G. C. Jain ( 1 ) M/s. Chemo-Pharma Laboratories Ltd. , the defendant by its "preliminary letter of appointment dated November 16, 1972 (p-1) appointed Muni Lal Talwar, the plaintiff, as its Resident Representative at Delhi for a period of 10 years on a remuneration of Rs. 1500. 00 per month. Formal letter of appointment (P-2) was issued on December 14, 1972. This letter also contained other terms of the service. By his letter dated December 3, 1974 (D-6) the Marketing Manager of the defendant placed the plaintiff under suspension pending further investigations on three charges namely (1) that he (plaintiff) had not been attending office at Delhi, regularly for the last two months; (2) that his behaviour to his superiors had been un-cooperative and rude; and (3) that he had been debarred from entering D. G. S. and D. Office and how he had been claiming to do the the liaison work. The plaintiff assailed this order by his counsel s notice dated llth January, 1975 (Ex. Public Witness-1/21 ). It was averred in the notice that the allegations in the suspension letter were vague, untrue and without any foundation and that the Managing Director had no jurisdiction to suspend the plaintiff. It was also pointed out that his salary for the period commencing July 1, 1974 besides Rs. 3,031. 00 the expenses incurred by him had not been paid inspite of repeated requests and instead he had been suspended. Without any further investigation or correspondence, the services of the plaintiff were terminated with effect from July 1, 1974 by letter dated January 15, 1975 (Ex. D-3) on the charges mentioned in the suspension letter. ( 2 ) THE plaintiff sent a notice dated 5th May, 1975 (Ex. PV/-1/22) to the defendant stating that his dismissal having been made on unfounded grounds was illegal and claiming Rs. 10,450. 00 towards his salary from 1st July 1974 to 15th January, 1975, Rs. 2,06,250. 00on account of salary from 16th January, 19/5 to 9th January 1983, Rs. 16,416. 00towards provident fund earned upto the date of the notice and to be earned thereafter, Rs. 12,000. 00 towards gratuity and Rs. 18. 000. 00towards bonus. There was uo response and consequently the plaintiff on May 20, 1975 brought this suit for recovery of Rs. two lacs. 16,416. 00towards provident fund earned upto the date of the notice and to be earned thereafter, Rs. 12,000. 00 towards gratuity and Rs. 18. 000. 00towards bonus. There was uo response and consequently the plaintiff on May 20, 1975 brought this suit for recovery of Rs. two lacs. In addition to the claims made in the notice the plaintiff in the suit also claimed an additional amount of Rs. 25,000. 00 for making defamatory charges disparaging his efficiency, regularity, behaviour, character and honesty. The total amount came to Rs. 2,88,116. 00 but he confined his claim only to Rs. two lacs. ( 3 ) IT was averred in the plaint that the plaintiff had been appointed for a fixed period of ten years. The grounds for dismissal were without any substance and the dismissal order was illegal. The plaintiff had special knowledge of transacting business and obtaining contracts for huge supplies of the pharmaceutical products of manufacture of the defendant and could not obtain a job with similar emoluments, especially when the termination of the service had been made on most defamatory accusation. The plaintiff was entitled to the various amounts claimed in the suit. ( 4 ) THE defendant resisted the suit. It was pleaded that the plaintiff, under the terms of his employment, was governed by the conditions of service which may be in force in defendant s establishment. Under the said conditions of service an employee could be dismissed by giving one month s notice in writing or paying, in lieu of notice, one month s pay. An employee could be dismissed, without any notice, for misconduct. Plaintiff s dismissal was legal. It was next pleaded that the plaintiff had not made any efforts to find any other employment and had he made efforts he would have definitely got some employment and that the plaintiff was not entitled to any amount. ( 5 ) ON the pleadings of the parties, the following issues were framed; " 1. Whether the services of the plaintiff were validly terminated by the defendant? 2. If issue No. 1 is found in favour of the plaintiff, then is he not entitled to the salary for the period July 1974 to January 15, 1975? 3. Whether the plaintiff is entitled to salary from 16th January 1975 to 9th January 1983 as damages? 4. Whether the services of the plaintiff were validly terminated by the defendant? 2. If issue No. 1 is found in favour of the plaintiff, then is he not entitled to the salary for the period July 1974 to January 15, 1975? 3. Whether the plaintiff is entitled to salary from 16th January 1975 to 9th January 1983 as damages? 4. Whether the plaintiff is entitled to any amount on account of provident fund, gratuity or bonus? 5. Whether the plaintiff has been defamed as alleged in the plaint, and if so, is he entitled to obtain any amount as damages in this suit? 6. Relief". ( 6 ) THE relationship of employer and employee is the creation of a contract expressed or implied. The question as to the duration of the employment and its terminability, therefore, depends on the terms of the contract. Preliminary letter of appointment says; "you would be our Resident Representative in Delhi for a period of 10 years. " Clause 2 of formal letter of appointment says: "this appointment is for a period of ten years as per our earlier letter dated 16th November, 1972". It is thus clear that the plaintiff had been appointed by the defendant for a fixed period of ten years. Duration of the plaintiff s appointment was, therefore, upto January 9, 1983. Clause 4 of the letter of appointment dated December 14, 1972 provided the conditions of service which may be in force and/or amended from time to time will be being on you . Relying on this term itwas contended on behalf of the defendant that the defendant had rules fixing the conditions of the service of their employees in the establishment and one of the conditions was that the services of an employee could be dispensed with by giving one month s notice in writing or paying in lieu of the notice one month s salary, and in case of misconduct services of an employee could be dispensed with without notice. To prove the existence of such service conditions the defendant produced oral evidence. Vijay P. Dixit, Sales Manager, Anil Chakarvurty, Resident Manager and Dr. Prem Balwani, Marketing Manager of the defendant deposed about such service conditions This oral evidence cannot be accepted. Defendant is a public limited company. Had there been any such service conditions, the same, ordinarily, must have been in writing. Vijay P. Dixit, Sales Manager, Anil Chakarvurty, Resident Manager and Dr. Prem Balwani, Marketing Manager of the defendant deposed about such service conditions This oral evidence cannot be accepted. Defendant is a public limited company. Had there been any such service conditions, the same, ordinarily, must have been in writing. No such written service conditions have been produced. I, therefore, hold that the defendant has failed to prove that there was any conditions of service empowering it to terminate the services of an employee who had been appointed for a fixed period before the expiry of that period with or without notice. The contract of employment creates mutual rights and obligations. The plaintiff, as is clear from the letter of appointment, was appointed as a Resident Representative in Delhi. He was, obviously, required to perform the duties of a Resident Representative in Delhi with reasonable care. There was an implied term of contract that the plaintiff would obey the lawful and reasonable orders of the defendant. If the plaintiff refused to perform his duties/obligations under the contract in its entirety this contract of service could be terminated by repudiation. It is clear from the provisions contained in Section 39 of the Contract Act which reads: "when a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance. "it has, therefore, to be determined whether the plaintiff showed wilful disregard of the essentials of the contract of service which amounted to repudiation of contract by him. In the suspension letter dated December 3, 1974, the allegations made against the plaintiff by the defendant s Marketing Manager were that (1) the plaintiff had not been attending office at Delhi regularly for the last two months; (2) that his behaviour to his superiors was un-cooperative and rude and (3) that he had been debarred from entering D. G. S. and D. office which fact he had concealed and that having debarred to enter the said office how could he do the liaison work. Similar allegations were made in the dismissal letter dated January 15, 1975. Whether the defendant has been able to prove these allegations? Similar allegations were made in the dismissal letter dated January 15, 1975. Whether the defendant has been able to prove these allegations? Vijay P. Dixit, Sales Manager of the defendant (DW-1) deposed that whenever he visited the office at Delhi he found that the plaintiff was not in the office and there were number of letters lying on his table which were unattended. Anil Chakorvurty, Resident Manager of the defendant (DW-2) stated that he visited the office at Delhi twice or thrice a week and on most of the occasions he did not find the plaintiff in office though sometimes he was there. Dr. Prem Balwani, (DW-3) deposed that many a times the plaintiff. was not performing his duties. I have carefully examined the entire evidence. The evidence is vague and most unsatisfactory. None of these witnesses has given the details when the plaintiff was found absent from duty. Anil Chakarvurty had admitted that the plaintiff s duty as a Resident Representative was to look after the business with the Government including D. G. S. and D. Keeping in view the nature of his duties it was not possible for the plaintiff to be always available in the office during office hours. No letter was written to the plaintiff pointing out to him about his absence from duties prior to the suspension letter. Dr. Prem Balwani himself wrote a letter to the plaintiff dated October 10, 1974 (P-19) intimating that he would come to Delhi for the follow up of important items mentioned in the letter. He wrote a similar letter to the plaintiff on October 12, 1974 proposing to come to Delhi to help the plaintiff to try for increase in the rates. Another letter dated October 29, 1974 (P-7) was written on behalf of the defendant to the plaintiff for forwarding certain bills. Defendant sent letters dated October 17, 1974, October 16, 1974, October 16, 1974 and October 17, 1974 (Exs. P-34 to P-37) to the Pay and Accounts Officer, New Delhi, copies of which were sent to the plaintiff. It is clear from these facts that the plaintiff was attending office in October 1974. Otherwise, there was no question of sending letters to him. In the presence of these letters it cannot be believed that the plaintiff was not attending his duties from October 1, 1974. It is clear from these facts that the plaintiff was attending office in October 1974. Otherwise, there was no question of sending letters to him. In the presence of these letters it cannot be believed that the plaintiff was not attending his duties from October 1, 1974. Had it been so then at least the defendant must have written some letter to the plaintiff in this behalf. There was no inkling even about the absence of the plaintiff in these letters. In the dismissal letter it was also alleged that the plaintiff was absent from July 1, 1974 to September 30, 1974 as well. No such allegation was made in the suspension letter. It was clearly an after thought. ( 7 ) THE second allegation was that the plaintiff was ucooperative and rude which amounted to misconduct and breach of discipline. No details of the alleged misconduct have been given either in the suspension letter or in the dismissal letter. Dr. Balwani deposed that the plaintiff was not co-operative on all his visits to Delhi. The evidence is vague and most unsatisfactory. The details showing non-cooperation on the part of the plaintiff have not been disclosed. The dates on which he was non-cooperative or rude have not been given. Ordinarily, Dr. Balwani must have complained in writing to the Management if there was any complaint as stated by Vijay P. Dixit. No such complaint has been produced. The plaintiff was never intimated about the alleged non-cooperation in any of the letters before his suspension. This charge, in my view, is not proved, ( 8 ) THE third charge in the suspension letter was that the plaintiff had been debarred from entering the of D. G. S. and D. and he had concealed this fact. There is no evidence to prove that the plaintiff had been debarred from entering the office of D G. S. and D. In the termination letter it was stated that the plaintiff never attended the D. G. S, and D. office on behalf of the plaintiff. This allegation again is vague. Plaintiff, admittedly, earlier was employed in D. G. S, and D. He resigned and joined the defendant. The main duty was to follow up the orders of the defendant with the D. G. S. and D. It is unbelievable that he never visited the D. G. S, and D. after joining services with the defendant. This allegation again is vague. Plaintiff, admittedly, earlier was employed in D. G. S, and D. He resigned and joined the defendant. The main duty was to follow up the orders of the defendant with the D. G. S. and D. It is unbelievable that he never visited the D. G. S, and D. after joining services with the defendant. The plaintiff has admitted that he had not been doing any work for the defendant with D. G. S, and D. since October 1, 1974. That, however, would not make any difference. Defendant has not produced any evidence to prove that the plaintiff was required to do any duty in the office of D. G. S. and D. during that period or that plaintiff disobeyed its lawful and reasonable orders. For all these reasons, the defendant, in my view has failed to prove that the plaintiff had repudiated the contract of service or that he had disregarded the essential conditions of service to give existence to repudiation. I, consequently, hold that the termination of the services of the plaintiff was not valid. Issue is decided against the defendant. ( 9 ) ISSUE No. 2 The plaintiff has claimed a sum of Rs 10,450. 00 towards his salary from July I, 1974 till January 15, 1975. The plaintiff s services were terminated by letter dated January 15, 1975. Thus, he was in service upto January 15, 1975. It was not shown to me as to how he was not entitled thesalary for this period. The plaintiff, in my view, was entitled to salary for this period which comes to Rs. 9,750. 00. The plaintiff has claimed an increment at Rs. 100. 00 per month for this period. No doubt the appointment letter provided that he would be given a suitable grade increment but in spite of this term no term grade increment was given. Nothing was shown as to what was the suitable increment. In the absence of proof about the amount of suitable increment , the plaintiff was not entitled to any increment. I, consequently, hold that the plaintiff was entitled to Rs. 9,750. 00 as salary from July 1, 1974 to January 15, 1975. Issue is decided accordingly. ( 10 ) ISSUE No. 3 As held above, the dismissal of the plaintiff was illegal. The defendant had committed the breach of contract of employment. I, consequently, hold that the plaintiff was entitled to Rs. 9,750. 00 as salary from July 1, 1974 to January 15, 1975. Issue is decided accordingly. ( 10 ) ISSUE No. 3 As held above, the dismissal of the plaintiff was illegal. The defendant had committed the breach of contract of employment. The plaintiff, as provided in Section 73 of the Indian Contract Act, was, therefore, entited to damages which naturally arose in the usual course of things from this breach. In the case of breach of contract of employment the damages are to be measured by the amount of remuneration, which the employee has been prevented from earning by reason of his wrongful dismissal. Thus, the plaintiff, ordinarily, was entitled to the remuneration for the period January 16, 1975 till January 9, 1983. The principle mentioned above, however, is qualified by a second principle contained in the explanation to Section 73 of the Indian Contract Act. It enjoins upon the Court to take into account the means which existed of remedying the inconvenience caused by the non-performance of the contract, in estimating the loss or damage arising from a breach of contract. This principle imposes on the plaintiff a duty to take all reasonable steps to mitigate the loss consequent on the breach and debars him from claiming any part of the damages which is due to his neglect to take such precautions, In British Westing house Electric and Manufacturing Company, Limited v. Under ground Electric Railways Company of London, Limited,1 it was observed as page 689 : "the fundamental basis is thus compensation for pecuniary loss naturally flowing from the breach; but this first principle is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps. In the words of James L. J. in Dunkirk Colliery Co. v. Lever (7 ). "the person who has broken the contract is not to be exposed to additional cost by reason of the plaintiffs not doing what they ought to have done as reasonable men, and the plaintiffs not being under any obligation to do anything otherwise than in the ordinary course of business. v. Lever (7 ). "the person who has broken the contract is not to be exposed to additional cost by reason of the plaintiffs not doing what they ought to have done as reasonable men, and the plaintiffs not being under any obligation to do anything otherwise than in the ordinary course of business. "in Halsbury s Law of England, Fourth Edition, Volume 16 the relevant observations at page 443 read : "in any other case the damages are to be measured by the amount of remuneration which the employee has been prevented from earning by reason of his wrongful dismissal, including the value of any other benefit to which he is entitled by virtue of his contract and of which he is deprived in consequence of its breach, after taking into consideration the probabilities of his obtaining employment else-where. If, therefore, he obtains other employment immediately after his dismissal the amount which would otherwise be payable as compensation must be reduced by the amount of remuneration which he receives in respect of such employment, and if he is paid same or higher wages his loss is merely nominal. Moreover, it is his duty to minimise his loss, and he cannot therefore claim damages in respect of any loss which he could have avoided by using due diligence in endeavouring to obtain employment. If, but for his own default or neglect, he could, immediately after dismissal, have obtained suitable employment at similar wages, he cannot recover more than nominal damages against the employer. He is not, how-ever, bound to accept employment of a different kind, or even a lower position in the same kind of employment, and, in such case, it is immaterial that the rate of remuneration offered is the same. "in Chitty on Contracts 25th Edition Volume 1 para 1715 page 951 it was observed : "avoidable loss. The first rule "imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, a d debars him from claiming any part of the damage which is due to his neglect to take such steps. "in M/s, Murlidhar Chiranjilal v. M/s. Harishchaniira Dwarkadas and Another2 the Supreme Court held : "the two principles on which damages in such cases are calculated are well-settled. "in M/s, Murlidhar Chiranjilal v. M/s. Harishchaniira Dwarkadas and Another2 the Supreme Court held : "the two principles on which damages in such cases are calculated are well-settled. The first is that, as far as possible, he who has proved a breach of a bargain to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the contract had been performed; but this principle is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damages which is due to his neglect to take such steps : (British Westing house Electric and Manufacturing Company Limited v. Underground Electric Railways Company of London ). These two principles also follow from the law as laid down in Section 73 read with the Explanation thereof. "learned counsel for the plaintiff contended that the burden was on the defendant to prove that means existed to mitigate the loss. Reliance was placed on a decision of this Court in S. M. Murray v. Mis. Fenner India Ltd. 1 In this case it was held : "the words in the Explanation that "means which existed of remeying the inconvenience caused" would mean the existence of suitable job. The Explanation does not cast any duty on the plaintiff to look for an alternative employment If a suitable job existed which the plaintiff did not take, the salary and perks in that job could certainly be taken into account while assessing the damages. The Explanation says no more. In any case, (he paity which is at fault, as the defendant in the present case is, cannot ask the plaintiff to show the existence of suitable jobs and also the attempts made by the plaintiff to get the same. Burden lies on the defendant to show that means existed to mitigate the loss and if it is so proved, the plaintiff cannot recoverfor a loss which he could have avoided. "onacts learned Judge had found that the plaintiff in that case looked for the alternative job in order to minimise the loss or damage arising from the breach of the contract. "onacts learned Judge had found that the plaintiff in that case looked for the alternative job in order to minimise the loss or damage arising from the breach of the contract. The observations that burden lies on the defendant to show that means existed to mitigate the loss do not help the plaintiff much, In any case decision of the Supreme Court in M/s. Murlidhar Chiranjilal (supra) says that the plaintiff must take all reasonable steps to mitigate the loss. Reliance was also placed on a decision in India International Centre v. Sh. S. N. Pandit2. A Division Bench of this Court in this case allowed damages for the remainder period of the term of his service contract. But it had been found that the employee had asked for a certificate from the employer on the basis of which it could have been easier for him to get alternative employment but the employer refused to give him the certificate. It was further found that the employee had applied for several posts but was not successful in getting an alternative employment. This decision, in these circumstances, does not support the contention of the plaintiff that it was not the duty of the plaintiff to take reasonable steps to minise the loss. Whether the plaintiff had taken reasonable steps to minimise the loss in the present case ? There is no allegation in the plaint that he had made efforts to get alternative job. The plaintiff in his statement deposed that he was 46 years of age when his services were terminated. Wild charges were spread against the plaintiff It was also spread that he had been debarred from entering the office of D. G. S. and D. and therefore, he could not get any other suitable job. However, there is no cogent evidence to show that he applied anywhere for a job. His statement is very unsatisfactory. DW-1 has stated that he has been told that the plaintiff has been doing business with his brother-in-law after his services were terminated. This evidence is hearsay evidence and of no value. This, however, does not mean that the plaintiff was not entitled to any damages. Explanation to Section 73 of the Contract Act requires the Court to take into account the means which existed for mitigating the loss. This evidence is hearsay evidence and of no value. This, however, does not mean that the plaintiff was not entitled to any damages. Explanation to Section 73 of the Contract Act requires the Court to take into account the means which existed for mitigating the loss. As observed by the Division Bench of (his Court in India International Centre (supra) the unemployment situation in our country is well known. It has also to be kept in mind that the plaintiff had reached the age of 46 which, in my opinion, reduces the chances of getting a suitable job. Moreover, he was not a technically qualified person. He had experience in dealings with D. G. S. and D. where he was employed. Keeping in view all the facts and circumstances, I think it would be reasonable if three years salary was allowed as damages to the plaintiff. I, consequently, hold that the plaintiff was entitled to Rs. 54,000. 00 as damages. ( 11 ) ISSUE No. 4 There is no evidence on record to show that any bonus had been declared during the period he was employed or that he was entitled to any bonus. Learned counsel for the plaintiff could not show me any law under which the plaintiff was to receive any amount on account of provident fund from the defendant, the employer. Under the Employees Provident Funds and etc. Act, 1952, the employer was liable to make contribution to the fund. On the termination of the services the employee however is entitled to receive the amount from the authority under that Act and not from the employer. ( 12 ) GRATUITY under the Payment of Gratuity Act, 1972 is payable to an employee on termination of his employment after he has rendered continuous service for not less than five years. The plaintiffs having not rendered continuous service for more than five years, was not entitled to any gratuity. ( 13 ) I, consequently, hold that the plaintiff was not entitled to any amount towards bonus, provident fund, or gratuity. The plaintiff, however, would be at liberty to claim provident fund amount, due if any, from the Provident Fund Authorities. The plaintiffs having not rendered continuous service for more than five years, was not entitled to any gratuity. ( 13 ) I, consequently, hold that the plaintiff was not entitled to any amount towards bonus, provident fund, or gratuity. The plaintiff, however, would be at liberty to claim provident fund amount, due if any, from the Provident Fund Authorities. ( 14 ) ISSUE No. 5 Learned counsel for the plaintiff contended that the allegation made by the defendant in the suspension letter that the plaintiff had been debared from entering the office of the D. G. S. and D. defamed the plaintiff. There is no evidence to prove defamation. The vague self serving statement of the plaintiff that his reputation was badly affected is of no consequence. In my view, the plaintiff was not entitled to any damages on account of alleged defamation. ( 15 ) ISSUE No. 6 In view of my findings above the plaintiff was entitled to Rs. 63,750. 00. Section 34 of the Civil Procedure Code empowers the Court to allow interest at such rate as the Court deems reasonable from the date of the suit till the date of the decree. Learned counsel for the defendant contended that no interest could be allowed in this case on the amount of damages. I do not agree. The damages in this case represent the part of the remuneration which the plaintiff would have been entitled towards his salary but for his illegal dismissal. In my view, he was entitled to interest. The suit was filed in 1975. Keeping in view the rate of interest prevalent in those days and prevalent now 1 think it would be reasonable if interest was allowed at 9% per annum. So far as the interest after the date of the decree is concerned it can be allowed only at 6% as provided under Section 34 of the Civil Procedure Code. I, consequently, grant a decree for Rs. 63. 750. 00 with interest at 9% per annum from the date of the suit till the date of the decree on the said amount and @ 6% per annum from the date of the decree till the payment. The plaintiff would also be entitled to proportionate costs.