Case Note & Summary
The case arose from the termination of the plaintiff, H.R. Thimappa Gowda, a Diploma holder in Metallurgy who had worked in various capacities at Goetze (India) Ltd. (later Federal Mogul Goetze (India) Limited) since 10.1.1980. He rose through the ranks to become a Manager (M-5) and was drawing a monthly salary. On 2.7.1999, he was served with a termination order citing unsatisfactory performance, accompanied by a cheque for three months' salary in lieu of notice. The plaintiff contended that his performance had always been meritorious and that the termination was actually due to his involvement in disputes within a co-operative society. He alleged the order cast a stigma and was passed without any enquiry, violating principles of natural justice. He filed O.S.No.7383/1999 in the City Civil Court, Bangalore, seeking a declaration that the termination was illegal, and for reinstatement and damages. The trial court, by judgment dated 17.1.2004, declared the termination illegal and ordered reinstatement along with damages of Rs.7,65,216. On appeal by the defendants, the High Court in RFA No.325/2004 upheld the finding of illegality but set aside the reinstatement and damages, holding that the plaintiff was not a workman under the Industrial Disputes Act and reinstatement could not be granted under the Specific Relief Act. The High Court allowed an amendment to the plaint for a damages claim and remitted the matter to the trial court for quantification of damages. The defendants' Special Leave Petition to the Supreme Court was dismissed after a failed mediation, rendering the finding of illegality final. On remand, the trial court quantified the damages at Rs.26,76,000 by the judgment dated 24.6.2010. Aggrieved, the defendants filed RFA No.1475/2010 challenging the quantum, and the plaintiff filed Cross Objection No.9/2012 seeking an additional Rs.55 lakhs in damages. The High Court heard the appeal and cross-objection; the judgment excerpt provided does not include the final decision on the quantum.
Headnote
A) Employment Law - Termination - Stigmatic Order without Enquiry - The earlier High Court upheld the trial court's declaration that the termination order based on unsatisfactory performance without opportunity of hearing was illegal, unjust, arbitrary, null and void - The order of reinstatement was set aside as the plaintiff held a managerial position and was not a workman under the Industrial Disputes Act, 1947 - The matter was remitted for quantification of damages (Paras 7-8).
B) Damages - Wrongful Termination - Quantification - On remand, the trial court quantified damages at Rs.26,76,000 - The defendants challenged this quantum by way of the present appeal and the plaintiff sought enhancement by cross-objection (Paras 1, 9).
Issue of Consideration
How much damages are payable to the plaintiff for the illegal termination of his services, and whether the trial court's award of Rs.26,76,000 is just and proper; additionally, whether the plaintiff is entitled to enhanced damages of Rs.55 lakhs as claimed in the cross-objection.
Law Points
- illegal termination
- stigma
- unsatisfactory performance
- damages for wrongful termination
- quantification of damages
- cross-objection for enhanced damages
- reinstatement not available under Specific Relief Act
- remand for limited purpose of damages
Case Details
2015 LawText (KAR) (02) 14
R.F.A.No.1475/2010 c/w RFA.Crob.No.9/2012
Justice N. Kumar, Justice B. Veerappa
Sri Umesh N., Sri Subramanya for Sri B.C.Prabhakar, Sri C.M. Poonacha
Goetze (India) Ltd. (now Federal Mogul Goetze (India) Limited) and The Executive Director
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Nature of Litigation
Civil suit for declaration that termination order is illegal, and for reinstatement and damages.
Remedy Sought
Plaintiff sought a declaration that the termination order dated 30.6.1999 was illegal and void, mandatory injunction for reinstatement, and consequential damages. Later amended to claim quantified damages.
Filing Reason
Plaintiff's services were terminated by the defendant company on the ground of unsatisfactory performance, but he alleged the real reason was his involvement in a co-operative society dispute, and the order was stigmatic and passed without any enquiry.
Previous Decisions
The trial court initially on 17.1.2004 decreed the suit declaring the termination illegal and ordered reinstatement and damages of Rs.7,65,216. On appeal (RFA 325/2004), the High Court upheld the declaration of illegality but set aside reinstatement and damages, allowed amendment for a damages claim, and remanded for quantification of damages. The Supreme Court dismissed an SLP against the High Court's order. On remand, the trial court by judgment dated 24.6.2010 quantified damages at Rs.26,76,000. The present RFA and cross-objection challenge that quantum.
Issues
Whether the trial court's quantification of damages at Rs.26,76,000 is correct and sustainable.
Whether the plaintiff is entitled to enhanced damages of Rs.55 lakhs as claimed in the cross-objection.
Judgment Excerpts
the trial Court held that, the order of termination dated 30.6.1999 issued by the 2nd defendant as illegal, unjust, arbitrary, null and void. (Para 7)
This Court after hearing the parties, upheld the judgment of the trial Court in so far as declaring the order of termination dated 30.6.1989 as illegal, unjust, arbitrary, null and void. However, the order of the trial Court directing reinstatement and awarding damages of Rs.7,65,216/- was set aside. ... The application filed by the plaintiff i.e., IA-6 in the suit for amendment of the prayer seeking for damages was allowed. Thereafter, the matter was remitted to the trial Court with a direction to restore OS.No.7383/99 for the limited purpose of quantification of damages. (Para 8)
The Apex Court after hearing both the parties, referred the matter to Mediation Centre, Bangalore. When the mediation failed, Special Leave Petition came to be dismissed. With the dismissal of the Special Leave Petition, the judgment and decree passed by the trial Court attained finality. (Para 8)
Procedural History
Plaintiff filed O.S.No.7383/1999 in the City Civil Court, Bangalore, seeking declaration and injunction. The suit was decreed on 17.1.2004 holding the termination illegal and ordering reinstatement and damages of Rs.7,65,216. The defendants appealed in RFA No.325/2004 before the High Court of Karnataka. The High Court partly allowed the appeal, upholding the declaration of illegality but setting aside the reinstatement and damages; it allowed an amendment for a damages claim and remitted the suit for quantification of damages. The defendants' SLP (Civil) No.18703/2006 was dismissed by the Supreme Court after a failed mediation, rendering the illegality finding final. On remand, the trial court quantified damages at Rs.26,76,000 vide judgment dated 24.6.2010. Aggrieved, the defendants filed RFA No.1475/2010 and the plaintiff filed Cross Objection No.9/2012.
Acts & Sections
- Code of Civil Procedure, 1908: Section 96, Order XLI Rule 1, Order 41 Rule 22
- Indian Contract Act, 1872: Section 23
- Constitution of India: Articles 16(1), 19(1)(f), 21
- Specific Relief Act, 1963:
- Industrial Disputes Act, 1947: Section 2(s)
