James J. Pongrace vs Power Machines (India) Ltd. and Another

Shiv Narayan Dhingra, J.—By this Order I shall dispose of an application under Order 37 Rule 3(5), CPC seeking leave to defend.

The plaintiff has filed this Summary Suit under Order 37, CPC for recovery of Rs. 4,36,95,361/-. The plaintiff had entered into an employment agreement with defendant dated 23rd April, 2007. This employment agreement was for a period of 5 years. The employment agreement provided that plaintiff would receive USD 11,000 p.m. as net salary. He shall receive USD 39,600/- p.a. as annual bonus in case of achievement of goal (as set by the company). The plaintiff was also entitled to residential house rent subject to maximum of Rs. 1,15,000/- inclusive of electricity, water charges, etc., reimbursement of medical expenses to the tune of Rs. 4140/- p.m., free use of company car including fuel and maintenance maximum upto Rs. 18,400/- p.m. and daily allowance in case of travel abroad. The services of the plaintiff were terminated after about two years of entering into the employment agreement. The plaintiff thus filed this suit claiming the entire salary and all allowances for remaining period of employment. A perusal of suit would show that he had claimed 35 months'' salary, bonus money against unpaid vacation, medical allowance, unpaid business class fare plus excess baggage allowance for 35 months.

The defendants have stated that suit itself was not maintainable under Order 37, CPC. The contract (employment agreement) between the plaintiff and defendants was a service contract which could not be specifically enforced. Though there was no provision in the contract for termination of employment agreement by either side, but the standing orders of the company provided for termination of the employment with one month''s notice and the termination of employment of plaintiff was validly done vide notice dated 4th August, 2008 and thereafter notice salary, etc. were paid to the plaintiff.

It is obvious that in order to hold that the plaintiff was entitled to damages/ compensation for balance period of his service, the Court has first to decide whether his termination was legal or illegal, which itself is a triable issue. The perusal of suit/ plaint also shows that the plaintiff has claimed all those amounts which were in the nature of reimbursable expenses and could be paid after he had incurred the expenses like house rent, electricity and water charges, medical, travel expenses, etc. These expenses prima facie can be claimed by an employee for the period of employment when he served the company and incurred the expenses. The contract relied upon by the plaintiff does not provide that irrespective whether the services of the plaintiff was terminated or not, he would be entitled to get HRA, travel allowance, bonus, company car allowance, etc. I consider that such claims made by the plaintiff do not fall within the ambit of Order 37, CPC. They are not liquidated claims and they are disputed claims and these would have to be adjudicated.

5.I, therefore, consider that it is a fit case where leave to defend should be granted unconditionally. The application is therefore allowed and leave to defend is granted to the defendants.

CS (OS) No. 1738/2008

WS be filed within 30 days from today. Replication, if any, if be filed within four weeks thereafter. Parties to file all original documents and appear before the Joint Registrar for admission/denial of the documents on 3rd February, 2010 and for framing of issues on 10th March, 2010.