1997 Supreme(Raj) 958
RAJASTHAN HIGH COURT
P.P.Nadlekar, J.
Kamal Auto Engineering Works Pvt. Ltd. - Appellant
Versus
Mahendra Kumar Parekh - Respondent
Civil Regular First Appeal No. 156 of 1991 (Against judgment passed by P.K. Tiwari, Dist. Judge Udaipur in C.O.S. No. 76 of 1988.
Decided On : 16-01-1997
An employer is liable to pay compensation for wrongful termination of employment without providing the required notice period, as per the terms of the employment contract.
Headnote:
EMPLOYMENT LAW - TERMINATION OF EMPLOYMENT - INDUSTRIAL DISPUTES ACT, 1947 - SECTION 2(S) - INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1946 - SECTION 10 - WRONGFUL TERMINATION - NOTICE PERIOD - COMPENSATION - DAMAGES - INTERPRETATION OF CONTRACTUAL TERMS - ASSESSMENT OF DAMAGES.
Fact of the Case:
The plaintiff, an employee of Udaipur Cement Works, was approached by the defendant-appellant, Kamal Auto Engineering Works Pvt. Ltd., to join the firm as Chief Executive Officer. The plaintiff resigned from Udaipur Cement Works and joined the defendant-firm based on an agreement that provided a five-year term of employment, a monthly salary of Rs. 3,000/-, and other benefits. The agreement allowed for termination of services by either party with six months' notice. However, the defendant-firm terminated the plaintiff's services without notice, leading to a lawsuit.
Finding of the Court:
The court found that the plaintiff's services were terminated without giving the required six months' notice, in violation of the terms of the employment agreement. The court also found that the plaintiff had worked until 6-9-1987, contrary to the defendant's claim that he had left the job on his own.
Issues: 1. Whether the plaintiff was entitled to six months' salary as compensation for wrongful termination without notice. 2. Whether the plaintiff was entitled to damages for mental pain and suffering, and loss of face.
Ratio Decidendi: 1. The court held that the plaintiff was entitled to six months' salary as compensation for wrongful termination, as per the terms of the employment agreement. The court found that the defendant-firm had failed to provide the required notice period, and thus breached the contract. 2. The court held that the plaintiff had failed to prove the allegations of damages, mental pain and suffering, and loss of face, and therefore dismissed the claim for damages.
Final Decision: The court dismissed the appeal filed by the defendant-appellant and also dismissed the cross-objection filed by the plaintiff-respondent. No order was made as to costs.
"1. Salary at the rate of Rs. 3,000/- for July, August and up to 15th September 1987 7,500.00 2. Amount of annual-grade-increment at the rate of Rs. 200/- for May, June, July, August and up to 15th September 1987 900.00 3. House-rent at the rate of 500/- per month for the period from July up to 15-9-1987 1,200.00 4. Conveyance allowance at the rate of Rs. 200/- per month 500.00 5. One month's Ex-gratia Payment 3,000.00 6. 45 days' salary in lieu of leave 4,800.00 Total: 17,950.00