Kumar Srivastav Vs. National Insurance Company, Limited & Ors  INSC
247 (27 April 1998)
Anand, K.T. Thomas Thomas, J.
claims to be still in the service of National Insurance Company Limited
(respondent) as a probationary Inspector on a contention that the order passed
by the respondent on 13.31982 terminating his probation is bad in law. He
succeeded in the trial court where he filed the suit for a declaratory decree
and also in the first appellate court, but he was non-suited by the High Court
in the second appeal filed by the respondent. Hence he has come up in this
Court with this appeal.
was appointed as Inspector on probation at Khalidabad under the Gorakhpur branch of the respondent Company
with effect from 19.91980, initially for a period of twelve months subject to
certain conditions. On 13.3.1982 respondent-company served upon him thirty days
notice of termination of his service on the premise that appellants falled to
achieve the targeted premium amount.
filed the suit in the Munsif's Court Gorakhpur for a decree declaring that the
said notice of termination is illegal and void and that he continues to be in
service of the Company with all the benefits flowing from the post.
Respondent-company contested the suit by filling a written statement in which
it was contended, inter alia, that the suit is not maintainable under Section
34 of the Specific Relief Act (for short `the Act') and that the notice of
termination of the appellant is legal and valid.
respondent-company did not participate during evidence stage and hence the
trial court proceeded with the suit ex-parte and a decree was passed in terms
of the plaint on 25.1.1991. Appellant took out execution proceedings in which
he claimed a sum of Rs. 1,02,861/- as arrears of pay due to him from the date
of notice of termination.
resisted the execution by putting-forth various contentions including that the
decree in unenforceable and void as the same was passed without jurisdiction.
The execution court has replied all such objections by its order dated
challenged the said order by means of a writ petition filed under Article 226
and 227 of the Constitution. High Court of Allahabad dismissed the writ petition holding that the decree was passed by a
court having jurisdiction and, that the suit was maintainable under Section 34
of the Act.
thereafter that the respondent-company preferred a first appeal before the
Court of Civil Judge (Senior Division) Gorakhpur challenging the decree of the trial court. When that appeal was
dismissed respondent-company preferred a second appeal before the High Court of
Allahabad. Four questions were formulated by the respondent- Company in the second
appeal and pressed them into service as substantial questions of law. They are
Whether the termination order is violative of the contractual term that one
month's notice or pay in lieu thereof is sine qua non;
appellant is entitled to reinstatement without entering upon a finding that
there was statutory violation ;
the suit is barred under the Industrial Disputes Act;
the suit is barred under section 34 of the Act.
Court did not permit the respondent-Company to pursue with the last two
questions on the premise that those questions were finally decided in the writ
petition and such decision will operate as a bar of res-judicate. However,
learned Single Judge of the High Court proceeded to consider the other two
questions and held that non-payment of one month's pay in lieu of the notice
would not vitiate the termination order and that at any rate, appellant is not
entitled to continue as a Probationary Inspector.
the High Court reversed the decree of the trial court and dismissed the suit.
counsel for the respondent-company once again convassed for acceptance of the
argument that the suit is not maintainable in view of Section 34 of the Act.
But in view of the clear finding rendered by the High Court in the judgment
dismissing the writ petition that such a suit for declaration is maintainable
before a civil court, the first appellate court did not go into that question.
second appeal, respondent's counsel repeated the contention but learned Single
Judge of the High Court, who disposed of the second appeal, did not allow the
respondent to re-agitate the said question on the premise that the decision
rendered in the writ petition on that point would operate as res judicata. Undeterred
by such repeated repudiation of the contention, learned counsel for the
respondent made an endeavour to convince us that the suit is not maintainable
on the same ground.
well neigh settled that a decision on an issue raised in writ petition under
Article 226 or Article 32 of the Constitution would also operate as res judicata
between the same parties in subsequent judicial proceedings. The only exception
is that the rule of res judicata would not operate to the detriment or
impairment of a fundamental right. A Constitution Bench of this Court has
considered the applicability of rule of res judicata in writ proceedings under
Article 32 of the Constitution in Daryao & ors. vs. State of U.P. & ors. [1962 (1) SCR 574] and it was held that
the basis on which the rule rests is founded on consideration of public policy
and it is in the interest of public at large that a finality should attach to
the binding decision pronounced by a court of competent jurisdiction and it is
also in the public interest that individuals should not be vexed twice over in
the same kind of litigation.
was relterated by another Constitution Bench of this Court in The Amalgamated
Coalfields Ltd. vs. The Janapada Sabha, Chhindwara [1963 Supple (1) SCR 172].
The following is the ratio : "Therefore, there can be no doubt that the
general principle of res judicata applies to writ petitions filed under Art. 32
or Art. 226. It is necessary to emphasise that the application of the doctrine
of res judicata to the petitions filed under Art.32 does not in any way impair
or affect the content of the fundamental rights guaranteed to the citizens of India.
the above has now become an a accepted legal position [vide G.K. Sharam &
ors. vs. S.D. Sharma & ors. (1986 Supple. SCC 239), the contention raised
here is that since the writ petition was in challenge of an order passed in
execution of a decree, the decisions rendered in such writ petition would only
remain in the reaim of execution and they would not preclude the parties to the
suit from raising such issues over again when the very decree itself is
challenged in appeal. The Explanation VII, added to Section 11 of the Code of
Civil Procedure as per CPC Amendment Act 104 of 1976 read thus :
provisions of this section shall apply to a proceeding for the execution of a
decree and references in this section to any suit, issue of former suit shall b
e construed as references respectively, to a proceeding for the execution of
the decree, question arising in such proceeding and a former proceeding for the
execution of that decree." Though the said explanation may not stricto sensu
apply to the trial stage, the principle couched in it must gain application
thereto. It is immaterial that the writ petition was filed only subsequently
because the findings made therein became final as no appeal was filed against
the judgement. The basic idea in the rule of res judicata has sprouted from the
maxim "nemo debet bis vexari pro una at eadem causa" (no man should
be vexed twice over for the same cause). In Y.B. Patil & ors vs. Y.L. Patil
[1976 (4) SCC 66] a three-Judge Bench of this Court considered the effect of a
decision rendered in a writ petition at subsequent stages of the same its. It held
: " The principles of res judicata can be invoked not only in separate
subsequent proceedings, they also get attracted in subsequent stage of the same
proceedings. Once an order made in the course of a proceeding becomes final, it
would be binding at the subsequent stage of that proceeding." Thus, the legal
position is clear and the respondent cannot now re-agitate the question
regarding maintainability of the suit under Section 34 of the Act. However,
learned counsel adopted an alternative contention before us that the suit is in
effect one for specific enforcement of a contract and such a suit is not
conceived under Section 14 of the Act and hence it is not maintainable.
According to the learned counsel, the reliefs claimed in the suit, if granted,
would result in specific enforcement of a contract of employment.
14(1)(a) of the Act makes it clear that a contract of employment is not
specifically enforceable since non performance of can be compensated by money,
contended the counsel.
said contention is based on a fallacious premise that the suit was for
enforcement of a contract of employment. Respondent was appointed on certain
terms and pursuant to such appointment he worked within the scope of such
employment. Termination of his employment purportedly in terms of the same
contract is challenged by him by praying for a declaration that such
termination is invalid and therefore, he continues in the same employment.
of a suit cannot be adjudged from the effect which the decree may cause. It can
be determined on the basis of the ostensible pleadings made and the stated reliefs
claimed in the plaint.
Specific Relief Act widens the spheres of the civil court its preamble shows
that the Act is not exhaustive of all kinds of specific reliefs. "An Act
to define and amend the law relating to certain kinds of specific relief. It is
well to remember that the Act is not restricted to specific performance of
contracts as the statute governs powers of the court in granting specific reliefs
in a variety of fields. Even so, the Act does not cover all specific reliefs in
a variety of fields. Even so, the Act does not cover all specific reliefs concievable.
Its preceding enactment (Specific Relief Act, 1877) was held by the courts in India as not exhaustive. Vide Ramdas Khatavu
vs. Atlas Mills (AIR 1931 Born. 151). In Hungerford Investment Trust Ltd. vs. Haridas
Mundhra & ors . [1972 (3) SCC 684] this Court observed that Specific Relief
Act, 1963, is also not an exhaustive enactment and it does not consolidate the
whole law on the subject. "As the preamble would indicate, it is an Act
`to define and amend the law relating to certain kinds of specific relief. It
does not purport to lay down the law relating to specific relief in all its remifications."
Chapter II contains a fasciculus of rules relating to specific performance of
contracts, Section 14 falls within that chapter and it points to contracts
which are no specifically enforceable. Powers of the Court to grant declaratory
reliefs are adumbrated in Section 34 of the Act which falls under Chapter VI of
the Act. It is well to remember that even the wide language contained in
Section 34 did not exhaust the powers of the court to grant declaratory reliefs.
In Veruareddi Ramaraghava Reddy & ors. vs. Konduru Seshu Reddy & ors.
[1966 Supple. SCR 270] and in M/s Supreme General Films Exchange Ltd. vs. His
Highness Maharaja Sir Srijnath Singhji Deo of Maihar & ors. [1975 (2) SCC
530] this Court while interpreting the corresponding provision in the preceding
enactment of 1877 (Section 42) has observed that "Section 42 merely gives
statutory recognition to a well-recognised type of declaratory relief and
subjects it to a limitation, but it cannot be deemed to exhaust every kind of
declaratory relief or to circumscribe the jurisdiction of courts to give declarations
of right in appropriate cases falling outside Section 42." The position
remains the same under the present Act also. Hence the mere fact that a suit
which is not maintainable under Section 14 of the Act is not to persist with
its disability of non admission to civil courts even outside t he contours of
Chapter II of the Act. Section 34 is enough to open the corridors of civil
courts to admit suits filed for a variety of declaratory reliefs.
the more important question is, whether appellant is entitled to declaration
that he continues to be in the employment of respondent-company. High Court
held that he is not because the contract of employment does not entitle him to
and conditions of employment of the appellant have been incorporated in the
letter of appointment dated 2.12.1980. It contains the following :
Initially h e would be on probation for a period of 12 months and during that
period he has to achieve a premium of at least Rs.75,000/- to become eligible
for promotion as Probationary Inspector, Grade I.
appellant falls short of the said target, respondent - company reserved its
right to extent the period of probation by another 12 months provided the
following conditions are satisfied.
should have produced a premium amount of Rs. 50,000/- during the first 12
request should be made by the appellant in writing for the purpose of getting
extension of the period of probation.
The company has discretion to decide whether such request should be granted or
Unless a letter appointing him as Probationary Inspector (Grade - I) is issued
by the company, before the expiry of the initial probationary period or the
extended probationary period (as the case may be) his service shall stand automatically
His service is also liable to be terminated without assigning any reason during
probationary period and/or extended period.
has no case that respondent-company has issued any letter appointing him as
"Probationary Inspector (Grade -I)" before the expiry of the initial
period of 12 months nor has he a case that initial period of probation was
further extended at any time.
above being the admitted position, appellant cannot get a declaration that he
continues to be in service. Hence the conclusion of the High Court that the
suit is liable to be dismissed does not warrant any interference.
result, we dismiss this appeal. No costs.