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[Landmark Judgement] SBI v/s S.N. Goyal (2008)

Published on: 08 October, 2022 at 11:06 IST

Court – Supreme Court of India

Citation – SBI v. S.N. Goyal (2008) AIR 2008 SC 2594

Hon’ble Supreme Court of India has held that the test for deciding the nature of relief—damages or reinstatement with consequential reliefs—is whether the employment is governed purely by contract or by a statute or statutory rules. It is held that, where the employer is a non-statutory body, but the employment is governed by a statute or statutory rules, a declaration that the termination is null and void and that the employee should be reinstated can be granted by courts.

However, when an employee of a statutory body whose service is terminated pleads that such termination is in violation of statutory rules governing his employment, an action for declaration that the termination is invalid and that he is deemed to continue in service is maintainable and will not be barred by Section 14 of the Specific Relief Act.

Para –17

Where the relationship of master and servant is purely contractual, it is well settled that a contract of personal service is not specifically enforceable, having regard to the bar contained in Section 14 of the Specific Relief Act, 1963. Even if the termination of the contract of employment (by dismissal or otherwise) is found to be illegal or in breach, the remedy of the employee is only to seek damages and not specific performance.

Courts will neither declare such termination to be a nullity nor declare that the contract of employment subsists nor grant the consequential relief of reinstatement. The three well-recognised exceptions to this rule are:

(i) where a civil servant is removed from service in contravention of the provisions of Article 311 of the Constitution of India (or any law made under Article 309);

(ii) where a workman having the protection of the Industrial Disputes Act, 1947 is wrongly terminated from service; and

(iii) where an employee of a statutory body is terminated from service in breach or violation of any mandatory provision of a statute or statutory rules.

Drafted By Abhijit Mishra

Key Words – Relief, Reinstatement, Damage, Employment.