IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS TUESDAY, THE 8TH SEPTEMBER 2009 / 17TH BHADRA 1931 AS.No. 411 of 1998(C) --------------------- OS.659/1994 of I ADDL.SUB COURT,ERNAKULAM .................... APPELLANTS/DEFENDANTS: ---------------------------------------- 1. SRI. N. RAJEEV, S/O. V.K. ACHUKUTTY, RESIDING AT 'MANJU', KADAVANTHARA P.O. KOCHI 682 020. 2. V.K. ACHUKUTTY, S/O. LATE P. ACHUTA MENON, RESIDING AT DO. DO. BY ADV. SRI.V.M.KURIAN SRI.MATHEW B.KURIAN SRI.M.C.THANKACHAN SRI.A.V.THOMAS SRI.E.K.DIL RAJ SRI.K.T.THOMAS RESPONDENT/PLAINTIFF: ------------------------------------ M/S. O.E.N. CONNECTORS LIMITED, A LIMITED COMPANY INCORPORATED UNDER THE COMPANAIES ACT, HAVING ITS REGISTERED OFFICE AT VYTTILA, TRIPUNITHURA ROAD, COCHIN 682 019. BY ADV. SRI.A.M.SHAFFIQUE, SENIOR ADVOCATE SMT.PRIYA MANJOORAN SMT.PRIYA MAHESH THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 26/08/2009, THE COURT ON 08/09/2009 DELIVERED THE FOLLOWING: ORDER ON C.M.P.NO. 5147/2000 IN A.S. 411 OF 1998 DISMISSED 8.9.2009 SD/- M.L.JOSEPH FRANCIS, JUDGE /TRUE COPY/ M.L. JOSEPH FRANCIS, J. - - - - - - - - - - - - - - - - - - - - - - A.S.No. 411 of 1998 - - - - - - - - - - - - - - - - - - - - - - Dated this the 8th day of September, 2009 JUDGMENT This appeal is filed by defendants 1 and 2 in O.S.No. 659 of 1994 on the file of the Sub Court, Ernakulam. The respondent herein is the plaintiff in that suit. O.S. 659 of 1994 is a suit for damages. 2. The facts of the case are briefly as follows. The plaintiff is a limited company manufacturing electronic and other components. In response to the application for employment submitted by the first defendant, the plaintiff issued a letter dt.31.1.1991 to the first defendant offering him appointment as a Graduate Trainee, subject to the terms and conditions incorporated therein. One of the conditions specified in that letter is to execute an agreement, along with a surety, undertaking to serve the A.S.No. 411 of 1998 2 company for 3 years from the date of completion of the training. On failure or breach of the said condition, they undertook to pay an amount of Rs.45,000/- by way of liquidated damages. 3. The defendants voluntarily executed the agreement on 6.6.1991, undertaking their joint and several liability for an amount of Rs.45,000/- While continuing the training, the plaintiff by letter dt.30.7.91 reduced the training period and appointed the first defendant as Assistant Engineer, subject to the terms and conditions specified in the agreement. The first defendant is bound to serve the company for 3 years from the date of appointment as Assistant Engineer. 4. The first defendant issued a fax message dt.11.2.1994 to the plaintiff informing his resignation from the service, as he got better job abroad. The said message was further confirmed by letter dt.28.2.1994. The act of the first defendant is in violation of the obligations on his part as per A.S.No. 411 of 1998 3 the contract of service. So the plaintiff is entitled to get liquidated damages stipulated in the agreement. The plaintiff has actually suffered heavy loss on liquidated damages. After adjusting the payments due to the first defendant, a sum of Rs.40,351/- is due from the defendants to the plaintiff. 5. The plaintiff had caused to send a lawyer notice dt.26.4.1994, to which the defendants sent reply notice. As per the letter received by the plaintiff from Bank of Baroda, the first defendant availed credit to the tune of Rs.4,557.84 as on 1.6.1994 as per the BOBCARD. That amount is payable by the plaintiff and is due from the first defendant. On debiting the said amount, the balance actually due from the defendants is Rs.44,908.84, which is the suit amount. Therefore, the plaintiff prays for a decree for damages of Rs.44,908/- with interest and costs from the defendants. 6. The defendants have filed a joint written statement contending that the first defendant is the son of the second A.S.No. 411 of 1998 4 defendant. The suit is not maintainable. The first defendant, who passed B.Tech (Mechanical) examination was initially absorbed as a Management Trainee by Thoshiba Anand Batteries Limited and later confirmed as Engineer. The first defendant applied for the post of Engineer in the plaintiff company resigning from Thoshiba Anand Batteries Ltd. He was appointed as apprentice by the plaintiff company in February, 1990. Since the first defendant had relinquished the post in Thoshiba Anand Batteries Ltd., he was forced to accept the offer. 7. In January 1991, the plaintiff appointed the first defendant as Graduate Engineer Trainee for a period of one year. On 30.7.1991, the first defendant was confirmed as Assistant Engineer. The first defendant was trained well before joining the plaintiff company and no apprenticeship or further training was required. The agreement was unilaterally imposed on the defendants. It was not signed voluntarily. The A.S.No. 411 of 1998 5 agreement is arbitrary and against public policy. The first defendant left the plaintiff after 4 years of service. Even according to the plaintiff, the first defendant had put in 3 years of service since his appointment on 31.1.1991 as a graduate Engineer. The plaintiff has not suffered any loss on account of the resignation. The amount payable for using BOBCARD was paid by the defendants directly to the Bank of Baroda. The plaintiff is not entitled to get interest. Therefore, the defendants prayed for the dismissal of the suit with costs. 8. In the Sub Court, PW1 and DW1 were examined and Exts.A1 to A18 were marked. The learned Sub Judge, on considering the evidence, decreed the suit in part, allowing the plaintiff to realise a sum of Rs.22,500/- as damages, together with interest at the rate of 6% p.a. from the date of the suit till the date of realisation and proportionate cost from the defendants. Against that judgment and decree defendants 1 and 2 filed this appeal. A.S.No. 411 of 1998 6 9. Heard the learned counsel for the appellants and the learned counsel for the respondent. 10. There is no dispute that the plaintiff Company appointed the first defendant as a Graduate Engineering Trainee on 1.2.1991 for a period of one year and he was confirmed on 1.8.1991 as Assistant Engineer, reducing the period of training to six months. On 6.6.1991 the first defendant executed Ext.A4 agreement, along with the second defendant as surety, undertaking to serve the plaintiff Company for a period of three years from the date of completion of the training period and on failure to pay Rs.45,000/- to the plaintiff company by way of liquidated damages. 11. The first defendant resigned from the plaintiff company on 11.2.1994 without completing three years period as per the agreement. The learned counsel for the appellants submitted that the first appellant served the plaintiff company A.S.No. 411 of 1998 7 for 2½ years after completion of the training and therefore the learned Sub Court ought not to have decreed the suit to realise Rs.22,500/- The learned counsel for the appellants, relying on the decisions in Lakshman Khatik v. State of West Bengal (AIR 1974 SC 1264) and State of Kerala v. United Shippers and Dredgers (1982 KLT 738), argued that since the plaintiff company has not suffered any legal injury, the plaintiff company is not entitled to get any compensation. 12. The learned Sub Judge, relying on the decision reported in F.A.C.T. Ltd. v. Ajayakumar & others (ILR 1991 (1) Kerala 549), decreed the suit for Rs.22,500/-, which the first defendant received as allowance during the training period. In that decision, this Court relied on the decisions cited by the learned counsel for the appellants. In the decision reported in F.A.C.T. Ltd. (supra), this court allowed the plaintiff in that suit to receive back Rs.4,000/- received by the first respondent as stipend during the training period. A.S.No. 411 of 1998 8 13. In that case, the first defendant agreed to undergo training for two years and to serve the plaintiff company for five years after completion of the training and executed a bond for Rs.10,000/- But the first defendant left the plaintiff company after five months of training and during that training period the first defendant had received Rs.4,000/- as stipend for five months at the rate of Rs.800/- per month. In the present case, the first defendant had served the plaintiff company for 2½ years after the completion of the training. The plaintiff company gave only six months training to the first defendant, instead of one year training stipulated in Ext.A4 agreement. 14. Considering all these aspects of the matter, I am of the view that in the interests of justice proportionate reduction has to be made from the liquidated damages of Rs.45,000/- shown in Ext.A4 agreement. Calculating on that basis, the plaintiff company is entitled to get Rs.7,500/- Therefore, I A.S.No. 411 of 1998 9 find that the plaintiff company is entitled to get Rs.7,500/- as damages, instead of Rs.22.500/- 15. Accordingly this appeal is allowed in part. The judgment and decree in O.S.No. 659 of 1994 on the file of the Sub Court, Ernakulam is modified and the plaintiff is allowed to realise a sum of Rs.7,500/- together with interest at the rate of 6% p.a. from the date of the suit till the date of realisation and proportionate cost of the suit from the defendants and their assets. The parties are directed to suffer their respective cost in this appeal. (M.L. JOSEPH FRANCIS) Judge tm