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2013 Supreme(Del) 1096

IN THE HIGH COURT OF DELHI AT NEW DELHI
P.K. BHASIN, J.
NARENDER KUMAR SEHGAL – Plaintiff
Versus
TAL ISHIKAWA LTD. AND ORS. - Defendants
I.A. No.10913/2011 in CS(OS) 993/2011
Decided On : 2nd September, 2013

Advocates:
Advocate Appeared:
Ms. Sapna Sinha, Advocate
Mr. Jayant K. Mehta, Mr. Vaibhav Mr. Sukant Vikram, Advocate for Defendant Nos.2, 4 and 5 (applicants).
Ms. Diya Kapur, Ms. Seema and Ms. Ritika Ahuja, Advocate for Defendant No.4

Directors of a Company are not personally liable for the payment of employment dues of any employee even if the same are not paid by the employer Company.

Headnote:

C.P.C. - Application under Order VII Rule 11 - Acts of Commission and Omission - Summary of the acts and sections referenced and discussed by the court: The court discussed the application under Order VII Rule 11 of the Code of Civil Procedure and the plaintiff's claim for compensation on account of mental torture allegedly caused by the acts of commission and omission by the Directors of the Company. The court highlighted the legal position that Directors of a Company are not personally liable for the payment of employment dues of any employee even if the same are not paid by the employer Company.

Fact of the Case:

The plaintiff, an employee of a company, filed a suit for recovery of dues and compensation for mental trauma allegedly caused by the acts of the Directors of the Company.

Finding of the Court:

The court dismissed the application under Order VII Rule 11, stating that the plaintiff's claim for compensation on account of mental torture allegedly caused by the Directors cannot be rejected at the threshold.

Issues: The issues revolved around the rejection of the plaint under Order VII Rule 11 and the plaintiff's claim for compensation on account of mental torture allegedly caused by the Directors.

Ratio Decidendi: The court held that the plaintiff cannot be deprived of his right to establish the claim for compensation on account of mental torture allegedly caused by the Directors by rejecting the plaint at the threshold.

Final Decision: The application under Order VII Rule 11 was dismissed, allowing the plaintiff to proceed with the claim for compensation on account of mental torture allegedly caused by the Directors.

ORDER

P.K. BHASIN, J:

This order shall dispose off an application under Order VII Rule 11 read with Order I Rule 10(2) of the Code of Civil Procedure(in short ‘C.P.C.’) filed on behalf defendant nos.2, 4 and 5 for rejection of the plaint qua them only or for deleting their names from the array of parties being neither necessary not proper parties.

2. The plaintiff was employed by M/s Reinz Gaskets Limited as a Sales Executive on 18th June, 1998 at a monthly salary of Rs.6000/- plus HRA, conveyance allowance etc. This Company was manufacturing Gaskets and other rubber products in India. In November, 1998 one Japanese Company by the name of M/s Ishikawa Gasket Co. Limited entered into a Joint Venture Contract with the said Indian Company, whose Managing Director was defendant no.3 Mr. Navneet Talwar, and as a result of that contract the name of the said Indian Company with which the plaintiff was employed, came to be changed to M/s Tal Ishikawa Ltd., which is defendant no.1 in this suit. Defendant nos. 2, 4 and 5 were nominated by the said Japanese Company as its nominee Directors on the Board of defendant no.1 Company. Defendant no.2 became its Chairman while defendant no.3 Mr. Navneet Talwar remained its Managing Director.

3. The plaintiff filed the present suit for recovery of Rs.43,29,040/- in the year 2011 as an indigent person alleging that while in the employment of defendant no.1 he had to perform tedious tasks including excessive talking to the customers for selling the Company’s products he developed throat cancer which disease came to be detected initially in the August, 2000. It was pleaded by the plaintiff that though he was entitled to get medical assistance from defendant no.1 Company but not only he was not rendered any such assistance but he was denied entry to the factor premises after 14th April,2001 and he was also not paid even his salary and other allowances.

4. The plaintiff claimed the suit amount under various heads as detailed in para no.14 of the plaint which is re-produced below:

“14. That the plaintiff is not in a position to go any where and all these problems are due to ACTS OF COMMISSION AND OMISSION of the company as a whole. The plaintiff has suffered enough and it appears that his life is also limited due to CANCER. The plaintiff is making the following genuine claim from the company: -

?Salary Pending September 1999and October 1999 that is about 9541/- p.m(two month salary. Rs.19082/-

?Salary Pending form July 2000 to August 2002 (26 months) Rs.248066/-

?Imprest Money (petty Cash Voucher) amount pending (Already given to the company inclusive of Rs. 37952/-

Daily local conveyance, which is fixed by the Company from the year 1998)

?Medical Treatment expenses at various places from 1999 to August (Expenses bill already submitted to the company. Rs.2,75,000/-

Including — Throat Cancer big operation, (total laryngectomees) Voice box removal in G.T.B. Hospitals, Radiotherapy Treatment, and Gall Bladder stone operation from AIIMS, mental depression (Cyclogist treatment)

?Artificial Electronic Larynx Germany Rs. 40,000/-

(Simens Company [speech device] Pamphlet enclosed photocopy of around 744 $ + import & other expenses etc.) India lauding cost.

?Four years L.T.A. allowance pending since long 1998 that is about Rs. 6000 per year. (1998-99, 1999-2000,2000 to 2001,2001-02) Rs. 24,000/-

?Other expenses from July 2000 to till date like telephone expenses, Photocopy expenses, Postage expenses, and Internet expenses, Conveyance expenses and other misc. expenses etc. Rs.30,000/-

?Legal consultation, lees expenses etc. in more than 1 I 2 year period (time to time to so many Advocates). Rs. 35,000/-

- Expenses in Registrar of companies for

Certified copy Photocopy etc. Rs. 6500/-

___________

Rs .7,15,600/-

Salary @ Rs.9541/- for 14 years

i.e. upto the age of 60 years. Rs.16,02,888/-

Mental Shock & harassment of MN

self and to my Family member Rs.15,00,000/-

?Interest on all the out standing dues @ 24% o











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