B.M.L. Garg Vs. Lloyd Insulations (India) Ltd. and ors - Court Judgment

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injunction - conditions for grant of interim injunctions--all the three conditions namly (i) prima facie case (ii) balance of convenience and (iii) irreparable injury which can not--be compensated with money, must be met before--interim injunction can be granted. hazrat surat shah v. abdual shaed jt 1988(4) sc, 232 applied) execution committee of vaish degree college v. lakshmi narain air 1976 sc 888 distinguished. - - however, it is well settled that the main factors to be considered for granting or refusing interim relief are (1) prima facie case; however, ordinarily, no order of stay is called for where the relief can be measured in terms of money and, in particular, no interim stay should be granted in the cases of dismissal, removal, termination or on any employee attaining the normal age of superanuation, except of course, in a very exceptional case. the present does not fall in the category of a very exceptional case. the high court failed to notice that even if a prima face case was made out, the balance of convenience and the irreparable injury were necessary to exist. in the instant case the respondent plaintiff was claiming to enforce compensated by way of damages in terms of money in the event of his success in the suit. where,in a country like ours, large numbers of people are unemployed and it is extremely difficult to find employment, an employee who is discharged from service may have to remain without means of subsistence for a long period of time. damages equivalent to one or two months' wages would be poor consolation to him. but in conditions prevailing in our country, damages are a poor substitute for reinstatement;p.n. nag, j.(1) this appeal has been filed by the appellant against the order dated 27th may, 1992, of shri g.sjugti, additional district judge, delhi, whereby the application of the petitioner under order 39 rules 1 and 2 of the code of civil procedure for reinstatement as company secretary has been dismissed. (2) the brief facts are that the appellant was discharged from services by respondent no.1 vide resolution dated 26th july, 1991. according to him the resolution of the board of directors dated 26th july, 1991, which purports to have discharged the petitioner from service is contrary to law and without jurisdiction and that the meeting was not convened according to the law and that the board of directors were not even served. thereforee, the said resolution dated 26th july, 1991, according to him is a nullity in the eyes of law. according to the appellant/ plaintiff another resolution dated 24th august, 1991 has been passed by board of directors nullifying the earlier resolution dated 26th july, 1991, and as such he is entitled to continue as company secretary. under these circumstances, the petitioner/appellant has filed the suit for declaration to the effect that the meeting of the board of directors dated 26thjuly, 1991, is a nullity and void and termination of the appellant from the office of the company secretary is illegal. (3) mr.p.p. malhotra, learned counsel for the appellant, has vehemently argued the case and time and again he has stressed that since the board of directors were not served and the resolution has been passed in contravention of the provisions of law, such resolution dated 27th july, 1991 terminating the services of the petitioner is a nullity in the eyes of law. the trial court in such circumstances should have given finding to the effect that the petitioner has a prima facie case in his favor and granted of injunction. on the other hand, the trial court has observed that at this stage, it cannot be known that the resolution dated 26th july, 1991 is legal and valid or the resolution dated 24th august, 1991 is legal and valid. it is pre mature to test it what is right or wrong. the issues have not been framed and no evidence recorded so far. the case is at the initial stage. since the trial court has not examined the case whether the petitioner has prima facie case in his favor, his order cannot be legally sustained. (4) it is no doubt true that, in matter of injunction the trial court should have examined the case whether the plaintiff has a prima facie case; that the balance of convenience lies in his favor and that irreparable loss and injury would be caused to the plaintiff which cannot be compensated in terms of money in case the interim injunction is not granted. (5) in this case, we may notice that the order of discharge/termination of services has been implemented and that the plaintiff/appellant has been conveyed this order. in the face of this, whether the interim injunction can be granted or not by applying the above mentioned tests. . (6) similar questions arose before a full bench of this court in a case sim hari krishan shannav. municipal corporation of delhi, decided on 14.8.1987, wherein it was held that no hard and fast rules can be laid down as to when stay should be granted or refused. however, it is well settled that the main factors to be considered for granting or refusing interim relief are (1) prima facie case; (2) balance of convenience and (3) irreparable loss. (7) in that case, the appellant was shown to have prima facie case in his favor. however, the order of compulsory retirement was already implemented. it was further laid down that:- 'the grant of interim relief would amount to allowing the writ petition itself. the court would be extremely show to grant interim stay in such cases when injury to the respondent is likely to remain uncompensated but injury to the petitioner even, without the interim stay can be compensated by award of damages. xxxx xxxx xxxx it may not be possible to lay down the broad principles that where compensation can be given by way of damages, no order of stay should at all be issued. as stated above it would depend upon the facts and circumstances of each case. however, ordinarily, no order of stay is called for where the relief can be measured in terms of money and, in particular, no interim stay should be granted in the cases of dismissal, removal, termination or on any employee attaining the normal age of superanuation, except of course, in a very exceptional case. the present does not fall in the category of a very exceptional case.'(8) in hazrat surat shah urdu education society v. abdul sahed, jt 1988 (4) s.c.232, the supreme court while upholding the judgment of the district judge and setting aside the judgment of the high court held:- 'that even if the plaintiff respondent had prima facie case there was no balance of convenience in his favor and if any injury was caused to him on account of the breach of contract of service he could be compensated by way of damages in terms of money thereforee he was not entitled to any injunction. the high court failed to notice that even if a prima face case was made out, the balance of convenience and the irreparable injury were necessary to exist. the question whether the plaintiff could be compensated by way of damages in terms of money for the injury which may be caused to him on account of the breach of contract of service was no considered by the high court. no temporary injunction should be issued unless the three essential ingredients are made out, namely (i) prima facie case, (ii) balance of convenience and (iii) irreparable injury which could not be compensated in terms of money. if a party fails to make out any of the three ingredients he would not be entitled to the injunction and the court will be justified in declining to issue injunction. in the instant case the respondent plaintiff was claiming to enforce compensated by way of damages in terms of money in the event of his success in the suit. the resident was, thereforee not entitled to any injunction order.'(9) in the instant case, as already referred to, the order of discharge already stands implemented and in case the stay of operation of this order is granted, it would amount to decreeing the suit of the plaintiff itself at this stage. furthermore, it goes without saying that the petitioner can be compensated by award of damages in case ultimately the plaintiff/petitioner succeeds in the suit and the suit is decree. (10) mr. malhotra, learned counsel for the petitioner further relied upon a case reported in executive committee of vaish degree college, shmli and others v. lakshmi narain and others, : (1976)iillj163sc , more particularly the observations of hon'ble mr. justice p.n. bhagwati as under: 'where,in a country like ours, large numbers of people are unemployed and it is extremely difficult to find employment, an employee who is discharged from service may have to remain without means of subsistence for a long period of time. damages equivalent to one or two months' wages would be poor consolation to him. they would be wholly insufficient to sustain him during the period of unemployment following upon his discharge. the provision for damages for wrongful termination of service was adequate at a time when an employee could without difficulty find other employment within the period of reasonable notice for which damages were given to him. but in conditions prevailing in our country, damages are a poor substitute for reinstatement; they fall for short of the redress which the situation requires. to deny reinstatement to-an employee by refusing specific performance in such a case would be to throw him to the mercy of the employer; it would enshrine the power of wealth by recognising the right of the employer to fire an employee by paying him damages which the employer can afford to throw away but which would be no recompense to the employee.' xxx xxx xxx '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.'(11) these observations, in my opinion, cannot be relied upon, first, it is a minority judgment and secondly, these observations do not deal with the point of grant of interim injunction during the pendency of the substantive proceedings. (12) mr. malhotra, learned counsel for the petitioner, further relied upon hill v. c a parsons' & co. ltd. [1991] 3 all er 1345. in this case, it appears that interim injunction was asked to restrain the company from implementing the notice dated 30th july, 1991, purporting to determine his employment. (13) the case of union of india v. bhuneshwar prasad, : air1963pat196 relied upon by mr. malhotra cannot be considered to have laid down the correct law in view of the judgment of our full bench and the supreme court aforementioned. (14) in the light of the above discussion, the appellant has no merit. accordingly, the appeal is dismissed.