( 1 ) IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD WRIT PETITION NO. 232 OF 1993 Shri Shankarrao Balaji, R/o Shrirampur, Taluka Shrirampur, dist. Ahmednagar. PETITIONER VERSUS 1. Shrirampur Taluka Kapus Utpadak Sut Girni Ltd., At Shrirampur, District Ahmednagar, through its Chairman/Manager. 2. The Liquidator, Shrirampur Taluka Kapus Utpadak Sahakari Sut-Girni Ltd. (Liquidated) at Shrirampur, Tq. Shrirampur, District Ahmednagar. RESPONDENTS .... Mr. V.R. Dhorde, advocate holding for Mr. V.H. Dighe, advocate for the petitioner. Mr. V.D. Hon, advocate for the respondent No. 1. .... [CORAM : V.R. KINGAONKAR, J.] [DATE : 22nd June, 2010] ORAL JUDGEMENT : 1. Challenge in this petition is to judgement and order rendered by the Cooperative Appellate Court, in appeal No. 44/1991 whereby the appeal preferred by the respondent No. 1 ( 2 ) was partly allowed and the amount of compensation awarded to the petitioner was reduced to Rs. 9800/- from Rs. 1,30,258.33 p. though the rate of interest was increased from 6% p.a. to 12% p.a. 2. The petitioner was appointed as Secretary on establishment of the respondent. He had responded to an advertisement published for the purpose of employment. The Administrator of the respondent entered into a contract of service with the petitioner. The terms of the contract were reduced into writing and the agreement (kararnama) dated 6th August, 1983 was brought into existence. The petitioner and the Administrator of the respondent were the signatories to the agreement of the terms of service. One of the terms of such agreement was that the Management of the respondent will not be entitled to illegally remove the petitioner from service. It was further agreed that if he was to be removed before completion of five (5) years’ period, which was the assured and guaranteed period of service, the petitioner will be entitled to receive the pay for period of five (5) years as compensation. The petitioner took charge of his post as Secretary on 6th August, 1983 in pursuance to the appointment made by the respondent on the terms and service conditions ( 3 ) which are enumerated in the agreement dated 6th August, 1983. The respondent issued notice dated 19th May, 1984 and thereby terminated services of the petitioner for the reason that the approval to the proposal was not given by the Director of Hand-looms, Power-looms and Cooperative Textiles. The petitioner, therefore, was aggrieved due to the termination. He filed dispute No. SR/ABN/281/84. The main controversial issue was whether the petitioner was illegally terminated by the respondent. The Cooperative Court held that the termination was illegal and as per terms of the agreement, the petitioner was entitled to receive the pay for the relevant period though he had not served from the date of termination. Consequently, award of Rs. 1,30,258.33 p. was rendered and the petitioner was held entitled to receive amount alongwith the interest at rate of 6% p.m. from the date of the filing of dispute till realisation of the entire amount. The Cooperative Appellate Court held that the petitioner was removed from service due to non-approval of the appointment by the competent authority and hence, his termination was not illegal as such. Consequently, the substantive part of the claim was disallowed. 3. Heard learned counsel for the parties. ( 4 ) 4. At the threshold, it is important to notice that the copy of appointment order is not placed on record. There is nothing on record to show that the appointment of the petitioner was made subject to approval by the competent authority. The terms of the agreement dated 6th August, 1983 (Exh-A to the petition) also are silent in this behalf. It appears that as per resolution dated 5th August, 1983 of the respondent, the petitioner was appointed as Secretary of the respondent – Thread Mill. The copy of the said resolution is also not placed on record. Obviously, it is not explicit as to whether, the petitioner agreed to the term that if his appointment is not approved by the competent authority, then the termination will be acceptable to him. The appointment of the petitioner was, therefore, in accordance with the terms of the service contract. The terms will have to be, therefore, construed strictly according to the language and words used in the agreement itself. The interpretation cannot be made on basis of any extraneous material. The language of the agreement (Exh-A) clearly shows that the respondent agreed that the petitioner shall not be removed from service within period of five (5) years. The specific assurance was given to him that his services shall be continued for atleast initial ( 5 ) period of five (5) years from 6th August, 1983 onwards. There was no rider in the agreement that if services were not approved, then the petitioner will not be entitled to claim the compensation pertaining to pay for period of five (5) years i.e. the period for which his service tenure was guaranteed. 5. The Cooperative Appellate Court appears to have overlooked the fact that the Management did not dispute the terms of the service contract. The claim for damages could not be denied to the petitioner for the reason that the contract itself was ultra vires act of the Administrator. The Cooperative Appellate Court observed : “Even assuming that on the basis of agreement dated 6.8.83 the respondent is entitled to claim damages stated in the agreement. Even then the society would not be liable for payment of compensation for ultra-vires act of its officers, which was within the knowledge of respondent. At the most, respondent could have claimed damages for branch of agreement from the Manager and Administrator who have given guarantee of service and in case respondent is discontinued from service for payment of salary of 5 years.” ( 6 ) Perusal of the above observation would show that the Cooperate Appellate Court invented a new case which was not pleaded by the respondent. The Administrator was duly authorized to act for and on behalf of the respondent. There is no substantial reason to infer that appointment of the petitioner was illegally made by the Administrator. The approval or non- approval of the appointment is another issue. The basic appointment is not tainted with any patent illegality. There was an advertisement and the petitioner had to go through the regular process of recruitment. A resolution was also passed by the respondent for the purpose of his appointment. In this view of the matter, the Cooperative Appellate Court committed error while upsetting the findings of the Cooperative Court. The construction of the terms of the agreement by the Cooperative Court was the proper exercise and the Cooperative Appellate Court should not have interfered with the said findings. 6. At this stage, Mr. Hon submits that the respondent has gone in liquidation. The Liquidator has been appointed. The petitioner will have to stake his claim before the Liquidator. The payment may be given to him in accordance ( 7 ) with the relevant provisions of the Insolvency Act. However, on such a ground, the due claim cannot be deflated by the Court. 7. Considering the foregoing reasons, the petition is allowed. The impugned judgement of the Cooperative Appellate Court is set aside. The judgement and order of the Cooperative Court in Dispute No. SR/abn/281/84 is substituted in place of the impugned judgement. No costs. [V.R. KINGAONKAR] JUDGE NPJ/wp232-93