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Specific Relief Act, 1963: Sections 14 and 41-Contract for employment-Whether enforceable against employer-Damages- Whether a ramedy for breach of personal contract. A contract of employment cannot ordinarily be enforced by or against an employer. The remedy is to sue for damages. The grant of specific performance is purely discretionary and must be refused when not warranted by the ends of justice. Such relief can be granted only on sound legal principles. In the absence of any statutory requirement, courts do not ordinarily force an employer to recruit or retain in service an employee not required by the employer. There are, of course, certain exceptions to this rule, such as in the case of a public servant dismissed from service in contravention of Article 311 of the Constitution; reinstatement of a dismissed worker under the Industrial Law; a statutory body acting in breach of statutory obligations, and the like.

PETITIONER:
NANDGANJ SIHORI SUGAR CO. LTD., RAE BARELI AND ANR.

Vs.

RESPONDENT:
BADRI NATH DIXIT AND ORS.

DATE OF JUDGMENT24/04/1991

BENCH:
THOMMEN, T.K. (J)
BENCH:
THOMMEN, T.K. (J)
SHETTY, K.J. (J)
YOGESHWAR DAYAL (J)

CITATION:
 1991 AIR 1525  1991 SCR  (2) 468
 1991 SCC  (3) 54  JT 1991 (2) 338
 1991 SCALE  (1)794


ACT:
     Specific Relief Act, 1963: Sections 14 and 41-Contract
for employment-Whether enforceable against employer-Damages-
Whether a ramedy for breach of personal contract.



HEADNOTE:
     The  first respondent instituted a suit  for  mandatory
injunction  to enforce a contract  alleged  to  have been
entered into between him and the appellant, officers of the
second respondent Corporation, for appointment to the post
of  Instrumentation Foreman in the appellants' company, and
for  consequential  reliefs. He contended that he  had been
sponsored  by  the  Chairman and Managing  Director  of the
second respondent Corporation, which was the holding company
of the appellants'company by his two letters for appointment
as an Apprentice Engineer in terms of a scheme formulated by
the  Government of  India. The appellants  and the  second
respondent denied the existence of any contract.
     The trial court dismissed the suit. However, on appeal,
the first appellate court decreed the suit and directed the
first appellant to appoint the first respondent to the post
of  Apprentice Engineer under the scheme sponsored  by the
Government  of India. This was confirmed, in appeal, by the
High Court, which held the first respondent was entitled  to
be  appointed  to the post of Instrumentation  Foreman with
effect from the date on which the former incumbent of that
post had resigned.
     In the  appeal  before this Court, on  behalf  of the
appellants  it was contended that there was no evidence  of
the contract having been entered into by the appellant with
the first respondent; nor was there any evidence of a scheme
of  the Government  of India, which  entitled him  to  be
appointed to any post in the appellants' company, and  that,
in  any view, he was not qualified for appointment  as  an
Apprentice, much less to the higher post of  Instrumentation
Foreman.
      469
     On  behalf  of the first respondent it  was  contended
that  the letters addressed by the second respondent in his
capacity  as Chairman, and Managing Director of the  holding
company,  to the appellants, the officers of the  subsidiary
company, made  it obligatory on the part of  the  latter  to
appoint him in terms of the Government of India scheme,  as
so  found  by both the first Appellate court  and  the high
Court.
     Allowing the appeal, this Court,
     HELD: 1.1 A contract of employment cannot ordinarily be
enforced  by or against an employer.  The remedy is  to sue
for  damages.  The grant of specific performance  is  purely
discretionary and must be refused when not warranted by the
ends  of justice.  Such relief can be granted only on  sound
legal principles.   In  the  absence of   any   statutory
requirement,  courts do not ordinarily force an employer  to
recruit or  retain in service an employee not required  by
the  employer. There are, of course, certain exceptions  to
this rule, such as in the case of a public servant dismissed
from  service  in  contravention  of  Article  311  of the
Constitution; reinstatement of a dismissed worker under the
Industrial  Law;  a  statutory body  acting  in  breach  of
statutory obligations, and the like. [475-E]
     B.N. Tiwari v. District Board, Agra, AIR 1964 SC  1680;
U.P.  State Warehousing Corporation v. C.K. Tyagi, [1970]  2
SCR  250  and Executive Committee of Vaish  Degree  College,
Shamli and  Ors. v. Lakshmi Narain and Ors., [1976]  2 SCR
1006, referred to.
     Indian Contract and Specific Relief Acts, by  Polock  &
 Mulla, Tenth Edn., page 983 and Halsbury's Laws of England.
Fourth Edn., Volume 44, paragraphs 405 to 420, referred to.
     1.2  In the instant case, neither from the plaint nor
from  the evidence is it possible to identify and  concluded
contract   to which the first respondent is a party or which
he  can enforce.  There is no specific plea or evidence  as
regards the particulars of the scheme of the Government  of
India  in  terms of which he seeks relief whether  it  is  a
statutory  scheme, and if so, what are the provision  relied
on by him and whether a duty is cast on the appellants and a
benefit is conferred on persons like the first respondent.
Assuming  that such a scheme existed or any  such  contract
bound the parties, it would be violative of all basic  norms
of  law  to  decree a suit for specific  performance  of  a
contract of personal service.[472E-G]
    470
     1.3  Courts  do not ordinarily enforce  performance  of
contracts  of a personal character, such as a contract  of
employment.   Subject to certain well defined categories  of
exceptions, law does not permit, and the Specific Relief Act
does  not contemplate, the enforcement of a contract  of  a
personal  nature by a decree for specific performance. The
facts of  the instant  case do  not fall  within the
exceptions. [472A, 474D]
     Rigby  v. Connol, [1880] 14 ChD 482, 487 and  Executive
Committee  of  Vaish Degree College, Shamli  and  Others  v.
Lakshmi Narain and Ors., [1976] 2 SCR 1006 at 1020, referred
to.
     Cheshire, fifoot and Furmston's Law of Contract, 11th
ed.,  p. 614 and Halsbury's Laws of England Fourth  Edition,
Volume 44, at page 407, referred to.
     1.4 Even if there was a contract in terms of which the
first respondent was entitled to seek relief, the only which
was   available in  law  was  damages and   not   specific
performance.   Breach of contract must ordinarily  sound  in
damages,  and  particularly  so in  the  case of  personal
contracts.  Assuming that a contractual relationship   arose
consequent   upon  the letters addressed  by the   second
respondent  to the first appellant, the first respondent was
a   total  stranger  to any  such  relationship,   for  no
relationship  of a fiduciary character existed between the
first respondent   and  the  second  respondent   or the
appellants.   Neither  on principles of law  or equity nor
under  any  statute  did the  first  respondent acquire  an
enforceable right by reason of the letters exchanged between
the  appellant and  second respondent, nor  did   he have
private of any kind to their relationship.   No  collateral
contract  to which he was a party did arise on the facts  of
this  case  and at no time was the second respondent  acting
as  his agent. There is no express  or  implied  contract
which is enforceable by him. [475-H, 476-B]
     In the circumstances, the decrees of the High Court and
the  first  appellate Court are set aside and  that  of the
trial court  is restored.[476D]



JUDGMENT:
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3644  of
1989.
     From  the Judgment and Order dated 10.10.1988  of the
Allahabad High Court in S.A. No. 194 of 1987.
     Yoeshwar  Prasad  and  Mrs.  Shobha  Dikshit  for the
Appellants.
  471
     B.D.  Agarwala,  Gopal  Subramaniam,  Ms. Bina  Gupta,
Arvind Verma, Ms. Monika Mohil, R.K. Srivastava and P. Misra
for the Respondents.
     The Judgment of the Court was delivered by
     THOMMEN,  J. This appeal is by defendants 1 and 2 in  a
suit for mandatory injunction. The appellants are  officers
of Nandganj Sihori Sugar Co. Ltd., Rae Bareli, of which the
third defendant, the U.P. State Sugar Corporation Ltd. (the
second respondent herein) is the holding company. The State
of  Uttar  Pradesh  (the third respondent)  is the  fourth
defendant.   The  plaintiff,  Badri Nath  Dixit (the  first
respondent), instituted the suit for mandatory injunction to
enforce a  contract  alleged  to  have been  entered into
between the plaintiff and defendants 1 & 2 for appointment
of  the plaintiff to the post of Instrumentation Foreman  in
the defendants company and for consequential reliefs. The
plaintiff  contended   that he had been sponsored  by the
Chairman  and Managing Director of the third  defendant,  by
his letters dated 18 October, 1982 and 14 December, 1982 for
appointment by defendants 1 & 2 as an Apprentice Engineer in
terms  of a scheme formulated  by the Government  of  India,
but  such  appointment was not made by defendants  1  &  2.
The   plaintiff  prayed  for an   injunction  compelling
defendants   1 &  2  to  appoint  him to  the   post  of
`Instrumentation Foreman', which post, according to him, was
at  the time of the suit lying vacant. In effect, what the
plaintiff   seeks  is  a  decree  to  compel  the   specific
performance of a contract of personal service.
     Defendants 1  to 3  filed a  joint  written  statement
denying the  allegations.   They stated that there  was  no
contract,  as  alleged, and there was no vacancy    for any
post  to which the plaintiff was qualified to be  appointed.
They   further stated  that the   plaintiff  had been
conditionally offered appointment  as  a   Fitter   Trade
Apprentice,   subject  to  his possessing   the   requisite
qualifications and his selection by the  Apprentice  Board,
Kanpur.   The plaintiff  was not  qualified  and was,
therefore,  not selected.   They  further  contended that
neither as an Apprentice nor as Instrumentation Foreman was
the  plaintiff qualified  to be appointed.   The  suit was
dismised  by  the trial court. However, on  appeal  by the
plaintifif it was decreed by the learned Additional District
Judge  who directed defendant 1 to appoint the plaintiff  to
the post of Apprentice Engineer under the s cheme  sponsored
by  the Government of India.  This  decree was confirmed  in
appeal by the High Court by the impugned judgment.  The High
Court further held
   472
that   the  plaintiff was entitled to be appointed   to the
post of Instrumentation Foreman with effect from the date on
which the former incumbent of that post had resigned.
     Counsel  for the appellants (defendants 1 & 2 )  submit
that  there  is no evidence of the alleged  contract  having
been entered into by the defendants with the plaintiff; nor
is there any evidence of a scheme of the Government of India
which entitled the plaintifif to be appointed to any post in
the defendants' company.  Counsel states that, in any  view,
the  plaintiff was  not qualified for appointment  as  an
Apprentice   and   much  less to  the  higher   post  of
Instrumentation Foreman.
     The  plaintiff's  counsel, however,  submits  that the
letters addressed by the third defendant in his capacity  as
Chairman  and  Managine Director of the holding company  to
defendants  1 & 2, the officers of the subsidiary  company,
made it obligatory on the part of the latter to appoint the
plaintiff  in terms of the Government of India scheme.  It
was  so found by the first Applleate Court   and  the High
Court. That finding is not liable to be impeached  in the
present proceeding.   He  says that  the  defendants are,
therefore,  liable to be compelled by means of a  mandatory
injunction  to honor  the offer held out  by  them  to the
plaintiff,  who is entitled to enforce the contract  founded
on such offer by seeking specific performance of it.
     We are surprised that the first Appellate Court and the
High Court should have proceeded on the assumption that any
enforceable  contract existed. Neither from the plaint nor
from  the evidence is it possible to identify and  concluded
contract  to  which the plaintiff is a party  or  which the
plaintiff can enforce. The defendants deny the existence of
any  contract  or any other relationships  which  gives the
paintiff any cause of action against the defendants.   There
is no specific plea or evidence as regards the particulars
of the alleged scheme of the Government of India in terms of
which the plaintiff seeks relief.  Whether it is a statutory
scheme, and if so what are the provisions relied on by the
plaintiff, and whether a duty is cast on the defendants and
a  benefit  conferred  on persons  like the  plaintiff,  is
neither pleaded nor spoken  to inevidence.   Assuming that
any  such  scheme  existed or any such contract  bound the
parties, to have decreed a suit for specific  performance of
a  contract of personal service on the facts alleged by the
plaintiff,  was to  violate all basic norms of law.   Courts
do  not ordinarily enforce performance of  contracts  of  a
personal character, such as a contract of  employment.  In
the words of Jessel M.R.:
     473
"The courts have  never  dreamt   of   enforcing
agreements  strictly  personal in  their   nature,
whether they are  agreements of hiring and service,
being the  common relation of master and  servant
..." [Rigby v. Connol, [1880] 14 ChD 482, 487; see
Cheshire,  Fifoot and Furmston's Law  of  Contract,
11th ed., p. 614]."
     In the joint  written statement filed by defendants  1
to  3, representing the holding and  subsidiary  companies,
the  alleged  contract has been clearly denied. We fail  to
see how the letters addressed by the Chairman of the holding
company to the officers of the subsidiary company  advising
the  appointment  of the plaintiff to a post  which  he was
found to be not qualified to hold could have resulted in any
contract  between  the defendants of the one  part  and the
plaintiff  of  the other part. Assuming  that the  letters
written by the Chairman of the holding company were  in the
nature of  a  direction  which a  subsidiary company was
compelled  to carry out, we fail to see how on the facts  of
this  case, the plaintiff, who had no privity whatever to  a
contract,  assuming there was a contract, could enforce any
right under it. In the first place, the letters sent by the
Chairman  of the holding company are merely in nature of  an
advise giving rise to no contractual relationship.  Even  if
the  advise is taken to be of the character of a  direction
which  the subsidiary company is bound to comply  with, any
obligation arising from such direction is not enforceable at
the  instance of a total stranger.  The Chairman  was in  no
sense acting as  a  trustee of  the plaintiff  and  no
relationship of a fiduciary character whatever is alleged or
proved to have existed between them.  Assuming that the then
Chairman  was personally interested in the  plaintiff, that
was not an interest which is legally enforceable against the
defendants.   Such predilection on the part of the  Chairman
of  a  holding company,  whatever be  its  impact   on the
subsidiary  company, does not give rise to  any  actionable
claim. There is  no evidence,  whatsoever, as  to the
existence of a Government scheme, apart from a reference  to
it  in the Chairman's letter. The plaintiff has  not shed
any  light  upon it.  The defendants have not  admitted any
such scheme.  Even if a scheme existed, there is no evidence
that it was enforceable at the instance of a person  seeking
its  benefit. Nor has the plaintiff  pleaded estoppel  or
adduced any evidence to support any such contention.
     In the  absence  of any specific plea or evidence  as
regards the nature and other particulars of the scheme,  it
is preposterous that the courts below should have thought it
fit   to  issue a  mandatory  injunction  to compel the
performance of the alleged contract of service in terms
474
of  or pursuant to an unknown scheme. Subject to  certain
well  defined  categories of exceptions, the  law  does not
permit, and the Specific Relief Act does  not contemplate,
the  enforcement  of a contract of a personal  nature  by  a
decree for specific performance.  The facts of this case  do
not  fall  within the exceptions.  Assuming  that  the fact
alleged by the plaintiff to be true-as stated earlier, there
is  no evidence whatever to support them-the  plaintifif  is
not entitled to any relief other than damages in the even of
his being in a position to prove that he has been damnified
by  reason  of the defendants' failure to  carry  out the
obligations arising under what he calls a  contract.
     In Halsbury's Laws of England, Fourth Edition,  Volume
44, at page  407, it is stated:
"407. Contracts for personal work or services.-  A
judgment for specific performance of a contract for
personal work or services is not pronounced, either
at the suit of the employer or the employee. The
court does  not  seek to      compel
persons  against their will to maintain  continuous
personal and confidential relations.  However, this
rule is not absolute and without exception.  It has
been  held that an employer may be restrained from
dismissing  an employee in breach of contract  if
there is no loss of confidence between employer and
employee   or if  (at least in  a  contract  of
employment to carry out a public duty) the employee
has  been  dismissed  in a manner  which  does not
comply with statutory or  contractual regulations
governing dismissal.  No court may, whether by way
of  an order of specific performance of a  contract
of  employment  or  an  injunction  restraining  a
breach or  threatened breach of such a  contract,
compel an employee to do any work or attend  at any
place for the doing of any work.
This  principle applies not merely to contracts  of
employment, but to all contracts which involve the
rendering   of continuous services by one person to
another,  such as a contract to work a  railway
line..."
(emphasis supplied)
     As stated by this Court in  Executive   committee  of
Vaish Degree College, Shamli and Others v. Lakshmi and Ors.,
[1976] 2 SCR 1006 at 1020:
   475
"....a  contract   of personal   service   cannot
ordinarily  be specifically enforced and  a  Court
normally  would  not give a  declaration  that the
contracts  subsists  and the  employee even  after
having been removed from service can be deemed  to
be  in service against the will and consent of the
employer.  This rule, however, is subject to  three
well  recognised  exceptions; (i)  where  a  public
servant  is  sought to be removed from service  in
contravention of the provisions of Art.311 of the
Constitution  of  India;  (ii) where  a  worker  is
sought to be reinstated on being  dismissed  under
the  Industrial  Law; and (iii) where a  statutory
body  acts in breach or violation of the  mandatory
provisions of the statute."
(emphasis supplied)
     A contract of employment cannot orodinarily be enforced
by  or against an  employer. The remedy  is to  sue for
damages.   (See section  14 read with section 41  of the
Specific Relief Act; see Indian Contract and Specific Relief
Acts,  by Polock & Mulla, Tenth Edn., page 983).  The  grant
of specific performance is purely discretionary and must  be
refused when  not warranted by the ends of  justice. Such
relief can be granted only on sound legal  principles.  In
the  absence  of any statutory requirement,  courts  do not
ordinarily force an employer to recruit or retain in service
an  employee  not required by the employer.  There  are,  of
course, certain exceptions to this rule, such as in the case
of a public servant dismissed from service  in contravention
of  Article  311  of the Constitution; reinstatement  of  a
dismissed worker under the Industrial Law; a statutory body
acting in  breach of statutory obligations, and  the  like.
(B.N. Tiwari v. District Board, Agra, AIR 1964 SC 1680; U.P.
State  Warehousing Corporation v. C.K. Tyagi, [1970]  2 SCR
250; Executive Committee of Vaish Degree College, Shamli and
Ors.  v.  Lakshim Narain and  Ors., [1976] 2  SCR  1006 see
Halsbury's   Laws  of  England, Fourth Edn., Volume 44,
paragraphs 405 to 420.)
     On the facts of this case, the High court was  clearly
wrong  in  issuing  a mandatory injunction  to appoint the
plaintiff.   Even if there was a contract in terms of  which
the plaintiff was entitled to seek relief,  the only  relief
which  was  available in law was damages  and  not  specific
performance.   Breach of contract must ordinarily  sound  in
damages,  and  particularly  so in  the  case of  personal
contracts.   Assuming that a contractual relationship  arose
consequent upon the letters addressed by the third defendant
to the 1st  defendant, the plaintiff was a total stranger to
any  such relationship, for, on the facts of this  case,  no
relationship  of a fiduciary character existed between the
plaintiff and
   476
the  third  defendant  or  other  defendants. Neither  on
principles  of law or equity nor under any statute  did the
plaintiff  acquire  an enforceable right by  reason  of the
letters exchanged between the first and  third defendants.
The   plaintiff had  no  privity  of  any  kind  to   their
relationship.  No collateral contract to which the plaintiff
was a party did arise on the facts of this case.  At no time
was the third defendant acting as an agent of the plaintiff.
There is no express or implied contract which is enforceable
by the plaintiff.  (See Halsbury's Laws of England.,  Fourth
Edn., Volume 9, paragraphs 334 to  342).
     The  plaintiff's  counsel suggests that  the  claim  is
justifiable  on the basis of  legitimate  expectations for
appointment.   There  is  no specific plea  or evidence  to
support any such contention.  Whatever expectations  might
have   arisen from the letters of the third defendant, they
could not have in law given rise to any right enforceable by
specific performance.
     For all these reasons we hold that the plaintiff's suit
for  mandatory injunction, on the facts of  the  case, was
rightly dismissed by the trial court and wrongly decreed  by
the first Appellate Court and the High Court.  We set  aside
the decrees of the High Court and the first Appellate  Court
and  restore that of the trial court.  The plaintiff's suit
shall accordingly   stand dismissed  and  the defendants'
appeal allowed with  costs throughout.
N.P.V.     Appeal allowed.
      477
   477



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