Veerendr Singh Siradhana, J.
1. Aggrieved of the letter/order dated 30th April, 2013, terminating the contract of employment with further advise to relieve the petitioner on 29th July, 2013; the petitioner has instituted the present writ proceedings, praying for the following relief(s):
"(i) To issue an appropriate writ/order/direction quashing and setting aside the letter/order dated 30.4.2013 and restore the status quo ante with all consequential benefits with interest @ 18% per annum.
(ii) To issue an appropriate writ/order/direction quashing and setting aside the Clause (a) of Notice Period falling under Annexure - III of Letter of Appointment which empowers Respondent to terminate the service of the petitioner even after his confirmation, by giving three months notice.
(iii) Any other relief which this Hon'ble Court deem fit and proper in facts and circumstances of the case may also be passed in favour of petitioner.
(iv) Award cost of petition."
2. Shorn off unnecessary details, the indispensable skeletal material facts necessary for appreciation of the controversy are that the petitioner was appointed in the Management Grade J - I, as a Team Member at it's Jaipur Office vide letter dated 11st August, 2008, by the respondent No.2. On promotion to Grade J - 3 as `Territory Sales Manager', his Annual compensation was enhanced fromRs.2,00,000 / - (Rupees Two lacs) toRs.2,25,000/ - (Rupees Two lacs Twenty Five Thousand), vide order dated 5th January, 2009. After review of the performance during probation, the petitioner was accorded confirmation vide communication dated 3rd September, 2009, in the services of the Organization w.e.f. 3rd March, 2009. Annual compensation was further enhanced, in view of the performance of the petitioner, for the financial year 2009-2010 and 2011-2012. However, the employment of the petitioner was suddenly put to an end vide order dated 30th April, 2013, w.e.f. 29th July, 2013; invoking Clause (a) under Annexure - III, which provided for a Notice Period.
3. Learned counsel for the petitioner Mr. Sunil Samdariya, reiterating the pleaded facts and grounds of the writ application, while assailing the impugned provision i.e. Clause (a) of Notice Period under Annexure - III of the Letter of Appointment, asserted that the condition as contemplated under Clause (a) of the offer of appointment, empowering the respondent-employer to terminate the service of a confirmed employee by serving three months notice is non-est, void and inoperative in the eye of law in view of the several pronouncements by the Hon'ble Apex Court of the land.
4. According to the learned counsel, no order terminating the service of a confirmed employee could have been passed, and therefore, the provision as contemplated under Clause (a) of the offer of appointment is patently unlawful, illegal and invalid, and therefore, deserves to be quashed and set aside on that count alone. The petitioner, who was appointed by the respondent - employer in the Management Grade J - I as a 'Team Member' at it's Jaipur Office vide letter dated 11th August, 2008, was accorded promotion to the Grade J - 3 as 'Territory Sales Manager' and his Annual compensation was enhanced. Moreover, the services of the petitioner were confirmed vide letter dated 3rd September, 2009; thus, he acquired a substantive status, hence, the impugned order, terminating the employment of the petitioner, dated 30th April, 2013, is bad in the eye of law.
5. It is further urged that pari materia provisions have been struck down by the Hon'ble Apex Court of the land for such terms of contract are void being in violation to the mandate of Section 23 of the Contract Act, and therefore, the impugned action deserves to be quashed and set aside on that count alone.
6. Termination of a confirmed employee by an innocuous order amounts to removal/dismissal of an employee and cannot be effected without holding a regular departmental enquiry. Furthermore, principles of natural justice are to be complied with. Mere discontinuation of a particular activity such as 'Out Board Source Team' (for short, 'OBST'), cannot be a ground of termination of the services of a confirmed employee of the organisation for the petitioner's age of retirement in the Respondent organisation is 60 years, as has been incorporated, in the offer of appointment under Annexure - III. Thus, the impugned order of termination dated 30th April, 2013, is not only cryptic, non-speaking and unreasoned without any cogent and tangible reasons but is also violative of fundamental rights of the petitioner as guaranteed under Article 14 and 21 of the Constitution of India.
7. In support of his submissions, learned counsel has placed reliance on the opinion in the case ofMoti Ram Deka v. N.E. Railways: AIR 1964 SC 600,Central Inland Water Transport Corporation v. Brojo Nath Ganguly: AIR 1986 SC 1571=1986(3) SCC 156,Uptron India Limited v. Shammi Bhan: 1998 (6) SCC 538,Ram Saha Rai v. Sachiv Samanya Prabhandak and another: 2001(3) SC 323,Pradeep Kumar Biswas v. Indian Institute of Chemical Biology: 2002 (5) SC 111,Zee Tele Films Limited v. Union of India: 2005(4) SCC 649, andNawal Kishore Sharma v. Union of India: 2014 (9) SCC 329.
8. In response to the notice of the writ application, the respondents have filed their counter affidavit, raising preliminary objections, as to the very maintainability of the writ application for want of territorial jurisdiction on behalf of respondent No. 1, since the impugned order dated 30th April, 2013, has been issued by respondent No. 2 from its Mumbai office.
9. It is further contended that respondent No.1 is not 'State' within the meaning of Article 12 of the Constitution of India. Though, the Government of India holds majority shares in IDBI Bank; there is no interference in the day to day working and operations of the Bank, and there is no deep and pervasive Government control as well. Moreover, IDBI Bank is a Company under the Companies Act, 1956, and unlike other public sector banks the policies are directed and driven by Board of Directors independently.
10. It is also pleaded that the petitioner was an employee of respondent No.2, which is a different legal entity though providing services under an agreement entered into between respondent No.1 and 2, which contained a Clause to the effect that the respondent No.2, alone shall remain responsible for the personnel/employees supplied by respondent No.2.
11. Learned Senior Counsel, Mr. Sanjeev Prakash Sharma, assisted by Mr. Ankit Sethi, appearing on behalf of the respondents, referring to the contents of the counter-affidavit, emphasised that the writ application is not maintainable for want of territorial jurisdiction as well as for the reason that the impugned order/communication dated 30th April, 2013, was issued by respondent No.2, therefore, the writ application cannot be maintained qua the respondent No.1 - IDBI Bank. Furthermore, respondent No.1, is not 'State' within the meaning of Article 12 of the Constitution of India, rather a Company under the Companies Act, 1956.
12. According to the learned counsel, respondent No. 2 alone is responsible for the personnel/employees supplied to respondent No.1 i.e. IDBI Bank, as is evident from the agreement dated 12th February, 2008.
13. It is further submitted that the two respondents are two different legal entities and there is no privity of contract between the petitioner and respondent No.1. Agreement between respondent No.1 and the petitioner for providing services by respondent No.2 to respondent No.1.
14. It is further contended that in order to find the most competitive rates for the outsourced services, which in turn would save the public money; new vendors/service providers have been selected as was recommended by the Central Vigilance Commission.
15. During the course of arguments, learned counsel further submitted that the petitioner was invited to join Talent Pro India HR Pvt. Ltd. as one of its valuable associates with the designation as 'Territory Sales Manager', with the terms and conditions incorporated therein, and was called upon to join on or before 24th June, 2013. A formal appointment order was to be issued subsequent to his joining the organisation but the petitioner did not respond to the offer, therefore, the writ application deserves to be dismissed.
16. In support of his submissions, learned counsel has placed reliance on the opinion in the case of thePraga Tools Corporation v. Shri C.A. Imanual and ors., 1969(1) SCC 585,All India ITDC Workers Union and Ors. v. ITDC and Ors., 2006 (10) SCC 66,State of Haryana & Ors. v. Navneet Verma, 2008 (2) SCC 65,Balmer Lawrie & Co. Ltd. & Ors. v. Partha Sarathi Sen Roy & Ors., JT 2013 (8) SCC 345andBalwant Rai Saluja v. Air India Ltd., 2014(9) SCC 407.
17. I have heard the learned counsel for the parties and with their assistance perused the materials available on record as well as gave my thoughtful consideration to the rival submissions at Bar.
18. Indisputably, the petitioner was appointed for the position of a 'Team Member' in the Management Grade J - I, at it's Jaipur Office vide offer of appointment dated 11th August, 2008. Annexure - I of the offer of appointment contains the details of guaranteed salary wher
Please Login To View The Full Judgment!
as, the Annexure - 2 provided for terms and conditions of Provident Fund and Gratuity. Annexure - III contemplated details with reference to the Date of joining, Probation period and Confirmation, Transfer, Retirement age, Other employment, Confidentiality, General Conditions [as to false declaration, statutory deductions including income tax, employment terms supersede and replace any existing agreement or understanding etc.], Separation and Notice Period.19. Annexure - IV contemplated consequences of the petitioner leaving the services of the organisation within one year of joining or before confirmation. Annexure - III under the Retirement Age contemplated thus:Retirement Age:"Your retirement age will be 60 years and is subject to organization's policies in force from time to time. The age for this purpose will be taken from your employment application form, as declared by you."20. The offer of appointment under 'Notice Period' provided thus:Notice Period:"a. Subject to the terms of General clause above, the contract of employment is terminable, without reasons by either party giving one month's notice during probationary period and three months notice after confirmation. In either of this eventuality, you will serve the notice period as above or till the date the organisation decides to relieve you which ever is earlier. Payment or recovery of salary in lieu of notice period will be at the discretion of the organization.b. Not withstanding above, the organisation may at its discretion relieve you without notice or salary in lieu of the same, if the business interests of the organisation warrant so."21. From a glance of contents of the offer of appointment dated 11th August, 2008 (Annexure - III), it is evident that the offer of appointment contemplated retirement age of the incumbent as 60 years subject to organization's policies in force from time to time and the age for this purpose was to be determined with reference to the date furnished in the employment application form, by the petitioner. The offer of appointment also incorporated 'Notice Period' subject to General Clause.22. IDBI Intech Ltd. (IIL) (respondent No.2), is a wholly owned subsidiary IDBI Bank (respondent No.1) established in the year 2000. It provides IT related services in the area of Consultancy, System Integration, System implementation & support, Applications & Server hosting and other IT related managed services and specialised training. The details as reflected in the documentary evidence Annexure - 9, enclosed with the rejoinder, unmistakably indicates to the effect that IDBI Intech Ltd. (respondent No.2), is a subsidiary of IDBI Bank (respondent No.1). The parent establishment has been indicated as IDBI Bank.23. Further, Annexure - 10 indicates the details of the employees of the IDBI Bank Limited, who are on deputation to IDBI Intech Ltd. (respondent No.2). Annexure - 11, is a mail sent by the petitioner, which contained the details of his performance till 27th June, 2013.24. Thus, seen in the backdrop of the contents of Annexure 9 and 10, it is evident that the functions and affairs of the respondents are intensely interwoven and the segregation attempted is an eye wash. The petitioner has also placed on record Annexure - 11, a copy of communication dated 27th June, 2013, from the e-mail Box, reflecting performance of the petitioner qua others, which is another indicator of interwoven affairs and activities of the respondents.25. Another document placed on record Annexure - 12 along with rejoinder to the reply of respondent No.1, further reflects general about general form and/or character on the website of IDBI (respondent No.1) i.e. an Indian Financial service company headquartered Mumbai, India. Reserve Bank of India (RBI) categorized it as an "other public sector bank" established in the year 1964, by an Act of Parliament to provide credit and other facilities for the development of the Fledgling Indian Industry with details of Revenue, Operating income, Net income, Total assets, Employees and website. Under the caption recent developments, the information furnished reads thus:"To meet emerging challenges and to keep up with reforms in financial sector, IDBI has taken steps to reshape its role from a development finance institution to a commercial institution. With the Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003, IDBI attained the status of a limited company viz. Industrial Development Bank of India Limited (IDBIL). Subsequently, the Reserve Bank of India (RBI) issued the requisite notification on 30th September, 2004 incorporating IDBI as a 'scheduled bank' under the RBI Act, 1934. Consequently, IDBI, formally entered the portals of banking business as IDBIL from 1st October, 2004. The commercial banking arm, IDBI BANK, was merged into."26. Office memorandum dated 26th February, 2013 (Annexure - 1), the communication from the Government of India, Ministry of Finance, Department of Financial Services to the Chairman and Managing Director IDBI (respondent No.1), in response to letter dated 8th January, 2013, while treating IDBI Bank Ltd. on par with Nationalised Bank, informed in no uncertain terms that IDBI Bank Ltd. holds the status of a Public Sector Bank on par with State Bank of India for all purposes including accepting the deposits of amount allocated under MPLAD Scheme. Reserve Bank of India has categorized IDBI Ltd. under a new sub-group "Other Public Sector Banks". The communication dated 15th April, 2005 (Annexure - 2), reads thus:"Considering its shareholding pattern, IDBI Ltd., may be considered as a Government-owned bank. In view of the assurance to the Parliament given on 8th December, 2004 by the Finance Minister during the discussion on the Repeal Bill, 2003 that the Government holding in IDBI Ltd. would always be above 51%, IDBI Ltd. is categorized under a new sub-group "Other Public Sector Banks"."27. In the case ofM/s Zee Tele Films Ltd. and another v. Union of India and others: AIR 2005 SC 2677=2005 (4) SCC 649. A Constitution Bench of the Hon'ble Supreme Court referring to the development of law by judicial interpretation culminated in the judgment of the 7 - Judge Bench in the case ofPradeep Kumar Biswas: 2002 (5)SCC 111, did take note of the fact that earlier opinion in the case ofAndi Mukta Sadguru Shree Muktajee Pandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Ors. v. V.R. Rudani and Ors., 1989 (2)SCC 691, and observed that Article 226 confers wide powers on the High Courts to issue writs in the nature of prerogative writs. Under Article 226, writs can be issued to "any person or authority". The term "authority" used in the context must receive a liberal meaning unlike the term in Article 12 which is relevant only for the purpose of enforcement of fundamental rights under Article 32. Article 226 confers powers on the High Courts to issue writs for enforcement of the fundamental rights as well as non-fundamental rights. The form of the body concerned is not very much relevant rather relevant is the nature of the duty imposed on the body. The duty is to judge the issue in the light of positive obligation owned by the person or authority to the affected party, no matter by what means the duty is imposed. If a positive obligation exists mandamus cannot be denied. The Hon'ble Supreme Court further held thus:"33. Thus, it is clear that when a private body exercises its public functions even if it is not a State, the aggrieved person has a remedy not only under the ordinary law but also under the Constitution, by way of a writ petition under Article 226. Therefore, merely because a nongovernmental body exercises some public duty that by itself would not suffice to make such body a State for the purpose of Article 12. In the instant case the activities of the Board do not come under the guidelines laid down by this Court in Pradeep Kumar Biswas case (supra), hence there is force in the contention of Mr. Venugopal that this petition under Article 32 of the Constitution is not maintainable."28. In the case of Nawal Kishore Sharma (supra), wherein the appellant (Nawan Kishore Sharma) who suffered with serious heart muscle disease (Dilated Cardiomyopathy) and breathing problem which forced him to stay in native place Bihar, where from he had been making all correspondence with regard to his disability compensation being declared permanently unfit for service on medical grounds-all replies including rejection of claim for disability pension were addressed to him at his address in Bihar; the Hon'ble Supreme Court referring to the earlier opinion in the case ofState of Rajasthan and Ors. v. M/s. Swaika Properties and Anr., 1985 (3) SC 217, held thus:10. In the case ofState of Rajasthan and Ors. v. M/s. Swaika Properties and Anr., (1985) 3 SCC 217, the fact was that the Respondent - Company having its registered office in Calcutta owned certain land on the outskirts of Jaipur City was served with notice for acquisition of land under Rajasthan Urban Improvement Act, 1959. Notice was duly served on the Company at its registered office at Calcutta. The Company, first appeared before the Special Court and finally the Calcutta High Court by filing a writ petition challenging the notification of acquisition. The matter ultimately came before this Court to answer a question as to whether the service of notice Under Section 52(2) of the Act at the registered office of the Respondent in Calcutta was an integral part of cause of action and was it sufficient to invest the Calcutta High Court with a jurisdiction to entertain the petition challenging the impugned notification. Answering the question this Court held:"7. Upon these facts, we are satisfied that the cause of action neither wholly nor in part arose within the territorial limits of the Calcutta High Court and therefore the learned Single Judge had no jurisdiction to issue a rule nisi on the petition filed by the Respondents Under Article 226 of the Constitution or to make the ad interim ex parte prohibitory order restraining the Appellants from taking any steps to take possession of the land acquired. Under Sub - section (5) of Section 52 of the Act the Appellants were entitled to require the Respondents to surrender or deliver possession of the lands acquired forthwith and upon their failure to do so, take immediate steps to secure such possession Under Sub-section (6) thereof.8. The expression "cause of action" is tersely defined in Mulla's Code of Civil Procedure:The 'cause of action' means every fact which, if traversed, it would be necessary for the Plaintiff to prove in order to support his right to a judgment of the court.In other words, it is a bundle of facts which taken with the law applicable to them gives the Plaintiff a right to relief against the Defendant. The mere service of notice Under Section 52(2) of the Act on the Respondents at their registered office at 18 - B, Brabourne Road, Calcutta i.e. within the territorial limits of the State of West Bengal, could not give rise to a cause of action within that territory unless the service of such notice was an integral part of the cause of action. The entire cause of action culminating in the acquisition of the land Under Section 52(1) of the Act arose within the State of Rajasthan i.e. within the territorial jurisdiction of the Rajasthan High Court at the Jaipur Bench. The answer to the question whether service of notice is an integral part of the cause of action within the meaning of Article 226(2) of the Constitution must depend upon the nature of the impugned order giving rise to a cause of action. The notification dated February 8, 1984 issued by the State Government Under Section 52(1) of the Act became effective the moment it was published in the Official Gazette as thereupon the notified land became vested in the State Government free from all encumbrances. It was not necessary for the Respondents to plead the service of notice on them by the Special Officer, Town Planning Department, Jaipur Under Section 52(2) for the grant of an appropriate writ, direction or order Under Article 226 of the Constitution for quashing the notification issued by the State Government Under Section 52(1) of the Act. If the Respondents felt aggrieved by the acquisition of their lands situate at Jaipur and wanted to challenge the validity of the notification issued by the State Government of Rajasthan Under Section 52(1) of the Act by a petition Under Article 226 of the Constitution, the remedy of the Respondents for the grant of such relief had to be sought by filing such a petition before the Rajasthan High Court, Jaipur Bench, where the cause of action wholly or in part arose.11. This provision was again considered by this Court in the case ofOil and Natural Gas Commission v. Utpal Kumar Basu and Ors., (1994) 4 SCC 711. In this case the Petitioner Oil and Natural Gas Commission (ONGC) through its consultant Engineers India Limited (EIL) issued an advertisement in the newspaper inviting tenders for setting up of Kerosene Recovery Processing Unit in Gujarat mentioning that the tenders containing offers were to be communicated to EIL, New Delhi. After the final decision was taken by the Steering Committee at New Delhi, the Respondent NICCO moved the Calcutta High Court praying that ONGC be restrained from awarding the contract to any other party. It was pleaded in the petition that NICCO came to know of the tender from the publication in the "Times of India" within the jurisdiction of the Calcutta High Court. This Court by setting aside the order passed by the Calcutta High Court came to the following conclusion:"6. Therefore, in determining the objection of lack of territorial jurisdiction the court must take all the facts pleaded in support of the cause of action into consideration albeit without embarking upon an enquiry as to the correctness or otherwise of the said facts. In other words the question whether a High Court has territorial jurisdiction to entertain a writ petition must be answered on the basis of the averments made in the petition, the truth or otherwise whereof being immaterial. To put it differently, the question of territorial jurisdiction must be decided on the facts pleaded in the petition. Therefore, the question whether in the instant case the Calcutta High Court had jurisdiction to entertain and decide the writ petition in question even on the facts alleged must depend upon whether the averments made in paragraphs 5, 7, 18, 22, 26 and 43 are sufficient in law to establish that a part of the cause of action had arisen within the jurisdiction of the Calcutta High Court.12. InKusum Ingots and Alloys Ltd. v. Union of India and Anr.: (2004) 6 SCC 254, this Court elaborately discussed Clause (2) of Article 226 of the Constitution, particularly the meaning of the word 'cause of action' with reference to Section 20 (c) and Section 141 of the Code of Civil Procedure and observed:9. Although in view of Section 141 of the Code of Civil Procedure the provisions thereof would not apply to writ proceedings, the phraseology used in Section 20(c) of the Code of Civil Procedure and Clause (2) of Article 226, being in pari materia, the decisions of this Court rendered on interpretation of Section 20(c) Code of Civil Procedure shall apply to the writ proceedings also. Before proceeding to discuss the matter further it may be pointed out that the entire bundle of facts pleaded need not constitute a cause of action as what is necessary to be proved before the Petitioner can obtain a decree is the material facts. The expression material facts is also known as integral facts.10. Keeping in view the expressions used in Clause (2) of Article 226 of the Constitution of India, indisputably even if a small fraction of cause of action accrues within the jurisdiction of the Court, the Court will have jurisdiction in the matter.Their Lordships further observed as under:"29. In view of Clause (2) of Article 226 of the Constitution of India, now if a part of cause of action arises outside the jurisdiction of the High Court, it would have jurisdiction to issue a writ. The decision in Khajoor Singh has, thus, no application.30. We must, however, remind ourselves that even if a small part of cause of action arises within the territorial jurisdiction of the High Court, the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on merit. In appropriate cases, the Court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum conveniens."13. In the case ofUnion of India and Ors. v. Adani Exports Ltd. and Anr. : (2002) 1 SCC 567, this Court held that in order to confer jurisdiction on a High Court to entertain a writ petition it must disclose that the integral facts pleaded in support of the cause of action do constitute a cause so as to empower the court to decide the dispute and the entire or a part of it arose within its jurisdiction. Each and every fact pleaded by the Respondents in their application does not ipso facto lead to the conclusion that those facts give rise to a cause of action within the Court's territorial jurisdiction unless those facts are such which have a nexus or relevance with the lis i.e. involved in the case. This Court observed:17. It is seen from the above that in order to confer jurisdiction on a High Court to entertain a writ petition or a special civil application as in this case, the High Court must be satisfied from the entire facts pleaded in support of the cause of action that those facts do constitute a cause so as to empower the court to decide a dispute which has, at least in part, arisen within its jurisdiction. It is clear from the above judgment that each and every fact pleaded by the Respondents in their application does not ipso facto lead to the conclusion that those facts give rise to a cause of action within the court's territorial jurisdiction unless those facts pleaded are such which have a nexus or relevance with the lis that is involved in the case. Facts which have No. bearing with the lis or the dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the court concerned. If we apply this principle then we see that none of the facts pleaded in para 16 of the petition, in our opinion, falls into the category of bundle of facts which would constitute a cause of action giving rise to a dispute which could confer territorial jurisdiction on the courts at Ahmedabad.14. InOm Prakash Srivastava v. Union of India and Anr.: (2006) 6 SCC 207, answering a similar question this Court observed that on a plain reading of Clause (2) of Article 226 it is manifestly clear that the High Court can exercise power to issue direction, order or writs for the enforcement of any of the fundamental rights or for any other purpose if the cause of action in relation to which it exercises jurisdiction notwithstanding that the seat of the Government or authority or the residence of the person against whom the direction, order or writ is issued is not within the said territory. In para 7 this Court observed:"7. The question whether or not cause of action wholly or in part for filing a writ petition has arisen within the territorial limits of any High Court has to be decided in the light of the nature and character of the proceedings Under Article 226 of the Constitution. In order to maintain a writ petition, a writ Petitioner has to establish that a legal right claimed by him has prima facie either been infringed or is threatened to be infringed by the Respondent within the territorial limits of the Court's jurisdiction and such infringement may take place by causing him actual injury or threat thereof.15. In the case ofRajendran Chingaravelu v. R.K. Mishra, Additional Commissioner of Income Tax and Ors., (2010) 1 SCC 457, this Court while considering the scope of Article 226 (2) of the Constitution, particularly the cause of action in maintaining a writ petition, held as under:"9. The first question that arises for consideration is whether the Andhra Pradesh High Court was justified in holding that as the seizure took place at Chennai (Tamil Nadu), the Appellant could not maintain the writ petition before it. The High Court did not examine whether any part of cause of action arose in Andhra Pradesh. Clause (2) of Article 226 makes it clear that the High Court exercising jurisdiction in relation to the territories within which the cause of action arises wholly or in part, will have jurisdiction. This would mean that even if a small fraction of the cause of action (that bundle of facts which gives a Petitioner, a right to sue) accrued within the territories of Andhra Pradesh, the High Court of that State will have jurisdiction.* * * *11. Normally, we would have set aside the order and remitted the matter to the High Court for decision on merits. But from the persuasive submissions of the Appellant, who appeared in person on various dates of hearing, two things stood out. Firstly, it was clear that the main object of the petition was to ensure that at least in future, passengers like him are not put to unnecessary harassment or undue hardship at the airports. He wants a direction for issuance of clear guidelines and instructions to the inspecting officers, and introduction of definite and efficient verification/investigation procedures. He wants changes in the present protocol where the officers are uncertain of what to do and seek instructions and indefinitely wait for clearances from higher-ups for each and every routine step, resulting in the detention of passengers for hours and hours. In short, he wants the enquiries, verifications and investigations to be efficient, passenger-friendly and courteous. Secondly, he wants the Department/officers concerned to acknowledge that he was unnecessarily harassed."29. From a perusal of the law declared by the Hon'ble Apex Court of the land as noted herein above, there cannot be any doubt that the question where cause of action wholly or in part for filing a writ petition has arisen within the territorial jurisdictional of any High Court, has to be decided in the light of the nature and character of the proceedings Under Article 226 of the Constitution. In order to sustain the writ application, the petitioner is obliged to establish infrication of his legal right within the territorial jurisdiction of the Court's jurisdiction wherein remedy is sought for.30. In the instant case at hand, it is not in dispute that the petitioner was appointed for the position of 'Team Member' in the Management Grade J - 1 at Jaipur office and the offer of appointment was addressed and delivered to the petitioner at Jaipur, as would be evident from the offer of appointment. Further, the petitioner was appointed at Jaipur Office of the respondent employer, therefore, it can safely be inferred that the part of cause of action arose in the instant case at hand, Jaipur. Therefore, the writ application is within the territorial jurisdiction of the Court. The objection pleaded as to the territorial jurisdiction is hereby rejected.31. The fact that the respondents fall within the definition of 'Government Company', including a subsidiary, is further evident in the light of the text of Section 617 of the Companies Act, 1956, which reads thus:617. DEFINITION OF "GOVERNMENT COMPANY" For the purposes of this Act, Government company means any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments and includes a company which is a subsidiary of a Government company as thus defined.32. A glance of the definition Clause of 'Government Company' would reveal that a 'Government Company' means any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments and includes a company which is a subsidiary of a Government company.33. In the case of Central Inland Water Transport Corporation (supra); the Hon'ble Supreme Court while dealing with somewhat similar controversy that the State is an abstract entity and it can, therefore, only act through its agencies or instrumentalities. The trading and business activities of the State constitute "public enterprise". The structural forms in which the Government operates in the field of public enterprise are many and varied. For the purposes of Article 12 one must necessarily see through the corporate veil to ascertain whether behind that veil is the face of an instrumentality or agency of the State. If there is an instrumentality or agency of the state which has assumed the garb of a Government company as defined in Section 617 of the Companies Act, 1956, it does not follow that it thereby ceases to be an instrumentality or agency of the State. Applying above test in the present case, the respondent(s) do fall within the meaning of 'State' within the meaning of Article 12 of the Constitution. Hence, the objection pleaded on behalf of the respondents, to the contrary, is hereby rejected.34. In the same judgment (Central Inland Water Transport Corporation), the Hon'ble Supreme Court further held that termination of service of a permanent employee on three months notice or pay on either side and provision in such term employment are void and inoperative for if employer is an instrumentality of a State within the meaning of Article 12, such provision would also be violative of Article 14, 38, 39 and 41 of the Constitution of India. The facts, terms and conditions of offer of appointment are somewhat identical in the case at hand.35. At this juncture, it will be relevant to consider the text of Clause (i) of Rule 9 of "Service, Discipline & Appeal Rules, 1979" in the case of Central Inland Water Transport Corporation Limited. The Hon'ble Supreme Court in that case took note of such a provision contemplated under Rule 9 therein, which reads thus:"9. We are concerned in these Appeals with the "Central Inland Water Transport Corporation Ltd. Service Discipline and Appeal Rules" of 1979 framed by the Corporation. These rules will hereinafter be referred to in short as "the said Rules". The said Rules apply to all employees in the service of the Corporation in all units in West Bengal, Bihar, Assam or in other State or Union Territory except those employees who are covered by the Standing Orders under the Industrial Employment (Standing Orders) Act, 1946, or those employees in respect of whom the Board of Directors has issued separate orders. Rule 9 of the said Rules deals with termination of employment for acts other than misdemeanour. The relevant provisions of the said Rule 9 relating to permanent employees are as follows:9. TERMINATION OF EMPLOYMENT FOR ACTS OTHER THAN MISDEMEANOUR. -(i) The employment of a permanent employee shall be subject to termination on three months' notice on either side. The notice shall be in writing on either side. The Company may pay the equivalent of three months' basic pay and dearness allowance, if any, in lieu of notice or may deduct a like amount when the employee has failed to give due notice.(ii) The services of a permanent employee can be terminated on the grounds of "Services no longer required in the interest of the Company" without assigning any reason. A permanent employee whose services are terminated under this clause shall be paid 15 days' basic pay and dearness allowance for each completed year of continuous service in the Company as compensation. In addition he will be entitled to encashment of leave at his credit.Under Rule 10, an employee is to retire on completion of the age of fifty-eight years though in exceptional cases and in the interest of the Corporation, an extension may be granted with the prior approval of the Chairman-cum - Managing Director and the Board of Directors. Rule 11 provides as follows :11. RESIGNATION. -Employees who wish to leave the Company's services must give the Company the same notice as the Company is required to give them under Rule 9.Rule 33 provides for suspension of an employee where a disciplinary proceeding against him is contemplated or is pending or where a case against him in respect of any criminal offence is under investigation or trial. Rule 34 provides for payment of subsistence allowance during the period of suspension. Rule 36 sets out the different penalties which can be imposed on an employee for his misconduct. These penalties are divided into minor and major penalties. Rule 37 is as follows:37. ACTS OF MISCONDUCT. -Without prejudice to the general meaning of the term 'misconduct' the Company shall have the right to terminate the services of any employee at any time without any notice if the employee is found guilty of any insubordination, intemperance or other misconduct or of any breach of any rules pertaining to service or conduct or nonperformance of his duties.Rule 38 prescribes the procedure for imposing a major penalty and sets out in detail how a disciplinary inquiry is to be held. Rule 39 provides for action to be taken by the disciplinary authority on the report made by the Inquiring Authority. Rule 40 prescribes the procedure to be followed for imposing minor penalties. Rule 43 provides for a special procedure to be followed in certain cases. This special procedure consists of dispensing with a disciplinary inquiry altogether. The said Rule 43 provides as follows:43. SPECIAL PROCEDURE IN CERTAIN CASES. -Notwithstanding anything contained in Rule 38, 39 or 40, the disciplinary authority may impose any of the penalties specified in Rule 36 in any of the following circumstances :(i) The employee has been convicted on a criminal charge, or on the strength of facts or conclusions arrived at by a judicial trial; or(ii) where the disciplinary authority is satisfied for reasons to be recorded by it in writing that it is not reasonably practicable to hold an inquiry in the manner provided in these Rules; or(iii) where the Board is satisfied that in the interest of the security of the Corporation/ Company, it is not expedient to hold any inquiry in the manner provided in these rules.Rule 45 provides for an appeal against an order imposing penalty to the appropriate authority specified in the Schedule to the said Rules and Rule 45 - A provides for a review."36. The Hon'ble Supreme Court examined both the issues i.e. expression 'the State' under Article 12 of the Constitution as well as unconscionable term in a contract of employment in the backdrop of Section 23 of the Indian Contract Act, 1872, and in the light of Article 14, 39 and 41 of the Constitution of India.37. On a survey of several earlier opinions of the Hon'ble Supreme Court, Rule 9(i) was held to be discriminatory for it enabled the Corporation to discriminate between employee and employee. Thus, the provision was also found to be discriminatory. Further, the contract entered into was not like any contract between the parties in the course of its trading activities. Moreover, employees cannot be equated with goods which could be bought and sold; nor could a contract of employment be equated with a mercantile transaction between two businessmen much less when the contract of employment is between a powerful employer and a weak employee. Detailing out the concepts of consciousness, fairness and reasonableness and distributive justice affecting the law of contracts, the Hon'ble Supreme Court held thus:"76. The said Rule constitute a part of the contract of employment between the Corporation and its employees to whom the said Rules apply, and they thus form a part of the contract of employment between the Corporation and each of the two contesting Respondents. The validity of Rule 9(i) would, therefore, first fall to be tested by the principles of the law of contracts.77. Under Section 19 of the Indian Contract Act, when consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused. It is not the case of either of the contesting Respondents that there was any coercion brought to bear upon him or that any fraud or misrepresentation had been practised upon him. Under Section 19A, when consent to an agreement is caused by undue influence, the agreement is a contract voidable at the option of the party whose consent was so caused and the court may set aside any such contract either absolutely or if the party who was entitled to avoid it has received any benefit thereunder, upon such terms and conditions as to the court may seem just. Sub-section (1) of Section 16 defines "Undue influence" as follows:16. 'Undue influence' defined. -(1) A contract is said to be induced by 'undue influence' where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.The material provisions of Sub-section (2) of Section 16 are as follows :(2) In particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in a position to dominate the will of another -(a) where he holds a real or apparent authority over the other ....We need not trouble ourselves with the other sections of the Indian Contract Act except Sections 23 and 24. Section 23 states that the consideration or object of an agreement is lawful unless inter alia the Court regards it as opposed to public policy. This section further provides that every agreement of which the object or consideration is unlawful is void. Under Section 24, if any part of a single consideration for one or more objects, or any one or any part of any one of several considerations for a single object is unlawful, the agreement is void. The agreement is, however, not always void in its entirety for it is well settled that if several distinct promises are made for one and the same lawful consideration, and one or more of them be such as the law will not enforce, that will not of itself prevent the rest from being enforceable. The general rule was stated by Willes, J., inPickering v. Ilfracombe Ry. Co. 1868 L.R. 3 C.P. 235as follows:The general rule is that, where you cannot sever the illegal from the legal part of a covenant, the contract is altogether void; but where you can sever them, whether the illegality be created by statute or by the common law, you may reject the bad part and retain the good.78. Under which head would an unconscionable bargain fall? If it falls under the head of undue influence, it would be voidable but if it falls under the head of being opposed to public policy, it would be void. No case of the type before us appears to have fallen for decision under the law of contracts before any court in India nor has any case on all fours of a court in any other country been pointed out to us. The word "unconscionable" is defined in the Shorter Oxford English Dictionary, Third Edition, Volume II, page 2288, when used with reference to actions etc. as "showing no regard for conscience; irreconcilable with what is right or reasonable". An unconscionable bargain would, therefore, be one which is irreconcilable with what is right or reasonable.79. Although certain types of contracts were illegal or void, as the case may be, at Common Law, for instance, those contrary to public policy or to commit a legal wrong such as a crime or a tort, the general rule was of freedom of contract. This rule was given full play in the nineteenth century on the ground that the parties were the best judges of their own interests, and if they freely and voluntarily entered into a contract the only function of the court was to enforce it. It was considered immaterial that one party was economically in a stronger bargaining position than the other; and if such a party introduced qualifications and exceptions to his liability in clauses which are today known as "exemption clauses" and the other party accepted them, then full effect would be given to what the parties agreed. Equity, however, interfered in many cases of harsh or unconscionable bargains, such as, in the law relating to penalties, forfeitures and mortgages. It also interfered to asset aside harsh or unconscionable contracts for salvage services rendered to a vessel in distress, or unconscionable contracts with expectant heirs in which a person, usually a money-lender, gave ready cash to the heir in return for the property which he expects to inherit and thus to get such property at a gross undervalue. It also interfered with harsh or unconscionable contracts entered into with poor and ignorant persons who had not received independent advice (See Chitty on Contracts, Twenty-fifth Edition, Volume I, paragraphs 4 and 516).80. Legislation has also interfered in many cases to prevent one party to a contract from taking undue or unfair advantage of the other. Instances of this type of legislation are usury laws, debt relief laws and laws regulating the hours of work and conditions of service of workmen and their unfair discharge from service, and control orders directing a party to sell a particular essential commodity to another.81. In this connection, it is useful to note what Chitty has to say about the old ideas of freedom of contract in modern times. The relevant passages are to be found in Chitty on Contracts, Twenty - fifth Edition, Volume I, in paragraph 4, and are as follows:These ideas have to a large extent lost their appeal today. 'Freedom of contract,' it has been said, 'is a reasonable social ideal only to the extent that equality of bargaining power between contracting parties can be assumed, and no injury is done to the economic interests of the community at large.' Freedom of contract is of little value when one party has no alternative between accepting a set of terms proposed by the other or doing without the goods or services offered. Many contracts entered into by public utility undertakings and others take the form of a set of terms fixed in advance by one party and not open to discussion by the other. These are called 'contracts d'adhesion' by French lawyers. Traders frequently contract, not on individually negotiated terms, but on those contained in a standard form of contract settled by a trade association. And the terms of an employee's contract of employment may be determined by agreement between his trade union and his employer, or by a statutory scheme of employment. Such transactions are nevertheless contracts notwithstanding that freedom of contract is to a great extent lacking.Where freedom of contract is absent, the disadvantages to consumers or members of the public have to some extent been offset by administrative procedures for consultation, and by legislation. Many statutes introduce terms into contracts which the parties are forbidden to exclude, or declare that certain provisions in a contract shall be void. And the courts have developed a number of devices for refusing to implement exemption clauses imposed by the economically stronger party on the weaker, although they have not recognised in themselves any general power (except by statute) to declare broadly that an exemption clause will not be enforced unless it is reasonable. Again, more recently, certain of the judges appear to have recognised the possibility of relief from contractual obligations on the ground of 'inequality of bargaining power. What the French call "contracts d'adhesion', the American call "adhesion contracts" or "contracts of adhesion." An "adhesion contract" is defined in Black's Law Dictionary, Fifth Edition, at page 38, as follows:Adhesion contract'. Standardized contract form offered to consumers of goods and services on essentially 'take it or leave it' basis without affording consumer realistic opportunity to bargain and under such conditions that consumer cannot obtain desired product or services except by acquiescing in form contract. Distinctive feature of adhesion contract is that weaker party has no realistic choice as to its terms. Not every such contract is unconscionable.82. The position under the American Law is stated in "Reinstatement of the Law - Second" as adopted and promulgated by the American Law Institute, Volume II xx which deals with the law of contracts, in Section 208 at page 107, as follows :Section 208. Unconscionable Contract or TermIf a contract or term thereof is unconscionable at the time the contract is made a court may refuse to enforce the contract, or may enforce the remainder of the contract without the unconscionable term, or may so limit the application of any unconscionable term as to avoid any unconscionable result.In the Comments given under that section it is stated at page 107:Like the obligation of good faith and fair dealing (S 205), the policy against unconscionable contracts or terms applies to a wide variety of types of conduct. The determination that a contract or term is or is not unconscionable is made in the light of its setting, purpose and effect. Relevant factors include weaknesses in the contracting process like those involved in more specific rules as to contractual capacity, fraud and other invalidating causes; the policy also overlaps with rules which render particular bargains or terms unenforceable on grounds of public policy. Policing against unconscionable contracts or terms has sometimes been accomplished by adverse construction of language, by manipulation of the rules of offer and acceptance or by determinations that the clause is contrary to public policy or to the dominant purpose of the contract'. Uniform Commercial Code $ 2-302 Comment 1.... A bargain is not unconscionable merely because the parties to it are unequal in bargaining position, nor even because the inequality results in an allocation of risks to the weaker party. But gross inequality of bargaining power, together with terms unreasonably favourable to the stronger party, may confirm indications that the transaction involved elements of deception or compulsion, or may show that the weaker party had no meaningful choice, no real alternative, or did not in fact assent or appear to assent to the unfair terms.There is a statute in the United States called the Universal Commercial Code which is applicable to contracts relating to sales of goods. Though this statutes is inapplicable to contracts not involving sales of goods, it has proved very influential in, what are called in the United States, "non-sales" cases. It has many times been used either by analogy or because it was felt to embody a general accepted social attitude of fairness going beyond its statutory application to sales of goods. In the Reporter's Note to the said Section 208, it is stated at page 112:It is to be emphasised that a contract of adhesion is not unconscionable per se, and that all unconscionable contracts are not contracts of adhesion. Nonetheless, the more standardised the agreement and the less a party may bargain meaningfully, the more susceptible the contract or a term will be to a claim of unconscionability.The position has been thus summed up by John R. Pedan in "The Law of Unjust Contracts" published by Butterworths in 1982, at pages 28 - 29 :...Unconscionability represents the end of a cycle commencing with the Aristotelian concept of justice and the Roman law iaesio enormis, which in turn formed the basis for the medieval church's concept of a just price and condemnation of usury. These philosophies permeated the exercise, during the seventeenth and eighteenth centuries, of the Chancery court's discretionary powers under which it upset all kinds of unfair transactions. Subsequently the movement towards economic individualism in the nineteenth century hardened the exercise of these powers by emphasising the freedom of the parties to make their own contract. While the principle of pacta sunt servanda held dominance, the consensual theory still recognised exceptions where one party was overborne by a fiduciary, or entered a contract under duress or as the result of fraud. However, these exceptions were limited and had to be strictly proved.It is suggested that the judicial and legislative trend during the last 30 years in both civil and common law jurisdictions has almost brought the wheel full circle. Both courts and parliaments have provided greater protection for weaker parties from harsh contracts. In several jurisdictions this included a general power to grant relief from unconscionable contracts, thereby providing a launching point from which the courts have the opportunity to develop a modern doctrine of unconscionability. American decisions on Article 2. 302 of the UCC have already gone some distance into this new arena....The expression "laesio enormous used in the above passage refers to "laesio ultra dimidium vel enormous which in Roman law meant the injury sustained by one of the parties to an onerous contract when he had been overreached by the other to the extent of more than one-half of the value of the subject-matter, as for example, when a vendor had not received half the value of property sold, or the purchaser had paid more then double value. The maxim "pacta sunt servanda" referred to in the above passage means "contracts are to be kept".83. It would appear from certain recent English cases that the courts in that country have also begun to recognise the possibility of an unconscionable bargain which could be brought about by economic duress even between parties who may not in economic terms be situate differently (see, for instance,Occidental Worldwide Investment Corpn. v. Skibs A/S Avanti 1976 (1) L Rep. 293,North Ocean Shipping Co. Ltd. v. Hyundai Construction Co. Ltd. 1979 Q.B. 705,Pao On v. Lau Yin Long 1980 A.C. 614andUniverse Tankships of Monrovia v. International Transport Workers Federation 1981 (1) C.R. 129, reversed in 1981 (2) W.L.R. 803and the commentary on these cases in Chitty on Contracts, Twenty-fifth Edition, Volume I, paragraph 486).84. Another jurisprudential concept of comparatively modern origin which has affected the law of contracts is the theory of "distributive justice". According to this doctrine, distributive fairness and justice in the possession of wealth and property can be achieved not only by taxation but also by regulatory control of private and contractual transactions even though this might involve some sacrifice of individual liberty. InLingappa Pochanna Appelwar v. State of Maharashtra and Anr.:  2 SCR 224this Court, while upholding the constitutionality of the Maharashtra Restoration of Lands to Scheduled Tribes Act, 1974, said (at page 493) :The present legislation is a typical illustration of the concept of distributive justice, as modern jurisprudence know it. Legislators, Judges and administrators are now familiar with the concept of distributive justice. Our Constitution permits and even directs the State to administer what may be termed 'distributive justice'. The concept of distributive justice in the sphere of law-making connotes, inter alia, the removal of economic inequalities and rectifying the injustice resulting from dealings or transactions between unequals in society. Law should be used as an instrument of distributive justice to achieve a fair division of wealth among the members of society based upon the principle : 'From each according to his capacity, to each according to his needs'. Distributive justice comprehends more than achieving lessening of inequalities by differential taxation, giving debt relief or distribution of property owned by one to many who have none by imposing ceiling on holdings, both agricultural and urban, or by direct regulation of contractual transactions by forbidding certain transactions and, perhaps, by requiring others. It also means that those who have been deprived of their properties by unconscionable bargains should be restored their property. All such laws may take the form of forced redistribution of wealth as a means of achieving a fair division of material resources among the members of society or there may be legislative control of unfair agreements.85. When our Constitution states that it is being enacted in order to give to all the citizens of India "JUSTICE, social, economic and political", when Clause (1) of Article 38 of the Constitution directs the State to strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which social, economic and political justice shall inform all the institutions of the national life, when Clause (2) of Article 38 directs the State, in particular, to minimise the inequalities in income, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations, and when Article 39 directs the State that it shall, in particular, direct its policy towards securing that the citizens, men and women equally, have the right to an adequate means of livelihood and that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment and that there should be equal pay for equal work for both men and women, it is the doctrine of distributive justice which is speaking through these words of the Constitution.86. Yet another theory which has made its emergence in recent years in the sphere of the law of contracts is the test of reasonableness or fairness of a clause in a contract where there is inequality of bargaining power. Lord Denning, M.R., appears to have been the propounder, and perhaps the originator-at least in England, of this theory. InGillespie Brothers & Co. Ltd. v. Roy Bowles Transport Ltd. 1973 (1) Q.B. 400where the question was whether an indemnity clause in a contract, on its true construction, relieved the indemnifier from liability arising to the indemnified from his own negligence, Lord Denning said (at pages 415 - 6) :The time may come when this process of 'construing' the contract can be pursued no further. The words are too clear to permit of it. Are the courts then powerless? Are they to permit the party to enforce his unreasonable clause, even when it is so unreasonable, or applied so unreasonably, as to be unconscionable? When it gets to this point, I would say, as I said many years ago:there is the vigilance of the common law which, while allowing freedom of contract, watches to see that it is not abused':John lee & Son (Grantham) Ltd. v. Railway Executive 1949 (2) All. E.R. 581, 584. It will not allow a party to exempt himself from his liability at common law when it would be quite unconscionable for him to do so.In the above case the Court of Appeal negatived the defence of the indemnifier that the indemnity clause did not cover the negligence of the indemnified. It was inLloyds Bank Ltd. v. Bundy 1974 (3) All E.R. 757that Lord Denning first clearly enunciated his theory of "inequality of bargaining power". He began his discussion on this part of the case by stating (at page 763) :There are cases in our books in which the courts will set aside a contract, or a transfer of property, when the parties have not met on equal terms, when the one is so strong in bargaining power and the other so weak that, as a matter of common fairness, it is not right that the strong should be allowed to push the weak to the wall. Hitherto those exceptional cases have been treated each as a separate category in itself. But I think the time has come when we should seek to find a principle to unite them. I put on one side contracts or transactions which are voidable for fraud or misrepresentation or mistake. All those are governed by settled principles. I go only to those where there has been inequality of bargaining power, such as to merit and intervention of the court.He then referred to various categories of cases and ultimately deduced therefrom a general principle in these words (at page 765) :Gathering all together, I would suggest that through all these instances there runs a single thread. They rest on 'inequality of bargaining power'. By virtue of it, the English law gives relief to one who, without independent advice, enters into a contract on terms which are very unfair or transfers property for a consideration which is grossly inadequate, when his bargaining power is grievously impaired by reason of his own needs or desires, or by his own ignorance or infirmity, coupled with undue influences or pressures brought - to bear on him by or for the benefit of the other. When 1 use the word 'undue' 1 do not mean to suggest that the principle depends on proof of any wrongdoing. The one who stipulates for an unfair advantage may be moved solely by his own self-interest, unconscious of the distress he is bringing to the other. I have also avoided any reference to the will of the one being 'dominated' or 'overcome' by the other. One who is in extreme need may knowingly consent to a most improvident bargain, solely to relieve the straits in which he finds himself. Again, I do not mean to suggest that every transaction is saved by independent advice. But the absence of it may be fatal. With these explanations, 1 hope this principle will be found to reconcile the cases."38. The Hon'ble Supreme Court concluded that the power to terminate the service of a permanent employee by giving him in writing or in lieu thereof to pay the equivalent of three months pay is a naked 'hire and fire' rule. At this juncture, it will be relevant to extract text of paragraph of 97 to 100, which reads thus:"97. We will now test the validity of Rule 9(i) by applying to it the principle formulated above. Each of the contesting Respondents was in the service of the Rivers Steam Navigation Company Limited and on the said Scheme of arrangement being sanctioned by the Calcutta High Court, he was offered employment in the Corporation which he had accepted. Even had these Respondents not liked to work for the Corporation, they had not much of a choice because all that they would have got was "all legitimate and legal compensation payable to them either under the Industrial Disputes Act or otherwise legally admissible". These Respondents were not covered by the Industrial Disputes Act for they were not workmen but were officers of the said company. It is, therefore, difficult to visualise what compensation they would have been entitled to get unless their contract of employment with their previous employers contained any provision in that behalf. So far as the original terms of employment with the Corporation are concerned, they are contained in the letters of appointment issued to the contesting Respondents. These letters of appointment are in a stereotype form. Under these letters of appointment, the Corporation could without any previous notice terminate their service, if the Corporation was satisfied on medical evidence that the employee was unfit and was likely for a considerable time to continue to be unfit for the discharge of his duties. The Corporation could also without any previous notice dismiss either of them, if he was guilty of any insubordination, intemperance or other misconduct, or of any breach of any rules pertaining to his service or conduct or non-performance of his duties. The above terms are followed by asset of terms under the heading "Other Conditions". One of these terms stated that "You shall be subject to the service Rules and regulations including the conduct rules". Undoubtedly, the contesting Respondents accepted appointment with the Corporation upon these terms. They had, however, no real choice before them. Had they not accepted the appointments, they would have at the highest received some compensation which would have been probably meagre and would certainly have exposed themselves to the hazard of finding another job.98. It was argued before us on behalf of the contesting Respondents that the term that these Respondents would be subject to the service rules and regulations including the conduct rules, since it came under the heading "Other Conditions" which followed the clauses which related to the termination of service, referred only to service rules and regulations other than those providing for termination of service and, therefore, Rule 9(i) did not apply to them. It is unnecessary to decide this question in the view which we are inclined to take with respect to the validity of Rule 9(i).99. The said Rules as also the earlier rules of 1970 were accepted by the contesting Respondents without demur. Here again they had no real choice before them. They had risen higher in the hierarchy of the Corporation. If they had refused to accept the said Rules, it would have resulted in termination of their service and the consequent anxiety, harassment and uncertainty of finding alternative employment.100. Rule 9(i) confers upon the Corporation the power to terminate the service of a permanent employee by giving him three months' notice in writing or in lieu thereof to pay him the equivalent of three months' basic pay and clearness allowance. A similar regulation framed by the West Bengal State Electricity Board was described by this Court inWest Bengal State Electricity Board and Ors. v. Desh Bandhu Ghosh and Ors.(at page 118) as :...a naked 'hire and fire' rule, the time for banishing which altogether from employer-employee relationship is fast approaching. Its only parallel is to be found in the Henry VIII clause so familiar to administrative lawyers. As all lawyers may not be familiar with administrative law, we may as well explain that "the Henry VIII clause" is a provision occasionally found in legislation conferring delegated legislative power, giving the delegate the power to amend the delegating Act in order to bring that Act into full operation or otherwise by Order to remove any difficulty, and at times giving power to modify the provisions of other Acts also. The Committee on Ministers' Powers in its report submitted in 1932 (Cmd. 4060) pointed out that such a provision had been nicknamed "the Henry VIII clause" because "that King is regarded popularly as the impersonation of executive autocracy". The Committee's Report (at page 61) criticised these clauses as a temptation to slipshod work in the preparation of bills and recommended that such provisions should be used only where they were justified before Parliament on compelling grounds. Legislation enacted by Parliament in the United Kingdom after 1932 does not show that this recommendation had any particular effect."39. In the case of Uptron India Limited (supra), the Hon'ble Supreme Court reiterating the earlier opinion in the case of Central Inland Water Transport Corporation (supra), held thus:"15. Conferment of 'permanent' status on an employee guarantees security of tenure. It is now well settled that the services of a permanent employee, whether employed by the Government, or Govt. company or Govt. instrumentality or Statutory Corporations or any other "Authority" within the meaning of Article 12, cannot be terminated abruptly and arbitrarily, either by giving him a month's or three months' notice or pay in lieu thereof or even without notice, notwithstanding that there may be a stipulation to that effect either in the contract of service or in the Certified Standing Orders."40. In the case of Moti Ram Deka (supra), the Hon'ble Supreme Court, held thus:"26. Reverting then to the nature of the right which a permanent servant has under the relevant Railway Rules. What is the true position ? A person who substantively holds a permanent post has a right to continue in service, subject, of course, to the rule of superannuation and the rule as to compulsory retirement. If for any other reason that right is invaded and he is asked to leave his service, the termination of his service must inevitably mean the defeat of his right to continue in service and as such, it is in the nature of a penalty and amounts to removal. In other words, termination of the services of a permanent servant otherwise than on the ground of superannuation or compulsory retirement, must per se amount to his removal, and so, if by R. 148(3) or R. 149(3) such a termination is brought about, the Rule clearly contravenes Article 311(2) and must be held to be invalid. It is common ground that neither of the two Rules contemplates an enquiry and in none of the cases before us has the procedure prescribed by Article 311(2)been followed. We appreciate the argument urged by the learned Addl. Solicitor General about the pleasure of the President and its significance; but since the pleasure has to be exercised subject to the provisions of Article 311, there would be no escape from the conclusion that in respect of cases falling under Article 311(2), the procedure prescribed by the said Article must be complied with and the exercise of pleasure regulated accordingly."41. In the case ofDelhi Transport Corporation v. D.T.C. Mazdoor Congress and Ors., 1991 (Supp) (1) SCC 600, the Hon'ble Supreme Court, in order to minimise the scope of the arbitrary use of power in all walks of life, held thus:"230. There is need to minimise the scope of the arbitrary use of power in all walks of life. It is inadvisable to depend on the good sense of the individuals, however high-placed they may be. It is all the more improper and undesirable to expose the precious rights like the rights of life, liberty and property to the vagaries of the individual whims and fancies. It is trite to say that individuals are not and do not become wise because they occupy high seats of power, and good sense, circumspection and fairness does not go with the posts, however high they may be. There is only a complaisant presumption that those who occupy high posts have a high sense of responsibility. The presumption is neither legal nor rational. History does not support it and reality does not warrant it. In particular, in a society pledged to uphold the rule of law, it would be both unwise and impolitic to leave any aspect of its life to be governed by discretion when it can conveniently and easily be covered by the rule of law.231. The employment under the public undertakings is a public employment and a public property. It is not only the undertakings but also the society which has a stake in their proper and efficient working. Both discipline and devotion are necessary for efficiency. To ensure both, the service conditions of those who work for them must be encouraging, certain and secured, and not vague and whimsical. With capricious service conditions, both discipline and devotion are endangered, and efficiency is impaired.232. The right to life includes right to livelihood. The right to livelihood therefore cannot hang on to the fancies of individuals in authority. The employment is not a bounty from them nor can its survival be at their mercy. Income is the foundation of many fundamental rights and when work is the sole source of income, the right to work becomes as much fundamental. Fundamental rights can illafford to be consigned to the limbo of undefined premises and uncertain applications. That will be a mockery of them.233. Both the society and the individual employees, therefore, have an anxious interest in service conditions being well-defined and explicit to the extent possible. The arbitrary rules, such as the one under discussion, which are also sometimes described as Henry VIII Rules, can have no place in any service conditions.234. These are the conclusions which flow fromSukhdev Singh and Ors. v. Bhagatram Sardar Singh Raghuvanshi and Anr. (1975) ILLJ 399 SC;Maneka Gandhi v. Union of India:  2 SCR 621;The Manager, Government Branch Press and Anr. v. D.B. Felliappa: (1979) ILLJ 156 SC;Managing Director, Uttar Pradesh Warehousing Corporation and Anr. v. Vinay Narayan Vajpayee : (1980) ILLJ 222 SC;A.L. Kalra v. The Project & Equipment Corporation of India Limited : (1984) IILLJ 186 SC;Workmen of Hindustan Steel Ltd. and Anr. v. Hindustan Steel Ltd. and Ors. : (1985) ILLJ 267 SC;West Bengal State Electricity Board and Ors. v. Desh Bandhu Ghosh and Ors. :(1985) ILLJ 373 SC;Olga Tellis and Ors. v. Bombay Municipal Corporation and Ors. etc.  Su. 2 SCR 51;Union of India and Anr. v. Tulsiram Patel and Ors.  Su. 2 SCR 131;Central Inland Water Transport Corporation Ltd. and Anr. v. Brojo Nath Ganguly and Anr. etc.  3 SCR 156;O.P. Bhandari v. Indian Tourism Development Corporation Ltd. and Ors., (1986) IILLJ 509 SC;N.C. Dalwadi v. State of Gujarat,  3 SCR 640;M.K. Agarwal v. Gurgaon Gramin Bank and Ors. :  3 SCR 640andDaily Rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch etc. v. Union of India and Ors.: (1988) ILLJ 370 SC.235. Since, before us the rule in question which admittedly did not lay down explicit guidelines for its use was sought to be defended only on two grounds, viz., that the power conferred by it is to be exercised only by high authorities and that it is capable of being read down to imply circumstances under which alone it can be used, I need deal only with the said grounds.236. The "high authority" theory so-called has already been adverted to earlier. Beyond the self-deluding and self-asserting righteous presumption, there is nothing to support it. This theory undoubtedly weighed with some authorities for some time in the past. But its unrealistic pretensions were soon noticed and it was buried without even so much as an ode to it. Even while Shah, J. in his dissenting opinion inMoti Ram Deka etc. v. General Manager, N.E.P. Railways, Maligaon, Pandu, etc. : (1964) IILLJ 467 SChad given vent to it, Das Gupta, J. in his concurring judgment but dealing with the same point of unguided provisions of Rule 148(3) of the Railway Establishment Code, had not supported that view and had struck down the rule as being violative of Article 14 of the Constitution. The majority did not deal with this point at all and struck down the Rule as being void on account of the discrimination it introduced between railway servants and other Government servants.237. The reliance placed on the decision inShri Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar and Ors. :  1 SCR 279to support the above theory is also according to me not correct. As has been pointed out there, the Commission of Inquiry Act, 1952, the validity of which was challenged on the ground of unguided powers to, institute inquiries, was not violative of Article 14 because the long title and Section 3 of the Act had contained sufficient guidelines for exercise of the power. Section 3 has stated that the appropriate Government can appoint a Commission of Inquiry only for the purpose of making inquiry into any definite matter of public importance. It is in the context of this guideline in the Act, that it is further stated there that even that power is to be exercised by the Government and not any petty official. Hence a bare possibility that the power may be abused cannot per se invalidate the Act itself. The proposition of law stated there is to be read as a whole and not in its truncated form. The authority does not lay down the proposition that even in the absence of guidelines, the conferment of power is valid merely because the power is to be exercised by a high official. It must further be remembered that in this case, the contention was that although the appropriate Government was given power to appoint Commission of Inquiry into any definite matter of public importance, the delegation of power was excessive since it was left to the Government to decide for itself in each case what constituted such matter. The court repelled the argument by pointing out that "definite matter of public importance" constituted sufficient guideline to the government. It was not, therefore, a case of no guideline but of the absence of details of the guideline.238. Of similar nature is the reliance placed on the decision inThe Collector of Customs, Madras v. Nathella Sampathu Chetty and Anr.  3 SCR 786for the proposition that the possibility of the abuse of the powers is no ground for declaring the provision to be unreasonable or void. The relevant observations are made while repelling the contention there that the burden thrown under provisions of Section 178A of the Sea Customs Act, 1878 on the possessor of the goods to show that they were not smuggled was violative of Article 19 (1)(f) and (g) of the Constitution. The observations are as follows:"The possibility of abuse of a statute otherwise valid does not impart to it any element of invalidity. The converse must also follow that a statute which is otherwise invalid as being unreasonable cannot be saved by its being administered in a reasonable manner. The constitutional validity of the statute would have to be determined on the basis of its provisions and on the ambit of its operation as reasonably construed. If so judged it passes the test of reasonableness, possibility of the powers conferred being improperly used is no ground for pronouncing the law itself invalid and similarly if the law properly interpreted and tested in the light of the requirements set out in Part III of the Constitution does not pass the test it cannot be pronounced valid merely because it is administered in a manner which might not conflict with the constitutional requirements. In saying this we are not to be understood as laying down that a law which might operate harshly but still be constitutionally valid should be operated always with harshness or that reasonableness and justness ought not to guide the actual administration of such laws.The statute there was saved by the provisions of Article 19(6) of the Constitution and was otherwise valid. It was not a case of a provision which was constitutionally invalid being saved by recourse to the spacious assumption of its reasonable exercise in individual cases."239. InTata Oil Mills Co. Ltd. v. Workmen and Anr. : (1966) IILLJ 602 SC, it was a case of an employee of a private company who was given a discharge simpliciter. This Court following its earlier decisions on the point observed that in several cases, contract of employment or Standing Orders authorise an industrial employer to terminate the employee's service by giving one month's notice or salary of one month in lieu of notice and normally an employer may, in a proper case be entitled to exercise the power. But where such order gives rise to an industrial dispute, the form of the order would not be decisive and the industrial adjudicator would be entitled to probe it to find out whether it is mala fide or is made in colourable exercise of the power. Being a private employment, the power so conferred was not assailed on the ground that it violated Article 14 of the Constitution. I fail to understand the reliance placed on this authority to support the appellants' case before us.240. The other authorities relied on behalf of the appellants have similarly no relevance to the point. InJyoti Pershad v. The Administrator for the Union Territory of Delhi :  2 SCR 125, the Slum Clearance Act which was challenged there contained enough guidelines for the exercise of the power. InMunicipal Corporation of Greater Bombay v. P.S. Malvenkar and Ors. : (1978) IILLJ 168 SC, Order 26 of the Standing Orders and Service Regulations which was in question there required reasons to be given for effecting termination simpliciter of an employee. InOrgano Chemical Industries and Anr. v. Union of India and Ors.:(1979) IILLJ 416 SC, Section 143 of the Provident Fund Act which was challenged was held to be valid since the Act contained enough guidelines for imposing penal damages. InChampaklal Chimanlal Shah v. The Union of India : (1964) ILLJ 752 SC, Rule 5 of the Central civil Services (Temporary Services) Rules, 1949 was challenged on the ground that it discriminated between temporary and permanent employees. There was no challenge to the absolute power given by the said rule to terminate the services of temporary employees. InRam Gopal Chaturvedi v. State of Madhya Pradesh: (1970) ILLJ 367 SCit was a case of termination of a temporary Government servant's services. InAir India Corporation, Bombay v. V.A. Rebellow and Anr. : (1972) ILLJ 501 SC, the challenge was to the termination of services on the ground that it was done in colourable exercise of power under Regulation 48 of the Air India Employees' Service Regulations. The said regulation was not challenged on the ground that it gave unchannelised and unguided power of terminating the services of employees. InHira Nath Mishra and Ors. v. The Principal, Rajendra Medical College, Ranchi and Anr. : (1973) IILLJ 111 SC, it was the case of the expulsion of students from college for two academic sessions pursuant to the order passed by the Principal of that college. The expulsion was effected following a confidential complaint received from 36 girl students residing in the girls' hostels alleging that the students in question had entered the compound of the girls' hostels at belated night and walked without clothes on them. The students were heard but the evidence of the girls was not recorded in their presence. The Court held that under the circumstances the requirements of natural justice were fulfilled since the principles of natural justice were not inflexible and differed in different circumstances. I have not been able to appreciate the relevance of this decision to the point in issue."42. The Hon'ble Supreme Court further observed that the instrumentality of the State such as agency or public Corporation are obliged to observe fundamental rights guaranteed under part III and also to ensure observance of directive principles as contained under Part IV of the Constitution. Paragraphs 202 and 269 are relevant, which reads thus:"197. Thus on a conspectus of the catena of cases decided by this Court the only conclusion follows is that Regulation 9(b) which confers powers on the authority to terminate the services of a permanent and confirmed employee by issuing a notice terminating the services or by making payment in lieu of notice without assigning any reasons in the order and without giving any opportunity of hearing to the employee before passing the impugned order is wholly arbitrary, uncanalised and unrestricted violating principles of natural justice as well as Article 14 of the Constitution. It has also been held consistently by this Court that the Government carries on various trades and business activity through the instrumentality of the State such as Government Company or Public Corporations. Such Government Company or Public Corporation being State instrumentalities are State within the meaning of Article 12 of the Constitution and as such they are subject to the observance of fundamental rights embodied in Part III as well as to conform to the directive principles in Part IV of the Constitution. In other words the Service Regulations or Rules framed by them are to be tested by the touchstone of Article 14 of Constitution. Furthermore, the procedure prescribed by their Rules or Regulations must be reasonable, fair and just and not arbitrary, fanciful and unjust. Regulation 9(b), therefore, confers unbridled, uncanalised and arbitrary power on the authority to terminate the services of a permanent employee without recording any reasons and without conforming to the principles of natural justice. There is no guideline in the Regulations or in the Act, as to when or in which cases and circumstances this power of termination by giving notice or pay in lieu of notice can be exercised. It is now well settled that the 'audi alteram partem' rule which is essence, enforces the equality clause in Article 14 of the Constitution is applicable not only to quasi-judicial orders but to administrative orders affecting prejudicially the party-in-question unless the application of the rule has been expressly excluded by the Act or Regulation or Rule which is not the case here. Rules of natural justice do not supplant but supplement the Rules and Regulations. Moreover, the Rule of Law which permeates our Constitution demands that it has to be observed both substantially and procedurally. Considering from all aspects Regulation 9(b) is illegal and void as it is arbitrary, discriminatory and without any guidelines for exercise of the power. Rule of law posits that the power to be exercised in a manner which is just, fair and reasonable and not in an unreasonable, capricious or arbitrary manner leaving room for discrimination. Regulation 9(b) does not expressly exclude the application of the 'audi alteram partem' rule and as such the order of termination of service of a permanent employee cannot be passed by simply issuing a month's notice under Regulation 9 (b) or pay in lieu thereof without recording any reason in the order and without giving any hearing to the employee to controvert the allegation on the basis of which the purported order is made.""265. The right to public employment and its concomitant right to livelihood, thus, receive their succour and nourishment under the canopy of the protective umbrella of Article 14, 16(1), 19(1)(g) and 21. Could statutory law arbitrarily take away or abridged or abrogated it? InBoard of Trustees, Port of Bombay v. Dilip Kumar : (1983) ILLJ 1 SC : AIR 1983 SC 109this Court held that the expression "life" does not merely connote animal existence or a continued drudgery through life, the expression life has a much wider meaning. Where, therefore, the outcome of a departmental enquiry is likely to affect reputation or livelihood of a person, some of the finer graces of human civilisation which makes life worth living would be jeopardised and the same can be put in jeopardy only by law which inheres fair procedure."43. In the case of Moti Ram Deka (supra), the Hon'ble Supreme Court, held that the claim resisted by the respondents that the petitioner accepted the offer of appointment accepting the terms and conditions of offer of appointment was a contract; cannot be sustained for what has been observed by the Hon'ble Supreme Court in a catena of judgments as noted herein above. The contract put to an end allegedly in terms of stipulation as contained in the offer of appointment, cannot be accepted for the contract is opposed to public policy and a complete answer is found in the pronouncement made by the Hon'ble Supreme Court in somewhat similar circumstances in the case of Central Inland Water Transport Corporation (Supra). The activity of the respondents is inter-se, interwoven and inseparable, and therefore, the stand of the respondent No.1 (IDBI Bank) to the effect that it was not responsible for the appointment accorded to the petitioner by respondent No. 2, is without any factual foundation.44. In the case ofOfficial Liquidator v. Dayanand and Ors.: 2008 (10) SCC 1, the Hon'ble Supreme Court dealt with the two categories of employees in the offices of the Official Liquidators attached to different High Courts. One those who are recruited in accordance with the procedure prescribed in the rules framed under proviso to Article 309 of the Constitution and the other category of the persons employed/engaged by the Official Liquidators pursuant to sanction accorded by the Court concerned under Rule 308 of the 1959 Rules, and there was a Scheme of Government of India for absorption of the company paid staff against Group C posts in the subordinate offices of the Department of Company Affairs. Those were the cases where employees were in continuity for 22 to 25 years and some of them claimed regularisation for they having completed more than 240 days in their respective services. Thus, it is apparent on the face of record that the facts of the case, referred to and relied upon, are different and distinguishable from that of the case at hand, hence, the opinion is of no help to the respondents.45. In the case ofState of Haryana & Ors. v. Navneet Verma(supra), the Hon'ble Supreme Court examined the controversy and the power of the Government in abolishing a post as well as role of the Court for interference in the backdrop of the singular facts of that case observing that if the decision was taken in good faith Court's interference is not warranted. In the instant case at hand, it is not a case of abolishing of a post rather terminating the employment of a substantive employee on the pretext of a stipulation entered into between the parties in the initial offer of appointment. Therefore, the opinion has no application to the facts of the case at hand.46. In the case of thePraga Tools Corporation v. Shri C.A. Imanual and ors.(supra), the Hon'ble Supreme Court after having considered the controversy held that company being non-statutory body and one incorporated under Companies Act. There was neither statutory nor public duty imposed on it by statute in respect of which enforcement could be sought, by means of a mandamus, nor was there in its workmen any statutory or public duty. In view of the development of law in course of the time, as has been elaborately dealt with by the Hon'ble Apex Court of the land in the case of Central Inland Water Transport Corporation (supra), the opinion as referred to and relied upon, by the learned counsel for the respondents is of no help in the singular facts of the case at hand.47. In the case ofAll India ITDC Workers Union and Ors. v. ITDC and Ors.(supra), the Hon'ble Supreme Court dealt with the issue of disinvestment policy of Government of India wherein the service conditions of the petitioners were protected under new management on disinvestment of Hotel, and therefore, the Hon'ble Supreme Court declined to interfere with the decision of the Government whereas in the instant case at hand, the employment of the petitioner who was appointed as a substantive employee has been brought to an end allegedly by virtue of a stipulation entered into between the parties in the offer of appointment. Thus, it is apparent on the face of the record that the facts of the case, as referred to and relied upon and one at hand, are entirely different and distinguishable.48. For the reasons and discussions aforesaid, the writ application succeeds and is hereby allowed. The impugned letter/order dated 30th April, 2013, terminating the employment of the petitioner, is hereby quashed and set aside.49. The respondents are directed to reinstate the petitioner restoring the status-quo ante with all consequential benefits. In view of the order dated 22nd May, 2014, made by the Court while adjourning the matter to 11th July, 2014, with the condition that in case the petition succeeds, the respondents shall, along with consequential benefits, pay to the petitioner interest @ 9% per annum. Order is made accordingly.50. The Clause (a) of 'Notice Period' falling under Annexure - III of letter/offer of appointment which empowers the respondents to terminate the services of the petitioner even after his confirmation by giving three months' notice; is hereby quashed and set aside being opposed to public policy and is also ultra-vires Article 14 of the Constitution of India, to the extent it confers upon the respondent-employer the right to terminate the contract of employment of a permanent employee by giving him three months' notice after confirmation or till the date the organisation decides to relieve the employee whichever is earlier, and further providing for the payment or recovery of salary in lieu of notice period to the discretion of the organization.51. The respondents will pay to the petitioner costs which is quantified asRs.40,000/ - (RupeesFourty Thousand). The respondents are directed to ensure the compliance of this order, within four weeks from the date of receipt of a certified copy of this order.Writ petition allowed with costs ofRs. 40, 000/ - Impugned clause (a) of letter of appointment quashed as violative of article 4 of constitution.
"2015 (4) WLC 733,"