Vishal Gupta vs. l& t Finance Limited Ouster Clause in Appointment Letter

7/28/2019 Vishal Gupta vs. l& t Finance Limited Ouster Clause in Appointment Letter

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CS (OS) 2309 of 2008 Page 1 of 24

IN THE HIGH COURT OF DELHI AT NEW DELHI

CS (OS) 2309 of 2008 & IA No. 13399/08

Reserved on : September 2, 2009Decision on : September 9, 2009

VISHAL GUPTA ..... Plaintiff

Through Mr. Ashish Mohan, Advocate

versus

L & T FINANCE LIMITED .... DefendantThrough Ms. Indu Malhotra, Senior

Advocate with Mr. Vikas Mehta andMr. Praveen Pahwa, Advocates

CORAM:HON'BLE DR. JUSTICE S. MURALIDHAR

1.Whether reporters of the local newspapersbe allowed to see the judgment? No

2.To be referred to the Reporter or not? Yes

3. Whether the judgment should be reported in the Digest? Yes

JUDGMENT09.09.2009

S. Muralidhar, J.

1. By this order, the preliminary issue in the suit concerning the territorial

jurisdiction of this Court to try the suit as well as the question of grant of

an ad interim injunction are being dealt with.

2. The Plaintiff was appointed by the Defendant L & T Finance Limited by

a letter dated 19th June 2006 as an Assistant Manager in their Corporate

Product Financing Division at New Delhi. Significant among the terms and

conditions of employment were following:

Place of Work:


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You will be assigned to work at our office in New

Delhi at present. However, you will be liable to be

transferred to any of the companys establishment in

India or outside, as and when required by the

management.

Termination of Employment:

The above offer of employment is for continuous

employment. However it may be terminated at any

point of time by either party giving two months notice

in writing. The company has right to pay two months

salary in lieu of such notice to you. The company shall

also have the right to adjust any leave due to you

and/or recover from you such amounts towards notice

pay for the shortfall in the period of notice.

Dispute

Any dispute between yourself and the company

concerning with or relating to or arising out of this

employment, shall be subject to the jurisdiction in

Greater Mumbai only.

3. The said letter was issued from the Corporate Product Financing

Division of the Defendant at Bandra (East), Mumbai. At the foot of the

first page of the appointment letter, the address of the registered office of

the Defendant at Ballard Estate, Mumbai was indicated.

4. On 12th February 2007, the Plaintiff was informed of the confirmation of

his appointment with the Defendant with effect from 3rd January 2007. The

updated Human Resource Manual & Procedure of the Defendant as on 13 th


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October 2008 has been filed by learned counsel for the Defendant. The two

clauses relevant for the purpose of present case are follows:

Abandonment

If unauthorized absence exceeds eight working days

(consecutive), the management at its sole discretion,

strike off the name of the employee from the rolls of

the company on ground of abandonment of

employment and advise him/her accordingly. If within

15 days from receipt of such advise, the employee

presents himself/herself and offers an

explanation/reasons of absence, the management has

an option to review the matter and confirm or

otherwise stand by its earlier decisions.

Exit Policy

An employee who wishes to resign from the services of

the company will be required to give the notice of

resignation as per terms of appointment or subsequent

amendments thereof. An employee will have to serve a

minimum period of 2 month as notice period or agreed

as per the term of employment.

If the employee desires to be relieved earlier than the

notice period, management at its sole discretion may

decide to waive the notice period or otherwise the

employee is required to surrender the equivalent salary(Basic Salary) applicable for the notice period waived.

If the company asks the concerned individual to leave

before the notice period, then the company will pay the

equivalent salary (Basic salary) for the remaining

notice period.

Management at its sole discretion may sanction leave

to the employee during his/her notice period provided

such leave exists to the credit of the individual.

In case an employee leaves within 1 year of service, no

unclaimed leave will be either encashed or

compensated against the settlement of notice period.

However, in case of an employee leaving after

completion of 1 year of service, the unclaimed leave

may be either encashed or compensated or settled

against notice period at the discretion of the


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arrangement. The encashment would be as per leave

Rules (i.e. only Basic salary).

The company may at its sole discretion terminate the

employment without notice and/or salary in lieu ofnotice, if in the opinion of the company, the

continuance of his/her employment is detrimental to

the interest of the company. In the event of such

termination, all benefits/perquisites/ allowances shall

stand forfeited.

All the loans availed by the employee are to be settled

before the date of resignation takes effect. Necessary

clearances on handing over the company assets shouldbe obtained from the respective authorities.

5. On 4th August 2008, the Plaintiff resigned from the services of the

Defendant by sending an e-mail addressed to Mr. Jaspal Singh Ahluwalia.

The said e-mail reads as under:

From: Gupta Vishal

Sent: Monday, August 04, 2008 11:27 AM

To: Ahluwalia Jaspal SinghCC: Kalra Anil; Ramesh V; Samant Biswajit D.; Singh

Niraj Kumar

Subject: Letter of Resignation

Dear Sir,

This is to formally inform that I will not be able to

continue my service for L & T Finance Limited as

Assistant Manager TEG, for Delhi NCR region.For personal reasons I would like to resign from the

aforesaid post. I wish to be relieved by closing hoursof 5/8/2008.

I would like to thank this organization for giving me an

opportunity to work together and imparting a goodexposure in Sales field.

I would request you to please relieve me of my officialduties on 5/8/2008. I am willing to compensate the

organisation as per policy in lieu of my notice period.

Thanking you,

Yours truly,


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Vishal Gupta

Employee N.-735310Assistant ManagerTEG

L&T Finance Ltd

New Delhi.

6. In response to the above e-mail which was sent at 11.27 am Mr. Jaspal

Singh Ahluwalia replied by e-mail to the Plaintiff on the same day at 11.42

am to the following effect:

RE: Letter of ResignationAhluwalia Jaspal SinghSent: Monday, August 04, 2008 at 11.42 AM

To: Gupta VishalCC: Kalra Anil; Ramesh V; Samant Biswajit D;

Sing Niraj Kumar

Vishal, you are required to resolve the Non Starter

Cases done by you after which only you will berelieved from the services of the Organisation.

Regards,

Jaspal Ahluwalia

7. On 5th August 2008, the Plaintiff received an e-mail at 5.59 pm from

another employee Ms. Manju Sachin Chowre attaching an Exit Interview

Form, Clearance Form and the details of the amount to be recovered from

the Plaintiff. According to the Plaintiff, he filled out these forms. As far as

the clearance form is concerned under the column Dues if any it was

indicated No by his own department, by the Admin. Department and

Operations Department. As regards the Fin. & Accts Department the

aforementioned column was left blank. As regards the recovery of the

amount due for two months salary in lieu of notice , the LTA Recovery

and the General Purpose Loan Recovery, a total sum of Rs.2,20,318/- was

indicated.


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8. It requires to be noticed that in response to the e-mail dated 4th August

2008 from Mr. Jaspal Singh Ahluwalia the Plaintiff sent an e-mail on 5 th

August 2008 at 11.53 AM stating that as per the report from the system,

two cases are been shown as non starter cases in which legal action has

been already initiated. On 6th August 2008 at 11.41 am Mr. Jaspal

Ahluwalia sent an e-mail to him that Vishal, you are required to resolve

these cases and ensure No Loss is incurred, till that time your release from

the organisation is withheld. The Plaintiff has placed on record the report

of non starter cases as on 15th October 2008 which shows that there were

two cases of commercial vehicles financing pertaining to one Birender

Singh and the other Sanjay Singh. Birender Singh had given some post-

dated cheques, some of which had been encashed and some dishonoured. It

is stated that legal action has been initiated as regards the dishonoured

cheques.

9. It is not in dispute that on 14st August 2008 the Plaintiff issued to the

Defendant a cheque in the sum of Rs.2,20,318/- and this was encashed by

the Defendant on 21st August 2008. It is, however, contended by the

Defendant that this amount has been placed in a sundry account.

10. The controversy in the present case is that the Plaintiff has not been

issued a relieving letter by the Defendant as a result of which he is unable

to take up employment with any other organization. According to the

Plaintiff, he received an offer for appointment from Axis Bank but was


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unable to join as he could not produce the relieving letter from the

Defendant.

11. Faced with a difficult situation where the Defendant refused to issue a

letter relieving him from its service, despite his clearing the dues, the

Plaintiff wrote to Mr. Anil Kalra, Head (HR) of the Defendant on 2nd

September 2008 an e-mail as follows:

From; Gupta Vishal

Sent : 02 September 2008 11:27To: Kalra Anil

CC:[email protected]

Sub: Re: Letter of resignation_Vishal Gupta

Dear Sir,

This is in reference to my mail sent to you on

25/8/2008 in which I intimated that the cheque of

Rs.2,20,318/- in the name of L&T FINANCE LTD

as my settlement amount is cleared from my bank

account, but till date I have not been relieved from

the organisation. If organisation is not relieving

me, I am ready to join the services of the

organisation (L&T Finance Ltd) and also I

request you to kindly refund the settlement

amount recovered from me through cheque no.

233075 of UTI Bank LTD.

Waiting for your reply at the earliest.

Thanking you,

Regards,Vishal Gupta (emphasis supplied)
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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12. In response to the above e-mail, Mr. Anil Kalra wrote to the Plaintiff

on 18th September 2008 as follows:

ToVishal GuptaAsst Manager-EPG-TEG

P.S. No. 735310

Location: New Delhi

Dear Vishal,

Refers to your request of 2nd

September 2008 for

resignation, we would like to put the following on

record:

1. You have already been informed that you have

done irregular lending in 2 cases where no

repayment has come so far and customers and

assets are not traceable.

2. We hereby give you a months time i.e. upto 30 th

October 2008 to find out the customers to whom you

have done the lending and also the assets for which

you have done the lending.

Please note that if the above is not organized by 30th

October 2008 the company will initiate the

appropriate civil/criminal action against you.

For: L & T Finance Ltd.

Anil Kalra

Head HR- L&T Financial Services. (emphasissupplied)

13. The Plaintiff then sent an e-mail on 15th October 2008 to Mr. Anil

Kalra, Head (HR) of the Defendant tracing the developments till then. He

pointed out that his requiring to resolve the non starter cases was not a

condition mentioned in the offer letter. He maintained that his

employment stood terminated when he paid two months salary in lieu of


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notice which was accepted by the Defendant. As regards the documents

collected by him from the borrowers in the two non-starter cases, he

mentioned that the current address proof and photo proof in both cases

were duly forwarded to the Defendant. He further informed that Birender

Singh was still available at the same place mentioned in his loan

application. In the same e-mail, the Plaintiff informed the Defendant of the

other address of Sanjay Singh He called upon the Defendant to

immediately issue him a relieving letter.

14. Thereafter, on 4th November 2008, the present suit was filed. The

prayers, inter alia, are for a declaration that the Plaintiff is entitled to a

letter relieving him from the Defendant with effect from 4th

August 2008;

for a permanent mandatory injunction directing the Company to issue a

relieving letter and other reliefs including refund of an amount of

Rs.32,890/ paid by the Plaintiff to the Defendant as salary in lieu of notice;

reimburse his out of pocket expenses and compensation for the loss of job

with Axis bank. He also sought damages for the loss of mental peace and

for the mala fide actions of the Defendant.

15. The suit was listed for hearing on 5th November 2008. The Defendants

2 and 3 who are officers of Defendant No.1 were not found to be necessary

parties and were struck off from the array of the parties. On 28th April

2009, the following order was passed by this Court:

The suit is ripe for framing of issues. However, there appear

to be some element of settlement and it is deemed expedient to


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give the parties an opportunity for the same.

List on 15th May, 2009. If no settlement is arrived at by the

parties, issues shall be framed.

IA.No.13399/2008(of the plaintiff u/O 39 Rule 1 and 2 CPC)

The plaintiff seeks interim order directing the defendant to issue

the employment relieving certificate to the plaintiff. It is stated

that the said certificate is necessary for the plaintiff to take

employment elsewhere. The counsel for the defendant has

stated that the plaintiff had, in fact, abandonedthe employment of the defendant and contrary to the agreement

with the defendant and has otherwise not given all the

information required to be submitted as to the business

transacted by the plaintiff on behalf of the defendant and owing

to which the defendant is suffering losses. The counsel for the

defendant has stated that if the plaintiff were to cooperate with

the defendant and give the requisite information to the

defendant, the defendant would consider issuing the

relieving certificate without prejudice to its rights and

contentions.

The counsel for the defendant has also contended that this court

does not have the territorial jurisdiction to entertain the suit. Toexplore the possibility of the settlement it has been agreed that

the plaintiff shall visit the office of the defendant at Moti Nagar,

Delhi at 11.00 a.m. on 29th April, 2009 and meet Mr Neeraj

Singh of the defendant and give all the information which is in

his power and possession and as required by the said

Mr Neeraj Singh. If the plaintiff is required to go to the office

of the defendant on subsequent dates also, the plaintiff shall do

so.

List on 15th May, 2009 for further consideration. If no

settlement is arrived at, the arguments on the application shall

be heard on that date.


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16. Pursuant to the said order, the Plaintiff went over to the Defendants

office on two dates i.e. 29th April 2009 and 5th May 2009. What happened

during those meetings is differently described by the Defendant and the

Plaintiff. According to the Plaintiff, instead of asking him about the two

non-starter cases, the Defendant asked him about various other cases and

therefore, they were not acting fairly. According to the Defendant, the

Plaintiff was not cooperating with them and declined to give them the

details regarding the nine loan defaulters whom he had introduced. The

Defendant has placed on record the copy of a letter dated 11 th May 2009

addressed by it to the Plaintiff listing out the 15 cases of defaulting parties

to whom loans were advanced by the Defendant on the recommendation of

the Plaintiff.

17. Despite learned counsel for the parties taking adjournments for

exploring the possibility of a settlement, it was reported finally that no

settlement was possible. The Defendant was prepared to give a letter

stating that the Plaintiff had ceased to be an employee of the Defendant on

account of abandonment of services; that his name stood struck off from

the rolls and that the certificate was being issued without prejudice to the

rights and contentions of the Defendant in the present suit. This kind of a

qualified relieving letter was of course not acceptable to the Plaintiff. The

parties were therefore heard at length on the application for ad interim

injunction as well as the question of territorial jurisdiction of this Court to

try the suit. Mr. Ashish Mohan, learned Advocate appeared for the Plaintiff


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and Ms. Indu Malhotra, learned Senior Advocate and Mr. Vikas Mehta,

learned Advocate appeared for the Defendant.

18. As regards the preliminary issue of territorial jurisdiction, it is

submitted on behalf of the Defendant that if the suit itself was not

maintainable then the question of grant of an ad interim injunction would

not arise. It is submitted by learned Senior Advocate for the Defendant that

in view of the specific clause in the appointment letter that any dispute

between the Plaintiff and the Defendant concerning with or relating to or

arising out of the employment was subject to the jurisdiction in Greater

Mumbai only, the suit filed by the Plaintiff in this court was not

maintainable. It is further pointed out that even for the purpose of Section

20 (a) and (c) CPC, the corporate office of the Defendant which issued the

appointment letter was in Mumbai, the refusal of the acceptance of the

resignation letter was also at Mumbai and therefore, the cause of action

arose only within the jurisdiction of the Court in Mumbai. Reliance is

placed upon the judgments in A.B.C. Laminart Pvt. Limited v. A.P.

Agencies, Salem AI R 1989 SC 1239, Shr ee Subhlaxmi Fabri cs Pvt. Ltd v.

Chand Mal Baradia AIR 2005 SC 2161. It is further submitted that the

granting of any relief of mandatory injunction directing the Defendant to

issue a relieving letter to the Plaintiff would tantamount to granting the

final relief itself and this was impermissible in law. Reliance is placed

upon the judgment of the Supreme Court in Metro Marins v. Bonus Watch

Co. Pvt. Ltd. AI R 2005 SC 1444.


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19. It is then submitted on behalf of the Defendant that when the employee

had a poor track record and had abandoned its services, the Court could not

compel it to issue a relieving letter simpliciter. It is repeatedly pointed out

that at least 15 of the borrowers whom the Plaintiff had recommended for

loan had defaulted. The full details of the borrowers were not available

with the Defendant. Considerable losses were suffered by it on account of

the conduct of the Plaintiff. There was no question, therefore, of the

Defendant being asked to issue a relieving letter to the Plaintiff

unconditionally. It is submitted that in any event a decision on this aspect

would require the case to go for trial. At the same time, it was contended

by the Defendant that there was no question of the Plaintiff being taken

back in its service particularly when the Defendant had lost confidence in

the Plaintiff. Therefore, this was a case where no relief could be granted at

this stage even by asking the Defendant to take the Plaintiff back in

service.

20. On the other hand, it is contended by the Plaintiff that the observations

made in A.B.C. Laminart Pvt. Ltd v. A.P. Agencies(supra) do not

categorically hold that the ouster clause would also apply in the contracts

of employment and that the said judgment was given in the context of a

commercial contract. Reliance has also been placed on certain decision of

the High Courts in M/s. Snehalkumar Sarabhai v. M/s. Economic

Transport Organization AI R 1975 Gujarat 72, M /s. Patnaik I ndustries

Pvt. L td v. Kal inga I ron Works AI R 1984 Orissa 182 and I ndian Rare

Ear ths L imited v. M /s. Unique Buil ders L imited AI R 1987 Orissa 30 . It

is submitted that there are instances where a mandatory temporary


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injunction can be granted and this is one such instance. Reliance is also

placed on the judgment of Dorab Caswaji Warden v. Coomi Sorab

Warden AIR 1990 SCC 867and Sukerma Rani Kapoor v. Om Prakash

Kapoor (2002) 2 AD (Del) 860.

21. As regards the submission regarding the territorial jurisdiction of this

Court, there is an ouster clause in the contract in terms of which only the

courts in Greater Mumbai would have jurisdiction. Learned counsel for the

Defendant clarified that Bandra (E) is in Greater Mumbai and in any event

given the claim made in the present suit, it would have to be filed on the

original side of the Bombay High Court. According to them, therefore, the

Court in Delhi has no jurisdiction.

22. The decisions of the Supreme Court in regard to ouster clause have

invariably been in the context of commercial contracts. In A.B.C.

Laminart Pvt. Ltd v. A.P. Agencies, the Defendant was located in Gujarat

whereas the Plaintiff was in Salem (Tamil Nadu). The objection by the

Defendant as to the jurisdiction of the Court in Tamil Nadu was negatived

by the High Court. The Defendant then appealed to the Supreme Court.

The ouster clause in that case did not use the word only or exclusively.

In that context it was held therefore, that the ouster clause did not manifest

the intention of the parties to exclude the jurisdiction of the Court at Tamil

Nadu. Accordingly, the order of the High Court was not interfered with.

However, the following observations in the said judgment appear to

indicate that the convenience of the parties is also a factor that would have


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to be borne in mind, and that the jurisdiction of the court cannot be said to

be completely excluded:-

16. So long as the parties to a contract do not oust the

jurisdiction of all the Courts which would otherwise have

jurisdiction to decide the cause of action under the law it

cannot be said that the parties have by their contract ousted

the jurisdiction of the Court. If under the law several Courts

would have jurisdiction and the parties have agreed to

submit to one of these jurisdictions and not to other or

others of them it cannot be said that there is total ouster of

jurisdiction. In other words, where the parties to a contract

agreed to submit the disputes arising from it to a particular

jurisdiction which would otherwise also be a proper

jurisdiction under the law their agreement to the extent they

agreed not to submit to other jurisdictions cannot be said to

be void as against public policy. If on the other hand the

jurisdiction they agreed to submit to would not otherwise be

proper jurisdiction to decide disputes arising out of the

contract it must be declared void being against public

policy. Would this be the position in the instant case?

23. In Shree Subhlaxmi F abr ics Pvt. Ltd v Chand Mal Baradia(supra)

again the question was of interpretation of a commercial contract. Again

following the list of judgments from ABC Laminart Pvt. L td v. A.P.

Agencies, it was held in Angile Insulation v. Davy Ashmore India

L imited (1995) 4 SCC 153that the ouster clause using the words only or

exclusively would in fact decide the jurisdiction of other courts. While

the earlier decisions of the High Courts taking a different approach even in

commercial contracts (for e.g., see M/s. Patnaik I ndustr ies Pvt. Ltd v.

Kalinga I ron Works)could be distinguished on the basis that they were


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delivered at a time when the decision in ABC Laminart Pvt. Ltd v. A.P.

Agencies had not been rendered by the Supreme Court, none of the

decisions deal with a contract of employment.

24. In the considered view of this Court the decisions on the ouster clause

in the context of a commercial contract have to be held to be

distinguishable in their application to a case of a contract of employment.

In the employment contract, an employee would not be able to insist that

the disputes, if any, are to be referred only to one court and not the other.

The employee usually accepts the employment with all the attendant terms

and conditions or not at all. In the present case, the letter of employment no

doubt states that it is a transferable job. Still, the Plaintiff was to work

primarily for the Delhi office of the Defendant. He, in fact, rendered

services only in Delhi office. He submitted his resignation at Delhi. For an

employee no longer in service to be asked to go to Mumbai for instituting

and pursuing litigation would render the remedy expensive and

inefficacious for such employee. It would work harshly against him.

Moreover, in a situation like the present one where the prayer is essentially

for a direction to the Defendant to issue a relieving letter, to direct the

employee to go to a different city only because of the ouster clause seems

to be unfair and unjust. Although in commercial contracts, it has been held

that such an ouster clause would not be opposed to public policy (see the

observations in para 18 of the decision in ABC Laminart), in a contract of

employment such a clause could well be held to be opposed to public

policy. To repeat, the courts have thus far had no occasion to examine how

a strict application of the exclusion clause would work for an employee


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who is out of service. As regards the comparative hardship, the Defendant

has an office in Delhi and there will be no difficulty for it to appear before

this Court and defend itself.

25. As far as Section 20 CPC is concerned, in terms of clause (b) thereof,

the Defendant has an office in Delhi. The letter of appointment was

received in Delhi. The email correspondence referred to hereinbefore

shows that the Plaintiffs resignation letter was sent from Delhi and the

refusal of the relieving letter was communicated to the Plaintiff in Delhi.

The result is that the Courts in Mumbai (because of the clause in the

appointment letter) and this court, on account of the substantial part of the

cause of action having arisen here, have jurisdiction to try the case. The

observation in ABC Laminartin para 21 that the intention of the parties to

completely oust the jurisdiction of the court in Delhi will have to be tested

in the above background. The use of the word only in the instant case to

qualify the ouster clause cannot be read as conferring exclusive jurisdiction

on the court in Mumbai.

26. For the above reasons, it is held that the ouster clause in the letter of

appointment of the Plaintiff cannot preclude this Court from entertaining

the present suit. The preliminary objection of the Defendant to the

maintainability of this suit on the said ground is hereby overruled.

27. Turning to the application for an ad interim mandatory injunction , it is

seen that there was no condition in the letter of employment that the


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Plaintiff has to first ensure that the non starter cases are resolved before his

letter of resignation could be accepted. Further, the conduct of the

Defendant in refusing to take the Plaintiff back into service becomes

relevant. When on 2nd September 2009 the Plaintiff offered that in the

event the defendant does not issue a relieving letter, he is prepared to join

back the service, there was no positive response by the Defendant. During

the course of arguments, the learned Senior Advocate for the Defendant

repeatedly stated that since it had lost confidence in the Plaintiff it would

not permit him to join duties. As far as the Defendant was concerned, the

Plaintiff was no longer in their service and yet, they would not issue him a

relieving letter simpliciter. To this Court, it appears that the point of refusal

of the Defendant to take back the Plaintiff into service while at the same

time refusing to grant him a relieving letter is not legally tenable. If the

Plaintiff was indeed responsible for the non starter cases, then consistent

with such plea the Defendant ought to have proceeded to hold an inquiry

against the Plaintiff while he was still in service. At no point in time while

he was in service, did the Defendant initiate any disciplinary proceedings

against the Plaintiff.

28. Even the reason of the Plaintiff having to first resolve the two non-

starter cases appears to have been a ruse to somehow deny him the

relieving letter. It transpired subsequently that the Defendant did not

confine its understanding of the Plaintiffs obligation to the two non-starter

cases. The Defendant has been insisting that the Plaintiff should help it

resolve 15 cases of default whereas only two are shown to be non-starter

cases. The Defendant is, therefore, trying to build a new case which it


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ought not be permitted to do. Even as regards the non-starter cases, the

Plaintiff appears to have given the information to the Defendant. In one of

the cases, the payments have been made in part and, therefore, in a strict

sense it is not a non-starter case. If in fact the Defendant has initiated legal

proceedings to recover the amounts due from both the borrowers, the

Plaintiff cannot be put on hold indefinitely to await the resolution of these

cases.

29. The stand of the Defendant is not consistent with the terms of the

contract of employment. It accepted the payment made by the Plaintiff for

two months notice period as well as the outstanding loan amount which

was a condition of the Plaintiff being relieved from service. It is not in

dispute that this cheque, which includes the loan amount, was encashed.

Therefore, there are no monetary dues as far as the Plaintiff is concerned.

There being no other term of service that requires to be fulfilled for issuing

a relieving letter, the refusal by the Defendant to do so seems unjustified.

The stand of the Defendant that the Plaintiff has abandoned his service is

also not borne out by the correspondence. In fact, the Plaintiffs offer to

join back service has been refused by the Defendant.

30. The only question that remains is whether a mandatory interim

injunction by this Court can be issued at this stage to the Defendant. The

rule that a Court cannot grant an interim relief that would amount to grant

of the final relief at the interlocutory stage is not an inflexible one. It would

depend on the facts of every case. The decision relied upon by the


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Defendant in Metro M arins v. Bonus Watch Co. Pvt. Ltd. was in a

different set of circumstances. That case dealt with a commercial contract.

It cannot ipso facto be applied to the instant case where the dispute arises

out of a contract of employment, and where the dispute is limited to the

employer refusing to issue to the employee, who has resigned, a relieving

letter/certificate. If, for the relieving letter, the Plaintiff has to wait for the

conclusion of the trial, the whole purpose of the Plaintiff coming to the

court would be defeated. The denial of a relieving letter by the Defendant

in the instant case has already prevented the Plaintiff from accepting any

other offer of employment.

31. It was observed in Dorab Cawasji Warden v. Coomi Sorab Warden

AI R 1990 SC 867as under (AIR, p.873-74):

14. The relief of interlocutory mandatory injunctions

are thus granted generally to preserve or restore the

status quo of the last non-contested status which

preceded the pending controversy until the final hearingwhen full relief may be granted or to compel the

undoing of those acts that have been illegally done or

the restoration of that which was wrongfully taken from

the party complaining. But since the granting of such an

injunction to a party who fails or would fail to establish

his right at the trial may cause great injustice or

irreparable harm to the party against whom it was

granted or alternatively not granting of it to a party who

succeeds or would succeed may equally cause great

injustice or irreparable harm, courts have evolved

certain guidelines. Generally stated these guidelines

are:


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(1) The plaintiff has a strong case for trail.

That is, it shall be of a higher standard than a

prima facie case that is normally required for

a prohibitory injunction.

(2) It is necessary to prevent irreparable or

serious injury which normally cannot be

compensated in terms of money.

(3) The balance of convenience is in favour of

the one seeking such relief.

15. Being essentially an equitable relief the grant or

refusal of an interlocutory mandatory injunction shall

ultimately rest in the sound judicial discretion of the

Court to be exercised in the light of the facts and

circumstances in each case. Though the above

guidelines are neither exhaustive or complete or

absolute rules, and there may be exceptional

circumstances needing action, applying them as

prerequisite for the grant or refusal of such injunctions

would be a sound exercise of a judicial discretion.

32. Also relevant are the following observations of the Bombay High

Court in Baba Narayan L andge v. Mahadu Bhikaji Tonchar AIR 1989

Bom 247as under (AIR, p.247)

The subject of temporary injunction is mainly

covered by O. 39, Rr. 1 and 2, C.P.C In cases not

covered by those provisions, an appropriate temporary

injunction can be granted also in exercise of inherent

power of a Court under S. 151, C.P.C. After all O. 39,

Rr. 1 and 2 are not exhaustive of the circumstances

under which interim injunction can be granted. The

controversy on that aspect of the matter is set at rest by
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a majority decision of the Supreme Court in the leading

case ofManoharl al v. Seth H ir alal (AIR1962 SC 527).

But that apart the language employed in those two

Rules is clearly wide enough to include an order in the

form of a mandatory injunction and admits of no

exception with reference to a point of time to which it

can be made. Injunctions are a form of equitable relief

and they have to be adjusted or moulded in aid of

enquiry and justice to the facts and circumstances of

each particular case. Jurisdiction is thus undoubted even

under S.39, Rr. 1 and 2. Even If it cannot be granted

under the said Rules, S. 151, is the source of such

jurisdiction. I see no reason to lay down an absolute

proposition and forge unnecessary and unjustified

fetters on the power of the enquiry Courts to grant

appropriate relief even in a well deserving case and

reduce its position only to a willing but helpless

spectator - a situation not warranted by our enquiry

jurisprudence.

Undoubtedly, power to issue mandatory injunction at an

interlocutory stage is not to be exercised lightly or

commonly. Ordering maintenance of statues quo as on

the date of the suit as an interim measure is rate and

rarer still is the order of maintenance of status quo as on

the date anterior to the institution of suit. But existence

of jurisdiction and its proper exercise are two distinct

topics.

33. In the instant case, a direction to the Defendant to issue a relieving

letter is not the only relief being sought by the Plaintiff in the suit.

Therefore, in issuing such a direction, the suit itself does not become

infructuous. All that the Defendant is required to do is to issue the Plaintiff

a letter stating that he is no longer in their service. Any other qualification
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to such statement might render the cessation of the services of the Plaintiff

stigmatic. In such an event, the resort to a clause of termination simpliciter

by the Defendant would be futile and the Defendant will have to

acknowledge that the Plaintiff is still in their service and proceed against

him disciplinarily. This it refuses to do. Viewed from any angle, therefore,

a case is made out for issuing an interim mandatory injunction to the

Defendant to issue to the Plaintiff a simple relieving letter stating that he is

no longer in their service. The balance of convenience in issuing such an

interim injunction is clearly in favour of the Plaintiff.

34. Accordingly, an interim mandatory injunction is issued directing the

Defendant to issue to the Plaintiff a relieving letter within a period of seven

days stating that he is no longer in their service. The said letter will not

state that the Plaintiff has abandoned the service or any other qualification

that prevents the Plaintiff from taking any other employment.

35. With the above directions, the interlocutory application is disposed of.

CS (OS) 2309 of 2008

36. Pleadings are complete.

37. The suit be listed before the Joint Registrar on 11th November 2009 for

admission/denial of the documents.

38. It is made clear that the parties should complete the admission/denial of


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documents on the date fixed by the learned Joint Registrar for that purpose.

If, for some reason, they are unable to do so, then each party will file an

affidavit within two weeks thereafter indicating in a separate column

alongside the index of documents filed by the other party, which of the

documents is admitted or denied.

39. List before Court on 9th December 2009 for framing of issues.

S. MURALIDHAR, J.

SEPTEMBER 9, 2009

rk

Vishal Gupta vs. l& t Finance Limited Ouster Clause in Appointment Letter

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