R IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26th DAY OF NOVEMBER, 2019 PRESENT THE HON’BLE MRS.JUSTICE B.V.NAGARATHNA AND THE HON’BLE MR. JUSTICE ASHOK G.NIJAGANNAVAR REGULAR FIRST APPEAL No.386 OF 2017 (MON) BETWEEN:
MR. RAVI .K S/O. KUPPAREDDI, AGED ABOUT 34 YEARS, R/AT NO.160, 2ND CROSS, NEXT TO BELLEMANE, J.S. DINNE, J.P. NAGAR, 8TH PHASE, BENGALURU – 560 076.
(BY SRI RAVI K., PARTY-IN-PERSON) AND:
... APPELLANT 1. MR. MAHESH MEDHEKAR, HR MANAGER, MERCEDES BENZ RESEARCH AND DEVELOPMENT INDIA PRIVATE LIMITED, PHASE I, OPP: SATHYASAI HOSPITAL, 9, 10, 1ST MAIN ROAD, KIADB EXPORT, PROMOTION INDUSTRIAL AREA, WHITEFIELD, BANGALORE – 560 066.
2. DR. JENS CATTARIUS. CEO AND MD, (ABSCONDED TO GERMANY, LAST KNOWN WORK LOCATION ADDRESS IS BELOW) MERCEDES BENZ RESEARCH AND DEVELOPMENT INDIA PRIVATE LIMITED, PHASE I, OPP: SATHYA SAI HOSPITAL, 9, 10, 1ST MAIN ROAD, KIADB EXPORT, PROMOTION INDUSTRIAL AREA, WHITE-FIELD, BANGALORE – 560 066.
3. MERCEDES BENZ RESEARCH AND DEVELOPMENT INDIA PRIVATE LIMITED, PHASE IM OPPOSITE SATHYA SAI HOSPITAL, 9, 10, 1ST MAIN ROAD, KIADB EXPORT, PROMOTION INDUSTRIAL AREA, WHITEFIELD, BANGALORE – 560 066.
... RESPONDENTS (BY SRI V.N. PRASHANTH, ADVOCATE FOR R-1 AND R-3; VIDE COURT ORDER DATED 22/02/2018 NOTICE TO R-2 IS DISPENSED WITH) ***** THIS RFA IS FILED UNDER SECTION 96 OF CPC, AGAINST THE JUDGMENT AND DECREE DATED 02.01.2017 PASSED IN O.S. NO.6430/2013 ON THE FILE OF THE VIII ADDL. CITY CIVIL AND SESSIONS JUDGE, BENGALURU, DISMISSING THE SUIT FOR RECOVERY OF MONEY AND DAMAGES.
THIS APPEAL BEING HEARD, RESERVED ON 08/08/2019 AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, NAGARATHNA J., DELIVERED THE FOLLOWING THROUGH VIDEO CONFERENCE:-
J U D G M E N T Plaintiff, in O.S. No.6430/2013, has preferred this appeal being aggrieved by the dismissal of the suit filed by him by the VIII Additional City Civil and Sessions Judge (CCH-15) at Bengaluru, by judgment dated 02/01/2017. The appellant – plaintiff had filed the suit against the defendants to pay a sum of Rupees one crore towards damages jointly and severally with interest at 18% p.a. from the date of the suit till realization.
2. The appellant – plaintiff - Ravi K., has appeared in person. We have heard him as well as learned counsel Sri V.R.Prashanth, for respondent Nos.1 and 3. Notice to respondent No.2 has been dispensed with.
3. For the sake of convenience, parties shall be referred to in terms of their ranking and status before the trial Court.
4. It is the case of the appellant – plaintiff that defendant No.4 is a company registered under the Companies Act, 1956 which is carrying on research and development at Whitefield, Bengaluru. Third defendant is the Chief Executive Officer and Managing Director (CEO and MD) of the fourth defendant - company. First defendant was working as the head of Human Resources in the fourth defendant - company at the relevant point of time and second defendant was the manager of fourth defendant – company. Second defendant was deleted by order dated 21/07/2014 before the trial Court.
5. According to the plaintiff, he is a graduate in Engineering and considering his capability and skill, fourth defendant offered him a job opportunity in their company and offer letter dated 13/07/2009 was issued informing him that he was selected by the company as a Lead Engineer in the company’s Grade Level-2 in the Department of CAD MBC and VAN with an instruction to join the Company on or before 10/08/2009. Plaintiff joined the company on 10/08/2009 and after six months his service in the company was confirmed and he became a permanent employee. According to the plaintiff, he did not have an efficient work environment and he had difficulty in his efforts of filing research patents solely for the fourth defendant – company. That first and second defendant never encouraged nor tolerated plaintiff’s efforts of innovation and his invention could not be patented in the name of fourth defendant. That the plaintiff was threatened by the first defendant, which resulted in his submission of resignation to the second defendant on 08/06/2012. But the second defendant – CEO did not reply to his mail but first defendant – H.R. Head on 08/06/2012 itself informed the plaintiff as follows:
“You need not to attend the duties to serve your notice period, kindly handover the project related IT assets to your reporting Manager and the ID card to Sunil K. from Corporate Security by 5 p.m. today – final settlement will be done after completion of the notice period i.e., after September 7, 2012.”
6. According to the plaintiff, false information was given in his formal exit documents which damaged his career and shattered his confidence. That plaintiff became a victim losing his future as well as his career in reputed companies for no fault of his inspite of having all the ability and talent and hard work for decades. As a result, plaintiff’s reputation, respect and identity got destroyed. According to the plaintiff, though he was forced to resign on 06/08/2012, first defendant asked him not to attend to the duties, thereafter he was not issued any exit documents, therefore, plaintiff sent an email on 23/08/2012 requesting first defendant to relieve him officially. Plaintiff was asked to contact the concerned officers and after several exchange of mails, vide mail dated 28/08/2012, it was stated:
“this is to certify that Mr. Ravi K (Employee ID 50445) worked with Mercedes Benz Research and Development India Private Limited from August 10, 2009 until June 30th 2012 as Lead Engineer in the department of MVM Interior exterior”.
Plaintiff requested for correction in the exit letters which read as above.
7. According to the plaintiff, defendants committed malpractice against the plaintiff by giving false information in the exit letters whereas, plaintiff was not allowed to work in the company from 08/06/2012. That action of the defendants in not permitting the plaintiff to work from 08/06/2012 was illegal and high handed on the part of the defendants as the plaintiff lost his opportunity to work in the company from 08/06/2012 onwards till he was relieved. Plaintiff was given a settlement after a long delay. Having no other alternative, plaintiff issued a legal notice on 03/07/2013 and called upon the defendants to pay a sum of Rupees one crore as damages to the plaintiff towards loss of reputation, loss of job and image as well as mental agony suffered by him. According to the plaintiff, the defendants, on receipt of the said legal notice, issued an untenable reply on 19/07/2013 and left with no other option, plaintiff filed the suit seeking damages for a sum of Rupees one crore with interest at 18% p.a. from the date of the suit till realization.
8. In response to the suit summons and notices issued by the trial Court, defendant Nos.1 and 4 filed written statement stating that defendant Nos.2 and 3 are neither necessary nor proper parties to the suit. That the suit had to be dismissed for misjoinder of parties. Admitting that plaintiff was working as a Lead Engineer in the fourth defendant – company from 10/08/2009 to 24/08/2012, they contended that the plaintiff, after his resignation from the institution filed the suit with a malicious intention of extorting undue amounts from the defendants under the pressure of vexatious legal proceedings. They averred that on 13/07/2009 fourth defendant issued a letter of appointment to the plaintiff to join the company as a Lead Engineer. In September 2009 plaintiff was deputed to undergo training with one of its group companies in Germany. On reaching Germany, plaintiff wanted to pursue employment there instead of returning to India on completion of his training but on his return from Germany he resumed his employment with the fourth defendant – company and worked for a period of three years. That on 08/06/2012, plaintiff addressed an email to the management of the fourth defendant – company intimating the decision to leave the company. In his resignation letter, plaintiff communicated his appreciation and gratitude for working in the company for three years. Plaintiff stated that due to personal reasons, he be permitted to remain absent from work forthwith and sought permission to do so while he completed his three months notice period under the terms of the appointment letter. On 08/06/2012 itself plaintiff was informed that he was permitted to remain absent from work during the notice period and that the final settlement of his dues would be made only after completion of the notice period. Plaintiff accordingly remained absent from work while completing his notice period. But on 23/08/2012, a few days before the completion of notice period plaintiff addressed an email to the first defendant requesting to be relieved forthwith i.e., with effect from 24/08/2012. His request was acceded to and the plaintiff was asked to get in touch with the concerned persons for completion of his exit formalities as well as for settling his dues. Thus, plaintiff exited from employment with fourth defendant with effect from 24/08/2012. That plaintiff was paid full salary for June 2012. Plaintiff’s salary for the month of July along with salary for August, 2012 on pro rata basis was paid to him in December 2012. Relieving letter dated 28/08/2012 was issued, but it contained some typographical errors. The document was dated 13/07/2012 instead of 28/08/2012 and the last working day of the plaintiff was wrongly indicated as 30/06/2012 instead of 24/08/2012. That on 29/08/2012 plaintiff requested for correction in the exit documents and the same were corrected wherein, last working day of the plaintiff was recorded as 28/08/2012 and exit documents were e-mailed to him on 31/08/2012 and hard copies were sent to him. That Provident Fund amount was also sent to the plaintiff by communication dated 25/04/2013 enclosing cheque of the same date, for a sum of Rs.1,23,629/- drawn in favour of the plaintiff on HDFC Bank, M.G.Road Branch, Bengaluru. There was no communication thereafter between the plaintiff and defendant Nos.1 and 4 till July, 2013. But, defendant Nos.1 and 4 received legal notice dated 03/07/2013 issued by plaintiff’s advocate making unfounded and frivolous allegations against the defendants. The said legal notice sent on 03/07/2013 is contrary to the documents and communication referred to above. Despite reply dated 19/07/2013 to the legal notice, plaintiff for reasons best known to him filed the suit, which is frivolous and vexatious.
9. With reference to each of the paragraphs in the plaint, the defendant denied the same as false. However, it is admitted that in the exit documents initially issued, there were typographical errors, which were corrected and were released to the plaintiff. Defendant Nos.1 and 4 have denied that plaintiff was forced not to attend to his duties after his resignation. Later, on 23/08/2012, plaintiff requested first defendant to release him officially. That plaintiff has received benevolent treatment by the defendants and there was no ill-treatment of the plaintiff in any manner whatsoever, when he was on the rolls of the company. Contending that the reliefs sought for by the plaintiff were not tenable and liable to be rejected, first and fourth defendants sought for dismissal of the suit.
10. On the basis of the rival pleadings, trial Court framed the following issues for its consideration:
“ISSUES 1) Whether the plaintiff proves that on account of de-motivation inequality, humiliation, harassment at the working place starting with non- cooperation by his superiors and not providing efficient work, environment to the plaintiff by defendants, the plaintiff was forced to tender his resignation?
2) Whether the plaintiff, proves that on account of false information furnished by the defendants in his exit formal documents made the plaintiff victim of loosing his future as well as career in reputed companies for no fault of him?
3) Whether the plaintiff proves that he is entitled for damages for Rs.one crore with interest at the rate of 18% p.a., from the date of suit, till its realisation?
4) What order or decree?”
11. In order to substantiate his case, plaintiff examined himself as P.W.1. He produced nineteen documents which were marked as Exs.P.1 to P.90. The first defendant examined himself as D.W.1 on behalf of the defendants. Two documents were produced by him which were marked as Exs.D.1 and D.2.
12. On the basis of the evidence placed on record, trial Court answered Issue Nos.1 to 3 in the negative and dismissed the suit without any order as to costs. Being aggrieved by the dismissal of the suit, plaintiff has preferred this appeal.
13. We have heard appellant – plaintiff Sri Ravi K., in person and learned counsel, Sri V.G.Prashanth, for respondent – defendants and perused the material on record as well as the original record.
14. Appellant drew our attention to the pleadings and contended that he resigned on 08/06/2012 and his resignation was accepted on the very same day without taking into consideration any notice period, both from his side as well as from the side of the fourth defendant – company. His employer, nevertheless, stated that his dues would be settled only in the first week of September, 2012. Therefore, according to the appellant – plaintiff, he continued to remain on the rolls of the company, but his Identity Card was taken away and he was prevented from attending to his work from 09/06/2012 onwards. That for a period of three months, he was not allowed to work in the company and though he might have been paid salary for the month of June, July and August 2012 that is not relevant according to the appellant – plaintiff as his right to work had been denied, which is a breach of contract. He submitted that principles applicable in the instant case are known as ‘garden leave’ principles. That an employee cannot be denied his right to work. Relying on the judgment of the United Kingdom’s Supreme Court in William Hill Organization vs. Tucker, [(1999) ICR 291] and VFS Global Services Private Limited vs. Mr.Suprit Roy, [(2008) 2 Bom.C.R. 446] as well as Srikantha S.M. vs. Bharath Earth Movers Ltd., [(2005) 8 SCC 314], he contended that his right to work being deprived by the defendants he is entitled to compensation. Appellant – plaintiff contended that he is not seeking reinstatement, but compensation on account of the stigma and loss of reputation, employment defamation and administrative suspension suffered by him on account of the defendants preventing or restraining him from continuing to work in the company. He submitted that he is entitled to compensation on account of the action of the defendants and his employer. The judgments relied upon by him shall be discussed later.
15. Appellant – plaintiff’s next limb of argument was that in the letter as well as in the certificate issued by the defendants an error was committed intentionally and deliberately. The exit documents did not contain an inadvertent or typographical error, rather the defendants intentionally stated that his resignation was dated 30/06/2012 whereas, his resignation was on 08/06/2012. Further, the exit document was dated 13/07/2012 instead of 28/08/2012. That the object and purpose of the defendants in issuing such exit documents containing erroneous dates was in order to defame the plaintiff and on account of discrepancies in the exit documents, he has not been able to secure a job in a good and reputed company or with a reputed employer. That whenever he applied for a job, on account of the discrepancies in the documents issued by the defendants, plaintiff has not been believed and as a result, he has lost all job opportunities. He contended that defendants have defamed his reputation and there is employment defamation. Plaintiff submitted that on account of being kept away from work, it is a case of administrative suspension. That no employee who continues on the rolls of the company can be prevented from continuing to work in the company, but in the instant case, that is precisely what has happened. Therefore, appellant – plaintiff contended that he is entitled for damages.
16. Appellant further submitted that the trial Court has failed to appreciate his case in its proper perspective and has simply dismissed the suit. That the judgment of the trial Court may be reversed and relief may be granted to him.
17. Per contra, learned counsel for respondent Nos.1 and 4 contended that the plaintiff’s suit is misconceived and that the trial Court has rightly dismissed the suit and there is no merit in the appeal. That this is not a case of public employment. It is a case of private employment with fourth defendant – company, which is governed by a contract and not by rules and regulations. That no damages are payable to the appellant. He contended with reference to Ram Narain Singh vs. State of U.P. [(2007) 4 AWC 3382], the concept of right to work is not recognized in India. That for the specified period of work a person is entitled to salary. That, it is a prerogative of the employer to permit an employee to perform his duties in the company otherwise, as per the terms of the contract the employer can terminate the services of the employee and also restrain him from performing his duties in the company. In the instant case, it is not a case of termination of the plaintiff rather than the plaintiff suo motu resigned from his job. The resignation was accepted, but the monetary settlement was to be made after three months i.e., in September 2012, till then, the plaintiff was requested not to attend to his duties in the company. This was because the plaintiff resigned from his job on 08/06/2012 and his resignation was accepted on the same day as per his request. The only thing remaining was settlement of his monetary benefits which was to be made after a three month period i.e., in September 2012. That no prejudice, harm or deprivation had been caused to the plaintiff on account of the employer requesting the plaintiff not to attend to his duties in the company rather, even in the absence of any duty being rendered by the plaintiff in the company he was paid salary for the said period of June and July until the plaintiff requested for being relieved on 23/08/2012 and till that date, pro rata salary for the month of August 2012 was also paid.
18. Learned counsel for respondent Nos.1 and 3 submitted that the judgments relied upon by the appellant do not apply to the instant case and the principles of garden leave, employment defamation, administrative suspension, which are principles which apply in other legal systems have not been recognized in India. Therefore, the appellant cannot seek relief on the basis of those principles. Moreover, the same cannot be imported into the Indian jurisprudence without there being any basis for doing so.
19. He next submitted no doubt, there was a mistake in the exit document communication and certificate stating that the plaintiff had resigned on 30/06/2012 instead of 08/06/2012, the same were corrected on the request made by the plaintiff and therefore, there is no cause of action which could arise on the said facts.
20. Learned counsel for respondent Nos.1 and 3 further contended that in the absence of any proof of having suffered damage, compensation cannot be awarded by the Court. That if an employee has not been given work or is asked not to attend to work, it is not stigmatic. This is not a case of right to livelihood and the right to work is not a principle which is recognized in India. That even though the plaintiff did not work from 09/06/2012 onwards, he was nevertheless paid salary from the said period till 23/08/2012. That the employer has a right to keep away any employee from work. The same is not stigmatic. According to learned counsel for respondent Nos.1 and 3 the principle of garden leave is applicable post cessation from service, which cannot be applied when a person is still on the rolls of the company. That the judgment cited by the appellant – plaintiff cannot be simply relied upon and applied to Indian conditions. In this regard, learned counsel relied upon General Electrical Company vs. Renusagar Pawar, [(1987) 4 SCC 137], to contend that foreign judgments cannot be simply applied in India in the absence of there being any basis for doing so. He therefore submitted that there is no merit in the appeal and the same may be dismissed by confirming the judgment and decree of the trial Court.
21. By way of reply, appellant – plaintiff appeared in person and relied upon the judgment from House of Lords in the case of Rookes vs. Barnard, [(1964) UKHL 1 [(21 January 1964)]. He further contended that the judgment rendered by the Delhi High Court is one of termination by the company and cannot be applied to the present case. He submitted that foreign judgments could be applied in India so long as they are not against the Indian law. That the mistake in the dates of the exit documents are not inadvertent or innocent, they are deliberate and malicious. He contended that evidence on record as well as judgments cited by him may be considered and relief may be granted to him.
22. Having heard appellant in person, learned counsel for respondent Nos.1 and 3 and on perusal of the material on record as well as the original record, the following points would arise for our consideration:
“ 1) Whether the judgment of the trial Court would call for any interference or whether the plaintiff is entitled to damages of rupees one crore as sought for by him?
2) What order? ”
23. It is not in dispute that the plaintiff, being an engineering graduate, was offered to join the fourth defendant – company as a Lead Engineer by offer letter dated 13/07/2009 on or before 10/08/2009. Plaintiff joined the company on 10/08/2009 and ultimately submitted his resignation on 08/06/2012 to the second defendant – C.E.O. On the same day, the second defendant did not reply to his e-mail but the first defendant – H.R. Head informed him that he need not attend to his duties during the notice period and he should hand over the project related I.T. assets to the reporting manager and the I.D. Card to Mr.Sunil K., from Corporate Security by 5.00 p.m. on the same day i.e., 08/06/2012. That final settlement would be made after completion of the notice period i.e., after 07.09.2012. But later, plaintiff requested to be relieved by sending an email on 23/08/2012. He was informed that the exit formalities were being processed. Plaintiff received the first set of relieving letters on 28/08/2012 stating that he worked from 10/08/2009 up to 30/06/2012 as a Lead Engineer. Later, the exit documents were corrected and sent to the plaintiff.
24. On the aforesaid undisputed facts, two contentions have been raised by the plaintiff. According to him if he was to be relieved after the notice period in the first week of September 2012, then he could not have been restrained or prevented from attending to his duties in the company from 09/06/2012 until the date he was relieved from the company. According to the plaintiff, though his resignation was accepted on the very same day it was sent i.e., on 08/06/2012 nevertheless, he was continued on the rolls of the company and his terminal benefits were to be settled in the first week of September 2012 i.e., after the period of three months, which is the notice period. That it is only on the request made by the plaintiff on 23/08/2012 that he was relieved on 28/08/2012, which means, he continued to be an employee of the fourth respondent – company. If that is so, then he had to be permitted to work in the company and serve the company instead of being directed not to attend to office. According to the plaintiff, the fact that he was prevented from attending to his duties in the company till he was formally relieved, despite his resignation being accepted on the same day, is a case of employment defamation, administrative suspension and the principles of garden leave would apply in the instant case. That the employer could not have restrained the employee from attending to his work in the company as he remained on the rolls of the company. That the said restraint on the plaintiff has damaged his reputation and hence, he has not been in a position to secure any other suitable employment in reputed companies. Therefore, plaintiff has sought for compensation in the form of damages.
25. Second contention of the plaintiff is that deliberately the employer committed mistakes with regard to his date of resignation by indicating it as 30/06/2012 instead of 08/06/2012 and the relieving letter and the certificate were so issued intentionally to harm the reputation of the plaintiff and subsequent correction of the same made by the defendants is in vain. That the plaintiff has suffered on account of the deliberate mistakes made in the exit letters. That 30/06/2012 was a Saturday, a non- working day, on which date the plaintiff could not have resigned from the company and that on noting the said facts, the other prospective employers have not accepted the documents issued by the defendants and as a result, his livelihood has been deprived and therefore, for that reason also plaintiff is entitled to damages.
26. Of course, the aforesaid two contentions have been rebutted by learned counsel for first and fourth defendants as narrated above. In the background of the aforesaid discussion, the oral and documentary evidence on record shall be considered.
27. Plaintiff examined himself as P.W.1 by filing an affidavit by way of examination-in-chief reiterating the facts referred to above. He has stated in the cross- examination that he completed his Engineering Degree in the year 2008 and before joining defendant – company he was working with General Motors, earning Rs.3,00,000/- per annum. That defendant – company offered Rs.7,00,000/- for which he worked for a period of three years and every year he received an annual increment. That at the time of giving evidence in the suit, he was working in Semcon, an European company, drawing a salary of Rs.12,00,000/- per annum. That the defendant – company does not owe him any monetary dues. He has also stated that he is not taking any treatment with regard to any psychological infirmities. He has filed one more affidavit stating that it is his specific case that on account of threat and pressure tactics of first defendant he resigned from his job and sent his resignation directly to third defendant. That on account of false information furnished by the defendants in his exit documents, he has lost his bright future and job opportunities in reputed companies for no fault of his. That he could not join Semcon, an European Company on account of the exit documents issued by the defendant – company not being proper. That along with the affidavit, by way of examination-in-chief plaintiff got marked ninety documents as Exs.P.1 to P.90. The plaintiff in his further cross- examination has stated that he was working in Semcon Europe company.
28. First defendant has let in his evidence by way of affidavit as D.W.1. He has admitted that plaintiff was appointed as a Lead Engineer in the fourth respondent – company and that he worked from 10/08/2009 to 24/08/2012. That on 08/06/2012, plaintiff addressed an email to the fourth defendant intimating his decision to leave his employment. That immediately on receipt of his resignation, plaintiff held discussions with him and requested that due to personal reasons he be permitted to remain absent from work forthwith and sought permission to do so while he completed his notice period of three months on the terms of the appointment letter. That, as a result, on 08/06/2012 itself, an email was sent to the plaintiff permitting him to remain absent in the notice period. It was however communicated to the plaintiff that the final settlement would be made to him only after completion of the notice period. Plaintiff thereafter remained absent from work while completing his notice period. That on 23/08/2012 i.e., few days before completion of the notice period, plaintiff requested to be relieved forthwith i.e., with effect from 24/08/2012. Defendant No.4 acceded to the request of the plaintiff and plaintiff exited from his employment with the fourth defendant – company with effect from 24/08/2012. Plaintiff was given salary till July 2012 and for the month of August 2012 on pro rata basis, which was paid to him in December 2012. Copies of relieving letter and experience certificate were issued on 28/08/2012, but the same contained some inadvertent typographical errors. The document was wrongly dated as 13/07/2012 instead of 28/08/2012 and the last working day of the plaintiff was shown as 30/06/2012 instead of 24/08/2012. That on 29/08/2012 plaintiff requested for correction in the exit documents and they were corrected and the last working day of the plaintiff was shown as 24/08/2012 and the scanned copies were sent to the plaintiff through e-mail dated 31/08/2012 and the hard copies of the same were handed over thereafter. That the plaintiff submitted his Provident Fund withdrawal form, the same was processed and Cheque No.586016 dated 25/04/2013 for a sum of Rs.1,23,629/- drawn in favour of the plaintiff in HDFC Bank, M.G.Road Branch, Bengaluru, was sent to him. To the surprise of the defendants, in July 2013 legal notice dated 03/07/2013 was issued on behalf of the plaintiff and the same was received by the defendants which was responded to on 19/07/2013. Thereafter, the suit has been filed, which is an abuse of the process of law and therefore, D.W.1 has sought for dismissal of the suit.
29. In his cross-examination, D.W.1 has stated that defendant No.3 Dr.Jens Cattarius was working in the fourth defendant – company till 31/03/2014 and his resignation has been accepted. That when plaintiff joined the company, he was at Level-8. He has denied that he had any role to play in the “kick out” of the plaintiff from the defendant – company. That plaintiff sent his resignation directly to the third defendant instead of addressing to the fourth defendant.
30. In his further cross-examination, he has admitted that in Ex.P-2, date and time is shown as 08/06/2012 at 10.00 a.m. Ex.P-2 was addressed to Jens Cattarius, while Ex.P-3 is e-mail correspondence with the plaintiff wherein he intimated the plaintiff to leave the identity card and to hand over the project records before 05.00 p.m. on the said date. That Manager Rohit Purandare accepted the resignation of plaintiff. That after receipt of Ex.P-2, he gave instructions to the Manager to check the contents of Ex.P-2 and to take necessary action. He has denied that he was harassing the plaintiff and therefore, the plaintiff was constrained to give his resignation letter directly to the CEO. He has also denied that the dismissal of the plaintiff is a pre-planned act from his end. He has admitted that as per clause 14 of Ex.P-1, three months’ notice period is fixed or three months’ salary. He has denied as false that since plaintiff opted to quit the Company voluntarily, he was under an obligation to pay three months’ salary to defendant No.4 Company. He has denied that the service of the plaintiff to defendant No.4 Company came to an end in the evening at 05.00 p.m. on 08/06/2012. That no employee is permitted to enter the premises without having an identity card. That the Company has completed the exit formalities of the plaintiff and the documents are before the Court. That when an employee leaves the company, Exit Feed Back Form is obtained. But, in the present case, no such Exit Feed Back Form was obtained from the plaintiff. But, the same is not in violation of any terms and conditions of the appointment order.
31. DW-1 also admitted as true that no document has been produced to evidence the fact that the plaintiff resigned from the defendant company on 30/06/2012 as per Ex.P-8. That there is no document to show that the plaintiff had worked in the defendant company from 09/06/2012 to 30/06/2012. He has also denied that Ex.P-8 being the letter was kept ready on 13/07/2012, but it was sent through e-mail on 28/08/2012. He has also admitted that the plaintiff requested for completing corrected exit and relieving letter on 29/08/2012 and Ex.P-8(b) is the corrected exit letter. In the document, date of resignation is shown as 30/06/2012. But, he was relieved on 24/08/2012. That no document has been produced to show that the plaintiff had worked in defendant No.4 company from 09/06/2012 to 24/08/2012. Ex.P-8(c) is the relieving letter. It is also admitted by DW-1 that 30/06/2012, being a Saturday, was a holiday for the Company. But, he has denied that the date 30/06/2012 was mentioned as the date of resignation purposely although it is a wrong date. He has also admitted as true that it is not possible for an employee to resign on an holiday. It is also admitted that defendant No.4 Company paid salary to the plaintiff for the entire month of June 2012. He has stated that it is false to suggest that the false exit letter of the Company has destroyed the career of the plaintiff who is an Engineer and that, since defendant No.4 Company issued false exit letters, the plaintiff was unable to secure a job in better companies. He has also denied that on account of any malicious act, plaintiff suffered mental agony and he went into depression for some time. He has stated that the corrigendum letter was issued as there was a typographical error in the earlier letter. That the provident fund of plaintiff has not yet been settled as on that date.
32. We now proceed to consider the documentary evidence. Ex.P-1 is the offer letter to join Mercedes-Benz Research and Development India Private Limited (MBRDI) issued by the defendant Company to the plaintiff on 13/07/2009 enclosing the details of remuneration, etc., as Annexure I and terms and conditions as Annexure II.
Clause Nos.14 and 15 of the terms and conditions read as under:
“14. Discontinuation of service:
If you wish to leave MBRDI during the course of your employment, a minimum of three months notice has to be given in writing or salary equivalent to three months should be deposited with MBRDI after obtaining the consent, in writing, from the Management of the Company. MBRDI has the right to waive this notice period if it desires so.
Failing to observe condition no.2 above, a sum equivalent to the unserved period will be deducted from any of the pending amount of the employee with MBRDI.
Notwithstanding anything in above, if have been sent abroad on official duty by MBRDI and decide to discontinue your services in MBRDI without fulfilling your task for which you have been sent abroad, you will have to refund all the cost incurred by MBRDI for sending you abroad, including the travel cost incurred on you.
15. Termination of service:
MBRDI has the right to terminate your services after giving notice equivalent to a period of three months or a compensation equivalent to three months salary at any time it desires so specifying the reason. The decision of MBRDI is full and final and is binding to all employees of the company.”
33. On a combined reading of the aforesaid two clauses, it is clear that if the employee wished to leave MBRDI i.e., his employer, during the course of his employment, a minimum of three months notice had to be given in writing or salary equivalent to three months should be deposited by the plaintiff with MBRDI after obtaining the consent in writing from the Management of the Company. MBRDI had right to waive the notice period if it so desired. If the second of the above conditions was not followed, then a sum equivalent to the un-served period would be deducted from any of the pending amounts of the employee with MBRDI. On the other hand, MBRDI had the right to terminate the services of an employee after giving notice equivalent to a period of three months or a compensation equivalent to three months salary at any time it so desired by specifying the reason. The decision of the MBRDI is final and is binding to all employees of the Company. Bearing in mind the aforesaid conditions regarding discontinuation of service or termination of service in-mind the facts which emerge in the present case shall be considered on a reading of the documentary evidence on record. Ex.P-2 is an e-mail dated 08/06/2012 written by the plaintiff to Jens Cattarius informing that he was leaving the Company after a period of three years. The said e-mail was also sent to Torsten Meier and Mahesh Medhekar. The same was sent at 10.01 a.m. On the same day, at 02.02 p.m., Mahesh Medhekar sent an e-mail stating that his resignation had been accepted and that he need not attend to his duties to serve the notice period. The plaintiff was also asked to hand- over the project related IT assets to his reporting manager and the identity card to Sunil K. from Corporate Security by 05.00 p.m. on the said date. The final settlement was to be made after completion of the notice period i.e., after 07/09/2012 (three months).
34. When Exs.P-2 and 3 are read together, it is observed that the plaintiff did not indicate in Ex.P-2 email as to from what date his resignation was to take effect. But, as per clause 14, the plaintiff had to give the employer a minimum of three months’ notice in writing or, in the absence of such a notice, had to pay three months salary to the Company after obtaining the consent in writing. Ex.P-2 does not indicate whether the resignation was immediate or to come into effect after a period of three months. But, the response to Ex.P-2 by Ex.P-3 e- mail stated that his resignation had been accepted and that the plaintiff did not have to attend to his duties to serve the notice period and the final settlement was to be made after completion of the notice period i.e., after 07/09/2012. By this, it can be inferred that the MBRDI, employer of the plaintiff, on the one hand had waived the notice period, which is permissible under Clause 14, in which event, it was not necessary for the plaintiff to attend to his duties during the notice period. But, the monetary settlement was to be made on completion of the notice period i.e., in the month of September 2012.
35. The crux of the matter is, whether, the employer of the plaintiff could have, on the one hand, waived the notice period and directed the plaintiff not to attend to his duties during the notice period, while on the other hand, also state that the monetary settlement would be made after completion of the notice period i.e., on 08.09.2012. On a reading of Clause 14, it becomes clear that the employer had waived the notice period, in which event it was not necessary for the plaintiff to work for a minimum period of three months during the notice period.
But, the monetary settlement was to be done after completion of three months period i.e., on 08.09.2012. That means, if there was a waiver of the notice period by the employer, it was not necessary for the employee to work during the three month period or to attend to his duties in the Company, but the final settlement was to be made after the completion of notice period, which was after 07/09/2012 in the instant case. However, salary for the said period of three months had to be paid and was paid in the instant case till date of issuance of the exit documents. On 23/08/2012, even before the completion of the three months period, the plaintiff requested that he be relieved from his duties from the following day, i.e., from 24/08/2012. This e-mail is produced as Ex.P-4, to which a reply was sent on the same day as per Ex.P-5 requesting the plaintiff to get in touch with the concerned persons for the exit formalities and final exit documents and on 28/08/2012, the scanned copies of the exit and relieving letters were issued vide Ex.P-6. Ex.P-7 is the Certificate dated 13/07/2012 certifying that the plaintiff had worked with the Company from 10/08/2019 until 30/06/2012 as a Lead Engineer in the Department of MVM- Interior Exterior. This certificate was signed by the Head of the Human Resources and Deputy Manager. Also attached to the email dated 13/07/2012 was a letter of the same date stating that the resignation letter of the plaintiff dated 30/06/2012 had been accepted and that he had been relieved of his duties with effect from the closing hours of 30/06/2012 (Ex.P-8).
36. In response to this, plaintiff sought for correction of the exit letters and on 28/08/2012, Ex.P-8(b) was issued along with letter at Ex.P-8(a) once again stating, the resignation letter dated 30/06/2012 had been accepted and the plaintiff had been relieved of his duties with effect from closing hours on 30/08/2012 and another certificate as per Ex.P-8(c) dated 28/08/2012 to the effect that the plaintiff was working from 10/08/2009 till 24/08/2012 as a Lead Engineer in Department of MVM- Interior Exterior was issued. In this regard, legal notice dated 03/07/2013 was issued on behalf of the plaintiff as per Ex.P-9 stating that the plaintiff was not allowed to serve in the Company from 08/06/2012 onwards, which was objectionable and which had caused mental and emotional suffering to the plaintiff and therefore, the damages of Rs.1,00,00,000/- was sought. The said legal notice was replied to as per Ex.P-18 dated 19/07/2013 refuting the allegations made by the plaintiff. The other documents produced by the plaintiff are not relevant for the controversy.
37. Two documents have been produced on behalf of the defendants namely, copy of the communication dated 25/04/2013 issued by the defendant Company enclosing a cheque dated 25/04/2013 for a sum of Rs.1,23,629/- towards the settlement of provident fund accumulations and Ex.D-2 is the copy of the said cheque.
38. On considering the said documentary and oral evidence, the trial court has found that the plaintiff had failed to prove that on account of demotivation, inequality, humiliation, harassment at his workplace, he had to tender his resignation. Further, the plaintiff had failed to prove that on account of false information furnished by the defendant in his formal exit documents, he had become a victim and had lost his future career prospects. The trial court has also found that on 08/06/2012, the plaintiff tendered his resignation and on the same day, the head of the Human Resources Department replied stating that his resignation had been accepted and he need not perform his duties during the notice period. That in fact, the plaintiff had not worked from 08/06/2012 to 24/08/2012. On 23/08/2012 plaintiff had requested the defendant company to relieve him officially with effect from 24/08/2012. The plaintiff was relieved as per his request and for the period of June and July up to 24/08/2012, he was paid salary by December 2012 and subsequently, provident fund also was settled on 25/04/2013.
39. With regard to the exit letters, no doubt, it was stated that the plaintiff had worked from 10/08/2009 to 30/06/2012 (Ex.P-7). Subsequently, on the request made by the plaintiff, corrected exit letters were issued stating that he had worked from 10/08/2009 till 24/08/2012 (Ex.P-8(c)) On considering the said evidence, the trial court has held that the plaintiff had not established that he was treated with humiliation or with injustice which resulted in his resignation. The trial court has also found that the plaintiff had admitted that he was working in SEMCON company and drawing a salary of Rs.12,00,000/- per annum, which was a higher salary than what the plaintiff was receiving from the defendant Company. The trial court also found that, no doubt, there was a wrong mentioning of the date of resignation of the plaintiff, in that, he did not resign on 30/06/2012, but had tendered his resignation on 08/06/2012 on which day it was accepted. The same was later corrected on the request made by the plaintiff to the effect that he had resigned on 08/06/2012 and on the same day, it was accepted. The trial court has found that the reason for resignation of the plaintiff has not been due to any discriminatory treatment against the plaintiff or due to any harassment or humiliation. The trial court has also found that the wrong mentioning of the resignation in the exit letters issued by the defendant company has not in any way caused any adverse effect on the career of the plaintiff. Therefore, the trial court has concluded that the plaintiff is not entitled to any damages as no case for grant of damages has been made out by the plaintiff. In the circumstances, the suit of the plaintiff has been dismissed.
40. On re-appreciation of the aforesaid evidence on record, it is necessary to consider, as to, whether, the trial court was justified in dismissing the suit. But, while doing so, it would be necessary to refer to the case laws that have been submitted by both appellant / plaintiff as well as the respondent / defendant.
41. Thus, as noted above, two aspects of the case fall for our consideration in this appeal, namely, whether the appellant-plaintiff is entitled for damages on account of the stigma and loss of reputation, employment defamation and administrative suspension on account of the defendant Company restraining him from continuing to perform his duties in the Company subsequent to 08/06/2012. Secondly, whether mentioning of the wrong date of resignation, namely as 30/06/2012 instead of 08/06/2012, in the exit letters or documents has caused any prejudice or adverse effect on the career and reputation of the appellant-plaintiff. The aforesaid two aspects shall be considered in light of the evidence on record and the decisions cited at the Bar by the respective parties.
The appellant, who has appeared in person, has contended, on account of the Company restraining the appellant from continuing to perform his duties in the Company subsequent to 08/06/2012, the day on which he resigned has marred his reputation and has caused a stigma to him. We have already referred to Clauses 14 and 15 of Ex.P-1 and analysed the same. On an analysis of the same, we find that in the instant case, MBRDI i.e., the 4th defendant Company did not insist that there should be a three months’ notice period to be given in writing by the plaintiff nor did it insist that the salary equivalent to three months’ notice period should be deposited by the plaintiff. When the Company accepted the resignation of the plaintiff on the day it was sent, it is implied that the Company had waived the notice period. When once there was a waiver of the notice period by the Company, the plaintiff was not required to perform his duties during the notice period. This was particularly so when the employer did not desire that the employee / plaintiff herein to continue to perform his duties in the company.
42. Further, the defendant Company stated that the settlement of dues of the plaintiff was to be after a period of three months. This was, having regard to the fact that the cessation of service as per Clause 14 would take place at the end of three month notice period. But, on account of waiver of the three months’ notice period, it was not necessary for the plaintiff to discharge his duties during the said period. In other words, when the Company had waived the three months’ notice period, it was left to the discretion of the defendant employer to either permit the employee plaintiff herein to discharge his duties or not to do so. But, in either case, it was the duty of the employer to pay the salary of the employee which was to be for the period of three months’ notice period and thereafter, to settle the monetary dues. This has been followed in the instant case.
43. In fact, in the instant case, when the plaintiff employee sought immediate cessation of service without a minimum of three months’ notice to be given in writing, the plaintiff had to pay to the defendant-employer salary equivalent to three months’ notice period. In such a situation, there could be discretion exercised by the employer to waive the notice period, if so desired and accept the resignation immediately and relieve the employee without insisting upon the employee to pay an amount of salary equivalent to three months’ notice to the Company. In the instant case, the defendant Company did not insist upon three months’ notice period when the plaintiff tendered his resignation to the defendant Company. The Company waived the said period, accepted the resignation on 08/06/2012 itself, and did not insist the plaintiff to deposit the salary equivalent to three months’ notice period to the Company. On the other hand, the defendant - Company stated that the monetary dues of the plaintiff would be settled after the period of three months but paid the salary for three months to the plaintiff. Therefore, de facto, the plaintiff ceased to be an employee of the defendant Company as the plaintiff was requested not to attend to his duties, but de jure continued to remain an employee of the Company as his monetary dues had not been settled on completion of three months. Hence, his salary was paid for the three months period. Such a situation could be contemplated on a reading of Clause 14 of Ex.P-1. In other words, when there was waiver of the notice period by the defendant Company when resignation had been tendered by its employee, it would be justified on the part of the Company to restrain the employee from attending to his duties with effect from the date of tendering resignation by the employee. However, it would be incumbent upon the Company to pay the salary dues to the employee even though he does not perform his duties for the notice period of three months. This is because, it is at the instance of the employer, that the employee is not permitted to perform his duties in the company during the three months’ notice period. That is exactly what has happened in the instant case. The plaintiff was asked to return his identity card and other documents and assets of the Company in his possession on the date he tendered his resignation i.e., on 08/06/2012, which means that he was not to render his services to the Company after that date. When such discretion was exercised by the Company, there was waiver of the notice period, but the employee did not cease to be on the rolls of the Company as it was only on the completion of the notice period that the monetary dues of the employee was to be settled. But, for the period of three months, it would be incumbent upon the company to pay the salary and allowances to the employee, even though discretion has been exercised by the Company requesting the employee not to perform his duties in the Company.
44. The said situation is also in total consonance with Clause 15 of Ex.P-1 where the defendant Company has the right to terminate the services of the employee only after giving notice equivalent to a period of three months or if there has to be immediate cessation or termination, then compensation equivalent to three months’ salary has to be paid by specifying the reason. In other words, three months’ notice period prior to termination by the defendant Company is a mandatory requirement, or if the termination is immediate, then salary for the period of three months has to be given and thereafter the monetary dues could be settled.
45. Therefore, what emerges on a combined reading of Clauses 14 and 15 of Ex.P-1 in the instant case is that there could be waiver of three months notice period at the instance of the employee or the employer, but in either case, salary for the period of three months would assume significance and has to be paid by the employer to the employee. Thus, even if the three months’ notice period is waived by the employer when the employee tenders resignation and requests the employee not to attend to his duties in the Company, salary for the said period of three months would have to be paid. On the other hand, when an employer also seeks immediate termination of the employment, compensation equivalent to three months’ salary must be paid by the employer. Thus, when an employee tenders resignation without three months’ notice period and there is waiver of the said period by the employer, discretion is vested with the employer to restrain the employee from attending to his duties or to permit him to attend his duties. In either case, the salary for the period of three months notice period must be paid to the employee by the employer.
46. In the instant case, the plaintiff was requested not to attend to his duties immediately on receiving the resignation letter, which discretion exercised by the defendant Company cannot be found fault with. This is because the plaintiff tendered his resignation with immediate effect without complying with Clause 14 of Ex.P-1. On the other hand, if the defendant Company had terminated the services of the plaintiff herein, without issuance of notice, then also, it was necessary for the Company to pay three months’ salary to the employee. But, if the employee wanted an immediate cessation of service from the employer without three months’ notice period, then the employee has to deposit with the employer the salary for the three month period which is a penalty that the employee had to pay for being immediately relieved from the Company on an abrupt cessation of service, so to say. But, in case of a waiver of the three month notice period, discretion was vested with the defendant Company to request the plaintiff not to discharge his duties in the Company, but plaintiff continued to be on the rolls of the defendant company and receive salary for the said period. In the instant case, it has come on record that the salary for the period of June, July and up to 24/08/2012 was paid by the defendant Company to the plaintiff by waiving the period of notice and informing the plaintiff not to attend to his duties. In the instant case, the principles of garden leave as contended by the appellant do not apply.
47. The appellant who has appeared in person has relied upon certain citations which could be discussed at this stage.
48. (a) William Hill Organisation Limited v.
Tucker, ([1999] ICR 291 : 1998 EWCA Civ. 615), (Tucker) is a judgment of the Supreme Court of Judicature, QBD 98/0321/1, Court of Appeal (Civil Division) United Kingdom, wherein the question considered was, when an employee has given notice to determine his contract of employment, may his employer, while continuing to pay his remuneration, insist that he stays away from work for the duration of the notice period, colloquially known as sending him on garden leave? That, if there is an express contractual term to that effect, there would be no impediment as such. But in the absence of such a term, whether a person could be sent on garden leave, was considered.
(b) In the said case, Mr. Tucker joined his employment in the year 1987 and worked in various odd positions. In April 1995, he moved to London to take up the position of Senior Dealer at their office in Finsbury. He entered into a new contract of employment with the Employer comprising an “Individual Statement of Main Terms and Benefits” and a “Staff Handbook”. He was entitled to determine the contract on only one month’s notice but the Employer had to give him three months’ notice for that purpose. On 12/09/1996, Mr.Tucker agreed to a variation of his contract of employment. He was to receive an increased salary and became entitled to a company car. In turn, the period of notice he was required to give, to determine the contract was increased, from one to six months. Notwithstanding this agreed variation on 02/02/1998, Mr.Tucker purported to give one month’s notice of his intention to leave the Company. On 03/02/1998, the Personnel Manager of the Company responded by indicating that six months notice was required with the consequence that Mr.Tucker’s employment would continue till 01/08/1998. It was also added that Mr.Tucker was not required to attend work for the remainder of his notice period and he would continue to receive his salary and all other contractual benefits during that period including bonus. The Personnel Manager reminded Mr.Tucker of his continuing obligations during the course of his employment with regard to confidential information, fidelity and the enticement of employees. The action was commenced by a writ issued by the Company on 24/02/1998 seeking an injunction until 01/08/1998 or further order restraining Mr.Tucker from entering into employment with any other Company or doing anything else which would amount to breach of his obligations to the Employer of good faith and fidelity. The said application was dismissed.
(c) In the said case, the point regarding right to work was considered and it was observed that as social conditions have changed the Courts have increasingly recognized the importance to the employee of the work, not just the pay. Quoting Lord Denning MR in Langston vs. Amalgamated Union of Engineering Workers (AUEW) ([1974] 1 All ER 980), that a man has, by reason of an implication in the contract, a right to work, he has a right to have the opportunity of doing his work when it is there to be done. The said right is a right to attend normally at his place of work. In other words, an employee might be able to show that he has a right to work out any notice which he may be given, that it is his employer’s duty to allow him to exercise that right by providing him with the work, and that by continuing to suspend him on full pay, as they are doing, they are in breach of their contract of employment with him. Distinguishing judgments such as Provident Financial Group v. Hayward, ([1989] ICR 160]), where there was a specific contract absolving the employer from providing any work so that the question of construction did not arise, it was observed that the employee has a concern to work and a concern to exercise his skills. On a construction of the contract of employment therein, it was held that the employer therein was under an obligation to permit Mr.Tucker to perform the duties of the post to which it had appointed him in accordance with his contract as well during the period of his notice as before it was given.
(d) In the said case, the Supreme Court of United Kingdom made two observations in the form of tests, namely, (i) did the employer have to demonstrate an express or implied term entitling him to send his employee home, albeit on full pay, for the period of his notice, colloquially known as garden leave? (ii) Or, the employee had to demonstrate an obligation on the Employer to permit to do the work? In other words, whether the employer has an obligation to permit the employee to do the work or is it confined to payment of the remuneration agreed? If the answer is, in the sense of the latter alternative, then the employer is entitled to send his employee home on garden leave notwithstanding the absence of an express or implied power to do so because there is no contractual obligation to prevent him. If the answer is in the sense of former alternative, then the employer needs a provision entitling him to send his employee on garden leave so as to absolve him from what would otherwise be a breach of contract. That an employer would have to stipulate an express power to send his employee on garden leave in all cases in which the contract imposes on him an obligation to permit the employee to do the work.
49. (a) With regard to Garden Leave Clause, the decision in the case of VFS Global Services Private Limited vs. Mr.Suprit Roy, [(2008) 2 Bom.C.R. 446] (VFS Global Services Pvt. Ltd.), was been pressed into service by the appellant. In the said judgment, it has been held that the garden leave clause is intended to operate after the contract of employment stands terminated either, as a result of resignation or upon the employee ceasing to remain in service upon termination. The Garden Leave Clause is prima facie in restraint of trade and is hit by Section 27 of the Indian Contract Act. The effect of the clause is to prohibit the employee from taking up any employment during the period of three months on the cessation of the employment. Quoting from Gujarat Bottling Company Limited vs. Coca Cola, [AIR 1995 SC 2372], it was observed that a negative covenant of this nature cannot be enforced if it would indirectly compel the employee either to remain idle or to serve the employer.
(b) In the said case, the defendant was employed by the plaintiff – VFS Global Services Private Limited in the grade of Senior General Manager. He was transferred to Visa Facilitation Services (VFS) division and designated as a General Manager. Under the original contract of employment, the services of the defendant could be brought to an end by either side with one month’s notice or salary in lieu thereof. On 11/07/2003, additional terms of conditions were imposed by the employer. Among them was a condition that the Defendant shall not participate with any other company carrying on similar business and shall not commence similar business during the period of employment or for a period of two years thereafter. On 26.07.2006, the plaintiff, upon a review of the conditions governing employment introduced a condition styled as a Garden Leave Clause to the following effect:
“The Company reserves the right to require you to remain away from work/employment for a period of 3 (three) months after termination or resignation of your services with the company. You shall agree to comply with all conditions that may be laid down by the Company at the time of such resignation or termination. The Garden Leave period shall commence after you have served the notice period and have ceased to be on the rolls on the Company.
You shall be bound and undertake that you will not directly or indirectly, whether through partnership or as a shareholder, joint venture partner, collaborator, employee, consultant or agent or in any other manner whatsoever, whether for profit or otherwise carry on any business, which competes directly or indirectly with the whole or any part of the business of visa processing services or having/conducting business similar to the business conducted by the company for a period of 3 (three) months after serving the notice period and ceasing to be an employee of the Company.
You shall also be bound to comply with the conditions of Non Compete and Non Solicitation as set out in the terms and conditions. The Company shall pay you compensation which shall be equal to 3 (three) month's remuneration last drawn by you at the time of your termination or resignation. Please note that the company shall apply this clause at its sole discretion and you shall not claim it as a right. ”
(c) On 08/10/2007, the defendant in the aforesaid case tendered his resignation from service and stated that while under the letter of appointment he was required to give a notice of thirty days, the activities with which he was currently involved with the plaintiff would be completed, so as to enable him to depart by the last week of November 2007. A suit was filed on 31/10/2007 seeking damages of Rs.5,00,00,000/- (Five Crores) and for enforcing the negative covenant contained in the contract of employment and a motion for interim relief, the plaintiff–company sought enforcement of the Garden Leave Clause with a view to prevent the defendant employee from joining any other Company or Organisation in the Visa Processing Business or travel related services or conducting business similar to that of the company contrary to the accepted terms of contract for a period of three months from the resignation.
(d) In the said case, the principle issue was regarding the enforceability of the Garden Leave Clause. Since the matter was at the interlocutory stage, the Bombay Court opined prima facie that the Clause was intended to operate after the cessation of the employment of the defendant either upon termination or resignation from service. The garden leave period is to commence after the employee has “served the notice period and have ceased to be on the rolls of the Company.”
(e) Section 27 of the Indian Contract Act, which provides that every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind is, to that extent, void, was considered. The exception to the said Section which deals with the goodwill of a business was also considered. The judgment also proceeded to discuss the distinction to be made in Indian law between a restrictive condition in a contract of employment which is operative during the period of employment and one which is to operate after the termination of the employment. That a restriction during the term of employment is regarded as valid and not in restraint of trade vide Niranjan Shankar Gokari vs. Century Spinning and Manufacturing Company Limited [AIR 1967 SC 1098].
(f) In the said case, it was held that the legal position with regard to the post-contractual covenants of restrictions is settled inasmuch as in India, while considering the provisions of Section 27 of the Contract Act, neither the test of reasonableness nor the principle of partial restriction have effect, unless the facts fall in the exception carved out in Section 27 of the Indian Contract Act. It was held that the Garden Leave Clause sought to be enforced in the said case was prima facie a restraint on trade and hit by Section 27 of the Contract Act. A negative covenant could not be enforced as it would indirectly compel the employee either to remain idle or to serve the employer only. Accordingly, the interim application was disposed.
50. (a) The next judgment relied upon by the appellant was Srikantha S.M. vs. Bharath Earth Movers Limited, [(2005) 8 SCC 314 : 2005 LLR 1185] which pertained to a writ petition and not in suit. The facts in the said case were that the appellant therein was appointed by an order dated 11/12/1989 as a Senior Manager in the Department of Security and Vigilance for KGF. He reported for duty on 29/12/1989. By order dated 03/12/1992, the appellant was transferred to the Corporate Office at Bangalore and was relieved on 04/12/1992. The appellant reported at Corporate Office, Bangalore on 07/12/1992. It was his case that he was not assigned any work at Bangalore. He, therefore, got upset and tendered a letter of resignation and to relieve him from the duties “as per Company rules”. His resignation was accepted by the Deputy General Manager (Personnel) on the same day. The appellant was informed that his resignation had been accepted and he would be relieved ‘with immediate effect’. It was also stated that the appellant would be entitled for pay towards notice period as per company rules. By another letter, appellant was informed that his casual leave had been sanctioned from 05/01/1993 to 13/01/1993. 14/01/1993 being a holiday, the appellant therein was to be relieved by the close of working hours on 15/01/1993. It was also stated that the appellant would be entitled for pay towards the balance of notice period as per Company rules. Between 04/01/1993 to 15/01/1993, the appellant therein changed his mind and withdrew his letter of resignation by addressing a letter on 08/01/1993. On 15/01/1993, the appellant was informed that he would be relieved after office hours on the said date. The service certificate in original along with a cheque of Rs.13,511/- was also given to the appellant.
(b) Since, the appellant was not allowed to work after 15/01/1993, he approached this Court by filing the writ petition. The learned Single Judge of this Court held that there is no illegality by the company and dismissed the writ petition. The Division Bench of this Court also being of the same opinion dismissed the appeal. The appellant therein then approached the Hon’ble Supreme Court. After hearing the rival contentions, the Hon’ble Supreme Court observed that this Court (High Court) was wrong in taking a view that the appellant was no more in service after 04/01/1993. It was observed that when a voluntary retirement is withdrawn by an employee, he continues to be in service. The relationship of employer and employee does not come to an end as the employee has the locus poenitentiae to withdraw his proposal for voluntary retirement, he could rejoin duty. After referring to several decisions, the Hon’ble Supreme Court observed in the said case that the respondent-Company had accepted the resignation of the appellant on 04/01/1993 and was ordered to be relieved on that day, and by a subsequent letter dated 04/01/1993, he was granted casual leave from 04/01/1993 to 13/01/1993. Moreover, he was informed that he would be relieved after office hours on 15/01/1993. The vinculum juris was that the appellant therein continued and the relationship of employer and employee did not come to an end on 04/01/1993. Further, the relieving order and payment of salary also made it abundantly clear that he was continued in service of the Company up to 15/01/1993. It was observed that the appellant therein could have withdrawn his resignation and had done so on 08/01/1993. It was, therefore, incumbent on the Company to give effect to the said letter. By not doing so, the Company had acted contrary to the law and the judgment of this Court was set aside.
(c) Then, the next question considered was as to what relief the appellant therein was entitled to. It was held that it was not open for the employer to deny monetary benefits to the workman who was not permitted to discharge his duties. It was held that the action of the respondent – company therein in accepting the resignation of the appellant therein on 04/01/1993 and not allowing him to work was illegal and unlawful and the same was set aside. The respondent Company was directed to treat the appellant in continuous service up to the age of superannuation i.e., on 31/12/1994 and give him all benefits including arrears of salary.
51. Learned counsel for the appellant also relied upon the concept of “Defamation in the Workplace: The Impact of Increasing Employers Liability” – Ann M.Barry – Marquette Law Review; Volume 72, issue 2 Winter (January 1989) Article 6. Defamation in the context of employment is any false statement about an employee communicated by an employer to a third party that harms that employee’s reputation or deters others from dealing with him or her in a business setting. The principal employment actions giving rise to potential defamatory statements are, terminations, references, dissemination of confidential information, evaluations, and internal discipline and criticism. The defamatory character of a statement depends upon its general tendency to cause harm to another’s reputation or deter third parties from associating with him or her. It should be emphasized that the actual harm does not have to result for a statement to be considered defamatory. The statements must refer to the nature of the ability of the employee to perform employment duties as opposed to above generally reflects upon the plaintiff’s character or qualities. Publication is an essential element of a defamation claim and is defined as the communication of the defamatory statement to any third party. In general, a defamatory writing is not published, if it is read by no one but, the defamed person; however, it is published as soon as it is read by someone else. The communication is defamatory “if it tends so to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him.
52. As against the aforesaid judgments, learned counsel for the respondent relied upon the judgment of the Division Bench of the Allahabad High Court in the case of Ram Narain Singh vs. State of U.P. and others, [2007 (4) AWC 3382], to contend that an employee has no right to work, but only a right to get salary and it is always open to the employer to take work from the employee and pay salary so long as the employee is not terminated in accordance with law or in accordance with the terms of the contract.
53. (a) Reliance was also placed on a judgment of the learned Single Judge of the High Court of Delhi in Shri Naresh Kumar vs. Shri Hiroshi Maniwa and others, [MANU/DE/3437/2015]. In the said case, the plaintiff had filed a suit for recovery of monies alleging his illegal termination. In effect, plaintiff sought damages for loss of employment opportunities and other related reliefs. During the course of the judgment, it was observed that a servant who has been wrongfully dismissed must use diligence to seek another employment, and the fact that he has been offered a suitable post may be taken into account in assessing the damages.
(b) Further, in a contract of employment which provides termination of services by one month’s notice, at best, the employee will only be entitled to one month’s pay in terms of the Employment contract. An employee is not entitled to any relief or continuation in service or pay with consequential benefits for alleged remaining period of services till the date of his superannuation. It was further observed that when relief is sought on the basis of any alleged defamation or loss of goodwill of the plaintiff with respect to any defamation or any alleged character assassination, there has to be entire set of facts which are required to be stated for claiming any damages with respect to defamation or character assassination or loss of goodwill. A bland statement made in the plaint, including in the relief clause, of loss of goodwill and reputation thus cannot be a basis for grant of damages for alleged defamation, loss of goodwill and reputation as the plaint lacks averments to constitute such a cause of action. That if the plaintiff is claiming damages for defamation, he must make averments as to how the plaintiff has been brought down in the estimation of right thinking members of the society. If in the case of illegal termination, remedy as per law is three months’ salary in lieu of the period of notice and there cannot be a claim in law with respect to damages on the ground of mental agony and distress inasmuch as by law the monetary benefits are limited to the notice period of termination.
54. General Electric Company vs. Renusagar Power Company, [(1987) 4 SCC 137], was pressed into service by the respondent to contend that this appeal cannot be decided merely on foreign precedent. In paragraph 15 of the said judgment, it has been observed that, the time has arrived to discourage uninhibited reference to foreign precedent, though the same may be welcome when they explore virgin territory and expand the horizons of legal thought. That a foreign judgment is set in the particular foreign country's past and present history, its economic relations, its social relations, its trade and commerce, its traditions, its values, its needs, the stages of the development of its people, its legal ideology, its constitutional direction and strategies and its statutes and judicial precedents. They are to be read and remembered in their setting, but never to be elevated to the level of binding precedent. Learned counsel Sri.Prashant, therefore, contended that merely because the appellant has relied upon certain foreign judgments in this appeal, the same cannot be applied de hors the pleadings and evidence on record.
55. We have closely perused the judgments relied upon by the appellant.
(a) In the case of Tucker, the action was commenced by a writ issued by the Company therein seeking an injunction or an order of restraint against Mr.Tucker from entering into employment with any other company or doing anything else which would amount to breach of his obligations to the Employer of good faith and fidelity. The said application was dismissed and rightly so, as the Supreme Court of Judicature of United Kingdom felt that a man has a right to work and that there was an obligation under the contractual term therein to permit Mr.Tucker to perform his duties of the post to which he was appointed to, in accordance with the contract as well as during the period of his notice, as before it was given. While enumerating the tests laid down therein, it was held that an employer would have to stipulate an express power to send his employee on Garden Leave in all cases, in which the contract imposed on him an obligation to permit the employee to do the work. In the absence of such a provision, it would be in breach of contract. In other words, if there is an obligation on the part of the employer to permit the employee to do the work under the contract, then restraining the employee from work during the notice period is a breach. But, on the other hand, if the term in the contract permits an employer to pay the employee during the notice period and at the same time, request him not to attend to his duties, then there would be no breach.
Having regard to the specific term in the contract, in the said case, it was held that the employee could not be restrained from entering into an employment with any other company or doing anything else which would amount to breach of his contract with his employer and the application filed by the employer was dismissed.
(b) In VFS Global Services Private Limited, the concept of Garden Leave subsequent to the contract of employment being terminated was considered. In that context, it was held that prima facie the Garden Leave Clause being in restraint of trade was hit by Section 27 of the Indian Contract Act. On considering the Garden Leave Clause in the said case, it was held that it was to commence after the employee had served the notice period and had ceased to be on the rolls of the Company and the Bombay High Court speaking through Dr.D.Y.Chandrachud J., while considering the case at the interlocutory stage held prima facie that the Clause in the said case was intended to operate after the cessation of the employment of the defendant therein, either, upon termination or resignation from service. It was further held that the restriction during the term of employment is regarded as valid and not a restraint of trade, but a Garden Leave Clause subsequent to the cessation of service is a restraint of trade and hit by Section 27 of the Contract Act.
(c) Similarly, the case of Shrikanth turns on its own facts and the question there was, whether, before the application for voluntary retirement was accepted by the employer, an employee could withdraw it, in which event, he would continue to remain in service. The said question does not arise in the instant case. Therefore, the aforesaid judgment is not applicable to the present case.
56. Thus, the decisions relied upon by the appellant/plaintiff are of no assistance to him.
57. Having regard to clause 14 of Ex.P.1, the employer had the right to request the appellant herein not to attend to his duties and the test laid down in Tucker if applied, does not lead to any breach of contract. We also do not think that the course of action taken by the employer, namely, the defendant company in the instant case, has caused any dent to the reputation of the plaintiff nor has there been any stigma or prejudice caused to the career of the plaintiff. Thus, the first aspect of the case is held against the plaintiff-appellant.
58. The second aspect of the case is with regard to the errors in the exit letters. In the first set of documents, namely exit and relieving letters, it was stated that the plaintiff had worked up to 30/06/2012. The plaintiff requested for correction and thereafter, it was stated that he had worked from 10/08/2009 to 24/08/2012. The trial court has found that on account of there being correction in the exit documents, no injustice has been caused to the plaintiff. That, in fact, he was working in Semcon Company drawing a higher salary of Rs.12,00,000/- per annum. That though the plaintiff did not resign on 30/06/2012, but had done so on 08/06/2012, on which day, it was accepted, the incorrect mentioning of the date of resignation was subsequently rectified. The contention of the appellant is that the error in the exit documents had been made purposely in order to cause harassment to him and ruin his reputation.
59. We do not think that the error which had crept-in in the exit documents of the appellant were made purposely or with an oblique motive so as to harass the appellant or to cause stigma to the reputation of the appellant. In any case, the corrected version of the exit documents were issued to the appellant. Therefore, we do not find that any prejudice or loss has been caused to the appellant on account of the mistakes that occurred in the exit documents initially issued to the appellant. Therefore, we do not find any reason to award damages to the appellant on account of the mistake that occurred in the exit documents.
60. Further, the appellant has not been able to establish before the Court what was the actual damage that he had sustained on account of the typographical errors in the exit documents, or in what way the same resulted in loss of his reputation or career. No evidence regarding monetary loss caused to the plaintiff has been established to the plaintiff. At any rate, on the request made by the appellant-plaintiff, the defendant Company corrected the mistakes and issued fresh exit documents. Those should have been made use of by the appellant for the purpose of seeking employment in any other establishment or Company.
61. The contention of the appellant-plaintiff that 30/06/2012 was a Saturday and a holiday and therefore, his resignation could not have been on the said date; that such a date was purposely shown in the exit documents issued by the defendant Company in order to harass the appellant and cause trouble to him cannot also be believed. There is no material on record to establish the fact that on account of the said errors, deliberate or otherwise, in the exit documents, the appellant could not secure any better employment or an employment otherwise equivalent to what he was discharging i.e., equivalent to the one in the respondent Company. Thus, we do not find any substance in the contention of the plaintiff that the mistake in the exit documents had been made by the officers of the defendant deliberately and with a view to cause harassment and loss to him.
62. We do not think that there was any defamation of the appellant in the workplace so as to hold that the appellant was subjected to loss of reputation so as to lower his estimation in the Society. There is no evidence in that regard also. Which of the third persons from the society were deterred from associating with or to deal with the appellant-plaintiff or ridiculed him in any way, on account of the mistake which crept-in in the exit documents, has not been established. Even otherwise, it is of significance to note that in the exit documents, the date of resignation of the appellant was corrected and fresh exit documents were issued to him. Hence, there has been no loss of reputation or harassment, which has been caused to the plaintiff on account of the mistake that occurred in the exit documents, as there is no evidence placed on the said aspect of the matter.
63. In the result, we find that there is no merit in the appeal. The appeal is hence dismissed.
Parties to bear their respective costs.
In view of dismissal of the appeal, all pending applications, if any, stand dismissed.
Sd/- JUDGE Sd/- JUDGE *mvs/RK/-