V. Kadirvelu vs The Secretary, The Madras State Khadi and Village Industries Board, Secretariat

M.M. Ismail, J.—The plaintiff in O.S. No. 873 of 1966 on the file of the City Civil Court, Madras, who lost before the Courts below, is the

appellant herein. He was appointed as the provincial Palm Gur Organiser, on a contract basis, in 1949'' against a post temporarily created for a

period of one year. His service was initially under the Co-operative Department. In 1956 the scheme of Palm Gur Development was placed in

charge of the Director of Industries and the post also was transferred to that Department. In i959, the Madras (State Khadi and Village Industries

Board) Act (XVIII of 1959) was passed, and persons who were employed under the Government in connection with the development of such

industries were given option to go over to the service of the Board constituted under the Act with effect from 15th September, 1960. The

Appellant was one of the persons who> came to serve under the Board with effect from 1st January, 1961. Prior to his coming over to the service

of the Board, his contract with the Government was being renewed from year to year. Even after he came under the services of the Board, a

contract was entered into between him and the Government on 19th October, 1961, for a period, commencing from 1st March, 1960, and a copy

of the same has been marked as Exhibit A-10 in these proceedings. When the Government permitted the transfer of its employees to the service of

the Board, after the constitution of the Board, it passed necessary orders in G.O. Ms. No. 3106, Food and Agriculture, dated 10th September,

1960. The said order and the Notification issued there under provided that such persons would serve under the Board with effect from 15th

September, 196(3) until corresponding service rules and regulations were framed by the Board under Clause (a) of Sub-Section (2) of Section 30

of the Act. Clause 4 of the Notification also provided that all orders passed by the Government of Madras in relation to the said staff on or after

the 15th September, I960,, shall be deemed to be Law ful orders passed by the Board and shall have effect accordingly. The Notification issued

by the Government is incorporated in the proceedings of the Board dated 15th September, I960, which has been marked as Exhibit A-11, in these

proceedings. It is admitted that after Exhibit A-10 no contract was actually entered into between the appellant on the one hand and the

Government or the Board on the other. However, from the conduct of the parties, the only inference possible is that even under the Board, the

appellant served on a contract basis and such a contract was deemed to have been entered into from year to year. In May 1964, the Board

purported to terminate the service of the appellant and the appellant filed W.P. No. 803 of 1964 on the file of this Court. This Court allowed that

writ petition holding that while the Board purported to punish the appellant, it did not give him an opportunity to put forward his defence.

Thereafter, pending further enquiries, the Board purported to appoint the appellant temporarily under Rule 10(A)(1) of the Madras State and

Subordinate Service Rules. Under Exhibit A-14 dated 16th March, 1965 the Board terminated the services of the appellant on one month''s notice

on the ground that his services were no longer required. Challenging this order passed by the Board, the appellant filed W.Ps. Nos. 1544 and

1545 of 1965 on the file of this Court. But those writ petitions were dismissed by Srinivasan, J., on 19th November, 1965 holding that for the

termination of the services of the appellant in violation of the contract entered into between the parties, no writ petition would lie under Article 226

of the Constitution of India. It is thereafter the appellant instituted the present suit for a declaration that the order of termination passed against him

by the respondent in proceedings Ms. 171 dated 16th March, 1965 was illegal, invalid and inoperative and consequently for directing the

respondent herein by a mandatory injunction to reinstate the plaintiff-appellant to his original service with the Board as Palm Gur Organiser with

effect from 16th April, 1965. The suit having been dismissed by the learned First Assistant Judge, who tried the suit, as well as by the learned First

Additional Judge, who disposed of the appeal, the plaintiff in the suit has preferred the present second appeal.

I have no hesitation whatever in holding that the order of termination of the services of the appellant passed by the respondent is not in

accordance with the terms of the contract entered into between the parties. I have already referred to the fact that subsequent to Exhibit A-10, no

fresh contract was entered into between the appellant on the one hand and the Government or the Board on the other. Notwithstanding this, the

parties proceeded on the basis that the said contract was renewed year after year and the service of the appellant was governed only by the terms

of that contract. That position was accepted by the respondent-Board in the counter-affidavit filed by it in W.P. Nos. 1544 and 154s of 1965. As

a matter of fact, in paragraph 10 of the plaint in the present suit itself the appellant has stated that he executed Exhibit A-10 contract for the year

unding 1960 while he was serving under the Board, even though the contract term had already expired. The learned First Assistant Judge who

tried the suit also points out in paragraph 11 of his judgment that it was conceded by both parties that the appointment was on a contract basis

renewable annually. Therefore, notwithstanding the non-existence of any contract between the parties subsequent to Exhibit A-10, I must proceed

only on the basis that the parties must be deemed to have renewed the contract for each calendar year subsequent to Exhibit A-10. If so, it is

incontrovertible that the termination of the services of the appellant had not been in accordance with the terms of the contract. Clause 4(1) of

Exhibit A-10 contract provides:

The services of the party of the first part (appellant herein) may be terminated as follows:

(i) At any time, on one calendar month''s notice in writing given to him by the Government, if in the opinion of the Government the party of the first

part proves unsuitable for the efficient performance of his duties during service under this agreement.

Therefore, action under Clause 4(i) of the contract can be taken only if the Government are of the opinion that the appellant has proved himself to

be unsuitable for the efficient performance of his duties. On the other hand, as far as Exhibit A-14 is concerned, the termination has been ordered

only on the ground that his services were no longer required, but not on the ground that he had proved himself to be unsuitable for the efficient

performance of his functions. Consequently, it must be held that the termination of the services of the appellant was not in accordance with the

terms of the contract. As a matter of fact, that question seems to have been concluded by Srinivasan, J., in his judgment in W.Ps. Nos. 1544 and

1545 of 1965, a copy of which has been marked as Exhibit A-15. This is what the learned Judge states:

Learned Counsel for the petitioner (appellant herein) does not deny that if the petitioner''s (appellant''s) service should be governed by the terms of

the contract, it would be open to the Board not to renew the contract at the end of the year. He Claims however that the claim to enable (sic) to

put an end to the contract under Clause 4(1) of the contract which has been extracted above is against the terms of that particular provision. That

is true.

Therefore, there can be no doubt, whatever that the termination of the services of the appellant under Exhibit A-14 was contrary to the terms of

the contract, namely, Clause 4(z) of Exhibit A-10,

The next question for consideration, is, whether the appellant is entitled to the issue of a mandatory injunction against the respondent herein,

directing the respondent to reinstate the appellant into service. As 1 have pointed out already, the plaint prays for a declaration that the order of

termination is illegal, invalid and inoperative and also for consequential mandatory injunction to the respondent to reinstate the appellant into the

service of the respondent.

It has been held repeatedly that ordinarily in relation to master and servant, if a master illegally terminates the services of a servant, the servant is

not entitled to the remedy of reinstatement, because that will be tantamount to specifically enforcing the contract of service between the parties.

Smt. Lena Ratnam V. The Indian Red Cross Society, Madras State Branch and Anr. (1970) 83 L.W. 682 relates to a case of an employee

whose services had been terminated. In that case, she had prayed for a declaration that the order 6of termination was illegal and for a further

declaration that she still continued in service. I have held that the former employee was not entitled to the declaration that she continued in service,

but she was entitled to the limited relief of declaration that the termination of her services was illegal. Such limited declaration was also upheld by

me in Stanes Motors (South India) Limited by its General Manager, having its office at Tiruchirapalli Road, Coimbatore V. T. Shanmugham S.A.

No. 1896 of 1966, disposed of on 15th July, 1970.

In Executive Committee, U.P. Warehousing Corporation Vs. Chandra Kiran Tyagi, The Supreme Court, after elaborately considering the

previous decisions, formulated the principles and conclusion as follows:

From the two decisions of this Court, referred to above, the position in Law is that no declaration to enforce a contract of personal services will be

normally granted. But there are certain well-recognized exceptions to this rule and they are:

To grant such a declaration in appropriate cases regarding

(1) a public servant, who has been dismissed from service in contravention of Article 311;

(2) reinstatement of dismissed worker under industrial Law by labour or industrial tribunal;

(3) a statutory body when it has acted in breach of mandatory obligation, imposed by statute.

Applying these principles enunciated by the Supreme Court, the question for consideration will be, whether the appellant herein is entitled to any

decree directing the respondent to reinstate him into the service of the respondent. Admittedly, once he chose to serve under the Board., he was

not a public servant to whom Article 311 of the Constitution would apply. Therefore, the first exception will not govern the case of the appellant.

The present remedy is sought in a civil Court in the form of a suit and consequently the second exception also will not apply. As far as the last

exception is concerned, I have already pointed out that the common case of the parties was that the appellant was serving under a contract with

the Board and therefore the termination of the services of the appellant contrary to the terms of the contract entered into between the parties

cannot be said to be an act of a statutory body in breach of a mandatory obligation, imposed by statute. The result is, the third and last exception

also will not apply and therefore the appellant is not entitled to the relief of reinstatement which he has prayed for in the present suit. The general

principles laid down in the above case have been reiterated by the Supreme Court again in Indian Airlines Corporation v. Sukdeo Raiji (1971) 1

S.C.W.R. 780. Therefore, the appellant herein will not be entitled to the mandatory injunction directing the respondent herein to reinstate him into

the service and his only remedy will be to claim damages for the termination of his services contrary to the terms of the contract entered into

between the parties. In this case, the appellant had not prayed for any such damages and therefore that relief cannot be granted in the present

proceedings.

The result is, the second appeal is partly allowed and in the place of the dismissal of the suit, there will be a decree declaring that the order of

termination passed against the appellant herein by the respondent in proceedings Ms. No. 171 dated 16th March, 1965 is illegal as being opposed

to the terms of the contract entered into between the parties. The suit will stand dismissed in other respects. The second appeal is disposed of

accordingly. The parties will bear their respective costs throughout.

No leave.