Safiya Malik

The Calcutta High Court has set aside orders of injunction granted by the trial court restraining Standard Chartered bank from acting upon a redundancy notice issued to an employee. The court held that the employment contract was determinable in nature, thereby precluding the grant of an injunction. It further ruled that since the contract provided for termination with three months’ notice or salary in lieu thereof, the appropriate remedy for the employee lay in damages rather than injunctive relief.

The appeals arose from two orders passed in a suit filed by an employee against Standard Chartered Bank. The employee challenged a letter dated January 29, 2024, issued by the bank, which he alleged constituted a termination notice. He sought a declaration that the appointment letter dated January 20, 2015, remained valid and could not be unilaterally cancelled without due process of law. The suit also sought an injunction restraining the bank from acting upon the January 29, 2024, letter and from interfering with the plaintiff’s employment as a Support Officer.

The trial court granted an ad interim injunction on February 26, 2024, restraining the bank from implementing the letter till March 28, 2024. This order was extended from time to time, with the last extension granted on December 9, 2024. The bank filed two appeals, challenging both the original grant of injunction and its extensions.

The appellant-bank argued that the January 29, 2024, letter was not a termination notice but merely an intimation of a potential redundancy arising from a restructuring exercise. It contended that the injunction effectively barred it from issuing a valid termination notice under Clause 6 of the Employment Agreement. It further submitted that employment contracts are inherently personal in nature and not specifically enforceable under Section 14 of the Specific Relief Act, 1963.

The employee, in response, contended that the redundancy notice posed a present and imminent threat of termination, making injunctive relief necessary. He further argued that, post the 2018 amendment to the Specific Relief Act, contracts of personal service could be specifically enforced except in limited circumstances.

The High Court framed three primary issues for consideration:

1. Whether the January 29, 2024, letter was a termination notice

The court examined the language of the letter and concluded that it did not amount to a termination notice. It stated: "The assailed notice dated January 29, 2024, if read as a whole, brings forth certain features implicit in it. The same is captioned as a notice of risk of redundancy and not as a termination notice. It is stated therein that the appellant-bank considers that they will source personal loans only from alternate intra-bank channels going forward, which means that the plaintiff’s employment is 'at risk' of termination due to redundancy."

The court further recorded that the letter provided for a consultation period, during which the employee could seek alternative roles within the organization. It was observed: "By itself, the said notice does not purport to terminate the contract of employment of the plaintiff at all but leaves open the scope for discussion and consultation on the issue of potential redundancy due to lack of alternative roles, if any."

2. Whether an injunction could be granted in respect of an employment contract

The court examined the impact of the 2018 amendment to Section 14 of the Specific Relief Act, which removed the previous bar on enforcing personal contracts. However, it noted that the amendment still retained an exception where a contract is dependent on the personal qualifications of an employee to such an extent that the court cannot enforce its material terms.

Applying this principle, the court held: "Such a situation might have occurred if the plaintiff had some specialized skill or intellectual expertise directly related to the work which would make him indispensable for performance of the work which he is doing. In such a case, the personal qualifications of the plaintiff would be of such a level that specific performance of the material terms of the contract could not be enforced by the court."

However, in the present case, the court found that the employee’s role did not fall within this category, thereby making the contract amenable to enforcement.

3. Whether the contract was determinable, barring injunctive relief

The court held that the employment contract was determinable under Clause 6.1, which permitted termination by either party upon giving three months’ written notice. Additionally, Clause 13 allowed for immediate termination in specific circumstances.

The court observed: "Clause 6.1 contemplates early termination before the expiry of the normal tenure of the employment, that is, the superannuation age of 60 years, merely by issuance of a written notice of three months by either of the parties to the contract."

It further noted: "Section 41(e) of the 1963 Act precludes a court from granting an injunction to prevent the breach of a contract, the performance of which would not be specifically enforced. Read with Section 14(d), since a contract which in its nature is determinable cannot be specifically enforced, the court also cannot grant injunction to aid the enforcement of such a contract or in respect of breach of such a contract which is by its very nature determinable."

The court concluded that since the contract was terminable with three months’ notice, the employee’s remedy lay in damages, specifically in the form of three months’ salary, rather than injunctive relief.

The High Court issued the following directions:

1. The impugned orders of injunction dated February 26, 2024, and December 9, 2024, were set aside.

2. Any subsequent extensions of the injunction order stood automatically vacated.

3. The plaintiff’s remedy, if any, lay in damages, and the bank was at liberty to proceed in accordance with the terms of the Employment Agreement.

Case Title: Standard Chartered Bank Limited v. Sanjib Kumar Dey, alias Sanjib Dey and another
Case Number: F.M.A. No.180 of 2025 with F.M.A. No.181 of 2025
Bench: Justice Sabyasachi Bhattacharyya and Justice Uday Kumar

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