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TMI Blog1971 (2) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... he remuneration fixed was ₹ 750/- per month with effect from January, 1958 and of annual increment of ₹ 10/- and dearness allowance of ₹ 180/-per month unless otherwise determined by the Board, It may be mentioned here that the plaintiff is a relative of the Defendant No, 2, the Managing Director of the Company and accordingly shareholders approval was considered necessary in view of Section 314 of the Companies Act, 1956. By another resolution dated April 24. 1963 passed by the Board of Directors of the Company, the post of Supervisor was abolished with effect from May 1, 1963 and the plaintiff was appointed Store-in-Charge on the same pay and allowances. While he was engaged in the said office, a notice was issued on July 5, 1963 by the Board for a proposed extra ordinary general meeting of the company to be held on July 29, 1963 to consider and if thought fit to pass the resolution appended thereto, with or without modification, as a special resolution, also in view of Section 314 of the Act. In the said proposed resolution it was stated that the plaintiff was to be appointed a Store-in-Charge with effect from May 1, 1963 at a basic salary of ₹ 810/- per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral meeting of the shareholders on July 29, 1963 was bad, invalid and of no binding effect. Accordingly, the plaintiff was still in the employment of the company in the post of a Store-in-Charge and not as Supervisor as claimed and was entitled to the monthly salary and allowances from July, 1963 till the date of the filing of suit on September 30, 1963 which was determined at ₹ 1,168/-, as he was prevented by the defendants from doing the work of the company though the plaintiff had been willing to do his work in his service under the company. The claim for damages was rejected as not pressed. The defendants and their servants were restrained by injunction from interfering with the plaintiff's service in the said post until his service was determined according to law. 5. An appeal was preferred by the defendants and the appellate court also affirmed the judgment and decree of the trial court and dismissed the appeal. The present appeal is against the said decision. 6. Before we proceed to consider the merits of the appeal, it will be proper for an adjudication of the issues involved in the case, to have a clear idea about the resolution and letter impugned in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri Sanatan Daw, the Managing Director of the company, holding and continuing to hold his present office as Store-in-Charge of the company with effect from 1-5-1963 ...... . Explanatory Notes. Sri Chunilal Daw was appointed as Manager from 1-1-1951 in the eighteenth ordinary general meeting held on 28-9-1951. Consent was given in the extra ordinary general meeting held on 11-4-1956. His designation from Manager to supervisor was changed in the extra ordinary general meeting held on 25-12-1957. His post of Supervisor was abolished from 1-5-1963 and he was appointed as store-in-charge from 1-5-1963 in the Directors' meeting held on 24-4-1963. Sri Chunilal Daw being a brother of the Managing Director, Sri Sana-tan Daw, the above said resolution requires the consent of the company to be accorded by a Special Resolution. Hence the proper resolution is sought to be passed as a Special Resolution of the company. Asansol. Dated the 5th July 1963. By order of the Board, Ex. 1/f For the Asansol Electric Supply Co. Ltd., Sd/- Sanatan Daw, Managing Director. 9. The minutes of the proceeding of the extra ordinary general meeting held on 29-7-1963 are to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will not compel a man to continue to employ another man in service of a personal nature nor compel one to serve another. In support he also referred to Section 21(b) of the Specific Relief Act, 1877 (Section 14(1)(b) of the Specific Relief Act, 1963). Mr. Banerjee further contended that a suit which prays for a declaration that the plaintiff is still in the service of the defendant employer is also not contemplated under Section 42 (new 34) of the Act. In short Mr. Banerjee's contention is that assuming the impugned resolution or letter terminating the service is bad in law, it is none-the-less a wrongful termination of service and the court under general law cannot direct the reinstatement nor make a declaration that the plaintiff continues to be in service of the company. 12. Mr. Mrigendra Mohan Sen, assisted by Shri Provat Kumar Mukherjee the learned counsel for the plaintiff respondent contended that the suit was maintainable as a suit for declaration that the impugned resolution was bad, invalid, ultra vires and inoperative and if it is found to be so, his client would be entitled to ancillary reliefs which flow from such declaration. The plaintiffs case is not one of w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the statutory scheme set up under the Dock Workers Regulation of Employment Order, 1947 had no power to dele-Rate its functions to the disciplinary committee and that the order of dismissal accordingly was a nullity. It was held in such a case that the plaintiff was entitled to a declaration that his name was never validly removed from the register as he would otherwise be disabled to work as dock worker and he continued to be an employee of the National Board. It was observed by Viscount Kilmuir, L. C., as follows:-- This is an entirely different situation from the ordinary master and servant case. There, if the master wrongfully dismisses the servant, either summarily or by giving any insufficient notice, the employment is effectively terminated, albeit in breach of contract. Here, the removal of the plaintiff's name from the register being, in law, a nullity he continued to have the right to be treated as registered dock worker with all benefits which, by statute, that status conferred on him. It is, therefore, right that, with the background of this scheme, the court should declare his rights. It was also observed by Lord Keith of Avonholm that: Normally, and apa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted termination of a contract of service a declaration to the effect that the contract of service still subsists will rarely be made. This is a consequence of the general principle of law that the courts will not grant specific performance of contracts of service. Special circumstances will be required before such a declaration is made and its making will be normally in the discretion of the court. In that case it was found that there was no circumstance which made it just or proper to make such a declaration. 18. In Vidyadaya University of Ceylon v. Silva (1964) 3 All ER 865 it was held by the Privy Council again that although the University was established and regulated by statute, that did not involve that contracts of employment made with teachers and subject to Section 18 (e) other than ordinary contracts between master and servant. In this case the respondent was not shown to have any other status than that of a servant and procedure by certiorari was not available where a master summarily terminated a servant's employment. 19. In the case of the Executive Committee of the U.P. State Warehousing Corporation v. Chandrakiron Tyagi (1970)ILLJ32SC after a review of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also an injunction restraining the defendants from interfering with the management of the plaintiff company by its Managing Agents. The decision of this Court on this issue was affirmed on appeal by the Privy Council in Ram Kissendas v. Satya Charan Law and it was observed that the decree merely prevented dismissal or termination of the appointment of the Managing Agents and had not the effect of enforcing a contract of personal service. 22. Mr. Banerjee sought to distinguish this case pointing out that the said suit was by and on behalf of the shareholders of the plaintiff company while the managing agents were not even a party to the proceeding. He further contended that the present suit was not by and on behalf of the shareholders of the defendant company and an employee should not be granted a declaration prayed for as he for himself alone is not competent to challenge the legality or otherwise of the impugned resolution. 23. The contention need not detain us long; under Section 9 of the Code of Civil Procedure person who has a cause of action against another would be entitled to institute a suit for such reliefs as he may have against the offending party unless its c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed is maintainable in law and the plaintiff would be entitled to the reliefs if he succeeds in establishing that the impugned resolution is ultra vires and void for non-compliance of the mandatory provisions of the statute. 25. Mr. Banerjee strongly relied on the decision of the Supreme Court in Warehousing Corporation case, (1970)ILLJ32SC and next contended that obviously the plaintiff had no statutory status nor there was any statutory obligation to be observed by the company in terminating the service of the plaintiff. The plaintiff accordingly could not seek for any declaration that he continued in service and his only remedy, if any, was for damages for the alleged wrongful termination and nothing beyond. He referred to Article 992 of Halsbury's Laws of England, Third Edition, Volume 25, wherein it is laid down that the remedy of a wrongfully dismissed servant is either to treat the contract as repudiated by the master and sue for damages or he may acquiesce in the master's wrongful act, treat the contract as rescinded in which case he may sue as upon a quantum meruit for the value of work done but not paid but he cannot pursue both. 26. It appears that the lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in breach of a mandatory obligation imposed by a statute. The same view was taken by the Privy Council in the case of the High Commr. for India and Pakistan v. I.M. Lall AIR 1948-PC 121 in which the procedure in Section 240(3) of the Government of India Act, 1935 had not been followed and the Court granted the declaration that the purported dismissal of the Civil Servant was void and inoperative and he remained a member of the Civil Service at the date of institution of the suit for such non-observance of the mandatory provisions of the statute. 28. Mr. Banerjee has also contended that a termination of service may also take place by preventing the employee from discharging his duties under the service. Reliance was placed on Batt's Law of Master and Servant (5th Edition page 270) in which doctrine of repudiation is also extended to cases when a master refuses to allow the servant to fulfil his contract of service and it was observed that a dismissal may be effected by such conduct. Similar view was taken in re: Rubel Bronze Metal Co. Ltd. 1918-1 KB 315 (321) which was cited in support. According to the plaint the allegations are that the plaintiff was forcibly prevented ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Chunnilal Daw was to be appointed a store-in-charge from May 1, 1963 and that he ceased to hold and to continue to hold his present office as store-in-charge of the company with effect from May 1, 1963 was never notified to the shareholders. Accordingly for default in compliance with the mandatory provisions of Section 172 of the Act the said resolution cannot but be held as invalid and void. It may be noted that resolutions which were notified to the shareholders were not moved at all and it has not been and cannot be argued that the impugned resolutions were amendments to the resolutions notified as indeed they are not so nor claimed as such. 32. Mr. Banerjee has drawn my attention to a decision of the Court of Appeal in re: Trench Tubeless Tyre Co. 1900 1 Ch. 408. In this case a resolution for voluntary winding up of the company by special resolution was legally passed. The notice of the confirmatory meeting included the appointment of a named person as liquidator; at the meeting the resolution for the appointment of the named liquidator was dropped and another person was appointed liquidator without further notice. This appointment was objected to by some debenture-hol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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