Dr K.D. Mehru Vs Cosmos Brands Distributors Pvt. Ltd.

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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SUMMONS FOR JUDGMENT NO. 246 OF 2011 IN

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SUMMARY SUIT NO. 1556 OF 2011 (UNDER ORDER XXXVII OF THE CODE OF CIVIL PROCEDURE, 1908)

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Dr.K.D.Mehru ) Adult, Indian Inhabitant residing ) at 1004, Hari Complex, Plot No.20,) Sector – 7, Ghansoli, ) Navi Mumbai – 400 701. ) ..... Plaintiff

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VERSUS

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M/s.Cosmos Brands Distributors	)
Pvt. Ltd.	)
8^thLevel, Aryston Centre,	)
Opp.J.W.Marriot Hotel, Juhu	)
Mumbai – 400 049	) ..... Defendant

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Ms.Sneha Phene with Ms.Prital Mehta, i/b. Little & Co. for the Plaintiff.

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Mr.Mikhail Behl, i/b. Sonal Doshi & Co. for the Defendant.

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CORAM : R.D. DHANUKA, J.

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DATE : 19th JUNE, 2012.

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ORAL JUDGMENT :

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The Plaintiff has filed this suit for recovery of Rs. 36,94,425/- with interest

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at the rate of 18% per annum based on the offer of appointment dated 6^th February, 2008 issued by the Defendant appointing the Plaintiff as Chief Investment Officer for Cosmos Group and all its sister concerns and joint ventures.

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It is the case of the Plaintiff that he was appointed as a Chief Investment Officer by appointment letter dated 6th February, 2008 for a period of five years on terms and conditions mentioned therein. The Plaintiff accepted the said offer on 18th February, 2008 and rendered services to the Defendant during the period 20th October, 2008 to 27th October, 2008. The Plaintiff was on sick leave as he was suffering from fever. It is the case of the Plaintiff that on 31st October, 2008 when the Plaintiff resumed the work, he was asked to handover the charge and ‘no dues certificate’. According to the Plaintiff the Plaintiff was terminated from the service without following the procedure laid down in clause 2(f) of the Offer of Appointment dated 6th February, 2008 and was not paid his remuneration and other perks payable under the said Letter of Appointment. The Plaintiff accordingly issue a legal notice dated 5th December, 2008 calling upon the Defendant to pay Rs. 3,94,425/-. The Plaintiff sent reminder to the Defendant on 7^th March, 2009. Since there was no reply to any of these letters, the Plaintiff issued statutory notice under Section 433 (e), 434 of the Companies Act, 1956 to the Defendant. There was no reply to the winding up notice given by the Plaintiff. The Plaintiff thereafter filed the winding up petition in this court. The Defendant remained absent. The said Company petition was admitted. The Defendant thereafter filed an Appeal before the Division Bench of this Court bearing Appeal Nos. 1172 of 2010 and 1175 of 2010. The Defendant deposited a sum of Rs.37 lacs. By an order dated 6^th April, 2011, the Appeal Court disposed of the said

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Appeal by consent of parties on the terms agreed. The Plaintiff agreed to file a summary suit seeking money decree. The Appeal Court directed that amount deposited by the Defendant shall be invested and shall be governed by the order that the Learned Single Judge will pass on the Summons for Judgment to be taken out in the summary suit by the Respondent. The Plaintiff thereafter has taken out this Summons for Judgment. The Defendant has filed affidavit in reply to this Summons for Judgment. The Plaintiff has filed rejoinder.

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From the perusal of the Particulars of Claim, it appears that the Plaintiff has made claim under six different heads in the sum of Rs.36,94,425/- and interest at the rate of 18% per annum thereon till the payment/realisation. As far as claim in respect of balance amount of salary for August 2008 in the sum of Rs.76,250/- is concerned, the Defendant in their affidavit in reply filed in company petition has admitted the said payment.

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As far as claim under Item No. 2 in the sum of Rs.4,82,500/- is concerned, the Defendant in their affidavit in reply dated 1st February, 2012 in para (4) has admitted an amount of Rs.3,42,420/- including reimbursement to the Plaintiff. However, the balance amount claimed under Item No.2 has been disputed by the Defendant. According to the Learned Counsel appearing for the Plaintiff, the Plaintiff was present during entire month excluding few days when he was on

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leave which was permitted under the terms of the contract and thus there was no substance in the dispute raised by the Defendant in respect of the balance salary for the month of September and October, 2008.

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I have gone through the attendance sheet produced by the Plaintiff for the month of September and October. The Defendant have already admitted a sum of Rs.3,42,420/-. In my opinion, there is no substance in the defence raised by the Defendant in respect of the balance amount as claimed in Item No.2 of the Particulars of Claim.

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In so far as claim under Leave Travel Allowance at Item No.3 of Rs.61,250/is concerned, the defence of the Defendant is that the Plaintiff is not entitled to claim Leave Travel Allowance relying upon Clause (3) of Offer of Appointment dated 6^th February, 2008. The Learned Counsel appearing for the Defendant submitted that since the Plaintiff has not completed one year of service, the Plaintiff is not entitled to claim Leave Travel Allowance. The Learned Counsel appearing for the Plaintiff invited my attention to Clause (2) of the Offer of Appointment which provides that the Plaintiff is entitled to reimbursement of Rs. 85,000/- per month. Accordingly, the Learned Counsel appearing for the Plaintiff submitted that the Leave Travel Allowance provided in Clause (3) is in addition to

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the fixed component to Rs.8,750/- per month which is a part of component amount of Rs.85,000/-. The Learned Counsel submitted that as a matter of

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record for the first two months, the Plaintiff was also paid Rs.8,750/- per month. However, the same has not been paid for the remaining period. The Learned Counsel pointed out from the Particulars of Claim that while making claim under Item Nos. 1 and 2, the Plaintiff has excluded a sum of Rs.8,750/- while making claim for the salary and the said amount is not overlapping. I am satisfied that there is substance in the said claim made by the Plaintiff and the amount is not overlapping under Item No.3. The Defendant is liable to pay the amount to the Plaintiff.

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As far as Variable Pay claimed under Item No.4 of sum of Rs.16,82,758/- is concerned, the Defendant in their affidavit in reply has disputed this figure relying upon clause 3(B) (1). The Learned Counsel appearing for the Defendant submitted that since the Plaintiff has not completed one year of service, he is not entitled to claim the variable remuneration as the same was payable only at the rate of 80% of annual basic remuneration which was linked to derivable. According to the Learned Counsel for the Defendant, since the Plaintiff resigned from the service that situation did not arise and thus the Plaintiff is not entitle to claim that amount. In my opinion, this issue raised by the Defendant is triable issue. The Plaintiff has admittedly not completed one year. The Defendant is granted unconditional leave in so far as his claim of Rs.16,82,758/- is concerned.

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In so far as claim of Rs.13,50,000/- as a gross salary in lieu of notice is concerned, the Learned Counsel appearing for the Plaintiff submitted that under clause (2) (f), service of Plaintiff could be terminated by the employer only after giving three months notice to the Plaintiff before the end of employment contract and since the Defendant terminated without giving three months notice, Plaintiff became entitle to payment relying upon the said clause. The Learned Counsel appearing for the Defendant however invited my attention to the letter dated 15^th October, 2008 addressed by the Plaintiff to the Defendant by which the Plaintiff asked for various payment and sought advice as to whom he should handover his charge and for relieving him. It is the case of the Defendant that Plaintiff thereafter handed over the charge to the Defendant and this amounts to resignation and cannot be construed as termination. In my opinion, considering the said letter, the Defendant has raised triable issue in so far as this claim made by the Plaintiff is concerned, unconditional leave in respect of the said claim. I am prima facie of the opinion that service of the Plaintiff was not terminated but he had resigned.

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As far as claim in Item No. 6 to the tune of Rs.41,667/- for encashment of 10 days earned leave is concerned, the Defendant has disputed this claim on the ground that the Plaintiff has not completed one year of service. Since I have already taken a view that the Plaintiff has resigned and his services has not been

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terminated, in my opinion the Plaintiff is not entitled to this claim. The defence raised by the Defendant in respect of this claim is also triable issue and is thus entitle to unconditional leave in respect of this claim.

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The last claim is in respect of the rate of interest at 18% per annum. In my view, in view of the admission of liability in respect of claim under Item No.1 and partly in respect of Item No.2 and in view of the observations made by me in earlier part of this Judgment, the Plaintiff is entitled to decree in respect of Item Nos. 1 to 3. The Defendant has raised triable issue in respect of Item Nos. 4 to 6 and is entitled to unconditional leave to defend.

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The Plaintiff is entitle to interest on the aforesaid amount of Rs.76.250/-, Rs.4,82,500/- and Rs.61,250/- at the rate of 18% from the date of filing of the suit till realisation.

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The Defendants are directed to file written statement within a period of eight weeks from today. Office is directed to place the matter thereafter for framing issues. Suit is transferred to the Long Cause.

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In view of the fact that I have granted unconditional leave to defend to the Defendant in respect of claims at Serial Nos. 4 to 6, as reflected in the Particulars

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of Claim at page 92 of the Plaint, I direct the office of the Prothonotary & Senior

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Master to permit the Defendant to withdraw the said amount of Rs.16,82,758/-, Rs.13,50,000/- and Rs.41,667/- within four weeks from today.

Dr K.D. Mehru v. Cosmos Brands Distributors Pvt. Ltd.

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Dr K.D. Mehru v. Cosmos Brands Distributors Pvt. Ltd.

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