IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. R.S.A. No.1111 of 2005 Date of Decision: 25.2.2009 The J. & K.Bank Ltd. and others. ....... Appellants through Shri Z.A.Shah, Senior Advocate with Shri A.P.Jagga, Advocate. Versus Smt.Neelam Rani. ....... Respondent through Shri Anupam Bhardwaj, Advocate. CORAM: HON'BLE MR.JUSTICE MAHESH GROVER .... 1. Whether Reporters of Local Newspapers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? .... Mahesh Grover,J. This Regular Second Appeal is directed against judgments and decrees dated 23.11.2001 and 15.12.2004 passed respectively by the Civil Judge (Junior Division), Amritsar (hereinafter described as `the trial Court') and the Additional District Judge, Amritsar (referred to hereinafter as `the First Appellate Court') whereby the suit of the plaintiff-respondent was decreed with costs and the appeal of the defendants-appellants was dismissed. The facts of the case, if noticed in brief, are that the respondent R.S.A.No.1111 of 2005 -2- .... filed a suit for declaration against the appellants challenging the order of termination of her service, which was passed on 22.4.1997. She was an employee of the appellants having joined as Cashier-cum-Clerk pursuant to the appointment order dated 18.9.1978. On 9.10.1989, she was promoted to the post of Manager and was posted in Majith Mandi Branch, Amritsar. Thereafter, she was transferred from that Branch to Mandi Gobingarh where she joined on 6.10.1993. On 7.10.1993, she sought three days' casual leave,which was sanctioned. Thereafter, repeated applications were sent by the respondent for grant of leave, which were not sanctioned. After two years, the appellants sent a notice dated 15.5.1995 to the respondent asking her to resume her duties immediately by 31.5.1995. In response to this notice, she submitted her medical certificate on 6.6.1995 expressing her inability to rejoin her duties. On 11.9.1995, another show cause notice was issued to which she submitted reply on 27.9.1995. Again, a notice was issued on 7.3.1996 followed by another notice dated 19.6.1996 asking her to join duties within 30 days or face action under Rule 265-A of the Jammu & Kashmir Bank Officers Service Manual, 1987 (hereinafter called as `the 1987 Manual'). A reply was submitted by the respondent on 22.7.1996 wherein she stated that she was sick and also attached therewith a medical certificate. This certificate was issued by a Homeopath and it was got verified by the appellants from a doctor practising in allopathic medicines. Finding entire evidence regarding illness of the respondent unconvincing, the order terminating her service was passed on 22.4.1997. The respondent alleged that the aforesaid order was liable to be R.S.A.No.1111 of 2005 -3- .... set aside as it was made operative with effect from a retrospective date; that before passing the same, no show cause notice was issued to her disclosing the actual state of affairs; that her reply was not considered wherein she had stated that she was unwell which fact was evident from the medical certificate enclosed therewith and that no enquiry was conducted before passing it. In their written statement, the appellants justified the order of termination on the ground that the respondent had remained absent from duty for more than 3-1/2 years and pleaded that they were very well within their right to invoke the provisions of Rule 265-A of the 1987 Manual. Both the parties went to trial on the following issues:- 1. Whether the plaintiff is entitled to declaration as prayed for?OPP 2. Whether the plaintiff is entitled to interest on the arrears, if so, at what rate?OPP 3. Whether the suit of the plaintiff is premature as she has not exhausted departmental remedy?OPD 4. Whether the suit of the plaintiff is not maintainable?OPD 5. Whether this court has no jurisdiction to try the present suit?OPD 6. Whether the suit of the plaintiff is not properly valued for the purposes of court fee and jurisdiction?OPD 7. Whether the plaintiff has suppressed the material facts from the court?OPD R.S.A.No.1111 of 2005 -4- .... 8. Relief. The parties thereafter led evidence and ultimately, the trial Court decreed the suit and declared the impugned order as wrong, illegal and against the principles of natural justice. Consequently, the respondent was held entitled to all the consequential benefits along with interest at the rate of 6% per annum. However, the appellants were given liberty to initiate enquiry proceedings against the respondent under the rules which governed her service. In appeal, the findings of the trial Court were affirmed by the First Appellate Court. Hence, this appeal by the appellants. It is pertinent to mention here that the matter was initially disposed of by this Court vide order dated 15.1.12007. This order was challenged by the appellants before the Apex Court by filing Petition for Special Leave to Appeal (Civil) No.8001 of 2007 (later on, converted into Civil Appeal No.5428 of 2008). Vide judgment dated 2.9.2008, their Lordships set aside the order of this Court and remanded the matter back for decision of the appeal afresh. While passing the aforementioned judgment, the Apex Court, in paragraph 5, observed as follows:- “5. the question that was needed to be decided by the high Court was whether the courts below could have interfered with the order of voluntary retirement passed by the appellant against the respondent in accordance with Rule 265-A of the J R.S.A.No.1111 of 2005 -5- .... & K Bank Officers Service Rules,1987 which does not require the holding of enquiry as a pre-requisite and whether a suit for specific performance of a contract for enforcing personal contract of service against the appellant for alleged breach of rules framed by the appellant as a non-statutory company was maintainable in law.” The matter, therefore, has to be considered afresh in the light of the above and the arguments have been addressed by the learned counsel for the parties accordingly. It has been contended by the learned counsel for the appellants that according to Section 14 of the Specific Relief Act,1963 (for brevity, `the 1963 Act'), no suit was maintainable to enforce a personal contract of service and the alleged breach of the provisions of the 1987 Manual as the appellant-Bank is a non-statutory company. He further contended that the appellant-Bank, being a company incorporated under the Companies Act,1956, was not a statutory body and, therefore, the suit was totally misconceived. To buttress the point that the appellant-Bank was not a statutory body, reliance was placed upon a Full Bench judgment of Jammu & Kashmir High Court reported as Firdous Ahmad Tanki Versus The J & K Bank Ltd. and others and others, 2006(1) S.L.J. 1, wherein this specific question regarding the appellant-Bank being an authority within the meaning of Article 12 of the Constitution of India, was adjudicated upon. It was next contended by the learned counsel for the appellants that action against the respondent was taken pursuant to the provisions of R.S.A.No.1111 of 2005 -6- .... Rule 265-A of the 1987 Manual and even though, the impugned order, the word `termination' has been used, the same was done erroneously and the intention of the appellants was always to resort to the provisions of the aforesaid rule while taking action which is reflected from the notices issued to her prior to the passing of the impugned order wherein reference to this rule was made and the intention to retire her voluntarily was indicated. On the strength of the above contentions, learned counsel for the appellants submitted that the impugned judgments and decrees deserve to be set aside. Reliance was also placed on a judgment of the Supreme Court in State Bank of India and others Versus S.N.golyal, (2008) 8 S.C.C. 92. On the other hand, learned counsel for the respondent argued that from the impugned order, it is clear that the service of the respondent had been terminated and no other meaning can be read into therein and since the termination order was passed without holding an enquiry, the same was violative of the principles of natural justice and, therefore, the judgments of the Courts below are perfectly justified and do not warrant any interference in the Second Appeal. I have thoughtfully considered the respective contentions and have perused the record. In my opinion, the foremost question that is to be decided is as to whether the suit itself was maintainable or not and if this question is decided against the respondent, then the second question regarding the impugned order having been passed by invoking Rule 265-A of the 1987 R.S.A.No.1111 of 2005 -7- .... Manual and its consequent impact would be rendered merely academic and illusory. In Firdous Ahmad Tanki's case (supra), the Full Bench of the Jammu & Kashmir High Court, while determining the question whether the appellant-Bank is an authority/ instrumentality of the State within the meaning of Article 12 of the Constitution of India and is amenable to the writ jurisdiction, it was observed in paragraph 56 of the judgment, per majority view, as under:- “For our conclusion hereinabove, we answer the reference by holding: (a) The Jammu and Kashmir Bank Ltd. is neither the State nor an authority or instrumentality of the State within the meaning of Article 12 of the Constitution of India; (b) The Bank does not perform any public duty or public functions while dealing wit its employees or carrying out its normal commercial and business activities as a Banking Company so as to make it amenable to writ jurisdiction under Article 226 of the Constitution of India read with Section 103 of the Constitution of Jammu and Kashmir. We also do not feel necessary to record our reasons for dis-agreement with the earlier Full Bench decision dated 5.9.1995 firstly because the said judgment stands set aside by Hon'ble Supreme Court and secondly in view of development of law in later judgments.” R.S.A.No.1111 of 2005 -8- .... However, the aforequoted observations do not ipso facto advance the case of the appellants as it is not a case where this Court is confronted with a question as to whether the writ is maintainable against the appellants or not. The question that is to be considered is as to whether the appellant-Bank is a statutory body so as to come within one of the exceptions as carved out by the Apex Court in its judgment in State Bank of India and others's case (supra) so as to make its action amenable to challenge in a civil suit. To appreciate the matter in correct perspective, it would be imperative to reproduce some of the observations which have been made by their Lordships in paragraph 17 of the above judgment. The same read as under:- “17. Where the relationship of master and servant is purely contractual, it is well settled that a contract of personal service is not specifically enforceable, having regard to the bar contained in Section 14 of the Specific Relief Act,1963. Even if the termination of the contract of employment (by dismissal or otherwise) is found to be illegal or in breach, the remedy of the employee is only to seek damages and not specific performance. Courts will neither declare such termination to be a nullity nor declare that the contract of employment subsists nor grant the consequential relief of reinstatement. The three well recognised exceptions to this rule are: (i)where a civil servant is removed from service in contravention of the provisions of Article 311 of the R.S.A.No.1111 of 2005 -9- .... Constitution of India (or any law made under Article 309); (ii) where a workman having the protection of the Industrial Disputes Act,1947 is wrongly terminated from service; and (iii) where an employee of a statutory body is terminated from service in breach or violation of any mandatory provision of a statute or statutory rules. There is thus a clear distinction between public employment governed by statutory rules and private employment governed purely by contract. The test for deciding the nature of relief – damages or reinstatement with consequential reliefs – is whether the employment is governed purely by contract or by a statute or statutory rules. Even where the employer is a statutory body, where the relationship is purely governed by contract with no element of statutory governance, the contract of personal service will not be specifically enforceable. Conversely, where the employer is a non-statutory body, but the employment is governed by a statute or statutory rules, a declaration that the termination is null and void and that the employee should be reinstated can be granted by courts.” In the Full Bench judgment of Jammu & Kashmir High Court, while concluding as above, a detailed discussion preceded the conclusion R.S.A.No.1111 of 2005 -10- .... and while noticing this very precise contention that was raised herein, it was observed as follows:- “42. Mr.Z.A.Shah, learned counsel appearing for the respondent Bank has argued with vehemence that a duty or function to be termed as public duty or public function must emanate from statutory provisions. We find that various activities of a Bank including its dealings with the public for the purposes of accepting the deposits advancing loans and other banking activities are normal commercial transactions of the Bank which are not specific to the respondent Bank but which are otherwise to be discharged by every and any private banking Company, having no share holding from the State and all such activities being common and normal commercial/ business activities cannot be termed as “public duty” or a `public function'.” In State Bank of India and others ' case (supra) , their Lordships also dealt with the term `statutory body', especially with reference to a Bank, to mean a body established under a statute or some legislation. It was observed by the Apex Court in paragraph 18 of the judgment as under:- “18. In this case the appellant is a statutory body established under the State Bank of India act,1955 and the contract of employment was governed by the State Bank of India Officers Service Rules, which are statutory rules framed under section 43(1) of the said Act. The respondent approached the civil R.S.A.No.1111 of 2005 -11- .... court alleging that his removal from service was in violation of the said statutory rules. When an employee of a statutory body whose service is terminated pleads that such termination is in violation of statutory rules governing his employment, an action for declaration that the termination is invalid and that he is deemed to continue in service is maintainable and will not be barred by Section 14 of the Specific Relief Act.” Now, when the above reproduced observations are amalgamated together to test the contentions of the learned counsel for the appellants in the back-drop of the facts and objections raised before this Court, the inevitable conclusion is that the appellant-Bank is merely a banking company incorporated under the provisions of the Companies Act,1956 and is not a statutory body as it does not stem from a legislation/ statute. That being the position, the next question would be as to whether the suit was maintainable for enforcement of a private contract in view of the categoric bar of Section 14 of the Specific Relief Act,1963. That section reads as under:- “14. Contracts not specifically enforceable.- (1) The following contracts cannot be specifically enforced,namely:- (a) a contract for the non-performance of which compensation in money is an adequate relief; (b) a contract which runs into such minute or numerous details or which is so dependent on the personal R.S.A.No.1111 of 2005 -12- .... qualifications or volition of the parties, or otherwise from its nature is such, that the court cannot enforce specific performance of its material terms; © a contract which is in its nature determinable; (d) a contract the performance of which involves the performance of a continuous duty which the court cannot supervise. (2) Save as provided by the Arbitration Act,1940 (10 of 1940), no contract to refer present or future differences to arbitration shall be specifically enforced; but if any person who has made such a contract ( other than an arbitration agreement to which the provisions of the said act apply) and has refused to perform it, sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit. (3) Notwithstanding anything contained in clause (a) or clause © or clause (d) of sub-section (1), the court may enforce specific performance in the following cases:- (a) where the suit is for the enforcement of a contract,- (i) to execute a mortgage or furnish any other security for securing the repayment of any loan which the borrower is not willing to repay at once: R.S.A.No.1111 of 2005 -13- .... Provided that where only a part of the loan has been advanced the lendor is willing to advance the remaining part of the loan in terms of the contract; or (ii) to take up and pay for any debentures of a company; (b) where the suit is for, - (i)the execution of a formal deed of partnership, the parties having commenced to carry on the business of the partnership; or (ii) the purchase of a share of a partner in a firm; © where the suit is for the enforcement of a contract for the construction of any building or the execution of any other work on land: Provided that the following conditions are fulfilled, namely:- (i)the building or other work is described in the contract in terms sufficiently precise to enable the court to determine the exact nature of the building or work; (ii) the plaintiff has a substantial interest in the performance of the contract and the interest is of such a nature that compensation in money for non-performance of the contract is not an R.S.A.No.1111 of 2005 -14- .... adequate relief; and (iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed.” In my opinion, once it is found that the appellant-Bank is not a statutory body, it escapes the clutches of the exceptions carved out to make an action of such a company amenable to the proceedings before the civil Court for enforcement of a private contract. Accordingly, it is held that the suit of the respondent was misconceived and the impugned judgments and decrees could not have been passed for enforcement of a private contract. Since the aforesaid finding has been returned with regard to the first question that was raised, this Court need not advert to the second question. In any eventuality, the Court is cast with a bounden duty to notice the contention that has been raised before it regarding this aspect of the matter. Learned counsel for the appellants contended that he had instructions to say that even though the impugned order has used the word `termination', it be deemed as a voluntary retirement of the respondent and the appellants are willing to grant her all the consequential and attending pecuniary benefits that may ensue upon her being deemed to be voluntary R.S.A.No.1111 of 2005 -15- .... retired from service. In view of the above, the respondent, if so advised, may accepted the impugned order as having been passed under Rule 265-A of the 1987 Manual and submit herself to the same so as to avail the attending benefits as projected on the strength of the statement made by the learned counsel for the appellants. It is, however, made clear that the findings or observations of this Court will not stand in the way of the respondent. The first question of law as formulated by the Apex Court in its judgment dated 2.9.2008 is answered accordingly, whereas the second question need not be answered in view of the fact that the suit has been held as not maintainable and it is not necessary to test the action being in violation of or in conformity with Rule 265-A of the 1987 Manual, as also in view of the second contention of the learned counsel for the appellants that instead of termination, the order be treated as that of voluntary retirement. In the result, the appeal is allowed and the impugned judgments and decrees are set aside. February 25,2009 ( Mahesh Grover ) “SCM” Judge