TANJOR PERMANENT BANK Vs. G N MUNISWAMI

JUDGEMENT

(1.) THIS second appeal raises the question as to the correct principles applicable in determining the quantum; of damages to be given to a dismissed employee on a finding that the dismissal is wrongful. The respondent, when he was acting as the secretary of the appellant bank, was, by an order of the latter dated 5-4-1958, dismissed from service. Though he applied under Section 41 of the Madras Shops and Establishments Act, 1947, he did not pursue that remedy. He instituted the suit, out of which this second appeal arises, for a declaration that the order of dismissal was illegal and that he was entitled to reinstatement with all his rights and privileges, and for recovery of a certain specified sum apparently as arrears of salary. Alternatively, he also asked for damages for wrongful dismissal. That the respondent's dismissal from service was wrongful is no longer in question In this court. Both the courts below held that the respondent was entitled to damages for wrongful dismissal but the lower appellate court on appeal by the respondent practically doubled the quantum of damages awarded by the trial court. The appellant-bank contends that while it does not dispute the quantum of damages awarded by the trial court, the enhancement thereof by the lower appellate court is contrary to principle and is unjustifiable.

(2.) THE respondent himself valued the damages for wrongful dismissal at Rs. 2000. But he claimed what he called overall damages at Rs. 4109 including back wages. The trial court considered that one year's salary at Rs. 154 per mensem was a proper measure of damages to be awarded to the respondent. The lower appellate court, on the other hand, has stated that in its view the clear legal effect and implication of a wrongful dismissal is that the respondent was entitled to damages for wrongful dismissal

(3.) WHERE an employment is contractual and the terms of which provide or do not provide for the manner of termination of service, the principles for assessing damages to be awarded for wrongful dismissal are not in doubt. The basis of damages in such cases is breach of contract of service either because the stipulated notice was not given for termination or in the process of termination, the requisite procedure, has not been followed. Where the contract provides for the manner of termination, as for instance, a month's notice or a month's pay in lieu of such notice, normally that will be the measure of damages. But in addition to that, on account of the fact that the employee has been wrongfully dismissed from service, the time that may probably be taken and the reasonable chance of getting re-employment should also be kept in view. Where the contract did not provide for the manner of termination, a reasonable period of notice or pay in lieu of such notice would be a basis, together with the additional factor I have mentioned for assessing damages. There may be exceptional cases where other circumstances may well enter into the computation of the quantum of damages, as for instance, employment in a specialised department in which case alternative employment will be difficult to get.