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Judgment
Mr. Tashi Rabstan, J. - Civil First Miscellaneous Appeal on hand is preferred against order dated 2nd September 2015 passed by Principal
District Judge, Srinagar, (for short ""Trial Court""), whereby Trial Court has disposed of application for grant of interim relief as also application for
vacation of interim relief, and ad interim order dated 22nd July 2015 withdrawn. The Trial Court also held that the action taken by respondents
shall remain subject to outcome of main suit.
Brief facts that lead to filing of Civil First Miscellaneous Appeal on hand are that appellants were appointed as Sales Development Managers in
respondent (HDFC Life Insurance Company) and subsequently they laddered the position to the level of Branch Manager/Circle Heads. The
appellants' services have been terminated vide orders dated 17th July 2015. Aggrieved thereof, appellants filed a Suit before the Trial Court
seeking following reliefs:
A) Declaratory decree declaring impugned orders of termination dated 17th July 2015 as null and void;
B) Declaratory decree declaring plaintiffs entitled to hold posts of Associate Circle Heads in their respective circles i.e. plaintiff no. 1 as Associate
Circle Head of Srinagar, Gole Market, plaintiff no. 1 as Associate Circle Head Sopore and plaintiff no. 3 as Associate Circle Head of Srinagar
Gole Market and be declared entitled to the payment of salary as attached to the post along with all increments and allowances permissible under
rules.
C) Decree of permanent injunction, restraining defendants from terminating the services of the plaintiffs and be restrained from removing the
plaintiffs from the respective posts of circle heads of the defendant insurance company and be restrained from causing any interference with their
services. Further appropriate injunction be passed directing defendants to allow plaintiffs to continue in service on their respective places and be
directed to pay the salary to the plaintiff as attached to the respective posts held by the plaintiffs with all consequential benefits.
D) Decree, declaring plaintiffs entitled to damages and compensation to the tune of Rs. 10.00 lacs for each of the plaintiffs for loss of honour,
reputation, credibility and goodwill as damaged by passing of the impugned orders and the defendants be held liable to pay such compensating to
plaintiffs in due course of law and a necessary injunction and direction be passed, directing defendants to pay compensation to plaintiffs along with
interest till final disbursement of the award of compensation.
Alongside suit, an application for ad interim relief was also filed by appellants, in which an order dated 22nd July 2015 was passed. It would be
appropriate to reproduce operative part thereof hereunder:
Accordingly subject to the objections, and till next date of hearing the orders impugned dated 17.07.2015 issued by the non applicant no. 3 with
respect to the termination of the applicants are kept in abeyance and the non applicants are restrained from filling up the posts of the Associate
Circle Heads held by the applicants at present and also the selection committee associated on non-applicants 8 to 10 be restrained from
proceeding ahead with the selection to substitute the services of the applicants. The non-applicants would be however at liberty to move the court
earlier for the discharge or variation....
Respondent insurance company filed an application for vacation of interim order dated 22nd July 2015. Trial Court, on going through the
contents of applications as also after hearing counsel for parties, vide order, impugned in the Appeal on hand, vacated ad interim order dated 22nd
July 2015 with further direction that action taken by respondent insurance company shall remain subject to outcome of main suit.
It is order dated 2nd September 2015, which is impugned in Civil First Miscellaneous Appeal on hand on grounds set out therein.
Heard and considered.
Mr. G.N. Shaheen, learned counsel for appellants, states that Trial Court has not appreciated the facts of the case in correct perspective and
circumstances attendant with the case and that the termination orders, impugned in the suit, were without jurisdiction as having been issued by
incompetent authority and therefore, it was moot question of law before Trial Court whether an order passed by an incompetent authority could be
allowed to survive. Learned counsel contends that Trial Court has not appreciated the impact of rules as devised in Insurance Regulatory and
Development Authority of India Act, 1999 and that respondent insurance company is governed by the rules and regulations contained in the Act of
1999. It is urged by learned counsel that impugned orders in the suit were without jurisdiction and in violation of rules and regulations, as such, it
was the duty imposed upon by law on Trial Court to address all angles and legal implications while withdrawing the interim direction.
Per contra, learned counsel for respondent insurance company states that once employer lost confidence in employee and loss of confidence is
affirmed, order of punishment must be considered to be immune from challenge for the reason that discharging the office and confidence requires
absolute integrity. He also urges that an employer is not bound to keep an employee in service with whom relations have reached the point of
complete loss of confidence/faith. According to learned counsel the remedy available to appellant may be to seek compensation, if it is established
that there is breach of any service rules and that appellants being not member of any government or semi government organization or instrumentality
of the State and that the appellants not being ""worker"" within the meaning of labour laws, could not claim retention in service.
The appellants' services have been terminated on the charge that they provided fraudulent documents/tampered with documents (Age proof,
income documents, AML/KYC related documentary proofs, any other documents supporting the application Form). Appellants are said to have
violated Malpractice Matrix Clause A4 and F30 (Loss of Confidence) and that the said act tantamount to termination. The List titled ""Malpractice
Matrix"", made available by learned counsel for respondents during course of argument, reveals number of punishments to be imposed upon
member of respondent insurance company, for commission of delinquency. One of the malpractices tabulated in the Malpractice Matrix List, under
the heading ""Fraud and Forgery"", figuring at Serial No. 04, indicates that submission of ""Fraudulent documents/tampering with documents (Age
proof, income documents, AML/KYC related documentary proofs, any other documents supporting the Application Form), would result in
termination of services of member of respondent insurance company. Apart from this, appointment order issued in favour of appellants would
reveal terms and conditions of appointment in respondent insurance company. One of conditions in the appointment letter is that the engagement
may be terminated by either party by giving to the other, at any time, notice of three months in writing or at its option, by paying compensation for
three months in lieu of notice and that notwithstanding anything, to the contrary contained in the appointment letter, misconduct on part of
appointee, will entitle the company to terminate services of the appointee without any notice or payment in lieu of notice, though it is mentioned
therein that such misconduct is to be determined by the company.
In the present case, appellants' case is that termination orders have been issued without determining the alleged misconduct and that the termination
orders should be stayed and appellants permitted to work in the same manner in which they were working prior to issuance of termination orders.
The ""misconduct"" alleged by respondent insurance company requires thorough investigation and inquiry. It cannot be determined at interim
stage. Though learned counsel for respondents relied on a number of judgments (viz. The Divisional Controller, KSRTC v. M.G. Vittal Rao
Supreme Court of India dated 18th November 2011; Dr. Partap Singh Kundu v. Mahant Chand Nath and Ors., Punjab and Haryana
High Court State Bank of India and Ors. v. S.N. Goyal, Supreme Court of India, dated 2nd May 2008; M/s Pearlite Liners Pvt. Ltd. v.
Manorama Sirsi, Supreme Court of India, dated 6th January 2004; Dr. S. Dutt v. University of Delhi, AIR 1958 SC 1050 (1) relating
to the subject matter, yet it would be appropriate not to discuss in detail the said judgments as these judgments relate to final stage of the
proceedings and not about the stage where interim relief is granted, varied or withdrawn. Same is true about the judgments cited by counsel for
appellants.
The Trial Court has rightly said that the contract entered into between the parties regarding the discharge of duties is determinable in nature. It
would be appropriate to reproduce the relevant portion of order impugned in the appeal on hand, hereunder :
While considering the rival arguments it is evident that the contract entered into between the parties regarding the discharge of duties is
determinable"" in nature. Leaving question whether the contract entered into between the parties is of ""personal service"" or is a ""contract of
service"", as it is, along with its bearing if any on the issue, it is required to be examined whether in these circumstances of the case injunction could
be granted at the conclusion of the trial. This as stated supra, is to be considered in the backdrop that contract between the parties is determinable
in nature. It has been noted above that either of the parties can put an end to the contract by service of the notice to each other and thus get
relieved from the rights and obligation of the contract executed in between them. The provision of specific Relief Act bar grant of relief of injunction
in case the contract is not specifically enforceable. A contract determinable in nature cannot be specifically enforced. Since the likelihood of relief
being not grantable at final stage is prima-facie evident, interim assistance too cannot be granted, as its issuance would overreach the main relief.
Compensation being adequate remedy available to the applicants is an additional bottleneck in grant of interim assistance.
It is pertinent to point out that interim relief, sought for by appellants in the interim application before the Trial Court, is to stay termination
orders. Such relief would amount to granting main relief that too at interim stage inasmuch as staying of termination orders, impugned in the main
suit before Trial Court, would restore the position that existed prior to issuance of termination orders i.e. allowing the appellants to resume their
duties in a usual manner that they had been discharging prior to issuance of termination orders. In other words, it would be appropriate to say that
it would amount to passing of main relief without framing of issues, adducing of evidence and determination of rights. Granting of relief of stay of
termination orders would be granting the full relief which can be granted only at the time of final decision. Reliance in this regard is placed on the
judgment passed in Cotton Corporation of India Ltd. v. United Industrial Bank Ltd., reported in AIR 1983 SC 1272.
In the backdrop of above discussion, order dated 2nd September 2015 passed by 3rd Principal District Judge, Srinagar, whereby application
for grant of interim relief and application for vacation of interim relief have been disposed of, and ad interim order dated 22nd July 2015
withdrawn, need not any interfere and is, accordingly, upheld.
Resultantly, Civil First Miscellaneous Appeal is dismissed.
No order as to costs.
Order be sent down.