1. The plaintiff in O.S. No. 80 of 1970 on the file of the Sub-Court, Chingleput, is the appellant. The suit was filed for recovery of a sum of Rs. 28,676.01 made up of a sum of Rs. 21,507.01, being the amount payable by the defendant on account of the money spent by the plaintiff on his foreign training and Rs. 7,169 being the liquidated damages payable as per the contract of service, Exhibit A-4 between the parties.
2. The case of the plaintiff was this: The defendant was employed under the plaintiff as Formulator from about September, 1965. He was subsequently deputed to take training in England on the plaintiff providing funds for the purpose. After completion of his training and return to India, he was to serve the plaintiff for the stipulated period in consideration of the plaintiff having sponsored and provided for his stay and training in England. An agreement, Exhibit A-4, dated 7th October, 1969, was entered into between the parties embodying the terms and conditions of service. According to the agreement, the defendant shall remain in the service of the plaintiff from 15th October, 1968 till 14th October, 1972 in consideration of the plaintiff having sponsored and provided him training in England. In case the defendant were to leave the services of the plaintiff before the completion of the minimum period of service mentioned in the agreement or brings about a situation by misconduct or in any manner except for reasons beyond his control compelling the plaintiff to terminate his services, the defendant has to refund all the amounts spent by the plaintiff in connection with his training abroad. Further, the defendant shall be liable to pay to the plaintiff as liquidated damages a sum equivalent to l/3rd of the total amount incurred by the Company on his training and becoming refundable as provided in the agreement. If the defendant leaves the services of the company after completing one year of service under the agreement, he shall be liable to refund only such proportion of the several amounts and the liquidated damages stipulated in the agreement as the service remaining to be rendered by him bears to the total service from the date of his reporting after training till 31st December, 1972. For this purpose, service remaining to be rendered under the service contract will be rounded off into full years less than six months being ignored and six months or more being treated as full year. If the defendant fails to pay the said amount, the Company would be entitled to recover the same from him and also have the right to withhold all his dues and adjust the same against the amount payable to him in accordance with the provisions in the agreement. The defendant is bound to diligently and faithfully and to the best of his skill and ability serve the plaintiff and perform all the duties pertaining to his job and devote the whole of his attention and energy to his duty and shall and will do all such things as may from time to time and at any time during such term be reasonably required of him by the plaintiff or any other person or persons employed by the plaintiff and having the authority to require the same to be performed by the defendant. Notwithstanding anything contained in the agreement, the plaintiff shall be at liberty to terminate the engagement of the defendant forthwith in any of the following events, namely: (1) if the defendant failed, refused or neglected to carry out and perform his duties and undertakings; (2) if the defendant was guilty of any fraud, insubordination or misconduct in the course of performance of his duties; (3) if the defendant commits any act which is prejudicial to the continued relationship between the plaintiff and the defendant; and (4) if the defendant commits breach of any of the terms of the service contract. In any such event, the employment of the defendant shall absolutely cease and determine upon delivery of a notice of termination to him either personally or by sending the same by registered post and he shall become liable to refund the training expenses and to pay liquidated damages to the Company in the same manner as provided for in the agreement. The defendant who later became Development Officer-in-charge was attending to his duties as contemplated in the agreement till about March, 1.969 and he thereafter absented himself on several occasions without leave or prior permission from his superiors and there was also a definite attitude of indifference to his duties, and in fact, his outturn of work showed neglect of duty and want of diligence pertaining to his job. The plaintiff first preferred to overlook some of the acts of absence without leave but when persisted in and when the defendant left the factory on 15th July, 1969 to attend a lunch without obtaining previous permission but merely placing a written request for half a day's casual leave on the office table and further when he again absented himself from 17th July, 1969 on grounds of fever and sickness it was found that he had no fever but though moving about expressed that he had back-sprain and subsequently sent a medical certificate which referred only to back-sprain, the plaintiff by their President called for a reasonable assurance from the defendant to the full satisfaction of his superiors that he will not repeat such acts of gross indiscipline in future. The defendant in reply thereto denied having committed any act of indiscipline and stated that the need for reasonable assurance did not arise at all and assumed an attitude inconsistent with his position as employee under the plaintiff. The defendant, however, offered to join duty on 28th July, 1969. But, with reference to the letter of the plaintiff to him, dated 24th July, 1969 he was called upon to express regret for his previous mistakes and misdemeanours by tendering an apology to close the correspondence as to the conduct of the defendant and to continue him in service so as to have the benefit of his training in England for the company; the defendant refused to tender any apology or express regret or give an assurance. On 28th July, 1969 when he was not permitted to join duty without such assurance, he sent a lawyer's notice alleging that the plaintiff had unilaterally rescinded the contract of service and had also committed breach of contract and made some claims against the plaintiff on that footing. The plaintiff by their reply notice, dated 30th July, 1969, made it perfectly clear that there was no rescission of the contract. The defendant was called upon to explain the various acts which amounted to misconduct and pending investigation, he was placed under suspension as the plaintiff intended to hold a regular enquiry into the conduct of the defendant after framing a charge. Charges were accordingly framed and communicated to the defendant by letter, dated 30th July, 1969, and he was informed that an enquire would be held on 7th August, 1969. The defendant sent a reply repudiating the charges and stating that he had ceased to be the plaintiff's employee with effect from 8 A.M. on 28th July, 1969 and that he was not obliged to attend any enquiry. The defendant did not attend the enquiry on 7th August, 1969 and after giving a further opportunity and holding the enquiry on 16th August, 1969, it was found that the defendant was guilty of the charges. The plaintiff by their letter, dated 20th August, 1969, communicated the findings of the Enquiry Officer to the defendant and pointed out that his conduct was prejudicial to the continued relationship of employer and employee and that with a view to give one more chance, they (Plaintiff) had decided to take a lenient view and let him off with suspension without pay for the period from 28th July, 1969 to 22nd August, 1969 and required him to report for duty on 23rd August, 1969. The defendant did not report for duty on 23rd August, 1969 and took up a defiant attitude that he had ceased to be an employee of the plaintiff with effect from 8 A.M. on 28th July, 1969. The plaintiff sent another charge-sheet to the defendant dated 13th September, 1969, calling for written explanation for absence without leave for 22 days, from 23rd August, 1969 and on no reply being received fixed an enquiry to be held in respect of the said charge on 6th October, 1969 and informed the defendant of the same by letter, dated 30th September, 1969. The defendant chose to remain ex parte at the enquiry. The Enquiry Officer found that the defendant was guilty of absence without leave for the period from 23rd August, 1969 to 13th September, 1969. The plaintiff accepted the finding of the Enquiry Officer and terminated the engagement of the defendant with effect from 7th October, 1969 and communicated the same to the defendant on the same date. Far from there being any rescission of contract or breach thereof on the part of the plaintiff, it was the defendant who had brought about a situation by his acts of misconduct compelling the plaintiff to terminate his engagement and he had consequently become liable under the terms of Clause 4 of the agreement, Exhibit A-4, to pay the plaintiff Rs. 21,507.01 p. towards the amount (sic)ent by them in connection with his training (sic)road and also to pay the plaintiff a sum of Rs. 7,169 by way of liquidated damages, and he had not paid the same in spite of lawyer's notice dated 5th December, 1969.
3. The defence was that the plaintiff was not properly represented by the Director who had no personal knowledge of the allegations made in the plaint. According to the defendant, the proper person who should have verified the plaint and represented the Company was A. H. Dalmia, the President-in-charge of the plaintiff-Company. The defendant did not have anything to do with the Director, Sri Satyanarayanan who has signed the plaint as he had no personal knowledge of the matters alleged in the plaint. Regarding the merits of the case, the defence was that at all material times, the defendant had been extremely diligent in the discharge of his duties and had devoted his entire working hours for the benefit of the plaintiff-Company. The defendant had never absented himself even for one day for any purpose without any leave or prior permission of his superiors; nor had he shown any indifference towards his work. He continued his employment under the plaintiff in spite of the many obstructions placed by the said Shri A. H. Dalmia. Labour relations had worsened and relations between the management and personnel deteriorated because of the attitude taken by the new management. The defendant sent a leave letter to the plaintiff when he fell ill and had a sprain and also produced a medical certificate. The President, A. H. Dalmia of the plaintiff, and another employee came to the defendant's house and not finding him there, they went to the doctor's house and found that the defendant was really unwell and could not attend office on 17th July, 1969. Shri A. H. Dalmia wanted an assurance from the defendant on 28th July, 1969, when he sought to rejoin duty that he (defendant) will not fall ill or otherwise be indisposed without prior notice. The defendant could not naturally give any such assurance as asked for and he stated that there was no need or occasion for giving apology for having fallen ill or for matters beyond his control or power. The plaintiff wrongfully prevented the defendant from joining duty and committed breach of the contract of service and unilaterally repudiated the contract and rescinded the same against law. Therepon, the defendant sent a lawyer's notice on the very same day making it clear that the plaintiff had committed breach of the contract and claiming reliefs on that basis. The plaintiff had no power or jurisdiction to hold any enquiry after 28th July, 1969. The defendant was not guilty of any misconduct and was not liable to pay any amount.
4. The learned Subordinate Judge framed the following issues:
On issues 1 and 2, he found that the suit had been properly framed and that Sri Satyanarayana, the then Director of the plaintiff-Company was competent to represent the plaintiff on the date of plaint. On issues 3 to 11, he found that the plaintiff unilaterally rescinded the contract of employment and committed breach of the contract, that the defendant has not committed any misconduct, that the defendant became absolved from all his obligations under the contract of employment after 28th July, 1969, that the plaintiff is not entitled to hold any enquiry against the alleged misconduct of the defendant after that date, that the enquiry has not been properly and validly held, that the plaintiff was not entitled to dismiss the defendant on the basis of the charges laid against him, that the conduct of A. H. Dalmia, the President of the plaintiff-Company has been mala fide, malicious and illegal in so far as it related to his dealing with the defendant and that the plaint was not defective. On issue No. 12 he found that there was no cause of action after 28th July, 1969, for instituting the suit against the defendant as he had ceased to be an employee of the plaintiff on account of breach of the contract of service committed by the plaintiff on 28th July, 1969. On issue No. 13, he found that this is not a fit case for awarding cost's in favour of the defendant. On these findings, he dismissed the suit without costs.
5. Mr. M. R. Narayanaswami, the learned Counsel for the appellant, submitted that there is no dispute between the parties regarding the expenses incurred by the plaintiff for the defendant's training in England, or the quantum of liquidated damages, that the defendant was merely suspended on 28th July, 1969, pending a contemplated enquiry, that even if there is no provision in the contract of employment for suspension of the defendant pending enquiry, the legal consequence of suspension is that the plaintiff will be liable to pay salary to the defendant for the period of suspension and it does not bring about a breach of the contract, that the defendant has committed breach of his contract and that the plaintiff will, therefore, be entitled to a decree for the amount claimed in the plaint.
6. On the other hand, Mr. Vedantam Srinivasan, the learned Counsel for the respondent submitted that there was no suspension on 28th July, 1969, or on any subsequent date, that the plaintiff committed breach of the contract of service between the parties by not permitting the defendant to join duty on 28th July, 1969, that the relationship of employer and employee had thereby come to an end and that it was no longer open to the plaintiff to treat the defendant as an employee and hold any enquiry against him. He further submitted that even if there was only a suspension as contended by the plaintiff, it would amount to a breach of the contract of service between the parties in the absence of any provision for the same in that contract and that the plaintiff is, therefore, not entitled to seek to enforce the terms of that contract and recover the amount.
7. Before considering the evidence, oral and documentary in the matter, it is necessary to note the points of law to which our attention was drawn by the learned Counsel for the parties in the course of their arguments. The main submission of the learned Counsel for the appellant is that there was only a suspension on 28th July, 1969. 'To suspend', according to the Shorter Oxford Dictionary, is to debar, usually for a time from the exercise of a function or the enjoyment of a privilege.
8. The learned Counsel for the appellant invited our attention to two decision of the Supreme Court. The first is the decision in Hotel Imperial v. Hotel Workers Union : (1959)IILLJ544SC . There, it has been observed in paragraph 10:
The first question, therefore, that falls for consideration is the extent of the power of the employer to suspend an employee under the ordinary law of master and servant. It is now well-settled that the power to suspend, in the sense of a right to forbid a servant to work is not an implied term in an ordinary contract between master and servant, and that such a power can only be the creature either of a statute governing the contract or of an express term in the contract itself. Ordinarily, therefore, the absence of such power either as an express term in the contract or in the rules framed under some statute would mean that the master would have no power to suspend a workman and even if he does so in the sense that he forbids the employee to work, he will have to pay wages during the so called period of suspension. Where, however, there is power to suspend either in the contract of employment or in the statute or the rules framed thereunder, the suspension has the effect of temporarily suspending the relation of master and servant with the consequence that the servant is not bound to render service and the master is not hound to pay....
Relying strongly on this observation, the learned Counsel for the appellant submitted that the only right which the defendant had was to claim salary for the period of his suspension if the plaintiff had no power to do so under the contract of service, Exhibit A-4, entered into between the parties. It is not disputed by the learned Counsel for the appellant that there is no provision in the contract, Exhibit A-4, for the plaintiff to suspend the defendant for any period pending any enquiry into any charges framed against him.
9. The second decision relied upon by the learned Counsel for the appellant is in V. P. Gindroniya v. State of Madhya Pradesh : 3SCR440 . where it is observed in paragraphs 7 and 8 as follows:
7. The legal position as regards a master's right to place his servants under suspension is now well-settled by the decisions of this Court. In Management of Hotel Imperial, New Delhi v. Hotel Workers' Union : (1959)IILLJ544SC . the question whether a master could suspend his servant during the pendency of an enquiry came up for consideration by this Court. Therein this Court observed that it was well-settled that under the ordinary law of master and servant the power to suspend the servant without pay could not be implied as a term in an ordinary contract of service between the master and the servant but must arise either from an express term in the contract itself or a statutory provision governing such contract. It was further observed therein that ordinarily the absence of such a power either in express terms in the contract or under the rules framed under some statute would mean that the master would have no power to suspend a workman and if he does so in the sense that he forbids the employee to work he will have to pay the wages during the so-called period of suspension. Where, however, there is power to suspend either in the contract of employment or in the statute or the rules framed thereunder, the suspension has the effect of temporarily suspending the relationship of master and servant with the consequence that the servant is not bound to render service and the master is not bound to pay.
8. The same view was reiterated by this Court in T. Gajee v. U. Jormanik Stem : (1961)ILLJ652SC . The rule laid down in the above decisions was followed by this Court in R. P. Kapoor v. Union of India : (1966)IILLJ164SC . The law on the subject was exhaustively reviewed in Balvantary Ratilal Patel v. State of Maharashtra : (1968)IILLJ700SC . Therein the legal position was stated thus: The general principle is that an employer can suspend an employee of his pending an enquiry into his misconduct and the only question that can arise in such a suspension will relate to the payment of his wages during the period of such suspension. It is now well-settled that the power to suspend, in the sense of a right to forbid an employee to work, is not an implied term in an ordinary contract between master and servant, and that such a power can only be the creature either of a statute governing the contract, or of an express term in the contract itself. Ordinarily, therefore, the absence of such a power either as an express term in the contract or in the rules framed under some statutes would mean that an employer would have no power to suspend an employee of his and even if he does so in the sense that he forbids the employee to work, he will have to pay the employee's wages during the period of suspension. Where, however, there is power to suspend either in the contract of employment or in the statute or the rules framed thereunder, the order of suspension has the effect of temporarily suspending the relationship of master and servant with the consequence that the servant is not bound to render service and the master is not bound to pay. It is equally well-settled that an order of interim suspension can be passed against the employee while an enquiry is pending into his conduct even though there is no such term in the contract of employment or in the rules, but in such a case the employee would be entitled to his remuneration for the period of suspension if there is no statute or rule under which, it could be withheld. The distinction between the contract of service of a servant and suspending him from performing the duties of his office on the basis that the contract is subsisting is important. The suspension in the latter case is always an implied term in every contract of service. When an employee is suspended in this sense, it means that the employer merely issues a direction to him that he should not do the service required of him during a particular period. In other words the employer is regarded as issuing an order to the employee which because the contract is subsisting, the employee must obey.
Relying upon this decision the learned Counsel for the appellant submitted that 'suspension' pending an enquiry is an implied term of the contract and this decision shows development of the law subsequent to the aforesaid decision in Hotel Imperial v. Hotel Worker's' Union : (1959)IILLJ544SC .
10. On the other hand, the learned Counsel for the respondent invited our attention to several passages in the texts and to some English decisions and the decision in District Council, Amraoti v. Vithal Vinayak A.I.R. 1941 Nag. 125. In paragraph 557 of Halsbury's Laws of England, Fourth Edition, Volume 16, it is stated:
It now seems probable that all contracts of employment by implication give to the employee not merely the right to be paid his agreed wage, but also the right to have the opportunity of doing his work when it is available.
In paragraph 584 of this book, it is stated:
Whether or not an employer has power to suspend an employee during the duration of the contract of employment depends upon the construction of the particular contract. In the absence of any express or implied term to the contrary, the employer cannot punish an employee for alleged misconduct by suspending him from employment and stopping his wages for the period of the suspension. Where, however, such a term is included in the contract, it is not rendered void by the statutory provision restricting deductions from workmen's wages for or in respect of fines, for the intention of the parties is taken to have been that for the period of suspension mutual duties and rights, including the right of wages, would be suspended.
At pages 534 and 535 of the Law of Contract, Seventh Edition, by Cheshire and Fifoot, we find the following passage:
It must be observed, however, that it takes two to end a contract. It cannot be terminated unilaterally. Therefore, if one party repudiates his obligations or fails to perform a term of vital importance this does not automatically terminate the contract. It merely gives the innocent party an option either to ignore the breach and to insist upon performance when due, or to accept it as decisive and to treat himself as free from further liability. If, for instance, he ignores a repudiation, the contract remains in full force. An unaccepted repudiation is a thing writ in water and of no value to anybody.
If the innocent party elects to treat the contract as discharged, he must expressly or implicitly communicate the decision to the party in default. Once he has made his intention clear, his election is final and cannot be retracted. A party who elects to pursue this course is generally said to rescind the contract, but this is a misleading word in the present context. In its primary and more correct sense, as we have already seen rescission means the retrospective cancellation of a contract ab initio as for instance where the defendant has been guilty of fraudulent misrepresentation. The contract is destroyed as if it had never existed. But, where a party elects to treat a breach as discharging him from his obligations, the effect is to terminate the contract from the moment of the election and not earlier....
If, on the other hand, the innocent party with full knowledge of the facts, makes it clear by words or acts that he insists on holding his co-contractor to the bargain and continues to render performance the effect is to keep the contract alive....
11. In Cases and Materials on Labour Law, 1967 Edition, by K. W. Wedderburn, the following observation of Lord Goddard made in Marshall v. English Electric Co., Ltd. 1945 All E.R. 653. is extracted at page 145:
In my opinion, what is called suspension is in truth dismissal, with an intimation that, at the end of so many days, or it may be hours, the man will be re-employed, if he chooses to apply for re-instatement.This indeed seems to be the effect of the evidence, as the witnesses called for the defendants appear to agree that a suspended man can go off and seek employment elsewhere; if he chooses, to do so, he is under no obligation to return if he does not wish to submit to suspension.
At pages 152 and 153 of the same Edition, the following observations of Eversheld, M. R., and Asquith, L. J., in Howard v. Pick-ford Tool Co., Ltd. (1951) 1 K.B. 411. are set out:
Evershed, M. R.: it is quite plain and I refer, if it be necessary to quote authority, to the speech of Lord Simon, L.C., in Heyman v. Darwins Ltd. (1942) A.C. 356 . that if the conduct of one party to a contract amounts to a repudiation, and the other party does not accept it as such but goes on performing his part of the contract and affirms the contract, the alleged act of repudiation is wholly nugatory and ineffective in law.
Asquith, L.J.: An unaccepted repudiation is a thing writ in water and of no value to anybody; it confers no legal rights of any sort or kind.
Section 39 of the Indian Contract Act reads thus:
When a party to a contract has refused to perform or disabled himself from performing, his promise in its entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance.
12. We find the following passage at page 358 of Pollock and Mulla's Indian Contract and Specific Relief Acts, 9th Edition:
The wrongful dismissal of a servant by a master operates instantly giving the servant the instant right to claim damages. But this general rule will not apply where the servant continues to work for the employer, the employment does not terminate....
13. In Hanely v. Please & Partners Limited (1915) 1 K.B. 698 . Lush, J., with whom Rowlatt and Atkin, JJ., agreed, has observed:.Assuming that there has been a breach on the part of the servant entitling the master to dismiss him, he may, if he pleases terminate the contract, but he is not bound to do it, and if he chooses not to exercise that right but to treat the contract as a continuing contract notwithstanding misconduct or breach of duty of the servant, then the contract, is for all purposes a continuing contract subject to the master's right in that case to claim damages against the servant for his breach of contract. But, in the present case after declining to dismiss the workman--after electing to treat the contract as a continuing one, the employers took upon themselves to suspend him for one day; in other words to deprive the workman of his wages for one day, thereby assessing their own damages for the servant's misconduct at the sum which would be represented by one day's wages. They have no possible right to do that. Having elected to treat the contract as continuing it was continuing. They might have had a right to claim damages against the servant but they could not justify their act in suspending the workman for the one day and refusing to let him work and earn wages. The case must be remitted to the justices with a discretion to award to the appellant whether under the denomination of wages or damages the sum of 6sh, 2d., which represents the wages the workman would have earned on the day he was suspended but which he did not earn owing to the employer's breach of contract.
In Lanston v. Auew (1974) 1 All E.R. 980 . Lord Denning, M.R., observed thus:.We have repeatedly said in this Court that a man has a right to work which the Courts will protect.... In these days an employer, when employing a skilled man, is bound to provide him with work. By which I mean that the man should be given the opportunity of doing his work when it is available and he is ready and willing to do it. A skilled man takes a pride in his work. He does not do it merely to earn money. He does it so as to make his contribution to the well-being of all. He does it so as to keep himself busy, and not idle. To use his skill, and to improve it. To have the satisfaction which comes of a task well done. Such as Longfellow attributed to the village blacksmith -- Something attempted, something done, has earned a night's repose'.... If this be correct, then if any person knowingly induces the employer to turn the man away and thus deprive him of the opportunity of doing his work then that person induces the employer to break his contract. It is nonetheless a breach, even though the employer pays the man his full wages. So also when fellow-workers threaten to walk out unless a man is turned off the job, they threaten to induce a breach of contract. At any rate, the man who is suspended has a case for saying that they have induced or threatened to induce the employer to break the contract of employment.
A.I.R. 1941 Nag. 152
A local body has no more authority and power over its servants and employees than any other person or body unless such powers are expressly conferred by statute. The matter, therefore, must be governed along the ordinary lines of master and servant.
It is to my mind clear that an ordinary master not given special powers by statute or by some rule of law flowing from a statute has no power to suspend a servant. He can either dismiss him or continue him in service on fresh terms. In either case the servant is entiled to be paid up to the date of dismissal in the one case or of continuance in service in the other.... A servant who is suspended is clearly not working in the interval. If therefore a servant who is dismissed is entitled to be paid his wages upto the date of dismissal, it is clear that a servant who has not been dismissed but continued in service has a right to similar treatment.
In an ordinary case of master and servant, a master who dismisses his servant has to justify his action in a Court of law if the servant brings an action for wrongful dismissal. If the servant succeeds in showing that the dismissal was without justification, he is entitled either to his wages or to damages. If a master has no power of suspension, then he can only justify a refusal to pay the wages during the period of suspension on the ground that he had a right to dismiss the servant because of some wrongful action justifying dismissal or that instead of exercising the right he came to a fresh agreement with the servant under which the servant rather than be dismissed agreed to forego his salary during a certain period and agreed to continue to serve on fresh terms under a fresh contract. But, it would be necessary for the master to prove in such a case first, that there is this fresh agreement, and secondly that he was justified in dismissing the servant and thus forcing him into a fresh engagement.
14. From the aforesaid passages and decisions relied upon by the learned Counsel for the respondent and from the decision of the Supreme Court in Hotel Imperial v. Hotel Workers' Union : (1959)IILLJ544SC . it would appear that the employer has no right to suspend an employee if there is no provision in the contract of employment for the same or it is not the creature of a statute governing the contract and it is not an implied term in an ordinary contract between master and servant. It would also appear from those passages and the decision in Hotel Imperial v. Hotel Workers Union : (1959)IILLJ544SC , that if an employer suspends an employee, in the absence of any term of contract of service between the parties or any statute governing the same, it is open to the employee to treat it as a breach of contract on the part of the employer and seek his remedies on that footing.
15. But, a departure has been made by the Supreme Court in the subsequent decision in V. P. Gindroniya v. State of M.P. : (1970)IILLJ143SC . wherein in paragraph 8 as extracted above, it is observed:
The distinction between suspending the contract of service of a servant and suspending him from performing the duties of his office on the basis that the contract is subsisting is important. The suspension in the latter case is always an implied term in every contract of service. When an employee is suspended in this sense, it means that the employer merely issues a direction to him that he should not do the service required of him during a particular period. In other words the employer is regarded as issuing an order to the employee which because the contract is subsisting, the employee must obey.
16. On the side of the plaintiff-appellant, two witnesses, namely, A. H. Dalmia, President of the plaintiff-Company and one Swamidoss, Personnel Manager of Dalmia Cements (Bharat) Ltd., Dalmiapuram, the Enquiry Officer who submitted the findings, Exhibits A-42 and A-43 in this case were examined as P.Ws. 1 and 2. The defendant is the only witness examined on his side. P.W. 2 has deposed only about the enquiry conducted by him. P.W. 1 and D.W. 1 have deposed about the relevant facts of the case. But, before considering the oral evidence of these witnesses, we think it necessary to refer to the relevant, main documents in the case.
17. Exhibit A-4 is the service contract which had been entered into between the parties after the defendant, who had been deputed for training in England, when the management of the plaintiff-Company was with his grand-uncle Mr. Tatachari, returned from England after the completion of his training. The main terms of the agreement have been set out in the plaint and referred to in this judgment. There is no dispute between the parties regarding the same. There will be no difficulty in holding that the defendant would be liable for the suit amount if he had committed breach of the contract, Exhibit A-4 by refusing to turn up for duty after 28th July, 1969.
(Discussion of facts omitted--Ed.).
Having regard to the strained feelings between P.W. 1 and the defendant and having regard to the stand taken by P.W. 1 in Exhibits A-7 and A-8 on 19th July, 1969, itself that the defendant will not be permitted to join duty until he gave a reasonable assurance to the full satisfaction of the superiors that he will not repeat acts of gross indiscipline in future and the intervening correspondence between the parties, it is probable that P.W. 1, had refused to permit the defendant to report for duty when he came to the factory at about 8 A.M.A. on 28th July, 1969, with the necessary medical certificate and fitness certificate as alleged in the notice Exhibit A-15 which was sent on the very same day. It was only in the lawyer's reply notice, Exhibit A-18 sent on 30th July, 1969, that the case that the defendant was only suspended on 28th July, 1969, was put forward for the first time. The contention of the defendant is that this change in the stand taken by the plaintiff had taken place only as a result of the plaintiff having consulted their lawyers after the plaintiff had been confronted with the defendant's lawyer's notice, Exhibit A-15 where it had been clearly alleged that the defendant had not been permitted by P.W. 1 to report for duty on that day and he was called upon to tender an apology and to give an assurance that he would not repeat acts of gross indiscipline in future. It may be so. In these circumstances, we prefer to accept the evidence of D.W. 1 that there was no suspension on 28th July, 1969, and that P.W. 1 prevented him from reporting for duty and insisted upon his tendering an apology and giving an assurance, and we are of the opinion that the evidence of P.W. 1 that there was only a suspension on that day and that he did not prevent the defendant from reporting for duty and commit breach of the contract of service Exhibit A-4 is not acceptable. It is not consistent with the stand taken by the plaintiff in Exhibits A-7 and A-8, The plaintiff had no right to insist upon an apology and assurance not to repeat acts of gross indiscipline in future on 28th July, 1969, as a condition precedent to his being allowed to join duty even without holding an enquiry into the disputed act's of gross indiscipline. The allegation in paragraph 6 of the plaint shows that the alleged misconduct of the defendant by way of absence in March and May, 1966 had been condoned by the plaintiff. The evidence of P.W. 1 shows that deduction has been made in the salary of the defendant for his absence in May, 1969.
However, the defendant's alleged absence without leave in March and May, 1969 also has been made a ground of charge in the memorandum of charges, Exhibit A-16 issued to the defendant. This would show that P.W. 1 was actuated by malice against the defendant even after 28th July, 1969. The defendant had the right to work on 28th July, 1969. The act of he plaintiff in not permitting the defendant to perform his duty on 28th July, 1969, clearly amounts to breach of contract of service between the parties.
32. The plaintiff had prevented the defendant from reporting for duty on 28th July, 1969, and committed breach of the contract of service, Exhibit A. entered into between the parties, and the defendant had accepted the position that the plaintiff had committed breach of the contract and sent the lawyer's notice Exhibit A-15 saying that the relationship of the employer and employee between the parties had ceased thereby, and that therefore, he was free to seek employment elsewhere or to do his own business. Subsequently, the plaintiff had no right to hold any enquiry against the defendant and to terminate the already broken agreement, Exhibit A-4 by Exhibit A-33 and call upon the defendant to pay the money spent for the training and stay of the defendant abroad and also the liquidated damages claimed by them.
33. No argument was advanced by the learned Counsel for the respondent regarding the maintainability of the suit, and it was not contended that merely because Mr. Satyanarayana, who has signed the plaint as the Director of the plaintiff-company did not know the facts of the case, he was not entitled to sue on behalf of the plaintiff-company. It has not been contended that he was otherwise not entitled to sue on behalf of the company. Therefore, we agree with the learned Subordinate Judge that Mr. Satyanarayana who was the Director of the plaintiff-company until he resigned and was succeeded by Mr. Vishnuprasad Chokhani, the present Director, was competent to sue on behalf of the plaintiff and that the suit as framed is maintainable. But, in view of our finding that the plaintiff has committed breach of the contract of service, Exhibit A-4 between the parties by preventing the defendant from reporting to duty on 28th July, 1969, after the expiry of the leave which had been applied for on the ground that the defendant was unwell for which necessary medical certificate had been produced by the defendant, and that position had been accepted by the defendant in the lawyer's notice Exhibit A-15, we hold that the plaintiff is not entitled to recover any portion of the amount spent for the defendant's stay and training in England or any liquidated damages as per the agreement, Exhibit A-4.
34. We confirm the judgment and decree of the learned Subordinate Judge and dismiss this appeal with costs.