Jammu and Kashmir Bank Ltd. vs Moti Lal Wattal

Petitionerbank is resisting the suit of the respondentplaintiff, ExManager, for a decree of declaration that his dismissal from service was void,

illegal and ineffective and for treating him in employment with all consequential benefits. The trial court framed seven issues in the suit on 4.5.1993.

It, however, framed the following two additional issues on the application of the defendant on 4.9.1993:

Whether the suit in the present form is not maintainable?

O.P.D.

Whether the suit is time barred?

O.P.D.

These two issues were treated as preliminary and decided in favour of the plaintiff by the impugned order dated 27.1.1994. While doing so the trial

court held the suit as maintainable in its present form and also within time. The defendantbank feels aggrieved of this and has filed the present

revision petition to question the legality of the impugned order.

Petitioner's case in nutshell is that the trial court could not have held the suit in order as it was incapable of granting a declaration to the plaintiff in

a case involving personal contract of service. His counsel, Mr. Sharma, argued that even if a contract of employment was wrongfully terminated,

his remedy lay in an action for damages because the civil court had no power to specifically enforce the contract of service in violation of the bar

imposed by Sec.21 (b) of the Specific Relief Act, 1979. He referred to the prayer clause in the plaint to show that the plaintiff had, infact, asked

for a decree of reinstatement in service from the trial court which could not be granted and in the circumstances the court had no option but to

dismiss the suit. He cited AIR 1981 SC 122, AIR 1980 SC 16, AIR 1982 Cal.174 and AIR 1976 A.P.321 in support. He did not, however,

pursue the other point on the plea of limitation.

Mr. Goja, learned counsel for the respondent, on the other hand, contended that the plaintiff had challenged the invalidity of defendant's action

for lack of jurisdiction. According to him, the suit sought a declaration for this action being void and inoperative and not for specific performance of

the contract. On the issue of limitation, he pointed out that the matter was covered and settled by AIR 1992 SC 111 and AIR 1990 SC 10..

It is well settled by a long line of decisions that a contract of personal service is not normally specifically enforceable and a civil court is loath to

give a declaration that the contract subsists and the employee even after having been removed from service, be in service against the will and

consent of the employer. The remedy of the aggrieved employee has been held to lie in an action for damages. There are, however, certain well

recognized exceptions to this: (i) Where a public servant is sought to be removed from service in contravention of provisions of Art.311 of the

Constitution of India; (ii) where a worker is sought to be reinstated on being dismissed under the Industrial law; and (iii) where a statutory body

acts in breach of the mandatory provision of the statute. This position was first stated by the Supreme Court in S.R. Tewari's case (AIR 1964 SC

1680) and was then consistently reaffirmed in AIR 1970 SC 1244, AIR 1971 SC 1828 and AIR 1973 SC 85 and other judgments. Therefore,

there is hardly any scope for any contrary view on this.

But while one may not venture to ignore a settled position on the point, cases are conceivable where the relationship between an employer and

employee in public bodies, local bodies or corporations etc., is governed by certain rules and regulations made by an employer creating a

mandatory obligation in the process. In such cases, the termination, which is as good as repudiation of the service contract, may, in a given

situation, be ultra vires such rules and regulations and null and void to that extent. That being so, any such repudiation cannot sustain in law, nor can

the doctrine of contract of personal service be pressed into service, with all its rigid and conservative connotation to come in the way. Because

what the aggrieved employee would be claiming in such a case is a declaration of invalidity of the action and not the enforcement of the specific

contract of service. To illustrate, where the termination is beyond the powers of an authority defined and determined by the rules/regulations laid

down by the employer, it would be a nullity and the employee would be well within his rights to ask f or a declaration from the court to the extent

and where the court grants such declaration, in the facts and circumstances of the case, it only declares a legal right without transgressing any rule

or principle governing the doctrine of unenforceability of personal contract of service. After all the relief of declaration under the provisions of the

Specific Relief Act, is purely an discretionary relief which the Courts do not grant for asking. They do so according to sound legal principles

keeping in view the principles of justice and fairplay and after making sure that the plaintiff fits in the bill. Moreover, such a declaration simpliciter

does not create any new state of things.

Applying all this to the present case it is not possible to upset the impugned order and to throw away the suit on the very threshold by invoking

the doctrine of the service contract. This is so for the reasons to follow.

Petitionerbank is a company constituted under the Banking Companies Act. It has framed rules and regulations which govern the service

conditions of its employees. Its last set of rules in force, is the ""Revised Recruitment, Discipline and Appeal Rules, 1972"" which apply to all

employees of the bank except the Chairman, persons on deputation, persons engaged on contract basis or any others appointed on specific terms

and conditions. These rules provide for the manner and method in which disciplinary action can be taken against an employee and also specify the

authorities in this regard. Without going into the character and status of these rules/regulations it cannot be gain said that the employer banks has

created a mandatory obligation for itself to regulate the service conditions of its employees by these rules. Therefore, it cannot resort to or do away

with these rules according to its convenience.

There is no dispute about the application of these rules to the plaintiff while he was in service. Therefore, if he alleges the infraction of these rules

to challenge his dismissal from service, he is only seeking a declaration for the invalidity of the action on the basis of the Rules, which indeed, bind

the Bank. In other words, he is not enforcing specific performance of any service contract. To hold otherwise would be render him virtually

remedyless considering the state and fate of the damage action in our prevailing system.

Moreover, it is not for certain that the Court would necessarily grant the declaration in favour of the plaintiff. As already noticed elsewhere, the

Court has to keep a variety of factors in view to give such a declaration. Therefore, it would be too much and too early to shut the doors of justice

to an aggrieved employee on the so called ""untouchability of the doctrine of personal service contract in a declaratory suit"".

I have also gone through the plaint and the written statement but I refrain from saying anything further lest it may tend to influence the trial court

in taking some view. Suffice it to say at this stage that the suit shall proceed and the trial court be left free to hold whether or not the plaintiff is

entitled to any declaration in the facts and circumstances of the case.

I am not required to labour much on the issue of limitation which stands squarely covered by AIR 1992 SC 111 and AIR 1990 SC 10. The trial

court has rightly held that the residuary Art. 119 of the Limitation Act applies to suit and that it is within time.

In the premises I dismiss this revision petition without any order as to costs with the hope that the trial court shall expeditiously conclude the

trial which is hanging fire since 1987. Record be returned to the court below forthwith.