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PETITIONER: PRABHUDAYAL BIRARI

       Vs.

RESPONDENT: M.P.  RAJYA NAGRIK AAPURTI NIGAM LTD

DATE OF JUDGMENT:       22/08/2000

BENCH: S. Rajendra Babu J.  & Shivaraj V.  Patil  J.

JUDGMENT:

Shivaraj V.  Patil J. L....I..........T.......T.......T.......T.......T.......T..J

Delay condoned.

Leave granted.

    The  facts  that  are  not  in  dispute  are  that  the appellant  was  appointed as Assistant District  Manager  in M.P.State  Commodities  Trading Corporation Limited,  Indore (the  respondent herein) by order no.  4383 dated 10.9.1980. As  per  the terms of the appointment, the services  of  the appellant  could  be terminated on one month’s notice or  on payment  of  one month’s salary in lieu of notice by  either side.   The  respondent is a Government company  within  the meaning  of  Section  617 of the Companies Act,  1956.   The respondent  by order dated 11.5.1981 terminated the services of  the appellant with effect from 11.6.1981.  The notice of termination  was served on the appellant on 8.6.1981 and  he was  relieved on 10.6.1981.  The appellant was not paid  one month’s salary also.

    Faced  with  the situation, the appellant filed a  suit for  declaration that the order terminating his services was illegal  and that he be treated as continuing in the service of  the respondent contending that the order of  termination of services was in contravention of the terms of employment.

    The  respondent  resisted this suit on the ground  that the  relationship  between  the parties was  contractual  of ‘master  and  servant’ and as such the appellant  could  not claim  specific performance of the contract;  the respondent was  under no statutory obligations to keep the appellant in service.

    The  trial  court  decreed the suit  of  the  appellant holding  that  neither the appellant was given  one  month’s notice  nor  one month’s salary as per condition no.   5  of Exbt.    P1  -  the   appointment  order  dated   10.9.1980. According  to  the trial court, the order of termination  of services was one passed without complying with the condition precedent.  It was void.  Hence the suit was decreed.

    The  respondent, aggrieved with the judgment and decree of  the  trial  court,  filed appeal in  the  court  of  the District  Judge, Bhopal.  The learned District Judge allowed

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the  appeal, set aside the judgment and decree passed by the trial  court  and  declared  that  the  appellant  was  only entitled  to  one month’s salary in lieu of notice from  the respondent-employer.   According  to  the  learned  District Judge, the only question that arose for determination in the appeal  was  whether  the  appellant   was  entitled  to   a declaration  that  termination of his services was  void  ab initio  and he could be treated still to be in service.   He referred  to  the decision of this Court in Kusum Gupta  vs. Haryana State Small Scale Industries Corporation (1986 Pt.II M.P.W.N.   108) in which it is held that the Corporation was bound  to  pay  one  month’s salary to  the  employee  while terminating  her  services but did not pay the same  and  as such the order of termination of the services was void.  The learned  District  Judge  however  took  the  view  that  no statutory  restriction existed in the case of the  appellant and  there  was  only contractual liability arising  out  of ‘master  and  servant’  relationship.    Hence  he  was  not entitled  for  re-instatement in service.  He  preferred  to rely upon a full bench decision of the High Court in Central Co-operative  Bank  Limited  vs.  Shibulal  &  Others  (1988 J.L.J.   20)  to state that a discharged employee  was  only entitled  to  one month’s salary in lieu of notice;  but  on the  ground of non-payment of one month’s salary, the  order of termination of service would not be illegal.

    The  appellant filed second appeal in the High Court of Madhya  Pradesh  at  Jabalpur.   In  the  said  appeal,  the appellant  urged  that  the  order  of  termination  of  his services  was  against the principles of natural justice  as well  as  against  the  Rules   relating  to  his  services. According  to  him,  the  Rules   that  govern  the  service conditions  of the State Government Servants were adopted by the  respondent-corporation;   since  the   Rules  were  not produced  by  the  respondent, he produced them  before  the first  appellate  court with an application under  Order  41 Rule 27 of the CPC.  But the said application was not at all considered by the first appellate court.  The learned Single Judge  in  the  impugned judgment has stated that  the  only question  to  be  considered  was   whether  the  order   of termination  of  services of the appellant was illegal.   He referred  the judgment of Kusum Gupta (supra) of this  Court but  simply observed that the said judgment did not help the appellant  without saying why.  He relied on the full  bench decision  of  the  High Court in Central  Co-operative  Bank Limited aforementioned and dismissed the appeal.

    The  appellant  filed an application for review of  the impugned  judgment  dated 28.10.1994 passed by  the  learned Single  Judge in the second appeal raising the grounds  that application  filed  under Order 41 Rule 27 CPC filed  before the  first  appellate  court  was  not  at  all  considered. Consequently  the judgment and decree of the first appellate court  were vitiated.  Along with the said application,  the appellant  produced documents to establish that his services were  governed by the service Rules which were applicable to the  employees of the Madhya Pradesh Government;  it was not a  mere  case  of  contractual relationship  of  master  and servant.   The review application was dismissed by the  High Court  on  11.8.1999.  It is thereafter the appellant  filed these  Special Leave Petitions challenging the judgment  and decree passed in the second appeal and the order made in the review application.

    The  learned  counsel for the appellant urged that  the

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first  appellate  court as well as the High Court  were  not justified  in law and on facts of the case in disturbing the judgment  and decree passed by the trial court;   admittedly the order terminating the services of the appellant was made without  complying  with a condition mentioned in  the  very appointment  order,  i.e., he was neither given one  month’s notice  nor one month’s salary in lieu of such notice;  when the  order of termination of services was made in  violation of  the  condition governing the services, it was  void  and consequently  the appellant is entitled for reinstatement in service.  He submitted that the appellant would be satisfied if  only he is reinstated in service and he would not insist for payment of back wages.

    The  learned counsel for the respondent submitted  that the  appellant  remained unauthorisedly absent;  he at  best was  entitled to only one month’s salary on the ground  that the appellant was only a temporary employee.

    As  already noticed above, it is not disputed that  the order  of termination of services of the appellant was  made without  giving  one month’s notice or one  month’s  salary. The  order of termination of services of the appellant dated 11.5.1981  was served on the appellant on 8.6.1981 and  made to  be  effective  from 10.6.1981.  The trial court  on  the basis  of  the evidence, recorded finding that the order  of termination  of  services  was  made  in  violation  of  the conditions mentioned in the order of appointment itself.  As such  the said order was void and illegal.  Consequently, it granted  decree  in  favour  of the  appellant.   The  first appellate  court did not consider the application made under Order  41  Rule  27  CPC under  which  Rules  governing  the services of the appellant were sought to be produced to show that  the  respondent  adopted  the   Rules  of  the   State Government  governing  its employees.  The learned  District Judge  refers to Kusum Gupta’s case but states that the said case  did  not help the appellant as there was no  statutory restriction.   Had  he only considered the application  made under  Order 41 Rule 27 CPC, perhaps the position would have been different.  He relied on the full bench decision of the High  Court  and held that the discharged employee was  only entitled   to  one  month’s  salary   in  lieu  of   notice. Unfortunately  the learned Single Judge did not consider the respective  contentions of the parties touching the question of law but has simply referred to the judgments in the cases of  Kusum  Gupta  and  Central  Coo-operative  Bank  Limited aforementioned  and concluded that the lower appellate court did  not  commit any mistake in reversing the  judgment  and decree passed by the trial court.  The learned Judge did not consider the effect of non-consideration of application made under  Order  41 Rule 27 CPC by the first  appellate  court. Without  examining  the  facts of the case,  he  has  simply stated  that the case of Kusum Gupta aforementioned did  not help   the   appellant.   When   admittedly  the  order   of termination  of  services  of  the  appellant  was  made  in contravention  of  the specific condition mentioned  in  the very  appointment  order, in our view, the trial  court  was right  and justified in decreeing the suit of the appellant. As the application filed under Order 41 Rule 27, CPC was not considered by the first appellate court, the case could have been  remanded.   But  we do not propose to do  so  for  two reasons  (1) the order of termination of services is of  the year  1981, and (2) admitted facts and circumstances of  the case  also  do not warrant such a remand.  The  facts  being

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almost  identical, the judgment of this court in the case of Kusum Gupta (supra) supports the appellant, having regard to the  admitted  facts  and the circumstances of the  case  in hand.   Further  the learned counsel for the  appellant  has fairly  submitted  that the appellant would not  insist  for payment  of  back wages and he would be satisfied if  he  is reinstated in service.

    Having  regard  to the facts stated and  reasons  given above,  the  judgments  and decrees of the  first  appellate court  as  well  as  the High Court are set  aside  and  the judgment and decree of the trial court are restored with the modification  that  the appellant shall not be entitled  for any  back wages.  In other words, the judgment and decree of the  trial court except to the extent of modification stated above,  shall  stand restored.  Appeals are allowed  to  the extent indicated.  Parties to bear their own costs.