Arshid Bashir Akhoon & Ors. v. Managing Director HDFC Standard Life Ins. Co. & Ors.
2015-10-16
TASHI RABSTAN
body2015
DigiLaw.ai
JUDGMENT 1. Civil First Miscellaneous Appeal on hand is preferred against order dated 2nd September 2015 passed by Principal District Judge, Srinagar, (for short "Trial Court"), whereby Trial Court has disposed of application for grant of interim relief as also application for vacation of interim relief, and ad interim order dated 22nd July 2015 withdrawn. The Trial Court also held that the action taken by respondents shall remain subject to outcome of main suit. 2. Brief facts that lead to filing of Civil First Miscellaneous Appeal on hand are that appellants were appointed as Sales Development Managers in respondent (HDFC Life Insurance Company) and subsequently they laddered the position to the level of Branch Manager/Circle Heads. The appellants' services have been terminated vide orders dated 17th July 2015. Aggrieved thereof, appellants filed a Suit before the Trial Court seeking following reliefs: "A) Declaratory decree declaring impugned orders of termination dated 17th July 2015 as null and void; B) Declaratory decree declaring plaintiffs entitled to hold posts of Associate Circle Heads in their respective circles i.e. plaintiff no. 1 as Associate Circle Head of Srinagar, Gole Market, plaintiff no. 1 as Associate Circle Head Sopore and plaintiff no. 3 as Associate Circle Head of Srinagar Gole Market and be declared entitled to the payment of salary as attached to the post alongwith all increments and allowances permissible under rules. C) Decree of permanent injunction, restraining defendants from terminating the services of the plaintiffs and be restrained from removing the plaintiffs from the respective posts of circle heads of the defendant insurance company and be restrained from causing any interference with their services. Further appropriate injunction be passed directing defendants to allow plaintiffs to continue in service on their respective places and be directed to pay the salary to the plaintiff as attached to the respective posts held by the plaintiffs with all consequential benefits. D) Decree, declaring plaintiffs entitled to damages and compensation to the tune of Rs. 10.00 lacs for each of the plaintiffs for loss of honour, reputation, credibility and goodwill as damaged by passing of the impugned orders and the defendants be held liable to pay such compensating to plaintiffs in due course of law and a necessary injunction and direction be passed, directing defendants to pay compensation to plaintiffs alongwith interest till final disbursement of the award of compensation." 3.
Alongside suit, an application for ad interim relief was also filed by appellants, in which an order dated 22nd July 2015 was passed. It would be appropriate to reproduce operative part thereof hereunder: "Accordingly subject to the objections, and till next date of hearing the orders impugned dated 17.07,2015 issued by the non applicant no. 3 with respect to the termination of the applicants are kept in abeyance and the non applicants are restrained from filling up the posts of the Associate Circle Heads held by the applicants at present and also the selection committee associated on non-applicants 8 to 10 be restrained from proceeding ahead with the selection to substitute the services of the applicants. The non-applicants would be however at liberty to move the court earlier for the discharge or variation...." 4. Respondent insurance company filed an application for vacation of interim order dated 22nd July 2015. Trial Court, on going through the contents of applications as also after hearing counsel for parties, vide order, impugned in the Appeal on hand, vacated ad interim order dated 22nd July 2015 with further direction that action taken by respondent insurance company shall remain subject to outcome of main suit. 5. It is order dated 2nd September 2015, which is impugned in Civil First Miscellaneous Appeal on hand on grounds set out therein. 8. Heard and considered. 7. Mr, G.N. Shaheen, learned counsel for appellants, states that Trial Court has not appreciated the facts of the case in correct perspective and circumstances attendant with the case and that the termination orders, impugned in the suit, were without jurisdiction as having been issued by incompetent authority and therefore, it was moot question of law before Trial Court whether an order passed by an incompetent authority could be allowed to survive. Learned counsel contends that Trial Court has not appreciated the impact of rules as devised in Insurance Regulatory and Development Authority of India Act, 1999 and that respondent insurance company is governed by the rules and regulations contained in the Act of 1999. It is urged by learned counsel that impugned orders in the suit were without jurisdiction and in violation of rules and regulations, as such, it was the duty imposed upon by law on Trial Court to address all angles and legal implications while withdrawing the interim direction. 8.
It is urged by learned counsel that impugned orders in the suit were without jurisdiction and in violation of rules and regulations, as such, it was the duty imposed upon by law on Trial Court to address all angles and legal implications while withdrawing the interim direction. 8. Per contra, learned counsel for respondent insurance company states that once employer lost confidence in employee and loss of confidence is affirmed, order of punishment must be considered to be immune from challenge for the reason that discharging the office and confidence requires absolute integrity. He also urges that an employer is not bound to keep an employee in service with whom relations have reached the point of complete loss of confidence/faith. According to learned counsel the remedy available to appellant may be to seek compensation, if it is established that there is breach of any service rules and that appellants being not member of any government or semi government organization or instrumentality of the State and that the appellants not being "worker" within the meaning of labour laws, could not claim retention in service. 9. The appellants' services have been terminated on the charge that they provided fraudulent documents/tampered with documents (Age proof, income documents, AML/KYC related documentary proofs, any other documents supporting the application Form). Appellants are said to have violated Malpractice Matrix Clause A4 & F30 (Loss of Confidence) and that the said act tantamount to termination. The List titled "Malpractice Matrix", made available by learned counsel for respondents during course of argument, reveals number of punishments to be imposed upon member of respondent insurance company, for commission of delinquency. One of the malpractices tabulated in the Malpractice Matrix List, under the heading "Fraud & Forgery", figuring at Serial No. 04, indicates that submission of "Fraudulent documents/tampering with documents (Age proof, income documents, AML/KYC related documentary proofs, any other documents supporting the Application Form), would result in termination of services of member of respondent insurance company. Apart from this, appointment order issued in favour of appellants would reveal terms and conditions of appointment in respondent insurance company.
Apart from this, appointment order issued in favour of appellants would reveal terms and conditions of appointment in respondent insurance company. One of conditions in the appointment letter is that the engagement may be terminated by either party by giving to the other, at any time, notice of three months in writing or at its option, by paying compensation for three months in lieu of notice and that notwithstanding anything, to the contrary contained in the ap-pointment letter, misconduct on part of appointee, will entitle the company to terminate services of the appointee without any notice or payment in lieu of notice, though it is mentioned therein that such misconduct is to be determined by the company. In the present case, appellants' case is that termination orders have been issued without determining the alleged misconduct and that the termination orders should be stayed and appellants permitted to work in the same manner in which they were working prior to issuance of termination orders. 10. The "misconduct" alleged by respondent insurance company requires thorough investigation and inquiry. It cannot be determined at interim stage. Though learned counsel for respondents relied on # number of judgements [(viz. The Divisional Controller, KSRTC v. M.G. Vittal Rao Supreme Court of India dated 18th November 2011; Dr. Partap Singh Kundu v. Mahant Chand Nath & Ors., Punjab & Haryana High Court; State Bank of India & Ors. v. S.N. Goyal, Supreme Court of India, dated 2nd May 2008; M/s Peariite Liners Pvt. Ltd. v. Manorama Sirsi, Supreme Court of India, dated 6th January 2004; Dr. S, Dutt v. University of Delhi, AIR 1958 SC1058 (1)], relating to the subject matter, yet it would be appropriate not to discuss in detail the said judgements as these judgements relate to final stage of the proceedings and not about the stage where interim relief is granted, varied or withdrawn. Same is true about the judgements cited by counsel for appellants. 11. The Trial Court has rightly said that the contract entered into between the parties regarding the discharge of duties is determinable in nature. It would be appropriate to reproduce the relevant portion of order impugned in the appeal on hand, hereunder: "While considering the rival arguments it is evident that the contract entered into between the parties regarding the discharge of duties is "determinable" in nature.
It would be appropriate to reproduce the relevant portion of order impugned in the appeal on hand, hereunder: "While considering the rival arguments it is evident that the contract entered into between the parties regarding the discharge of duties is "determinable" in nature. Leaving question whether the contract entered into between the parties is of "personal service" or is a "contract of service", as it is, alongwith its bearing if any on the issue, it is required to be examined whether in these circumstances of the case injunction could be granted at the conclusion of the trial. This as stated supra, is to be considered in the backdrop that contract between the parties is determinable in nature. It has been noted above that either of the parties can put an end to the contract by service of-the notice to each other and thus get relieved from the rights and obligation of the contract executed in between them. The provision of specific Relief Act bar grant of ?elief of injunction in case the contract is not specifically enforceable. A contract determinable in nature cannot be specifically enforced. Since the likelihood of relief being not grantable at final stage is prima-facie evident, interim assistance too cannot be granted, as its issuance would overreach the main relief. Compensation being adequate remedy available to the applicants is an additional bottleneck in grant of interim assistance." 12. It is pertinent to point out that interim relief, sought for by appellants in the interim application before the Trial Court, is to stay termination orders. Such relief would amount to granting main relief that too at interim stage inasmuch as staying of termination orders, impugned in the main suit before Trial Court, would restore the position that existed prior to issuance of termination orders i.e. allowing the appellants to resume their duties in a usual manner that they had been discharging prior to issuance of termination orders. In other words, it would be appropriate to say that it would amount to passing of main relief without framing of issues, adducing of evidence and determination of rights. Granting of relief of stay of termination orders would be granting the full relief which can be granted only at the time of final decision.
In other words, it would be appropriate to say that it would amount to passing of main relief without framing of issues, adducing of evidence and determination of rights. Granting of relief of stay of termination orders would be granting the full relief which can be granted only at the time of final decision. Reliance in this regard is placed on .the judgement passed in Cotton Corporation of India Ltd. v. United Industrial Bank Ltd., reported in AIR 1983 SC 1272 . 13. In the backdrop of above discussion, order dated 2nd September 2015 passed by 3rd Principal District Judge, Srinagar, whereby application for grant of interim relief and application for vacation of interim relief have been disposed of, and ad interim order dated 22nd July 2015 withdrawn, need not any interfere and is, accordingly, upheld. 14. Resultantly, Civil First Miscellaneous Appeal is dismissed. 15. No order as to costs. 16. Order be sent down. Appeal dismissed