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2015 Supreme(Bom) 530
High Court of Judicature at Bombay
ROSHAN DALVI, J.
Shanker Basu – Appellant
Versus
KBC Bank N V – Respondent
Suit No. 2180 of 2001
Decided On : 15-04-2015
For the Plaintiff:Vishal Talsania, a/w. Radha Ved, i/b. Sanjay Udeshi & Co., Advocates
For the Defendant t:J.P. Sen, Sr Advocate, a/w. Rasmin Khandekar, a/w. Atul Thakkar, i/b. Mulla & Mulla CBC, Advocates
The acceptance of a severance package in a termination letter constitutes a binding contract, and the doctrine of estoppel applies to prevent the challenging of the conditions of the termination.
Headnote:
Termination - Employment Contract - Clause 10 of the terms and conditions of the staff manual - Indian Contract Act, Section 63
Fact of the Case:
The plaintiff's employment as the head of the corporate division of the defendant bank was terminated, leading to a lawsuit for wrongful, illegal, and malafide termination and a claim for compensation.
Finding of the Court:
The court found that the termination was lawful and valid as per the terms of the employment contract and the termination letter, which constituted a binding contract between the parties. The plaintiff's acceptance of the severance package amounted to a final settlement, and the suit was dismissed with costs awarded to the defendant.
Issues: The issues revolved around the legality of the termination, entitlement to compensation, and the validity of the suit.
Ratio Decidendi: The court held that the termination was in accordance with the terms of the employment contract and the Indian Contract Act, Section 63. The plaintiff's acceptance of the severance package constituted a binding contract, and the doctrine of estoppel prevented the plaintiff from challenging the conditions of the termination letter.
Final Decision: The suit was dismissed, and costs were awarded to the defendant.
1. The service of the plaintiff who was an employee of the defendant bank, as the head of its corporate division, has been terminated and the plaintiff has sued for declaration that the termination of his contract of employment is wrongful, illegal and malafide. The plaintiff has claimed Rs.23.63 Crores with interest @ 16.5% thereon for delay in payment of the amounts payable under the plaintiff's contract of employment.
2. The plaintiff was employed under the contract dated 19th June, 2000, Exh.P2 in evidence. The plaintiff's contract was terminable under clause 10 thereof either upon retirement or upon sooner determination by a termination notice upon the conditions mentioned in the said clause.
3. The plaintiff's contract was terminated after certain correspondence between the parties by e-mails on 12th February, 2001. The plaintiff was offered severance package. The plaintiff accepted the said package and confirmed having received and accepted the terms and conditions in the letter dated 12th February, 2001. The plaintiff has sued for the aforesaid declaration and the recovery of the aforesaid amount upon the plaintiff's case that the employment has been wrongfully terminated.
4. It is the case of the defendant bank that the contract of termination is determined upon the defendant's business policy decision to close down the corporate banking division of which the plaintiff was the head. The defendant claims that the suit is for specific performance of the contract of employment which cannot be specifically enforced and that the plaintiff accepted the severance compensation. The defendant would, therefore, claim that the plaintiff having accepted the compensation under the letter of the termination cannot challenge it.
5. The plaintiff would, therefore, have to show how the contract of termination by the letter of termination dated 12th February, 2001 is unlawful, illegal and malafide.
6. Based upon the aforesaid pleadings the Court framed issues on 13th September, 2011 which are answered as follows:
| ISSUES | ||
| 1 | Does the plaintiff prove the termination of the agreement dated 19th June, 2000 as wrongful, illegal and malafide. | No |
| 2 | Does the plaintiff prove that on account of wrongful termination of the agreement dated 19th June, 2000 he is entitled to a sum of Rs.18,63,20,000/- along with interest @ 16.5% pa from 2nd July, 2001 till the date of payment. | No |
| 3 | Does the plaintiff prove that on account of loss of reputation and mental agony faced, he is entitled to a sum of Rs.5,00,00,000/- along with interest @ 16.5% pa from 2nd July, 2001 till the date of payment. | No |
| 4 | What order? | As per final order. |
7. The plaintiff has produced not only the contract of employment and the letters / contract of termination of his employment but also the agreement of previous employment of the plaintiff with Deutsche Bank and the salary earned therein. The plaintiff has produced and the defendant has accepted the letter of appointment reflecting the contract of appointment of plaintiff and the letter of termination accepted by the plaintiff reflecting the contract of termination of the plaintiff. The defendant has also accepted the correspondence between the parties under two e-mails of the bank to the plaintiff as also other employees in corporate division about the policy decision of the closure of such division and letter showing certain bonus paid to the plaintiff after such correspondence and prior to the termination.
8. The plaintiff has led oral evidence of what transpired during his previous employment which led to the plaintiff leaving the earlier employment and commencing the employment with the defendant bank under the aforesaid contract. To prove the worth of the plaintiff in the requirement of proof of the extent of damages suffered by the plaintiff, the
