Abhijit Gangopadhyay, J.
MAT 267 OF 2019
1. This mandamus appeal has been filed by the Indian Institute of Technology, Kharagpur (IIT, in short hereafter) which is a creature of Indian Institute of Technology (Kharagpur) Act, 1956 and it is an institute of national importance under Institutes of Technology Act, 1961. This appeal (MAT 267 of 2019) has been filed against the judgment and order dated January 9, 2019 in W.P. No. 15270 (w) of 2003 (Dr. Subroto Roy -versus- Union of India and Others) passed by Single Bench but the memorandum of appeal erroneously named another Hon'ble Judge as the author of the impugned judgment and order. Such mistake is ministerial one and to be corrected by the Department wherever necessary for maintaining the correct record of this Court from the certified copy of the judgment. The writ petitioner/respondent has also filed an appeal against the above judgment and order being MAT No. 282 of 2019, we will deal with it later.
2. The case, in brief, made out in the writ application by the writ petitioner, Dr. Subroto Roy, is that he was appointed as a faculty member of Vinod Gupta School Management (VGSOM, in short, hereafter) of IIT. In the course of hearing of this appeal it has come to light that VGSOM is a part of IIT but it has separate Rules for its management. The petitioner was appointed contractually on September 2, 1996 for a period of five years which expired on September 1, 2001.
3. The writ petitioner/respondent herein stated further in his writ application that he was told that his term of the contractual appointment had been extended for a further period of five years and further steps would be taken to formalise the same. Even before such formalisation the writ petitioner was assigned duty and responsibilities for the academic session 2001-2002 and he started performing his responsibilities based on the oral representation made by the responsible office holders of IIT like the Director, the Deputy Director, the Dean of Faculty and Dean of VGSOM.
4. It was the further case of the writ petitioner/respondent (hereinafter referred to as the respondent) that by an office memo dated September 14, 2001 the extension was formally communicated to him enclosing therewith a new draft agreement extending the contractual service. The petitioner found that the draft agreement was at variance with the terms of his earlier agreement of service. According to the respondent he took up this matter of variation of terms of agreement of service with some responsible post holders of VGSOM who had informed the respondent that his tenure had been extended on the same terms and conditions.
The respondent in his writ petition though indicated that the complete academic freedom was missing in the said new agreement (which was there in the 1st argument) at the time of hearing of this appeal he indicated two other clauses of the said new draft agreement by which he was aggrieved. Those two clauses are paragraph 2(a) and paragraph 2(b) of the said draft new agreement which are set-out below:
"2.(a) The party of the Second Part shall subject to satisfactory service be on contract service for a period of five years from 2.09.2001 to 1.09.2006.
(b) The aforesaid Contractual service of the Party of the Second part will cease automatically with effect from the date of expiry of the contract of five year from the date of joining or as agreed between the Institute and the Party."
(Vide: page 137 of Volume-I of the paper book) It has not been explained by the respondent what is really understood by the expression 'academic freedom' and as to why a contractual service holder whose contract is going to be renewed would object to the other two conditions being Clause 2(a) and Clause 2(b) which has been set-out hereinabove.
5. The bottom line of the above grievance of the respondent is that the new draft agreement for the second five-year period was not finalized signed and executed by the parties but the respondent performed his duties of VGSOM till termination of his service by a letter. The termination was on the ground that despite requests made to him he did not sign the new agreement. Such termination was made by the Professor and Dean of VGSOM. It is noted that on July 15, 2003 the appellant authority requested the respondent to sign the agreement within 15 days from the date of receipt of the said letter but the respondent did not sign the said new agreement.
6. VGSOM by a letter dated August 20, 2003 terminated the service of the respondent and directed him to handover to the Assistant Registrar of VGSOM of all items, assets, properties of VGSOM and of IIT which were with the respondent.
He was also requested to vacant the Bungalow No. A-3 which had been allotted to him.
7. By a letter dated August 22, 2003 the respondent indicated the Director of IIT that in terms of employment between the institute and himself 3 months notice were to be given to him (for termination of his service).
8. We have noted that the first agreement came to an end on September 1, 2001.
9. Thus, it is evident from the facts of the case and the documents disclosed before this Court that even after expiry of the first agreement under which the respondent was appointed from September 2, 1996 the respondent's understanding was the clauses of the expired agreement were applicable to him.
10. The respondent pointed out an illegality as to his terms of employment referring to the first agreement of five years stating that 3 months notice was required to be given. From the termination letter dated August 20, 2003 (At page no. 152 volume-1, of paper book,) it appears that no notice period before termination was given to the respondent by VGSOM. Nor was there any whisper of payment in lieu of notice.
11. The writ petition was filed challenging, inter alia, the said letter of termination with a further prayer to allow him to continue his duties as a Professor of the Institute.
12. After hearing the parties the Writ Court granted compensation in the nature of 'Exemplary Damages' and on the basis of the last gross pay of the respondent. The Writ Court held that the writ petitioner was not paid 38 month's salary and set aside the letter of termination issued by VGSOM dated August 20, 2003 granting the writ petitioner the aggregate of his 38 month's salary totalling to Rs. 13,19,360/- and compensation of Rs. 10,00,000/- taking into account the increased inflation rate.
13. Against this order of payment of full salary of the unexpired period of 38 months and the compensation etc. the appellant has preferred this appeal.
14. The appellant challenged the observation of the Writ Court to the effect that the persons running the institute were uncomfortable with the presence of petitioner and had him removed. The appellant submitted that such observation is wholly baseless and is clearly a conjecture and surmise whereby image of the world famous Institute has been tarnished. We have perused the impugned judgment and order and we have not found from the pleadings and documents and also from the judgment any reason for making such observation that the persons running the institute were uncomfortable with the presence of the writ petitioner and had him removed. Such observation is really without any foundation and has been taken first time at the Bar. Furthermore, we do not encourage such submission made at the Bar without any foundation in the pleadings.
15. The appellant has also submitted that the Writ Court has observed breach of service condition without holding what was the breach and what was the service condition. The appellants submitted that after the expiry of the first agreement after September 1, 2001 there was no contract between the writ petitioner and VGSOM of IIT and there was no question of breach of any service condition. The appellants further submitted that the judgment in Ruby Tours Services Limited -versus- Union of India reported in (2018) 9 SCC 537 relied upon by the writ court is not at all applicable in the case.
16. It is found from the Ruby Tours Services case that it was a case similar to one United Air Travel Services case wherein some Haj pilgrims were not allowed to secure the quota of Haj pilgrimage due to a patently wrongful order passed by the concerned authority and such wrongful order was termed as arbitrary and illegal. Here in this case no similarity is found with the said Ruby Tours and Services case and there is a gulf of difference in facts and circumstance between that case and the case in hand. In that case of Haj pilgrimage there was a question of breach of public duty. Here in the case in hand it is termination of contractual service and no breach of public duty.
Whether there was any breach of service condition will be checked now and is discussed hereinbelow.
17. The first agreement came to an end on expiry of September 1, 2001. The respondent continued his service under a proposed new service agreement which was not signed by the respondent and VGSOM did not seriously insist the respondent to execute the new agreement for nearly 24 months from September 2001. The case now made out by the appellant is that despite request made for several times the respondent did not sign the agreement. So the natural question that arises is why the respondent was allowed to continue in his service for nearly 24 months after September 1, 2001? There is no satisfactory reply to it this question.
18. It is evident that from September 2, 2001 to August 20, 2003 i.e. the date of termination of service of the respondent there was no agreement of service between the parties. Neither the first agreement was in existence after September 1, 2001. The respondent has submitted that as no new agreement was made, he was under the impression althroughout till his service was terminated that the terms and conditions of the first agreement executed on September 2, 1996 was in force though not the formal agreement itself.
19. The appellant submits that in absence of a new agreement, which the respondent refused to sign, there was no contractual service and the service was rightly terminated by issuing the letter dated August 20, 2003.
20. The respondent by his letter dated August 22, 2003 (at page 154 and 155 of volume-I of paper book) wrote to the Director of IIT saying that the terms of employment was three month's notice (before termination). 3 (three) month's notice was a condition for termination of service under the first contract which is clause 7 (seven) therein (at page 50 of volume-I of the paper book).
21. As the respondent, according to him, worked under the said conditions as a faculty member of VGSOM of IIT a three-months notice was required to be given by the appellant to the respondent because if there is a misunderstanding as to the conditions of the service in the mind of the outgoing service holder the equitable principle in absence of any provision to this effect in the statute of IIT or in the Rules of VGSOM will be of giving 3(three) month's notice before termination as in the first agreement. Nothing is specified either in IIT Act and Rules and the Rules of VGSOM as to what will happen if the service is terminated without giving such a notice. Here in absence of such a clause the age old principle of service jurisprudence would come into play, that is payment of last salary for a certain period in lieu of prior notice.
22. It is observed that no reason is found for the Writ Court's order for awarding 38 month's salary and a compensation of Rs.10,00,000/- to the respondent. The only mistake of VGSOM is that it did not insist upon execution of the new agreement and paid salary to the respondent for 22 months without execution of the new service agreement.
When there is actually no new service agreement and when the understanding of the individual i.e. the respondent is that he was working under the terms of the first contract and when he himself stated that 3 (three) month's notice was required (before termination), considering the Principles of justice, equity and good conscience the respondent is entitled to 3 (three) months' last drawn gross salary on termination i.e. on August 20, 2006 in lieu of prior notice.
23. Therefore, for the reasons as aforesaid we set aside the judgment and order delivered by the Writ Court in W.P. No. 15270 passed on January 9, 2019.
MAT 282 OF 2019
24. Now we deal with the appeal filed by the writ petitioner. In support of his appeal the appellant herein has relied upon some judgments which are discussed herein below:
(a) The first judgment relied upon by the appellant is reported in (2006) 5 SCC 311 (Bhagwati Prasad Pawan Kumar -versus- Union of India). The appellant relies upon paragraph 19 on the judgment to show that an offer may be accepted by conduct. Here in this case we have proceeded on the same line by holding that the appellant's offer for the service was accepted by the offeree VGSOM otherwise no monthly salary could have been be paid to the appellant by VGSOM for the period after the first agreement came to an end in September, 2001. VGSOM did not seriously pressed for execution of the new agreement however, this does not mean revival of the expired agreement. It is also not the case of the appellant that the expired agreement was revived. There is no such representation on the part of VGSOM wherefrom it would come to light that the expired contract revived; on the contrary the appellant received and accepted new pay structure as mentioned in the proposed agreement (vide: clause 4 at page 94 of volume-I paper book).
(b) The second judgment relied upon by the appellant is reported in (1969) 2 SCC 838 (Executive Committee, U.P. Warehousing Corporation -versus- Chandra Kiran Tyagi) and he has relied upon paragraph 20 of the said judgment. The Principle of an English decision quoted with approval, in the said judgment, is that the remedy of the employee is a claim for damages for wrongful dismissal or for breach of contract. As there was no existing service agreement between the parties in this case, since the first agreement had expired and the fresh agreement was not executed, neither claim for damages for wrongful dismissal or for breach of contract arises in this matter. Relief on the basis of payment for 3 (three) months in lieu of prior notice has been granted to the appellant by this court following the principles of justice equity and good conscience.
(c) The third judgment relied upon by the appellant is reported in AIR 1973 SC 855 (Sirsi Municipality -versus- Cecelia Kom Francis Tellis) which relates to violation of implied rules of natural justice in exercise of a quasi judicial statutory power resulting in a legally void decision.
"In this respect a decision of SC reported in ............. (Ashok Kumar Sonkar -versus- Union of India and Others) is to be taken note more of. The relevant paragraphs of the said judgment is reproduced herein below:
In P.D. Agarwal v. State Bank of India and Others [(2006) 8 SCC 776], this Court opined:
"The principles of natural justice cannot be put in a straight jacket formula. It must be seen in circumstantial flexibility. It has separate facets. It has in recent time also undergone a sea change."
It was further observed:
"Decision of this Court in S.L. Kapoor vs. Jagmohan & Ors. [(1980) 4 SCC 379], whereupon Mr. Rao placed strong reliance to contend that non-observance of principle of natural justice itself causes prejudice or the same should not be read "as it causes difficulty of prejudice", cannot be said to be applicable in the instant case. The principles of natural justice, as noticed hereinbefore, has undergone a sea change. In view of the decision of this Court in State Bank of Patiala & Ors. vs. S.K. Sharma [(1996) 3 SCC 364] and Rajendra Singh vs. State of M.P. [(1996) 5 SCC 460], the principle of law is that some real prejudice must have been caused to the complainant. The Court has shifted from its earlier concept that even a small violation shall result in the order being rendered a nullity. To the principal doctrine of audi alteram partem, a clear distinction has been laid down between the cases where there was no hearing at all and the cases where there was mere technical infringement of the principal. The Court applies the principles of natural justice having regard to the fact situation obtaining in each case. It is not applied in a vacuum without reference to the relevant facts and circumstances of the case. It is no unruly horse. It cannot be put in a straightjacket formula. [See Viveka Nand Sethi vs. Chairman, J & K. Bank Ltd. & Ots. (2005) 5 SCC 337 and State of U.P. vs. Neeraj Awasthi & Ors. JT 2006 2006 (1) SC 19. See also Mohd. Sartaj vs. State of U.P. (2006) 1 SCALE 265.]"
Here, the long and short of the controversy is non-execution the new agreement for extension of the contractual service. By making any quantum of argument or by producing any number of papers or documents the situation cannot be improved. The unexecuted agreement will keep the character of unexecuted agreement even after thousands of reasons shown and even after thousands of documents are placed. In this matter it cannot be shown that due to the termination in absence of any real prejudice has been caused to the appellant. The appellant took the risk of working and accepting salary month by month without existence of a service agreement. Here in the peculiar facts and circumstances of the case the termination was wrongful to a very limited extent as 3 months notice in lieu of immediate termination was not given to the appellant. We have directed payment of 3 months gross last paid salary upholding the termination of service.
(d) The next judgment relied upon by the appellant is reported in (2018) 18 SCC 216 (Kailash Singh -versus- Managing Committee, Mayo College, Ajmer and Others). The appellant relied upon paragraph 23 of the judgment, relevant portion of which is required to be quoted: "The aforesaid view is also adopted by the Constitution Bench in Sirsi Municipality v. Cecelia Kom Francis Tellis. We may usefully extract the observations in the following paras: (SCC p.413, paras 15-19) "15. The cases of dismissal of a servant fall under three broad heads. The first head relates to relationship of master and servant governed purely by contract of employment. Any breach of contract is such a case is enforced by a suit for wrongful dismissal and damages. Just as a contract of employment is not capable of specific performance similarly breach of contract of employment is not capable of finding a declaratory judgment of subsistence of employment. A declaration of unlawful termination and restoration to service in such a case of contract of employment would be indirectly an instance of specific performance of contract for personal services. Such a declaration is not permissible under the Law of Specific Relief Act."
This judgment does not help the appellant at all.
(e) The next judgment relied upon by the judgment was reported in (1994) 2 SCC 240 (Union of India and Others -versus- Justice S.S. Sandhawalia (Retd.) and Others). He has relied upon paragraph 4 of the said judgment. The principal laid down is in respect of payment of interest in the said paragraph of judgment whic
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h says that "once it is established that an amount legally due to a party was not paid to it, the party responsible for withholding the same must pay interest at a rate considered reasonable by the Court." In this case the above principle is applicable as we hold that 3 months gross salary as the last paid amount is the appellant's legal due and the appellant is entitled to get the interest on the three month's gross last paid salary on such total amount from the next date of termination i.e. from August 21, 2003 till the payment is made. The payment with interest has to be made by two months from the date of delivery of this judgment with interest @ 10% per annum. If the payment is delayed by more than two months then the interest rate will increase and it will be 15% from the next date of termination i.e. August 21, 2006 till the date of payment. 25. Another controversy between the parties is that non returning of the appellant's personal belongings to him from his quarter in IIT campus which were removed to the store room by the IIT after two years from the date of his termination. The Court requested IIT to look into the matter and it has been indicated on behalf of IIT that there is no such important thing as alleged by the appellant like the research papers etc. in custody of IIT. IIT by producing a gate pass having signature of the appellant submitted that some house-hold items like cot, refrigerator, gas cylinder, gas oven, bicycle, 3 books etc. were taken out by the appellant long back. This controversy cannot be settled by this Court in exercising its appellate jurisdiction of mandamus appeal and no observation is made in respect of the controversy as to this personal belongings by this Court. 26. The impugned judgment and order is set aside and both the appeals are allowed in part to the above extent. 27. For granting stay of operation of the order of the writ court, the appeal court on April 22, 2019 passed an order of stay on condition of deposition Rs.23,19,360/- with the Learned Registrar General, High Court Calcutta. We were told that the said amount was deposited. No costs. I agree.