' The plaintiff has filed suit for compensation for wrongful dismissal from service. The suit Was originally filed against Bank of Bahawalpur and the defendant No,
2. During the pendency of the suit the Bank was nationalized and merged with National Bank of Pakistan and therefore, on 10th April, 1979 National Bank of Pakistan was joined as defendant No, 1 instead of the Bank of Bahawalpur.
' The plaintiff was employed by Bank of Bahawalpur as Principal Officer on 1st June, 1964 and he entered into an agreement to serve for 5 years and the Bank agreed not to terminate his service during that period except for misconduct. The plaintiff completed his tenure of 5 years and continued in service. He was entitled to continue till he attained the age of 55 years on 16th April, 1971. In September, 1970 Managing Director of the defendant No, I extended the employment of the plaintiff by one year i,e, up to 16th April, 1971 on existing terms and conditions. On 19th November, 1970, the plaintiff received a letter from the Bank stating at the Board of Directors have abolished the Post of Chief Accountant with effect from 1st January, 1971 and the extension in service by one year was withdrawn. The defendant was allowed to proceed on leave from 1st January, 1971 to 16th April, 1971, On 3rd November, 1970 the plaintiff received another letter from the defendant No, 2 dismissing him from service. The plaintiff protested and termed the dismissal as malicious and illegal. The plaintiff, therefore, filed a suit for compensation for Rs, 1,49,402. Rs, 99,402 have been claimed from defendant No, I towards compensation for wrongful dismissal whereas Rs, 50,000 have been claimed from defendant No, 2 for defamation.
' The defendant No, 1 has admitted that the plaintiff was appointed as officer on the Post of Chief Accountant and after the expiry of the period of 5 years from 1st June, 1969 the employment of the plaintiff was governed by the Staff Bye-Laws of the defendants and in terms thereof defendant No, I was entitled to terminate the service by paying one month's basic pay in lieu of notice or by serving one month's notice. It has been denied that the service of the plaintiff as from 1st June, 1969 was governed by service agreement. It has been stated that the plaintiff had procured the extension up to 16th April, 1972 illegally and the order was made by the then Chairman and Managing Director without any authority which was withdrawn by the Board. Alternatively it has been pleaded that even if extension was valid the Board was authorised to terminate the service in accordance with Bye-Law 19. As the defendant No, 2 enjoyed the administrative powers delegated to him in Board's meeting dated 14th November, 1970, the order of termination was proper, legal and is not hit by bias or mala fides as alleged by the plaintiff. The defendants have further stated that as the plaintiff had threatened to take the bank in liquidation the defendant No, 2 lawfully dismissed him from service. On these pleadings the following issues were framed :-
(1) What was the status and terms and conditions of service of the plaintiff with Defendant Bank ?
(2) Whether withdrawal in November, 1970 of extension of service was in breach of agreement with plaintiff and mala fide ?
(3) Whether termination of service of the plaintiff in November, 1970 by Defendant No, 2 was in breach of terms and conditions of service without authority and mala fide ?
(4) Whether Defendant No, 2 slandered and defamed the plaintiff?
(5) To what amount is the plaintiff entitled to on account of remuneration, leave remuneration compensation and or damages?
(6) What should the decree be 7 ' On 28th October, 1978 the following additional 'Issue was framed by the Court :- "Whether the Chairman and the Managing Director of the defendant No, I was authorised to extend the service of the plaintiff without approval of the Board of Directors of the defendant No, 1,"
' My findings on the above issues are as under : Issue No, I : ' It is an admitted position that the bank made an offer to the plaintiff for appointment as Principal Officer in terms of its letter dated 1st June, 1964, whereby the plaintiff was required to execute an agreement to the effect that he would not leave or discontinue the service of the bank within a period of 5 years from the date of his reporting for duty. The agreement was executed on 1st June, 1964 in which the bank agreed that it will not terminate the plaintiff's service during the period of 5 years except on the ground of misconduct. In case of misconduct the bank was entitled to terminate the service without enquiry by giving one month's notice or one month's basic pay in lieu of notice or to dismiss the employee from service after he was found guilty of serious charges upon enquiry as laid down in Banks Staff Bye-Law No,
61. The plaintiff performed the duties of the Chief Accountant and after completing the period of 5 years he continued on the same position. After this period of 5 years i,e, after 1st June, 1969 the agreement ceased to exist and the plaintiff was to be governed by the Staff Bye-Laws. According to the Staff Bye-Law No, 2, the bye-laws applied to all officers except otherwise provided in the regulation or to such extent as may be prescribed by the Board of Directors to specialists recruited on special contracts or senior officers of the Bank whose salary or allowances are separately determined by the Board. In the present case there is no evidence to establish that the plaintiff was employed as a specialist. Merely because the plaintiff had a vast experience of banking service does not lead to the conclusion that he was a specialist in any of the branches of the banking business. The plaintiff was recruited as a Principal Officer to work as Chief Accountant. He was recruited as a senior officer whose salary and allowances were separately determined by the Board. There is sufficient evidence on record to show how the salary and allowances were determined from time to time and therefore the plaintiff was Principal Officer working as a Chief Accountant on terms and conditions mentioned in the letter of appointment and in the agreement which was valid for a period of 5 years where after except the emoluments and allowances all other terms and conditions were to be governed by the Staff-Bye-Laws of the Bank.
Additional Issue :- ' The main point for consideration under this Issue is whether the Chairman and Managing Director could extend the service of plaintiff without approval of the Board of Directors of the Bank ? It is an admitted position that on 7th September, 1970 the plaintiff applied for extension of his service for a period of one year up to 16th April, 1972. This extension was sought from the Chairman and Managing Director of the then Bank of Bahawalpur. The extension was necessitated because the plaintiff was to attain the age of 55 years on 16th April, 1971 and would have then retired from service. He, therefore, thought it fit to seek extension for one year, which was granted by the chairman and Director of the Defendant No,
1. The defendant No, 1 has challenged the authority of the Chairman and Managing Director on the ground that this extension should have been approved by the Board of Directors. Under the Staff Bye-Laws of the Bank the Managing Director and Chairman was the competent authority. Under Bye-Law 20 every employee was to retire at the age of 55 years provided the "Competent Authority" may in its discretion extend the period of service of any such employee in the interest of the Bank. Bye-Law 5 further provides that the powers and duties to be exercised in respect of the application of these Bye-Laws have been delegated to the "Competent Authority" of the Bank, and accordingly vested in him. Bye-Law 11 also contemplates that the appointment made to category 'A' by the Managing Director shall be laid before the Board. The plaintiff fell within category A as classified by the Staff-Bye-Law No,
9. It, therefore, follows that appointments made by the Managing Director in respect of the employees falling in category A were to be laid before the Board but Bye-Law 20 does not provide that the extension granted by the competent authority i,e, the Managing Director should be laid before the Board. It only provides that it can be extended by 'Competent Authority' in its discretion in the interest of the Bank. Furthermore it can be seen that the extension granted to an employee cannot be termed as a fresh appointment to attract Bye-Law 11. Mr. Mansoorul Arfin the learned counsel for the defendant has contended that the fact that the plaintiff was friendly with the then Managing Director, applied for extension at least six months before the expiry of the term, and that the Managing Director granted it on the eye of his retirement proves that the extension was illegally procured. These facts are hardly relevant to the issue under consideration which deals with the authority of the Managing Director to extend the period of employment. These facts by themselves do not constitute mala fides or collusion on the part of the plaintiff. Even the Board of Directors while considering the abolition of post did not object to the extension granted to the plaintiff on the grounds contended before me. In these circumstances I hold that the Chairman and the Managing Director was, authorised to grant extension of service of the plaintiff and it was not necessary to lay it before the Board or to seek its approval.
Issues Nos. 2 and 3.
' I will take up both these Issues together as they are interconnected. The plaintiff has challenged that the withdrawal of extension of service was in breach of agreement with the plaintiff and mala fide. According to the defendants the extension was illegally procured and that in order to economies the work of the bank the Board had taken certain steps which inter alia included the abolition of the post of the Chief Accountant and consequently the extension granted by the Board was withdrawn, The defendants have relied upon the resolution of the Board to substantiate that the extension was not withdrawn for victimizing the plaintiff or for any mala fide reasons but it was merely to economies the affairs of the Bank. The plaintiff has contended that although the post of the Chief Accountant was abolished, the work continued and was looked after by a junior officer. It has been further contended that the plaintiff was appointed as a Principal Officer and other Principal Officers who were junior to him were continuing with the defendant No,
1. In these circumstances it is argued that abolition of post awl withdrawal of extension was maid, foe and illegal. The defendant has produced the minutes book Exh. 29/7. At item No, 29 the Board seems to have discussed the proposed steps taken by the Bank to minimize its expenditure. Suggestions relating to use of official cars, their maintenance, conveyance allowance, telephone, taxes and charges for the houses of the officers were considered and decided. The question of retirement of bank employees also came for consideration. It was stated that all employees who were to attain the age of 55 years were to retire with the exception of the plaintiff whom extension of one year had been granted. Although the Board considered the extension granted to the plaintiff it does not seem to have disapproved it. It only decided that to effect economy the post of Chief Accountant should be abolished with effect from 1st January, 1971 and a senior accountant be placed as in charge of this work and since the post of the Chief Accountant would stand abolished the extension gran ted to the plaintiff would stand withdrawn. Upon the abolition of the post the plaintiff was allowed leave-preparatory to retirement. From the minutes of the meeting in which this decision was taken it seems clear that the extension granted to the plaintiff was not disapproved. It was not withdrawn for the reason that the extension was granted illegally or unauthorized or that it was not in the interest of the bank. The extension was withdrawn only because the post of the Chief Accountant had been abolished. It seems that in a drive to economies the expenditure the defendant No, 1 had been taking such steps which may be beneficial to the bank. One such step was to abolish the post of the Chief Accountant and his work was to be looked after by a Senior Accountant instead of a highly paid principal officer, who was to retire after few months. Another decision in this regard seems to be that all the employees attaining the age of 55 years were to retire. There is nothing to suggest on record that the extension granted to the plaintiff was withdrawn mala fide. The extension was granted at least 5 months before the plaintiff was to retire. It was withdrawn by the Board before its commencement.
The Board is authorized to make decision with regard to the employment and could also withdraw such decisions unless prohibited by any other Bye-Law. No such provision has been shown that the authority of the Board is restricted and extension cannot be withdrawn, The plaintiff has not been able to show any ground that the action taken by the Board was mala fide or in breach of the agreement.
' The matter did not end here. By a letter dated 23rd November, 1970 reproduced hereunder the bank dismissed the plaintiff- "We are aggrieved to know that because of the Board's decision dated 14th November, 1970, - conveyed to you vide our letter dated 19th November, 1970, you have threatened to take Bank into liquidation on the allegations that it is unable to pay its debts. Your intentions are harmful for the institution and as such it is not conducive that your service should continue any longer in the institution which you have threatened to take to liquidation. Your services, are hereby terminated with immediate effect and you are directed to collect your dues immediately from the Bank."
' Your's faithfully, (S. BASHIR AHMED), General Manager, ' A plain reading of this letter makes it clear that the service of the plaintiff was terminated as the plaintiff had threatened to take the bank into liquidation and therefore it was not conducive in the interest of the bank to allow him to continue in service. The service was terminated with immediate effect and the plaintiff was directed to collect his dues from the bank but the particulars of dues which the bank was prepared to pay have not been given nor there is any correspondence where the bank has indicated the amount payable to the plaintiff. The plaintiff challenged this order of termination as illegal, wrongful, void and mala fide. The plaintiff has also challenged that the allegation made against him in this letter is also incorrect.
' According to the learned counsel for the plaintiff the order is without authority as under the bye- laws the Managing Director was the competent authority to terminate the plaintiff's service but it was terminated by the Manager. In this regard reference has been made to a resolution passed on 14th November, 1970 whereby the bye-laws were amended and it was provided that wherever the word "Chairman" and "Managing Director" appeared in the bye-laws the word "General Manager" shall also be added. There is no dispute about this resolution but the learned counsel for the plaintiff has contended that according to Bye-Law No, 3 a resolution or any amendment in the staff bye-laws will be operative only from the day as it is circularised. According to him the amendment was not circularised. The learned counsel for the defendant has pointed out to Exh. 32/1 where the resolution making the amendment in the bye-laws was circulated. This objection has therefore no force.
' The plaintiffs' counsel then contended that the bye-laws are contracts between the parties and cannot be amended to the detriment of the other party. This argument loses sight of the fact that bye-law itself provides that the rules can be amended by Board of Directors. Therefore even if it is accepted that bye-laws become terms and conditions of the contract between the parties it provides for an amendment by the Board of Directors. In these circumstances amendments validly made cannot be challenged on this ground.
' The learned counsel for the plaintiff has contended that after the termination order was passed it was placed before the Board and it was decided that it should be withdrawn but. Later the defendant No, 2 obtained the approval by misrepresentation. The defendants have produced the minutes of the meeting of the Board of Directors held on 30th December, 1971 in which it was decided that in view of the legal advice the termination order should not be withdrawn. It seems that earlier the Board wanted to settle the dispute with the plaintiff amicably and had decided that the termination order will be withdrawn provided there is an overall settlement and the Bank is not dragged in litigation. From the minutes of the meeting and the legal advice it is clear that no settlement was reached and therefore, the Board decided not to withdraw the order of termination.
These facts do not establish that the decision of the Board was obtained by misrepresentation.
' In order to establish that the termination was wrongful the learned counsel for the plaintiff has relied upon bye-laws 18 and 19 of the Staff Bye-laws. The defendants have also relied upon Bye- Law 19. It is convenient to reproduce them as follows :-
18. No employee shall leave or discontinue his service in the if he is an employee under categories 'A' and 'B' without first giving three months notice and if he is an employee under categories other than 'A' without first giving one month's notice in writing to competent authority of his intention to do so. In case of breach of this Bye-laws he shall be liable to pay to the Bank as compensation a sum equal to his substantive pay for the notice period ; provided that the competent authority may in its discretion waive wholly or partly the payment of such compensation payable by such employee.
19. Notwithstanding anything contained in these Bye-laws the Bank shall have the right to terminate the services of any employee in any category without assigning any reason on giving one month's notice or pay in lieu thereof. Such powers of termination of service will be exercised by the competent authority.
' Under Bye-Law 18 an employee in category 'A' cannot leave or discontinue from his service without first giving notice of three months. It further provides that in case of breach of this bye-law the employee shall be liable to pay to the bank as compensation a sum equal to his substantive pay for the notice period. Bye-law 19 provides, that the bank shall be entitled to terminate the service of any employee of any category without assigning any reason on giving one month's notice or pay in lieu thereof. In this regard Bye-Law 61 will also the relevant which is reproduced hereunder :- "Any employee of the Bank, including any officer who commits < a breach of any of the bye-laws (Staff) or any other instructions issued hereunder or by the General Manager or who displays negligence, inefficiency or indolence or who knowingly and intentionally does nothing detrimental to the interest or reputation of the Bank or in any manner in conflict with the instructions issued by it or who commits a breach of discipline or is guilty of any other act of misconduct, or who is convicted of a criminal offence by a competent Court of law shall be liable to the following penalties :-
(1) Reprimand.
(ii) Delay or stoppage of increment or promotion or both.
(iii) Degradation to a lower post in his permanent class or Category.
(iv) Recovery from pay of the whole or part of any pecuniary loss caused to the Bank.
(v) Dismissal.
' Bye-Law 61 authorises the bank to impose the penalty of dismissal in case of misconduct.
However it regulates the procedure in which such a penalty can be imposed. The preconditions are that before dismissal a notice shall be served in writing giving an opportunity to the employee to defend himself and the charge shall be investigated by the competent authority or enquiry officer appointed by the competent authority. Bye-Laws 65 and 66 provide an appeal by the employee against the order of dismissal passed under Bye-Law 61. The learned counsel for the plaintiff has contended that as procedure provided under Bye-Laws 61 and 62 was not followed the dismissal was wrongful. Mr. Arfin the learned counsel for the defendant has contended that the case is governed by Bye-Law 19 under which the bank was authorised to terminate the service without assigning any reason on giving one month's notice or pay in lieu thereof, and therefore the termination was valid and proper. A close scrutiny of Bye-Laws 19, 61 and 62 makes it clear that Bye-Law 19, will apply where the service is terminated without assigning any reason on giving one month's notice or pay in lieu thereof. It contemplates a termination simpliciter without assigning any reason. But once any charge is levelled against the employee which is the basis for order of termination resort should be had to bye-laws 61 and 62. In the event it will not be necessary to give one month's notice or pay in lieu thereof but it will be incumbent upon the bank to hold an enquiry according to the procedure provided in Bye-Law 62 and then pass an order imposing any of the penalties mentioned in Bye-Law 61. If the employee's service is terminated by assigning any reason which is adverse to the employee then Bye-Law 19 will not come into operation. The bank could have terminated the service by issuing a letter of termination simpliciter without assigning any reason. In that event either one month's notice should have been given or one month's salary in lieu of notice should have been paid. In the present case nothing was done. In fact a serious allegation was made against the plaintiff that he threatened to take the bank into liquidation and therefore in order to save the interest of the bank the service was terminated. The charge was of a very serious nature particularly in respect of an employee who had served up to the age of superannuation. It is an admitted position that the plaintiff was not charge-sheeted nor opportunity was given to him to defend himself. In the circumstances the termination was wrongful. Reference has been made to the case of J. J. Miranda v. Fishermans Co-operative Society Ltd. (1), where after the review of host of authorities my brother Ajmal Mian, J. Held that any breach of rule shall entitle an aggrieved employee to maintain an action for damages. Termination of service in breach of rule wil 1 amount to a wrongful termination. The defendants stand that it was terminated under Bye-Law 19 is without any force. The defendants seem to be laboring under a misapprehension that since under Bye-Law 19 they have the power to terminate the service) without/assigning any reason on giving one month's notice, they are entitled to terminate the service for any reason whatsoever. It is not correct. The termination of service without notice or one month's notice is permissible only where it is a termination simpliciter and neither any charge has not been levelled on the employee nor any penalty has been imposed upon him. My finding to issue No, 3 is that the termination of service of the plaintiff was wrongful and in breach of the term and condition of service and bye-laws.
' It now brings to the crucial issue of compensation. The plaintiff has claimed damages in the following manner
(1) A sum of Rs, 80,038.00 being the salary from December 1970 up to April, 16, 1972 at the rate of 4,841 P.M. Which he was drawing at the time of termination of service
(2) Rs, 19,364 being the leave pay for 4 months,
(3) General damages of Rs, 50,000 from defendant No, 2 as both petitioners for loss and/or damage caused to be plaintiff by acting maliciously or without authority and by defaming the plaintiff. {{FOOT NOTE}} PLD 1978 Kar. 990 {{FOOT NOTE}} ' The plaintiff has contended that since his service has been extended up to 16th April, 1972, but for the wrongful termination he would have continued in service till that period. The plaintiff has therefore, claimed salary for that period. The plaintiff has given a breakdown of Rs, 4,841 in Annexure 'X' to the plaint. It is stated that the basic salary was Rs, 2,000, personal pay Rs, 400.
Dearness allowance Rs, 300 Servant Allowance Rs, 70, Furnishing Allowance Rs,
70. All these items are covered by the bye-laws and letters of the bank which were issued from time to time. The plaintiff has also claimed Rs, 766 towards Banks car with driver and maintenance and Rs, 700 P. M.
For the residential accommodation. He has also claimed water charges at the rate of Rs, 30 per month and electricity at the rate of Rs, 50 per month which are borne out by the Exh.
10. He was entitled to the provident fund of Rs, 200 as provided by the Provident Fund Rule and entertainment allowance of Rs, 200 per month which is borne out by Exh.
8. The plaintiff has also claimed Rs, 50 towards the telephone charges but no document has been produced to substantiate it. The plaintiff has however submitted that from the claim of Rs, 99,402 credit has to be given for the amount which the plaintiff has earned from October, 1972, as from that month he got employment of a salary of Rs, 2,000 per month. This amount of Rs, 2,000 shall be deducted only if the plaintiff is found entitled to claim damages beyond October, 1972.
' The defendants while denying the entire claim have stated that as according to the terms of service it could be terminated on one month's notice or salary in lieu of notice the plaintiff is not entitled to claim compensation more than the sum equivalent to one month's salary. The learned counsel for the defendants has relied upon Malik & Haque's case (1) and cases reported as PLD 1962 Kar. 899, PLD 1961 Kar. 2, PLD 1968 Kar. 526, PLD 1977 Kar.
1121. While referring to J. J. Mirandas' case Mr. Arfin has contended that the observation has been made without reference to PLD 1962 Kar. 899 and PLD 1961 SC 531. In J. J. Miranda's case except these two cases all the cases mentioned above have been referred and fully discussed. I therefore need not refer and discuss them again. I will only refer to three cases namely, PLD 1961 SC 531, PLD 1962 Kar. 899 and PLD 1978 Kar.
990.
' In PLD 1961 SC 531 a suit was filed for declaration by the employee that the termination of service was illegal and void and he continued to be in the 'service. He had also prayed that a preliminary decree for damages be passed and Commissioner be appointed to assess the damages but no court-fee was paid. The suit was however decreed. The Supreme Court held that suit for declaration was not maintainable. The defendants have relied on the following observation:- "The decree passed in this suit has to be set aside. It is contended that we should remand the case for a decision as to right of respondent No, 1 to damages for there was alternative prayer for damages though court-fee had not been paid on it. We are of the opinion that no useful purpose will be served by a remand. No period of service was provided in the contract in suit and therefore termination of service on payment of one month's salary was proper."
' The facts of this case are clearly distinguishable with the present case. In the present case the suit has been filed for damages for wrongful {{FOOT NOTE}}
(1) P L b 1961 SC 531 {{FOOT NOTE}} ' termination of service. The agreement was initially for a period of five years. After that the service was to be governed by the rules and regulations and in terms thereof the plaintiff would have continued in service up to the age of 55 years. Thereafter the period of employment was extended up to 16th April, 1972. The post was however abolished with effect from 31st December, 1970. The plaintiff was thus to continue in service till 31st December, 1970 and was also allowed leave from January, 1972 to 16th April, 1972, the date when he would have attained the age of 55 years. All these facts show that a period of service was provided in the contract between the parties. In the Supreme Court case one month's salary in lieu of notice though first refused was later accepted by the employee. In the present case nothing was offered to or accepted by the plaintiff. These facts in my opinion distinguish the Supreme Court case from the present case.
' In the case of Gulf Steamship Co. v. Dilwash Balooch (1) an employee of the Gulf Steamship Co.
Ltd. Joined service for two years from 26th of May, 1960. Employee's service could be terminated on giving one month's notice by the employer. On 14th November, 1960 the employee fell ill and when he reported for duty on 26th December, 1960 he was asked to come the next day when a notice of termination was served upon him and he was asked to collect one month's salary in lieu thereof.
On 14th February, 1961 employee filed a suit for declaration that he was still in the service and claimed recovery of Rs, 1,860/58 as his wages and other allowances up to 13th February, 1961. The Civil Judge granted the claim and decreed the suit. However in appeal the claim for Victual allowance to the extent of Rs, 397 was disallowed but the decree was maintained. The employer filed revision in the High Court on two grounds namely that the suit for declaration was not maintainable and that the employee was only entitled to claim damages in the sum of Rs, 475 being one month's salary in lieu of notice. The first contention of the employer was upheld. On the second contention the following observation was made which is relied upon by the learned counsel for the defendants:- "Ordinarily in the absence of an express terms in the contract or usage to that effect, an employee cannot be dismissed without notice by paying his wages for the notice period in lieu of notice. But in those cases where no notice is served or the service has been improperly terminated the employee would be entitled in the case of such wrongful dismissal under a contract of employment which provided for terminating the employment by giving notice on either side for a certain period, only to pay and allowances due for the period of the notice and nothing more.
There is not the slightest doubt that an employee in such cases is not entitled to his pay and allowances for the entire unexpired period of his service". It was further observed that "in some cases in assessing damages a further factor is also taken into consideration, namely, damages in respect of the time which might reasonably elapse before the employee could obtain other employment."
' To support this observation reference has been made to a passage from Bakham v. Drake (2) and Addis v. Gramophone Co. Ltd. (3). It can therefore be noticed that even in 1962 Kar. 899 no final and absolute rule {{FOOT NOTE}}
(1) PLD 1962 Kar. 899 (2) (1849) 2 H L C 579
(3) 1909 A C 481 {{FOOT NOTE}} ' for assessing the damage as propounded by the defendant has been laid down. No doubt in the facts and circumstances of that case certain observations have been made which may lend support to the defendant's contention but the Honourable learned Judge who was known for his learning being aware of the correct legal proposition did not stop there. The succeeding observations as quoted above clearly establish that there existed strong views which ruled that in assessing damages the time elapsed in getting the employment can be taken into consideration.
In facts the Court maintained the decree of the lower Court and did not curtail it on the basis of the observation relied upon by the defendants.
Basically, the principle that the notice period provided in the agreement is based on an express or implied agreement that salary in lieu thereof will be adequate compensation can be applied strictly where the termination is in terms of agreement and not in breach thereof. Secondly the mere fact that notice has been provided cannot lead to the inference that it was within the contemplation of the parties that salary in lieu of notice will be sufficient compensation for the breach. Before pressing this principle in service it has to be seen whether such a contingency was within the contemplation of the parties and the salary in lieu of notice period was intended to serve this purpose. Chitty on Contracts, 24th Ed. In para. 3636 states that "the normal measure of damage is the amount the employee would have earned under the contract for the period until the employer could lawfully have terminated it, less the amount he could reasonably be expected to earn in other employment." This clearly suggests that the employee will be entitled to agreed damage where the employee will be entitled to agreed damage where the employer has lawfully terminated the service. Therefore in case of wrongful termination of service the erring employer cannot restrict his liability to damages equivalent to salary of notice period unless it is specifically or impliedly agreed.
' In the present case to substantiate their contention the defendants have solely relied on Bye-Law
19. It therefore requires determination whether it was within the contemplation of the parties that pay of one month's notice period will serve as compensation for the breach of the agreement committed by the bank. Bye-law 18 provides that an employee under category 'A' to which the plaintiff belonged could not leave or discontinue without first giving three months' notice and in case of breach of this bye-law the employee shall be liable to pay to the bank as compensation a sum equal to his substantive pay of the notice period. Bye-Law 18 therefore governs the rights of the Bank and a sum equal to the pay for the notice period of three months was fixed as compensation payable to the bank for the breach of contract committed by an employee.
Strangely enough Bye-Law 19 has been worded in the same fashion. It only provides that notwithstanding anything contained in this bye-law the bank shall be allowed to terminate the service of any employee in any category without assigning any reason on giving one month's notice or pay in lieu thereof. This bye-law confers discretionary powers on the bank but does not provide that the bank would be liable to pay compensation, sum equal to the substantive pay of the notice period. It therefore cannot be inferred that it was in contemplation of the parties that a sum equal to the salary of notice period of one month will be the compensation for the employee for breach of contract committed by the bank. In view of this inequitable position in which the parties are placed Gulf Steam Ship Co. In case PLD 1962 Kar. 899 will have no application.
' Because strictly the principle pressed by the defendants can apply to a contract of employment which provides for terminating the employment by giving notice on either side which should be equitable and further the employment, as observed by Chitty should have been lawfully terminated.
The rest of the authorities relied by the learned counsel for the defendants have been thoroughly discussed and distinguished in J. J. Miranda's case and I agree with the observation made in that judgment. In this case Ajmal Mian, J. After a review of host of authorities came to the conclusion that in a fit case damages may be moved than the salary of the notice period.
' Now coming to the present case and applying the principles discussed above it has to be determined what amount of compensation the plaintiff is entitled to recover. It has been already held that the abolition of the post and withdrawal of extension was proper. The defendants had allowed the plaintiff to continue in service up to 31st December, 1970 and thereafter he was allowed to go on leave for 3 1/2 months up to 16th April, when the plaintiff would have retired. It has been held that the service of the plaintiff was wrongfully terminated by the defendants. The plaintiff claims to have been deprived of all the benefits he would have derived from 23rd November, 1970 till 16th April, 1971, and has suffered loss of the amount equivalent to the salary of 4 months 24 days at the rate of Rs, 4,841 per month. It has to be seen what amount of compensation will be sufficient for the damages suffered by the plaintiff. As discussed above it has been laid down that besides the amount equivalent to notice period provided in the agreement for compensation for breach of agreement the employee is also entitled to damages for the lapse of time during which he is unable to obtain another employment. The plaintiff has admitted that from October, 1971 he was employed on a monthly salary of Rs, 2,000 Mr. Mansoorul Arfin the learned counsel for the defendants has contended that while assessing the damages the Court has to see whether the plaintiff has taken steps to mitigate the damage. The learned counsel for the defendants has referred to PLD 1969 Kar. 576 where it has been held that an employee must do that are possible to mitigate the damages. According to the learned counsel for the defendants it is for the plaintiff to prove that he had taken steps to mitigate the damages and that he was unable to obtain any suitable service during the period he remained unemployed. The plaintiff has stated that he had applied to the United Bank Ltd. But he was not able to get any job and in spite of his best efforts he succeeded in getting employment in October 1972. The learned counsel for the defendants has contended that this is not sufficient to prove that he had taken steps to mitigate the damages as the U. B. L. Has not been called to prove the statement of the plaintiff and further that merely one attempt seems to have been made during the period of one year. While considering this aspect of the case one has not to lose sight of the fact that the plaintiff's service was terminated wrongfully at the fag-end of his career when he was about 55 years of age and was about to retire. If a person is placed in such a situation coupled with the fact that a stigma has been attached to him it is likely that all his efforts may have been unsuccessful. The plaintiff has produced some evidence to show that efforts were made by him to get a job and the at he was able to get it in October, 1971. In these circumstances it was the duty of the employer and heavy burden was cast upon the defendants to prove that the plaintiff had an opportunity of obtaining other employment and was in a position to mitigate the loss but failed to do so. In the present case the defendants have not led any evidence to show that alternate employment or better opportunities were available and the plaintiff did not make any effort to get them. Initial burden is upon the employee to show what steps he has taken to mitigate the damages but simultaneously the employer has also to prove that opportunities were open to the employee to obtain another employment. In Moulamein Rubber Plantation Co. Ltd. v. C. W. Mitchell (1) it was held that though it is the duty of the servant who is discharged to seek employment, the onus rests with the person who denies his right to receive his wages in full to show that he could have obtained employment. Reference may also he made to Chitty on Contracts, 24th Edition, para. 3636 where it has been observed that "the onus of proof is on the defendant employer to produce evidence to show that the dismissed employee ought reasonably to have obtained alternative employment." In the present case the plaintiff has led sufficient evidence to discharge the burden. In the circumstances and in the light of the evidence it is evident that the plaintiff had made reasonable efforts for obtaining alternate employment and to mitigate the damages. There can be no established or fixed rule to determine the length of period during which an employee may be able to get an alternate employment. This determination depends entirely upon the facts and circumstances of each case which inter alia include the status and the position the employee was holding and the prevailing conditions and difficulties in seeking the employment. The plaintiff was an experienced accountant he had in his back ground a rich experience of the banking service which was praised by the defendant No, 1 at the time of his employment. He was the Chief Accountant of the defendant No, 1 and therefore it may take sufficient time to obtain, if not the same position but somewhat similar employment. In J.J. Miranda's case where the employee was an account officer in the grade of Rs, 700 per month one year's salary was granted as compensation for (2) wrongful termination of service. In the case of Themakutty v. Thomas where a school teacher was wrongfully dismissed one year's salary was awarded as compensation. In the present case the plaintiff was drawing salary of Rs, 4,841 per month. Considering the status of the plaintiff and the salary earned by him it can reasonably be held that one year's salary should be the compensation for the wrongful termination. By way of damages the plaintiff has inter alia claimed salary up to the unexpired period of employment i,e, 16th April, 1972. The salary for the unexpired period cannot be a basis for grant of compensation. But for the extension granted to the plaintiff he would have been relieved on 16th April, 1971 up to which period the defendant had allowed the plaintiff to proceed on leave. Within six months from that date the plaintiff was able to obtain an employment. In these circumstances a sum equal to the salary for ten months amounting to Rs, 48410 will be adequate and proper compensation.
Issue No, 4 : ' The plaintiff has also claimed damage of Rs, 50,000 against defendant No, 2 for slander and defamation on the ground that the letter of termination issued by the defendant No, 2 contained defamatory material which was published by him. The only evidence on the point is the statement of the plaintiff that the defendant No, 2 issued this letter mala fide and with the intention to defame him. The learned counsel {{FOOT NOTE}}
(1) 46 I C 615 (2) AIR. 1954 Tray.-Co. 104 {{FOOT NOTE}} ' for the plaintiff has contended that the contents of the letter are defamatory per se and therefore it was not necessary to examine any evidence to prove that the plaintiff has suffered any damage due to defamation. Before a plaintiff may succeed in an action for defamation has first to prove that the words complained of are defamatory, they refer to the plaintiff and were published to third parties. However if the statement is made in such language that it is defamatory per se it is not necessary to prove that it was published. General damages are those which law presumes in every case of defamation as having been suffered by the Party defamed even though no pecuniary loss has been sustained. General damage is granted for the loss of reputation, character and credit.
Before arriving at a decision whether the contents of particular letter are defamatory the Court has to examine the character of the defamatory words. It is not every kind of abusive or filthy language used against the plaintiff that will furnish a cause of action. The mere abuse not tending to lower a man in the estimation of others or to bring him in contempt or ridicule may not be actionable. But if the language is used with the intention to lower the prestige and dignity of the person addressed, in the estimation of the people or to bring him in ridicule and injure his reputation or profession, the cause of action will arise. If defamatory language is used the damage will be presumed. But the degree to which the reputation suffers will depend upon the seriousness of the imputation. The factum of damage will also depend upon the social position and status of the defendant and the manner in which the defamatory language was published. Assessing the damage in an action', for defamation the whole conduct of the defendant from the time" defamatory statements were made and published down to the very moment of the verdict should be considered.
' Mr. Mansoorul Arfin, the learned counsel for the defendants has contended that the plaintiff has failed to establish that any defamatory language was used or that by issuing a letter of termination it was intended to defame the plaintiff or degrade him in the eyes of the people or that it was published by the defendants. He has referred to a passage from Ramswamy Ayyer's Law of Torts, VIIIth. Edition at page 206 para. 10 where it has been observed "a statement or representation is defamatory if it conveys a defamatory meaning about the plaintiff to reasonable man placed in the position of those to whom it was published. In an action for defamation the plaintiff should establish this tact. It is not enough for him to show that by some persons the statement was understood in a defamatory sense, or to refer to him. The standard of understanding is that of the ordinary reasonable man having the intelligences, knowledge, education, experience and prejudices of the average man in the class of people to whom the words were published. Liable in an action for words. The defamation must be found in the words themselves and not on facts extrinsic to the. It may be expressed or implied but whichever it is therefore must be something in the words themselves which points to the plaintiff and is defamatory to him." lyre has quoted Spencer Bower who has laid down the test of a reasonable man in these words, "he is neither a genius nor an idiot, neither a fanatic nor a faddist, neither walking encyclopedia nor an illiterate." It is well settled that the statement complained of should be understood in its plain ordinary and natural meaning and whole of it must be read together. Applying these principles to the letter taken as a whole it does not seem to be defamatory per se. The letter starts with a polite address and it mentions that the plaintiff had threatened to take the bank in liquidation and as this was considered harmful for the bank the services were terminated. There is hardly any statement which may bring the plaintiff in contempt or injure his reputation before the third parties. Plaintiff has hardly led any convincing evidence to show that the letter was written mala fide and with intention to injure the reputation of the plaintiff. In the circumstances the plaintiff has failed to establish that the letter was defamatory and that he has suffered damages for Rs, 50,000. In the circumstances the claim for damages against defendant No, 2 is dismissed. In the result suit is decreed against the defendant No, 1 for a sum of Rs, 48,410 with proportionate cost.