Business Law Case-I

Case: Compensation should be

received for breach of the Contract
of Employment

Mr. Modraj Sharma vs. Mr. Rajeev Gajurel.

 Case Highlights:
Mr. Rajeev Gajurel On 24th July 2003 entered into an
agreement (Service Bond) with Everest Bank Ltd.
regarding his employment which specified that he would
render his services to the bank for a duration of 4 years
(from 24-07-2003 to 24-07-2007)
If he failed to fulfill the terms he would be liable to pay
the bank a compensating sum of Rs two lakhs which had
been clearly stated in the Service Bond and signed by the
Mr. Rajeev.
He resigned from the post on 27-02-2007 which was
before the date of discharge of the ‘Service Bond’ formed
during employment against which Everest Bank launched
a suit to claim the compensation.
 Claims of the Plaintiff:
1) The rival party agreed to compensate the sum expressively at the time
of contract formation alongside the fact that he signed the service order
willingly and with his own consent.
2) It is the right of the Bank to claim the compensation. The Defendant also
breached the terms of the contract and as per Contract Act 2056 Sec 13
he is liable for compensation.
3) The rival party during his course of employment had undergone various
training programs which as a matter of fact must be compensated for ;
the untimely resignation by the party
 Issues of the Defendant:
1) The defendant claims that the contract regarding his terms of
employment was created without his consent
2) The terms of employment stated that the defendant was supposed to
render his services to the organization for a period of Four years, Implying
that he was a temporary staff
Decisions Made
1) Decision made by the District
Court:
The hearing of the case was held in Kathmandu’s District Court. The
district court based of the incompetence of the evidence provided by the
Plaintiff’s based on Contract Act 2056 Sec 2(a) and Sec 13 passed on a
decision that the defendant might not be held liable for the
compensation of the sum of Rs Two lakhs.
Case Contd
Application Letter to Appellate Court:
There is no explanation on the claim of Plaintiff regarding how the
evaluation of compensation of incomplete performance was done.
Then a Claim after due date needed be dismissed and error full
Judgment as per contract act was delivered. The Plaintiff then filed a
letter that the Judgment should be reevaluated.
 Decision made by the Appellate Court:

The Appellate court of Patan was where the Second Hearing of the case
had taken,
The appellate court based its decision that the Employer had the right to
form the terms and conditions of the contract and it was the Employee
who had the right to either accept or reject the terms. In the following
case it was held that:
1) The defendant had with his free consent hence the defendant for his
untimely resignation leading to the breach of the contract which caused an
injury to the Plaintiff whereby the rival Party has to pay the compensation.
This decision was based on Sec 74, Sec 82 and Sec 83 of the Contract Act
2056.
2) The additional charges for receiving the justice could be claimed by The
Plaintiff against the Defendant Rs Six thousand eight hundred and fifty
However additional damages incurred by the Everest bank for training Mr.
Rajeev Gajurel cannot be recovered.
Decision Made by the Supreme Court:

The Supreme Court’s decision favored the Claims of the Plaintiff.

The untimely resignation of the defendant; Mr. Rajeev Gajurel has
caused a breach of the service bond signed by him which stated
that he was to remain in the bank and provide his service for 4
years.
Additionally, the Supreme Court stated that the defendant entered
into the contract of his own will, he signed the contract as well
which was enough of a proof that he would abide by the
contractual terms and conditions. Since he failed to do so, he must
compensate in return to the victim Plaintiff.
Ratio of the Judgment Made:
The Defendant had signed and Employment Term for four years
and had breached the so- signed contract by not rendering his
services for the term duration
The Defendant upon entering the service had been clarified of the
service terms and conditions, his activity of untimely resignation
can be taken that he violated the very contract’s condition he
agreed to and as per the provisions for breach of the contract
signed he must pay the compensation.
Held
Thus the decision was held in the favor of the Plaintiff; the
Rival Party the Defendant should be held liable for the
Compensation
There occurred a breach of Contract terms and not fulfilling
one’s contractual obligations (untimely resignation before the
discharge period) which has given the Plaintiff the Right to
Claim Compensation.
CASE SUMMARY !!!!

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