1 sj387-09.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMONS FOR JUDGMENT NO.387 OF 2009 IN SUMMARY SUIT NO.289 OF 2009 United Helicharters Pvt Ltd .. Plaintiff versus A.S. Rao .. Defendant Ms.Mamta Saadh i/by Roys Law Firm for the plaintiff. Ms.Saumya Srikrishna i/by PDS & Associates for the defendant. CORAM : S.C.DHARMADHIKARI, J. 29th November 2011. P.C.: . The plaintiff has filed this suit invoking Order XXXVII of the Code of Civil Procedure, 1908, on a written contract as evidenced by an Agreement at Annexure A to the plaint. 2} It is the case of the plaintiff that the plaintiff carries on business of rendering helicopter services primarily for use by companies in the Oil and Natural Gas Industry for transportation of men and equipments for their off shore projects. The company requires specially trained pilots. 2 sj387-09.doc The company arranges for their training and after training the pilots by spending considerable sums of money, the assurance of inducting them in the services is given vide this Agreement. In the present case, the defendant also is pilot who was inducted in the services of the plaintiff in April 2005. It was decided to send him to United States of America for training to operate S 76 helicopters. Therefore, a written Agreement was executed between the parties and the salient features thereof are pointed out. It is stated that after the training was complete and the plaintiff offered the employment to the defendant, he accepted the same. 3} Reliance is placed on para 9 of the plaint to urge that the terms and conditions of the Service Agreement required the plaintiff to exercise the option and it was exercised and, therefore, the plaintiff offered employment to the defendant for a period of five years from 5th June 2005 till 4th June 2010. 4} The grievance of the plaintiff is that under the pretext of certain grievances, the defendant tendered his resignation on 27th April 2006. The plaintiff intimated to the defendant that he would have to comply 3 sj387-09.doc with the stipulations of the Directorate of Civil Aviation that would supersede the clause in the Agreement. The plaintiff also brought to the notice of the defendant that he was liable to pay to the plaintiff liquidated damages for not serving the plaintiff for five years as provided in the Service Agreement. 5} It is the case of the plaintiff that this sum was not remitted by the defendant although reminded by several letters leading to the institution of this suit. 6} On the issue of maintainability of this suit as a summary suit, on a query from the Court and in all fairness Ms.Saadh appearing for the plaintiff brought to my notice the judgment of the Division Bench of this Court in the case of Karim Hussainali Wajawalla & Anr vs. M/s.Origin Information Technology (India) Ltd., Mumbai - (Appeal No.801 of 2002 decided on 4th June 2008). She submits that the Division Bench has taken a view that a suit under Order XXXVII of the Code of Civil Procedure to be maintainable must be founded inter alia on a written contract as is envisaged by the provision, namely, Order XXXVII Rule 2 of the CPC. She submits that there is nothing in the contract or 4 sj387-09.doc Agreement in the present case whereby the parties have left to the discretion of the Court or authority, the determination of damages post termination of the contract. In fact, the parties have stipulated and quantified the sum as Rs.10 lakhs which would be payable in the event the contract is breached as in the instant case by the defendant. Therefore, the judgment of the Hon’ble Division Bench holding that damages have to be proved and until such proof is rendered, the Court cannot proceed in summary manner and adjudicate the claim, is erroneous. She submits that with great respect to the Division Bench, its attention was not invited to the decision of the Hon’ble Supreme Court in the case of Oil and Natural Gas Corporation vs. Saw Pipes Ltd reported in (2003) 5 Supreme Court Cases 705. She submits that the Hon’ble Supreme Court has taken a view by relying on the earlier decision that it is not as if terms of the contract are to be ignored but they will have to be taken into consideration before arriving at the conclusion whether the party claiming damages is entitled to the same. If the terms of the contract are clear and unambiguous stipulating liquidated damages in case of breach of contract, unless it is held that such estimate of damages/compensation is unreasonable or is by way of penalty, the party who has committed the breach is required to pay 5 sj387-09.doc such compensation and that is provided under section 73, which section must be read with section 74. Therefore, in every case of breach of contract, the person aggrieved by the breach is not required to prove actual loss or damage suffered by him before he can claim a decree. The Court is competent to award reasonable compensation in case of breach even if no actual damage is proved to have been suffered in consequence of the breach of contract. She has invited my attention to the judgment of the Hon’ble Supreme Court in the case of Fateh Chand vs. Balkishan Dass reported in AIR 1963 Supreme Court 1405. She submits that the latter judgments of the Supreme Court including in the case of Union of India vs. Raman Iron Foundry reported in AIR 1974 Supreme Court 1265 and the still latter judgment in the case of Kamaluddin Ansari & Co vs. Union of India reported in AIR 1984 Supreme Court 29, have all been noticed in the case of Oil and Natural Gas Corporation (supra) but the attention of Division Bench was not invited to the law laid down in these decisions. Therefore, the Division Bench judgment does not bind me and it is clearly per incuriam 7} It is not possible to accept these contentions of Ms.Saadh for more than one reason. Firstly, a binding decision of this Court cannot be 6 sj387-09.doc brushed aside or ignored on the spacious plea that certain aspects of the controversy were not brought to its notice. For a conclusion to be arrived at and the decision to be termed as per incuriam the tests as laid down by the Hon’ble Supreme Court would have to be satisfied. In the instant case, what I find from the reading of the Agreement is that upon completion of the training there is an option given to the plaintiff. If that option to offer employment is exercised in terms of the clauses of the Agreement, what further follows therefrom is, that the plaintiff is at liberty to terminate the employment by giving 90 days notice in writing anytime during the period of five years. If the employee wishes to leave the company, he shall be required to give 90 days notice in writing but subject to the provisions of the liquidated damages as stipulated in para 4. Therefore, what it contemplates is, that if employee commits breach of any of covenants in clause (3), his training or post training employment as the case may be, with the company shall stand terminated immediately without notice and he shall forthwith pay to the company a sum of Rs.10 lakhs, which the parties expressly agree shall be liquidated damages which the company shall without prejudice to its other rights including rights under clause 7 be entitled to receive in the event the employee commits a breach. In the present case, what the 7 sj387-09.doc employee has stated in the affidavit in reply is that he was offered employment and given to understand that complete employment Agreement governing terms of Agreement will be executed in due course. Accordingly, Employment Agreement/Appointment Letter dated 1st April 2006 was entered into. The terms and conditions mentioned in the Employment Agreement dated 1st April 2006 were to come into force from 18th April 2005, i.e date of joining the employment. There were certain assurances given to him, according to the employee-defendant. It is stated that he was not meted out with proper treatment and he was given indifferent and unfair treatment. His grievances have been set out in his affidavit and particularly para 4(e) and 4(f) and reference is made to certain e-mails. Thus, after referring to the e-mails, it is stated that sometime he was given assignments, but on assurance that the matter would be dealt with in fair and transparent manner. Therefore, he resumed duties till 3th November 2006. Prior thereto he refers to resignation letter dated 3rd November 2006. 8} From reading of this material, it is clear that the case of the defendant is, that there is a distinct agreement other than one referred to by the plaintiff, namely, Annexure A. The terms and conditions of the 8 sj387-09.doc Agreement at Annexure A and the employment letter dated 1st April 2006 are distinct. Latter would supersede the former. Further, there are several allegations that have been made and some of them are forming part of the letter dated 10th November 2006, Annexure C to the plaint. It is in such circumstances, that to my mind in addition to the law laid down by the Division Bench which is binding on me, triable issues arise for determination in the suit. This is not a case of liquidated damages, quantified as alleged on a written contract, that has been claimed. This is a case of damages and losses caused due to the breach of employment agreement, which have to be proved by the plaintiff. Thus, whether there is a breach and by whom, whether, therefore, the amount quantified can be claimed or not are matters whch cannot be decided on affidavits alone. The defendant is, therefore, entitled to unconditional leave to defend the suit as transferred to the list of Commercial Causes, written statement be filed within twelve weeks from today. (S.C.DHARMADHIKARI, J)