Ajay Mohan Goel, Judge: By way of this appeal, the appellants/defendants have challenged the judgment and decree passed by the Court of learned Additional District Judge, Solan, camp at Nalagarh, in Civil Appeal No. 28NL/13 of 2005, dated 09.03.2006, vide which, learned Appellate Court while setting aside the judgment and decree passed by the Court of learned Civil Judge ( Jr. Divn.) Nalagarh, in Civil Suit No. 70/1 of 2001 and Counter Claim No. 252/1 of 2002, dated 22.06.2004, allowed the appeal so filed by the present respondent/plaintiff and decreed the suit of the plaintiff as well as dismissed the counter claim of the defendant which was allowed by the learned trial Court. 2. This appeal was admitted on 02.03.2009 on the following substantial questions of law: “1. Whether the learned appellate court below has misconstrued and misinterpreted Ex. D6 and Ex. D7 i.e. appointment letter and employment agreement which has resulted into wrong and erroneous finding of law. If so its effect? 2. Whether the learned appellate court below has misconstrued and misinterpreted Ex. D8, Ex.D9, Ex. D10, Ex. D13 and Ex. D14 which has resulted into wrong and erroneous finding of law. If so its effect? 3. Whether the learned appellate court below has erred in law in not considering that in absence of any evidence lead by respondent to prove its case even in counterclaim, adverse inference U/S 114 (g) of Evidence Act ought to have been drawn against respondent/plaintiff and counter claim ought to have be allowed. If so its effect? 4. Whether the learned appellate Court below has totally failed to appreciate and take into consideration legal principle of law and misinterpreted Ex D-7 that the appellants were liable to give compensation only in case the appellants wanted to terminate the services of the respondent without giving three months notice and not otherwise. If so its effect?” 3. Brief facts necessary for the adjudication of this appeal are that respondent/plaintiff (hereinafter referred to as ‘plaintiff’) filed a suit for recovery of an amount of Rs.15,954/- alongwith interest @ 12 % per annum on the grounds that plaintiff was appointed as a Store Manager with the defendant company and he joined as such on 19.01.1998. Brief facts necessary for the adjudication of this appeal are that respondent/plaintiff (hereinafter referred to as ‘plaintiff’) filed a suit for recovery of an amount of Rs.15,954/- alongwith interest @ 12 % per annum on the grounds that plaintiff was appointed as a Store Manager with the defendant company and he joined as such on 19.01.1998. As per the employment agreement which was entered into between the plaintiff and defendant company, the employment could be terminated by either party of its option by giving notice of three months to the other party in writing and in case notice for a period of less than three months was given by either party, then the compensation equal to the shortfall of the notice period was payable by the party concerned. As per plaintiff, he submitted his resignation on account of personal reasons by serving three months notice requesting to relieve him from service of the company on the expiry of three months i.e. w.e.f. 31st May, 2001, however, on receipt of said notice, defendant company without waiting for three months, relieved him from the service of the company on 10.04.2001 and thereby terminated his services before 31st May, 2001. As per plaintiff defendant-Company relieved him by issuing communication dated 10.04.2001 without paying the amount of compensation for the shortfall period of fifty days between the date of his relieving i.e. 10.04.2001 and 31st May, 2001. Plaintiff issued letter dated 11.04.2001 with details of his entitlement of compensation for the shortfall period as well as for other allowances, however, defendant company did not pay him the said amount which act of the defendant company was illegal and against the terms and conditions of the employment agreement settled between the parties. Accordingly, plaintiff filed the suit praying for issuance of decree for recovery of Rs.15,954/- alongwith interest @ 12 % per month. 4. Plaintiff’s claim was contested by the defendants inter alia on the ground that the suit had in fact been filed by the plaintiff to avoid payment of Rs.73,372.67 which amount was due from the plaintiff to the defendant-Company on account of outstanding car loan of Rs.1,09,254/- which was taken by the plaintiff from the defendant- Company. In the written statement, defendant-Company admitted that plaintiff was appointed on the terms and conditions as were contemplated in the agreement entered into between them which envisaged three months prior notice to the either party. In the written statement, defendant-Company admitted that plaintiff was appointed on the terms and conditions as were contemplated in the agreement entered into between them which envisaged three months prior notice to the either party. It was further admitted by the defendant-Company that plaintiff submitted his resignation in writing with the defendant-Company w.e.f. 01.03.2001. As per the defendant-Company, plaintiff was relieved on 10.04.2001 and was also issued full and final statement of account. Defendant- Company denied that the services of the plaintiff stood terminated w.e.f. 10.04.2001. As per defendant-Company, it had not terminated the services of the plaintiff but had only accepted the resignation of the plaintiff and relieved the plaintiff from the post w.e.f. 10.04.2001. According to the defendants, the condition envisaged in the agreement was that the employment could have been terminated by either party of its option by giving notice to the other party of three months, in writing and in case notice for a period of less than three months was given by either party, then compensation equivalent to the shortfall of the notice period by three months was payable by the party concerned. As per the defendants, they had not terminated the services of the plaintiff rather it was the plaintiff who had who had come forward to terminate the employment with the defendant-Company and had submitted his resignation in writing on 01.03.2001 and there was no bar as far as the defendant-Company was concerned to have had considered and accepted the same by waiving the three months’ notice period. On these grounds, it was contended by the defendants that they were not liable to pay any amount which was being claimed by the plaintiff. 5. Defendant-Company also filed counter claim for an amount of Rs.83,000/- on the ground that the company had advanced loan of Rs.2,12,355/- to the plaintiff for the purpose of purchase of car and as per statement of full and final settlement dated 10.04.2001, plaintiff had to return an amount of Rs.1,09,254/- towards the car loan account and after settlement of account, net recoverable amount from the plaintiff was Rs.73,372/.67 as on 10.04.2001. Defendant-Company also claimed certain other amounts from the plaintiff i.e. an amount of Rs.6609 and Rs.2817/- which were due from the plaintiff to the defendant-Company on account of personal telephone calls made by him. Defendant-Company also claimed certain other amounts from the plaintiff i.e. an amount of Rs.6609 and Rs.2817/- which were due from the plaintiff to the defendant-Company on account of personal telephone calls made by him. On these bases, it filed counter claim for recovery of an amount of Rs.82,798/- alongwith interest @ 5% per annum from the plaintiff. 6. On the basis of pleadings of the parties, learned trial Court framed the following issues. “1.Whether the plaintiff is entitled to the salary of three months? OPP. 2. Whether the plaintiff is entitled for the suit amount? OPP 3. Whether this suit is not maintainable? OPD. 4. Whether the suit of the plaintiff is not properly valued for the purpose of Court fee and jurisdiction? OPD. 5. Whether the plaintiff is liable to pay a sum of Rs.82,798.67 as car loan, telephone bill to the defendant? OPD. 6. Whether the defendant is entitled for the interest at the rate of 5% per annum? OPD. 7. Whether the courter claim of the defendant is not maintainable? OPP 8. Relief.” 7. On the basis of evidence led by the parties both ocular as well as documentary in support of their respective cases, the issues so framed were answered by the learned trial Court as under. “Issue No.1 : Infructuous. Issue No. 2 : Infructuous. Issue No. 3 : Infructuous. Issue No. 4 : Infructuous. Issue No. 5 : Partly yes. Issue No. 6 : Yes. Issue No. 7 : No. Issue No. 8 (Relief) : As per operative portion of the judgment counter claim stands decreed partly.” 8. Learned trial Court held that issues No. 1, 2, 3 and 4 required no findings as the suit of the plaintiff stood dismissed in default on 07.03.2002. On Issue No. 5 it was held by learned trial Court that records demonstrated that plaintiff owed an amount of Rs.1,09,254/- to the defendant defendant-Company as outstanding car loan when he left the job. Learned trial Court also held that the evidence led in support of the Counter-claim stood un-rebutted qua Ext. D-10, which was copy of full and final settlement statement of the plaintiff. Learned trial Court also held that the evidence led in support of the Counter-claim stood un-rebutted qua Ext. D-10, which was copy of full and final settlement statement of the plaintiff. Learned trial Court also held that contention of the plaintiff that he was entitled for compensation of 50 days was having no force as even in the cross examination of DW1 and DW2 plaintiff was not able to elucidate anything in his favour from them. On these bases, it was held by learned trial Court that claim put forth by the Counter-claimant to the extent of Rs.73,372.67 stood proved. Learned trial Court however did not decree the counter-claim qua telephone bills. 9. In appeal, learned Appellate Court held that as plaintiff had written letter Ext. D8 dated 01.03.2001 to defendant-Company intimating the defendant-company that he was not able to continue with his job after duty hours w.e.f. 31.05.2016 and no request was made by the plaintiff to relieve him from duty before 31.05.2001, therefore, the act of defendant-company of relieving the plaintiff on 10.04.2001 entitled the plaintiff to be compensated for the shortfall of three month notice. Learned Appellate Court held that in fact the terms of employment of the plaintiff were wrongly interpreted by the defendant-company and thus it held that if the company was to relieve the plaintiff from the service before 31.05.2001, then it was liable to pay compensation to the plaintiff equivalent to the shortfall period of three months notice. Learned Appellate Court held that as the total salary of plaintiff for the period of 50 days worked out to more than Rs.73,372.67 which was claimed by the defendant-company from him, therefore, learned trial Court committed grave error in not properly appreciating the documentary evidence and the decree passed for recovery of Rs.73,372.67 with interest in favour of defendant and against the plaintiff was not legally sustainable. On these bases, learned Appellate Court set aside the judgment and decree passed by learned trial Court. 10. Feeling aggrieved, defendant-Company has filed this appeal. 11. I have heard Mr. Rahul Mahajan, learned counsel for the appellant and also gone through the records of the case as well as judgments passed by both the learned Courts below. 12. Before proceeding further, it is relevant to refer to the relevant documents on record Ext D-6 is the appointment letter vide which the plaintiff was appointed by the defendant-Company. Rahul Mahajan, learned counsel for the appellant and also gone through the records of the case as well as judgments passed by both the learned Courts below. 12. Before proceeding further, it is relevant to refer to the relevant documents on record Ext D-6 is the appointment letter vide which the plaintiff was appointed by the defendant-Company. Employment agreement is on record as Ext. D-7. Relevant clause in the appointment letter which has significance as far as issue involved in the present lis is concerned reads as under. “Your services may be terminated by either you or the company giving 3 months notice or salary in lieu thereof.” 13. Similarly, the relevant condition contained in employment agreement Ext. D-7 reads as under. “The Employee shall commence employment 19th January 1998 at Factory. The employment can be terminated by either party of its option by giving notice to the other party of three months, in writing. In cases where notice for a period of less than 3 months is given by either party, compensation equivalent to the shortfall of the notice period by 3 months, shall be payable by the party concerned.” 14. Resignation submitted by the plaintiff is on record as Ext. D-8 and the relevant portion of same reads as under. “I would like to inform you for personal reason I shall not be able to continue with my present responsibility in this company after duty hours on May 31st, 2001. I request you to release me after May 31st, 2000 keeping in view of three months notice period as per the company’s policy applicable to my position. I am grateful to you for giving me an opportunity to work with this organization since January 1998.” 15. Records demonstrate that a notice was issued by the plaintiff to the defendants on 01.03.2001 vide which he intimated defendant-Company that he was resigning from the service of the company and he be relieved after the lapse of three months from the date of issuance of the notice i.e. after 31st May, 2001 as he was not able to continue with his present responsibility. Time of three months as per plaintiff was given by him in lieu of agreement entered into between him and the Company that in the event of either of the party intending to terminate service, a clear notice of three months had to be issued to the other party and in case the notice was less than the period of three months then said period was to compensated by party issuing notice. As per plaintiff, he in fact was entitled for shortfall of the notice period as he had a right to continue at least for a period of three months after he had tendered his resignation as was contemplated in the terms and conditions of the agreement entered into between him and the Company. Learned Appellate Court has also while decreeing the suit of the plaintiff interpreted the said clause in this manner. 16. I am afraid that the interpretation given by learned Appellate Court to the clause in issue is totally misconceived and not sustainable at all. This is for the reasons that this is not a case where the defendant-Company issued a letter to the employee intimating him that his services were being terminated and then before the expiry of three months from the date of issuance of said notice had terminated the services without compensating for the shortfall period of three months. In the present case, it is the employee who opted to resign from the service and intimated the same to his employer vide letter dated 01.03.2001 and the employer/company in its wisdom accepted it on 10.04.2001. A perusal of the relevant clause of the agreement demonstrates that in such like situation where one party gives notice to the other party and the other party intends to condone the period of notice, then it is not incumbent upon the party which was condoning the period of notice to compensate for the so called shortfall period of three months. This very important aspect of the matter has not been appreciated and understood by the learned Appellate Court at all. 17. Resignation of the plaintiff was accepted by the defendant-Company vide Ext. D-9 which is communication dated 10th April, 2001, in which it was written that the resignation of the plaintiff had been accepted by the Company and the plaintiff was relieved from the Company from the close of business hours of 10th April, 2001. 17. Resignation of the plaintiff was accepted by the defendant-Company vide Ext. D-9 which is communication dated 10th April, 2001, in which it was written that the resignation of the plaintiff had been accepted by the Company and the plaintiff was relieved from the Company from the close of business hours of 10th April, 2001. A perusal of the conditions contemplated in the appointment letter Ext. D-6 demonstrates that the services of the plaintiff could have been terminated by him or the company by giving three months notice or salary in lieu thereof. Similarly in the relevant agreement also it was contemplated that employment of the plaintiff could have been terminated by either party on its option after issuing notice of three months to the either party and where notice of less than three months was given by either party, compensation for the shortfall of period less than three months was payable by the party concerned. 18. Now this Court shall apply the said two clauses to the facts of the present case. Admittedly, in this case, resignation has been submitted by the plaintiff. Therefore, it was incumbent upon him to either have had served a three months notice or have had paid the company either three months salary or compensation equivalent to the shortfall period of less than three months. Plaintiff in his wisdom vide communication dated 01.03.2001 Ext. D-8 submitted his resignation. He also gave three months clear notice to the defendant-Company, meaning thereby that he was not liable either to pay three months salary to his employer or pay compensation equal to the shortfall period of less than three months as he had given three months notice. Defendant-Company further it its wisdom accepted the resignation tendered by the plaintiff w.e.f. 10.04.2001. Meaning thereby that defendant-Company could not have had called upon the plaintiff to compensate it for the shortfall of notice period of three months from 10.04.2001 to 31st May, 2001, because in the present case, it was the defendant-Company which accepted the resignation of the plaintiff at an earlier date. However, simply because the defendant company accepted the resignation of plaintiff from a date anterior to expiry of three months notice, this does not mean that the defendant-Company had to compensate the plaintiff for the shortfall period of less than three months. However, simply because the defendant company accepted the resignation of plaintiff from a date anterior to expiry of three months notice, this does not mean that the defendant-Company had to compensate the plaintiff for the shortfall period of less than three months. Therefore, in view of my findings returned above, it is apparent that learned Appellate Court totally misread and misconstrued the documents Ext. D-6 and Ext. D-7 as well as other documents on records including Ext. D-8 to Ext. D-10 and Ext. D-13 and D-14 which has resulted in learned Appellate Court delivering wrong and erroneous judgment. 19. Accordingly judgment and decree passed by learned Appellate Court is set aside as the same is not sustainable in law. The aforesaid substantial questions of law are answered accordingly. 20. In view of the discussion above, this appeal is allowed and the judgment and decree passed by learned Appellate Court in Civil Appeal 28-NL/13 of 2005, dated 09.03.2006 is set aside whereas the judgment and decree passed by the learned trial Court in Civil Suit No. 70/1 of 2001 and Counter claim No. 252/1 of 2002, dated 22.06.2004 are upheld. No orders as to costs. Pending miscellaneous application(s), if any, also stands disposed of.