1. The appellant is the plaintiff who worked as a clerk under the defendant who is a distributor of petrol in Mangalore. On 16 July, 1958, the defendant terminated the plaintiff's service, and the plaintiff appealed to the appellate authority under S. 41(2) of the Madras Shops and Establishments Act (Madras Act 36 of 1947). On 29 November, 1961, the appellate authority declared the order of termination to be illegal and the sequel to that decision was the suit out of which this appeal arises brought by the plaintiff for the recovery of a sum of Rs. 2,330 from the defendant. Out of this sum of money, a sum of Rs. 2,325 was claimed by the plaintiff as salary which he would have drawn has not his services been illegally terminated. This sum of money was also claimed in the alternative as damages, and to this sum of money a sum of Rs. 5 was added as expenses of notice.
2. The Munsif gave the plaintiff the decree which he wanted. But the District Judge in the appeal preferred by the defendant made a decree for a small sum of Rs. 680 as damages. This sum of money included a small sum of Rs. 5 which was claimed as expenses of notice. Both sides are dissatisfied with this decree made by the District Judge. The plaintiff contends that a decree should have been made in his favour for the entire sum of Rs. 2,330 out of which a sum of Rs. 2,325 was the amount which the plaintiff would have drawn as his salary; and quite unnecessarily he has paid court-fee even on the sum of Rs. 680 for which the District Judge gave him a decree. The defendant, who is dissatisfied with the decree made in favour of the plaintiff, has taken across-objection to that part of the decree.
3. Much of the argument in this appeal surrounded the question whether in consequence of the order of the appellate authority under S. 41(2) of the Madras Shops and Establishments Act the plaintiff stood reinstated in the post which he occupied before he was removed from it.
4. Sri Raghavendra Rao contended that the vary purpose of an appeal under Sub-section (2) of S. 41 was to secure an order of reinstatement and that such reinstatement was a necessary consequence flowing from the order of the appellate authority declaring the order of termination as illegal.
5. Sri Krishnamurthi for the defendant maintained that the imposition of a penalty under S. 45 of the Act was the only consequence emanating from that order, and that in any event, even if the order of the appellate authority that the termination of the plaintiffs service was illegal has becomes conclusive, the plaintiff can get only reasonable compensation and not the salary for the entire period to which the plaint refers.
6. Section 41(1) prohibits, among other masters the termination of an employee's services except for reasonable cause and after the issue of a months notice of the payment of salary in lieu of notice. Sub-section (2) authorises an appeal from an order of termination. Section 45 provides for the imposition of a penalty for the infringement of the provision of S. 41. The clear meaning of that section is that a termination in disobedience to S. 41(1) invites a penalty which could be imposed under that section. But there is one good reason for reaching the conclusion that imposition of a penalty is not the only purpose for which an appeal is authorised by Sub-section (2) of S. 41. Sub-section (3) of that section provides that a decision of the appellate authority in the appeal heard under Sub-section (2) shall be final both on the employer and on the employee and if the imposition of a penalty is the only consequence generated by the decision of the appellate authority. Sub-section (3) of of S. 41 would be a little difficult to understand since it would be unmanning to say that the decision of the appellate authority which subjects the employer to a penalty also binds the employee.
7. In my opinion the purpose of an appeal under Sub-section (2) of S. 41 is to enable the employee to secure an adjudication on the legality of the termination of his service, and although it is not necessary for me to express any opinion on that matter in this case, it may be within the competence of the appellate authority to make available to the employee one of the many reliefs to which he would be entitled in consequence of an adjudication that the termination was illegal. It might be open to the appellate authority to direct reinstatement of to direct the payment of compensation or the like. But, unfortunately, the appellate authority stopped with a mere declaration that the termination was illegal and without giving the employee any relief in the form of reinstatement of compensation.
8. So, what is binding upon both the employee and the employer under Sub-section (3) of S. 41 is the adjudication on the legality of the termination. In the absence of an express direction to that effect, the plaintiff did not get transported back into service. It would not be safe to depend upon the analogy which emerges from the provisions of Art. 311 of the Constitution and the service conditions applicable to a person holding a civil post under Government since, as rightly suggested by Sri Krishnamurthi, the right of a civil servant to continue in service and to stay in it to some material extent depends upon the provisions in the relevant service conditions in regard to superannuation and retirement.
9. But in the case before me there was no contract between the plaintiff and the defendant as to tenure, nor was there any provision for the issue of a notice preceding termination. The only prohibition against termination was that created by S. 41 of the Madras Shops and Establishments Act which regulated the procedure by which termination could be made. In consequence of that prohibition, the defendant became disabled from dispensing with the service of the plaintiff except in conformity with the procedure enjoined by the section. There was no adherence to that procedure, and so it was that the appellate authority pronounced the termination to be illegal.
10. But the question is whether that pronouncement entitles the plaintiff to the salary for the period between the date of termination and 31 January 1961, which was the date selected for the plaintiff, or, whether that adjudication entitles him to damages. Although the question is not quite free from difficulty, I lean to the view that in a case like this the plaintiff can claim reasonable compensation.
11. There are many reasons which impel that view in my mind. The first is, as already observed, the omission on the part of the appellate authority to direct reinstatement. The second is that the appeal preferred to the appellate authority remained undisposed of during a long period of nearly 2 years and 4 months. I am not sure in my mind that if the appellate authority had focused attention on the question, the preference would have been for compensation and not for reinstatement both of which were within its competences. Indeed, if some guidance could be derived from the provisions of the Mysore Shops and Commercial Establishments Act, 1961, which received the assent of the president on 15 February, 1962, and I think such guidance is permissible, it will be observed that S. 39(3) makes it explicit that the appellate authority can either direct reinstatement of the payment of compensation and that the compensation which may be so directed to be paid shall not exceed the salary which could have been drawn during a period of six months.
12. The acceptance of the view to the contrary that in consequence of the pronouncement of the appellate authority on the legality of the termination, the plaintiff became once again an employee without interruption, and, that he continues to be such employee until his services are properly dispensed with by rigid adherence to S. 41(1) of the Madras Act, would lead to the extremely unreasonable consequence that until there is such termination once again there would be an interminable liability on the part on the part employer to pay the salary of the employee.
13. I would say that the only efficacy which the decision of the appellate authority has for the plaintiff is that the employer cannot dispute the adjudication made by it that the plaintiffs termination was illegal and that the defendant can no longer assert in the suit brought by the plaintiff that there was a proper termination. If that be the true position as explained by the Supreme Court in S. S. Shetty v. Bharat Nidhi, Ltd. [1957 - II L.L.J. 696], the compensation payable to the plaintiff must be measured by the application of well-known rules set out in Chitty on Contracts, 21st Edn., Vol. II, p. 559, and in this context the Supreme Court said :
'They are to be assessed by reference to the amount earned in the services wrongfully terminated and the time likely to elapse before the servant obtains another post for which he is fitted. If the contract expressly provides that it is terminable upon, e.g., a month's notice, the damages will ordinarily be a month's wages. No compensation can be claimed in respect of the injury done to the servant's feelings by the circumstances of his dismissal nor in respect of extra difficulty of finding work resulting from those circumstances. A servant who has been wrongfully dismissed must use diligence to seek another employment, and the fact that he has been offered a suitable post may be taken into account in assessing the damages,'
14. The District Judge thought that the damages which could be properly awarded to the plaintiff is a sum equivalent to the salary which he would have drawn for a period of nine months, and I am not prepared to say that this estimate made by him is to any extent faulty or erroneous.
15. So, I dismiss the appeal and the cross objection. In regard to costs, it seems to me reasonable to make a direction that the plaintiff should get his full costs in the appeal. In the cross-objection, each party will bear his own costs.