JUDGMENT
S. Mukerjee, J.
1. These are objections by the petitioner
ex-employee praying for setting aside a part of the
arbitral award dated 11.1.2000, as passed by Shri J.P.
Sharma, Sole Arbitrator.
2. The background of facts, to the extent necessary
for appreciating the challenge to the arbitral award, is
that the petitioner joined the employment of the
respondent, in the capacity of the “Chief Modalist”,
drawing in those times, a fairly huge salary of Rs.
37,216/- per month.
3. The petitioner’s case is that he was illegally
suspended w.e.f. 18.12.96, and then illegally dismissed
from service w.e.f. 31.8.98 and that he was not paid his
salary from December 1996 onwards, despite repeated
demands.
4. The respondent had preferred a counter claim on
the ground of breach of non-completion of agreed tenure
of service as stipulated by the agreement of training
dated 25.10.94, pursuant to which, the respondent claims,
that the petitioner was obliged to serve for a minimum
period of 7 years, failing which he had agreed to
compensate the respondent, by way of liquidated damages
at Rs. 1 lakh per year of the balance period not
served/less-served.
5. The Ld. Arbitrator, in his award dated
11.2.2000, came to a categorical finding that the
disciplinary enquiry conducted by the respondent against
the petitioner, was vitiated by illegality. The Ld.
Arbitrator also held that the termination order dated
31.8.98, being based upon the illegal enquiry, is also
illegal. It was further held that the petitioner is
entitled to his salary w.e.f. December, 1996.
6. While all these findings were rendered in favor
of the petitioner, however the petitioner is aggrieved of
part of the findings of the Ld. Arbitrator, holding that
the petitioner would not be entitled to the conveyance
allowance and entertainment allowance for this period.
The petitioner is also aggrieved of the direction/finding
of the arbitrator, by which he has assumed a termination,
and/or through the award, terminated the services of the
petitioner, by simply ordering payment of three months
salary in petitioner’s favor, and that too
retrospectively for the period from September to November
1998.
7. The petitioner is also aggrieved of another
finding returned to the effect that the respondent is
entitled to receive Rs. 4 lakhs as compensation/damages
for balance period of four years, less served out of the
total agreed period of 7 years.
8. The respondent has not filed any objections
against the award, and therefore cannot claim to be
aggrieved of any of the findings of the award.
9. As regards the contentions of the
petitioner/objector, I do find a case made out for
setting aside certain severable parts of the award, which
are liable to be therefore set aside as against the
pubic policy of India. In Renusagar Power Co. Ltd.
v. General Electric Co. it has been
held that the application of doctrine of public policy is
wider in the field of domestic law as compared to the
field of conflict of laws (refer para 51 at page 885).
Furthermore even in the context of conflict of laws, the
Apex Court has held that contrary to public policy would
mean contrary to fundamental tenets of Indian Law, and
contrary to morality or justice.
9A. The contract of service being one single contract
with a pay package and a minimum tenure stipulation, the
finding that the petitioner is not entitled to
“conveyance allowance” and “entertainment allowance” for
the duration of illegal enquiry and the duration of
illegal suspension, is contrary to the pubic policy of
India, as enshrined by the enacted laws and the law
declared by the Supreme Court, which is binding in terms
of Article 141 of the Constitution of India. In the
entire records before the Arbitrator, no provision or
document was brought out which, under the service rules,
permitted the forfeiture/non-payment of the “conveyance
allowance” or of the “entertainment allowance” component
during the period of suspension. It is settled law, as
declared by the Hon’ble Apex Court, in the Hotel
Imperial, New Delhi and Ors. v. Hotel Workers Union
Labour Law Journal 1959 (2) 544 that in the absence of
any provision in the contract stipulating otherwise, the
right of the employer to suspend, would be however
subject to payment of 100% of the emoluments.
10. In this view of the matter, the direction by the
arbitrator to pay only a part of the total package of
emoluments in relation to the period in question, is
clearly contrary to the law laid down by the Supreme
Court and therefore against the public policy of India
and as such liable to be set aside to the extent to which
the Ld. Arbitrator had restricted the relief awarded in
favor of the petitioner, only to the extent of part of
the total pay package, and not granted the whole pay
package for the whole period.
11. There is another way of looking at this aspect of
the matter. Once a finding has been returned to the
effect that the enquiry stood vitiated, and the
termination rendered illegal on that account, it would
follow that the petitioner was thereby prevented by the
suspension order form performing his duties, and from
earning his full emoluments, As such, the moment the
arbitrator came to a finding that the action of the
respondent was illegal, thereupon the petitioner had to
be placed back in the situation as if the termination
order had not been passed at all. This is all the more
so, since the arbitrator in the award, did not permit he
management to hold an enquiry afresh into the matter. It
is another mater, that even if the arbitrator has so
ordered, the petitioner would have still been entitled to
be treated as if no order of suspension had been passed
at all, and moreover petitioner would have stood then as
entitled to receive more money from the respondent and/or
would have stood to suffer less on account of liquidated
damages/penalty, because whatever causes petitioner’s
service to last longer, reduces the default period for
penalty.
12. The other aspect on which the award is contrary
to the public policy of India, as enshrined in the
enacted law and the law as laid down by the Supreme
Court, is in relation to the arbitrator himself treating
the three month’s notice period to be imagined to have
been over in 1998 itself even though the management had
not issued any communication to that effect.
13. There is an invalidity on the same account, as a
corollary, in relation to the balance period of the
counter claim of the respondent.
14. It is well settled that there cannot be a
retrospective notice, even where same is purported to be
issued by the management itself. In any case, there thus
cannot be a notice by a deemed fiction, created through
the award of the arbitrator.
15. A notice of termination had to be issued, if at
all, under the signatures of the competent authority, on
any date after the award, and that would have been
applicable after further three months thereafter, and
would have given a cause of action for any further
grievances.
16. It is not known whether the management would have
terminated the services, or whether after reading the
award, holding the termination to be illegal, the
management would have become considerable, or would have
otherwise changed its decision. then again the date of
such a notice, cannot also be based on total assumption.
Furthermore, that notice had to be actually and validly
issued, and had to be validly served to become
enforceable. For all these reasons, this severable
portion of the award regarding assumed date of notice is
also set aside, consequence whereof will be that up to the
date of the award, the petitioner will be entitled to
full emoluments, and thereafter, the petitioner will be
entitled to his legal remedies to claim salary for
subsequent period by appropriate proceedings and
respondent will be entitled to take action as available
to a management.
17. Yet another aspect of the award also requires to
be treated as severable and set aside. This is in
relation to the counter-claim of the respondent. As and
when the services of the petitioner are terminated by a
valid and actually issued notice, thereafter the balance
period, if at all, would be the maximum period which can
be taken into consideration for purposes of working out
the demand at Rupees one lakh for each remaining year of
service, out of the seven years mandatory period. It is
not known when the notice will be issued, and also that
the balance period will be. Therefore, the award to this
extent of the counter-claim, which is also severable, is
held to be contrary the public policy of India, and hence
set aside. Respondent will obviously be entitled to
raise claim for damage in relation to any period
remaining less served out of total seven year period.
That claim will be contested or complied by petitioner as
he may be advised in law.
18. In view of the above, the award is made a Rule of
this Court, to the extent of the findings holding that
the disciplinary enquiry against the petitioner was
vitiated, and the termination order was illegal on that
account. The relief of full emoluments for the period
December 1996 onwards will however operate only up to the
date of the award. For the subsequent period, the
petitioner has to avail his legal remedies in accordance
with law. The counter-claim awarded in favor of the
respondents as well as the findings against the
petitioner, holding that the conveyance allowance and
entertainment allowance, being not payable, as well as of
deemed termination by petitioner by assumed retrospective
notice in October, 1998, is treated as severable findings
of the arbitrator which are liable to be set aside.
19. Since the payment due to the petitioner, being
Rs. 2.77 lakhs under the award, as had been passed (and
now an ever larger amount, in terms of these orders
passed today), is lying held-up, the petitioner will be
entitled to interest at 15% thereupon from the date the
amounts fell due, and up to the date on which the total
dues are actually paid by the respondent to the
petitioner.
20. The petitioner will also be entitled to costs
which are quantified at Rs. 10,000/-.