9. Through the present petition the petitioner seeks enforcement of a contract of service. The law on the issue is no more res integra. Subject to well defined categories of exceptions, the law and more particularly provisions of Specific Relief Act, do not contemplate enforcing a service contract, as that would amount to specific performance of a contract. In this context I may usefully rely on a passage from Halsbury’s Laws of England, Fourth Edition, Volume 44, which is as under:-
“407. Contracts for personal work or services.— A judgment
for specific performance of a contract for personal work or
services is not pronounced, either at the suit of the employer
or the employee. The court does not seek to compel persons
against their will to maintain continuous personal and
confidential relations. However, this rule is not absolute and
without exception. It has been held that an employer may be
restrained from dismissing an employee in breach of contract
if there is no loss of confidence between employer and
employee or if (at least in a contract of employment to carry
out a public duty) the employee has been dismissed in a
manner which does not comply with statutory or contractual
regulations governing dismissal. No court may, whether by
way of an order for specific performance of a contract of
employment or an injunction restraining a breach or
threatened breach of such a contract, compel an employee to
do any work or attend at any place for the doing of any work.
This principle applies not merely to contracts of employment,
but to all contracts which involve the rendering of continuous
services by one person to another, such as a contract to work
a railway line ….”
10. Supreme Court in several judgments has observed that a Court would normally not give a declaration that a contract subsists and the employee, after removal from service, can be deemed to be in service against the consent of the employer, subject to three broad exceptions (i) where a public servant is removed in contravention of Article 311 of the Constitution of India; (ii) where the worker is reinstated on being dismissed under the Industrial Law; and (iii) where a statutory body
violates mandatory provisions of a Statute.
11. The only remedy thus available to such an employee, who is
discontinued from service, if aggrieved, is to sue for damages and this is evident from reading the provisions of Section 14 read with Section 41 of the Specific Relief Act.
8. In view of the aforesaid judgments, the following
conclusions in law emerge:-
(i) A contract of private employment is not similar to the
public employment and in such private employment there is
no scope of applicability of the principles of administrative
law/public law.
(ii) A contract of employment which provides termination of
services by one month's notice, then, at best the employee
will only be entitled to one month's pay in terms of the
employment contract. An employee is not entitled to any
relief of continuation in services or pay with consequential
benefits for alleged remaining period of services till the date
of his superannuation.
(iii) As per the provision of Section 14(1)(c) of the Specific
Relief Act, 1963, a contract which is determinable in nature
cannot be specifically enforced. Since the service contract in
the present case is determinable by one month's notice there
does not arise the question of giving of any reliefs which
tantamount to enforcement of a determinable contract. As
per Section 14(1)(b), a contract of personal service cannot
be enforced when the employer is not the Government or
“State” as per Article 12 of the Constitution of India.
Plaintiff has in fact received one month's pay and therefore
his claim will stand satisfied in law and he is not entitled to
any reliefs as prayed for in prayer clauses in the suit.”
IN THE HIGH COURT OF DELHI AT NEW DELHI
W.P.(C) 7196/2020
DEEPAK WANKHEDE Vs INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY
CORAM:
HON'BLE MS. JUSTICE JYOTI SINGH
Date of Decision:09.11.2020
1. Petitioner was employed as a Driver by Respondent No.4 to work
in Indian Renewable Energy Development Agency (hereinafter referred
to as IREDA) in June 2012. He was attached with Director (Finance),
IREDA. IREDA/Respondent No.1 is a Company owned by the
Government of India and under the administrative control of Ministry of
New and Renewable Energy, while Respondent No. 4 is an Agency for
engaging manpower and outsourcing the work. Respondent No.1 deploys
outsourced/temporary staff through manpower agencies empanelled with
it and had accordingly empanelled Respondent No.4.
2. As per the case set up by the Petitioner, he was hired by
Respondent No.4 and attached to Director (Finance) till he retired in
April 2020. On 06.05.2020 Respondent No.2 was appointed as the new
Chairman and Managing Director of Respondent No.1. Petitioner has
worked continuously for eight years since June 2012 without any
complaint and has been removed without any just cause or even a
sufficient notice period after the appointment of Respondent No.2. He
was verbally informed on 29.05.2020 by the Manager (HR) that his
services were no longer required and he need not come to office with
effect from 01.06.2020.
3. Grievance of the Petitioner is that while there is a requirement of
Drivers and the record of the Petitioner is unblemished, his services have
been illegally and arbitrarily discontinued. This is substantiated by the
fact that two new Drivers have been hired by the Respondents and that
too on a pay scale higher than what was being given to the Petitioner.
4. It is argued by learned counsel for the Petitioner that the
Respondents have erroneously stated in their reply dated 05.06.2020 to
the legal notice sent by the Petitioner that since the Director (Finance) has
retired, the services of the Petitioner are no longer required, whereas the
fact is that the Petitioner was hired for employment with Respondent
No.1 and not specifically for Director (Finance). This is fortified by the
identity card of the Petitioner.
5. It is further argued that the sudden removal of the Petitioner has
left him in a state of penury and he is the sole bread earner of his family.
On account of the Pandemic Covid-19 the Petitioner will find it difficult
to get employment elsewhere.
6. Mr. Patnaik on the other hand submits that the Petitioner was hired
as a Driver through Respondent No.4 and attached to the Director
(Finance), on contract basis, and there is no privity of contract between
Respondent Nos.1 to 3 and the Petitioner. Learned counsel for
Respondents further argues that under the law a contract of service is
unenforceable and therefore the present petition seeking directions to the
Respondents to reinstate the Petitioner is not maintainable.
7. Dr. P. Sreenivasan, General Manager (Human Resources), is
present in Court. He reiterates that the Petitioner was hired through an
Agency for Director (Finance) and his services are no longer required. He
submits that the employment of the Petitioner was on contract basis and
there is no provision under which his services can be continued, as
Respondent No.1 is a Company controlled by the Government of India
and bound by its Rules and Regulations for employing the Drivers.
Despite the fact that the Petitioner was not working during the Pandemic,
special powers were invoked and exercising the discretion, salary of the
Petitioner has been released upto May, 2020. He submits that it is not
possible for Respondent Nos. 1 to 3 to accede to the request of Petitioner,
as it would be beyond the jurisdiction of the said Respondents.
8. I have heard learned counsels for the Petitioner and the
Respondents.
9. Through the present petition the petitioner seeks enforcement of a
contract of service. The law on the issue is no more res integra. Subject
to well defined categories of exceptions, the law and more particularly
provisions of Specific Relief Act, do not contemplate enforcing a service
contract, as that would amount to specific performance of a contract. In this context I may usefully rely on a passage from Halsbury’s Laws of England, Fourth Edition, Volume 44, which is as under:-
“407. Contracts for personal work or services.— A judgment
for specific performance of a contract for personal work or
services is not pronounced, either at the suit of the employer
or the employee. The court does not seek to compel persons
against their will to maintain continuous personal and
confidential relations. However, this rule is not absolute and
without exception. It has been held that an employer may be
restrained from dismissing an employee in breach of contract
if there is no loss of confidence between employer and
employee or if (at least in a contract of employment to carry
out a public duty) the employee has been dismissed in a
manner which does not comply with statutory or contractual
regulations governing dismissal. No court may, whether by
way of an order for specific performance of a contract of
employment or an injunction restraining a breach or
threatened breach of such a contract, compel an employee to
do any work or attend at any place for the doing of any work.
This principle applies not merely to contracts of employment,
but to all contracts which involve the rendering of continuous
services by one person to another, such as a contract to work
a railway line ….”
10. Supreme Court in several judgments has observed that a Court
would normally not give a declaration that a contract subsists and the
employee, after removal from service, can be deemed to be in service
against the consent of the employer, subject to three broad exceptions (i)
where a public servant is removed in contravention of Article 311 of the
Constitution of India; (ii) where the worker is reinstated on being
dismissed under the Industrial Law; and (iii) where a statutory body
violates mandatory provisions of a Statute.
11. The only remedy thus available to such an employee, who is
discontinued from service, if aggrieved, is to sue for damages and this is
evident from reading the provisions of Section 14 read with Section 41 of the Specific Relief Act.
12. A similar question came up before a Coordinate Bench of this
Court in Shri L.M. Khosla vs. Thai Airways International Public
Company Limited and Anr. 2012 SCC OnLine Del 4019 where the
issues framed by the Court were as under:-
“1. Whether the continuance of the plaintiff in the
employment of defendant was vested and inherent right until
the date of superannuation?
2. Whether there is privity of contract between defendant
no.2 and the plaintiff?
3. Whether the termination of the plaintiff was as per the
terms of contract of employment?
4. Whether the plaintiff was entitled to automatic promotions
and revisions of salaries as claimed by him?
5. Whether the plaintiff is entitled to damages and
compensation as claimed alongwith interest and if so at
what rate and for which period?
6. Relief.”
13. Relevant paras of the judgment are as under:-
“4. In the judgment in the case of Shri Satya Narain
Garg (supra), I have referred to the recent judgment of the
Supreme Court in the case of Binny Ltd. v. V.
Sadasivan (2005) 6 SCC 657 and which holds that public
policy principles or administrative law principles do not
apply to private employment. The relevant paras in the
judgment in Shri Satya Narain Garg (supra) read as under:-
“7. Merely because two views are possible, this Court
will not interfere with the conclusion arrived at by the
Trial Court, unless the conclusion is illegal or perverse
or causes grave injustice. In case of private employment,
the employers are fully justified in taking steps for
termination of services, if it finds that the employee is not
upto the mark. Principles applicable in public law
domain do not apply with respect to employees in private
employment. Employment in private sector is governed
by the terms and conditions of employment, and unless
the termination is shown to be violation of the terms and
conditions of employment, it cannot be said that the
termination is illegal. In the present case, in my opinion,
since there was no fixed period of employment so far as
the deceased plaintiff is concerned, the deceased plaintiff
could have been terminated from services even by a
simplicitor notice, assuming even if the services of the
deceased plaintiff were upto the mark. Further, even if
there is illegal termination of services, it is not possible
to grant damages as claimed inasmuch as the principle of
mitigation of damages squarely applies. As per this
principle of mitigation of damages enshrined in Section
73 of the Contract Act, 1872 even if an employee is
illegally terminated from services, he cannot sit at home
and he must take sufficient steps to procure alternative
employment. The law in this regard is contained in the
judgment of the Supreme Court reported as S.S.
Shetty v. Bharat Nidhi Ltd., AIR 1958 SC 12. Paras 12
and 13 of this judgment are relevant and the same read
as under:
12. The position as it obtains in the ordinary law of
master and servant is quite clear. The master who
wrongfully dismisses his servant is bound to pay him
such damages as will compensate him for the wrong
that he has sustained.
“They are to be assessed by reference to the
amount earned in the service wrongfully
terminated and the time likely to elapse before
the servant obtains another post for which he
fitted. If the contract expressly provides that it
is terminable upon, e.g., a month's notice, the
damages will ordinarily be a month's wages…
… … No compensation can be claimed in
respect of the injury done to the servant's
feelings by the circumstances of his dismissal,
nor in respect of extra difficulty of finding work
resulting from those circumstances. A servant
who has been wrongfully dismissed must use
diligence to seek another employment, and the
fact that he has been offered a suitable post
may be taken into account in assessing the
damages.” (Chitty on Contracts, 21st Edition,
Vol (2), p. 559 para. 1040).
13. If the contract of employment is for a specific
term, the servant would in that event be entitled to
damages the amount of which would be measured
prima facie and subject to the rule of mitigation in the
salary of which the master had deprived him.
(Vide Collier v. Sunday Referee Publishing Co. Ltd.,
1940-4 ALL. E.R. 234 at p.237 (A). The servant would
then be entitled to the whole of the salary, benefits,
etc., which he would have earned had he continued in
the employ of the master for the full term of the
contract, subject of course to mitigation of damages
by way of seeking alternative employment.”
xxxx xxxx xxxx xxxx
9. Surely, these types of self-serving averments cannot
be held as discharge of onus of proof of mitigation of
damages. The statement made by the deceased
plaintiff is bereft of any details as to which companies
or firms or persons he applied to, and on which dates,
and for what position, and for what salary and also
the details as to why he could not obtain the
alternative employment. I am, therefore, of the
opinion that the deceased plaintiff, even assuming he
was wrongly terminated from services, failed to prove
that he had taken sufficient steps for mitigation of
damages.”
5. In the case of GE Capital Transportation
Financial (supra), I have referred to the earlier judgment in
the case of Shri Satya Narain Garg (supra), and also the fact
that contracts which are determinable in nature cannot be
specifically enforced as per Section 14(1)(c) of the Specific
Relief Act, 1963. I have also referred to the fact that if the
contract of employment provides for one month's notice,
then, the maximum entitlement of damages of an employee
who alleges illegal termination is one month's pay. Paras 10
to 12 of the judgment in the case of GE Capital
Transportation Financial (supra) are relevant and the same
read as under:-
“10. In fact, the subject suit was also barred by Section
14(1)(c) of the Specific Relief Act, 1963 which provides
that the contract which is in its nature determinable,
cannot be specifically enforced. I have referred to the fact
that the contract was determinable by a one month's
notice as per clause 7 of the terms and conditions of the
letter dated 21.4.1998 and therefore the contract which
was determinable by one month's notice cannot be
specifically enforced. What cannot be done directly
cannot be done indirectly i.e. if there cannot be specific
performance of the contract, there cannot be declaration
and injunction to continue such a service contract. Section
41(e) of the Specific Relief Act, 1963 provides that
injunction will not be granted to prevent breach of the
contract, performance of which could not be specifically
enforced.
11. Therefore, looking at the matter from the point of view
of the contract of personal service not being enforceable
under Section 14(1)(b) of the Specific Relief Act, 1963, the
contract being determinable in nature and hence cannot
be enforced as per Section 14(1)(c) of the Specific Relief
Act, 1963 or that injunction could not be granted to
prevent breach of a contract which cannot be specifically
enforced, the suit was clearly barred and not
maintainable. The judgment of the trial Court does not
refer to the binding provisions of Sections 14(1)(b), (c)
and 41(e) of the Specific Relief Act, 1963. To complete the
discussion on this aspect, I would once again refer to the
recent judgment of the Supreme Court in the case of Binny
Ltd. (supra) and which specifically provides that in private contracts i.e. in strict contractual matters, there
does not arise the issue of applicability of Administrative
Law principles.
12. I have already stated above that even presuming there
was breach of contract, at best reasonable damages can
be granted and once there is a clause for termination of
services by one month's notice, it can only be one month's
notice which can be treated as reasonable damages
inasmuch as parties understood the period for obtaining
of an alternative employment as a one month's notice
period-vide SS shetty's case (supra)”
As already stated above, an S.L.P. filed against this
judgment has been dismissed.
xxxx xxxx xxxx xxxx
8. In view of the aforesaid judgments, the following
conclusions in law emerge:-
(i) A contract of private employment is not similar to the
public employment and in such private employment there is
no scope of applicability of the principles of administrative
law/public law.
(ii) A contract of employment which provides termination of
services by one month's notice, then, at best the employee
will only be entitled to one month's pay in terms of the
employment contract. An employee is not entitled to any
relief of continuation in services or pay with consequential
benefits for alleged remaining period of services till the date
of his superannuation.
(iii) As per the provision of Section 14(1)(c) of the Specific
Relief Act, 1963, a contract which is determinable in nature
cannot be specifically enforced. Since the service contract in
the present case is determinable by one month's notice there
does not arise the question of giving of any reliefs which
tantamount to enforcement of a determinable contract. As
per Section 14(1)(b), a contract of personal service cannot
be enforced when the employer is not the Government or
“State” as per Article 12 of the Constitution of India.
Plaintiff has in fact received one month's pay and therefore
his claim will stand satisfied in law and he is not entitled to
any reliefs as prayed for in prayer clauses in the suit.”
14. This law applies with greater vigour in the case of writ jurisdiction where disputed questions of law cannot be adjudicated. In the facts of the present case it is an admitted position that the petitioner was not an employee of respondent No.1, but was hired through an agency/
Respondent No.4. This was not an employment which conferred any right
upon the petitioner to continue, on the threshold of a regular employment
or even an ad-hoc appointment and was purely a contract of personal
service, through an outsourced agency.
15. In view of the settled law this Court in a writ jurisdiction cannot
give any direction to reinstate the petitioner and continue his services.
16. There is no merit in the petition and the same is accordingly
dismissed.
17. Ms. Sweety Chauhan learned counsel for the Petitioner, at this
stage, submits that she may be given the liberty to resort to remedies
under the Industrial Disputes Act, 1947.
18. Liberty is granted to the Petitioner to approach an appropriate
Forum, to ventilate his grievances, in accordance with law.
(JYOTI SINGH)
JUDGE
NOVEMBER 9, 2020
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