Delhi High Court
Mr Gaurav Rajgaria vs Maruti Suzuki India Limited (Msil) & Ors on 2 July, 2025
Author: Purushaindra Kumar Kaurav
Bench: Purushaindra Kumar Kaurav
* IN THE HIGH COURT OF DELHI AT NEW DELHI
BEFORE
HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV
+ CS(OS) 208/2024, I.A. 39720/2024, I.A. 39722/2024, I.A.
48920/2024 & I.A. 6123/2025
MR. GAURAV RAJGARIA
S/O SH. PAWAN KUMAR RAJGARIA,
R/O HOUSE NO. 7, H3,
GROUND FLOOR, VATIKA INDIA NEXT,
SECTOR 82, GURUGRAM,
HARYANA- 122004 ....PLAINTIFF
(Through: Ms. Madhura M. N., Mr. Abhishek Tongar and Ms. Vanshika
Mittal, Advs.)
Versus
MARUTI SUZUKI INDIA LIMITED
THROUGH ITS MANAGING DIRECTOR& CEO,
HAVING ITS REGD. OFFICE AT:
1, NELSON MANDELA ROAD, VASANT KUNJ,
NEW DELHI - 110070
....DEFENDANT NO.1
MR. RAJESH UPPAL
MEB (HR, SAFETY, IT& DE)
MARUTI SUZUKI INDIA LIMITED,
PAIAM GURGAON ROAD, UDYOG VIHAR
GURUGRAM, HARYANA - 122015
MOBILE NO. 9873187725
....DEFENDANT NO.2
MR. AJAY SETH
CFO,
MARUTI SUZUKI INDIA LIMITED,
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PALAM GURGAON ROAD, UDYOG VIHAR
GURUGRAM, HARYANA - 122015
MOBILE NO. 9811668454
....DEFENDANT NO.3
MS. MANJAREE CHOWDHARY
SR. EO (LEGAL),
MARUTI SUZUKI INDIA LIMITED,
1, NELSON MANDELA ROAD, VASANT KUNJ,
NEW DELHI - 110070
MOBILE NO. 9632015489
....DEFENDANT NO.4
MR. SALIL LAL BIHARI
EXECUTIVE VICE PRESIDENT (HR)/SR DVM (PIR),
MARUTI SUZUKI INDIA LIMITED,
PALAM GURGAON ROAD, UDYOG VIHAR
GURUGRAM, HARYANA - 122015
MOBILE NO. 9711809503
....DEFENDANT NO.5
(Through: Mr. Sanjeev Sindhwani, Sr. Adv. with Mr. Siddharth Nath, Mr.
Asjad Hussain, Mr. Gaurav Sindhwani and Mr. Anunay Chawdhary, Advs.
for D-1.
Mr. Suden Singh Juneja, Adv. for D-2 to 5.)
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% Reserved on: 07.05.2025
Pronounced on: 02.07.2025
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JUDGMENT
I.A. 38359/2024 (Under Order VII Rule 11 of CPC, filed on behalf of
defendant no.1/applicant No.1 for rejection of plaint) in CS(OS) 208/2024
1. The present application has been filed by defendant no.1/applicant
under Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereinafter
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referred to as “CPC“), seeking rejection of the plaint on the grounds that the
plaint does not disclose a cause of action and that the suit is barred by law.
The application relies on the „contractual nature‟ of the relationship between
the parties and the express „termination clause‟ contained in the appointment
letter dated 06.02.2006, which is stated to have governed the plaintiff/non-
applicant‟s employment with the defendant no.1/applicant company,
i.e.,Maruti Suzuki India Limited.
Factual Background
2. The facts of the present case would evince that the plaintiff/non-
applicant, who was employed in a „managerial capacity‟ with defendant
no.1/applicant, has instituted the present civil suit alleging that his
termination from service, effected through the termination letter dated
13.02.2023, was unlawful. Consequently, he seeks a declaration to that
effect, along with a prayer for reinstatement to service and compensation
amounting to a sum of Rs.2,00,00,000/- on account of loss of income,
harassment, and undue hardship purportedly resulting from the said
termination.
3. It remains undisputed that the employment of the plaintiff/non-
applicant was governed by the terms of the appointment letter dated
06.02.2006,which unequivocally permits either party to terminate the
contract upon giving three months‟ prior notice or by payment in lieu
thereof. Notably, the plaintiff/non-applicant himself places reliance on the
said document and does not dispute having received his contractual dues
pursuant to the said termination. In view of this admitted „contractual
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framework‟, defendant no.1/applicant contends that no triable cause of
action arises from the plaint and that the reliefs sought therein are ex facie
barred by law.
4. It is in this backdrop that the defendant no.1/applicant has moved the
present application under Order VII Rule 11 CPC, seeking rejection of the
plaint in limine.
Submissions
5. Mr. Sanjeev Sindhwani, learned senior counsel appearing on behalf of
defendant no.1/applicant has submitted as follows:
5.1 As a preliminary submission, learned senior counsel for defendant
no.1/applicant submitted that the present suit is liable to be rejected under
Order VII Rule 11(a) and (d) CPC, as it discloses no cause of action as well
as is barred by law. It was further contended that the relationship between
the plaintiff/non-applicant and defendant no.1/applicant is purely contractual
in nature, governed exclusively by the terms of the appointment letter dated
06.02.2006, which permits termination by either party upon giving three
months‟ notice or salary in lieu thereof. The plaintiff/non-applicant has
neither pleaded any breach of these terms by the defendant no.1/applicant
nor denied having received his contractual dues. Therefore, in the absence of
any actionable breach, it was submitted that the plaint is fundamentally
devoid of any cause of action and, accordingly, deserves to be rejected at the
threshold.
5.2 Learned senior counsel further contended that, although not necessary
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in light of the „contractual termination clause‟, the termination in the present
case was occasioned by repeated breaches of the employment contract and
the Employee Governing Policy by the plaintiff/non-applicant. It was
submitted that the plaintiff/non-applicant was afforded due opportunity to
respond to and defend against the allegations levelled against him. However,
after due consideration, defendant no.1/applicant concluded that termination
was the appropriate course of action. It was emphasised that, even de hors
such violations, the defendant No.1/applicant was legally entitled to
terminate the employment, as the contract in question permits „termination
simpliciter‟ without assigning cause, upon compliance with the prescribed
notice requirements.
5.3 Proceeding further, he submitted that the reliefs sought by the
plaintiff/non-applicant, including a declaration of illegal termination, and
reinstatement to service are ex facie barred under Section 14(d) of the
Specific Relief Act, 1963 (hereinafter referred to as “SRA, 1963”).
According to him, the plaintiff/non-applicant seeks specific performance of
a „determinable contract‟ and a „contract of personal service‟, both of which
are statutorily prohibited.
5.4 In addition, it was submitted that the plaintiff/non-applicant‟s claim
for a decree of Rs. 2 Crores is not only excessive and unsubstantiated, but
also contrary to the terms of the appointment letter, which limits the
defendant no.1/applicant‟s liability to three months‟ notice pay. It was his
submission that even in the event of alleged „wrongful termination‟, no
claim exceeding the contractual entitlement can be sustained in law.
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5.5 Mr. Sindhwani submitted that the plaintiff/non-applicant‟s claim for
distress and emotional hardship, as articulated under prayer (ii) of the plaint,
is barred by limitation under Article 79 of Part VII of the Schedule to the
Limitation Act, 1963 (hereinafter referred to as “Limitation Act“). As per
the averments made in the plaint, the alleged distress commenced in
December 2022, with the initiation of the inquiry, and continued until
13.02.2023, i.e., the date on which the plaintiff/non-applicant‟s services
were formally terminated by defendant no.1/applicant. It was, therefore,
contended that the institution of the present suit on 07.03.2024 is patently
beyond the prescribed limitation period of one year. Accordingly, he
submitted that the suit is not only devoid of merit but also constitutes an
abuse of the process of law, ostensibly intended to exert undue pressure
upon defendant no.1/applicant.
5.6 To bolster his submissions, learned senior counsel placed reliance on
the decisions rendered by the Supreme Court in the cases of Pearlite Liners
(P) Ltd. v. Manorama Sirsi1, J. Tiwari v. Jwala Devi Vidya Mandir2, Army
Welfare Education Society v. Sunil Kumar Sharma3and S.S. Shetty v.
Bharat Nidhi Ltd.4,and by this Court inPawan Kumar Dalmia v. HCL
Infosystems Ltd.5,Satya Narain Garg v. DCM Ltd.6and Naresh Kumar v.
Hiroshi Maniwas7.
6. Per contra, while vehemently opposing the aforesaid submission, Ms.
1
(2004) 3 SCC 172
2
(1979) 4 SCC 160
3
2024 SCC OnLine SC 1683
4
1957 SCC OnLine SC 29
5
2012 SCC OnLine Del 1508
6
2011 SCC OnLine Del 5205
7
2015 SCC OnLine Del 13315.
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Avshreya Pratap Singh Rudy, learned counsel for the plaintiff/non-applicant,
advanced the following arguments:
6.1 She submitted that the application filed by defendant no.1/applicant
under Order VII Rule 11 CPC is wholly misconceived and devoid of merit.
According to her, the plaint clearly discloses a valid cause of action, arising
from a sequence of events that culminated in the alleged illegal and arbitrary
termination of the plaintiff/non-applicant‟s employment, in contravention of
the principles of „natural justice‟. Learned counsel specifically referred to
paragraph no. 49 of the plaint, which delineates the chronology of events,
including the issuance of the suspension order, the chargesheet, the
termination letter, subsequent correspondence, and the legal notice dated
26.12.2023.
6.2 She underscored that the plaintiff/non-applicant has rendered over 18
years of unblemished service with defendant no.1/applicant, during which he
received multiple fast-track promotions on merit, reflecting his professional
competence and sustained dedication. It was contended that the termination
in question was not a „simpliciter disengagement‟ in accordance with the
terms of appointment, but a „punitive measure‟ undertaken pursuant to
disciplinary proceedings allegedly vitiated by procedural infirmities.
6.3 It was also her submission that no genuine or reasonable opportunity
was afforded to the plaintiff/non-applicant to respond prior to the issuance of
the chargesheet and the termination letter. As per Ms. Rudy, the abrupt and
summary manner in which the plaintiff/non-applicant, who had served with
defendant no.1/applicant since the inception of his career, was terminated
further exemplifies the arbitrary character of the impugned action.
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6.4 Elaborating on her submission, learned counsel further submits that
the plaintiff/non-applicant‟s claim for compensation and damages on
account of mental harassment and loss of reputation is not barred under
Article 79 of Part VII of the Schedule to the Limitation Act, as alleged by
the defendant no.1/applicant. She contended that the said claim squarely
falls within the ambit of Articles 58 and 113 of the Schedule to the
Limitation Act, both of which prescribe a limitation period of three years. It
was further argued that the issue of limitation, in the facts of the present
case, raises mixed questions of law and fact, which cannot be conclusively
determined at the threshold stage under Order VII Rule 11 CPC, and should
instead be adjudicated upon after the parties have led the evidence.
6.5 It was further submitted that the application proceeds on a selective
reading of the plaint, overlooking the broader factual matrix and legal
context, which collectively disclose substantial and triable issues. She then
invited the attention of the Court to the alleged well-settled proposition of
law that a plaint cannot be rejected solely on the ground that some reliefs
sought therein may not ultimately be granted. As per her understanding, the
suit, as framed, raises serious questions, necessitating adjudication upon a
full-fledged trial and cannot, therefore, be dismissed at the threshold under
Order VII Rule 11 CPC.
6.6 She placed reliance on Hema Gusain v. India International Centre8,
to buttress her submission that a cause of action arising from the forced
resignation of the plaintiff/non-applicant, amounting to illegal termination
and a corresponding claim for compensation in respect thereof, cannot be
8
2022 SCC OnLine Del 1972
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decided at the stage of Order VII Rule 11 CPC, as it necessitates the
production of evidence.
Issues
7. Having heard the rival submissions advanced by the learned counsel
for the parties and upon perusal of the record, it comes to the fore that the
present dispute requires consideration of four key issues. The first is whether
the plaint filed by the plaintiff/non-applicant is maintainable or barred by
law. This question is closely linked to the second issue–whether the
„employment contract‟ between the plaintiff/non-applicant and defendant
no.1/applicant is of a „determinable nature‟ within the meaning of Section
14(d) of the SRA, 1963,which bars specific performance of such contracts.
The third issue, linked to the admitted fact that the employment was
contractual and governed by the terms of the appointment letter containing
an „express termination clause‟, is whether the relief of reinstatement can be
granted or whether the plaint is liable to be rejected under Order VII Rule 11
CPC. The final issue, which is in a way dependent upon the aforesaid issues,
is whether the termination of the plaintiff/non-applicant from service was
unlawful and, as a sequitur, whether the claim for compensation of
Rs.2,00,00,000/- on grounds of loss of income, harassment, and undue
hardship is legally sustainable.
Analysis
8. Since at the stage of deciding an application under Order VII Rule 11
CPC, the Court is required to examine only the averments made in the
plaint, therefore, it is important to briefly discuss the scope of Order VII
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Rule 11 CPC before adverting to the factual matrix. Undeniably, the scope
of such an application is limited solely to determining whether, on the basis
of the plaint as it stands, a cause of action is disclosed or if the suit is barred
by any law. No reference can be made to the written statement or any
defence raised, as the assessment must be confined strictly to the pleadings
of the plaintiff/non-applicant.
9. For the sake of clarity, Order VII Rule 11 CPC, which enumerates the
grounds for rejection of a plaint, is extracted as under:
“11. Rejection of plaint. – The plaint shall be rejected in the following
cases-
(a) where it does not disclose a cause of action;
(b) where the relief claimed is undervalued, and the plaintiff, on being
required by the Court to correct the valuation within a time to be fixed by
the Court, fails to do so;
(c) where the relief claimed is properly valued, but the plaint is written
upon paper insufficiently stamped, and the plaintiff, on being required by
the Court to supply the requisite stamp-paper within a time to be fixed by
the Court, fails to do so;
(d) where the suit appears from the statement in the plaint to be barred
by any law:
(e) where it is not filed in duplicate;
(f) where the plaintiff fails to comply with the provision of rule 9: Page
15 of 49Provided that the time fixed by the Court for the correction of the
valuation or supplying of the requisite stamp-paper shall not be extended
unless the Court, for reasons to be recorded, is satisfied that the plaintiff
was prevented by any cause of an exceptional nature for correcting the
valuation or supplying the requisite stamp-paper, as the case may be,
within the time fixed by the Court and that refusal to extend such time
would cause grave injustice to the plaintiff.”
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10. This Court, while discussing the real objective of Order VII Rule 11
CPC in the case of Meena Vohra v. Master Hosts (P) Ltd.9,has held as
under:
“11. The real object of Order VII Rule 11 CPC is to keep out
irresponsible lawsuits from the Courts and it provides for an independent
remedy for the defendant no.1/applicant to challenge the maintainability
of the suit itself, irrespective of his right to contest the same on merits.
The Supreme Court in Sopan Sukhdeo Sable v. Asstt. Charity Commr.9,
held as under:
“17. .. The real object of Order 7 Rule 11 of the Code is to keep
out of Courts irresponsible law suits. Therefore, Order 10 of the
Code is a tool in the hands of the Courts by resorting to which
and by a searching examination of the party, in case the Court is
prima facie of the view that the suit is an abuse of the process of
the Court, in the sense that it is a bogus and irresponsible
litigation, the jurisdiction under Order 7 Rule 11 of the Code can
be exercised.
***
20….Rule 11 of Order 7 lays down an independent remedy made
available to the defendant no.1/applicant to challenge the
maintainability of the suit itself, irrespective of his right to contest
the same on merits. The law ostensibly does not contemplate at
any stage when the objections can be raised, and also does not
say in express terms about the filing of a written statement.
Instead, the word “shall” is used, clearly implying thereby that it
casts a duty on the Court to perform its obligations in rejecting
the plaint when the same is hit by any of the infirmities provided
in the four clauses of Rule 11, even without intervention of the
defendant no.1/applicant. In any event, rejection of the plaint
under Rule 11 does not preclude the plaintiff/non-applicants from
presenting a fresh plaint in terms of Rule 13.””
11. At the same time, it is equally important to bear in mind that a
sentence or a particular passage from a judgment ought not to be extracted
and interpreted in isolation or out of context, as was held by the Supreme
9
2025 SCC OnLine Del 1758
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Court in the case of Hardesh Ores (P) Ltd. v. Hede & Co.10. It is rather the
substance and not merely the form, which has to be looked into. The plaint
has to be construed as it stands, without addition or subtraction of words. If
the allegations in the plaint prima facie show a cause of action, the Court
cannot embark upon an enquiry as to whether the allegations are true in fact
or not. Therefore, a roving inquiry akin to the appreciation of evidence is not
contemplated at the stage of deciding an application under Order VII Rule
11CPC.
Determinable contracts and the bar to specific performance
12. The words „determinable‟ or „determinability‟ are not defined in the
SRA, 1963. While Merriam Webster‟s dictionary defines „determinability‟
as “liable to be terminated”, Black‟s Law Dictionary, 2nd Ed. and Collins‟
Dictionary define „determinability‟ as “liable to termination under certain
conditions.” The former definition suggests that a contract which can be
terminated irrespective of the conditions for termination would be a
terminable contract, whereas the latter definition suggests that a contract
which can be terminated under certain conditions would be a determinable
contract. In conclusion, a contract which in its nature is „determinable‟
cannot be specifically enforced by the Courts.
13. However, these definitions are juxtaposed to the judicial meaning
which has been ascribed by the Indian Courts to “a contract which is in its
nature determinable”. This is so because of the different termination clauses
contained in different kinds of agreements. The concept of determinability
10
(2007) 5 SCC 614
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of a contract has always been a subject matter which has been highly
contested between parties, and various Courts have taken different views.
14. The issue of „specific performance of determinable contracts‟ was
dealt with by the Supreme Court in Indian Oil Corpn. Ltd. v. Amritsar Gas
Service11, whereby the Court held as „determinable‟ a distribution contract
which either party could terminate by giving 30 days‟ notice and without
assigning any reason for termination. It was held that such a contract could
not be specifically enforced. The Supreme Court further held that for
forthwith termination, the “only relief which could be granted was the
award of compensation for the period of notice, that is, 30 days” (i.e., the
notice period during which the contract could have been performed by the
terminating party). Notably, though the terminating party invoked the clause
for termination which provided for „termination upon happening of certain
circumstances‟ / „termination for cause‟, the Supreme Court proceeded on
the fact that under the said contract, parties were entitled to terminate
„without cause‟ as well, by giving a 30 days‟ notice.
15. Moreover, this Court had, more than two decades earlier, broadened
the meaning and purport of „determinability‟. In the case of Rajasthan
Breweries Ltd. v. Stroh Brewery Co.12, the Division Bench, while dealing
with a technical know-how agreement and a technical assistance agreement,
held as follows:
“19. Even in the absence of specific clause authorising and enabling
either party to terminate the agreement in the event of happening of the
events specified therein, from the very nature of the agreement, which is11
(1991) 1 SCC 533
12
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private commercial transaction, the same could be terminated even
without assigning any reason by serving a reasonable notice. At the most,
in case ultimately it is found that termination was bad in law or contrary
to the terms of the agreement or of any understanding between the
parties or for any other reason, the remedy of the appellants would be to
seek compensation for wrongful termination but not a claim for specific
performance of the agreements and for that view of the matter learned
Single Judge was justified in coming to the conclusion that the appellant
had sought for an injunction seeking to specifically enforce the
agreement. Such an injunction is statutorily prohibited with respect of a
contract, which is determinable in nature. The application being under
the provisions of Section 9(ii)(e) of the Arbitration and Conciliation Act,
relief was not granted in view of Section 14(i)(c) read with Section 41 of
the Specific Relief Act. It was rightly held that other clauses of Section 9
of the Act shall not apply to the contract, which is otherwise
determinable in respect of which the prayer is made specifically to
enforce the same.”
16. It is beneficial to refer to the decision of this in Beoworld (P) Ltd. v.
Bang & Olufsen Expansion13, whereby, while relying upon Rajasthan
Breweries, it was held that even an agreement which provides for
termination for cause is also determinable. The relevant excerpt of the
decision in Beoworld (P) reads as under:
“19. The argument of Mr. Mehta that the MDA and PA were not in the
nature of determinable contracts because it could only be terminated for
a cause by the defendant is also flawed. The reason being that a
determinable contract is not only one which can be terminated or
brought to an end at will by a party against whom specific performance
is sought by giving a reasonable notice, albeit, without cause but is also
one which can be terminated on account of the conduct of the party
which is seeking specific performance. Both in Rajasthan Breweries
case as well as in Amritsar Gas Service case termination was sought to
be made for a cause.
19.1 Statement of law, on this aspect, is set forth in Treitel “The Law of
Contract” [7th Edition; G.H. Treitel] at page 797:
“Terminable Contracts
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If a party against whom specific performance is sought is entitled to
terminate the contract, the order will be refused as the defendant could
render it nugatory by exercising his power to terminate. This principle
applies where the contract is terminable under its express terms or on
account of the conduct of the parties seeking specific performance.””
The case at hand
17. For an appropriate adjudication of the reliefs sought in the present suit
and their legal viability, it becomes necessary to closely examine the
pleadings set out in the plaint, along with the „judicial precedents‟ cited by
both parties. Such scrutiny is essential to determine whether the suit is
maintainable or barred by law.
18. For the facility of reference, the reliefs claimed in the instant suit are
as follows:
“i. Pass a decree declaring the termination letter dated 13.02.2023
issued by Defendant No. 5 to the Plaintiff, thereby terminating his
services with Defendant No. 1, as null and void;
ii. Pass a decree for Rs.2,00,00,000/- (Rupees Two Crores only) in
favour of the Plaintiff and against the Defendants for loss of income and
on account of continuous harassment, undue hardship, and victimization
allegedly caused by the Defendants;
iii. Pass a decree directing Defendant No. 1 to reinstate the Plaintiff in
service with continuity and full back wages, along with all consequential
benefits;
iv. Award the cost of the suit and such other costs as this Hon’ble Court
may deem fit and proper.”
19. Since the defendantno.1/applicant relies on the contention that the
contract is „determinable‟ in nature and resultantly barred from specific
enforcement under the SRA, 1963, it becomes essential to reproduce Section
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14 of the said Act to examine the legal position. The said provision reads as
under:
“14. Contracts not specifically enforceable-
The following contracts cannot be specifically enforced, namely:–
(a) where a party to the contract has obtained substituted performance of
contract in accordance with the provisions of section 20;
(b) a contract, the performance of which involves the performance of a
continuous duty which the Court cannot supervise;
(c) a contract which is so dependent on the personal qualifications of the
parties that the Court cannot enforce specific performance of its material
terms; and
(d)a contract which is in its nature determinable”
20. At this juncture, the question which falls for or consideration of this
Court is whether the „employment contract‟ between the plaintiff/non-
applicant and the defendant no.1/applicant is „determinable‟ or not. Notably,
Clause 18 of the contract unequivocally states that the services may be
terminated by either party upon giving three months‟ notice or salary
(including dearness allowance) in lieu thereof, even in cases of shorter
notice. On this issue, since our examination would be within the four corners
of Clause 18 of the said contract, it is reproduced as under for full reading:
“18. After successful completion of the training period and absorption as
a regular employee, services may be terminated by giving three months’
notice by either party or pay plus Dearness Allowance in lieu of such
notice, or in case of shorter notice, pay plus Dearness Allowance for the
period falling short of such three months’ notice, subject always to the
conditions of the Agreement executed by you/your surety.”
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21. A bare reading of the aforesaid Clause makes it abundantly clear that
the „employment contract‟ is of a „determinable‟ nature, at the behest of
either of the parties, without any conditions attached. Resultantly, the said
contract is not specifically enforceable as per Section 14 of the SRA,
1963.In addition to this, the plaintiff/non-applicant does not dispute that he
has received three months‟ salary and dearness allowance in lieu of notice.
This fact stands uncontroverted and is rather admitted by the plaintiff/non-
applicant. It is, therefore, evident that the contract is „determinable‟ and
cannot be specifically enforced.
22. An obvious reason to deny the specific performance of a contract
which is determinable can be that even if the Court were to grant specific
performance, one or both of the parties will still be entitled to terminate the
contract without cause thereafter. This can also be traced in “The Law of
Contract” (7th Edition) by G.H. Treitel at page 797. The pertinent portion is
extracted as under:
“Terminable Contracts
If a party against whom specific performance is sought is entitled to
terminate the contract, the order will be refused as the defendant could
render it nugatory by exercising his power to terminate. This principle
applies where the contract is terminable under its express terms or on
account of the conduct of the parties seeking specific performance.”
23. It must also be noted that the very foundation of contract law is the
idea that individuals and entities are free to enter into agreements and to
determine the terms by which they will be bound. This freedom extends not
just to the formation of the contract but also to its duration and termination.
When parties explicitly include a „termination clause‟ (e.g., notice period
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termination without cause), they are exercising this inherent legal right to
define the boundaries of their commitment. An express „termination clause‟
in a contract is the clearest manifestation of the parties‟ intent regarding the
contract‟s longevity. By signing a contract that includes such a clause, both
parties signal their acceptance that the relationship is not permanent and can
be dissolved. To then compel specific performance of such a contract would
be to override the very terms they mutually assented to.
24. Upon analysing the second relief claimed in the suit, it is evident that
the plaint lacks any specific averments substantiating the plaintiff/non-
applicant‟s entitlement to a decree of Rs.2 Crores for the alleged harassment,
hardship, and victimisation. The fundamental pleadings necessary for
substantiating how such a sizeable monetary claim of Rs. 2 Crores for non-
pecuniary losses was arrived at are conspicuously absent. Furthermore, the
remaining reliefs–whether the prayer for a declaration that the termination
was void, a decree for loss of income, or reinstatement–are all predicated
on the alleged illegality of the termination and proceed on the assumption
that the employment contract was not determinable.
25. The contractual terms relating to termination have been duly complied
with, and there are no pleadings in the plaint explaining how the
plaintiff/non-applicant has suffered any damages beyond what is provided
for under the contract. The core legal issue, therefore, is also whether the
reliefs sought are legally sustainable. It is copiously settled through judicial
pronouncements that a contract of „personal service‟ cannot ordinarily be
specifically enforced, as held in the Executive Committee of Vaish Degree
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College v. Lakshmi Narain14.However, this general rule of law is not
absolute and is subject to three well-established exceptions, as has been held
in numerous cases, including the Executive Committee of Vaish Degree
College. These arise (i) in cases involving the removal of a public servant
from service in contravention of Article 311 of the Constitution of India; (ii)
where a worker‟s reinstatement is sought following dismissal under the
ambit of Industrial Law; and (iii) when a statutory body acts in breach or
violation of its mandatory statutory obligations.
26. With regard to the contract of „personal service‟, reliance can also be
placed on Halsbury‟s Laws of England, Fourth Edition, Volume 44, at page
407, which states that specific performance of contracts for personal work or
services, including employment contracts, is generally not granted. This
doctrine is rooted in the Court‟s reluctance to compel parties to maintain
involuntary, continuous personal and confidential relations. For ease of
reference, the said principle is stated as follows:
“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 a14
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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…”
27. Similarly, the above enunciated principle also finds mention in the
classic work, i.e., “A Treatise on the Specific Performance of Contracts” by
Edward Fry (2nd Edition) at page 40, under the title “Where the enforced
performance of the contract would he worse than its non-performance”. The
relevant paragraph is extracted as follows:
“The relation established by the contract of hiring and service is of so
personal and confidential a character that it is evident that such
contracts cannot be specifically enforced by the Court against an
unwilling party with any hope of ultimate and real success ; and
accordingly the Court now refuses to entertain jurisdiction in regard to
them.”
28. It may be pertinent to note that any contract, particularly those
involving personal service or ongoing business relationships, inherently
depends on subjective elements like mutual trust, confidence, goodwill, and
seamless cooperation. If this trust breaks down, forcing the continuation of
such a relationship through specific performance is often impractical and
undesirable. In case employers are forced to reinstate an employee with
whom they have lost trust, who otherwise does not have any legal right to
continue, the possibility of an unworkable and potentially hostile work
environment, leading to inefficiency and further disputes, cannot be ruled
out. Put otherwise, the ability to discontinue certain professional or business
associations is an important aspect of commercial freedom. Nevertheless,
the case of an employee governed by a statute or subordinate legislation is
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placed on a different footing, as was held in the case of the Executive
Committee of Vaish Degree College. For reference, the relevant excerpt
from the said judgment is reproduced as under:
“32…The doctrine that a contract of personal service cannot be
specifically enforced would not stand in the way of the employee,
because the termination being null and void, there being no repudiation
at all in the eye of the law, there would be no question of enforcing
specific performance of the contract of employment. What the employee
would be claiming in such a case is not enforcement of a contract of
personal service but declaration of statutory invalidity of an act done by
the employer…”
29. If the facts of the present case are tested on the touchstone of the
aforesaid enunciation of law, it is discernible that this case does not fall
within any of the aforementioned three exceptions. The plaintiff/non-
applicant is neither a “workman” as defined under Section 2(s) of the
Industrial Disputes Act, 1947, nor is the defendant no.1/applicant a
„statutory body‟. There is no specific statute governing the service
conditions as well. Instead, the present matter concerns a case of private
employment, governed solely by agreed-upon terms of the employment
contract between the plaintiff/non-applicant and the defendant
no.1/applicant.
30. Furthermore, it is a settled law that the rights and obligations of
employees in private institutions are governed by the terms of an
„employment contract‟. Even in cases of wrongful termination by a private
employer, the employee may, at best, be entitled to damages, provided the
contract is not determinable. Any such relief must be properly pleaded and
justified in the plaint.
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31. The Supreme Court in S.S. Shetty authoritatively reaffirmed the
settled position under common law that, where a master wrongfully
dismisses a servant, the servant is entitled only to such damages as would
compensate for the loss of income during the notice period or until
alternative suitable employment is secured, whichever is earlier. Where the
employment contract provides for termination by notice, the quantum of
damages is ordinarily restricted to the wages payable during that notice
period.
32. The Supreme Court in the aforesaid decision further clarified that
compensation cannot be awarded for emotional distress, injury to reputation,
or the added difficulty in obtaining new employment resulting from the
dismissal. A wrongfully dismissed employee is under a duty to mitigate
damages by making reasonable efforts to secure other employment, and any
suitable offer received may be taken into account in assessing the final
amount of compensation. Paragraph no. 12 of the judgment specifically
reinforces this principle, and the same reads as under:
“12. The position as it obtains in the ordinary law of master and servant
is quite clear. The master who wrongfully dismisses his servant is bound
to pay him such damages as will compensate him for the wrong that he
has sustained. “They are to be assessed by reference to the amount
earned in the service wrongfully terminated and the time likely to elapse
before the servant obtains another post for which he is fitted. If the
contract expressly provides that it is terminable upon,. e.g., a month’s
notice, the damages will ordinarily be a month’s wages …. No
compensation can be claimed in respect of the injury done to the
servant’s feelings by the circumstances of his dismissal, nor in respect of
extra difficulty of finding work resulting from those circumstances. A
servant who has been wrongfully dismissed must use diligence to seek
another employment, and the fact that he has been offered a suitable post
may be taken into account in assessing the damages.” (Chitty on
Contracts, 21st Edn., Vol. (2), p. 559 para 1040).”
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33. Further, in J. Tiwari, which has been strenuously relied upon by
defendant no.1/applicant, the Supreme Court, while following the decision
in Executive Committee of Vaish Degree College, reaffirmed that where an
employment contract is terminable by notice, the only remedy available to
the employee even in cases of wrongful termination is compensation by way
of damages, not reinstatement. Therefore, in the present case, reliefs such as
reinstatement or damages for loss of expected future income are barred
under Section 14(d) of the SRA, 1963, as the contract is determinable in
nature and specifically provides for termination upon giving three months‟
notice or salary in lieu thereof.
34. Insofar as the reliance placed on Binny Ltd. v. V. Sadasivan15., the
Supreme Court conclusively held that the principles of public law and
administrative law do not apply to private employment. This principle has
been consistently followed by this Court in a series of decisions, including
Satya Narain Garg, GE Capital Transportation Financial Services Ltd. v.
Tarun Bhargava16, Pawan Kumar Dalmia, and L.M. Khosla v. Thai
Airways International Public Co. Ltd.17, thereby reinforcing the legal
position that private employment contracts are governed strictly by the terms
of the contract and not by principles applicable to public employment.
35. The judgment of L.M. Khosla delineates the legal principles with
clarity and from their correct perspective. Paragraph 24, in particular,
succinctly sets out the applicable legal doctrines, which are summarised
below:
15
(2005) 6 SCC 657
16
2012 SCC OnLine Del 1684
17
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(i) Contracts of private employment are distinct from public employment
and do not invoke public law principles.
(ii) Where a contract provides for termination by notice, onlythe pay
corresponding to that notice period is recoverable.
(iii) Under Section 14(1)(c) of the Specific Relief Act, contracts that are
determinable cannot be specifically enforced.
36. In Pearlite Liners (P) Ltd., the Supreme Court held that where the
relief claimed in a suit is not legally tenable, such a suit should be dismissed
at the threshold and need not be proceeded to trial. This principle reflects the
importance of evaluating the legal sustainability of the reliefs sought at the
initial stage.
37. Furthermore, the judicial pronouncements relied upon by the
plaintiff/non-applicant are clearly distinguishable. In Hema Gusain, the
Court allowed the suit to proceed under Order VII Rule 11 CPC on the
ground that the issue of damages arising from alleged illegal termination
warranted adjudication at trial. However, the decision was based on the
presence of a specific and well-pleaded claim for damages directly linked to
the alleged wrongful termination. In contrast, the present case does not
involve a claim for damages on account of wrongful termination, but rather
seeks a decree of Rs. 2 Crores for alleged harassment, hardship, and
victimisation claims that lack the requisite pleadings and are not legally
tenable in the context of a determinable contract.
38. Therefore, any alleged loss of income or suffering resulting from
harassment, hardship, or victimisation is not independently compensable
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when the underlying employment contract is determinable by notice. Such
claims lie outside the ambit of enforceable reliefs, as they do not arise from
a breach of contractual obligations but rather from general grievances, which
the law does not recognise as a basis for substantial monetary compensation
in this context.
39. Bearing in mind the aforesaid analysis, the legal principles laid down
in S.S. Shetty and a series of consistent precedents squarely apply to the
present case. These authoritative pronouncements unequivocally establish
that in matters involving determinable contracts, the only permissible
remedy, if any, is compensation strictly in accordance with the terms of the
contract. The Courts have repeatedly held that reinstatement or damages
beyond what the contract expressly provides are impermissible.
Accordingly, the reliefs sought by the plaintiff/non-applicant, being contrary
to the established legal framework, are not maintainable, and the suit is
liable to be rejected as barred by law.
40. In view of the aforesaid, the instant application is allowed and the
plaint is rejected.
41. Accordingly, the instant civil suit bearing CS(OS) 208/2024 stands
disposed of along with all pending applications.
(PURUSHAINDRA KUMAR KAURAV)
JUDGE
JULY 02, 2025
Nc
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