Judgment

DWIVEDI, J. :- Seemingly it is a small case. It has not hit the headlines in the news media. Nor it has gripped the public mind. The pecuniary stake is trivial. A tiny sum of Rs. 200/- is payable as costs by the appellant. However, this case brings into the flash point an issue of great consequence to liberty of contract: Where to draw the dividing line between the area of Contempt of court and the area of operation of contractual rights.

2. The appellant is the Chairman of the Hindustan Steel Limited (hereinafter referred to as the Company). The respondent was employed in the Company on a contract of service. The contract provided for termination of his service by giving three months notice or three months; pay in lieu thereof and without assigning any cause. On February 21, 1968, the Company gave him this notice :

"It is found that your performance and conduct in this plant have not been good and that you have not proved useful for the Company. You are hereby advised to note this position and also to try for alternative employment elsewhere. You may be released from this company at your request on payment of the amount required under the bond executed by you on pro-rata ba