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Ashok Kumar Srivastav Vs National Insurance Company Ltd: Maintainability Of Suit Is To Be Adjudged From Actual Pleadings

Rheaa Nair ,
  16 October 2021       Share Bookmark

Court :

Brief :

Citation :

Crux:
Maintainability of suit is to be adjudged from actual pleadings.

Coram:
J.A.S. Anand,
J. K.T. Thomas

Parties:
Appellant-Ashok Kumar Srivastav
Respondent- National Insurance Company Ltd.

Subject

The Appellant claims to be still in the service ofthe respondent, and contends the order passed by the respondent terminating him is bad in law. Although he succeeded in the trial court, the High court ruled against the appellant, giving rise to the current appeal.

Overview

  • The respondent appointed the appellant as an inspector on probation, for an initial period of 12 months, subject to certain conditions. The company served a thirty-day notice of termination of service to the appellant, on the premise that the appellant had failed to achieve the targeted premium account.
  • The appellant claims to still be in the service of the respondent, as an inspector, stating that the termination letter was invalid. The appellant filed a suit in the Munsif Court, praying for a decree declaring the termination notice is illegal. The respondents contended this suit, by stating it is not maintainable under Section 34 of the Specific Relief Act. They, however, did not participate during the evidence stage, and the trial court gave an ex parte decree for the appellant. The appellant also succeeded in the first appellate court, but they failed in the appeal filed by the respondent in the High Court.The High Court reversed the decree of the trial court and dismissed the suit. Thus, the present suit has come up.

Relevant Provisions

Section 32 Specific Relief Act, 1963- A person entitled to a legal character, or right, can file a suit against a person denying such a right. The court, in such a case,may use its discretion to make a declaration, that the plaintiff is so entitled. The plaintiff does not need, in such suit, ask for any further relief.

Section 14 of the Delhi Rent Control Act, 1958- Stipulates contracts which are not specifically enforceable.

Issues

  • Whether the termination order served by the respondent is violative of the contractual terms?
  • Whether the appellant is entitled to reinstatement?

Analysis

  • The court in referred back to its previous decisions to see if the principle of res judicata applies in the case. It felt it was legally clear that the respondent cannot now re-agitate the question regarding maintainability of the suit under Section 34.
  • However, the contention made before the court was that the suit was in effect for specific enforcement of a contract, and such a suit is not covered by Section 14 of the Specific Relief Act, and thus was not maintainable. According to the respondents, if the reliefs claimed by the suit are granted, it would lead to the specific enforcement of a contract of employment. Since Section 14 makes it clear that a contract of employment is not specifically enforceable, the present suit should not be maintained.
  • The court found this line of argument is based on the fallacious premise of a contract of employment. The respondent has been appointed with certain terms, within which he has worked. The maintainability of the suit should not be determined from the impact the decree may cause. It has to be judged based on the actual pleadings.
  • The Specific Relief Act is not exhaustive of all kinds of relief. It is also not restricted to specific performance alone. The mere fact that a suit is not maintainable under Section 14 does not mean it is inadmissible in civil courts. Section 34 alone is sufficient to open the doors of the civil courts to admit suits of declaratory relief.
  • The crucial question in the case is whether the appellant is entitled to a declaration that he is still an employee in the respondent’s company. The High Court had held he is not entitled as the contract does not entitle him to do so.
  • The Supreme Court also holds the view that the appellant cannot get a declaration for continuing service. The High Court’s judgment stands, the suit is liable to be dismissed and does not require further interference. The appeal was dismissed.

Conclusion

The case is about an employee claiming their termination was bad in law and moving the court to get their employment reinstated. They have utilised Section 34 of the Specific Relief Act to move to the court, while the first appellate court decided the case in favour of the appellant, the High Court sided with the Respondent. The Supreme Court’s decision matches that of the High Court. The Apex court clarified that even though a suit may not be entertained by the court under Section 14, it can be entertained in the civil courts. But, concurring with the High Court’s conclusion, the court felt that the contract of the appellant does not entitle him to a declaration stating he is still an employee in the respondent’s company. Thus, the suit is dismissed and relief sought is not granted.

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