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2002 DIGILAW 460 (ORI)

RADHANATH PATRA v. DALMIA INSTITUTE OF SCIENTIFIC AND INDUSTRIAL RESEARCH

2002-07-25

L.MOHAPATRA

body2002
JUDGMENT : L. Mohapatra, J. - Defendant is the Appellant before this Court against a confirming judgment. The Plaintiff-Respondent filed the suit for a decree to recover Rs. 4,944.25 paise from the Defendant-Appellant alongwith pendente lite and future interest. The case of the Plaintiff-Respondent is that it is a society registered under the Societies Registration Act, 1860 having its registered office and research institute at Rajgangpur in the district of Sundargarh. The Defendant-Appellant was selected in an interview in August, 1972 for appointment as a Trainee Engineer in the institute and on payment of stipend of Rs. 350/- per month. The initial appointment was for a period of two years commencing from 1.9.72 on the condition that during the training if he is found suitable for the post, he may be considered for permanent appointment. After completion of the aforesaid period' of two years, the Plaintiff-Respondent having found the Defendant-Appellant suitable for appointment on permanent basis entered into a service contract with him. As per the said service contract, the Defendant-Appellant was appointed for a period of five years i.e. from 1st August, 1975 to 31st July, 1980. Further condition in the said contract is that if the Defendant-Appellant leaves the service before completion of the said period of five years, he would be liable to pay to the Plaintiff-Respondent liquidated damages equivalent to twelve times the monthly salary last drawn. The further case of the Plaintiff-Respondent is that the Defendant-Appellant having left the job before completion of five years, he is liable to pay liquidated damages as provided in the service contract and accordingly the suit had been filed for recovery of damages to the tune of Rs. 4,944.25 paise. 2. The Defendant-Appellant in his written statement took the plea that he had agreed to serve the Plaintiff-society for a period of five years. The initial appointment for a period of two years having expired on 31.8.1974 the period of regular service as indicated in the service contract should start from 1st, September, 1974 and end on 31st August, 1979. The Defendant having left the job on 5th August, 1980, had completed five years service as per service contract. The further case of the Defendant-Appellant is that without taking into consideration the period from 1.9.1974 to 1.8.1975, five years period has been calculated and damages have been claimed. 3. The Defendant having left the job on 5th August, 1980, had completed five years service as per service contract. The further case of the Defendant-Appellant is that without taking into consideration the period from 1.9.1974 to 1.8.1975, five years period has been calculated and damages have been claimed. 3. The learned Subordinate Judge, Sundargarh on the pleadings of the parties framed four issues and held that the service contract, Ext. 5 is legal and valid. The learned Subordinate Judge further held that the Defendant having left the job before completion of period as indicated in the service contract is liable to pay the liquidated damages as claimed by the Plaintiff-respondent. The appeal carried by the Defendant before the learned District Judge, Sundargarh having been dismissed on similar findings, this appeal has been filed. 4. The following substantial questions of law have been raised in the present second appeal: 1. For that the learned Courts below have acted illegally and with material irregularity in not holding Clause 4 of Ext. 5 judged of at the time of making contract, was not liquidated damages and that it was not only imposed as security for due performance of the contract and as such it was by way of penalty and not recoverable? 2. For that it ought to have been held that inspite of the words, used in Ext. 5 that the amount payable is liquidated damages, it is actually not liquidated damage and the learned Courts below have erred in law in not holding that the said formula fixing the sum as liquidated damage i.e. 12 times monthly pay on the date of termination or cessation of-service is not at all pre-estimated damage but it is in fact interrorem. extravagant, unconscionable as the same was based on a set of formula, out of proposition to the injury caused and the same damage was stipulated to be payable under various circumstances as mentioned in Clause 4 and 12 of the agreement without any graduated sums in proportion to the seriousness of the breach? 3. For that the learned Courts below have erred in law in not holding that Ext 5 was neither valid, legal nor binding on the Appellant, as such the judgment as has been passed is liable to be set aside. 5. 3. For that the learned Courts below have erred in law in not holding that Ext 5 was neither valid, legal nor binding on the Appellant, as such the judgment as has been passed is liable to be set aside. 5. The learned Counsel appearing for the Appellant challenged the findings of the Courts below in reference to the substantial questions of law as indicated above and submitted that Ext. 5 is opposed to public policy and is not a valid contract. The learned Counsel also submitted that after completion of the training period as indicated in Ext. 4 the Defendant continued in service till the service contract was entered into between the parties. The period between 1.9.74 and 1.8.75 having not been taken into consideration for the purpose of computation of period of five years both the courts below committed an error by holding that by the time the Defendant left the service he had not completed five years. The learned Counsel appearing for the Respondent, on the other hand, submitted that the service contract clearly provides that the period of five years shall be calculated from 1.8.75 and admittedly the Defendant left the job before 31st July, 1980 and accordingly he is liable to pay liquidated damages as provided in Clause 4 of the service contract. 6. The questions that have to be decided in the appeal are as to whether Ext. 5 can be held to be a valid contract and as to whether the Appellant left the service of the Plaintiff-Respondent before completion of five years. The specific case of the Plaintiff-Respondent before the trial Court is that during the training period the society has spent a lot of money for imparting training to the Defendant-Appellant expecting that he would serve the society for a minimum period of five years. The learned Counsel appearing for the Respondent submitted that the training is a specialised training which was imparted to the Defendant-Appellant with the hope that he would serve the society at least for a period of five years and at no point of time the Defendant had ever raised any objection. The learned Counsel appearing for the Respondent submitted that the training is a specialised training which was imparted to the Defendant-Appellant with the hope that he would serve the society at least for a period of five years and at no point of time the Defendant had ever raised any objection. In view of the amount of money spent by the Plaintiff-Respondent for the purpose of training Clause 4 was inserted in the service contract so that in the event the Defendant leaves the job before expiry of five years period, the society can at least recover the part of the amount spent on such training. Ext. 4 is a letter dated 31st December, 1973 wherein it is stated that the period of training shall be for a period of two years commencing from the date on which the Defendant reported for duty i.e. 1.9.72. There appears to be no grievance that the Defendant continued to serve during this training period for two years which came to an end with effect from 31st August. 1974. There is no dispute that the Plaintiff continued in service tilt execution of the service contract i.e. from 1.9.74 till the date of execution of the service contract. There is no material whatsoever on record to indicate that the probation period of two years had been extended. Taking this aspect into consideration, the learned Counsel for the Respondent submitted that this period cannot be calculated for the purpose of computing five years service. From the pleading of the parties as well as the evidence adduced before the Court, it appears that the society had in fact imparted training for a period of two years with the expectation that the Defendant shall serve the society at least for a period of five years and accordingly had entered into a service contract with the Defendant-appellant. Knowing the contents of the service contract the Appellant had accepted the same and agreed to the terms and conditions. In my view, the said contract cannot be termed to be invalid. There is absolutely no material to indicate that the Appellant was opposed to execute such a service contract. Accordingly, I agree with the finding of the Courts below that the service contract vide Ext. 5 is a valid contract. In my view, the said contract cannot be termed to be invalid. There is absolutely no material to indicate that the Appellant was opposed to execute such a service contract. Accordingly, I agree with the finding of the Courts below that the service contract vide Ext. 5 is a valid contract. Now the question arises in this appeal for consideration is as to whether the period between 1.9.74 till the execution of service contract vide Ext. 5 can be taken into consideration for the purpose of computing five years service. Clause'2 of the service contract clearly indicates that the employee i.e. the Appellant shall remain In the service of the employer i.e. the Respondent for a period from 1.8.75 to 31.7.80. The contract having provided a specific period, no other interpretation can be made and the period between 1.9.74 till the date of execution of the service contract cannot be taken into consideration for the purpose of computing five years service. From Exts 7 and 8 it appears that the Appellant had availed leave and went on extending the same till tie wrote a letter dated 5th August. 1980. Ext. 9 In Ext. 9 the Appellant has indicated his clear intention by informing the Respondent that he is no longer interested to continue in service because of personal trouble and requested for payment of the employees welfare fund with interest, three months salary, gratuity etc. Ext. 7 is a letter of the Appellant dated 14th December, 1979 to extend the leave up to 5th March, 1980. Ext. 8 is also a letter of the Appellant requesting the Respondent to extend the leave up to 5th August, 1980. There is nothing on record to show that the request for extension of leave has been allowed. In absence of any such evidence indicating that the request for extension of leave was allowed by the Respondent, I am of the view that the Court below was justified in holding that the Appellant had left the service of the Respondent before completion of five years as indicated in service contract vide Ext. 5. No other substantial question of law being involved in this appeal, I find no merit in the appeal and the same stands dismissed. Final Result : Dismissed