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M/S Bharat Electronics Ltd. v. Sri Alok Kumar Garg - SECOND APPEAL No. 1353 of 1987 [2006] RD-AH 19036 (10 November 2006)


This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).



    Judgment reserved on 20.9.2006

Judgment delivered on 10.11.2006


M/s Bharat Electronics Limited and another-Defendant-Appellants


Alok Kumar Garg - Plaintiff-Respondents

Hon'ble Sunil Ambwani, J.

1. In this Second Appeal filed on 5th May 1987 the Court issued notice on 7th May 1987 to the respondent  for final hearing. The appeal, however, could not be heard for almost two decades. The operation of the decree of the lower appellate court dated 3.3.1987 confirming the decree of the trial court, declaring the order dated 24.9.1980 terminating petitioner's services as Deputy Engineer (Mechanical), and for reinstatement with full back wages and also Rs. 9350/- towards costs, was stayed by the Court. The stay vacation application filed on 10.7.1999 is still pending.

2. The appeal was admitted on 3.2.2003 without framing any issue summoning the record for final hearing. On the submissions of learned counsel for the parties, the substantial questions of law are framed as follows:-

1) Whether  the plaintiff's absence for eight consecutive days, would be deemed as leaving the services voluntarily and loss of lien in terms of Rule 25 of Executive Conduct (Discipline and Appeal) Rules of M/s Bharat Electronic Ltd., a public sector undertaking?.

2) Whether a contract of personal service can be specifically enforced  by the Civil Court?

3. Heard Shri S.D. Singh, learned counsel for appellant and Shri K.P. Agarwal, Senior Advocate for respondent.

4. The "Bharat Electronic Ltd." was established as a Public Sector Corporation. It is wholly owned and controlled by the Central Government. The Executive Conduct (Discipline and Appeal) Rules regulate the matter of conduct of the executives in the corporation. Shri Alok Kumar (the plaintiff) ''Master of Technology' from IIT Delhi, was appointed on 24.4.1978 and  joined the corporation as Probationary Engineer (Mechanical). He completed his probation and was appointed as Deputy Engineer (Mechanical) in the Works Department w.e.f. 3.8.1978 and was allotted Staff Quarter No. 438.

5. The plaintiff fell ill on 13.2.1980 and was not able to attend to his duties. He informed of his illness to the section head on the same day and made a request for medical leave. He then applied for medical leave with medical certificate to the Chief Administrative Officer at Sahibabad, where he was working under certificate of posting on 15.2.1980. He could not recover until 11.3.1980,  and sent a request for extension of medical leave through registered post/A.D. followed by another medical certificate dated 18.3.1980.

6. On his recovery  from the illness, the plaintiff presented himself before the concerned authority on 11.4.1980. He was not allowed to join. A written request and reminder dated 17.4.1980 to the Chief Administrative Officer did not get any response. He was not given any charge sheet nor any notice or enquiry was initiated. A legal notice was served on him by  the corporation on 13.8.1980. He came to know  on 25.9.1980 that the Assistant Personnel Officer, Sahibabad Factory of the corporation issued an Office Circular dated 2.4.1980 stating therein that the plaintiff was absent from duties without any authority since 11.2.1980 and as such, he would be deemed to have left the services of the company voluntarily. The plaintiff received a letter dated 24.9.1980 from the office of General Manager of the corporation on 1.10.1980, stating that he had lost his lien on the employment w.e.f. 11.2.1980 under Rule 25 of the Executive Conduct (Discipline and Appeal) Rule. The plaintiff then filed a suit praying for a declaration that his services were illegally terminated, a mandatory injunction to allow him to continue in service and for  recovery of salary from 11.4.1980 to 30.11.1980  quantified at Rs. 9350/-.

7. The defendant-corporation denied the plaint allegations and stated that the plaintiff was regularly absent from January to October 1979 in between which he took 73 days leave including 46 days without pay. In November 1979, he took leave on 13.11.1979 and was again absent from 16.11.1979 to 1.1.1980, and reported for duty 21.1.1980. He further applied for  41 days  of leave without pay and 30 days for his past absence. He was again absent on 1st, 4th, 6th, and 7th February 1980 and thereafter from 11.2.1980 onwards. During his entire service of one and half years, the plaintiff was absent either on leave or otherwise for 150 days. His services were, therefore, found to be wholly unsatisfactory. He did not intimate his absence to the section head nor sent any medical certificate. He did not come to the factory on 11.4.1980 to join duties. He could not be allowed to join as he was no longer in service. He was informed on 11.4.1980 and 17.4.1980 that he was no longer in service and is not entitled to salary after 10.2.1980. Rule 25 of the Executive Conduct (Discipline and Appeal) Rules (In short the ''conduct rules') provides that where an executive, absents without leave or application, he is to be treated as being no longer in service after 8 days continuous absence from duties. The plaintiff was absent from 11.2.1980 continuously without any information of his absence and thus he was treated to be  no longer in service. He was given reply to his notice on 24.9.1980 and 6.11.1980 under registered  cover that he was no longer in service of the defendants and that in fact the defendant-corporation is entitled to recover Rs. 10,000/- from him on the basis of a bond executed by the plaintiff with the defendant.

8. The trial court allowed documentary and oral evidence on  issues No. 1 and 2 regarding the validity of the order dated 2.4.1980 and the right of the plaintiff to recover Rs. 9350/- from the corporation. The trial court held that the plaintiff, who appeared as PW-1, failed to prove his illness during the period of the absence. PW-2 Dr. Jagdish Chandra  the father of the plaintiff,  a qualified doctor was found to be an  interested witness who could himself have treated his son. The counter foils of medical prescriptions were not written by the doctor and that the register of patients, had blank entries. The trial court disbelieved that the plaintiff had fallen ill on 12.2.1980, while working in the factory. In the plaint, it was stated that he fell ill from 13.2.1980. The trial court found that the defendant did not discharge the burden of proving his absence on 11.2.1980 and 12.2.1980 as they could not produce the ''punching card' and the record of the accounts section, if the punching machine was found to be defective. The defendant admitted to have received  the letter dated 11.3.1980 but without any medical certificate. The defendant did not open the letter. The witnesses of the defendant-corporation did not even remember the name of the section head, the conversation on telephone, and the fact whether the letter dated 15.2.1980 was received by the Chief Manager. Shri P.K. Gupta, the supervisor was not produced in evidence. The defendant corporation was required to  consider the application for leave dated 11.3.1980,  even if it was not supported by the medical evidence. The  copies of the rules were not given to the plaintiff. The fact, that the plaintiff was absent for 8 continuous days without any  basis, was not established. The order dated 24.9.1980, that the plaintiff is deemed to have left the service voluntarily, was thus found to be illegal.

9. On the issue of maintainability of the suit for enforcing contract of  service and the relief to which the plaintiff is entitled, the trial court held that defendant is a state corporation. The plaintiff has a right to continue in service until he violated the rules which took away his right to serve. The plaintiff did  not violate Rule 25. The corporation as a Government Company under Section 617 of the Companies Act 1956  is a state under Article 12 of the Constitution of India and that the employees of that corporation have certain rights which could be enforced in law. Relying upon Bank of Baroda vs. G.N. Malhotra (1971) SCC 667, the trial court held that there are certain exceptions to the bar of enforcement of contract of service. These exceptions are the cases where Article 311 is violated; the enforcement of the provisions of the industrial law and where any statutory body has acted contrary to law. The defendant-corporation as a Government Company and was required to act in accordance with the law. Rule 25 of the Rules framed by the corporation is not applicable to the facts and thus the termination of the plaintiff's services under Rule 25 was not in accordance with the law. The suit was  decreed on 31.5.1984 with amount to Rs. 9350/- claimed by the plaintiff towards arrears of salary.

10. In the Civil Appeal No. 67 of 1984 preferred by the Corporation, the appellate court framed two main points for consideration in appeal:-

1. Whether the service of the respondent was terminated in accordance with the Rules of the Company?

2. Whether the contract of personal service is incapable of being specifically enforced.?

11. The civil appeal was dismissed on 3.3.1987. The appellate court recorded findings that the plaintiff was confined to bed and had sent the leave application along with requisite medical certificates. He did not absent himself for the stipulated  eight consecutive days and shall not be deemed to have left the service voluntarily, so as to attract Rule 25 of the Rules.

12. On the question as to whether the contract of personal service is incapable of being specifically enforced, the appellate court relied upon A.K. Kalra vs. Project and Improvement Corporation of India AIR 1984 SC 1361, which distinguished Vaish Degree College vs. Laxmi Narain AIR 1976 SC 888, and carved out  exceptions to the general rule that contract of personal service cannot be specifically enforced.

13. The appellate court found that plaintiff-respondent is a  qualified engineer holding first position in B.E. examination from Jiwaji University and is first division holder with distinction in Master of Technology, from IIT Delhi. He was working with  sincerity, diligence and intelligence. He was confirmed. He was confirmed and was given  additional annual increment for rendering better services.  No enquiry was made for his continuous absence on account of illness. He submitted leave application and then reported for joining after he recovered but was not allowed to join. The corporation did not conduct any enquiry about his illness and the confinement of the plaintiff. The relief of declaration could be granted in respect of the employees serving the state, where the state corporations have acted arbitrary to the rules in terminating the service of its employees.

14. Rule 25 of the Executive Conduct (Discipline & Appeal) Rules of Company provide:-

"Rule 25-Abandonment of service:

i) Any Executive who absents himself for eight consecutive days without leave shall be deemed to have left the company's service voluntarily. If he returns and gives explanation to the satisfaction of the competent authority, his absence may be treated as leave with or without pay at the discretion of the competent authority.

ii) Where an Executive remains absent beyond the period of leave originally granted or subsequently extended, he shall lose the lien on his appointment unless the:-

a) returns within eight days of the expiry of the leave; and

b) explains to the satisfaction of the Head of the Division his inability to return before the expiry of the leave.

iii) Where an Executive is deemed to have left the company's service voluntarily under clause (i) or has lost the lien on his appointment under clause (ii) as the case may be, the company shall have the right to recover the amount required to be paid by him in lieu of notice for quitting service, in terms of the provisions of the appointment order."

15. The appointment letter dated 5.8.1978 (Paper No. 30-A-1) in clause-11 stated that the service of the plaintiff-respondent were governed by the rules. The plaintiff-respondent accepted the appointment under the terms and conditions which included Rule 25  of the Rules providing in last line of the appointment. The finding of the appellate court that the plaintiff-respondent was confined to bed on 11.3.1980 and had sent a medical certificate by registered post on 11.3.1980 and thereafter a leave application with medical certificate under postal certificate dated 18.3.1980 and the absence of denial in the written statement that these letters were not received by the corporation establish that the application of leave was not considered by the corporation. The observations of the trial court based on the assumptions that the testimony of Dr. Jagdish Chandra,PW-2 being father of the plaintiff could not be relied were found to be rather strange by the appellate court which found that as a father Dr. Jagdish Chandra PW-2 could have examined and put his son under his treatment for which the prescriptions were filed as (Paper No. 91-C, 92-C, 93-C, and 95-C) certifying that plaintiff was confined to bed  due to amoebic dysentery and was under going his treatment. The witness had produced original register and was cross-examined. Further no reason was forthcoming from the appellant for withholding the evidence of Shri P.K. Gupta, the section head to whom the plaintiff had first informed about his illness on telephone. This finding that the plaintiff was confined to bed and has sent leave applications along with requisite medical certificates are findings of fact.

16. Shri S.D. Singh submits that the plaintiff-respondent absented himself for 150 days in 18 months and did not work from 11.2.1980 onwards. The contention overlooks the fact that his probationary services were confirmed and he was given an increment thereafter. The corporation had no complaint against him or his absence until he applied for leave on 15.2.1980 w.e.f. 11.2.1980. He had informed  his section head  with the cause of his absence on telephone. The question of grant of medical leave to the plaintiff from 11.2.1980 was not considered by the corporation and that in fact  the Corporation did not even care to open the envelop with the  application dated 11.2.1980 for leave. The applicability of rule 25 (ii) (a) is thus  doubtful. The loss of lien on abandonement of service is applicable only when  the executive remained absent beyond the period of leave originally granted or subsequently extended for a period beyond eight days. The question of absence beyond eight days from the expiry of leave, did not arise as the leave application was never considered. In the circumstances without going into the submissions of Shri K.P. Agarwal that Rule 25 is violative of Article 14 and 16 of the Constitution of India, I find that in the present case the  consequences of rule were never attracted. The first question  of law is  returned against the appellant.

17. On the  question for enforcement of contract of personal service,  Shri S.D. Singh submits that section 34 of the Specific Relief Act prohibits the enforcement of the contract of personal service and that even if the court comes to a conclusion otherwise, the relief of reinstatement after twenty six  years will be extremely harsh unjust and will visit serious financial implications on the  corporation. The plaintiff-respondent was gainfully employed during this period and is not entitled to reinstatement with continuity in service and full back wages.  Shri S.D. Singh has relied upon Nandganj Sirohi Sugar Co. Ltd vs. Badri Nath Dixit (1991) 3 SCC 54, para-10 and Pearlite Liners (P) Ltd vs. Manorma Sirsi (2004) 3 SCC 172, para-7  in support of his submission.

18. In Nandganj Sirohi Sugar Company Ltd (supra) the Supreme Court after relied upon  Rigby vs. Connol (1880) 14 Ch.D 482, 487, " the courts have never dreamt of enforcing agreements strictly personal in their nature, whether they are agreements of hiring and service, being the common relation of master and servant"; In Halsbury's Laws of England (4th Edition, Volume-44, para 407) it is stated  that the court does not seek to compel persons against their will to maintain continuous personal and confidential relations. The rule, however, is not absolute and without exception and an employer may be restrained from dismissing an employee for breach of  contract if there is no loss of confidence between employer and employee or if the employee has been dismissed in a manner which does not comply with statutory or contractual  regulations governing dismissal. No court may, whether by way of an order for specific performance of a contract of employment or an injunction restraining a breach or threatened breach of such a contract, compel an employee to do any work or attend at any place for the doing of any work. This principle not only applies to contracts of employment but all contracts which involve the rendering of continuous service, by one person to another, such  as a contract to work  a railway line. In Executive Committee of Vaish Degree College Shamli vs. Laksh Narain (1976) 2 SCC 58, the Supreme Court held that a contract of personal service cannot ordinarily be specifically enforced and a court normally would not give a declaration that the contract subsists and the employee, even after having been removed from service can be deemed to be in service against the will and consent of the employer. This rule, however, is  subject to three well recognised exceptions: (i) where a public servant is sought to be removed from the service in contravention of the provisions of Article 311 of the Constitution of India; (ii) where a worker is sought to be reinstated on being dismissed under the Industrial Law and (iii) where statutory body acts in breach or violation of the mandatory provisions of the statute. The Supreme Court also considered S.R. Tiwari vs. District Board, Agra AIR 1964 SC 1680; Executive Committee of U.P. State Warehousing Corporation vs. C.K. Tyagi (1969) 2 SCC 834 and set aside the decree of the High Court  and  first appellate court which granted enforcement of contract of personal service and dismissed the suit of the apprentice engineer seeking injunction compelling the respondent-corporation, owned and controlled by the State Government, to appoint him to the post of Instrumentation Foreman and thus seeking a decree of specific performance of contract of personal service.

19. In Pearlite Liners (P) Ltd (supra) the plaintiff, who had joined as trainee accountant, was promoted as an officer and was transferred from the head office to sales office-cum-godown of Shanker Rice Mill Shimoga. The plaintiff did not comply with the transfer orders and remained absent from work without any authority. A charge sheet was issued on 17.1.1987 to which she did not give reply and filed the suit. Reiterating the exceptions even otherwise the Supreme Court found that a declaration that transfer order is illegal and void and imposed the plaintiff on the defendant, amounts to enforcement of a contract of personal service is barred under the law. The Supreme Court found that such suit should have been thrown out at the threshold. Both these cases are contextually different on facts.  The well recognised rule of exceptions were reiterated but the relief was denied as in both the cases the employees attempted to enforce  their services upon the employer on the terms contrary to the contract.

20. In D.K. Yadav vs. M/s J.M.A. Industries Ltd. 1993 (67) FLR 111 where the services of the workman were terminated for willful absentation from duty continuously for more than 8 days without leave and prior information and thus he was treated  to have left the service on his own account and lost the lien under clause-13 (2) (v) of its certified Standing Order. The Supreme Court relying upon Article 14 and 21 held that every action must conform to the requirements of fairness and be just and reasonable. The manner and exercise of powers and its impact on the rights of the person affected should be in conformity with the principles of natural justice. Article 21 gives right to life which include the right to live with dignity. Article 14 has a pervasive, processual potensy and versatile quality, equalitarian in its soul and allergic to discriminatory dictates. Equality is the antithesis of arbitrariness where no opportunity is given or any enquiry is held. The plea that despite reporting to his duty on all subsequent days and his readiness to join duty, he was not allowed to sign the attendance register will make again Standing Order 13 (2) (v) as arbitrary, unjust and unfair violating Article 14.

21. In Aligarh Muslim University and others vs. Mansoor Ali Khan (2000) 7 SCC 529; Dr. Gurjeewan Garewal vs. Dr. Sumitra Dash and others (2004) 5 SCC 263;Syndicate Bank s. General Secretary, Syndicate Bank Staff Association and another AIR 2000 SC 2198 and Ajit Kumar Nag vs. General Manager (PJ) IOC Ltd. and others (2005) 7 SCC 764 cited by Shri S.D. Singh for the Corporation, the absence of the employees  without leave  was found o be against the conduct rules. The rules provided that in such cases the officer shall be deemed to have resigned and accordingly ceased to be in service. In Aligarh Muslim University and others vs. Mansoor Ali Khan, a Laboratory Assistant applied for two years extraordinary leave to join Al-Fatah University, Tripoli, Libya. Before expiry of the period, he sought for three year's extension which was granted only for one year. Having exhausted the leave  and reminded to return back and join, he again entered into fresh contract in Libya  for a period of two years and was found to be ceased from the University in service.

22. In Dr. Gurveewan Garewal's  Dr. Sumitra Dash, working in Post Graduate Institute of Medical Education and Research, Chandigarh, was granted two years extraordinary leave for working in Bahrain. She sought extension of leave which was rejected and was asked to resume duties. She was informed that she would be deemed to have permanently left the instituting, she did not return. An interim order as granted by the High Court. A memorandum was issued for misconduct which was withdrawn with apology to the High Court. Her joining thereafter was rejected. The Supreme Court vacated the interim order and directed PGIMER to continue an enquiry of misconduct.

23. In Syndicate Bank the employee absented for 90 days or more consecutive days. A show cause notice was given by the registered post, giving a date for joining failing which he would be deemed to have voluntarily retired from service. The notice was returned back with refusal. The Bank under Clause- 16 of the Bipartite Settlement treated the delinquent to have absented himself . The High Court upheld the order of tribunal as the bank did not examine the post man. The Supreme Court drew the presumption of refusal and found that the opinion of the bank that the employee has voluntarily retired from service was correct. It was found that an enquiry  was necessary if the delinquent has submitted an  intimation which was not accepted to the bank or contended that he did report for duty but was not allowed to join by the bank. The principle of natural justice requires that the workman should know the nature of complaint and acquisition and opportunity to state his case, and the management should act in good faith,  means that the action of the management should be fair, just and reasonable.

24. In Ajit Kumar Nag (supra) it was held that dismissal for absence without reasonable cause is permissible where exigency of the situation demand prompt action. The Standing Order did not give blank authority. The officer should have passed speaking order on the facts in which the workman was treated as a defaulted employees and promoted as Operator-A Special Grade. He had  extended a helping hand  to his immediate friendly neighbour whose wife was required to be suddenly hospitalized and her sons were in difficulty,  and in that  situation  the workman entered into  heated exchange with the doctor in connection of her treatment. The workman  suffered the complaint of doctor and was dismissed by the General Manager of the corporation, without issuing notice seeking explanation, charge sheet or disciplinary enquiry. The workman did not challenge the validity of the Standing Order 20 before the High Court of Calcutta and allowed the corporation to take action. He  was acquitted by the criminal court. The appellant was not a  civil servant under Article 311, as he was not holding a civil post. The power, however,  the general manager, was to be exercised legally, properly and reasonably. The Supreme Court refused to strike down the Standing Order 20 as it found that it was otherwise legal, valid and intra vires and could not be declared unconstitutional merely on the ground that there is possibility of abuse or misuse of such powers. There were sufficient safeguards in the Standing Order inasmuch as the order passed under it could be challenged in appeal and in the High Court. The possibility of misuse of powers would not make the rule  bad.

25. In A.L. Kalra vs. Project and Equipment Corporation of India Limited (1984) 3 SCC 316, the petitioner had taken advance from the Corporation which was wholly owned and controlled by the State. He did not furnish the documents of the purchased items nor refunded the unutilized advance within the stipulated period in compliance with the Rules. He was charged for misconduct, and unbecoming of a public servant. He was also charged penal interest and his salary was withheld for recovery. In the enquiry the mandatory rules were not  observed. The Supreme Court held that action was arbitrary;  motivated and was liable to be quashed. It was then pleaded that the writ petition was not maintainable in the High Court as the Corporation is not the instrumentality of the State and comprehended in the expression ''other than' under Article 12 of the Constitution. The High Court and then the Supreme Court held that respondent-Corporation was the instrumentality of the State and was thus covered under the expression ''other authority' under Article 12 of the Constitution and was amenable to the writ jurisdiction. It was then contended before the Supreme Court that contract of public service cannot be specifically enforced. The Supreme Court did not agree with the submission and rely upon the judgments in Sukhdeo Singh (1975) 1 SCC 421, 459 and UP.P. Warehousing Corporation (1980) 3 SCC 459 and held that a declaration could be granted that a man continues to be in service. The principle of applicability of enforcement of contract of personal service, explained in Vaish Degree College Vs. Laxmi Narain (1976) 2 SCC 58, in para 18 still holds good. It was held:-

"18. On a consideration of the authorities mentioned above, it is therefore, clear that a contract of personal service cannot be ordinarily be specifically enforced and a court normally would not give a declaration that the contract subsists and the employee, even after having been removed from service can be deemed to be in service against the will and consent of the employer. This rule, however, is subject to three well recognized exceptions-(i) where a public servant is sought to be removed from service in contravention of the provisions of Article 311 of the Constitution of India; (ii) where a worker is sought to be reinstated on being dismissed under the Industrial Law; and (iii) where a statutory body acts in breach or violation of the mandatory provisions of the statute."

26. The Service and Conduct Rule applicable to the Corporations owned and controlled by the State Government are statutory in character. Where the authorities act in breach or violation of such rules violating the employee's right under Article 14 and 16 of Constitution of India, the employee can enforce the contract of service against such State Corporation.

27. Second question of law is no longer res integra and is decided in favour of plaintiff-respondent. The findings of the trial court and appellate court are confirmed.

28. With these findings the second appeal should be dismissed. Shri S.D. Singh, however, submitted that in such case the relief of re-instatement may not be granted. The Corporation terminated the petitioner's services in September 1980. The direction of reinstatement will cause severe hardship to the Corporation inasmuch as the plaintiff-respondent will claim the entire back wages and all benefits of service including promotions. He submits that in such case a reasonable compensation would serve the ends of justice. An opportunity was given to Shri K.P. Agarwal to file an affidavit of plaintiff-respondent,  stating  whether  he  was gainfully employed during the period. A supplementary affidavit of Shri Alok Kumar Garg, plaintiff-respondent was filed on 19.9.2006 stating therein that he has not been employed after the termination of services in any industrial establishment, big or small. He tried to get employment but that was denied for the reason that he was in litigation with the defendant-appellant and in case he was to win the case he would leave the job. The job of Deputy Engineer was a highly skilled nature in the establishment at Ghaziabad. There was no other place where he could get either on identical or similar job. He was hopeful upto 1984 of the success of the suit for declaration that he continued to be in the employment. There was stay order in the appeal. The plaintiff-respondent, therefore, could not get gainfully employed in any manner till the dismissal of the appeal by Additional District Judge in 1987. His father was medical practitioner. He is member of the joint family and these years he depended on his father wherever after the father of the defendant died, he engaged himself as Commission Agent in the sale of electrodes use for building. He did the work upto 1995 and then tried to start his own business for manufacturing electrodes in the small shop at Ghaziabad. He took loan from Vaishya Bank but could not succeed in the business and that the bank auctioned his private property. He has two sons, the first is aged 24 years, who completed B.A. in engineering and has secured employment in September 2006. The deponent's sister took him to USA where he qualified B.A. in engineering. The other son is student of B.Sc.. He has also  a daughter aged 21 and half years is a graduate and is of marriageable age. The deponent has not been able to manage for marriage of his daughter. He has somehow managed to run his family and in keeping the body and sole together.

29. The financial position of the defendant-appellant has not been brought on record. The corporation has not pleaded that it had lost confidence in the plaintiff. The fact and circumstances  and the allegations made in the written statement, however, demonstrate that the corporation was not satisfied with his regular absence from service. He was declared to have abandoned  the service and has not worked with the Corporation from February 1980. I find substance in the submission of Shri S.D. Singh that if the direction of reinstatement is given, the plaintiff-respondent will not only be entitled to full salary but will also claim a seniority which may cause a severe financial burden and a liability of giving him on a responsible post, without much experience.

30. It is difficult to believe that an IIT graduate from Delhi having lost the initial employment, was not gainfully employed for next 26 years. On his own admission, the plaintiff-respondent carried on some business, the details of income of which has not been disclosed. It is no where stated that he is not an income tax payee and that he did not make any profits out of business.

31. In the circumstances, though I hold the findings that the termination order was illegal, arbitrary and violative to the Service Rules are upheld, I do not find it appropriate to sustain a direction of reinstatement with full back wages  and find that as in the case of K.C. Sharma vs. Delhi Stock Exchange (2005) 4 SCC 4, and The Kayasth Pathshala Allahabad vs. Rajendra Prasad and others AIR 1990 SC 415; a compensation in lieu of reinstatement and back wages would serve the interest of justice. Taking into account the post on which the petitioner was appointed, the short period of two years and six months for which he was in employment and the salary paid to him in 1980, a compensation of ten years of salary quantified at rate of Rs. One lac per annum with simple  interest  at 6% per annum, w.e.f. the end of six years i.e. 10.2.1986 would be fair and reasonable.

32. The second appeal is partly allowed to the extent that the findings given in the judgment of courts below are  confirmed but relief to be given to the plaintiff-respondent is modified to the extent that he will be entitled to a compensation of Rs. ten lacs from the defendant-corporation with 6% simple interest per annum w.e.f. 10.2.1980. I further award a sum of Rs. 2 lac (Rupees two lacs only) towards cost of legal proceedings to be paid to the plaintiff-respondent for the cost of litigation and harassment for last 26 years.



Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites


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