CHANDER SHEKHAR MALHOTRA Vs. NIRLON LIMITED

JUDGEMENT

(1.) THE plaintiff has filed this suit for a declaration that the plaintiff continues in employment even after 9th January, 1999 and is entitled to work and salary. Notice of Motion has been taken out with a prayer for injunction restraining the defendants from acting on the letter of termination dated 9th January, 1999, and for a direction to pay to the plaintiff his monthly salary in full from January, 1999 and month to month basis thereafter.

(2.) THE plaintiff was appointed by the defendant No. 1 as General Manager (Personnel and Administration ). The defendant No. 1 is a company incorporated and registered under the Companies Act, 1956, which is engaged in the manufacture of synthetic fibres and yarn. On 19th November, 1993, the Board for Industrial and Financial Reconstruction (B. I. F. R.) sanctioned Rehabilitation Scheme for defendant No. 1. The B. I. F. R. also directed the defendant No. 1 to appoint the defendant No. 2 as part-time Chairman. He was so appointed on 29th April, 1994. The Performance Appraisal Report of the plaintiff given by the defendant No. 4 till 1994 was very good. By Resolution dated 29th April, 1994, the defendant No. 2 was given all the powers of the earlier Chairman. By a further Resolution dated 15th March, 1996, all the powers of management of the company earlier vested in the Chairman, were delegated with immediate effect to the defendants No. 3 and 4. The defendant No. 2 had not been given any powers by this Resolution. Subsequently, in a meeting dated 29th November, 1996, it was observed that the normal procedure of the executive submitting issues for decision to the Executive Vice-Chairman should continue. However, in exceptional circumstances where decisions are delayed adversely affecting the financial functioning of the company, the Executive concerned or any of the Executive Vice-Chairman may refer issue to the Chairman who may take the decision in consultation with the Executive Vice-Chairman. If such decisions are not implemented in time, the Chairman should bring it before the Board of Directors, for such action as deem appropriate. On 27th October, 1998, the defendant No. 4 informed the Board of Directors that there is a failure of duty by the plaintiff. On 30th October, 1998, the Board of Directors requested the defendant No. 2 to look into the matter. Thereafter the plaintiff was not informed of anything, but served with an order of termination on 12th January, 1999. The letter is dated 9th January, 1999. During this period, there have been certain moves to replace the defendant No. 2 on the recommendation of the operating agent. But it appears that no order of replacement of the defendant No. 2 has been passed till today.

(3.) THE short controversy before this Court is as to whether or not the plaintiff can be granted the reliefs as prayed for in the Notice of Motion, i. e. a direction to the defendants to permit the plaintiff to join duty and to pay the salary of the plaintiff from month to month. Mr. C. U. Singh, in support of the Notice of Motion, has submitted that earlier the law had been settled that no relief of reinstatement could be granted to an employee of a private limited company. Yet the Supreme Court has now held that a suit for declaration together with a mandatory injunction for reinstatement is maintainable. For this proposition the learned Counsel has relied upon a judgement of the Supreme Court in the case of (Ashok Kumar Srivastav v. National Insurance Company Ltd. and others), reported in 1998 (4) S. C. C. 361. The learned Counsel has relied particularly on paragraphs 2, 4, 5, 15, 16, 18 and 19 of the judgement. These paragraphs are as follows : 2. The appellant claims to be still in the service of National Insurance Company Limited (the respondent) as a Probationary Inspector on the contention that the order passed by the respondent on 13-3-1982 terminating his probation is bad in law. He succeeded in the trial Court where he filed the suit for a declaratory decree and also in the first Appellate Court, but he was non-suited by the High Court in the second appeal filed by the respondent. Hence he has come up in this Court with this appeal. "