1979 (1) TMI 247 - SC - Indian Laws

Summary

Issues:
1. Validity of suspension and termination of services of the appellant.
2. Interpretation of the agreement between the appellant and respondent 1.
3. Entitlement of the appellant to a declaration of continued service and reinstatement.
4. Calculation of arrears of salary and damages.
5. Mitigation of damages by the appellant.

Analysis:

Issue 1: Validity of suspension and termination of services
The appellant, appointed as the Head Mistress of a school, was suspended and later had her services terminated by the Executive Committee of the Society. The High Court initially decreed in favor of the appellant, stating the suspension was invalid due to the improper constitution of the Committee. However, the Division Bench later ruled that while the dismissal was wrongful, the appellant was only entitled to damages, not reinstatement. The Supreme Court held that the appellant, being an employee of a private institution, was governed by the terms of the contract, which allowed for termination with notice. The Court cited a previous judgment to support the conclusion that the appellant was only entitled to damages, not reinstatement.

Issue 2: Interpretation of the agreement
The Court examined the agreement between the appellant and respondent 1, which outlined the terms for termination of services. While the order terminating the appellant's services was found to be unlawful for lack of proper notice, the Court emphasized that the mutual rights and obligations of the parties were governed by the contract. Therefore, even if the dismissal was wrongful, the appellant was entitled to damages as per the terms of the agreement.

Issue 3: Entitlement to a declaration of continued service and reinstatement
The appellant sought a declaration that she continued to be in service and reinstatement. The High Court ruled against this, stating that the appellant was only entitled to damages. The Supreme Court agreed, emphasizing that the appellant, being an employee of a private institution, was not entitled to a declaration of continued service or reinstatement.

Issue 4: Calculation of arrears of salary and damages
The Court addressed the calculation of arrears of salary and damages. It noted that the appellant was entitled to three years' arrears of salary due to the invalidity of the suspension and absence of a termination order until a certain date. The Court also awarded the appellant an additional sum equivalent to three months' salary as provided in the agreement.

Issue 5: Mitigation of damages
The Court considered the appellant's failure to mitigate damages by seeking alternative employment. Despite the appellant's claim amounting to a substantial sum, the Court noted her lack of effort to secure other employment opportunities. Therefore, the Court affirmed the High Court's judgment with a modification to award the appellant an additional sum equivalent to three months' salary.

In conclusion, the Supreme Court upheld the High Court's judgment, granting the appellant damages but not reinstatement, and awarded additional compensation equivalent to three months' salary.