Rasiklal Chandulal Shah v. New Shorrock Spinning AND MANUFACTURING COMPANY LIMITED
1977-04-04
D.A.DESAI
body1977
DigiLaw.ai
D. A. DESAI, J. ( 1 ) APPELLANT-ORIGINAL plaintiff filed Civil suits No. 423 of 1973 in the City Civil court at Ahmedabad praying for a declaration that the order dated 20th january 1973 transferring him from the new Shorrok Spinning and manufacturing Company Limited ahmedabad Mills to the Nadiad unit of the same company is illegal, invalid, in breach of contract and therefore, void and for an injunction restraining the defendant from implementing the order. The defendant contested the suit as per its written statement Exh. 8 inter alia contending that the suit is not maintainable and that the Trial Court had no jurisdiction to entertain the suit. It was also contended that the plaintiff as engineering Supervisor was specifically assigned to work in the Processing department and therefore when the processing Department was transferred, he was required to be transferred and was in fact transferred to Nadiad. It was contended that the defendant as employer had a right to transfer the plaintiff and it was denied that there was specific agreement not to transfer him. It was also contended that the suit is one for specific performance of contract of personal service and that ordinarily the court in such a situation does not decree specific performance and must leave the plaintiff if he has any claim to a suit for damages. ON the pleadings of the parties, the learned Trial Judge framed 7 issues. Issue no. 6 was whether the Trial Court had jurisdiction to hear the suit. This issue was directed to be heard as preliminary issue. The Trial Court held that it has no jurisdiction to hear the suit. The plaintiff questioned the correctness of this decision in the appeal preferred in the high Court and this appeal was allowed holding that the Trial Court had jurisdiction to entertain the suit. The matter was remanded to the Trial Court for disposal of the remaining issues. When the matter went back to the trial Court, the plaintiff examined himself at Exh. 49. Oh behalf of the defendant one Mr. Dayashanker Bhanushankar raval was examined at Exh. 52. ( 2 ) THE learned Judge held that the plaintiff in fact was appointed to work as Engineering Supervisor as alleged by him and that the defendant has failed to prove that the plaintiff was appointed to perform duties in the Processing department.
49. Oh behalf of the defendant one Mr. Dayashanker Bhanushankar raval was examined at Exh. 52. ( 2 ) THE learned Judge held that the plaintiff in fact was appointed to work as Engineering Supervisor as alleged by him and that the defendant has failed to prove that the plaintiff was appointed to perform duties in the Processing department. It was further held that the order of the transfer was in no way against the terms of the contract between the parties. It was also held that the suit being one for specific performance of contract of personal service, a decree to that effect cannot be granted. Consequent upon this finding, relief of injunction was refused and suit was dismissed. Plaintiff having been aggrieved by this Judgment and decree has preferred this appeal. ( 3 ) THERE was a controversy between the parties whether the plaintiff was specifically appointed to serve as engineering Supervisor in the Processing department only, or he was employed in Engineering Department as engineering Supervisor and amongst others he was required to look after maintenance and repairs of machinery in the Processing Department. The Trial court, after taking into consideration oral and documentary evidence recorded a finding that the plaintiff was appointed to work as Engineering Supervisor in the engineering Department of the defendant company and, therefore, issue No. 1 was answered in the affirmative in favour of the plaintiff. The Trial Court also negatived the contention of the defendant that the plaintiff was mainly appointed to perform his duties in the Processing department. These two findings were not questioned on behalf of the respondent in this appeal. Therefore, it can be taken as well established that the plaintiff was appointed to serve as Engineering supervisor in the General Engineering department in the Ahmedabad unit of the defendant Company and he was not specifically assigned or exclusively attached to the work of repairs and maintenance of the machinery in the processing Department. The defendants suggestion in this behalf has been rightly negatived by the Trial Court and in the absence of any controversy on this point, that finding need not be disturbed.
The defendants suggestion in this behalf has been rightly negatived by the Trial Court and in the absence of any controversy on this point, that finding need not be disturbed. ( 4 ) NEXT question is whether under the contract of employment, the plaintiff was liable to be transferred from Ahmedabad unit to Nadiad unit of the company irrespective of the fact whether he was exclusively assigned to Processing department and that the Processing department itself is transferred to nadiad. Contract of employment has to be culled out from the letter of appointment Exh. 38, and there is no specific term in the contract, which enables the defendant to transfer the plaintiff from Ahmedabad to Nadiad. Controversy centred round whether by necessary implication, such a power can be culled out in favour of the defendant employer. ( 5 ) ON the one hand, the contention is that the transfer is management function and that it is an incidence of service and such an order can always be made according to the need and convenience of the employer. On the other hand, it was contended that transfer ordinarily causes hardship and inconvenience and no implication of power can be made in favour of the employer, unless the nature and business of the employer is such as would indicate that the employer could not be presumed to enter into contract of employment which forbids transfer. Whether such a power by necessary implication can be read or not, will have to be culled out from the nature of service, type of business of the employer extent of the business of the employer at the time of appointment of the employee and various surrounding circumstances. But to say that the employer has inherent right of transfer, is to set the proposition very broadly and cannot be sustained. It is undeniable that transfer does cause hardship. The man joined the service, keeping in view the place where he is going to serve, arranged for his affairs, education of children and various other factors, may even go in for providing permanent residence to himself because while joining employment he has kept in mind that looking to the nature of employment and type of business of the employer or nature of the industry carried on by the employer there is no question of his transfer.
Now, after settling himself if he was to be transferred because employer has undertaken proliferation of its activities in the industrial field, that cannot heap hardship on the employee by reading implication of power to transfer. It may have been so in the olden times when in such contract of employment the rule was hire and fire and there was no sort of protection, or there was no social inhibition against looking at the hardship of the employee. At a time when an employee was to be treated at the mercy of the employer, such a thing could have been conceived. But at this stage of the development or social values, it is not possible to read such a power by necessary implication. Undoubtedly, it is not necessary in every case to provide for a right to transfer in the contract of employment. It can be read by necessary implication, provided the circumstances warrant such a reading of the power by necessary implication. But ordinarily attempt should be not to read such power by implication only, as it is power which can unilaterally be exercised causing hardship and inconvenience. However, if the circumstances so warrant, such a power can be read, or for better industrial relations may have to be read. ( 6 ) IN this connection earliest case referred to me is Alexandre v. The ottoman Bank, A. I. R. 1930 P. C. 118. That was a case in which an employee of the Bank had filed a suit for damages consequent upon his dismissal without notice and without pension because of his refusal to conform to the order made by the respondent for his transfer from the Branch to another Branch outside the city where he was working. The contract of employment did not confer any express power of transfer. The question arose whether such a power can be read by necessary implication. In this connection, it was observed as under:"from the point of view of proper organisation of their staff, it is difficult to assume that the Bank would willingly agree that their employees should not be found to serve outside the place where the contract was made except with their consent, and, in their Lordships opinion, such a condition of the contract would require to be clearly established.
" It appears crystal clear that keeping in view the fact that employee had entered in the service of a Bank and keeping in view the further fact that the Bank had branches at various places in the country, an assumption was made that Bank would not willingly agree that their employees should not be transferred. Principle that can be culled out from the ratio of this decision is that whether such power of transfer can be read by necessary implication has to be culled out from the nature of employment, nature of the. business of the employer and various surrounding circumstances. In the case of Bank one can easily make such an implication, because banks usually have branches at various places in the country. Such an implication, if required to be made, in the case of Government servants, can be easily made. But this very decision would negative a submission that an employer has inherent right of transfer. There is no such inherent right because to confer such a right is to confer power to cause unnecessary hardship and inconvenience to employees who are not in a position to resist the employer, to be suffered at their own peril which I would presently point out. Law in such a situation appears to be weighted and weighted in favour of a party who hardly needs any succour and substance. ( 7 ) MY attention in this respect was also drawn to Syndicate Bank v. Its workman, 1966 (1) LLJ 440 . That from vijayawada to Bangenpelli and the transfer led to a dispute in respect of which reference was made under Section 10 (1) (d) of the Industrial Disputes Act to the Industrial Tribunal. The allegation was one of mala fide. When the matter came up before the Supreme Court, it was observed that finding of mala fide was unsustainable. Thereafter an observation was made which was relied upon. It was said that there is no doubt that the banks are entitled to decide on a consideration of the necessities of banking business whether the transfer of an employee should be made to a particular branch. There is also no doubt that the management of the bank is in the best position to judge how to distribute its employees between the different branches.
There is also no doubt that the management of the bank is in the best position to judge how to distribute its employees between the different branches. It may be made clear in this case power of transfer was not questioned but it was urged that power was exercised in extraneous consideration and therefore, it would hardly help in deciding the point raised in this appeal. The next case in this context relied upon is Canara Banking corporation v. Vittal, 1963 (2) LLJ 354. There again, the question was of transfer of a bank clerk and the Court said that it must be presumed to be proper unless it is proved that it was made mala fide or by way of victimisation, unfair labour practice or some ulterior motive, not connected with the business interest of the bank. When we are in search of power for transfer, this decision would hardly assist us. Reference was also made to caravan Goods Carriers Private Limited v. Labour Court, Madras, (1977) 50 f. J. R. 197. Six clerks working under the company were transferred on the same day to different places. That was questioned on the ground of unfair labour practice. It was held that these transfers might have been due to exigencies of the employer as contended by him, and it was not for the Labour Court to sit in appeal over those exigencies and find out whether they demanded this course of action. Again this decision would not assist us on the question under discussion. In this connection reference may also be made with advantage to Kundan Sugar mills v. Ziyauddia, A. I. R. 1960 S. C. 650. It clearly recites the first proposition I am examining and negatived it. It says that an employer has no inherent right to transfer his employee to another place where he chooses to start to business subsequent to the date of the employment. In fairness to Mr. J. C. Bhatt, learned advocate who appeared for the respondent, it must be stated that such a case was not made out though it appears to have been repeatedly asserted by the trial Court.
In fairness to Mr. J. C. Bhatt, learned advocate who appeared for the respondent, it must be stated that such a case was not made out though it appears to have been repeatedly asserted by the trial Court. Suba Rao, J. speaking for the court has observed as under: "in the absence of an express term of the contract of service between the employer and the employee that the latter should serve in any future concerns which the former might acquire or start, a person employed in a factory cannot be transferred to some other independent concern started by the same employer at another place at a stage subsequent to the date of his employment. In such a case, the right of the employer to transfer the employee to the new concern cannot be implied as condition of service of the employment. " that was a case in which the employer sought to transfer an employee to a new concern it had acquired after the employee had joined service in the concern in which he was employed. Subsequently, a new and independent concern was set up at another place and right to transfer employee from the first mentioned concern to the new concern was claimed and it was in terms negatived. The Court in that case has dealt with one aspect of the matter, namely, whether power to transfer by necessary implication to a concern which has not in existence at the time when the employee joined service under the employer, could be read by necessary implication in the contract of employment. But the situation is not exhaustive of the circumstances in which such a power must be negatived. The ratio does not indicate whether at the time when the employee joined service with the employer there were already two independent units of the employer and in such a situation power to transfer must be read by necessary implication. It is too broad a proposition to be accepted. Let me take this very case. The respondent is a company registered under the Indian Companies Act, 1913. It had two independent units one at Ahmedabad and another at Nadiad. I was, however, told that there is a common accounting system and balance-sheet for both the units is one combined balance-sheet. That may be so. That part need not be questioned. Both are textile units and Mr.
It had two independent units one at Ahmedabad and another at Nadiad. I was, however, told that there is a common accounting system and balance-sheet for both the units is one combined balance-sheet. That may be so. That part need not be questioned. Both are textile units and Mr. Bhatt pointed out that both had engineering Departments of their own. It is in this background that claim was made that employer will have a power of transfer which must be read by necessary implication. It is not possible to read such a power by necessary implication. Undoubtedly there are two textile units belonging to the same company, namely, the defendant company. But they are in two different cities. There is nothing on the record to show that there is common seniority list or common cadre of the staff. There is nothing to show that some posts are filled in by promotion and that promotion is given by bringing the staff of both the units on common cadre. Undoubtedly, as both the units belong to the same company, higher officers look after both the units and I was told that the Secretary of the Company enjoy the power of secretary in respect of both the units. The textile unit need not have a Secretary. Secretarys appointment is in the company and company can have two units and in fact it has two units. They were textile units and I believe that they were composite units in the sense from the blow room to the finished product. Each had its own independent working with all the departments required for the same. However, it was said that the Processing department which was at Ahmedabad was transferred to Nadiad and evidence does not make it clear whether there was already a Processing Department at nadiad or not and that after transfer of the Processing Department from ahmedabad to Nadiad what happened to the grey colth that is manufactured at ahmedabad unit. These questions are not clarified in evidence. Now, merely because both the units are set up by the same company or that some of its officers with managerial power look after the affairs of the company and therefore, incidentally they look after both the units, it cannot be said that they are mere two separate departments of the same entity.
These questions are not clarified in evidence. Now, merely because both the units are set up by the same company or that some of its officers with managerial power look after the affairs of the company and therefore, incidentally they look after both the units, it cannot be said that they are mere two separate departments of the same entity. It is common knowledge that same companies set up number of textile units and each can be a unit by itself, each can have its own staffing pattern and the Managing Director may look after all units. But that is neither here nor there. Therefore, unless it was shown that staff was on common cadre, or that if there was something like gradation and there was common gradation list, and that there was frequent horizontal mobility, it cannot be said that in such a situation whenever an employee is appointed ai ahmedabad merely because he knew and in this case, the plaintiff admittedly knew that there is another unit set up by the same company at Nadiad he was liable to be transferred. ( 8 ) MR. Bhatt in this connection relied on certain circumstances which are not in dispute and which may be enumerated. It was said that when the plaintiff was appointed, Nadiad unit was already working and that the plaintiff knew about it. That is a fact. Processing Department of the Ahmedabad unit was transferred to Nadiad unit and that staff attached to the Processing Department was simultaneously transferred and that even after setting up the Processing department at Nadiad, the plaintiff was sent to Nadiad for a period of three months and he did go and worked there. That again is not in dispute. It was said that he was given free first class railway pass for commuting between Nadiad and ahmedabad daily: that he was given benefit of subsidised lunch arrangement in the guest house at Nadiad. That again is not in dispute. It was then said that by transferring the plaintiff as far as his pay packet is concerned it is in no way effected or that he suffers any disadvantage, or any of his advantages would be withdrawn except the fact that one would be daily required to commpute between Ahmedabad and Nadiad.
That again is not in dispute. It was then said that by transferring the plaintiff as far as his pay packet is concerned it is in no way effected or that he suffers any disadvantage, or any of his advantages would be withdrawn except the fact that one would be daily required to commpute between Ahmedabad and Nadiad. The statement is correct and further statement was made that if the plaintiff carries out transfer he would be given first class free railway pass for commuting between nadiad and Ahmedabad and benefit of subsidised lunch arrangement and that these benefits would continue till he is posted at Nadiad. It was also stated that the plaintiff can start from Ahmedabad railway station at 7. 00 a. m. and leave nadiad station by 4. 00 p. m. and more or less that would coincide with his working hours at Ahmedabad. Lastly it was said that number of persons of ahmedabad unit who were connected with the Processing Department have been transferred along with the processing Department and the plaintiff has also been transferred accordingly and there is no case of mala fide or victimisation or unfair labour practice in transferring the plaintiff. These submissions certainly are weighty. The concessions herein mentioned, it was said, are unilaterally extended to all those who are transferred from Ahmedabad and who are commuting between Ahmedabad and Nadiad. Question, however, is whether concessions could assist the court in reading a power of transfer by necessary implication in the contract of employment. That would hardly be relevant for deciding the point under discussion. The important question really is, merely because the Company had two separate units setup by the company, one at Nadiad and another at Ahmedabad, anyone who joined one or the other merely with the knowledge of the fact that there is a unit at another place would be sufficient to read power of transfer by necessary implication. As I said earlier, power can be read by reference to the nature of the business of the employer, nature and character of employment and other relevant circumstances. I am afraid, between two textile units such a transfer ordinarily is not to be found and such power therefore, cannot be read by necessary implication.
As I said earlier, power can be read by reference to the nature of the business of the employer, nature and character of employment and other relevant circumstances. I am afraid, between two textile units such a transfer ordinarily is not to be found and such power therefore, cannot be read by necessary implication. To make the point clear, there are in this country large business houses which control number of industries and their employees some one often spread over the whole country. Take for instance Associated Cement companies, having one factory at Dwarka and another near Calcutta. Everyone who joined such a concern knows that this company has number of similar or identical factory, concern or setup in far flung different parts of this country. Could it be said that such a person is liable to be transferred anywhere throughout the country and that such power must be read by necessary implication ? I am afraid, it is not possible to do so because it would cause such tremendous hardship which would hardly be repaired. Therefore, in the circumstances of this case and especially looking to the nature and character of the business of the employer and nature and character of employment of the plaintiff and keeping in view the special fact Mr. Bhatt mentioned to me initially that there is engineering Department both at ahmedabad and Nadiad, it is not possible to accept the submission that by necessary implication, Court should read power of transfer in contract of employment. Once such implication could not be made it must be held that employer had no power to transfer the plaintiff from Ahmedabad to Nadiad. ( 9 ) LET me make the position very clear, that whenever power of transfer is exercised with consent of the employee transferred, it is not an exercise of power of transfer, it is arrangement brought about between the employer and employee. Therefore, the fact that number of employees attached to the Processing department of the Ahmedabad unit of the defendant company had carried out the transfer would be hardly relevant. They might have accepted the transfer for the reasons best known to them.
Therefore, the fact that number of employees attached to the Processing department of the Ahmedabad unit of the defendant company had carried out the transfer would be hardly relevant. They might have accepted the transfer for the reasons best known to them. Absence of resistance in this country, where unemployment looms large by employee to an order of employer is hardly indicative of the power and right of the employer, because resistance as I would presently point out in this case merely leads to unemployment a stark liability which one shudders to visualise. Therefore, I have no hesitation into the conclusion that power to transfer in this case cannot be read by implication and it must be held that employer-defendant had no power to transfer the plaintiff from Ahmedabad to Nadiad. ( 10 ) THAT brings me to the vital question raised by Mr. Bhatt in this appeal namely whether the Court would pass a decree for specific performance of a contract of personal service. It was said that the suit in this case is none other than a suit praying for specific performance of a contract of personal service and weight of authorities shows that the Court does not grant that relief or prayer and leaves the party to sue for damages. It was very strenuously urged that contract of personal service is repudiated. A party complaining breach can sue for damages, but is not entitled at the hands of the court to a decree for specific performance of the contract. It was said that unwilling employee cannot be compelled to serve against his will because such an approach would convert the contract of employment into a contract of slavery and it was said from the same standpoint, employing the same yardstick on unwilling employer should not be compelled to take service from the employee who does not wish to employ him any more. ( 11 ) BROADLY stated, the Court ordinarily does not grant a decree for specific performance of contract of personal service. This approach dates back to the locus classicus of Fry, L. J. in Da pransees v. Barnum (1890) 45 Ch. D. 430 which reads as under:"for my own part, I should be very unwilling to extend decisions the effect of which is to compel persons who are not desirous of maintaining continuous personal relations.
This approach dates back to the locus classicus of Fry, L. J. in Da pransees v. Barnum (1890) 45 Ch. D. 430 which reads as under:"for my own part, I should be very unwilling to extend decisions the effect of which is to compel persons who are not desirous of maintaining continuous personal relations. I have a strong impression and a strong feeling that it is not in the interest of making (sic.) that the rule of specific performance should be extended to such cases. I think the Courts are bound to be jealous, least they should turn contracts of service into contract of slavery, and therefore, speaking for myself, I should lean against the extension of the doctrine of specific performance and injunction in such a manner. " ( 12 ) THIS observation was made in the days when laissez fairs doctrine was prevalent and undeniable assumption prevailed that the parties to the contract were so equally placed that while negotiating the contract they have worked out their mutual rights and advantages. There was feeling that if an employer is forced to take service against his will from such employee as cook, a driver or a valet, he would throughout be under apprehension from these servants who would be so inextricably intertwined in their personal affairs that life would be thoroughly miserable and that such could not be the approach in law. Those were the days when there were no multinational giant industrial empires. Those were the days when a small entrepreneur could put a small business and every employee would be intimately known to him. Like or dislike, or confidence or loss of it, would easily influence the relationship between the employers and employees. We have moved far away from that situation. Today if the employer is a big concern governed by Board of Management and technocrat management, it is just inconceivable that man at the top of the hierarchy would have any apprehension from a small employee in the lower echelon of service. In such a situation, even to hang on to those old worn out and outdated notions is to pay respect to principle of law which completely outlived its utility. Therefore, we will have to understand the observations of Fry. L. J. in the context of the modern industrial empires. ( 13 ) BIG houses have number of concerns.
In such a situation, even to hang on to those old worn out and outdated notions is to pay respect to principle of law which completely outlived its utility. Therefore, we will have to understand the observations of Fry. L. J. in the context of the modern industrial empires. ( 13 ) BIG houses have number of concerns. Presumably top managerial officers would hardly personally know even the higher officers. It is impossible to believe that they would ever knew those serving at the grass-root level or even at intermediate level. If the governance of the empire is by rules or regulations or Standing Orders, and power is diffuged at various levels to take disciplinary action and if such an action fails and employee comes back, there is no question of anyone being put under any apprehension, personal or to the interest of the concern. In such a situation to say that contract of employment is a contract of personal service is to shut ones eyes to realities. This topic has been very ably examined in the concurring judgment of Bhagwati j. in Vaiah Degree College v. Bakshai narain, A. I. R. 1876 B. C. 888. The pertinent observation is worth reproducing in extenso. "this rationale obviously can have application only where the contract of employment is a contract of personal service, involving personal relationship. It can have little relevance to conditions of employment in modern large scale industry and enterprise or statutory bodies or public authorities where there is provisional management of impersonal nature. It is difficult to regard the contract of employment in such cases as a contract of personal service save in exceptional cases. There is no reason why specific performance should be refused in cases of this kind where the contract of employment does not involve relationship of personal character. It must be noted that all these doctrines of contract of service as personal, non-assignable, unenforceable, and so on, grew up in an age when the contract of service was still frequently a personal relation between the owner of a small workshop or trade or business and his servant. The conditions have now vastly changed and these doctrines have to be adjusted and reformulated in order to suit needs of a changing society. We cannot doggedly hold fast to these doctrines which correspond to the social realities of an earlier generation far removed from ours.
The conditions have now vastly changed and these doctrines have to be adjusted and reformulated in order to suit needs of a changing society. We cannot doggedly hold fast to these doctrines which correspond to the social realities of an earlier generation far removed from ours. We must rid the law of these anachronistic doctrines and bring it in accord with the felt necessities of the times. It is interesting to note that in Frys classic work on Specific Performance, contracts of service appear in a small group under the sub-heading where enforced performance would be worse than non-performance. We may ask ourselves the question: For whom it would be worse and for whom it would be better ? Where, in a country like ours, large numbers of people are unemployed and it is extremely difficult to find employment, an employee who is discharged from service may have to remain without means of subsistence for a long period of time. Damages equivalent to one or two months wages would be poor consolation to him. They would be wholly insufficient to sustain him during the period of unemployment following upon his discharge. The provision for damages for wrongful termination of service was adequate at a time when an employee could without difficulty find other employment within the period of reasonable notice for which damages were given to him. But in conditions prevailing in our country, damages are a poor substitute for reinstatement; they fall far short of the redress which the situation requires. To deny reinstatement to an employee by refusing specific performance in such a case would be to throw him to the mercy of the employer: it would enshrine the power of wealth by recognising the right of the employer to fire an employee by paying him damages which the employer can afford to throw away but which would be no recompense to the employee. It is, therefore, quite possible, within the limits of the doctrine that a contract of personal service cannot be specifically enforced, to take the view that in case of employment under a statutory body or public authority, where there is ordinarily no element of personal relationship, the employee may refuse to accept the repudiation of the contract of employment by the statutory body or public authority and seek reinstatement on the basis that the repudiation is ineffective and the contract is continuing. Mr.
Mr. Bhatt, however, urged that it is now well settled by catena of decisions that a declaration that a person continues in service which would amount to enforcement of contract of personal service, could only be made in three well recognised cases and extension of the principle even with the observations herein above quoted has not taken the matter further. It was said that declaration to enforce contract of personal service can be granted in the following three cases: (I) Appropriate cases of public servants who have been dismissed from service in contravention of Article 311; (II) Dismissed workers under industrial and labour law; and (III)WHEN a statutory body has acted in breach of a mandatory obligation imposed by a statute, (vide Mysore and state Road Transport Corpn. , v. Mirja khasim A. I. R. 1977 S. C. 747 at 755 ). In recording this conclusion the Court relied upon its earlier decision in Vaiah Degree college (supra), Indian Air Lines corporation v. Sukhdeo Rai, A. I. R. 1971 s. C. 1928 and other decisions bearing on the subject. In view of this latest pronouncement, it is not necessary to refer to those earlier decisions. However, reference was made to D. K. N. B. V. College v. Mrs. Aleyamma Thomas, (1971) I LLJ 79, wherein the Madras High Court has observed that the Court cannot specifically enforce the contract of personal service. The lower Court had chosen to pass an order of interim injunction enforcing the contract of personal service and on this account revision application was allowed. Reference was also made to Bank of baroda v. Jawan Lal Mehrotra, 1970 (2) LLJ 54 , In that case a Bank clerk was dismissed from service after domestic enquiry and he had filed a suit for a declaration that he was in the service of the bank and for recovering the arrears of salary. This suit was dismissed. First appellate Court decreed the suit on certain grounds and Second Appeal to the High Court did not meet with success. The management carried the matter to the Supreme Court. After reiterating the aforementioned three circumstances in which declaration could be made by enforcing the contract of personal service the appeal was allowed observing that the case of the respondent did not come under any of the aforementioned three situations.
The management carried the matter to the Supreme Court. After reiterating the aforementioned three circumstances in which declaration could be made by enforcing the contract of personal service the appeal was allowed observing that the case of the respondent did not come under any of the aforementioned three situations. ( 14 ) RELYING on the aforementioned decisions it was urged that the plaintiff seeks to enforce the contract of personal service and as this case does not fall in any of the exceptions, wherein such a declaration should be made, the Court cannot entertain his suit. In the plaint the plaintiff has asked two separate and independent reliefs. By prayer (i) the plaintiff requests the Court to declare that transfer order dated 20th January 1973 is illegal and invalid and as it is in breach of contract, it is void, and declaration to that effect should be made. Second prayer was in two parts. By the first part of the second prayer an injunction was sought restraining the defendant from transferring the plaintiff from ahmedabad to Nadiad, and further injunction restraining the defendant on the ground that he was failed to carry out the transfer. The learned Trial Judge has observed that Mr. B. D. Shah, learned advocate appearing for the plaintiff had not pressed the second prayer. In court is, therefore, left with the first prayer. Now, the first prayer is that transfer order be declared illegal and invalid and Mr. Bhatt said that even if such a declaration would be made it would be enforcing contract of personal service. I fail to see how a declaration can be said to be enforcing the contract of personal service. When an injunction is granted, certainly there is enforcement of contract of personal service because the employer is restrained from doing something which it considers itself entitled to do.
I fail to see how a declaration can be said to be enforcing the contract of personal service. When an injunction is granted, certainly there is enforcement of contract of personal service because the employer is restrained from doing something which it considers itself entitled to do. ( 15 ) NOW, this aspect raises an important question whether where employer does not terminate service or repudiate the contract of employment, but merely tries to enforce one of the conditions of contract of employment which employer seeks to read in the contract of employment by necessary implication and employee resists on the ground that no such implication can be made and seeks a declaration that there is no power in the employer to make such an order in exercise of the so called power, could it ever be said that there is repudiation of the contract by the employer and employee seeks to enforce the same. It is quite well known that contract may consist of not a single promise of which there is promissor or a promisee; there might be mutual counter-obligation and duties in contract. The contract may be executed by one and may be executed for the other part. Even it is quite well known that in a contract there are what are known as principal conditions subject to which contract is entered and there are incidental terms of contract. Mr. Bhatt, however, said that under the India law, wherein one contract there are several promises by one promissor but the contract is one and indivisible non-performance of any one of the promises or repudiation of the obligation to perform any one of the promises, is breach of contract or repudiation of contract. He further said that a suit for declaration that promissor is not entitled to so repudiate or is bound to perform the contract by fulfilling that obligation which is violated therein specific performance of the contract as claimed. It was further said that suit for declaration that such non-performance or repudiation and co-related prayer for injunction would be a suit in the nature of a suit for specific performance of contract of personal service. I am afraid, the proposition from my point of view is rather broadly stated.
It was further said that suit for declaration that such non-performance or repudiation and co-related prayer for injunction would be a suit in the nature of a suit for specific performance of contract of personal service. I am afraid, the proposition from my point of view is rather broadly stated. Contract of employment may include within itself number of other conditions such as liability to be transferred, liability to be reverted, liability to serve at some other place, liability for time being to serve some other master. All these situations may arise from contract of employment. Now, if an employer makes an order in respect of which there is no power in that contract of employment to make such an order and while making order, there is refusal to obey, but does not repudiate the contract, a relief by the aggrieved employee sought from Civil Court for a declaration that power claimed by the employer is not to be found anywhere in the contract of employment or in any other law or statute and therefore, the order is bad, such a relief can and ought to be granted by the Court. When such a relief is sought, it cannot be said that merely because an order is made as part of enforcement of contract without putting an end to the contract of employment, it amount to repudiation of contract, and it is difficult to entertain such a submission. ( 16 ) QUESTION here is whether the employer had a right to order transfer of the employee and a right was claimed and right was sought to be read by necessary implication in the contract of employment. If the Court is not inclined to read such a power or right by necessary implication in the contract of employment, what is illegal is the order of transfer. Employer has not repudiated the contract. Making a transfer order is enforcement of the contract. It can never be said to be repudiation of contract when the employer says that who serves at A is ordered to serve at B. It is enforcement of contract. How can it ever be said to be repudiation of contract ? It is well settled that where employee is suspended from service, it is not repudiation of contract but truly speaking it is enforcement of contract which can be illustrated thus.
How can it ever be said to be repudiation of contract ? It is well settled that where employee is suspended from service, it is not repudiation of contract but truly speaking it is enforcement of contract which can be illustrated thus. It is the right of the employer to tell the employee to do work assigned to him. By the same token the employer in enforcement of the very contract can tell the employee not to do that work. Suspension is continuing of the contract of employment with a right in the employer asking the employee not to do work and yet hold himself liable to the employee for payment of wages. Therefore, every such order which would impinge upon contract of employment does not amount to repudiation of contract. If there is no repudiation of contract, it would mean that contract is subsisting. If the contract is subsisting, the Court can definitely say that the contract is subsisting. That is not enforcement of the contract and therefore the prayer (1) can definitely be granted. ( 17 ) IT is only when injunction restraining the employer from doing something which would be enforcing a covenant in the contract of employment that one may say that there is an attempt to enforce the contract of personal service by its specific performance. The plaintiff here seeks additional relief of injunction. If that is to be granted, the suit would be one for specific performance of contract of personal service. That of course, in view of the weight of authorities and as the case does not fall under any of the excepted situations, cannot be done. But I fail to see why a declaration that order of transfer was illegal cannot be made. What is its effect, it is not easy to foresee or decipher at this stage. But once the Court is satisfied that there was no power to transfer the plaintiff a declaration that there was no such power is not enforcement of the contract of personal service. This is the Courts conclusion on the assertion by the employer that there is such power to transfer and denial of the employee that there is no such power. A mere declaration is not specific performance of the contract of personal service.
This is the Courts conclusion on the assertion by the employer that there is such power to transfer and denial of the employee that there is no such power. A mere declaration is not specific performance of the contract of personal service. And the man whose rights are violated can always move the Court for a declaration against the person who is interested in denying that position. Therefore, first part of the prayer (1) can easily be considered and may be granted. Of course injunction cannot be granted and to that extent the suit must fail. ( 18 ) ACCORDINGLY this Appeal is partly allowed by making a declaration that transfer order dated 20th January 1973 made by the defendant company is illegal, invalid and void and the rest of the prayer is rejected. In the circumstances of the case, there shall be no order as to costs. As the appeal on the question of injunction fails, injunction granted by the court would stand vacated. But at the request of Mr. J. R. Nanavati, it would continue to be operative till 6th May 1977. Order accordingly. (RPV)Appeal partly allowed. .