### Fixed-term employment may be terminated for cause and damages limited to notice period pay

The appellant was appointed as Director of Respondent No. 2 for a fixed five-year term starting September 19, 2010, receiving a monthly honorarium of Rs. 30,000/-

Due to a brain tumor and subsequent surgery in January 2013, the appellant took sanctioned medical leave from February to July 2013

When she applied for a further extension from August to October 2013, the Respondents declined and relieved her of her duties via a letter dated August 1, 2013

The appellant filed a suit seeking a declaration that the termination was illegal and claiming damages of Rs. 12,50,000/-

The Trial Court decreed the suit only for Rs. 90,000/- (equivalent to three months' notice pay) plus interest, leading to this appeal for modification/higher compensation

1. Whether a fixed-term employment contract can be terminated by the employer prior to the expiry of the term for just cause.

2. Whether the appellant was entitled to compensation for the remainder of the five-year term or merely for the notice period prescribed by the Service Rules.

The Court applied the principle that employment under a registered society is private contractual employment, governed by its internal Service Rules rather than Article 311 of the Constitution

It relied on the precedent of *Shriram Pistons and Rings Ltd. and Anr. v. T.S. Mokha*, which establishes that even in cases of wrongful repudiation of an employment contract, an employee is generally only entitled to damages in lieu of the notice period rather than salary for the remainder of the term

Furthermore, citing *India International Centre v. SN Pandit*, the Court affirmed that a fixed-duration contract can be terminated prior to expiry if "just causes" exist

Rule X(2) of the Respondents’ Service Rules, providing for three months’ notice for termination, was the specific governing provision for quantum of damages

The Court reasoned that the Respondents had "just cause" to terminate the contract because the appellant’s prolonged absence—exceeding the 90-day medical leave limit prescribed in Rule VI(10) of the Service Rules—adversely affected the functioning of the institution

The Court rejected the appellant's claim that a five-year fixed term is absolute, noting that an employer cannot be reasonably expected to extend leave indefinitely

Regarding the quantum of damages, the Court followed the *Shriram Pistons* doctrine, holding that the measure of damages for termination of private employment is the salary for the notice period

Since the Service Rules stipulated a three-month notice period, the Trial Court’s calculation of Rs. 90,000/- (Rs. 30,000 x 3) was legally sound

The Court dismissed the appellant’s new plea regarding a purported leave extension till September, finding it contradictory to the Governing Body's formal resolutions

The appeal was dismissed, and the Trial Court’s judgment awarding Rs. 90,000/- with 9% interest per annum was upheld