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Andhra Pradesh Flying Club Vs. S.C. Saxena - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAndhra Pradesh High Court
Decided On
Case NumberC.C.C.A. No. 36 of 1976
Judge
Reported in(1980)IILLJ337AP
ActsAndhra Pradesh (Telangana Area) Public Societies Registration Act, 1350 F; Indian Contract Act
AppellantAndhra Pradesh Flying Club
RespondentS.C. Saxena
Excerpt:
.....even if bad at the inception, becomes valid on account of the aforesaid resolution of the committee. , the order of the secretary dated 28th november, 1970, is clearly illegal and wrongful. 10. the next question however, is :what is the quantum of damages to which the plaintiff is entitled, on account of the wrongful termination ? we are of the opinion that the basis upon which, and the amount awarded by the trial court, is clearly erroneous. 104, it is stated :a servant complaining of wrongful dismissal from service cannot rest content by merely putting forward a claim for recovery in a lump and in advance the entire amount of anticipated salary covering the whole period for which he expected to continue in service so as to utilize such amount for safe investment and thus to..........the power to appoint and dismiss the members of the staff employed by the club is vested in the committee. the committee is empowered to delegate its powers, except the power to appoint and dismiss its staff members, to the executive committee. 2. the plaintiff was appointed on 1st september, 1969 as a pilot instructor on a probation of six months. after satisfactory completion of probation, he was confirmed with effect from 1st march, 1970. in the absence of the chief flying instructor he was appointed to officiate in that post. it appears, there was a quarrel between him and one captain neal who was also an employee of the club. in connection with which the plaintiff was suspended from service, but subsequently reinstated. in the same month, the plaintiff was served with an order,.....
Judgment:

Jeevan Reddy, J.

1. Andhra Pradesh Flying Club, the defendant in the suit, is the appellant before us. The Club is established for promoting the art of flying and for training pilots. It is a Society registered under the Andhra Pradesh (Telangana Area) Public Societies Registration Act, 1350 F. Its Rules and Regulations are registered under the Act, copy of which has been placed before us. It has a Managing Committee, called 'Committee' which comprises of the President and Vice-President of the Club, Station, Commander, Air-Force Station, Begumpet, and certain other officials. There is a Secretary of the Club who is the Chief Executive Officer of the Club, and whose duties inter alia are to give effect to the resolutions and carry out the directions of the Committee. The President has the administrative control over the affairs of the club. The Chief Secretary to the Government of Andhra Pradesh is the Ex-Officio President of the club. The power to appoint and dismiss the members of the staff employed by the club is vested in the Committee. The Committee is empowered to delegate its powers, except the power to appoint and dismiss its staff members, to the Executive Committee.

2. The plaintiff was appointed on 1st September, 1969 as a pilot instructor on a probation of six months. After satisfactory completion of probation, he was confirmed with effect from 1st March, 1970. In the absence of the Chief Flying Instructor he was appointed to officiate in that post. It appears, there was a quarrel between him and one Captain Neal who was also an employee of the club. in connection with which the plaintiff was suspended from service, but subsequently reinstated. In the same month, the plaintiff was served with an order, dated 28th November, 1970, terminating his services. The order of termination reads as follows :

'As per Service Rules of the club I have been directed to give you notice that your services with the club have been terminated with immediate effect. This may be taken as one month's notice ending with 31st December, 1970.

'Further, a cheque No. 158272, dated 28th November, 1970 for Rs. 1,554.40 on State Bank of India, Secunderabad is attached herewith in full settlement of your account with the club including the salary and allowances for the month of December, 1970 in lieu of notice.

A statement of your account is attached herewith.

Kindly acknowledge receipt.

Yours faithfully,

for Andhra Pradesh Flying Club,

Sd./-

Hon. Secretary ....'

3. Immediately thereupon the plaintiff approached the Court and instituted O.S. No. 1099 of 1970 on the file of the IV Assistant Judges, City Civil Court, Hyderabad, wherein he filed I.A. No. 1853 of 1970 to restrain the defendant therein from giving effect to, or terminating his services. A temporary injunction was granted as prayed for. Against the order of temporary injunction, the club filed C.M.A. No. 142 of 1970, and the appellate Court suspended the operation of the, order passed by the IV Assistant Judge. On 17th February, 1971, the Civil Miscellaneous Appeal was allowed and the temporary injunction vacated. Thereafter, the plaintiff filed I.A. No. 1257 of 1971 for amending the plaint, claiming damages in a sum of Rs. 3,18,000. The said sum was arrived at by calculating the total amount of salary which the plaintiff would have drawn, had he continued in service upto his 55th year, i.e., the normal period of superannuation. As a result of the amendment, the IV Assistant Judge lost jurisdiction and, therefore, returned the plaint for presentation to proper Court. The plaintiff then presented the same, in forma pauperis, which was allowed and the suit was registered as O.S. No. 149 of 1974 on the file on the Additional Chief Judge-cum-Special Judge for SPE & ACB cases, Hyderabad.

4. The main contention of the plaintiff has been that the order of termination, dated 28th November, 1970 was incompetent and illegal, and was passed in violation of the principles of natural justice. He attributed malice to the Secretary of the club. In the written statement filed by the defendant, it was submitted that the plaintiff's services were terminated in accordance with the conditions of his service and the Rules and Regulations of the club. It was submitted 'the termination of the services of plaintiff was dictated in the interests of the economy of the Flying Club, having regard to its size and resources, and the action of termination was duly and properly taken by the Executive Committee.' The charge of malice or mala fides, as the case may be, was denied. It was submitted that there was no connection between the termination, and the dispute between the plaintiff and Captain Neal.

5. On the above pleadings, the trial Court framed the following three issues, viz. :

'(1) whether the order of termination of services dated 28th November, 1970 is illegal, and void and inoperative

(2) whether the plaintiff is entitled to any, and if so, what damages

(3) to what relief

6. On behalf of the plaintiff, only one witness, namely, the plaintiff, was examined, while on behalf of the defendant, the Secretary of the club was the only witness. Both patties adduced documentary evidence, to which a reference will be made at the appropriate stage; but, a reference to Ext. B7 is called for at this stage itself. Exhibit B7 is a resolution of the Managing Committee of the club, dated 6th May, 1971, whereunder by a majority of nine votes as against two, the Committee resolved to ratify the action taken by the Honorary Secretary of the club to terminate the services of the plaintiff. The minutes of the Committee reads as follows :

'514. Judgment of Chief Judge, City Civil Court, Hyderabad in the case of Mr. S. C. Saxena.'

The subject, termination of the services of Mr. S. C. Saxena by the Honorary Secretary was discussed and the following resolution was put to vote and it was carried by a majority of nine votes against two :

'That the action taken by the Honorary Secretary to terminate the services of Mr. S. C. Saxena be ratified.'

(Mr. Ramesan, I.A.S., Finance Secretary to Government of Andhra Pradesh, was not present as he had to leave the meeting earlier due to other engagements ....)

7. On a consideration of the oral and documentary evidence on record, the learned trial Judge held (i) that, the order of termination passed by the Secretary of the club is incompetent and illegal; (ii) that, the resolution of the Managing Committee purporting to ratify a void order is of no effect. The Managing Committee did not itself terminate the service of the plaintiff; (iii) the stand taken in the written statement that the Executive Committee had taken the decision to remove the plaintiff, even if true, is incompetent; and (iv) that, the termination effected by the Secretary on the instructions of the President is equally incompetent. On the question of relief, the trial Judge held that the basis upon which the plaintiff has calculated the amount of damages, claimed in the suit, has not been disputed in the written statement, nor has it been challenged in cross-examination of the plaintiff. The trial Judge, therefore, held that the plaintiff is entitled to the said amount. Accordingly, he decreed the suit in a sum of Rs. 3,18,000 along with costs.

8. In this appeal Sri P. R. Ramachandra Rao, the learned counsel for the appellant (defendant), challenged the correctness of the various findings and the decree of the trial Court. We shall first take up for consideration the validity of the order of termination.

9. The order is signed by the Secretary. In the order, the Secretary has recited that he has been directed to terminate the services of the plaintiff. In his evidence, the Secretary has clarified that the instructions were those of the President of the club, and not of the Committee. The President of the club cannot be equated to the Managing Committee. The termination is, therefore, undoubtedly incompetent and contrary to the Rules and Regulations of the club. In the written-statement, the stand taken by the defendant was that the termination was in pursuance to the decision taken by the Executive Committee; but no attempt was made at the trial to produce any resolution or proceedings of the Executive Committee. On the contrary, the stand has been that the termination was effected in pursuance to the oral instructions of the President. Now, the resolution of the Managing Committee, referred to above was produced and got exhibited only in the re-examination of D.W. 1. Strangely enough, though the written statement in this case was filed on 17th January, 1978, no reference was made therein to the resolution which is dated 6th May, 1971. We have perused the original Minutes Book of the club, and we have absolutely no reason to disbelieve that this resolution was passed by the Committee on the date, and in the manner it purports to be. Indeed, no suggestion is made to D.W. 1 that the resolution was not passed as averred. In spite of the said resolution of the Managing Committee - and there being no resolution of the Executive Committee - the stand taken in the written statement was that the termination was effected in pursuance to the resolution of the Executive Committee. In the arguments before us, as before the trial Judge, the club took the stand that the resolution of the Managing Committee ratifying the action of the Secretary effectuates and validates the order of termination. It was argued that the order of termination, even if bad at the inception, becomes valid on account of the aforesaid resolution of the Committee. So far as the retrospective validation is concerned, we are of the opinion that the Managing Committee had no power to restropectively validate the action of the secretary, or terminate the services of the plaintiff restrospectivety. The power of retrospective validation is a power which can be conferred only by a statutory enactment. The Rules and Regulations of the defendant's club are neither statutory nor do they expressly, or by necessary implication, confer such a power. The order of termination dated 28th November, 1970, therefore, continues to be an invalid and incompetent order. But, it is possible to construe the resolution of the Managing Committee as an order of termination by itself; but, the difficulty we found in adopting this approach is that the resolution of the Managing Committee was never communicated to the plaintiff. At no stage, until 4th July, 1975 when it was produced into Court during the re-examination of D.W. 1 was its existence ever disclosed either to the plaintiff, or to the Court, nor is it argued before us by the counsel for the appellant that its production into Court amounts to communication to the plaintiff. We are, therefore, of the opinion that the termination of the plaintiff's service under Ext. A16, i.e., the order of the Secretary dated 28th November, 1970, is clearly illegal and wrongful. The alleged oral instructions of the President of the club are equally incompetent, nor can the President of the club be invested with, or delegated, the powers of the Committee.

10. The next question however, is : What is the quantum of damages to which the plaintiff is entitled, on account of the wrongful termination We are of the opinion that the basis upon which, and the amount awarded by the trial Court, is clearly erroneous. The trial Court has, upholding the plea of the plaintiff, granted him the total salary which he would have earned, had he continued in service until he attained the age of 55 years. On no principle can this award be sustained. In our opinion, the said decree seeks to grant indirectly what it could not grant directly. The civil Court which could not grant a decree for reinstatement in service has, in effect, granted that relief without the obligation of the plaintiff serving the club. In fact, the plaintiff can take all the salary in lumpsum and seek re-employment, and thus earn two salaries simultaneously. As a matter of fact it appears from the Memo, filed by the respondent-plaintiff before us that the plaintiff has secured alternative employment as Chief flying Instructor in Delhi Flying Club in December, 1976. And according to the decree of the trial Court he has been awarded salary until the year 1988-89, from the defendant club. Sri A. S. Prakasam, the learned counsel for the plaintiff-respondent relied upon two decisions before us, to support the decree of the trial Court which, in our opinion, do not support his case at all. Union of India v. Jyotirmoyee Sharma, : (1969)ILLJ290Cal , is a case where on the termination of her service a Government servant sued for a declaration that the order of termination is void and illegal and, in the alternative, prayed for a decree in a sum of Rs. 5,34,804 which appears to be the total sum which she would have earned had she continued in service upto the date of superannuation. The trial Court granted the declaration as asked for, and a sum of Rs. 30,000 towards damages. When the matter came up before the High Court, it was found that the employee concerned had secured an alternative employment. Counsel for the Government also 'did not make any submission challenging the quantum of damages.' Accordingly, the Court confirmed the grant of Rs. 30,000 observing that it does not matter whether the amount is called 'damages', or the 'loss of wages.' We are unable to see how the principle of this case helps the plaintiff.

11. The other case is the one reported in Hiranandani v. Bharat Barrel & Drum ., : AIR1969Bom373 . The employee concerned in that case was employed for a fixed period, but his services were terminated during the currency of the tenure. It was in those circumstances that the arrears of salary which the employee would have earned had he continued in service for the full fixed term, were granted. In our opinion, this case also has no application herein.

12. On the contrary, the correct principle for assessing the damages on account of wrongful termination is found stated in the decisions of several High Courts, to which a brief reference is necessary.

13. In Thomakutty v. Thomas, A.I.R. 1954 Trav-Co. 104, it is stated :

'A servant complaining of wrongful dismissal from service cannot rest content by merely putting forward a claim for recovery in a lump and in advance the entire amount of anticipated salary covering the whole period for which he expected to continue in service so as to utilize such amount for safe investment and thus to convert the very injury complained of into a blessing in disguise. The common law which recognises his right to recover damages for wrongful dismissal imposes a corresponding duty on him to do all that is possible to mitigate such damages. He is bound to act in that direction not only in his own interests but also in the interests of the opposite party against whom he has to sustain an action for damages. He was to use due diligence in endeavouring to obtain suitable employment with wages approximating that which he was getting in the service from which he was dismissed, even though he is not expected to accept a fresh engagement in a lower status. The possible chance of obtaining a suitable employment elsewhere has to be taken into account in assessing the measure of damages to be awarded to the plaintiff. In the judgment of the House of Lords in Beckham v. Darke, [1848] 2 H.L.C. 579 (1), the principles to govern a claim for damages for wrongful dismissal in violation of an agreement for service, have been stated thus :

The measure of damages for the breach of promise now in question is obtained by considering what is the usual rate of wages for the employment here contracted for, and what time would be lost before a similar employment could be obtained. The law considers that employment in any ordinary branch of industry can be obtained by a person competent for the place, and that the usual rate of wages for such employment can be proved, and that when a promise for continuing employment is broken, it is the duty of the servant to use diligence to find another employment.' Even where the service is not covered by a contract, the rule is that the service can be terminated only after reasonable notice except in cases where the dismissal is for proved misconduct or for other justifiable causes. The period of such notice will ordinarily be fixed as the time during which a fresh employment may reasonably be expected to be obtained. Thus in either case the anticipated salary or wages for an unreasonably long period subsequent to the date of the dismissal cannot be fixed as the measure of damages arising out of the wrongful dismissal. These principles have been embodied in S. 73. Contract Act also. It is stated in that section that 'such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.' The Explanation to the section states as follows. 'In estimating the loss or damage arising from a breach of contract the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account ......

14. In Tanjore Permanent Bank v. G. N. Muniswami, : AIR1964Mad183 , Veeraswamy, J. (as he then was) observed that there an employment is contractual, and termination is made wrongfully, normally the salary for the period of notice provided in the contract, would be the reasonable amount of damages to be awarded. But, it was observed that the Court can justifiably take into consideration the reasonable period which the employee would require for getting an alternative employment. In that case, the contract of service did not provide for the period of notice for termination. The employee did not prove that he made any attempts to get re-employment. It was also found that the employment in which the employee was engaged could in no sense be described as a special category, nor was there any evidence proving the reasonable period within which re-employment could have been secured. In those circumstances, twelve months' salary was held to represent the proper damages.

15. In Satendra Kumar v. District Board, : (1959)ILLJ585Cal , a Bench of the Calcutta High Court followed the decision of Allahabad High Court in Prabhulal Upadhyaya v. District Board of agra, A.T.R. 1938 All. 276 and awarded three months' salary by way of damages on the basis that, in the case of discharge, the employee would have been entitled to three months' notice.

16. In Harisingh v. Fateh Singh, A.I.R. 1957 M.P. 406, it was held that in case of service of an employee engaged on a monthly basis, award of one month's salary by way of damages is reasonable in case of wrongful termination of service.

17. From the above decisions, the following principles emerge : Where the relevant Rule or contract prescribes a certain period of notice for termination, that should normally furnish the basis for assessing damages, in case of wrongful termination. Obviously, the period of notice is generally prescribed, so that within that period the employee may be able to secure alternative employment. In some cases, even for resignation by an employee, such period is prescribed, the idea obviously being to enable the employer to secure a substitute employee within that period. But, the period of notice so prescribed cannot be taken as a firm or inalterable rule. The proper test would be to look at the nature of the employment, the employment market in that behalf, and to determine what is the reasonable period within which the employee can secure an alternative employment. It would thus be a question of fact in each case, and the period may vary having regard to the nature of the post, or even from time to time. If the post is an ordinary post requiring no special skill and having a large market, the period of obtaining re-employment would be shorter; in such a case, the notice period may probably furnish the basis. But, if the employment is of a specialized nature, the openings for which are few and far in between, the period would naturally be longer. Sticking to the period of notice prescribed by the rule or the contract would not, in all cases, do justice to the parties. After all, a person is entitled to be compensated for wrongful termination of his service, and the just period would be the reasonable period within which the employee, by making reasonable efforts, is likely to obtain an alternate and substantially similar or equal employment. The principle would be the same even where the Rules or the contract do not provide the notice, or the notice period.

18. Applying the above principle to the facts of this case, we have to determine the amount of damages to which the plaintiff is entitled, in the suit, the plaintiff claimed Rs. 3,18,000 representing the total salary which he would have drawn had he continued in service until his age of superannuation, i.e., roughly for a period of 20 years. As pointed out by the trial Judge, the written-statement did not contain a specific denial of the basis of calculation, except stating that the plaintiff is entitled to no damages whatsoever. The plaintiff deposed in his testimony that, by the date of his termination, he was 36 years old, and though he tried his best to secure an alternative job at many places, he could not succeed. He stated that while working under the defendant-club, he got two offers from Lucknow and Haryana clubs, which he declined because he was continuing in service under the defendant-club. All that was brought out in cross-examination was that, he applied for the post of Lucknow and Haryana Clubs long prior to his joining the defendant-club, and nothing more. No evidence was produced to show either that the plaintiff did not make any reasonable efforts to secure an alternative employment, or that he would have secured such alternative employment had he made efforts. The post of the plaintiff is of a specialized nature, viz., that of flying instructor. The market for such employment cannot be said to be quite wide. The opportunities would be very few, and the number of posts limited. Counsel for the plaintiff, as stated above, has filed a Memo, before us stating that, it was in December, 1976 only that his client could get an alternative employment as Chief Flying Instructor, in Delhi Club . To repeat, there is no material to show that though he could get an alternative equivalent employment to the one held by him under the defendant-club within the said period the plaintiff did not avail, or declined the same. In the circumstances of this particular case, therefore, we think that the reasonable period for securing alternative employment for the plaintiff, should be taken as the period which he actually took for securing an alternative employment. On this basis, he would be entitled to damages representing the salary for the period commencing from the date of termination of his service upto the end of November, 1976, deducting the amount, if any, paid towards the notice period. The amount awarded by the trail Court cannot be sustained on any principle, or on any basis.

19. For the above reasons, the appeal is allowed in part, and the decree of the trial Court is modified accordingly. The amount to which the plaintiff shall be entitled by way of damages, is determined at Rs. 95,400. Having regard to the facts and circumstances of this case, we direct the parties to bear their own costs throughout.

20. The learned counsel for the appellant makes an oral application for grant of leave to appeal to the Supreme Court. We do not, however, think that this case involves such a substantial question of law of public importance which requires to be considered by the Supreme Court. The request for leave is accordingly rejected.


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