PARMESHWARI PRASAD GUPTA versus THE UNION OF INDIA

Citation: [1974] 1 S.C.R. 304 · Decided: 02-08-1973 · Supreme Court of India · Bench: KUTTYIL KURIEN MATHEW · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

J04 
PARMESHWARI PRASAD GUPTA 
'· 
THE UNION OF INDIA 
August 2, 1973 
(K, K. MATHEW AND M. H. BEG, JJ.J 
. Termination of. ser~ice-Reso/ution of Board of Directors terniinating ser~ 
vice of employee invalid because meeting not properly called-Ratification of 
-termination at a subsequent properly convened meeting relates back to date of 
act ratified and makes termination effective-Nott:e of termination-One month's 
.notice, sufficiency of. 
The appellant was appointed Secretary of the respondenf company in 1942. 
Later he was promoted as General Manager. By a resolution dated December 
16, 1953 the Board of Directors of the company decided to terminate the services 
of the appellant. 
By a telegram and a letter dated December 17, 1953 addressed 
to the appeilant the Chairman of the Board of Directors ferminatcd the serYices 
of the appellant. 
Subsequently at a meeting held on December 23, 1953 the 
Board of Directors confirmed the minutes of the meeting held on December t 6, 
1953- and the action of the Chairman in terminating the services of the appellant 
by his let~er and telegram dated December 17, 1953. The appellant filed a suit 
challenging his dismissal and also ·claimed that he was entitled to 
18 
months' 
notice before termination of his services. 
The trial Court and the High Court 
decided against the appeilant. In appeal by certificate to this Court the questions 
for consideration were : (i) whether the termination of the appeilant's 
service 
was valid and (ii) whether the appellant was bound by the company's rules which 
provided for termination of the service of employees after one month's notice. 
Dismissing the appeal, 
HELD : (i) Notice to all the Directors of a meeting of the Board of Directors 
was essential for the validity of any resolution passed at the meeting. As admit-
A 
B 
c 
D 
tedly no notice! was given of the meeting on December 16, 1953 to one of the 
E 
Directors, the resolution passed terminating the services of the 
appellant was 
invalid. 
[307 D-E] 
But the resolution of the Board of Directors to confirm the action of the 
Chairman to terminate the services of the appellant by his telegram and letter 
dated December 17, 1953, would show that the Board ratified the action of the 
(~hairman. Even if it be assumed that the telegram and the letter terminating 
the services of the appellant by the Chairman was in pursuance to the invalid 
resolution of the Board of Directors passed on December 16, 1953 to terminate 
F 
his services, it \vould not follow that the action of the Chairman could not be 
ratified in a regularly convened meeting of the 
Board of Directors. 
E\'en 
assuming that the Chairman was not legally authorised to terminate the services 
of the appellant, he was acting on .behalf of the Company in doing so. because 
he purported to act in pursuance of the invalid resolution. Therefore it 
\Vas 
open to a regularly constituted. meeting of the Board of Directors to ratify 
1
th~t 
action which, though unauthonsed, was done on behalf o~ the compa~y. h.ati-
fication would always relate back to the date of the act ratified and so 1t must be 
held that the services of the appe1lant were validly terminated on Dece1nber 17. 
G 
1953. 
[307 G-308 CJ 
(ii) The rules which provided for one month's notice in case of termination 
of services of all employees would apply to the appellant as 
well. 
The rules 
expressly purported to bind a1l the employees of the respondent-company. There 
\Vas no reason to hold that the appellant !Vas not an employee of the respond~nt­
company. The appellant had himself rehed on the rules. 
It was therefore idle 
to contend that the rules did not bind him. The contention of the appellant that 
H 
he was entitled to 18 months' notice must be rejected. [308 D-E] 
CJVTL APPELLATE JURISDICTION : Civil Appeal No. 1333 (N) of 
1967. 
) 
P. P. GUPTA v. UNION (Mathew,/,) 
305 
A 
From the Judgment and Decree dated the 25th November, 1966 
of the Delhi High Court in Regular First Appeals Nos. 89-D and 
104-D of 1956. 
" 
. 
V. S. Desai, Ravinder Rana, 0. P. Ra~a and Uma Mehta, for •Jie 
appellants. 
B. Sen, Suresh Sethi, R. K. Maheshwari and B. P. Maheshwari, for 
B the respondent. 
The Judgment of the Court was delivered by-
MATHEW, J.-This appeal by certificate is directed against the 
Decree of the High Court of Delhi dated November 25, 1966, passed 
in Regular First Appeals No 89-D of 1956 and No. 104-D of 1956, 
c both arising from Suit No. 282 of 

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