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2001 Supreme(Del) 1089
High Court Of Delhi
LOK NATH DUTT - Appellant
Versus
SIVA ELECTRONICA - Respondent
Suit 432 of 1979
Decided On : 08/21/2001
SANDIP SRIVASTAVA
The judgment establishes the principle that the terms of an employment contract and the applicable legal framework govern the entitlement of an employee to salary, bonus, and other benefits, as well as the validity of the termination of service.
Headnote:
Specific Relief Act - Recovery of Salary - Companies Act, 1956 - Employment Contract - Termination of Service - Bonus - Increment - Damages - Notice Period - Decree for Rs. 9200.00
Fact of the Case:
Plaintiff filed a suit for the recovery of Rs. 150,000 against the defendants, alleging wrongful termination of his services and claiming unpaid salary, bonus, and other benefits. The defendants contested the suit, arguing that the plaintiff's services were terminable at will and he had no right to claim additional amounts.
Finding of the Court:
The court found that the plaintiff's appointment was based on his own application, not at the request of the defendant. The terms of the appointment did not support the plaintiff's claims for increment, gratuity, or continuation of service until the age of 60. The court held that the plaintiff's services were validly terminated with a reasonable notice period and that he was not entitled to any damages.
Issues: The issues included the validity of the plaintiff's claims for salary, bonus, increment, and damages, as well as the notice period for termination of service.
Ratio Decidendi: The court determined that the plaintiff's claims were not supported by the terms of his appointment and the applicable legal principles for high-salary managerial employees in private businesses. The court also established the reasonableness of the notice period for termination of the plaintiff's services.
Final Decision: The court decreed the suit for the plaintiff in the amount of Rs. 9200.00 with proportionate costs, rejecting the plaintiff's claims for additional amounts.
(August 21, 2001) 2001 (TLS)126047
2001-ILRDLH-7-373
LOK NATH DUTT Vs. Siva Electronica
V. S. AGGARWAL
( 1 ) LOK Nath Dutt, plaintiff has. filed the present suit for the recovery of Rs. 150,000. 00 against the defendants. The wife of the plaintiff is the sister of defendant no. 2. Despite their close relationship there is a prolonged litigation.
( 2 ) THE Facts alleged are that plaintiff was appointed as General Manager by defendant no. 2 who was the then proprietor of business Shiva Electronica. This was with effect from 7/03/1973. The monthly salary fixed uas Rs. 2,000. 00 together with rs. 300. 00 and Rs. 200. 00 per month towards house rent and conveyance allowance. Plaintiff contends that he was entitled to increment of Rs. 200. 00 per annum subject to maximum salary of Rs. 3400. 00 per month. Subsequently it was converted into a partner-ship business and plaintiff continued to serve the said partnership. During the course of the civil suit it transpired that on 28/10/1978 the partnership concern had been taken over by Shiva Electronic a India (Pvt.) Ltd. , a company incorporated under the Companies Act, 1956 and it was also arrayed as defendant no. 3.
( 3 ) IT Is further asserted that plaintiff had been assured that he would continue in service till he completes the age of 60 years. In course of the dealings between the parties defendants paid to the plaintiff bonus as was done to the other employees which is generally 20% of the amount. He was also granted the increments. The grievance of the plaintiff has been that by a letter of 15/06/1978 the defendants wrongfully and in breach of the said agreement terminated the services of the plaintiff and in all offered Rs. 9200. 00 in full and final settlement of the dues. The plaintiff contended that because of the wrongful acts of the defendant and by depriving him of his salary and other benefits, he has suffered a loss of Rs. 3,04,120. 00 but he confined his relief to rs. 1,50,000. 00. In this amount so claimed? the plaintiff has asserted that He is entitled to annual ncrements which have not been paid. Salary, bonus and further salary upto the age of 60 years because his services have been terminated wrongly besides gratuity.
( 4 ) CIVIL suit had been contested by defendants 1 and 2. Preliminary objections have been taken that suit is not maintainable. Under the provisions of section 14 of the Specific Relief Act it was pleaded that plaintiff s services were terminable at will, contract of service by its nature was terminable and plaintiff had no right to continue in service against the wishes of the master. He is not entitled as of right to claim anything from the defendants for pay and allowance, bonus, gratuity, travelling allowance etc. He is also stated to be not entitled to any damages. If at all he could be given one months salary for the notice period. It is denied that plaintiff was entitled to continue upto the age of 60 years as claimed by him. It is not denied that when services of the plaintiff were terminated he was offered Rs. 9200. 00 which he refused to accept and that the defendant is still milling to make payment of the same.
( 5 ) PLAINTIFF had filed a rejoinder. The assertions of the defendants were controverted reiterating those of the plaint.
( 6 ) FROM these pleadings the following issues had been framed :-
1. Whether the plaint discloses any cause of action?
2. Whether the plaintiff has any cause of action against defendant no. 3?
3. Whether the plaintiff s suit is maintainable in law?
4. Whether termination of the plaintiff s service is wrongful?
5. Whether plaintiff can claim any right to continue in service and claim pay, allowance and other privileges or service for any period after its termination.
6. Whether plaintiff is entitled to be paid on termination of his service any sum over and above the sum of Rs. 9200. 00 offered to him on the date of termination?
7. Whether plaintiff was entitled to any bonus? If so, at what rate and upto w
