S M MOHANDAS Vs. ESSO STANDARD EASTERN INC

JUDGEMENT

(1.) THE facts of this case to a very great extent aw not in dispute arid mostly they are borne out by documentary evidence in the form of correspondence, notices, agreements and receipts which have been filed by consent of parties in this case as Exs. P1 to P29. Since these documents have been filed by consent of parties, they have not been marked separately as plaintiff's documents or defendant's documents and they have been given a single serial number as Ex. P series. Even in relation to the oral evidence, the only evidence is that of the plaintiff as P. W. 1 who has spoken to his case. The field of controversy in relation to facts is very very limited and I shall refer to the same later. x

(2.) THE plaintiff, who is a B. E. (Civil) was appointed as a road engineer in the service of the Standard Vacuum Oil Company the predecessorin-interest of the defendant herein. There was a contract in this behalf dated October 27, 1947 marked as Ex, PI. The salary of the plaintiff was fixed as Rs. 300 per mensem and the appointment was to be effective from November 1, 1947. Ex. PI says that the plaintiff would be on probation for a period of 12 months and if during that period his services proved unsatisfactory or unnecessary to the company, the company reserved the right to discharge the plaintiff without notice or pay in lieu of notice and would pay the plaintiff only the proportionate salary due for the number of days worked during the month concerned. A further clause in that agreement is: If at the end of twelve months your services are considered satisfactory by us your name will automatically be added to our regular staff pay roll. Thereafter your employment: will be subject to the usual condition of one month's notice on either side before either you can be discharged (except for criminal reasons) or you can leave our employ of your own accord. The said document further states that the appointment was made on certain terms and conditions which are enumerated as (a) to (sic) in Ex. PI itself. After this appointment, he was promoted as Assistant Superintendent in April, 1951 and in April, 1952 he was promoted as territory superintendent and was posted at Ernakulam. In 1959 he was promoted as operations manager in Madras and by a communication dated June 29, 1959 marked as Ex. P2. the plaintiff was confirmed in the post of territory operations manager effective from July 1, 1959, on a salary of Rs. 1,900 per month. While the plaintiff" was serving as operations manager, certain events took place on April 9, 1963. According to the plaintiff, whenever the territory manager was on leave or absent on tour, for a period of one year prior to April, 1963, it was the plaintiff who was acting as territory manager. However, on April 9, 1963 he received a notice to the effect that one Mr. Hosangady who was the sales manager, was appointed to act as territory manager, when the territory manager Mr. H. H. Howard went on tour to Bombay. As soon as the plaintiff received this notice, he was upset and he contacted Mr. Howard over the phone and complained to him against this nomination of Mr. Hosangady instead of himself as the acting territory manager. There is some dispute as to what transpired at this telephonic conversation which I shall refer to later. But on the same day Mr. Howard sent a note to the plaintiff, marked as Ex. P. 3. In that note, Mr. Howard stated that he would appreciate the plaintiff reconsidering his statement of leaving the office, if Mr. Hosangady acted during Mr. Howard's absence. Mr. Howard further stated that after his confirmation a sales manager should act for the manager during his absence and that was his feeling and he expected the plaintiff to accept it as a policy without personal implications, as the same would be implemented if not then sometime the same year. He also stated that he felt sorry that he did not have time to discuss the matter with the plaintiff prior to leaving but he requested the plaintiff to consider his point of not attending office, as he would have no alternative but to consider that the plaintiff has let personal feeling overcome this discipline they required to work together (sic ). From this communication, it is clear that during the course of the telephonic conversation, the plaintiff told Mr. Howard that if Mr. Hosangady was acting as the manager, he would not attend office. On the other hand the plaintiff states in his evidence that Mr. Howard repented for his having nominated Mr. Hosangady as his nominee to act in his place, but contrary to that regret or repentence expressed by him over the phone he sought to justify the same in Ex. P3. Next day namely, April 10, 1963, the plaintiff sent a communication to Mr. Howard marked as Ex. P4, in which he acknowledged the receipt of Mr. Howard's note dated April 9, 1963 (Ex. P. 3. ). He stated in that communication that he would like to reiterate at that stage very emphatically that the question of discipline has nothing to do with his desire not to attend office from that day. He also stated that the impression created in his mind after the telephone conversation was that Mr. Howard would restore the status quo ante and that the plaintiff would be in charge of the territory, but the note was just the opposite. Ultimately he wound up by saying that the turn of events has affected his morale very much and he most certainly felt that with this frustration he would not. be doing justice, if he continued to work. So he decided to avail his earned leave from April 10, 1963 for one month and 17 days as originally scheduled. On April 1, 1963 Mr. Howard wrote to the plaintiff stating that privilege is given at the convenience of the company and only with prior approval and though individual consideration is naturally taken into view, under no circumstances can personal feelings overrule the policy and/or the exigencies of company business. Therefore, Mr. Howard requested the plaintiff to report back to the office immediately. This has been marked as Ex. P5. On the same day the plaintiff had a talk over telephone with Mr. Howard and on the morning of 16th April also he had a further talk. On April 16, 1963 the plaintiff sent a note referring to this telephonic conversation and stated that during the said conversation he had advised Mr. Howard that he had to leave the station that day to attend to some personal matters and he hoped to be back on Friday and he would see Mr. Howard on Saturday, April 20, 1963 as discussed and decided. This letter of the plaintiff to Mr. Howard is marked as Ex. P 6. Obviously on April 20, 1963, the plaintiff had a talk over the phone with Mr. Howard and what transpired during this conversation is again a matter of controversy. But on April 22, 1963, the plaintiff sent a letter to Mr. Howard wherein he stated that Mr. Howard had made a suggestion to the plaintiff over the phone on April 20, 1963 that the plaintiff should continue to be on leave for some further time and in that letter he asked Mr. Howard to confirm the same. The letter further states : "i am, however, upset about your having told me during the discussion of April 20th, that I should not report for duty as operations manager. I wish to make it clear that. I for my part am prepared to report for duty to discharge my duties as operations manager any time cancelling the leave, if you so wish. Would kindly inform me by return post whether I can report for duty forthwith". This communication has been marked Ex. P7. Thereafter on April 27, 1963, the plaintiff had a telephonic conversation with Mr. Howard and confirmed the same by a letter dated April 27, 1963, which has been marked as Ex. P8. In that letter the plaintiff stated that he was confirming the telephonic advice to him that he could continue to be on leave. The next important event is the communication of May 13, 1963 sent by Mr. Howard to the plaintiff, marked as Ex. P9. In that letter, Mr. Howard confirmed that the plaintiff might continue to be on leave until the expiry of his total accrued privilege leave, which would be till May 27, 1963. Mr. Howard also added in that letter: "i have just received formal advice from general manager's office to the effect that you have been transcended to the general manager's office, Bombay. Please report to Mr. R. W. Camp of G. M. O. operations on May 27, 1963". This letter was received by the plaintiff on May 20, 1963, since he was away from Madras. On receiving that letter, the plaintiff wrote a letter to Mr. Howard on May 20, 1963 which has been marked as Ex. P10. In that letter, he stated that he noted that he was transferred to G. M. O. Bombay and ho was to report to Mr. R. W. on May 27, 1963. He was no doubt happy about the transfer to G. M. O. but he wished to point out that he (Mr. Howard) had given him a very short notice and in the next six days available, it would not be possible for him to make the necessary arrangements for himself and his family to move to Bombay. He, therefore, wanted time till June 28, 1963, to report Mr. R. W. Camp at Bombay. The letter ended with: "in this connection I request you to ascertain from G. M. O. and advise one the status and position to which I will be assigned in G. M. O. before I leave Madras". To this Mr. Howard sent a reply on May S. M. Mohandas vs. Esso Standard Eastern Inc. (01. 07. 1968 -MADHC) Page 5 of 28 21, 1963 which has been marked as Ex. P-11. In that letter after having pointed out that to cover both possibilities regarding the plaintiff's residence, i. e. , Madras and Nagercoil, the original was sent to Madras and a copy was sent to Nagercoil. Obviously referring to the letter dated May 13, 1963, and he stated that it would not be possible to extend the plaintiff's leave and arrangements should be made by the plaintiff to reach Bombay and report to Mr. R. W. Camp for assignment on May 27, 1963. On May 22, 1963 the plaintiff sent a further communication to Mr. Howard which has been marked as Ex, P 12. In that communication, he reiterated his request for a longer time for reporting at Bombay, after pointing out certain difficulties in his being called upon to report at Bombay at such a short notice. He further pointed out that to his specific request in the letter to which (sic) he would be assigned on joining duty at Bombay, Mr. Howard had not given any answer. He stated : "you will of course realise that it will not be possible for me to join duty at Bombay in a position inferior to that now held by me under contract of service. Kindly, therefore, confirm that the position I will be assigned will be equivalent to that of an operations manager of a territory". He also stated in that letter that since his leave was expiring on May 27, 1963, he would join duty at Madras as operations manager and requested Mr. Howard to confirm that arrangement. On May 23, 1963 Mr. Howard sent a reply to the plaintiff which has been marked as Ex. P13. In that letter Mr. Howard svated that the plaintiff had been told in the middle of April verbally that he would not be resuming duty in this territory and that this postion remained unchanged. Mr. Howard further stated that at that time the plaintiff indicated his acceptance of that position and, here fore, they presumed that arrangements had been made by the plaintiff to consider the problem attendant to his being transferred to another area. In relation to his request for rejoining at Madras as operations manager, Mr. Howard stated that it was not possible, since his old assignment had then been lined by a new person. In relation to his assignment at Bombay Mr. Howard stated: "we suggest you to report to Mr. Camp as recommended. Failure, and we trust this does not arise, will lead us to the unfortunate conclusion that you are unwilling to accept an assignment nominated at management's discretion. If you remain unwilling to proceed to Bombay, we would have no alternative regrettable though it may be to consider this as an attitude of indiscipline and to reserve the right to take suitable action. " There is a note added to his letter which states: "we presume that initially you will be going to Bombay alone on 27th. After reporting to Mr. Camp on 26th you may discuss with him the dome?s problems mentioned in your letter. " Thereafter the plaintiff wrote a letter Ex. P14 dated May 24, 1963. In this letter he complained that one month's time informally given to members of the staff who are transferred from on territory to another was denied to him. He further proceeded to state that he was pained to note that once again Mr. Howard had not answered for the question raised by the plaintiff in his letters dated May 20 and 22, 1963, relating to the position which he would be holding at Bombay, The letter further stated: The reason for my requiring an answer to this question was that during our conversation on April 20 you had informed me that, for certain personal reasons, you did not wish to continue me as operations manager and you further hinted that you intended transferring me to Bombay in a capacity inferior to that held by me as you had the right to do so. As this was mentioned only in passing I did not take serious notice of the matter but when 1 received your letter of May 13 I apprehended that the letter was one in implementation of what had been stated by you during the conversation of April 20. Your failure to meet the point, your insistence that I should join duty at Bombay in a post which was not disclosed to me, your refusal to allow me to discharge my duties as operations manager here Ht Madras even though factually to my knowledge even today it is my assistant who is discharging those functions and lastly the alleged urgency of transfer to an undisclosed post confirm my worst fears that the transfer to Bombay is only to humiliate me in an attempt to compell me to resign from the company. The contract of service between me and the company is in relation to the post of operations manager of the territory. If I am compelled to discharge the duties in a lower post, it amounts to terminating the contract of service and a reappointment in a lower post. . . . . . In the absence of any such reply I have no other alternative except to presume that you intend allocating to me a post inferior to that of operations manager of the territory, which offer I am entitled to decline. May I once again reiterate that I am ready and willing to serve the company in the capacity of operations manager of a territory or in any equivalent or higher post at all times. Towards the end of his letter, he further requested Mr. Howard to confirm that this transfer was not in implementation of his (Mr. Howard's) statement made in the conversation of April 20, 1963 to transfer the plaintiff outside Madras in a lower post but that the post the plaintiff was to hold in Bombay was equivalent to that of an operations manager of a territory. At this stage it is important to refer to one other fact. On April 21, 1963 the plaintiff had a telephonic conversation with Mr. C. B. Thomas, the general manager of the company at Bombay and he has produced the confirmation of the Indian Posts and Telegraphs Department for such a call having been booked and the same is marked as Ex. P. 24. The case of the plaintiff is that he told Mr. Thomas on that date of what Mr. Howard told him the previous day, and Mr. Thomas promised the plaintiff that he would look into the matter. The letter dated May 24, 1963 marked as Ex. P. 14, did not reach Mr. Howard immediately who had left for Bombay by that time. From Bombay on May 26, 1963 Mr. Howard had a telephonic conversation with the plaintiff and the plaintiff read over the entire letter dated May 24, 1963 to Mr. Howard over the phone. Thereafter, the plaintiff wrote the letter dated May 27, 1963, marked as Ex. P. 16, to Mr. Howard In that letter, he referred to his letter dated May 24, 1963 and the telephonic talk he had with Mr. Howard at Bombay on May 26, 1963, and his having read over the phone the entire letter to him. Having said that much, he further stated: I am sorry that I am unable to accept your suggestion that I should at present report at Bombay in a lower post, even though, according to you, as in the case of Mr. P. V. Menon who had been posted to a lower position, but had subsequently been promoted in due course to higher position, I too could not expect to be given the same treatment. Thereafter Mr. Howard wrote a letter to the plaintiff dated May 30, 1963 which has been marked as Ex. P17. In the course of that letter Mr. Howard told the plaintiff, "you are obliged to serve the company in any post it may choose to assign you". He referred to the events that had happened on April 9, 1963 and subsequently and stated : In view of the said developments you were verbally advised on 16th and 20th of April, 1963 by the territory manager that the company had no longer confidence in your willingness to abide by its instructions and decisions and as such it would not be in the interest of the company to retain you as operations manager of Madras territory. . . . We have considered your letter of 24th May, 1963 which reached the undersigned on the 27th of May at Bombay. Notwithstanding what is contained in that letter and in your letter of the 27th May, 1963, we reiterate our instructions to you to report to general manager's office, Bombay. You are, however, given time till June 4, 1963. As you are aware, failure to do so will render you liable to instant dismissal. Then on June 1, 1963, the plaintiff wrote a letter to Mr. Howard, which has been marked as Ex. P 18. In that letter, he referred to all the events that had taken place earlier and stated: Anyway the letters which have passed between us and the conversation which had taken place between me on the one hand and yourself and Mr. C. B. Thomas on the other have established beyond doubt the fact that in insisting on my joining. Bombay in a post inferior to that covered by my contract of service, the company has committed breach of contract. . . I am not prepared to join Bombay in any post inferior to that of operations manager of a territory in which post I was confirmed by your letter of 29-6-1959. Under the circumstances, I have no other alternative but to resign from the company which I have served faithfully and to the best of my ability for the last 15j years. lam, therefore, herewith tendering my resignation.

(3.) BY Ex. P 20 dated June 4, 1963 Mr. Howard acknowledged the receipt of this letter and stated that since the plaintiff had been transferred to general manager's office, Bombay, the plaintiff's letter was being for-warded to that office for further action. By Ex. P21 dated June 5, 1963, the Bombay office represented by the assistant general manager informed the plaintiff that his resignation was accepted as of June 1, 1963 This letter also stated : "we regret to say that you have made certain allegations in your letter under reference which are incorrect". Thereafter, on 2nd July, 1963, the plaintiff was paid two sums of money, namely, Rs. 40 487. 22 representing the amount due to him from the provident fund and a sum of Rs. 36,181. 45 representing the dues from the company upon the plaintiff's separation, effective from June 1, 1963. The plaintiff received the two amounts, but did not sign the receipts enclosed along with the cheques, but sent independent receipts marked Exts. P 28 and P 29, stating that he was receiving the amounts without prejudice to his rights arising out of the breach of contract by the company. These receipts are dated 16th August, 1963. On September 6, 1963, a lawyer's notice was sent on behalf of the plaintiff to the company complaining of breach of contract on the part of the company and claiming a sum of Rs. 3,14,704 as compensation by way of damages for the unilateral and illegal termination of his contract of service in the post of territory operations manager. This amount was arrived at on the basis that the plaintiff was drawing a salary of Rs. 2,800 per mensem and he was entitled to serve the company till the completion of the age of 55> and in that capacity he would have received a sum of Rs. 2,91,200 and also a sum of Rs. 23,504 being the company's contribution towards the provident fund. This notice has been marked as Ex. P 26. On September 25, 1963 a reply was sent by the company through its lawyer to the plaintiff's lawyer repudiating the liability of the company and stating that the plaintiff had utilised the opportunity to resign from service of the company to receive his separation benefits and venture into business of his own. It is after this exchange of notices the present suit has been filed by the plaintiff for recovery of compensation as damages. Though in the notice itself the plaintiff stated that he is entitled to a sum of Rs. 3,14,704 as compensation, in the plaint he restricted it to a sum of Rs. 50,100,