Case Note & Summary
The petitioner, Ms. Jayshree Gururaj, was appointed as Senior Director (Advanced Services) in Cisco Systems (India) Private Limited on 15 May 2012. Her employment was governed by a contract which included Clause 12(c)(ii) allowing either party to terminate employment without cause by giving 90 days' notice or pay in lieu thereof. On 24 April 2015, the company terminated her services under this clause. The petitioner filed a writ petition under Article 226 of the Constitution of India seeking to declare Clause 12(c)(ii) as illegal, arbitrary, unconscionable, and contrary to public policy under Section 23 of the Indian Contract Act, 1872, and to set aside the termination order with reinstatement and consequential benefits. The respondents opposed the petition, arguing that the clause was standard and mutually applicable, and that the writ was not maintainable against a private company. The court analyzed the nature of the clause, noting that it applied equally to both employer and employee, and was a common feature in employment contracts. The court held that the clause was not unconscionable or opposed to public policy as it provided flexibility and certainty. The court also held that a writ under Article 226 is not maintainable against a private company for a purely contractual dispute without any public law element. Consequently, the petition was dismissed, and the termination was upheld.
Headnote
A) Contract Law - Termination Clause - Unconscionability - Section 23 Indian Contract Act, 1872 - Clause 12(c)(ii) of employment contract permitted termination without cause - Petitioner challenged clause as unconscionable and contrary to public policy - Court held that the clause was not unconscionable as it applied equally to both parties and was a standard term in employment contracts - Held that the clause was not opposed to public policy as it provided flexibility in employment relationships (Paras 1-10). B) Constitutional Law - Writ Jurisdiction - Article 226 Constitution of India - Private Company Employment - Petitioner sought writ against private company - Court held that writ under Article 226 is not maintainable against a private company for breach of contract unless there is a public law element - Held that the dispute was purely contractual and no public law element was involved (Paras 1-10).
Issue of Consideration
Whether Clause 12(c)(ii) of the employment contract, which allows termination without cause, is illegal, arbitrary, unconscionable, and contrary to public policy under Section 23 of the Indian Contract Act, 1872, and whether the termination order based on that clause should be set aside.
Final Decision
The writ petition is dismissed. The termination order dated 24.04.2015 is upheld. No order as to costs.
Law Points
- Termination clause in employment contract
- Unconscionable contract
- Public policy
- Section 23 Indian Contract Act
- 1872
- Writ jurisdiction under Article 226
- Private company employment
- Contractual rights
