IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN WEDNESDAY, THE 14TH JULY 2010 / 23RD ASHADHA 1932 AS.No. 824 of 1996() ------------------------------ OS.70/1986 of I ADDL. SUB COURT, KOZHIKODE .................... APPELLANT/PLAINTIFF: ----------------------------------- C. BHANUMATHY, D/O.MADHAVAN, 5/1646, MADHAVA NIVAS, S.V. COLONY, CALICUT-6. BY ADV. SRI.V.V.SURENDRAN, SRI.P.M. PADMANABHAN. RESPONDENTS/DEFENDANTS: --------------------------------------------- 1. SRI.GUJARATHI VIDHYALAYA ASSOCIATION, REPRESENTED BY HONOURARY SECRETARY, BEACH ROAD, CALICUT. 2. VIJAYA SINH PADAMSI, MANAGER, GUJARATHI VIDHYALAYA ASSN., BEACH ROAD, CALICUT. 3. HARIKRISHNADAS CHABILDAS, PRESIDENT OF SRI.GUJARATHI VIDHYALAYA ASSOCIATION, BEACH ROAD, CALICUT. 4. HIRACHAND RATNASI, VICE PRESIDENT OF SRI.GUJARATHI VIDHYALAYA ASSOCIATION, BEACH ROAD, CALICUT. BY ADV. SRI.K.BHASKARAN NAIR , SRI.V.G.ARUN. THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 14/07/2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs. THOTTATHIL B. RADHAKRISHNAN & S.S.SATHEESACHANDRAN, JJ. ------------------------------- A.S.NO.824 OF 1996 (A) ----------------------------------- Dated this the 14th day of July, 2010 J U D G M E N T THOTTATHIL B. RADHAKRISHNAN, J. The plaintiff in a suit for damages is the appellant. She was a teacher in a school run by the 1st defendant of which the defendants 2 to 5 are office bearers. The 1st defendant's School is an unaided private school, one recognized by the State Government. The relationship between it and its employees including teachers is in the realm of master-servant relationship based on contract. The terms of the contract of employment of the plaintiff with the 1st defendant is Ext.B2, clause 10 of which relates to termination of service. The 1st defendant is a 'School' as defined in the Kerala Education Act, 1958 and the discipline of the School is put to be in terms of Chapter IX of the Kerala Education Rules. A.S.NO.824/96 2 2. On the premise that the plaintiff had committed certain acts of indiscipline and was involved in activities prejudicial to the interest of the institution, two show cause notices, Exts.A5 and A6, were issued to her on 26.3.1979 and 10.4.1979 respectively. She was placed under suspension on 18.5.1979 and following a domestic enquiry, she was dismissed from service on 4.2.1980. 3. The plaintiff filed O.S.No.86 of 1980 before the Sub Court, Kozhikode, seeking a direction for reinstatement. The trial court found against the proceedings in the domestic enquiry, but ultimately decided that her suit fails since there could not be any direction for reinstatement, having regard to the quality of the employment that the plaintiff had with the 1st defendant. The lower appellate court confirmed that. Exts.A1 and A2 are the judgments of the trial court and the lower appellate court in that round of litigation. Against that, the plaintiff came to this Court in Second Appeal No.361 of 1987. This Court held that the suit for reinstatement did not lie, having A.S.NO.824/96 3 regard to the nature of the jural relationship between the parties. It was noticed by this Court that the plaintiff had by that time filed the suit for damages from which this appeal arises. This Court vacated all the findings rendered by the lower courts in Exts.A1 and A2, touching the disciplinary proceedings and the domestic enquiry since those findings were rendered in a suit held to be not maintainable. 4. In opposition to the suit for damages, the appeal arising from which is in hand, the 1st defendant contended that the domestic enquiry was properly held and notwithstanding any illegality on which the domestic enquiry should fail, the 1st defendant had the authority to terminate the contract of appointment. 5. After hearing the evidence of the witnesses and with the documentary evidence on record, the court below held that the plaintiff was not offered opportunity to defend herself as enjoined by the law relating to domestic enquiries and, therefore, the domestic enquiry was bad. The court below, A.S.NO.824/96 4 however, held that in view of clause 10 (1) of Ext.B2, the 1st defendant could have terminated the service of the plaintiff by giving one month's notice even if no ground was established for removal of the plaintiff from service and all that the plaintiff is entitled is to is one month's salary in lieu of such a notice. Accordingly, the court below decreed the suit in part confining the relief to be only for recovery of one month's salary, hereby refusing to grant the decree for damages as sought for. The plaintiff hence appeals. 6. The learned counsel for the appellant-plaintiff argued that the finding of the trial court that the domestic enquiry was not proper stands unimpeached since there is no appeal or cross objection by any among the defendants on that issue and that the question for further determination in this appeal would be only as to whether the court below was justified in taking the view that the removal of the plaintiff from service could be referable to clause 10 (1) of Ext.B2, and if not, whether the plaintiff is entitled to any further amount by way of damages. If the answer to last among the questions posed, as noted above, is in favour of A.S.NO.824/96 5 the plaintiff, it is also to be determined as to what would be the quantum of damages to be awarded. In the light of the documentary evidence and the oral evidence, the learned counsel argued that at the time when the plaintiff was removed from service, her monthly salary was Rs.528/- and that, but for termination of her service, she would have retired from service only in the year 1999, that is, after serving for another 19 years. He stated that the progression of the pay pattern of educational establishments has to be taken into account and the claim of the plaintiff for damages of Rs.1,90,000/- is well founded on the evidence on record. 7. Per contra, the learned counsel for the respondents/defendants argued that as held in Ext.B1 judgment by this Court, the plaintiff is not entitled to a direction for reinstatement and, therefore, no relief could be formulated as if it is a relief in lieu of reinstatement. He argued that the written statement contained clear pleadings by the defendants asserting their right to terminate the plaintiff's service under clause 10 (1) of Ext.B2 and, therefore, the finding of the court below that the A.S.NO.824/96 6 termination of the plaintiff's service was referable to that provision cannot be held to be unreasonable and does not warrant interference in appeal. He further argued that in the event of this Court disagreeing with the finding of the trial court on that issue, the measure of damages, if any, to be awarded has to be made by taking into consideration the totality of the facts and circumstances including the factor that the plaintiff had an opportunity to mitigate the damages and even her evidence is to the effect that she had been working in different schools after she left the service of the 1st defendant and that she also had a private tuition center from her home and that these circumstances would necessarily militate against the plaint claim. He pointed out that the enhancement of the retirement age to 58 years was made after the plaintiff left the service and the quality of materials brought out even through the cross examination of the plaintiff tend to show that she had acted against the interest of the institution. 8. We stand with the uncontroverted findings of the trial court that the enquiry does not stand. It was found to have been A.S.NO.824/96 7 vitiated on grounds of natural justice . The court below found that the plaintiff/delinquent was not given appropriate opportunity of being heard in the domestic enquiry. That finding has become final. 9. The immediately surviving question, therefore, is as to whether the termination could be referable to clause 10 (1) of Ext.B2 or whether it could stand or fail only in terms of clause 10 (2) of Ext.B2. 10. Clause 10 of Ext.B2 reads as follows: 10. Termination of service:- 1. The service of any permanent staff member may be terminated with one month's notice in writing. 2. The service of any permanent staff member will be terminated without notice and with immediate effect for indiscipline, unsatisfactory working record and for activities prejudicial to the interest of the institution. 3. If any member of the staff wants to resign, he or she must give at least one month's notice. Moreover, no teacher will be relieved A.S.NO.824/96 8 before the end of the academic year. If teacher fails to abide by this rule, his/her one month's salary deposited with the Management will be forfeited and he or she shall not be entitled for refund of the same. 11. Clause 10 of Ext.B2 contains three limbs. It conceives of three different situations. The first limb, that is, clause 10 (1), provides the employer with the authority to force the non-stigmatic exit of the employee from service giving one month's notice in writing. The second, that is, Clause 10 (2), envisages that the service of a permanent staff could be terminated on ground of indiscipline, unsatisfactory working record and for activities prejudicial to the interest of the institution. When that is being done, there is no necessity to give notice and such action could be taken with immediate effect. The third, namely, clause 10 (3), provides the mode by which a member of the staff could resign by giving one month's notice. A reading of clause 10 as a whole would clearly show that sub clauses 1 and 3 are corollaries to each other, one giving the management the power to terminate the service of the employee without stating any reason but by giving one month's A.S.NO.824/96 9 notice; the other giving the employee the opportunity to resign and leave after giving one month's notice. In the latter, if the member of the staff does not give one month's notice, the employer has got certain rights to forfeit one month's salary etc. 12. It is noteworthy that clause 10 (1) of Ext.B2 does not provide for payment of salary in lieu of notice. The clause that govern the parties in the decision of the Apex Court in Smt.J.Tiwari v. Smt.Jawala Devi Vidya Mandir and Others (AIR 1981 SC 122), relied on by the court below, provided for a notice period and also for payment in lieu of notice. In the absence of such a contract between the parties, in our view, we would be imposing a term into the contract between the parties if we were to read in the concept of pay in lieu of notice without examining the reasonableness of the notice period of one month fixed in clause 10 (1) of Ext.B2, particularly, when the plaintiff does not get the specific cover of any protective labour welfare legislation. We may also refer to the well reasoned Bench decision of this Court in Travancore Electro-Chemical Industries Ltd. v. Harindranath (1975 KLT 340) holding A.S.NO.824/96 10 that a reasonable notice period would be six months. We concur with that view and follow it. 13. In so far as clause 10 (2) of Ext.B2 is concerned, the termination of service on a ground referable to indiscipline, unsatisfactory working record or for activities prejudicial to the interest of the institution would result in a stigmatic exit. Indisputably, such a stigmatic exit can be forced only after providing the employee an opportunity of hearing regarding the allegations made against that person. This is so fundamental that it has evolved as a basic requirement of every domestic enquiry bereft which, there cannot be any finding against the servant as to indiscipline. May be, there are cases where even an enquiry could be excluded but in the case in hand, the 1st defendant proceeded against the plaintiff by initiating a domestic enquiry. An enquiry officer was appointed and an enquiry conducted. 14. The court below having found that the said domestic enquiry does not stand, it will not be available for the 1st A.S.NO.824/96 11 defendant to put back its decision as to termination of the plaintiff from service as one referable to clause 10 (1) of Ext.B2. Firstly, to exercise the authority under clause 10 (1), there has to be a notice in writing. Admittedly, there is no notice issued by the employer in terms of clause 10 (1) of Ext.B2. Even in the written statement, while the 1st defendant stands to assert the authority available with it under clause 10 (1) of Ext.B2, no such authority is shown to have ever been exercised. Next, but more importantly, such a defense, if accepted, would lead to gross injustice. Plaintiff joined service on 18.6.1962 and had been serving in the school continuously. Thereafter, she became the First Assistant of the School in 1968 and was continuing in that capacity. That post is next to that of the Headmistress. The enquiry having been found as invalid, the fact of the matter remains that the plaintiff, a teacher, with fairly long service, as noted above, would be going out with a stigmatic exit though it could be circuitously shown that the employer could have terminated her service by giving her one month's notice without stating any reason. Having served as a teacher in a School, she would necessarily carry with her the respect she had gained of A.S.NO.824/96 12 having been a teacher and the social status attendant to that avocation. In that setting, it would be wholly unreasonable to get over the situation created by the domestic enquiry against her by treating the termination as a non-stigmatic exit referable to clause 10 (1) of Ext.B2. We have gone through the memo of charges against her. Under such circumstances, we find no room to accept the argument on behalf of the defendants that the termination is referable to clause 10 (1) of Ext.B2. 15. The aforesaid will show that the termination of the plaintiff from service was illegal. The fact that the termination from service was illegal is one that can be the subject matter of a suit for declaration and further relief of damages though there can be no direction for reinstatement or declaration that the plaintiff is entitled to reinstatement. The measure of damages will have to be determined on the basis of the evidence on record. 16. The plaintiff was placed under suspension on 18.5.1979 and her services were terminated on 4.2.1980. The A.S.NO.824/96 13 termination from service having been found to be illegal, she is eligible for the pay from 18.5.1979 to 4.2.1980, the date on which the order of termination was issued and for a further amount to be fixed as damages. The plaintiff possesses B.Sc and B.Ed and was appointed as a Science teacher in the 1st defendant's School on 18.6.1962 on an initial salary at Rs.118/- per month. She became the First Assistant of that School in 1968 and her monthly salary in 1979 was Rs.528/-. The post of the First Assistant is the one next to that of the Headmistress. The evidence tends to suggest that had she continued in service, she would have superannuated only by sometime in 1999. Taking into consideration her testimony as PW1 that she has worked in three different schools thereafter during three different academic years as headmistress or as teacher and had also been running a tuition center from home, we take it that as against the 19 years of service left for her, a period of ten years could be reasonably taken as one of the yardsticks to fix the damages payable to her. We also notice that it is only reasonable to assume that the salary of Rs.528/- which she was drawing at the time of the termination of her service in 4.2.1980 A.S.NO.824/96 14 would escalate with the passage of time during the currency of her service, had she continued to be employed with the 1st defendant. Taking the over all facts and circumstances in that regard, we are of the view that damages can be fixed by taking the monthly probable salary of Rs.750/- for a period of ten years. This would bring the damages payable to Rs.90,000/-. She will also be entitled to salary at the rate of Rs.528/- from 18.5.1979 to 4.2.1980, the date of termination. She is also entitled to interest at the rate of 8% on all amounts due in terms of this judgment and decree from 2.2.1983, the date of institution of the suit as an indigent person. She would also be entitled to proportionate costs here and the court below and the 1st defendant shall also pay the court fees payable on the plaint and in this appeal memorandum. The decree of the trial court has to be modified to be one in terms of what is stated above. In the result, this appeal is allowed in part and the decree of the trial court is modified as hereunder: (i) The plaintiff is granted a decree for A.S.NO.824/96 15 realisation of an amount of Rs.528/- per month from 18.5.1979 to 4.2.1980 with interest at 6% per annum on all such amounts from 2.2.1983, till realisation, from the 1st defendant and its assets; (ii) the plaintiff is granted a decree for realisation of an amount of Rs.90,000/- with interest at 6% per annum on such amount from 2.2.1983 till realisation, from the 1st defendant and its assets; (iii) In terms of Order XXXIII Rule 10, the 1st defendant is directed to pay the court fee payable on the plaint and on the memorandum of appeal and interlocutory applications thereon, failing which, the State Government shall recover the same from the 1st defendant and its assets; (iv) The plaintiff is allowed proportionate costs, excluding court fee, here and in the court below and will be entitled to recovery the same from the 1st defendant and its assets. (v) Having affirmed the finding of the court A.S.NO.824/96 16 below that the domestic enquiry ending with the termination of the petitioner is illegal and does not stand, the plaintiff will be eligible to collect all other statutory benefits, if any, in terms of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 and other provisions that may apply till 4.2.1980, the date of termination. THOTTATHIL B. RADHAKRISHNAN JUDGE S.S.SATHEESACHANDRAN JUDGE prp THOTTATHIL B. RADHAKRISHNAN & S.S.SATHEESACHANDRAN, JJ. ------------------------------- A.S.NO.824 OF 1996 (A) ----------------------------------- J U D G M E N T 14th day of July, 2010 A.S.NO.824/96 18