which the employer can afford to throw away but which would be no recompense to the employee. It is therefore, necessary and I venture to suggest, quite possible, within the limits of the doctrine that a contract of personal service cannot be specifically enforced, to take the view that in the case of employment under a statutory body or public authority, where there is ordinarily no element of personal relationship, the employee may refuse to accept the repudiation of the contract of employment by the statutory body or public authority and seek reinstatement on the basis that the repudiation is ineffective and the contract is continuing. That is in effect what happened in the case of Mc Clalland v. Northern Ireland General Health Service Board (1957)1 W.L.R. 504. The plaintiff’s contract in this case was really one of master and servant, the only special condition being that her post had been advertised as ‘permanent and pensionable’, and it provided specific reasons such as gross misconduct and inefficiency, for which she might be dismissed. The defendant Board introduced a rule after her appointment that women employees must resign on marriage and since the plaintiff got married, the respondents terminated her service by giving what they thought was a reasonable notice. The plaintiff contended that the defendant board was not entitled to terminate her service and claimed a declaration that the purported termination was null and void and she continued in service. The House of Lords held that the contract was exhaustive as regards the reasons for which the defendant Board could terminate the service of the plaintiff and since none of those reasons admittedly existed, the termination of service of the petitioner by the defendant Board was nullity and the plaintiff continued in service of the defendant Board. This was a case of a pure contract of master and servant and yet the House of Lords, held that the termination of employment of the plaintiff by the defendant Board which was not accepted by the plaintiff was ineffective and the plaintiff was entitled to a declaration that she continued in service. It should thus be possible to hold that even if a statutory body or public authority terminates the services of an employee in breach of a contractual obligation, the employee could disregard the termination as ineffective and claim a declaration that his service is continuing. But this would be a somewhat novel and unorthodox ground which has not j been recognised by any decision of this Court so far and moreover, I do not think, that, on facts, this is a proper case in which it would really be applicable and hence, I do not propose to finally pronounce upon it.
After quoting the above passage, this Court continued thus :
Though His Lordships has not chosen to give a final pronouncement on that aspect of the matter, I am of the opinion that an occasion has arisen in this case to consider that aspect and give a decision in view of the facts of the present case. With respect, I agree with the observations made by His Lordship that the law has to have relevance to conditions of employment in modern large-scale industries and enterprises or statutory bodies or public authorities where there is professional management of impersonal nature.
In the case of individuals entering into a contract of service, the position is entirely different. As regards the individuals, there are no set of rules which have to be obeyed by the master, though the master may frame rules to be obeyed by the servants. The matter entirely depends upon the will or rather the whims and fancies of the master. He may choose to dismiss a servant on any minor pretext. But, still the servant cannot enforce the contract of service and compel the master to continue his services. In such cases, the remedy of the servant may be to claim damages.
From the decision of the Apex Court it is clear that if the employer terminates the services of an employee in breach of a contractual obligation, the employee cannot claim a declaration that his service is continuing and such a novel ground has not been recognised by any decision of our Supreme Court so far.
6. However, learned Counsel for the appellant has placed reliance on a recent ruling of this Court in Sadasivan and Ors. v. Binny Limited represented by its Chairman and Managing Director, and another , where a similar question was raised in a writ petition field under Article 226 of the Constitution of India, and this Court held :
that a Rule or Clause in the Contract or agreement of Service which entitled the Management to terminate the services of an employee by merely giving one calender month’s notice or one month’s salary in lieu of such notice would be ultra vires Article 14 of the Constitution of India and that such provision would also be opposed to public policy and violative of Section 23 of the Indian Contract Act.
The above decision was based upon three decisions of the Supreme Court reported in Water Transport Corporation Ltd. v. Broo Nath ; O.P. Bharidari v. Indian Tourist Development Corporation Ltd. and Delhi Transport Corporation v. D. T.C. Mazdoor Congress . However, in all the above three decisions the management or the parties concerned are undertaking of the Government and they were taken as “State” within the meaning of Article 12 of the Constitution of India. In the decision of the Supreme Court in Executive Committee of Vaish Degree College Shamli v. Lakhsminarain A.I.R. 1976 S.C. 888 stated supra it was held that the novel and unorthodox ground to hold that even if a private management terminates the service of an employee in breach of a contractual obligation, the employee could disregard the termination as ineffective and claim a declaration that his service is continuing has not been recognised by any decision of the Supreme Court so far. The recent judgment of this Court in the case of Binny Limited is based on the provision which would be opposed to public policy and violative of Section 23 of the Indian Contract Act, but whereas, in the instant case no such pleadings have been put forth by the plaintiff. The case of the contract of service between a private management and a private individual has not been recognised on par with the conditions of service of employees who are statutory bodies or public authorities.
7. In the present case the appellant has filed a civil suit against the M/s. Golden Hills Estates Private Limited in the Court of District Munsif Madurai Taluk at Madurai for a prayer of declaring that the Order of termination dated 23.11.1973 passed by the defendant against the plaintiff, is null and void and the plaintiff is deemed to be in service. The plaintiff/appellant had not chosen to go before the Labour Court under the provisions of Industrial Disputes Act. The Supreme Court in Jitendra Nath Biswas v.Empires of India and Ceylone Tea Co. and Anr. after going through the provisions of the Industrial Disputes Act and the earlier pronouncements of the Supreme Court held :
It is therefore clear that the scheme of the Industrial Disputes Act clearly excludes the jurisdiction of the civil court by implication in respect of remedies which are available under this Act and for which a complete procedure and machinery has been provided in this Act.
Under these circumstances therefore so far as the present suit filed by the appellant plaintiff is concerned, there appears to be no doubt that civil court had no jurisdiction and the High Court Was right in coming to the conclusions. The appeal is therefore dismissed.
The decision of the Apex Court would clearly say that the civil court has no jurisdiction to try a case which will clearly fall under the Industrial Disputes Act. However, the present appellant has filed his case before the civil court claiming the termination as null and void and the civil court has no jurisdiction to grant such a relief. Accordingly the courts below had come to the concurrent finding.
8. The Apex Court in India Airlines Corporation v. Sukheo Rai 1971 L.L.J. 496 held :
The regulations contain the terms and conditions which govern the relationship between the Corporation and its employees. Though made under the power conferred by the statute, they merely embody the terms and conditions of service in the Corporation but do not constitute a statutory restriction as to the kind of contracts which the Corporation can make with its servants or the grounds on which it can terminate them. That being so, and the Corporation having undoubtedly the power to dismiss its employees, the dismissal of the respondent was with jurisdiction, and although it was wrongful in the sense of its being in breach of the terms of conditions which governed the relationship between the Corporation and the respondent, it did subsist. The present case, therefore did not fall under any of the three well recognized exceptions, and, therefore, the respondent was only entitled to damages and not to the declaration that his dismissal was null and void.
In the instant case the appellant has prayed for a declaration that the termination Order dated 23.11.1973 was null and void and the plaintiff is deemed to be in service. In view of the above ruling of the Supreme Court, it is clear that as a party to the personal contract of employment seeking for a declaration that his dismissal was null and void and he continued to be in service, cannot get a decree as prayed for.
9. this Court in Mohandas v. Esso Standard Inc. (1973)1 L.L.J. 59 at 74 held :
The basis of this rule is that, if the contract provided for giving one month’s notice and the employer had given that one month’s notice, or paid the salary for one month in lieu of notice, the termination cannot be challenged as illegal or unlawful. Consequently, when the employer terminates the services of an employee without giving any such notice, the employee will be entitled to the fulfillment of the contract, that is, payment of salary for the period of notice which was required to be given under the contract entered into between the parties. Therefore, I am unable to accept the contention of the learned Counsel for the plaintiff that the plaintiff will be entitled to claim by way of damages the salary which he would have earned in the post of operations manager, if he had continued in service till he completed the age of 55 years. On the other hand, in view of the conclusion I have come to, namely, mat the contract of service between the parties provided for one month’s notice on either side for the termination of the contract, if it is held that by giving the notice of transfer of the plaintiff from Madras to Bombay the employer had terminated the contract of service, without giving proper notice, the plaintiff would be entitled only to one month’s salary by way of damages.
As held by this Court in the above decision, in the instant case also the appellant is entitled to one month’s salary by way of damages.
10, In a similar circumstance but with a view to absolve the impediments in the future prospects of the employee in obtaining other employment, this Court in Smt. Lena Ratnam v. The Indian Red Cross Society, Madras State Branch, Madras and Anr. (1970)1 M.L.J. 601 at 604 held :
It is well-known that, once an employee is dismissed by an employer, the prospect of his/her obtaining other employment in future becomes very difficult or bleak. Therefore, it is certainly open to an employee whose services are terminated to file a suit for declaration that the termination of his or her services is illegal by way of vindicating his or her character and establishing his or her integrity. Under these circumstances, on the finding of the courts below mat the termination of the appellant’s service was illegal, the appellant is entitled to the limited relief in the suit namely, a declaration that the termination of the appellant’s services was illegal.
Though we decide that the termination of the appellant’s service was illegal in consideration of his future prospects, even then there is no valid ground to hold that such termination was null and void and he continued to be in service till his retirement. As per the rules and regulations of the company, his service could be terminated by giving a month’s notice or a month’s salary in lieu of the said notice. Accordingly the termination has been effected by the respondent company. The appellant instead of seeking the relief through the Industrial Disputes Act had gone to the civil court seeking declaration that the termination Order passed was null and void and his service continued even thereafter. From the foregoing discussion it is clear that such a declaration cannot be granted. As the contract between the appellant and the respondent was one on personal service, the decisions rendered by the courts in the case of statutory body or public authority, cannot be taken in favour of the appellant herein. While considering the various aspects of the case of the appellant it is clear that the suit as framed is not maintainable and on that ground also it is liable to be dismissed. Considering the nature of employment, the appellant is not entitled to the prayer for declaration that the Order of termination dated 23.11.1973 passed by the defendant is null and void and he is deemed to be in service. For the aforesaid reasons the second appeal fails and the same is liable to be dismissed.
In the result, this second appeal is dismissed and since the appellant had lost the employment long ago the parties are directed to bear their own costs throughout.
