2016 (5) TMI 1473 - HC - Companies Law

Termination of services of petitioner working as Manager in U.P. Export Corporation Limited Maintainability of writ petition under Article 226 of Constitution of India - specific relief - Held that - The petitioner s rights is founded on a contract and once contract has already come to an end in accordance with its stipulation no writ jurisdiction under Article 226 of the Constitution would lie so as to entitle a party to the contract for continuance of contractual obligation or for reentering into contract as there is no such statutory obligation upon respondents to enter into the contract once the same has come to an end. In such cases where the contract of service is not governed by the statutory provisions it is well-settled that contract of service cannot be sought to be enforced by seeking reinstatement or continuance since such a relief is barred under the Specific Relief Act. In Executive Committee of U.P. State Warehousing Corporation Lucknow Vs. C.K. Tyagi 1969 (9) TMI 125 - SUPREME COURT OF INDIA held that position in law is that no declaration to enforce a contract of personal service will be normally granted. But there are certain well-recognized exceptions to this rule and they are To grant such a declaration in appropriate cases regarding (1) a public servant who has been dismissed from service in contravention of Article 311. (2) Reinstatement of a dismissed worker under Industrial law by Labour or Industrial Tribunals. (3). A statutory body when it has acted in breach of a mandatory obligation imposed by statute. The petitioner therefore has remedy in common law regarding damages for alleged breach of contract but relief as sought in this writ petition is not permissible.

Summary

Issues:
1. Maintainability of a writ petition under Article 226 of the Constitution of India for termination of services.

Analysis:

Issue 1: Maintainability of a writ petition under Article 226 of the Constitution of India for termination of services

The petitioner sought relief through a writ petition to quash the order terminating their services and to allow them to work as a Manager. The petitioner was terminated from their position at a company under the Companies Act, 1956. The Court examined whether a writ petition under Article 226 of the Constitution was maintainable in such a case. It was established that the petitioner's rights were based on a contract, and once the contract had ended as per its terms, the writ jurisdiction under Article 226 would not apply to enforce the continuance of contractual obligations. The Court referenced the Specific Relief Act and highlighted that seeking reinstatement or continuance of a contract of service not governed by statutory provisions was not permissible. The judgment cited precedents such as Executive Committee of U.P. State Warehousing Corporation, Lucknow Vs. C.K. Tyagi to emphasize that courts typically do not force an employer to retain an employee when the contract has ended. Exceptions to this rule were mentioned, including cases involving public servants or statutory obligations. The Court further referred to judgments like Executive Committee of Vaish Degree College, Shamli and others Vs. Lakshmi Narain and others to support the view that relief in the form of reinstatement or continuance of service was not usually granted in cases of contractual service. The petitioner was advised to seek remedies in common law for damages due to an alleged breach of contract, as the relief sought through the writ petition was deemed impermissible. Consequently, the writ petition was dismissed.

This detailed analysis of the judgment from the Allahabad High Court in 2016 provides a comprehensive understanding of the issues involved and the legal reasoning applied by the Court in determining the maintainability of a writ petition under Article 226 of the Constitution of India for termination of services.