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2023 (2) TMI 45 - HC - Insolvency and BankruptcyTermination of employment - breach of service contract by terminating the services - recovery towards arrears of service contract, compensation, encashment of leave amount, gratuity COLA/DA, damages with interest. Salary in lieu of notice - HELD THAT:- The definition ‘salary’ was modified during the time when respondent was in appellant’s employment. Clause 8(d) of Exhibit 49 defines what is salary in case respondent’s services are terminated without notice. But that underwent a change when in March 2002 the salary and allowances payable to him was restructured. There was no COLA. Moreover, there is no evidence to indicate that basic pay mentioned in the revised compensation following the restructuring included COLA. That one has to only surmise. There is no cross examination of respondent also on this aspect. The Trial Court has not erred in applying the annual cost to company while determining the compensation in lieu of notice. It is also noted that if appellant had given 3 months’ notice for termination, appellant would have certainly paid respondent the entire compensation as payable under the cost to company formula. Damages - HELD THAT:- The court felt that the person, whose employment has been summarily terminated, would naturally suffer mental trauma. So also his family, and suddenly they would have no income also to survive. It is for that reason the appointment letter itself provided for 3 months’ notice or salary in lieu of 3 months notice. Appellant was duty bound to hand over the severance pay along with the letter of termination and not waited for two and half months to make that payment. Therefore, Trial Court was justified in granting the amount of Rs.2,50,000/- as damages. Perhaps, this would work as deterrent to all corporate employers that they cannot target a helpless employee by using its own muscle and money power. A sum of Rs.3,20,807/- together with proportionate interest be reduced from the decretal amount deposited in the Trial Court. That would leave us to decide what to do with this amount of Rs.3,20,807/- plus accumulated interest thereon. Appeal allowed in part.
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