27 Sep 2023 8:57 AM GMT
The Bombay High Court on Wednesday allowed a leave petition filed by Akasa Air, a low-cost airline, seeking permission to proceed against five pilots who resigned from the company without serving their notice period.Justice SM Modak observed that part of the cause of action arose within the jurisdiction of Bombay High Court as the resignations were accepted by the company in...
The Bombay High Court on Wednesday allowed a leave petition filed by Akasa Air, a low-cost airline, seeking permission to proceed against five pilots who resigned from the company without serving their notice period.
Justice SM Modak observed that part of the cause of action arose within the jurisdiction of Bombay High Court as the resignations were accepted by the company in Mumbai.
“...place where resignation was received can be part of cause of action. Sending a resignation through email cannot be sufficient. Ultimately, the company has to take a call on that. Either company may refuse to accept the resignation, or may accept it conditionally, or may accept it for future date. If these options are available to employer and these options can be exercised only when email is received, part of cause of action has arisen in Mumbai”, the court observed.
The court posted the matter for considering grant of interim reliefs to Akasa Air on October 4, 2023.
The dispute arose following the resignation of five Akasa Air pilots, who left the company without serving the contractual six-month notice period. Akasa Air has sought Rs. 21 Crores in damages from each pilot, as well as an additional Rs. 18 lakhs for breach of contract. Akasa Air has also sought an injunction compelling the pilots to serve their notice period.
Senior Advocate Janak Dwarkadas for Akasa Air argued that the employment agreement as well as the training agreement were executed in Mumbai, and the resignations were received in Mumbai, making it the appropriate jurisdiction for the case. Dwarkadas claimed that the company did not choose Mumbai for lower court fees but because it was the agreed-upon jurisdiction as per the agreements between the airline and the pilots.
Dwarkadas pointed out that as per the employment agreements, any disputes arising from the contract should be exclusively decided in Mumbai. He also emphasised that the pilots had provided four undated cheques to the company at the time of signing the agreement, which would be payable in Mumbai.
Senior Advocate Darius Khambata for the pilots argued that while the employment agreements were executed in Mumbai, they were signed by the pilots at their respective places of postings outside Mumbai. Further, undated cheques were not deposited by Akasa Air and it cannot be said that they are payable in Mumbai. Plaintiff may deposit the cheques at any place in India where it has a bank account, he said.
Khambata argued that the place of acceptance of resignation would be either New Delhi or Bangalore, as the emails accepting the resignations were received by the pilots in these cities. Therefore, he contended that the Bombay High Court lacked jurisdiction to hear this dispute.
Dwarkadas said that there is nothing to show that the pilots signed the agreements outside Mumbai.
The resignation clause of the employment agreements stipulated that when pilot resigns, the pilot has to continue his service till notice period of six months is completed. However, the company has the right to waive off the notice period entirely or partly. The company has the right to require the pilot to make payment in lieu of notice period waiver. Further, if pilot fails to serve the entire notice period, the company can recover payment for remainder of the notice period.
The court noted that the resignation isn’t complete once the pilot sends the resignation letter as the company has to take a call on the resignation. Thus, part of the cause of action arose where the company exercised its discretion to conditionally accept the resignations, i.e., Mumbai.
Therefore, the Bombay High Court has jurisdiction in this matter, the court held.
At this stage, the court did not go into the question of whether the resignation without serving notice period constituted repudiation of contract.
Case no. - LPETN(L)/24935/2023 [Original]
Case Title - SNV Aviation Pvt. Ltd. v. Capt. Gareema Kumar