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
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
