P.K. Jain, J.
1. This secondappeal arises out of the judgment and decree passed by the IIIrd Additional District Judge, Ghaziabad dated 3.10.98 dismissing the first appeal of the appellants and affirming the judgment and decree of the trial court in Suit NO. 309 of 1995.
2. Plaintiff-respondent S.M. Chopra filed the aforesaid suit for the following substantial reliefs :
(a) That by the decree of this Hon'ble Court it may be declared that the resignation of the plaintiff dated 11.3.92 being obtained by the defendants by force, under coercion and without the free consent and will of the plaintiff is illegal and voidable and is not binding on the plaintiff, and the plaintiff is continuing in services of the defendants without any effect of the said resignation letter.
(b) That by the decree of mandatory injunction, the defendants be directed to deposit all the dues of the plaintiff including the arrears of salary, emoluments and allowances as well as with the amount relating to the encashment of 274 earned leaves w.e.f. 11.3.92 in thecurrent account No. 49 of the plaintiff in the Lohia Nagar Branch of the defendants within the time fixed by this Hon'ble Court after calculating the same as per bank rules and regulations and to continue to pay the same till the retirement of the plaintiff.
3. The plaint allegations relevant for the purposes of the present appeal are that the plaintiff Joined services to the defendants bank on 30th August, 1970 at the branch office at Jalandhar in capacity of subordinate staff. Thereafter he continued his services in the bank in various capacities at various branches of the bank. He was promoted from time to time and alt of a sudden without any cause he was transferred to Head Office by letter dated 10.3.92 in which it was also mentioned that the responsibilities of the branch till 10.3.92 will be of the plaintiff. The said letter dated 10.3.92 was issued from the Head Office of the defendants and was addressed to Rakesh Malhotra, the then A.R.M. Ghaziabad. Neither any reference number nor letter number was mentioned in the letter nor it was sent directly to the plaintiff. Simultaneously by the said letter Sri Rakesh Malhotra was posted as Senior Manager of the Branch in place of the plaintiff. It was also stated in the said letter that the plaintiff be relieved immediately to report for his further duties at Head Office on the same day, i.e., on 10.3.92 copy of the said letter was handed over to the plaintiff by Sri Rakesh Malhotra on 11.3.92 which caused great surprise to the plaintiff. On 11.3.92 another letter dated 11.3.92 was sent by the Regional Office, Ghaziabad of the defendants to Sri Rakesh Malhotra showing his appointment as Senior Manager at Lohia Nagar Branch. Copy of this letter was given to the plaintiff on 11.3.92 in the afternoon. The plaintiff felt suspicious of the said letter as they were issued in mysterious circumstances. The plaintiff therefore became confused. Any how in the same state of condition he rushed tothe Head Office at New Delhi to report himself for further duties and as such he reported there at 4.30 p.m. on 11.3.92. The plaintiff was not assigned any seat or designation in the Head Office either by the concerned authorities or through the said letter. He contacted the Deputy Chief Manager (Personnel) to know about the designation and seating arrangement but nothing was told to him except to wait and see. At 4.45 p.m. the plaintiff was summoned to the cabin of Sri Surendra Mohan, the then General Manager of the defendant hank who asked the plaintiff to submit his resignation immediately without any reason or cause. He was also threatened by him of dire consequences on failure to submit the resignation by handing over him to CBI on false ground of committing frauds in the bank services. Besides the General Manager four other persons unknown to the plaintiff were also present at that time in the cabin of General Manager. They were also assisting the General Manager to obtain the resignation of the plaintiff by force. They created the 'Gherao' of the plaintiff from all sides and compelled him by manhandling to write a resignation letter from the services of the bank then and there. The plaintiff who was already in an unstable condition of mind became totally confused and frustrated in the aforesaid conditions and as such he lost his balance of mind and was not in a position even to write a letter of resignation or anything else with his own mind. He was unable to understand the consequences of submitting the said resignation letter. He had definitely told that he does not want to resign from his services as he had no other source of income to feed his family. The request made by the plaintiff was not considered by the General Manager and he was compelled with the help of four other persons to tender resignation letter. The General Manager himself dictated the letter of resignation and the plaintiff was forced to write and sign the same. After the letter was signed by the plaintiff it was snatched from his hands and thus the letter ofresignation was obtained under coercion and without his free consent and will and even without providing sufficient time to the plaintiff to consider regarding the consequences of the same. Simultaneously the resignation letter was also accepted at once at 5.00 p.m. on the same day which is closing time of the office. That in fact there was no reason for the plaintiff to tender his resignation. He was working on a respectable post with a considerable amount of salary as well as other emolument and allowances. The only reason of obtaining a resignation by force from the plaintiff appears to be that the management of the defendants made a plan to get rid off the plaintiff by creating a story of transfer and by issuing transfer letters and by procuring the resignation letter from him. It was obtained with mala fide intention and preplan of the Management. In this way, the letter of resignation obtained from the plaintiff with force and under coercion and also without his free consent is a voidable document in the eye of law and is not at all binding on the plaintiff. It deserves to be cancelled through a decree of declaration by the Court. It is further alleged that on 12.3.92 the plaintiff lodged an F.I.R. with SHO Cannaught place. New Delhi by Registered post and also informed the General Manager about withdrawal of his resignation by letter dated 12.3.92. On 30.4.92 Sri Rakesh Malhotra Senior Manager of the Lohia Nagar Branch called to the plaintiff in his office to discuss some matters and when the plaintiff reached there at about 11.00 a.m. two unknown persons not the employees of the defendants entered the cabin with Sri Rakesh Malhotra and compelled the plaintiff to sign the four papers which were already typed. Although the plaintiff could not read those papers but it was told to him that those papers related regarding his consent for the settlement of his provident fund, gratuity and other dues against the dues of the bank regarding furniture facilities and House loan and Car loan etc. which were provided to him by the defendants.When the plaintiff resisted the same and tried to leave the cabin he was forcibly made to sit there by manhandling. The plaintiff seeing no other alternative to save his life signed four typed papers at the direction of Sri Rakesh Malhotra and the two unknown persons. These documents were also got signed against free consent and will of the plaintiff. The plaintiff just after leaving the cabin of Sri Rakesh Malhotra reported the aforesaid matter to the SHO Sihani gate. Ghaziabad. A copy of the F.I.R. was also sent to the General Manager of the defendants at the Head Office. New Delhi. It was also averred in the plaint that as per provisions of the bank the adjustment of House loan and Car loan against the P.F. and gratuity is quite illegal and unauthorised. Thereafter the plaintiff wrote so many letters and reminders to the General Manager and C.M.D. through registered post dated 18.6.92. 12.7.92, 22.2.93. 7.6.94 and 4.3.95 requesting them to allow him to join the services but without any result. He had also approached the defendants and its concerned authorities to cancel the resignation letter and other letters but they paid no heed.
4. The appellant No. 1 alone contested the suit by filing written statement. It was stated in the written statement that the Court has no territorial jurisdiction to entertain the suit as the impugned resignation was accepted by defendant No. 1 at its Head Office, New Delhi. Therefore, no cause of action arose at all within the territorial jurisdiction of the Court at Ghaziabad. That the suit is barred by the provisions of the Specific Relief Act. 1963, as the plaintiff is trying to enforce contract of personal service which is not permissible under the law. The suit is not maintainable on the ground of acquiescence, delay and laches as the plaintiff slept over the matter and belatedly approached the Court. The relief of mandatory injunction can not be granted to the plaintiff in view of the delay and laches. Plea with regard to valuation of the suit, payment of the Court fee and non-joinder of theparties was also taken. It was further stated that the plaintiff had committed certain irregularities/ misconduct while working at Branch Office. Nasirpur, in the account of Steel Trading Company. As a measure of punishment the plaintiff was awarded punishment of stoppage of increment by the Disciplinary Authority. However, keeping the request of the plaintiff in mind and his subsequent conduct the increment was released to him in 1991. The plaintiff was, however, transferred from one Branch to another Branch in administrative exigencies. He was transferred to Head Office. New Delhi, vide order dated 10.3.92, pursuant to the order of transfer the plaintiff reported for duties at Head Office. New Delhi, on 11.3.92 at 4.00 p.m. The other allegations are wholly baseless and wrong. Since the plaintiff voluntarily resigned from the Bank services on 11.3.92 immediately after joining his duties at the Head Office, New Delhi with the request to relieve him on the same day, this request of the plaintiff was acceded by the defendant bank. No seat was allotted to him in the office. The resignation was tendered by the plaintiff voluntarily and it was wrong that the plaintiff was summoned by the then General Manager and who asked him to submit resignation immediately and it was wrong that the plaintiff was threatened of dire consequences and that his case would be handed over to C.B.I, in case he did not tender his resignation. The allegations of using force etc. are baseless and devoid of truth. The plaintiff slept over the matters for 3 years. The General Manager had not dictated the resignation letter to the plaintiff as alleged. The terminal dues were appropriated towards the bank's dues/loans outstanding against him after acceptance of his resignation and the plaintiff was advised vide bank's letter dated 3.7.92 to refund the balance amount recoverable from him. No letter dated 12.3.92 was received by the defendant Bank. It was plaintiff himself who called upon Sri Rakesh Malhotra, Senior Manager, Lohia Nagar Branch on 30.4.92 and itwas wrong to say that there were two unknown persons present in the cabin of Sri Malhotra and that Sri Malhotra forced the plaintiff and got his signatures on some blank papers as well as on typed papers. The plaintiff had himself signed the papers regarding settlement of his terminal dues whereby the authorised the defendant-bank to appropriate his terminal dues towards the bank's loans/liabilities outstanding against him.
5. On the pleadings of the parties the trial court framed a number of issues. The trial court on consideration of the evidence adduced by the parties decreed the suit of the plaintiff and declared that the resignation letter dated 11.3.92 was obtained by coercion and without free consent of the plaintiff and against his desire to continue in service and therefore, the same was void. The Court further declared that the plaintiff continues to be in the service of the defendant and that the defendants are directed to make payment within 2 months of the order and benefits which the plaintiff would have availed on being in service.
6. The first appeal filed by the defendant-bank was dismissed by the Additional District Judge, Ghaziabad by judgment and order dated 3.10.98. Thereafter the appellant-bank has filed this Second Appeal. While admitting the appeal the following substantial questions of law were framed.
(1) Whether defendants-appellants are statutory bodies and whether the contract of employment can be enforced against the defendants-appellants?
(2) Whether relief of declaration that the plaintiff is continuing in service can be granted by the civil court or whether the plaintiff is entitled to damages only?
(3) Whether the civil court had power to grant pendente lite and future salary and the decree passed by theappellate court in this regard is erroneous?
7. Sri G.N. Verma, learned senior counsel appearing for the appellants-bank and Sri Shashi Nandan, learned counsel for the plaintiff-respondent have been heard at length.
It is vehemently argued on behalf of the appellants that even though there is concurrent findings of fact of the Courts below that the resignation was obtained by coercion, there is no pleading as well as no finding that there was breach of any statutory rules. The relationship of master and servant between the parties was contractual and therefore, the civil court had no Jurisdiction to enforce the said contract. It is also submitted that Regulation 20 (1) (d) of the Oriental Bank of Commerce [Officers') Service Regulations, 1982 (hereinafter called as the Regulations) provided an appeal against an order passed under sub-regulation (1) (a) which right has not been exercised by the respondent and hence the suit was not maintainable. It is further submitted that the plaintiff-respondent did not specifically plead coercion and in any case the facts pleaded do not make out a case of coercion. Learned counsel for the respondent, however, submits that the findings of fact that the plaintiff-respondent was coerced or forced to submit resignation against his free will are concurrent findings of fact and being pure findings of fact cannot be challenged in this appeal. It is further submitted that the averments made in the plaint clearly make out a case of coercion. It is also submitted that the appellant-bank is a statutory institution being creation of statute and it has statutory rules governing relationship of employer and employee. Therefore, principle which governs the relationship between a private employer and its employee cannot be treated at par with the principle governing the relationship of the plaintiff and the respondent. It is pointed out , that the specific provisions contained in Regulation 20 of the Regulations have been violated. Therefore, the suit was maintainablein the civil court and the civil court had jurisdiction to grant relief of declaration. It is submitted that Regulation 20 (1) (d) of the Regulations referred to by the learned counsel for the appellants was not in existence when the cause of action, arose and besides this such a question was not raised at any earlier stage and therefore, it could not be raised for the first time during arguments.
8. In view of the arguments advanced by Sri G.N. Verma, learned senior counsel another substantial question of law that arises for determination is whether the facts alleged by the plaintiff-respondent make out a case of coercion or not. Therefore, following substantial question of law No. 4 is framed.
(4) Whether the facts alleged and established by the evidence on record make out a case of coercion or not?
The Decision on point No. 4 :
9. Sri G.N. Verma, learnedcounsel appearing for the appellants by referring to the material allegations in the plaint and evidence on record has vehemently argued that the facts alleged do not make out a case of coercion. His submission is that surrounding the plaintiff in the office of the General Manager at New Delhi and threatening him to hand over him to the C.B.I, on false ground of committing fraud in the bank services, does not amount to an act of commission of coercion. Sri Shashi Nandan, learned counsel appearing for the respondents, however. submits that such a plea was not raised at any earlier stage and in any case the facts alleged have been established which have not been controverted by leading evidence or by cross-examining the plaintiff and both the Courts below have categorically held that the alleged facts stand proved which clearly make out an act of coercion. So far as the submission of Sri Shashi Nandan that such a plea was never taken at any earlier stage is concerned, that is a legal question and can be raised at any stage and even at the time of the hearing of the Second Appeal.
10. Coercion is defined under Section 15 of the Indian Contract Act which reads as follows :
'15. 'Coercion' defined.--'Coercion' is the committing, or the threatening to commit, any act forbidden by the Indian Penal Code, or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.
Explanation.--It is immaterial whether the Indian Penal Code is or is not in-force in the place where the coercion is employed.'
Coercion as defined above under Section 15 of the Indian Contract Act thus means (a) committing or threatening to commit any act forbidden by the Indian Penal Code or (b) the unlawful detaining or threatening to detain any property to the prejudice of any person whatever, with intention of causing any person to enter into an agreement.
11. Admittedly in the present case there was no allegation of the unlawful detaining or threatening to detain any property to the prejudice of the plaintiff. The submission of Sri Verma is that the facts alleged also do not amount to committing or threatening to commit any act forbidden by the Indian Penal Code.
12. The material allegations in this regard are contained in paragraphs 21 to 26 of the plaint the substance of which is that plaintiff Joined the Head Office at New Delhi he was summoned soon thereafter i.e., at 4.45 p.m. in the cabin of the General Manager Sri Surendra Mohan who has appeared as D.W. 2. The General Manager asked the plaintiff to submit his resignation and threatened him for dire consequences on failure to submit the resignation by handing over him to the C.B.I. on false ground of committing fraud in the bank services. Further allegations are that about 4 other persons unknown to the plaintiff were also present in the cabin of the General Manager. They created 'gherao' of the plaintiff from all sides and compelledhim by manhandling to write the resignation letter from the services of the bank then and there. It is also stated that the plaintiff at that time had told that he did not want to resign from the service as he had no other source of income but he was compelled to write resignation letter. There is no dispute that the Courts below on the evidence adduced by the parties have concurrently held that the resignation letter which was dictated by the General Manager, was tendered by the plaintiff-respondent in the aforesaid circumstances. Such a finding of fact was arrived at by the trial court on the basis that these facts were categorically stated by the plaintiff in his deposition and he was not cross-examined in this regard and his testimony on this point was unchallenged. Sri Surendra Mohan the General Manager had appeared as D.W. 2 and in his deposition he did not refute the facts stated in the plaint and stated by the plaintiff on oath. At the relevant time he was General Manager of defendant-bank in New Delhi Branch. The question, therefore, arises whether the aforesaid act or the allegations against the General Manager of the defendants-appellants amount to coercion or not. As argued by Sri G.N. Verma it will have to be seen whether the acts alleged were forbidden by the Indian Penal Code so as to bring them within the definition of 'coercion'. Sri Shashi Nandan, learned counsel appearing for the respondent has suggested that the acts alleged amount to criminal intimation as defined in Section 503 of the Indian Penal Code and such an act is forbidden under Section 506 of the Indian Penal Code.
13. Criminal intimidation has been defined under Section 503 of the Indian Penal Code which reads as follows :
'503. Criminal Intimidation.--Whoever threatens another with any injury to his person, reputation or property, or to the person or reputation of any one in whom that person is interested, with intent to cause alarm to that person, or to causethat person to do any act which he is not legally bound to do, or to omit to do any act which that person is legally entitled to do, as the means of avoiding the execution of such threat, commits criminal intimidation.
Explanation.--A threat to injure the reputation of any deceased person in whom the person threatened is interested, is within this section.'
14. Reading of the definition of Criminal intimidation as reproduced above would indicate that there must be an act of threatening to another person, such a threatening should be of causing an injury to the person, reputation, or property of the person threatened or of the person in whom the threatened person is interested, the threatening must be with intent to cause alarm to the person threatened or it must be to do any act which he is not legally bound to do or omit to do an act which he is legally entitled to do. In the instant case there is specific allegation that the plaintiff was 'gheraoed' and manhandled and he was forced to tender the resignation letter as dictated by the General Manager of the defendants-appellants bank. It has been clearly stated that the plaintiff did not intend to submit or tender his resignation. The plaintiff was further threatened that in case he did not tender the resignation he will be handed over to the C.B.I. on false allegations of committing fraud relating to the affairs of the Bank. The allegations clearly show that the plaintiff was compelled to sign and tender the resignation by manhandling him. This allegation certainly amounted to a threat of injury to the person of the plaintiff in case he did not tender the resignation. There is no case of the defendants-appellants that the plaintiff was legally bound to tender resignation. Even though they have pleaded that the resignation was tendered by the plaintiff of his own free will and without any threats to his person but the plaintiffs evidence goes unchallenged. It has been found as a fact by the Courts below that the resignation was obtained by theplaintiff under threat of injury to his person and injury to his reputation by handing him over to C.B.I. on a false charge of committing fraud which he would not have otherwise tendered. Therefore, the plaintiff was forced to do an act, viz., to tender the resignation which he was not legally bound to do. The offence of criminal intimidation is punishable under Section 506 of the Indian Penal Code which provides that 'whoever commits the offence of criminal intimidation shall be punished with imprisonment of either description for a term which may extend to two years, or with fine or with both ; and in case threat, be to cause death or grievous hurt, or to cause the destruction of any property by fire or to cause an offence punishable with death or imprisonment for life or with imprisonment for a term which may extend to seven years as provided in second part of the section the sentence may extend to seven years or with fine or with both.' Therefore, act of criminal intimidation is an act prohibited by the Indian Penal Code.
15. Besides this Section 383 of the Indian Penal Code defines extortion which provides that 'whoever intentionally puts any person in fear of any injury to that person, or to any other, and thereby dishonestly induces the person so put in fear to deliver to any person and property or valuable security, or anything signed or sealed which may be converted into a valuable security, commits 'extortion'. Section 384 of the Indian Penal Code provides for punishment of extortion. Thus, an act of extortion is prohibited by Section 384 of the I.P.C. The ingredients of offence of extortion are that--(a) intentionally putting any person in fear of any injury to that person or to any other ; (b) thereby dishonestly inducing the person by putting in fear to deliver to any person, any property or valuable security or anything signed or sealed which may be converted into a valuable security. Here as already pointed out above the allegations are that by putting the plaintiff in fear of injury to his person and by manhandling him he was forced to sign the resignation letter.The resignation letter amounted to a valuable security as defined under Section 30 of the Indian Penal Code. It was a document which extinguishes the legal right of the plaintiff to hold office as servant of the appellants-bank and to draw salary and other benefits of service. Section 30 of the Indian Penal Code provides that the words 'valuable security' denote a document which is, or purports to be, a document whereby any legal right is created, extended, transferred, restricted, extinguished or released, or whereby any person acknowledges that he lies under legal liability, or has not a certain legal right.' Thus, a resignation letter which extinguishes the legal right of the person to hold an office and draw salary and benefits of service which he was legally entitled to hold amounts to valuable security as defined under Section 30 of the Indian Penal Code. To be forbidden by the Indian Penal Code an act of delivery of any valuable security must be with dishonest intention. Under Section 24 of the Indian Penal Code the expression 'dishonestly' [as used in Section 383 of the I.P.C.) means anything done with an intention of causing wrongful gain to one person or wrongful loss to another person. The expression 'wrongful loss' is defined under Section 23 of the Indian Penal Code which means the loss by unlawful means of property to which the person losing it is legally entitled. The term 'property' has not been defined in the Indian Penal Code. It however, includes a right to draw salary and other service benefits by holding office to which a person is entitled.
16. Therefore, when a person is put in fear of any injury to his person and thereby he is dishonestly induced or forced to deliver or tender the resignation letter which is a 'valuable security' shall be deemed to have committed an offence of extortion. Such an act is punishable under Section 384 of the Indian Penal Code and, therefore. It is prohibited by the Indian Penal Code. In my considered opinion, therefore, acts alleged by the plaintiff in the plaint and as found to have been established by theevidence on record, amount to an act of coercion and it is concluded that the resignation of the plaintiff-respondent was obtained by the General Manager of the appellants-bank by using of coercion.
Findings on question Nos. 1 and 2 :
17. First question that arises for determination is whether the appellants-bank is a statutory body or not. Such a question does not appear to have been raised before the trial court. The only question raised was that the suit was barred by the provisions of the Specific Relief Act as the plaintiff was trying to enforce the contract of personal service which was not permissible under the law. The trial court had also not framed a specific issue on the question whether the appellants-bank was statutory body. Such a question also does not appear to have been raised during the arguments before the trial court and was not decided by the trial court. The appellate court, however, has dealt with such a question while discussing point No. 4 raised at the time of hearing of the appeal which was to the effect that whether the relationship between the plaintiff and the defendants are based upon private contract and such suit was not maintainable. While considering the question the appellate court has held that the defendants-bank is a scheduled bank which was nationalised under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 and the contract of service which prior to such nationalisation was based upon the private contract was converted to statutory relationship of master and servant since by the Banking Companies Act, 1980 the defendant was declared to be a Nationalised bank and was thus a statutory body.
18. It is not in dispute that the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, was enforced w.e.f. 11.7,80. Chapter II of the said Act provides for transfer of undertakings of the existing banks as defined under Section 2(d) of the Act. Section 3 of the said Act provides for establishment of corresponding of new banks and business thereof.Section 3 of the said Act thus createdcorresponding new banks and thedefendants-appellants' bank was oneof such newly established bankscreated by statute and was thus astatutory body. The distinctionbetween a statutory body and a bodyor institution governed by certainstatutory provisions for propermaintenance and administration ofthe Institution was drawn by theHon'ble Supreme Court in the case ofExecutive Committee of Vaish DegreeCollege. Shamli and others v. LakshmiNarain and others, AIR 1976 SC 888.The facts in the said case were thatthe appellants were the ExecutiveCommittee of Vaish Degree Collegeregistered under the Registration ofCooperative Societies Act as anInstitution for imparting education.The affairs of the college weremanaged by the Executive Committee. In the year 1967 the Vaish DegreeCollege was affiliated to the AgraUniversity and consequently theCollege agreed to be governed by theprovisions of the Agra University andthe statutes and Ordinances madethereunder. With the establishment ofthe Meerut University some time inthe year 1965 the Vaish DegreeCollege got affiliated to the MeerutUniversity. Two years later it appearsthat differences arose between theExecutive Committee of the Collegeand the plaintiff/respondent. OnMarch 12, 1967 the ExecutiveCommittee by a resolution terminatedthe services of theplaintiff/respondent w.e.f. 24thOctober, 1966 which wassubsequently amended by anotherresolution dated 29th March. 1967.Before the resolution terminating theservices of the plain tiff-respondentwas passed the plaintiff had filed asuit in October, 1966 praying for aninjunction restraining the defendantsfrom interfering with his duties asPrincipal of the College. However,after the resolution of the ExecutiveCommittee was passed terminatingthe services of the plaintiff he was notallowed to work as Principal of theCollege up to the date of the disposalof the appeal by the Supreme Court.The defence taken by the ExecutiveCommittee was that it was not astatutory body and, therefore, was not bound by the statutes and the provisions of the Universities Act although as a matter of convention it had agreed to follow the same. When the matter went up before the High Court the question that came up for decision before the Full Bench of this Court was 'can the civil court grant the relief of injunction in view of the facts and circumstances of the present case. The full Bench had decided that the defendant-appellant being statutory body was bound by the provisions of the University Acts and statutes made thereunder and, therefore, the termination of the services of the plaintiff-respondent without obtaining the sanction of the vice-chancellor was illegal and invalid. The Court held that in the facts and circumstances of the case the plaintiff-respondent was entitled to injunction as prayed for. The first question that cropped up before the Supreme Court was whether in the circumstances the appellants Executive Committee can be said to be a statutory body. In para 9 of the judgment the Supreme Court held that 'it seems to us that before an institution can be a statutory body it must be created by or under the statute and owe its existence to a statute. This must be the primary thing which has got to be established. Here a distinction must be made between an institution which is not created by or under a statute but is governed by certain statutory provisions for the proper maintenance and administration of the institution. There have been a number of institutions which though not created by or under any statute have adopted certain statutory provision, but that by itself is not in our opinion, sufficient to clothe the institution with a statutory character.
19. The Court referring to the case of Sukhdeo Singh v. Bhagatram Sardar Singh Raghuvanshi, AIR 1975 SC 1331, has held that 'there is a well marked distinction between a body which is created by the statute and a body which after having come into existence is governed in accordance with the provisions of the statute. In other words the position seems to bethat the institution concerned must owe its very existence to a statute which would be the fountainhead of its powers. The question in such cases to be asked is if there is no statute would the institution have any legal existence. If the answer is in the negative, then undoubtedly it is a statutory body, but if the institution has a separate existence of its own without any reference to the statute concerned but is merely governed by the statutory provisions it can not be said to be a statutory body.'
20. In the present case before this Court there is no dispute that prior to coming into force the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, the appellants-bank was a private Banking Company having its name as Oriental Bank of Commerce Limited and it was nationalised bank in view of the provisions contained in Section 3 of the said Act and was given a new name, viz., Oriental Bank of Commerce. Section 19(1) of the Act provides for making of regulations by the Board of Directors of a corresponding new bank after consultation with Reserve Bank of India and with previous sanction of the Central Government. Sub-section (2) of Section 19 provides that without prejudice to the generality of the foregoing power, the regulations may provide for (besides other matters described in other clauses of subsection (2) :
(c) Delegation of powers and functions of the Board of Directors of a corresponding new bank to the General Manager, Director, officer or other employee of that banks.
(f) The establishment andmaintenance ofsuperannuation, pension,provident fund or other fundsfor the benefits of officers orother employees of thecorresponding new bank orthe dependants of suchofficers or other employeesand granting ofsuperannuation allowances,amenities and pensionpayable out of such funds.
After coming into force of the Act, the defendant appellant bank Js now an undertaking of the Government of India.
21. In exercise of the powers conferred by Section 19 of the Act of 1980 statutory Rules have been framed which provide for the conditions of services of the officers of the appellants-bank. The Rules are Oriental Bank of Commerce (Officers') Service Regulations, 1980 (hereinafter called the regulations). The Rules have been framed in exercise of the powers conferred under Section 19 read with subsection (2) of Section 12 of the Banking Companies (Acquisition and Transfer of Undertakings) Act. 1980, by the Board of Directors of the Oriental Bank of Commerce in consultation with the Reserve Bank of India and with the previous sanction of the Central Government of India. Being statutory Rules these Rules have the force of law and govern the relationship of employer and the employee between the defendant-appellants and the plaintiff-respondent. Regulation 20 specifically provides for termination of services.
22. Prior to coming into force of Act No. 40 of 1980. Banking Companies (Acquisition and Transfer of Undertakings) Act, similar Act of 1970 was passed. By the said Act of 1970 14 existing banks were declared new banks and were taken over by the Central Government of India. The provisions of Act No. 1970 were in part materia the same as the provisions of Act No. 40 of 1980. The Punjab National Bank Ltd. was one of the banks taken over by the Central Government by the said Act No. 1970 and its corresponding new bank was the Punjab National Bank. In the case of Ashoka Marketing Ltd. and another v. Punjab National Bank and others, AIR 1991 SC 855, the question came up for consideration before Hon'ble Supreme Court was whether the nationalised bank, viz., the respondent Punjab National Bank was an instrumentality of statute. The Hon'ble Supreme Court held that 'keeping in view the provisions of Bank Nationalisation Act we are ofthe opinion that Nationalised Bank is a corporation established by a Central Act and it is owned and controlled by the Central Government'. In para 23 of the judgment referring to the decision of S. S. Dhanoa v. Municipal Corporation, Delhi, AIR 1981 SC 1395, the Court has held that 'this Court has considered the question whether the Cooperative Store Limited, a Cooperative Society registered under the Bombay Cooperative Societies Act. 1925, is a Corporation established by or under a Central. Provincial or State Act, for the purposes of clause 12 of Section 21 of the Indian Penal Code. This Court has observed that a corporation established by or under an Act of Legislature could only mean a body corporate which owes its existence and not merely its corporate status to the Act and a distinction has been drawn between the corporation established by or under an Act and a body incorporated under an Act. It has been held that the Cooperative Store Limited which is a society registered under the Bombay Cooperative Societies Act, 1925, is not a statutory body because it is not created by a statute and that it is a body created by an Act of a group of individuals in accordance with the provisions of a statute.' The Court observed in para 14 of the judgment that 'the Nationalised Banks have been established under the Banks Nationalisation Act, wherein the Nationalised Banks have been described as corresponding new bank'. In sub-section (1) of Section 3 of the Bank Nationalisation Act, it has been provided that on the commencement of the said Act, there shall be constituted such corresponding new banks as are specified in the First Schedule. In sub-section (2) of Section 3. It is laid down that the paid-up capital of every corresponding new bank constituted under sub-section (1) shall, until any provision is made in this behalf in any scheme made under Section 9, be equal to the paid up capital of the existing bank in relation to which it is the corresponding new bank. Subsection (3) of Section 3 provides thatthe entire capital of the new bank shall stand vested in, and allotted to the Central Government. Sub-section (4) of Section 3 lays down that every corresponding new bank shall be a body corporate with perpetual succession and a common seal with power, subject to the provisions of the said Act, to acquire, hold and dispose of property, and to contract, and may sue and be sued in its name. From the aforesaid provisions contained in Section 3 of the Banks Nationalisation Act it is evident that the nationalised banks have been established under the provisions of the said Act and the same are distinct Juristic persons with perpetual succession and the power to acquire, hold and dispose of property and, to contract and having the right to sue and be sued in their own name and further that the entire capital of the said banks is vested in the Central Government, meaning thereby, that the said banks are owned by the Central Government.' Thus, the Punjab National Bank taken over by the Central Government under Act No. V of 1970 was held to be an instrumentality of the statute and therefore, in the instant case where the defendant-appellant bank has been taken over and created by a Central Act, it has to be held to be an instrumentality of Statute having been created by an Act of Parliament.
23. In the case of Prathama Bank Head Office at Moradabad v. Vijay Kumar Goel and others, AIR 1989 SC 1977, the Supreme Court has held after consideration of the various provisions of the Act creating Regional Rural Banks Act, 1976, that 'An examination of the relevant circumstances in regard to the appellant bank in the light of this decision leads to the irresistible conclusion that it is an instrumentality of the Central Government. As has been stated earlier, the Bank was established under the provisions of the Regional Rural Banks Act. 1976. The preamble of the Act..... clearly indicates thatthe Regional Rural Banks are established to discharge the duties which are basically the responsibility of a welfare State. The Court held that'the provisions of the Act do not leave any room for doubt that the Regional Rural Banks are under deep and pervasive control of the Central Government and have been established as its instrumentality and are, therefore, 'State' within Article 12 of the Constitution.'
24. The next question arises for determination is whether the contract of employment can be enforced against the defendant-appellant and the relief of declaration that the plaintiff is continuing in service can be granted by the civil court.
25. Sri G.N. Verma, learned senior counsel appearing for the appellants-bank has strenuously argued that such a relief cannot be granted in view of the specific provisions contained in Section 14(1)(a) and (b) of the Specific Relief Act. His submission is that the contract of personal service can not be enforced by the civil court. In the alternative his submission is that no breach of statutory duly/obligation was pleaded by the plaintiff nor a finding was given by the Court below with regard to breach of any statutory duty/obligation. Therefore, the relief could not have been granted by the Courts below. He has also referred to the provisions contained in Regulation 20 of the Regulations referred to above. Sri Shashi Nandan, learned counsel appearing for the respondent, however, submits that Regulation 20 provides specific procedure for termination of services of the officer of the Bank which has not been followed in the instant case and thus there was violation of the statutory duty and therefore, the suit for declaration was maintainable and the civil court had jurisdiction to pass the decree for declaration. It is further submitted that there are specific allegations that the resignation was obtained by coercion which is not permissible under Regulation 20 of the Regulations. It is next submitted that the plaintiff had pleaded that the resignation was obtained by coercion and the Courts below had found that the plaintiff on the basis of the evidence adduced on record was successful in establishingsuch plea. It is submitted that therefore it can not be successfully argued that no plea of breach of statutory obligation was taken or that the Courts below have not given any finding with regard to such plea.
26. Section 14(1)(a) and (b) of the Specific Relief Act reads asfollows :
'14. Contracts not specifically enforceable.--(1) The following contracts cannot be specifically enforced, namely-
(a) a contract for the non-performance of which compensation in money is an adequate relief;
(b) a contract the performance of which involves the performance of a continuous duty which the Court can not supervise.
Perusal of the aforesaid provisions would show that the contract of personal service can ordinarily be specifically enforced and a Court normally would not give a declaration that the contract subsists and the employee even after having been removed from service cannot be deemed to be in service against the will and consent of the employer. As held by Hon'ble Supreme Court in case of Executive Committee of Vaish Degree College (Supra). AIR 1076 SC 888 that 'this Rule as enshrined in Section 14 of the Specific Relief Act is subject to three well recognised exceptions--(i) where a public servant is sought to be removed from service in contravention of provisions of Article 311 of the Constitution of India : (ii) where a worker is sought to be reinstated on being dismissed under the Industrial Law and (iii) where a statutory body acts in breach or violation of the mandatory provisions of the statute. It was held by the Court that the relief of declaration and injunction under the provisions of the Specific Relief Act is purely discretionary and the plaintiff cannot claim it as of right. The relief has to be granted by the Court according to sound legal principles and ex debito Justitiae. The Court has to administer justice between theparties and cannot convert itself into an instrument of injustice or an engine of oppression. In these circumstances, while exercising its discretionary power the Court must keep in mind the well-settled principle of justice and fair play and should exercise the discretion only if the ends of justice require it for justice is not an object which can be administered in vaccum.'
27. On the facts of that case the Court has held that the Executive Committee was not a creation of statute. The Vaish Degree College had opted to be governed by the Act and the Rules framed thereunder by the Meerut University. It was thus not an instrumentality of the Act. In these circumstances the Court has held that when the Executive Committee of a College registered under Registration of Cooperative Societies Act and affiliated to a University is not a statutory body and without the approval of the Vice-Chancellor as required by Section 25C (2) of the Agra University Act the services of the plaintiff as Principal of the College are terminated on ground of his habitually and perpetually remaining absent from his duties without permission, such a case does not fall within any of the aforesaid exceptions to the rule of non-enforceability of contract of service and hence, prima facie the plaintiff is not entitled to any declaration or injunction. The Court has further held that in view of the special and peculiar circumstances of the case, it was held not to be a proper exercise of discretion to grant a decree for declaration and injunction in favour of the plaintiff. Sri Verma has placed reliance upon this decision as well as upon some other decisions that the contract of personal service cannot be enforced by the civil court.
28. The other decisions relied upon by Sri Verma are : Afsar Shaikh and another v. Solaman Bibi and others, AIR 1976 SC 163 ; ; Nandganj Sihori Sugar Co, Ltd. Rae Bareli and another v. Badri Nath Dixit and others. AIR 1991 SC 1525 : Indian Airlines Corporation v. Sukhdeo Rai. AIR 1971 SC 1828 and Punjab NationalBank v. P.K. Mittal, AIR 1989 SC 1083.
29. There is no dispute that in all these decisions it has been held by the Supreme Court that termination or dismissal of what is described as a pure contract of master and servant is not declared to be a nullity however, wrongful or illegal it may be. The reason is that dismissal in breach of contract is remedied by damages. However, on facts the decisions in these cases are not applicable to the facts of the present case. It may be pointed out here that well-settled principle of law is that the relationship of master and servant may be broadly categorised in three heads. In Sirsi Municipality v. C.K.F. Tellis, AIR 1973 SC 855, the Supreme Court held that 'the first head relates to relationship of master and servant governed purely by contract of employment. Any breach of contract in such a case is enforced by a suit for wrongful dismissal and damages. Just as a contract of employment is not capable of specific performance similarly breach of contract of employment is not capable of finding a declaratory judgment of subsistence of employment. A declaration of unlawful termination and restoration to service in such a case of contract of employment would be indirectly an instance of specific performance of contract for personal services. Such a declaration is not permissible under the law of Specific Relief Act. The second type of cases of master and servant arises under Industrial Law. Under that branch of law a servant who is wrongfully dismissed may be reinstated. This is a special provisions under the Industrial Law. This relief is a departure from the reliefs available under the Indian Contract Act and the Specific Relief Act which do not provide for reinstatement of a servant. The third category of cases of master and servant in the employment of the State or of other public or local authorities or bodies created under statute..... in the case of servantof the State or of local authorities or statutory bodies. Courts have declared in appropriate cases thedismissal to be invalid if the dismissal is contrary to rules of natural justice or if the dismissal is in violation of the provisions of the statutes. Apart from the intervention of statute there would not be a declaration of nullity in the case of termination or dismissal of a servant 'of the State or of other local authorities or statutory bodies.'
30. Similar view was taken by the Supreme Court in the case of Executive Committee of Vaish Degree College (supra). Para 17 of the judgment has already been quoted above which affirms the view taken by the Supreme Court in the case of Indian Airlines Corporation v. Sukhdeo Rai referred to above.
31. There cannot be a dispute that after taking over of the defendant-bank by the Central Government by enacting Act No. 40 of 1980, the defendant-bank has become a statutory body and therefore, general principle of master and servant's relationships as enshrined under the Indian Contract Act do not govern such relationship. They are governed by the statutory Rules framed under the provisions of a particular Act. So far as the cases relied upon by the learned counsel for the appellant are concerned, they are distinguishable on facts.
32. Afsar Shaikh's case. AIR 1976 SC 163 (supra) did not relate to master and servant relationship. That was a case in which the plaint case of the plaintiff was that he is an illiterate, simple villager, aged about 90 years. On April 2. 1957 one Saifuddin fraudulently got executed and registered a Will, dated April 2. 1957 by the plaintiff in favour of the former and his wife in respect of the suit lands. When this fraud was discovered by the plaintiff, he brought it to the notice of Afsar appellant a distant relation who was in his confidence and used to help him in cultivation of his lands. Afsar then with misrepresentation got executed and registered in his favour a Hiba-bil-Ewaz purporting to be a transfer of 12-1/2 bighas of lands by the plaintiff. The pure and simple case of the plaintiff was that of fraud andmisrepresentation on the part of Afsar. The trial court found that there was no fraud or misrepresentation on the part of Afsar and the donee was in possession of the gifted lands ever since the gift. The District Judge also dismissed the appeal on the same findings of the trial court. The High Court, however, remanded the matter to the lower appellate court. After remand the lower appellate Court again found that there was nothing to show that Afsar was in a position to dominate the will of the plaintiff or had got the Hiba-bil-Ewaz executed by exercising undue influence. Against this judgment of the lower appellate Court the plaintiff filed the Second Appeal which was allowed by the High Court holding that there was possibility of dominating the will of the plaintiff by defendant No. 1 and consequently the onus had shifted on the defendant to show that the plaintiff had access to independent advice. Since the defendant did not produce any evidence to show that he had refrained from dominating the will of the plaintiff in obtaining the Hiba-bil-Ewaz, 'the plaintiff should have been taken to have proved that the document was vitiated by undue influence of defendant No. 1.' The Supreme Court while deciding the appeal against the judgment of the High Court held that 'the High Court has tried in Second Appeal to make out a new case for the plaintiff on the ground of undue influence which was neither pleaded adequately in the plaint, nor put in issue.' The specific case set up in the plaint was that the Hiba-bil-Ewaz in question was vitiated by fraud and misrepresentation practised by Afsar defendant. It was in that context stated in a general way, that the plaintiff was a simple, illiterate man of 90 years, and had great confidence in Afsar, and 'the parties used to help each other in respective cultivation.' Apart from this general and fabulous allegation no particulars of a plea of undue influence were pleaded. Even the near relationship between the plaintiff and Afasar was not disclosed. It was not particularised how Afsar was in a position to dominate the will of the plaintiff in what manner he exercisedthat influence, how the influence, if any used by Afsar over him was 'undue' and how and in what circumstances the Hiba-bil-Ewaz was an 'unfair' or 'un-conscionable transaction.' The Supreme Court therefore, allowed the appeal by setting aside the judgment of the High Court and dismissed the suit of the plaintiff. This decision has thus no bearing on the facts of the present case or on the controversy in hands.
33. The second decision referred in Executive Committee Vaish Degree College, AIR 1976 SC-888 (supra) has already been discussed above and at the cost of repetition it may be stated that in that case the Court had found that the Executive Committee of the Vaish Degree College was not a statutory body and in these circumstances the Court had held that the relief of injunction or declaration cannot be granted and the personal contract of service cannot be enforced by the Civil Court.
34. The third decision in the case of Nandganj Sihori Sugar Co. Ltd., AIR 1991 SC 1525 (supra) is also not applicable to the facts of the present case. It is no doubt true that in para 10 of the judgment the Hon'ble Supreme Court held that 'the grant of specific performance is purely discretionary and must be refused when not warranted by the ends of justice...... in the absenceof any statutory requirement, Courts do not ordinarily force an employer to recruit or retain in service an employee not required by the employer. There are, of course, certain exceptions to this rule, such as in the case of a public servant dismissed from service in contravention of Article 311 of the Constitution ; reinstatement of a dismissed worker under the Industrial Law ; a statutory body acting in breach of statutory obligations, and the like,' On the facts of that case the Court had found that there was no concluded contract between the parties since the Chairman of the appellant sugar company had merely recommended for appointment of the plaintiff to a certain posts which could not have resulted in contractbetween the plaintiff on one side and the defendant on the other side. The Court had further found that there was no specific plea or evidence as regards the particulars of the alleged scheme of the Government of India in terms of which the plaintiff seeks relief, whether it is a statutory scheme, and if so what are the provisions relied on by the plaintiff, and whether a duty is cast on the defendants and a benefit conferred on persons like the plaintiff. It was in these circumstances, that the Supreme Court held that Courts do not ordinarily enforce performance of contracts of a personal character, such as contract of employment.
35. The decision in the case of Indian Airlines v. Sukhdeo Rat, AIR 1971 SC 1828 also does not help the appellants. That was a case in which the plaintiff was in the employment of the appellant before the Supreme Court. While he was in the employment of the appellant Indian Airlines Cooperation Act. XXVII of 1953 was passed and consequent thereupon the existing Airlines including the appellant were taken over by the Central Government. With the taking over of the appellant Company the plaintiff became the employee of the appellant Corporation. Section 8(1) of the Act provided that 'for purposes of discharging its functions under the Act each of the Corporations shall appoint a general manager and subject to such rules as may be prescribed in this behalf may also appoint such number of officers and employees as it may think necessary.' Sub-section (2) of Section 8 of the Act provided that 'subject to the provisions of Section 20, every person employed by each of the Corporations shall be subject to such conditions of service and shall be entitled to such remuneration and privileges as may be determined by regulations made by the Corporation by which he is employed.' Section 20 of the Act further provided that 'Every officer or other employee of an existing air company..... employedby that company prior to the first day of July, 1952, and still in its employment immediately before theappointed date shall become as from the appointed date an officer or other employee, as the case may be of the Corporation in which the undertaking has vested and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and conditions and with the same rights privileges as to pensions and gratuity and other matters as he would have held the same under the existing air company if its undertaking had not nested in the Corporation and shall continue to do so unless and until his employment in the Corporation is terminated or until his remuneration, terms or conditions are duly altered by the Corporation.'
36. In para 8 of the judgment, the Supreme Court has held that 'the effect of these provisions briefly, is (1) that Section 8 (1) authorises the Corporation to appoint officers and other employees, (2) that under Section 8 (2) the Corporation is empowered, subject to Section 20, to lay down the terms and conditions of service of such officers and employees as it may determine by regulations made under Section 45 (3) that by virtue of Section 20 the officers and employees of the existing air companies, whose undertakings were taken over by the Corporations, became, by the operation of the Act. the employees of the Corporation in whom a particular undertaking was vested. The section ensures that on their so becoming the employees of the Corporation they would the governed by the same terms and conditions of service by which they were governed immediately before the appointed date until the Corporation altered those terms and conditions by regulations.'
37. It was found as a fact that on the date of filing of the suit the relationship of employer and the employee between the plaintiff and the defendant continued to be governed by the Rules and Regulations existing prior to taking over of the company by the Corporation. It was also found as a fact that neither the Act nor the Rules made thereunder under Section 44 by the Central Government lay down anyobligation or restriction as to the power of the Corporation to terminate the employment of its employees or any procedural safeguards, subject to which such power could be exercised. It was in these circumstances the Supreme Court held that even though the plaintiff-appellant had become employee of the Corporation with the taking over of the existing company and such Corporation had become statutory body but since there was specific provision under Section 20 of the Act that the services of the existing employees of the Company who have become servant of the Corporation shall continue to be governed by the existing Rules and Regulations governing such relationship of master and servant relating to such company and that the Government has also not formed any regulation under Section 44 laying down obligation or restriction as to the power of the Corporation to terminate the employment of its employees or any procedural safeguards, the relationship between the plaintiff and the defendant-appellant shall continue to be governed by the general principle of the contract of service and the termination of service cannot be declared to be void in view of the provisions contained in the Specific Relief Act.
38. The decision in Punjab National Bank v. P.K. Mittal, AJR 1989 SC 1083 (supra) instead of helping the appellants helps the plaintiff-respondent. In that case plaintiff P.K. Mittal was a permanent officer of the Punjab National Bank. He sent a communication to the Bank by which he purported to have resigned from future date adding that the date of receipt of his letter should be treated as date of commencement of notice period. However, the Bank informed him by letter that his resignation was accepted with immediate effect by waiving condition of notice. The Supreme Court held that such letter would be without Jurisdiction. The resignation of the employee could have become effective only on the expiry of three months from date thereof or from the date on which he wished to resign.
39. Referring to clause (2) the Supreme Court held in para 5 of the judgment that 'clause (2) of Regulation 20 makes it incumbent on an officer of the bank before resigning to serve a notice in writing of such proposed resignation and the clause also makes it clear that the resignation will not be effective otherwise than on the expiry of three months from the service of such notice. There are two ways of interpreting this clause. One is that the resignation of an employee from service being a voluntary act on the part of an employee, he is entitled to choose the date with effect from which his resignation would be effective and give a notice to the employer accordingly. The only restriction is that the proposed date should not be less than three months from the date on which the notice is given of the proposed resignation. On this interpretation the letter dated 21st January. 1986 sent by the employee fully complied with the terms of this clause. Though the letter was written in January, 1986 the employee gave more than three clear months notice and stated that he wished to resign with effect from 30th of June, 1986 and so the resignation would have become effective only on that date. The other interpretation is that, when an employee gives a notice of resignation, it becomes effective on the expiry of three months from the date thereof. On this interpretation, the respondent's resignation would have taken effect on or about 21.4.86 even though he had mentioned a later date. In either view of the matter, the respondent's resignation did not become effective till 21.4.86 or 30.6.86.....
40. Much reliance was placed on the terms of the proviso to clause (2) of Regulation 20 to justify the action of the bank in terminating the respondent's services earlier but we do not think that the proviso can be interpreted in the manner suggested by learned counsel for the bank. The resignation letter of the officer has to give at least three months' advance notice under the main part of the clause. What the proviso contemplates is that in a case wherethe employee desires that his resignation should be effective even before the expiry of the period of three months or without notice being given by him, the bank may consider such a request and waive the period or requirement of notice if it considers it fit to do so. That question does not arise in the present case because the employee had not requested the bank to reduce the period of notice or to waive the requirement of notice. 'It may be observed here that the Rules governing the relationship of master and servant between the appellant and the plaintiff-respondent, i.e., Oriental Bank of Commerce (Officers') Service Regulations, 1982 are in pan materia the same as the Rules governing the relationship of master and servant between the Punjab National Bank and its officers. Regulation (2) of the said Rules reads as follows :
'(2) An officer shall not leave or discontinue his service in the bank without first giving a notice in writing of his intention of leave or discontinue the service or resign. The period of notice required shall be three months' and shall be submitted to the competent authority as prescribed in these Regulations.'
Provided that the competent authority may reduce the period of three months or remit the requirement of notice.'
41. Regulation 20 (2) of theRegulations as quoted above relates to voluntary and premature discontinuance of service of an employee of the bank by tendering his resignation. Learned counsel for the appellants has strenuously argued that the plaintiff did not commit any breach of statutory Rules which was violated by the bank-appellant in accepting the resignation tendered by the plain tiff-respondent. It is also argued that no finding was given by the Courts below regarding breach of any such statutory Rule. Learned counsel for the plaintiff-respondent, however, submits that it is true that it was not specifically stated that the aforesaid Regulation20 (2) of the Regulation was breached by the appellants-bank or the Regional Manager but at the same time in the plaint specific averments have been made relating to the manner in which the plaintiff was transferred from Ghaziabad to Delhi and further the manner in which his resignation was obtained and accepted by the Bank. This amounted to breach of Regulation 20 (2) of the Regulations. It is also submitted by Sri Shashi Nandan that the findings have been recorded by the trial court in this regard which have been affirmed by the lower appellate court. Such findings of fact have become final and cannot be interfered with in Second Appeal under Section 100 of the Code of Civil Procedure.
42. At the out set, it may be stated that the Regulation 20 (2) as quoted above relates to voluntary tendering of resignation by an employee of the Bank consciously and of his free will knowing and understanding the consequences of his tendering of the resignation. At the coat of repetition it may be pointed out that in the case of Punjab National Bank v. P.K. Mittal referred to above, the Hon'ble Supreme Court has held that the resignation of an employee from service being a voluntary act on the part of the employee, he is entitled to choose the date with effect from which his resignation would be effective. In the instant case, the findings of the trial court which have been affirmed by the lower appellate court are that the transfer of the plaintiff-respondent from Ghaziabad Branch of the defendant-bank to Delhi Branch was done in a preplanned way in order to obtain resignation of the plaintiff and thereby get rid of him. While deciding issue No. 8 the trial court had held that according to the plaint allegations 7 days' time is given between handing over and taking over of the charge. In support of this allegation the plaintiff had filed copy of the circular No. 911 dated 6.9.77 issued by the establishment which is Ex. 20. It was observed that in cities areas the time fixed is 8 days. It was alleged by the plaintiff that in all other cases such joining time wasstated in the letter of transfer. This requirement was not followed in the case of the plaintiff. Copy of his transfer letter is Ex. 18 and relieving letter is Ex. 19. It was also observed by the trial court in its judgment that P.W.1 Rakesh Malhotra has admitted in his deposition that when, an employee of the bank is transferred then the handing over and taking over of the charge are done in the proforma but in the case of the plaintiff no such proforma was got filled in by Sri Chopra and further that no time was given to him to hand over and take over of the charge. The trial court had held that thus the Rules and Regulations were violated.
43. On the question of resignation letter, the allegations in the plaint were that the transfer of the plaintiff was done from Ghaziabad to Delhi Branch in a preplanned way in order to relieve the plaintiff by obtaining the resignation letter in an illegal manner. In this regard, the trial court has observed that the plaintiff has stated in his deposition that he reached Delhi between 4.00 p. m. and 4.30 p. m. to give his joining report. At 4.45 p. m. he was called in the cabin of the General Manager and by show of force, he was told to tender his resignation. Four unknown persons had manhandled him by catching hold of his collar. His mental balance was disturbed and he was not in a position to decide whether to tender the resignation or not. The resignation letter was dictated by the General Manager at 4.40 p.m. and he was forced to sign the same. The trial court further observed that the plaintiff has not been cross-examined with regard to these specific allegations and therefore, it will be deemed that these facts were admitted to the defendant. The trial court referring to the various circumstances while deciding issue Nos. 9 and 10 held that the resignation of the plaintiff was obtained by coercion against his free will and forcibly. This finding of the trial court had been affirmed by the lower appellate court. This clearly shows that Regulation 20 (2) of the Regulations was violated. Thus there was pleading in the plaint relating tocircumstances and the manner in which the resignation letter was obtained and there was specific finding of the trial court which had been affirmed by the lower appellate court relating to the circumstances and the manner in which the plaintiff respondent was compelled to tender his resignation. A voluntary resignation is a resignation tendered by an employee of his free will consciously and knowing of consequences of tendering of such resignation. If a resignation is tendered in the circumstances created by the defendant, or its Officers and by show of force and coercion then such a resignation is voidable under the Indian Contract Act. The plaintiff had opted to withdraw such a resignation letter. The plaintiff has categorically stated that soon after tendering of the resignation, he had sent letters to the various authorities withdrawing his resignation letter. He has proved Exhibits 48. 49 and 50, copies of the letters dated 11.3.92 withdrawing the resignation letter and stating the circumstances in which he was forced to tender the resignation. It was specifically stated in these letters that the plaintiff did not want to resign from the service of the bank since he had no source of income and had a family to support. In Ex. 49 he had specifically requested the General Manager of the Bank to inform him when he should join the bank. Though the defendant has not admitted these papers but the plaintiff has filed postal receipts Exhibits 34. 35 and 36. The findings of fact arrived at by the Courts below are not shown to be perverse.
44. As already pointed out above. Regulation 20 (2) of the Regulations relates to voluntary tendering of the resignation by an employee of his free will and without any coercion, fraud or misrepresentation. In the instant case, there are clear allegations that the resignation was obtained in a preplanned manner by coercion. The Courts below have found in favour of the plaintiff-respondent in this regard and had categorically held that procedures provided for in the regulation coupled with various circulars issued by the bank forenforcing such regulation were not followed or adhered to by the appellants-bank in transferring the plaintiff from Ghaziabad to Delhi Branch and in accepting the resignation. Thus, there was a clear violation of the provisions contained in Regulation 20 (2) of the statutory Regulations of 1982. The original resignation letter and the relevant record relating to the manner in which the resignation letter of the plaintiff was dealt with by the officers of the bank have not been produced before the Court. Even though, the resignation letter copy of which has been produced by the plaintiff shows that a request for relieving the plaintiff immediately was made but it is not shown that the mandatory requirement of the Regulation 20 (2) of the Regulations was waived by the bank authorities. Thus, in my opinion, there is no force in the argument of Sri G.N. Verma, learned counsel for appellants-bank that there was no averment in the plaint with regard to non-observance of breach of statutory rules and that there is no finding of the Courts below in this regard.
45. Sri G.N. Verma has also argued that there was a provision in the Regulations providing for an appeal against termination of service. Sri Verma has produced extract of copy of the Regulation as amended upto 31.12.96. Regulation 20 (1) (d) of the Regulations provided that 'the officer employee shall be entitled to appeal against any order passed under sub-regulation (a) above by preferring an appeal within 15 days to the Board of Directors of the Bank. If the appeal is allowed the order under sub-regulation (a) shall stand cancelled.' It is submitted that since no appeal was filed by the plaintiff-respondent, the Court should not have entertained the suit. Sri Shashi Nandan, learned counsel for the plaintiff-respondent has, however, submitted that when the suit was filed and when the cause of action arose to the plaintiff, this amended Regulation 20 was not enforced. Regulation 20 (1) as it stood prior to the Amendment according to Sri Shashi Nandan was as follows :
'20. Termination of service :
(1) Subject to sub-regulation (3) of Regulation 16, the Bank may terminate the services of any officer by giving him three months' notice in writing or paying three months' emoluments in lieu thereof.'
Regulation 20 (1) as it stood after amendment reads as follows.
Termination of service :
1. (1) (a) Subject to sub-regulation3 of Regulation 16, where the Bank is satisfied thatthe performance of anofficer is unsatisfactoryor inadequate or there isa bona fide suspicionabout integrity or hisretention in bank'sservices would beprejudicial to theinterests of the Bank,and where it is notpossible or expedient toproceed against him asper the disciplinaryprocedure, the Bank mayterminate his services ongiving him three monthsnotice or emoluments inlieu thereof inaccordance with theguidelines issued by theGovernment from time totime.
(b) Order of termination under this sub-regulation shall not be made unless such officer has been given a reasonable opportunity of making a representation to the Bank against the proposed order.
(c) The decision to terminate the services of an officer employee under sub-regulation (a) above will be taken only by the Chairman and Managing Director.
(d) The officer employee shall be entitled to appeal against any orderpassed under sub-regulation (a) above by preferring an appeal ; within 15 days to the Board of Directors of the Bank. If the appeal is allowed the order under. sub-regulation (a) shall stand cancelled.
(e) Where an officer employee whose services have been terminated and who has been paid an amount of three months' emoluments in lieu of notice and on appeal his termination is cancelled, the amount paid to him in lieu of notice shall be adjusted against the salary that he would have earned had his services not been terminated and he shall continue in the bank's employment on same terms and conditions as if the order of termination had not been passed at all.
(f) An officer employee whose services are terminated under sub-regulation (a) above shall he paid gratuity, Provident Fund including employer's contribution and all other dues that may be admissible to him as per rules notwithstanding the years of service rendered.
(g) Nothing contained herein above will affect the Bank's right to retire an officer employee underRegulation 19 (1).
46. Sri Verma has not shown that at the time when the suit was filed by the plaintiff or when the cause of action arose to him, Amended Rule had come in force. Besides this there is another aspect of the matter. The objection about the maintainability of the suit on the ground that the plaintiff-respondent had a right to file an appeal against the order oftermination of his services was not taken at any stage either before the trial court or before the lower appellate court or even before this Court in the memo of appeal. It was raised for the first time during arguments. The defendants-appellants had submitted to the jurisdiction of the civil, court by waiving such objection that the plaintiff had a right to prefer an appeal. Besides this it may be further pointed out that Regulation 20 (1) (d) of the Regulations as reproduced above provides for an appeal against the order passed under sub-regulation (1). Sub-regulation (1) which has been reproduced above provides for termination of service of an employee where the Bank is satisfied that the performance of an officer is unsatisfactory or inadequate or there is bona fide suspicion about his intergrity or his retention in the Bank's service would be prejudicial to the interest of the Bank, and where it is not possible or expedient to proceed against him as per the disciplinary procedure. In that case the Bank may terminate his services on giving him three months' notice or emoluments in lieu thereof. Sub-regulation (d) of Regulation 20 (1) is not applicable to the cases of discontinuance of the services where there are allegations that the resignation was obtained by coercion or by playing fraud and on misrepresentation. Therefore, the arguments advanced by Sri Verma cannot be accepted.
47. Point Nos. 1 and 2 are therefore, decided accordingly. The Decision on Point No. 3.
48. Relief No. (b) sought by the plaintiff has been quoted earlier. The plaintiff had sought a relief for payment of arrears of salary, etc. through a decree of mandatory injunction. No such plea as now argued was taken by the appellants in their written statement with regard to the relief being claimed by the plaintiff. In the preliminary objection the only plea, was taken that the suit was barred by the provisions of specific Relief Act as the plaintiff is trying to enforce the contract ofpersonal service which is not permissible in law. In para 37 of the written statement only this much was stated that the plaintiff is not entitled to any relief as prayed for in this paragraph. No objection appears to have been taken by the defendants-appellants to the effect that the relief of directing the defendants to pay benefits on account of continuance of service of the plaintiff by declaration that the resignation letter obtained from his was voidable cannot be granted by the Court. The trial court also did not frame any specific issue in this regard. With regard to the relief clause only issue. No. 12 was framed which is to the effect to what relief, if any, is the plaintiff entitled. The trial Court on consideration of the material, however, passed the decree for issue of mandatory injunction directing the defendants-appellants to pay arrears of salary and other emoluments, encashment of E.L. of 274 days by depositing the same within 2 months in the Current Account No. 49 of the plaintiff in Lohiyanagar Branch of the Bank. Further mandatory injunction granted by the trial court was that the plaintiff shall also be paid salary up to the date of retirement including other benefits to which he is entitled according to the Rules and Regulations of the Bank. The objection with regard to the said relief also does not appear to have been raised specifically before the lower appellate court. However, since the said question is a legal question, it can be raised in Second Appeal.
49. Sri Verma, learned senior counsel appearing for the defendants-appellants has half-heartedly argued that such a relief cannot be granted by the Court. Sri Shashi Nandan has, however, argued that there is no reason why such a relief cannot be granted. He submits that there are constant decisions of the Apex Court holding that such a relief can be granted by the civil court while passing a decree of declaration that the termination of services was null and void or that the resignation letter tendered by the plaintiff was a voidable document.
50. Shri Verma is unable to point out as to why such relief cannot be granted along with the relief (a) as framed by the plaintiff. There are catena of pronouncements of the Apex Court holding that when services of an employee are illegally terminated, an employee is legally entitled in law to challenge the order of termination or removal from service and is further entitled to other consequential benefits. Some of the cases which may be referred in this regard are Central Inland Water Transport Corporation v. Brojo Nath, AIR 1986 SC 1571 and the Managing Director, 17. P. Warehouse Corporation and others v. Vijay Narain Bajapi. AIR 1980 SC 840.
51. In the case of Central Inland Water Transport Corporation Ltd. and another v. Brojo Nath Ganguly and another, AIR 1986 SC 1571, the Court dealt with the Central Inland Water Transport Corporation Ltd. Services Discipline and Appeal Rules of 1979 framed by the Corporation. Rule 9 of the said Rules relating to termination of employment was as follows :
'9. Termination ofEmployment for Act other thanMisdemeanour.
(i) The employment of a permanent employee shall be subject to termination on three months' notice on either side. The notice shall be in writing on either side. The Company may pay the equivalent of three months basic pay and dearness allowance, if any, in lieu of notice or may deduct a like amount when the employee has failed to give due notice.
(ii) The services of a permanent employee can be terminated on the grounds of 'Services no longer required in the interest of Company.' without assigning any reason. A permanent employee whose services are terminated under this clause shall be paid 15 days' basic pay andclearness allowance for each completed year of continuous service in the Company as compensation In addition he will be entitled to encashment of leave at his credit.'
52. In that case the Court had found that the Central Inland Water Transport Corporation Limited was 'State' within the meaning of Article 12 of the Constitution of India and the rules framed with regard to relationship between the employer and the employee were statutory rules. The Calcutta High Court had taken a view that clause (1) of Rule 9 in its entirety was ultra vires under Article 12 of the Constitution of India and had struck it down being void. The Supreme Court has held that the Calcutta High Court overlooked that Rule 9 also confers upon a permanent employee the right to resign from the service of the Corporation. The Supreme Court modified the order passed by the Calcutta High Court by holding that clause (i) of Rule 9 of the Service Discipline and Appeal Rules 1979 of the Central Inland Water Transport Corporation Limited is void under Section 23 of the Contract Act. 1872, as being opposed to public policy and is also ultra vires Article 14 of the Constitution to the extent that it confers upon the Corporation the right to terminate the employment of a permanent employee by giving him three months' notice in writing or by paying him the equivalent of three months' notice basic pay and dearness allowance in lieu of such notice. While passing the above order the Supreme Court has also directed the appellants to pay to the respondents in each of the appeals within six weeks from the date of the judgment all arrears of salary and allowances payable to them, if any, which still remain unpaid. Such an order was passed by the Supreme Court in view of the fact that at the stage of passing interim orders in the petition for Special Leave to Appeal the Corporation had undertaken to pay the respondents all arrears of salary and had also undertaken to pay thereafter their salary from month to month before the tenth dayof each succeeding month until disposal of the said petitions.
53. In another case of the Managing Director. V.P. Warehousing Corporation and others v. Vijay Narain Vajpayee, AIR 1980 SC 840, the Court has held that 'even if at the time of the dismissal the statutory regulations, had not been framed or had not come into force, then also, the employment of the respondent was public employment and the statutory body, the employer could not terminate the services of its employee without due enquiry in accordance with the statutory Regulations, if any in force or in the absence of such Regulations, in accordance with the rules of natural justice. In that case, the Court has held that 'further more whether a workman or employee of a statutory body should be reinstated in public employment with or without full back wages is a question of fact depending on evidence to be produced before the Tribunal. If after the termination of his employment the workman/ employee was gainfully employed elsewhere, that is one of the important factors to be considered in determining whether or not the reinstatement should be with full back wage and with continuity of employment. For the aforesaid reasons we are of the opinion that the High Court was in error in directing payment to the employee full wages. The Court was of the view that in case where the services of an employee of the State or a statutory body is terminated illegally the employee is entitled at the time of reinstatement to full back wages subject to the condition that in case he was gainfully employed elsewhere and such a factor has to be considered. In the instant case no evidence was adduced before the trial court nor any argument was advanced before this Court pointing out that there any materials showing that during the period the plain tiff-respondent was out of employment due to illegal discontinuance of his service he was gainfully employed somewhere else. Therefore, in the opinion of this Court a decree for back wages with all service benefits could be granted bythe Court. At this stage it may be pointed out that he trial court had also granted the decree for encashment of 274 days earned leave without considering that such encashment can be granted only at the time of retirement of an employee. In case during the pendency of the suit or appeal arising out of it, the plain tiff-respondent has not retired, such relief could not be granted to him.
54. In view of the foregoing discussions, the appeal is dismissed with following modification in the decree passed by the trial court and as modified by lower appellate court that the decree with regard to payment of 274 days leave encashment benefits shall be available to the plaintiff only in case he has retired from the service during the pendency of the suit or the subsequent appeals. In case he has not yet superannuated, then such relief shall not be available to him because he will be entitled to encashment of the leave only on retirement.
55. The plaintiff-respondent shall be entitled to costs of this appeal.