AI Structured Summary
Not yet generated for this judgment
Judgment
M.M. Ismail, J.—The plaintiff in O.S. No. 408 of 1962 on the file of the City Civil Court, Madras, who lost both before the trial Judge as
well as the appellate Judge is the appellant before this Court. She was appointed as a lecturer in Medical Social Work by the first respondent on
3rd November, 1956. However, in September, 1960 the department in which the appellant was working was itself transferred to the 2nd
respondent and consequently her services also were transferred to the 2nd respondent, Subsequently, certain events happened, the result of which
was that the appellant''s services were terminated by the 2nd respondent by notice dated 29th June 1961. It is thereafter that she instituted the suit
in question praying for ""a declaration that the notice, dated 29th June 1961 terminating the services of the plaintiff is illegal, void, inoperative and of
no effect, and that the plaintiff still continues to be in the service of the defendants, and for directing the defendants to pay the plaintiff her salary and
allowances from 1st August 1961 onwards which upto date of plaint amounts to Rs. 1,692 with interest at 6 per cent, per annum on the sum of Rs.
1,692/- from the date of plaint. ""The claim was based on several grounds. The first ground was that having been appointed by the first respondent,
the 2nd respondent had no right or power to terminate the services of the appellant, and therefore the termination of her service was illegal. The
second ground was that in any event the termination amounted to retrenchment as contemplated by the Industrial Disputes Act, 1947, and the
appellant not having been paid retrenchment compensation as provided for in the Act the retrenchment was illegal. The third ground was that the
Committee of the second respondent which terminated the appellant''s services was not properly covened, since the required notice was not given
to the members concerned.
The learned Second Assistant Judge, by his judgment and decree, dated 5th January 1965, dismissed the suit of the appellant, He recorded a
finding that the case of the appellant, that the termination of her services was illegal, was established. He also recorded further findings that the 1st
and 2nd respondents, namely, the Indian Rid Cross Society, constituted an industry, that therefore the Industrial Disputes Act applied, that the
termination of the appellant''s services was not by way of retrenchment, and that hence the claim of the appellant based on the alleged retrenchment
was not sustainable. The learned Judge was of the view that the only remedy of the appellant was by way of damages for wrongful dismissal and
she could not get a declaration that she still continues to be in service.
The appellant preferred an appeal and the same was disposed of by the learned Principal Judge, City Civil Court, on 19th February 1966. As
far as the finding of the trial Judge that the termination of the services of the appellant was illegal was concerned, this is what the Principal Judge
recorded in paragraph 22 of his judgment:
The learned trial Judge has upheld the appellant''s contention that the termination of her services by the committee of the 1st (sic) respondent was
illegal on the ground that no notice of the meeting had been given at which the resolution terminating the appellant''s services was parsed to some of
the members of the committee. This finding has not been challenged by the learned Counsel of the respondents in the course of his arguments in
appeal
However, the learned Principal Judge was of the view that the proper remedy of the appellant was to file a suit for damages for illegal termination
of her services and that she was not entitled to the relief asked for in the present suit. With regard to her claim on retrenchment, the learned
Principal Judge agreed with the conclusion of the learned trial Judge. Ultimately he also dismissed the appeal and hence the present second appeal.
Before me Mr. Ramachandran, the learned Counsel for the appellant, contends that the Courts below have concurrently found that the Red
Cross Society is an industry coming within the scope of the Industrial Disputes Act, that in the plaint the appellant bad categorically averred the it
the termination of her services amounted to retrenchment as contemplated by the provisions of the Industrial Deputes Act and that, therefore, the
learned Principal Judge was wrong in throwing the burden on the appellant to establish that such termination constituted retrenchment when the
respondents in their written statements had not denied this allegation of the appellant. His further case is that, in view of the failure on the part of the
respondents herein to deny the averment of the appellant that she was retrenched from service and the Industrial Disputes Act would be applicable
to her, the learned Principal Judge should have allowed the appeal and granted a decree in favour of the appellant I may straightway mention that
the complaint of Mr. Rarmchandran with regard to the reasoning and conclusion of the learned Principal Judge on the question of retrenchment is
justified. In paragraph 16(h) of the plaint, the plaintiff averred:
The plaintiff states that both the defendants and the plaintiff are governed by the Industrial Disputes Act, 1947. The termination of the services of
the plaintiff not being by way of disciplinary action but termination on the ground (as stated in the memo dated 29th June, 1961) that her services
were not required, it is clear that the termination of the services of the plaintiff is a retrenchment within the meaning of the word ''retrenchment'' in
Industrial Disputes Act.
Admittedly, this averment contained in the plaint was not traversed in the written statements filed by the respondents herein. Notwithstanding this,
the learned Principal Judge has stated:
I agree that there is no specific denial of the plaint allegation in the written statement of any of these respondents; but I am not, however, prepared
on that ground to debar them from contending that the words used in that letter do not imply retrenchment as contemplated by the Industrial
Disputes Act. It in not quite clear whether absence of denial in the written statement in respect of legal plea raised in the plaint would amount to an
irrevocable admission. In any event, I am not prepared to interpret the words ''no longer required'' as implying and amounting to retrenchment on
account of surplus in the staff.
I am of opinion that this reasoning of the learned Principal Judge is unsustainable. Once the appellant had made a specific averment that the
termination of her services amounted to a retrenchment as contemplated by the Industrial Disputes Act, the absence of the denial of the same on
the part of the respondents would practically amount to an admission of the case of the appellant in this behalf. If at all, the onus must be thrown on
the respondents to prove that the termination of the appellant''s services was not by way of retrenchment as contemplated by the Industrial
Disputes Act. However, in the view I take of the matter, I think it unnecessary to pursue this aspect further. The question whether the termination
of the appellant''s services constituted a retrenchment or not, will be relevant only if the Red Cross society happens to be an industry. If the Red
Cross Society is not an industry as contemplated by the definition of the term in the Industrial Disputes Act, 1947, it ii immaterial whether the
appellant''s services were terminated or merely she was retrenched from service. Both the Courts below have come to the conclusion that the Red
Cross Society is an industry within the meaning of the term in the Industrial Disputes Act. For the purpose of coming to this conclusion, the Courts
below relied upon the judgments of the Supreme Court in The State of Bombay and Others Vs. The Hospital Mazdoor Sabha and Others, , and in
Ahmedabad Textiles v. State of Bombay 1960 I L.L.J. 720 : (1962) 2 S.C.J. 645. The ratio of these decisions is no longer applicable after the
recent decision of the Supreme Court in The Management of Safdarjung Hospital, New Delhi Vs. Kuldip Singh Sethi, . Therefore, the very
premise that the Red Cross Society constituted an industry and therefore the rights of the parties are governed by the provisions of the Industrial
Disputes Act, 1947, disappears, and, in this view, it is unnecessary to go into the question whether the services of the appellant were terminated or
whether she was simply retrenched from service.
However, this does not dispose of the entire matter. The question for consideration is whether the appellant is entitled to any relief on the basis
of the finding of the Courts below that the termination of her services was illegal. No doubt, the appellant has prayed for a declaration that still she
continues in service and also asked for a decree for arrears of salary, But the Courts below have pointed out that the proper remedy of the
appellant would be to file as suit for damages. The question for consideration in this context is whether the Courts below were right in dismissing
the suit of the appellant in toto, without giving her at least a declaration that the termination of her services was illegal. I am of the view that the
appellant was entitled to this limited relief of declaration that the termination of her services was illegal. As a matter of fact, Mr. A.C. Muthanna, the
learned Counsel for the respondent, sought to argue that the finding that the termination of the appellant''s services is illegal is wrong and cannot be
supported. I am of the view that it is not open to the respondents to urge any such point in this second appeal. I have already extracted paragraph
22 of the judgment of the learned Principal Judge. That paragraph clearly indicates that the finding of the learned trial Judge in this behalf was not
challenged before the learned Principal Judge. Therefore, the question of the respondents seeking to support the decrees of the courts below on
the basis of a ground decided against him does not arise. Hence I must proceed on the basis that the finding of the courts below that the
termination of the appellant''s services was illegal stands, and is final. On that basis the appellant certainly is entitled to a decree declaring that the
termination of her services is illegal. I am emphasising this point simply for the reason that a particular employee whose services have been
terminated by an employer, may be interested in vindicating his or her character by merely obtaining a declaration in that behalf even without caring
to file a suit for damages or for compensation. It is well known that, once an employee is dismissed by an employer, the prospect of his or her
obtaining other employment in future becomes very difficult or bleak. Therefore, it is certainly open to an employee whose services arc terminated
to file a suit for declaration that the termination of his or her services is illegal by way of vindicating his or her character and establishing his or her
integrity. Under these circumstances on the findings of the Courts below that the termination of the appellant''s services was illegal, the appellant is
entitled to the limited relief in this suit namely, a declaration that the termination of the appellant''s services was illegal. To this limited extent the
second appeal is allowed, the judgments and decrees of the Courts below are set aside and in their place there will be a decree declaring that the
termination of the services of the appellant by the respondent herein is illegal. There will be no order as to costs.
No leave.