P NAGARAJAN Vs. SOUTHERN STRUCTURALS LTD

JUDGEMENT

(1.) THE 1st defendant, who failed in both the courts below, has preferred this second appeal against his employer, the plaintiff 1st respondent herein. Respondents 2 and 3 are defendants 2 and 3 in the suit.

(2.) THE suit by the above said employer is for a sum of Rs. 15,000 with interest, claimed as damages stipulated in Ex. A-2 dated September 4, 1985 the agreement entered into between the 1st respondent and the appellant after Ex. A-1 (July 30, 1985) the appointment order of the plaintiff appointing the first defendant as its employee. Under the said agreement the appellant should have served the 1st respondent for five years and if there is any breach committed by the appellant, he should pay Rs. 15,000 to the employer- 1st respondent. The appellant resigned in about two years and hence on the ground that breach has been committed, the 1st respondent laid the above said suit, claiming the above said sum of Rs. 15,000 stipulated in the agreement with interest. The courts below, on the ground that despite the above said claim for Rs. 15,000 the 1st respondent agreed to receive Rs. 10,000 have concurrently decreed the suit for a sum of Rs. 10,000 with interest, holding that the appellant has committed breach of the contract, he having resigned from service, as stated above.

(3.) BEFORE adverting to the arguments of learned counsel for the appellant, it must also be sated that under Ex. A-4 dated March 31, 1988, the letter written by the appellant to the 1st respondent, the appellant agreed to pay Rs. 7,500 instead of the above said sum of Rs. 15,000 stipulated in the agreement on the ground that he had already served for about two years. In Ex. A-4 the appellant prayed for only a concession to be shown towards him and requested the 1st respondent to waive its right to claim the above-said sum of Rs. 15,000 partly. While so, even at the outset I posed the question to learned counsel for the appellant, that when in Ex. A-4, the appellant has recognised the right of the 1 st respondent to claim damages for breach of the contract committed by the appellant and only sought for a concession being shown to him to reduce the amount stipulated in Ex. A-2, how can the appellant have any case in the second appeal. To this learned counsel for the appellant submitted that de hors what is contained in Ex. A-4 since in law, the amount stipulated in Ex. A-2, is only a penalty, spoken to in Section 74 of the Indian Contract Act it cannot be claimed at all. To this contention, I must first of all point out that no such ground at all has been taken in the second appeal. It is also not disputed that no such defence was taken in the court below. Further even Section 74 of the Contract Act only runs as follows: