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High Court of Judicature at Madras
V. RAMASUBRAMANIAN, J.
Gayatri Balaswamy
Versus
ISG Novasoft Technologies Ltd & Another
Original Petition No. 463 of 2012
Decided on: 02-09-2014
Tamil Nadu Prohibition of Harassment of Women Act, 1998 - Arbitration Act, 1940 - Section 15 - English Arbitration Act, 1996 - Section 67(3), 68(3) and 69(7) - International Arbitration Act, 1974 - Section 34 - Indian Penal Code – Employment and service - Challenging Award of Arbitrator – Jurisdiction - Petitioner entered into an Employment Agreement with first respondent-company - Under said agreement petitioner was to be appointed as Vice President with effect - Agreement contemplated imparting of training to petitioner in Courses relating to General Management Finance Business Strategy and Project Management during first year of employment - It also contemplated that petitioner would be stationed during first year of employment and would be transferred - Agreement contained an Arbitration Clause with seat of arbitration - It appears that within a few months of commencement of contract of employment some untoward incidents happened as a consequence of which petitioner claims to have tendered a resignation – But resignation did not take effect for reasons which court would not go into - After a year letters of termination followed in succession – Held, As court have indicated earlier 12th head of claim is for compensation not claimed directly for injuries suffered on account of alleged sexual harassment but claimed on account of failure of first respondent to constitute a committee - If first respondent had constituted a committee perhaps parties would have avoided a series of litigation including civil and criminal and consequent legal harassment to each other - Two things could have happened had a committee been put in place - Petitioner could have complained to committee and got her grievance vindicated - If committee had found her allegations to be untrue matter would have ended there - In first alternative petitioner would have continued in employment and offender thrown out of employment - In second alternative petitioner would have been legally compelled to go out without any legitimate claim against company – But non constitution of committee has actually resulted in damage suffered by petitioner being unquantifiable - All that an Arbitrator could have done had he arrived at correct conclusion with regard to head of claim is to have awarded an ad hoc amount as compensation without any scientific formula being available with mathematical precision - What Arbitrator should have done but failed to do is what court can do now – Therefore considering status occupied and position in which petitioner was employed in first respondent organisation and considering opportunities that she lost on account of non constitution of committee court of view that grant of an amount equivalent severance benefit as compensation towards head of claim would be appropriate - Petition is allowed
1. Not satisfied with the quantum of compensation awarded by the sole Arbitrator, who is the second respondent herein, the petitioner has come up with this petition under section 34, challenging the Award of the Arbitrator.
2. I have heard Mr.Arvind P.Datar, learned Senior Counsel for the petitioner and Mr.Arun Khosla, learned counsel for the first respondent.
3. The petitioner entered into an Employment Agreement with the first respondent-company on 10.3.2006. Under the said agreement, the petitioner was to be appointed as Vice President (M&A Integration Strategy) with effect from 27.4.2006. The agreement contemplated the imparting of training to the petitioner in Courses relating to General Management, Finance, Business Strategy and Project Management during the first year of employment. It also contemplated that the petitioner would be stationed at Chennai during the first year of employment and would be transferred to U.S.A., thereafter. The agreement contained an Arbitration Clause, with the seat of arbitration at Chennai.
4. It appears that within a few months of the commencement of the contract of employment, some untoward incidents happened, as a consequence of which, the petitioner claims to have tendered a resignation on 24.7.2006. But, the resignation did not take effect for reasons which I would not go into.
5. After a year, 3 letters of termination followed in succession. The first was dated 17.10.2007, the next was dated 12.12.2007 and the last was dated 20.12.2007.
6. Thereafter, the petitioner lodged a criminal complaint on 26.12.2007 against two Officers of the Company for alleged offences under the Indian Penal Code and the Tamil Nadu Prohibition of Harassment of Women Act, 1998. The company also filed criminal complaints of defamation and extortion against the petitioner. Eventually, when both the petitioner and the first respondent landed up at the Supreme Court, the Supreme Court referred the parties to the second respondent herein for the resolution of all their disputes through arbitration.
7. Before the Arbitrator, the petitioner filed a Statement of Claim for recovery of a total amount of Rs.28,88,55,500/- under 12 different headings. The various heads of claim and the amount claimed by the petitioner before the Arbitral Tribunal are extracted as follows:-
S.No. Nature of Claim Amount in Rs.
1. Bonus for the completion of the first year 21,60,000
2. Arrears in Salary 11,62,500
3. Severance payouts 1,17,00,000
4. Bonus for the second year of employment 18,00,000
5. Non-revision of salary after the end of the first year of employment 67,50,000
6. Failure of the Respondent to transfer the Claimant to the Unites States of America 3,51,00,000
7. Non-compliance of procedures by the Respondent while purportedly terminating the Claimant 3,51,00,000
8. Not providing bonus in the second year of employment 18,00,000
9. Not providing learning and training opportunities 26,10,000
10. Failure to provide stock under the Respondent's Employee Stock Option Scheme 4,50,00,000
11. Loss of employment opportunity 5,76,00,000
12. Damages for non-constitution of Committee to inquire into allegations of sexual harassment 9,07,00,000
Total 28,88,55,500
8. The first respondent filed a counter to the claim of the petitioner on 2.9.2011. Apart from filing a counter to the claim of the petitioner, the first respondent also filed an independent Statement of Counter Claim on the very same date. In the Counter Claim, the first respondent sought the following reliefs:
"(i) To declare that the Employment Agreement dated 10.3.2007 is null and void ab initio and the Claimant is liable to refund all payments (Rs.93,50,948) received by her during her employment with the Respondent Company along with interest calculated at the rate of 9% per annum from the dates of various payments till refund is made.
(ii) To direct the Claimant to refund the deposit made by the Respondent Company with her in the sum of Rs.1.55 crore along with interest calc
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