Birari Vs. M.P. Rajya Nagrik Aapurti Nigam Ltd.  INSC 443 (22 August
Babu J. & Shivaraj V. Patil J.
V. Patil J.
that are not in dispute are that the appellant was appointed as Assistant
District Manager in M.P.State Commodities Trading Corporation Limited, Indore (the respondent herein) by order
no. 4383 dated 10.9.1980.
the terms of the appointment, the services of the appellant could be terminated
on one month's notice or on payment of one month's salary in lieu of notice by
either side. The respondent is a Government company within the meaning of
Section 617 of the Companies Act, 1956. The respondent by order dated 11.5.1981
terminated the services of the appellant with effect from 11.6.1981. The notice
of termination was served on the appellant on 8.6.1981 and he was relieved on
10.6.1981. The appellant was not paid one month's salary also.
with the situation, the appellant filed a suit for declaration that the order
terminating his services was illegal and that he be treated as continuing in
the service of the respondent contending that the order of termination of
services was in contravention of the terms of employment.
respondent resisted this suit on the ground that the relationship between the
parties was contractual of `master and servant' and as such the appellant could
not claim specific performance of the contract; the respondent was under no
statutory obligations to keep the appellant in service.
trial court decreed the suit of the appellant holding that neither the
appellant was given one month's notice nor one month's salary as per condition
no. 5 of Exbt. P1 - the appointment order dated 10.9.1980.
to the trial court, the order of termination of services was one passed without
complying with the condition precedent. It was void. Hence the suit was
respondent, aggrieved with the judgment and decree of the trial court, filed
appeal in the court of the District Judge, Bhopal. The learned District Judge allowed the appeal, set aside the judgment
and decree passed by the trial court and declared that the appellant was only
entitled to one month's salary in lieu of notice from the respondent-employer.
According to the learned District Judge, the only question that arose for
determination in the appeal was whether the appellant was entitled to a
declaration that termination of his services was void ab initio and he could be
treated still to be in service. He referred to the decision of this Court in Kusum
State Small Scale Industries Corporation (1986 Pt.II M.P.W.N. 108) in which it
is held that the Corporation was bound to pay one month's salary to the
employee while terminating her services but did not pay the same and as such
the order of termination of the services was void. The learned District Judge
however took the view that no statutory restriction existed in the case of the
appellant and there was only contractual liability arising out of `master and
servant' relationship. Hence he was not entitled for re-instatement in service.
He preferred to rely upon a full bench decision of the High Court in Central
Co-operative Bank Limited vs. Shibulal & Others (1988 J.L.J. 20) to state
that a discharged employee was only entitled to one month's salary in lieu of
notice; but on the ground of non-payment of one month's salary, the order of
termination of service would not be illegal.
appellant filed second appeal in the High Court of Madhya Pradesh at Jabalpur. In the said appeal, the appellant
urged that the order of termination of his services was against the principles
of natural justice as well as against the Rules relating to his services.
to him, the Rules that govern the service conditions of the State Government
Servants were adopted by the respondent-corporation; since the Rules were not
produced by the respondent, he produced them before the first appellate court
with an application under Order 41 Rule 27 of the CPC. But the said application
was not at all considered by the first appellate court. The learned Single
Judge in the impugned judgment has stated that the only question to be
considered was whether the order of termination of services of the appellant
was illegal. He referred the judgment of Kusum Gupta (supra) of this Court but
simply observed that the said judgment did not help the appellant without
saying why. He relied on the full bench decision of the High Court in Central
Co-operative Bank Limited aforementioned and dismissed the appeal.
appellant filed an application for review of the impugned judgment dated
28.10.1994 passed by the learned Single Judge in the second appeal raising the
grounds that application filed under Order 41 Rule 27 CPC filed before the
first appellate court was not at all considered.
the judgment and decree of the first appellate court were vitiated. Along with
the said application, the appellant produced documents to establish that his
services were governed by the service Rules which were applicable to the
employees of the Madhya Pradesh Government; it was not a mere case of
contractual relationship of master and servant. The review application was
dismissed by the High Court on 11.8.1999. It is thereafter the appellant filed
these Special Leave Petitions challenging the judgment and decree passed in the
second appeal and the order made in the review application.
learned counsel for the appellant urged that the first appellate court as well
as the High Court were not justified in law and on facts of the case in
disturbing the judgment and decree passed by the trial court; admittedly the
order terminating the services of the appellant was made without complying with
a condition mentioned in the very appointment order, i.e., he was neither given
one month's notice nor one month's salary in lieu of such notice; when the
order of termination of services was made in violation of the condition
governing the services, it was void and consequently the appellant is entitled
for reinstatement in service. He submitted that the appellant would be
satisfied if only he is reinstated in service and he would not insist for
payment of back wages.
learned counsel for the respondent submitted that the appellant remained unauthorisedly
absent; he at best was entitled to only one month's salary on the ground that
the appellant was only a temporary employee.
already noticed above, it is not disputed that the order of termination of
services of the appellant was made without giving one month's notice or one
order of termination of services of the appellant dated 11.5.1981 was served on
the appellant on 8.6.1981 and made to be effective from 10.6.1981. The trial
court on the basis of the evidence, recorded finding that the order of
termination of services was made in violation of the conditions mentioned in
the order of appointment itself. As such the said order was void and illegal.
Consequently, it granted decree in favour of the appellant. The first appellate
court did not consider the application made under Order 41 Rule 27 CPC under
which Rules governing the services of the appellant were sought to be produced
to show that the respondent adopted the Rules of the State Government governing
its employees. The learned District Judge refers to Kusum Gupta's case but
states that the said case did not help the appellant as there was no statutory
restriction. Had he only considered the application made under Order 41 Rule 27
CPC, perhaps the position would have been different. He relied on the full
bench decision of the High Court and held that the discharged employee was only
entitled to one month's salary in lieu of notice.
the learned Single Judge did not consider the respective contentions of the
parties touching the question of law but has simply referred to the judgments
in the cases of Kusum Gupta and Central Coo-operative Bank Limited
aforementioned and concluded that the lower appellate court did not commit any
mistake in reversing the judgment and decree passed by the trial court. The
learned Judge did not consider the effect of non-consideration of application
made under Order 41 Rule 27 CPC by the first appellate court.
examining the facts of the case, he has simply stated that the case of Kusum
Gupta aforementioned did not help the appellant. When admittedly the order of
termination of services of the appellant was made in contravention of the
specific condition mentioned in the very appointment order, in our view, the
trial court was right and justified in decreeing the suit of the appellant.
application filed under Order 41 Rule 27, CPC was not considered by the first
appellate court, the case could have been remanded. But we do not propose to do
so for two reasons (1) the order of termination of services is of the year
1981, and (2) admitted facts and circumstances of the case also do not warrant
such a remand. The facts being almost identical, the judgment of this court in
the case of Kusum Gupta (supra) supports the appellant, having regard to the
admitted facts and the circumstances of the case in hand. Further the learned
counsel for the appellant has fairly submitted that the appellant would not
insist for payment of back wages and he would be satisfied if he is reinstated
regard to the facts stated and reasons given above, the judgments and decrees
of the first appellate court as well as the High Court are set aside and the
judgment and decree of the trial court are restored with the modification that
the appellant shall not be entitled for any back wages. In other words, the
judgment and decree of the trial court except to the extent of modification
stated above, shall stand restored. Appeals are allowed to the extent indicated.
Parties to bear their own costs.