- (1.) This is a defendant's appeal from the judgment and decree of the Civil Judge, Dehradun, dated 28-8-1975 decreeing the plaintiff's suit for declaration that an order passed by defendant No. 1 dated 7-7-1971 terminating the plaintiffa service was illegal and void and that he continued to be in the service of the de fendant No. 2 in which the defendant No, 1 had merged and was entitled to his salary as its employee. The suit was further decreed for recovery of a sum of Rs. 16,750/- as salary from 16-7-1971 to 30-4-1974 and for pendente lite and future salarly on payment of necessary court fee.
(2.) The plaintiff was appointed on a salary of Rs. 500/- per month on the post of Development Secretary in the Orissa Co-operative Insurance Society Ltd., defendant No. 1 by an order dated 14-11-1970 passed by the Divisional Manager of the Society. The appointment was made according to the service rules of the Society and on terms and conditions set out in the letter of appointment, Ext. A-80, which inter alia, provided that the plaintiff was to conduct the business of the Society in a faithful and honest manner and was to observe the Code of conduct prescribed under Insurance Act. It was further provided that he was to transmit the premiums and other amounts received on behalf of the Society from the agents of the Society and the parties concerned to the Head Office without any delay. The service was liable to termination by one month's notice or payment of one month's salary in lieu thereof. The contract of service was reduced into writing and was signed by the plaintiff in token of acceptance of the term and conditions imposed. It was to take effect from 5-11-1970. The appointment thus was a contractual one and not a statutory appointment. It was governed by the terms and conditions contained in the letter of appointment, and the Divisional Manager was the appointing authority of the plaintiff. The plaintiff conducted the business of the Society and collected premiums from its Customers and issued cover notes to them. It appears that he sent a number of cover notes to the Head Office of the Society without the supporting premiums. The cover notes were accordingly cancelled. The Society acted under the impression that the premiums had not been paid by the parties and they were informed accordingly. The parties protested against the cancellation of the cover notes and informed the Society that the premiums had already been paid to the plaintiff and they were not liable to pay them over again. The society was further informed that the business of such a reputed company was not to be conducted in such an irresponsible manner. The Society was asked to recover the premiums from the plaintiff, and the parties it was said were not to suffer for his negliehce. The Society discovered further lapses on the part of the plaintiff in the meantime. Accordingly the Divisional Manager by an order dated 7-7-1971 terminated the plaintiff's services. The material part of the order reads as follows: "We have received a bunch of cover notes contained in your various envelopes and were surprised to note that you have sent us the various cover notes without supporting premium which is a clear violation of the Code of conduct and our repeated instructions. Your many cheques issued in favour of the society being the premium have been returned from your bankers with the remarks 'refer to drawer' which means that you collected the cash premium and utilised it for your own affairs. You have issued cover note No. 42135 on 25-3-1971 which has been sent to us without any supporting premium. There are general complaints against you from your various clients and agents. For your ready reference we have been informed by one of your agents P. Bakshi that you have collected the premium against various cover notes which has not been deposited in the office so far. Under the above circumstances and on account of wilful negligence of duties, breach of Code of conduct and non- deposit of premium realised from the parties, society is no more interested to have your services. Now this letter may be treated as termination of your service without notice from the date and time of receipt of this letter at your end. Your final account is under preparation. In the meantime you are requested to please come here with all your accounts and unused cover notes and the Society's records for settlement of account. Sd/-. Divisional Manager."
(3.) Certain legislations in the meantime had come into force in regard to the Management of Insurance business. They were "The General Insurance (Emergency Provisions)) Ordinance No. 6 of 1971 and "The General Insurance (Emergency Provisions) Act No. 17 of 1971 vesting the management of General Insurance Business of Insurance Companies. in the Central Government. The former had come into force on , 13-5-1971 and the latter on 17-6-1971. Under these statutes prior approval of the Custodian in respect of certain transactions sought to be entered into by the Undertaking had to be obtained. The Divisional Manager in the circumstances mentioned in his letter that the matter of termination of service of the plaintiff had been discussed with the Custodian and he made a note to that effect in the termination order.;