The Delhi HC ruled that Wipro’s termination letter against ex-employee Abhijit Mishra was defamatory. The IT giant must now pay Rs 2 lakh and issue a new letter without damaging language.
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NEW DELHI: The Supreme Court in the case of Abhijit Mishra v. Wipro Limited emphasized that employers cannot include unsubstantiated defamatory remarks in termination letters, affirming the employee’s right to reputation under Article 21.
The case involved a challenge to an employment termination letter that contained unsubstantiated and adverse remarks about the employee’s conduct, including allegations of “malicious conduct” and “loss of trust.”
The Court held that while employers have the contractual right to terminate employment without assigning reasons, including damaging statements without conducting a formal inquiry or presenting evidence was unjustified.
Background
The plaintiff was employed by Wipro Limited as a Principal Consultant from 14 March 2018 to 5 June 2020, under a contract that allowed either party to terminate the employment with notice, one month during probation, and two months post-confirmation (Clause 10).
On 5 June 2020, Wipro, through its representative Mr. Srinath Sridharan, issued a termination letter, describing the plaintiff’s conduct as “malicious” and stating that it caused an irreparable breakdown in the professional relationship.
Claiming that these statements were defamatory and damaging to his reputation and professional integrity, the plaintiff filed a suit seeking a revised termination letter with the remarks removed.
In response, the defendant filed a written statement denying the allegations and asserting that the termination letter was issued in accordance with the employment contract. The defendant maintained that the remarks merely reflected the plaintiff’s conduct and were appropriate given the circumstances of the termination.
Arguments by the Parties
Plaintiff:
The plaintiff, appearing in person, asserts that the termination letter issued by Wipro contains defamatory and unsubstantiated allegations that damage his character and violate Clause 10 of the employment contract. He specifically challenges phrases like “malicious conduct” and “complete loss of trust” as baseless, defamatory, and unjustified.
He claims he had exercised his right to appeal and submitted a representation against the letter, but was denied a fair opportunity to respond. The plaintiff argues that the lack of evidence to support these serious claims renders the termination arbitrary, unjust, and a misuse of contractual rights.
He further claims that the remarks have harmed his professional reputation, making it difficult for him to find new employment. He also contends that this act violates his right to life with dignity under Article 21 of the Constitution.
The plaintiff submits that the termination was disguised as a contractual right but was executed in bad faith, breaching both natural justice and contractual fairness. He relies on several judicial precedents, including SP Sharma v. IFCI Ltd., Himanshu Bhatt v. IRCTC, Shohhna Bhartia v. State of NCT of Delhi, and Drummond-Jackson v. British Medical Association (UK).
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Defendant:
On the contrary, Mr. Mandeep Singh Vinayak, counsel for the defendant, argues that the plaint does not disclose any valid cause of action and should be dismissed. He also claims that the plaintiff has not shown that any defamatory statements were made public.
The defendant maintains that the plaintiff held a senior, managerial position requiring creativity and focus, but he was more interested in promoting himself as a “Crusader for Social Change” rather than fulfilling his professional duties. Due to performance issues, he was placed on a Performance Improvement Plan (PIP), but instead of improving, he filed numerous grievances and complaints.
The defendant claims the plaintiff showed insubordination and refused to cooperate, leading to his termination. The communications were internal and not published to the public, and the plaintiff was paid two months’ notice as per contract. It is also submitted that the plaintiff is now successfully practicing as an Advocate, and, hence, has not suffered reputational or livelihood loss.
Mr. Vinayak argues that the termination was justified, contractual, and based on factual conduct, not defamation. He relies on multiple judgments, including S.T.P. Singh v. Tarsem Singh, Bilal Ahmed Kaloo v. State of Andhra Pradesh, among others, to support the defendant’s position.
Court’s Observation
The Court observed that the employer-employee relationship, especially in senior roles, is founded on mutual trust, and any breakdown must be addressed with procedural fairness and dignity. While the employer was contractually permitted to terminate the employee without assigning reasons, it voluntarily included adverse comments regarding the employee’s character and conduct.
In doing so, the employer assumed the burden of substantiating those remarks with credible material, which it failed to do. The Court noted that no disciplinary inquiry was conducted, nor was any evidence placed on record to justify the use of phrases like “malicious conduct” or “complete loss of trust.”
Even though the termination letter was not publicly circulated, it formed part of the employee’s professional record and could potentially be disclosed during background checks, thereby impacting future employment.
The Court underscored that the right to reputation is an essential facet of the right to life under Article 21 of the Constitution, and allowing unverified, derogatory remarks to stand in an official document would amount to a violation of this right. The Court held,
“Court deems it just and proper to award a sum of Rs. 2,00,000/- as general compensatory damages to the plaintiff, to redress the reputational harm, emotional hardship, and loss of professional credibility occasioned by the conduct of the defendant.”
Consequently, the Court directed the issuance of a fresh termination letter, free from the impugned statements.
Case Title: ABHIJIT MISHRA Versus ABHIJIT MISHRA
CS(OS) 31/2021
READ JUDGMENT HERE
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