2000 PLP 1551(2) (CLC)

SABIHUDDIN AHMED, J.‑‑‑ This appeal is directed against the judgment of a learned Single Judge decreeing the respondent's suit for damages arising out of his (pre‑mature) retirement in the sum of Rs.1,000,

000. Briefly the admitted facts appear to be that the respondent was employed by the appellants in various capacities and was holding the office of its Joint Secretary when he was abruptly retired from service on 6‑1‑1996, whereas according to the Service Rules of the appellants retirement age was 58 years extendable by another 2 years. The respondent/plaintiff claimed that according to the Rules of Service applicable to employees of the appellant, he was to retire on 8‑1‑1998 and as a consequence of the unlawful action of the appellants he is entitled to arrears of salary for the remaining period i.e. 6‑1‑1986 to 8‑1‑1998 in the sum of Rs.982,001.41 together with costs. The appellants/defendants in their written statement raised certain legal objections as to the maintainability of the suit and stressed that the retirement of the respondent was brought about due to gross irregularities and deliberate mismanagements against the interest of appellant Federation on the occasion of Pakistan National Trade Fair concluded on 5‑1‑1986. Moreover, it was contended that though the respondent had rendered himself liable for termination of service on account of irregularities, he was retired at his own request in good faith and had in fact received an amount of Rs.92,385 in full and final settlement of all his claims against the appellants. As such the respondent was estopped from claiming the amount stated in the plaint. It was further averred that the Managing Committee of the appellants could always under any special circumstances deal with any service matter of an employee and Rule 15 of the Service Rules prescribing age of retirement at 58 years was not attracted.

2. Upon the pleadings of the parties the following issues were settled by the Court:‑‑ (1) Whether the instant suit is maintainable in law? (2) Whether the plaintiff has any cause of action against the defendants, after receipt of fully and finally settled amount of service dues from the defendants? (3) Whether the defendants have discretionary powers in dealing with any service matter of their employee under any special circumstances? (4) Whether the plaintiff has fully and finally settled and received all his service dues form the defendants against receipt, dated 8‑2‑1986? (5) Whether the receipt, dated 8‑2‑1986 is being tempered after its execution? (6) Whether the plaintiff is entitled to any relief? (7) What should the decree be? .

3. The parties filed affidavits‑in‑evidence and annexed document in support of their respective contentions and the deponents were duly cross- examined. After taking the evidence and the arguments submitted into consideration, the learned Single Judge decided issues Nos. l, 2 and 6 in the affirmative and issues Nos.3, 4 and 5 in the negative. The suit, however. was decreed in the sum of Rs.10.00,000 with costs.

4. The appellants have called, in question the judgment and decree of the learned Single Judge on various grounds: However, when the matter came up for arguments before us we are informed that notes of written arguments had already been filed on behalf of both parties and we were requested to decide the appeal on the basis thereof. Accordingly it would be appropriate to mention the question raised by Mr. Saeed A. Shaikh learned counsel for the appellants in his three paged written submissions on behalf of the appellants:‑‑ "(i) The defendants (appellants) vide their letter, dated 6‑1‑1986 had retired the plaintiff (respondent) from service and the latter had received. the amount payable to him. Only about 10 months thereafter the respondent caused a legal notice to be served upon the appellants required them either to withdraw the letter of retirement or pay all benefits of salary, bonus, leave encashment, gratuity etc. upto 1998 and subsequently filed the suit for recovery of such amount. . (ii) That only an amount of Rs.127,385.38 was payable to the respondent which included six months pay in lieu of notice in terms of Rule 10 of the Service Rules. As against the above he was admittedly liable to pay a sum of Rs.35,000 to the appellants by way of a price of a car that was sold to him and the remaining amount of Rs.92,385 was admittedly received by him through a cheque, dated 8‑2‑1986 in full and final settlement of his dues. (iii) The aforesaid amount was received by the respondent upon executing a duly typed receipt (Exh.l/C), without objection and a good conduct certificate (Exh.l/D), dated 10‑2‑1986 was also issued to him. Interpolation of the expression 'under protest' in the receipt was a result of subsequent manipulation. (iv) That the respondent had committed gross irregularities causing damage to the interest and reputation of the appellants and action was decided to be taken against him for misconduct. Accordingly, in a meeting of the Managing Committee held on 5‑1‑1986 it was decided to retire him from service and the letter, dated 6‑1‑1986 was issued accordingly. (v) That the amount claimed by the respondent in terms of the statement filed (Exh.l/J) is irrecoverable."

5. The main question, premised on the payment of Rs.92,385 had to be examined both from a factual and purely legal perspective. As regards the factual aspect, it is established in evidence that the receipt executed by the respondent while accepting the cheque for the aforesaid amount clearly mentions that it has been accepted "under protest". Indeed it was alleged that these words "under protest" were the result of some subsequent manipulation on the part of the respondent with the staff of the appellants. most of whom had been his erstwhile colleagues. It may be pertinent to observe that no credible evidence has been led to support the appellants contentions. Aran from the respondent's own statement on oath re‑confirtned in his cross examination his witness Waheed‑u‑Zaman who was the Deputy Chief Accountant of the appellant at the relevant time has clearly deposed that the respondent added the words "under protest" in the typed manuscript delivered to him in his own hand writing in the presence of the aforesaid Waheed‑u‑Zaman. On the other hand the only witness produced by the appellants Anwarul‑Haq has clearly admitted in cross‑examination that he was not present when the document in question was executed. Therefore, there is no evidence to support the appellants contention that the words "under protest" were added only subsequently.

6. As regards the assumption that the appellants would not have given a good conduct certificate if the respondent had recorded his protest while accepting payment, no evidence to the said effect was led at the trial. On the contrary such factual plea was not even taken in the written statement which was signed by the then Secretary General Mr. Aziz Siddiqui who, had himself issued the good conduct certificate. Moreover, by indicating that the appellants would have withheld issuance of a good conduct certificate which the respondent might have needed, the appellants are only attempting to show that the waiver of the respondent's claim was anything but voluntarily and he was made to give up his claim under coercion. We cannot help observing that by raising such contentions they are only trying to discredit their own certificates.

7. Moreover, from the legal stand point it may be pertinent to refer to the judgement of the Honourable Supreme Court in General Manager National Radio Telecommunication v. Muhammad Aslam and others 1992 SCMR 2169 wherein it has been held that mere acceptance of legal dues on A. the part of an employee would not amount to waiver so as to estop him from challenging the order of dismissal. We are, therefore, of the view that the findings of the learned Single Judge on this part of the controversy are entirely unexceptional.

8. As regards the justification for the pre‑mature retirement of the respondent, we regret to observe that the position taken up by the appellants appear to be inconsistent: Though it has been repeatedly alleged that such retirement was premised on misconduct of the respondent arising from gross irregularities in the International Trade Fair, it has been completely over looked that the rules of service of the appellants contained two separate and distinct provisions relating to normal retirement and pre‑mature termination of Service Rule 15 stipulates that notwithstanding anything contained in the Rules, the Federation may at its absolute discretion retire any employee from his service on the completion of 58 years of age but the President may for reason recorded in writing extend the service period provided that no employee shall be retained in service beyond the age of 60 years. On the other hand Rule 10 deals with termination, of services of an employee and contains elaborate provisions relating to grounds of termination and the procedure to be adopted. It may be appropriate to reproduce the relevant part of Rule

1. Service of the Employee can be terminated due to the following causes (1) When the employee is found guilty of misconduct. (2) When he is guilty of an offence involving moral turpitude. (3) By way of retrenchment keeping in view the principle of first come last go. (4) When an employee is found to be of unsound mind. (5) When services of an employee are terminated for the purpose of retrenchment, notice or pay in lieu of the notice will be given as under:‑ (a) In case of an employee who has served for five years or less one month's notice or pay in lieu of the notice. (b) In case of an employee who has served for more than five years but less than 10 years, two months notice or pay in lieu of the notice. (c) In case‑ of an employee who has served for more than 10 years but less than 15 years, three months notice or pay in lieu of the notice. (d) In case of an employee who has served for more than 15 years, six months notice or pay in lieu thereof. In case when the services of the employee are terminated under sub clauses (1) and (2), he shall be charge‑sheeted and after his explanation in writing is received a regular enquiry shall be held and if found guilty then he will be supplied with the enquiry proceedings alongwith the enquiry reports. He will be given a second show cause notice to show cause why the punishment proposed by the Enquiry Officer should not be inflicted upon him. He shall also be provided a chance of personal hearing and if the competent Authority is of the view that the accused has been proved to be guilty of misconduct then a written order of dismissal, showing explicit reason, shall be issued."

9. It is evident from the above that in the event of misconduct or his being involved in an offence involving moral turpitude he could even be dismissed from service but such action could only be taken after holding an appropriate enquiry and giving him a chance of personal hearing. Though it B has been persistently claimed that he was found to have committed several irregularities not a single instance of any irregularity has been mentioned either in the pleadings or in the evidence. Even the minutes of the special committee meeting, dated 6‑1‑1986 brought on record do not mention any particular irregularity. It is also interesting to mention that though it is pleaded that the respondent was given notice‑pay in terms of Rule 10(5)(d) (though strictly speaking it was payable only in the event of termination on grounds of retrenchment). The safeguards available to employee under Rule 10 were grossly violated. In Muhammad Siddique Jawaid, v. Government of West Pakistan PLD 1974 SC 393, the Honourable Supreme Court has held that even in cases where the Government is authorised to dispense with the services of its employees without notice, such notice ought to be given when allegations of misconduct or corruption formed the basis of termination of services. Under these circumstances it must be held that the. respondent premature retirement without such notice was illegal and the findings of the learned Single Judge must be upheld.

10. It may now be pertinent to come to the question of quantum of compensation. Unfortunately, we have not received mach assistance from the parties either in the form of written arguments or in the form of material produced at the trial. The respondent claimed had he continued to remain in service till the age of 58 years he would have received an amount of Rs.982,001.41 and prayed .for a decree against the defendants in the aforesaid sum or higher or lesser sum deemed fit and proper by the Court. In the cause title of the plaint, however, a figure of Rs.10,00,000 was shown. The appellants on the other hand did not dispute the basis on which the aforesaid amount had been worked out: The learned Single Judge decreed the suit for Rs.10,00,000:

11. Notwithstanding the above we are of the humble opinion that a C Court cannot pass a decree directing payment of an amount which a party) may not be entitled to under the law. From the facts and circumstances of the case it seems quite clear that the respondent was under the contract o employment embodies in the service regulations entitled to continue in the employment of the appellants up to the age of 58 years in terms of Rule 15 subject to the appellants right to effect premature termination in accordance E with Rule

10. However, since the safeguards provided in Rule 10 were never given effect to his pre‑mature retirement was obviously illegal. In the circumstances we are inclined to hold that following rule laid down by the Supreme Court of India in S.S Shetty v. Bharat Nidhi Ltd. AIR 1958 SC 12 would be attracted:‑‑ "If the contract of employment is for a specific term, the servant would in that event be entitled to damages the amount of which would be measured prima facie and subject to the rule of mitigation in the salary of which the master had deprived him (Vide Collier v. Sunday Referee Publishing Co. Ltd., 1940 ‑ 4 All. ER 234 at p.237(A). The servant would then be entitled to the whole of the salary, benefits etc., which he would have earned had he continued in the employ of the master for the full terms of the contract, subject of course to mitigation of damages by way of seeking alternative employment." (underlining ours).

12. Surprisingly, however, the question of the respondent's obligation to mitigate his damages was not only raised in the written statement, but even in his cross‑examination which took place more than 6 years after the termination of his services, it was not even suggested to him whether he had obtained any alternate employment and if so on what terms. Moreover, no evidence to the aforesaid effect was led by the appellants.

13. In the circumstances, it is not possible to make any deductions from the respondent's claim on the ground of obligation to mitigate damages. At the same time the plaintiff cannot claim anything more than what he would receive for the full term of contract: In such eventuality he would have retired on attaining the age of 58 years and no question of any notice pay could have arisen. It has been brought on record that an amount of Rs.152,885.38 was considered payable to the respondent by the appellants and after adjusting the loan of Rs.25,500 and the price of the car in his possession assessed to be Rs.35,000 an amount of Rs.92,385 was paid to him. This included Rs.24,097.50 towards notice pay. After deducting this amount his claim would work out to Rs.957,003.50. We would modify the decree accordingly.

14. For the foregoing reasons and subject to the above modification the appeal is dismissed and the respondent's suit is decreed in the sum off Rs.957,003.50 with costs. Q.M.H./M.A.K./F‑6/K Appeal dismissed.