NARENDRASINGH MOTILAL JOHARY Vs. KARAMCHAND PREMCHAND PVT LIMITED

JUDGEMENT

(1.) This is original defendants appeal against the decree passed in Civil Appeal No. 263 of 1959 by the learned District Judge Baroda awarding compensation to the plaintiff-respondant to the extent of Rs. 3 945 for an alleged breach by the defendant of a contract of service. The learned District Judge has thereby reversed the decree of dismissal of the plaintiffs suit that was passed by the learned Joint Civil Judge (Junior Division) Baroda in Civil Suit No. 10 of 1957 holding that the amount of damages stipulated in the relevant Clause 18 of the service agreement Ex. 52 was fixed in terrorem and was unconscionable unfair one-sided and unilateral and the plaintiff was not entitled to any compensation in the matter.

(2.) The relevant facts may first be briefly stated. The appellant- defendant named one Narendrasingh Motilal Johary Ph. D. (Lon.) D.I.C. was appointed by the respondent Company named M/s. Karamchand Premchand (Private) Ltd. Proprietors of the concern named Sarabhai Chemicals as an Administrative Assistant of the Company with effect from Febuary 28 1956 He was appointed on a salary of Rs. 460.00 per month and dearness allowance of Rs. 100.00 per month. He was appointed on probation for the first six months of his service during which period his services were liable to be terminated by the plaintiff Company without notice and it was provided that at the end of the period of probation unless his services were confirmed by the plaintiff Company by a separate letter his services were deemed to have been automatically terminated at the end of the period although his employment was for a period of five years involving an initial period of about a year covering specialized training. A Training Tentative Programme from the date of the defendants joining service namely February 28 1956 to September 30 1956 was drawn up by the plaintiff Company. The programme upto May 20 1966 was for training in quality control pharmaceuticals fine chemicals and research production control inventory stores accounts costing miscellaneous office work such as labour and secretarial. The training programme from May 21 1956 to September 30 1956 included training in sales service and administration; promotion adrema a training in the branch where training class takes place for a week a training in a field with a representative for two weeks; travelling etc. for a week; training in a branch at Madras; training at Bombay in purchases printing customs etc; and training in Ahmedabad office especially regarding insurance letters of credit and miscellaneous. Further training to be provided was to depend upon the progress of the defendant. The defendant left the plaintiffs service after undergoing a training for two months and eleven days. He tendered resignation of his office by letter Ex. 52 dated May 12 1956 The resignation was not accepted. However the defendant took a unilateral decision and left the service on May 12 1956 His salary at the time was Rs. 460.00 per month. In addition he was receiving dearness allowance of Rs. 100.00 per month. On this scale he had received the salary and dearness allowance for a period of two months. He does not appear to have received the salary for eleven days of the third month that he was in service. The plaintiff Company then filed the Civil Suit out of which this Second Appeal arises for recovery of a sum of Rs. 5 40 as compensation for the breach of service contract allegedly committed by the defendant. The damages were claimed on the allegation that the defendant had gone through the specialized training through most of the important Departments viz quality control manufacturing and production and inventory control etc. and that the defendant having committed the breach of the agreement by leaving his service before the expiry of the five years period of his service had made himself liable to pay to the plaintiff Company a sum equal to nine times the monthly salary of Rs. 560 which the defendant drew from the plaintiff Company on the date of his deserting the employment as liquidated damages according to Clause 18 of the agreement. It is significant that the plaintiff Company has invoked only a part of Clause 18 of the agreement of service Ex. 52 and has not relied upon the part relating to the cost incurred by the Company in respect of defendants training as will appear from paragraphs 5 and 6 of the plaint which read as under:-

(3.) The defendant had resisted the suit and contended that the agreement of service was unilateral unconscionable unfair one-sided and against law and therefore it was not binding to him. He denied his liability to pay any compensation amount by way of liquidated damages. In the alternative he pleaded that as he had served the plaintiffs concern only for two months and eleven days and had received the salary for two months in aggregate a sum of Rs. 920.00 the plaintiffs could claim that much amount and no more.