ON Civil Appeal No 2876 of 1986
From the Judgment and Order dated 1451986 of the Delhi High Court in Civil Writ No 1422 of 1985
Soli J Sorabji Attorney General Ashok Desai Solici tor General Vinod Bobade MC Bhandare MK Ramamurthy RK Garg Mrs Shyamala Pappu PP Rao Mrs J Wad Mrs Aruna Mathur Ms A Subhashini
P Parmeshwaran DK Garg AK Sil G Joshi SK Gupta BR Sabharwal Mrs Seita Vidyalingam SK Bisaria NP Salman Kurshid Irshad Ahmad VD Phadke A Sharan Lalit Bhasin Ms Nina Gupta Vineet Kumar RC Bhatia PC Kapur NP BS Charya NP Vijay K Verma CM Nayar HS Munjral and AVSL Somayajulu NP for the appearing parties
Satnam Singh appellant in person in CA No 1115 of 1976
The Judgments of the Court were delivered by SABYASACHI MUKHARJI CJ
These civil appeals special leave petitions and civil miscellaneous petitions deal with the question of constitutional validity of the right of the employer to terminate the 175 services of permanent employees without holding any inquiry in certain circumstances by reasonable notice or pay in lieu of notice
The facts involved in these matters are diverse but the central question involved in all these is one ie whether the clauses permitting the employers or the authori ties concerned to terminate the employment of the employees by giving reasonable notice or pay in lieu of notice but without holding any inquiry are constitutionally valid and if not what would be the consequences of termination by virtue of such clauses or powers and further whether such powers and clauses could be so read with such conditions which would make such powers constitutionally and legally valid In order to appreciate the question the factual matrix of these cases so far as these are relevant for the  determination of the aforesaid questions will have to be borne in mind in the light of the actual legal provisions involved in the respective cases
It will therefore be proper and appropriate to deal with the relevant facts in civil appeal No 2876 of 1986 first
The appellant herein the Delhi Transport Corpora tion is a statutory body formed and established under Section 3 of the Delhi Road Transport Act 1950 read with Delhi Road Transport Amendment Act 1971 hereinafter called the Act 
The appellant carries out the objects of vital public utility according to the appellant ie transport of passengers in the Union Territory of Delhi and other areas
Respondent No 2 Sri Ishwar Singh was appoint ed as conductor therein on probation for a period of 1 year in 1970
The probation period was extended thereafter for a further period of one year and thereafter he was regularised in service of the appellant
Similarly respondent No 3 Sri Ram Phal was appointed as Assistant Traffic Incharge and after the probation period he was regularised in serv ice
Respondent No 4 Sri Vir Bhan was appointed as driver and after completing the probation period he was also regu larised in service
It is stated that respondents Nos 2 to 4 became according to the appellant inefficient in their work and started inciting other staff members not to perform their duties
They were served with termination notices on 4th June 1985 under Regulation 9b of the Delhi Road Transport Authority Conditions of Appointment  Service Regulations 1952
On 11th June 1985 respondents Nos 2 to 4 and their Union being respondent No I DTC Mazdoor Con gress filed writ petition No 142285 in Delhi High Court challenging the constitutional validity of Regulation 9b of the Delhi Road Transport Act
On 11th May 1986 the division bench of the High Court of Delhi allowed the said writ petition and struck down Regulation 9b of the said Regulations and directed the appellant to 176 pay back respondents  wages and benefits within 3 months from the date of the said judgment
This is an appeal therefrom by special leave
The question therefore is was the High Court justified in the view it took It may be mentioned that regulations 9a  b were framed in exer cise of the powers conferred us 53 of the said Act which enables the formulation of Regulations
Regulation 9 of the said regulations which is material for the present contro versy reads as follows 9
Termination of service a Except as otherwise speci fied in the appointment orders the services of an employee of the authority may be terminated without any notice or pay in lieu of notice i During the period of probation and without assigning any reason thereof
ii For misconduct iii On the completion of specific period of appointment
iv In the case of employees engaged on contract for a specific period on the expiration of such period in accord ance with the terms of appointment
b Where the termination is made due to reduction of estab lishment or in circumstances other than those mentioned at a above one month notice or pay in lieu thereof will be given to all categories of employees
c Where a regulartemporary employee wishes to resign from his post under the authority he shall give threeone month s notice in writing or pay in lieu thereof to the Authority provided that in special cases the General Manager may relax at his discretion the conditions regarding the period of notice of resignation or pay in lieu thereof The said Regulation as set out hereinbefore deals with termination of services
Four contingencies are contemplated vide clause a of Regulation 9 whereupon the services of employees may be terminated without any notice or pay in lieu thereof except as otherwise provided in the appointment order
Apart from these four contingencies where termination is made due to reduction of establishment 177 or in circumstances other than those mentioned in clause a above one month s notice of pay in lieu thereof is required to be given to all categories of employees
Therefore except in the said four cases if there is reduction of establishment or there is any termination uncovered by these four contingencies referred to in clause a the same shall be by giving one month s notice or pay in lieu thereof to all categories of employees
Clause c postulates when a regular or temporary employee wishes to resign from his post under the authority then in such a situation one month s notice in writing or pay in lieu thereof to the authority may be provided
The High Court in the judgment under appeal noted that since the filing of this petition the notices issued by DTC to its various employees have been withdrawn and all these persons have been reinstated therefore the court was not concerned with the validity of clause a of Regulation 9 but respondents Nos 2 to 4 against whom action had been taken by the appellant by issuing notices of termination under Regulation 9b had not been reinstated and the court considered the validity of Regulation 9b
It was held by the court that the said provision gave absolute unbridled and arbitrary powers to the Management to terminate the services of any permanent or temporary employee
It was contended that such power was violative of Article 14 of the Constitution
In support of this contention reliance had been placed on which the High Court also relied upon on the decision of this Court in Workmen of Hindustan Steel Ltd  Anr
vs Hindustan Steel Ltd  Ors  In that case Standing Order 31 of Ms Hindustan Steel Ltd a public sector undertaking had prescribed for a detailed procedure for dealing with cases of misconduct and for imposing major penalty the employer had to draw up a chargesheet and give an opportunity to the delinquent workman to make his repre sentation within 7 days
If the allegations were controvert ed an enquiry had to be held by an officer to be nominated by the management and in such an enquiry reasonable opportu nity of explaining and defending the alleged misconduct had to be given to the workman
Suspension of the delinquent workman pending enquiry was also permitted
At the end of the enquiry if the charges were proved and it was provi sionally decided to impose any major penalty the delinquent workman had to be afforded a further reasonable opportunity to represent why the penalty should not be imposed on him
Standing Order 32 provided for a special procedure in case a workman was convicted for a criminal offence in a court of law or where the General 178 Manager was satisfied for reasons to be recorded in writing that it was inexpedient or against the interests of security to continue to employ the workmen  viz the workman could be removed or dismissed from service without following the procedure laid down in Standing Order No 31
There the appellant was an Assistant in the respondent s undertaking who was removed from service on the ground that it was no longer expedient to employ him
The management dispensed with the departmental enquiry after looking into the secret report of one of their officers that the appellant therein had misbehaved with the wife of an employee and that a complaint in respect thereof had been lodged with the po lice
In the reference to the Industrial Tribunal the Tribunal held that as the employer dispensed with the disci plinary enquiry in exercise of the power conferred by Stand ing Order 32 it could not be said that the dismissal was unjustified and that if there were allegations of miscon duct the employer was quite competent to pass an order of removal from service without holding any enquiry in view of the provisions contained in Standing Order 32 and rejected the reference
There was an appeal to this Court
This Court held that the reasons for dispensing with the enquiry do not spell out what was the nature of the misconduct alleged to have been committed by the appellant and what prompted the General Manager to dispense with the enquiry
As there was no justification for dispensing with the enquiry imposition of penalty of dismissal without the disciplinary enquiry as contemplated by Standing Order 31 was illegal and invalid
It was directed that the respondent should recall and cancel the order dated 24th August 1970 removing the appellant from service and reinstate him and on the same day the appellant was directed to tender resignation of his post which should be accepted by the respondent
The respondent should pay as and by way of back wages and future wages a sum of Rs15 lakhs to the appellant within 2 months which should be spread over from year to year commencing from the date of removal from service
It was reiterated that where an order casts a stigma or affected livelihood before making the order principles of natural justice of a reason able opportunity to present one s case and controvert the adverse evidence must have full play
Even under the Consti tution which permits dispensing with the inquiry under Article 3112 a safeguard is introduced that the concerned authority must specify reasons for its decision why it was not reasonably practicable to hold the inquiry
Standing Order 32 nowhere obligates the General Manager to record reasons for dispensing with the inquiry as prescribed by Standing Order 31
On the contrary it was held that the language of Standing Order 32 enjoins a duty upon the Gener al Manager to record reasons for his satisfaction why it was inexpedient 179 or against the interest of the security of the State to continue to employ the workman
Reasons for dispensing with the enquiry and reasons for not continuing to employ the workman stand wholly apart from each other
This Court finally observed that it was time for the public sector undertaking to recast Standing Order and to bring it in tune with the philosophy of the Constitution failing which the vires of the said Standing Order would have to be examined in an appropriate proceeding
Reliance was also placed before this Hon ble Court on the decision of this Court in the case of West Bengal State Electricity Board and Others vs Desh Bandhu Ghosh and Oth ers 1985 3 SCC 116 where this Court was concerned with regulations 33 and 34 of the West Bengal State Electricity Board
The said regulations 331 and 34 were as follows 331 Unless otherwise specified in the appointment order in any particular case the services of a permanent employee of the Board may be terminated without notice i on his attaining the age of retirement or by reason of a declaration by the competent medical authority that he is unfit for further service or ii as a result of disciplinary action iii if he remains absent from duty on leave or otherwise for a continuous period exceeding 2 years
In case of a permanent employee his services may be terminated by serving three months  notice or on payment of salary for the corresponding period in lieu thereof
 The High Court had come to the conclusion in that case that Regulation 34 was arbitrary in nature and suffered from the vice of enabling discrimination
The High Court there fore struck down the first paragraph of Regulation 34 and as a consequence quashed the order terminating the services of the first respondent therein
It was contended before this court on appeal that the Regulation 34 did not offend Article 14 of the Constitution that Sections 18 A and 19 of the Electricity Supply Act laid down sufficient guidelines for the exercise of the power under Regulation 34 and in any case the power to terminate the services of any permanent employee was vested in high ranking officials who might be expected to exercise the same in a 180 reasonable way
This Court was unable to accept that argu ment
This Court was of the view that the regulation was totally arbitrary and conferred on the Board a power which was capable of vicious discrimination
This Court was of the view that it was naked hire and fire  rule the time for banishing which according to this Court in the said deci sion altogether from employer employee relationship was fast approaching
It is only parallel this Court was of the view to the Henry VIII clause so familiar to administrative lawyers
Reference was made to the decision of this Court in Moti Ram Deka vs North East Frontier Railway  where Rules 1483 and 1493 of the Indian Railway Estab lishment Code had been challenged on the ground that these Rules were contrary to Article 3112 of the Constitution
The challenge was upheld though no opinion was expressed on the question whether the rule offended Article 14 of the Constitution or not since then Article 14 has been inter preted in several decisions of this Court and conferment and exercise of arbitrary power on and by the State or its instrumentalities have been frowned upon and struck down by this Court as offending Article 14 of the Constitution
Indeed it was noted in SS Muley vs JRD Tara by this Court that Justice Sawant of Bombay High Court had considered at great length Regulation 48a of the Air India Employees  Service Regulations which conferred similar power on the Corporation as Regulation 34 confers on the Board in the present case
The learned Judge therein Sawant J had struck down that Regulation
Reli ance had also been placed on another decision of the Bombay High Court in the case of Manohar P Kharkhar vs Raghuraj
This Court found it difficult to accept the reasoning therein
In that view of the matter the appeal was dismissed
Reference in this connection may also be made to the decision of this Court in Central Inland Water Transport Corporation Limited and Anr
vs Brojo Nath Ganguly and Anr There the appellant Corporation was a Government company incorporated under the Companies Act
The majority shares of the Corporation were held by the States of West Bengal and Assam
Article 51 of the Articles of Association of the Corporation conferred upon the President of India power to issue directionsinstructions regarding affairs and conduct of the business of the Corporation or of the Directors thereof as also regarding exercise and per formance of its functions pertaining to national security and public interest
Article 51 A of the 181 said articles entitled the President to call for returns accounts etc
of the Corporation
Articles 14 15 16 17 and 37 conferred on the President power to appoint and remove Chairman and the Board of Directors of the Corpora tion
Articles 41 and 42 were regarding the  President s control over the working of the Corporation
Article 47 provided for appointment of the auditors of the Corporation to be made by the Central Government on the advice of the Comptroller  and Auditor General of India and the nature of control to be exercised by the Comptroller and Auditor General in the matter of audit and accounts
Since another company namely the Rivers Steam Navigation Co Ltd was carrying on the same business as the Corporation was doing a Scheme of Arrangement was entered into between the Corpo ration and that Company for dissolution of the latter and taking over of its business and liabilities by the former
The Scheme inter alia stipulated that the Corporation shall take as many of the existing staff or labour as were possible and that those who could not be taken over shall be paid by the transferor company all moneys due to them under the law and all legitimate and legal compensations payable to them either under Industrial Disputes Act or otherwise legally admissible and that such moneys shall be provided by the Government of India to the transferor Company who would pay these dues
The Calcutta High Court approved the Scheme
Each of the respondents therein were in the service of the said company
Their services were taken over by the Corpora tion after the High Court s sanction to the Scheme of Ar rangement
While the respondent Ganguly therein was appoint ed as the Deputy Chief Accounts Officer and was later pro moted as Manager Finance the respondent Sengupta was appointed as Chief Engineer River Services and was later promoted as General Manager River Services Their appoint ment letters were in stereotype forms under which the Corpo ration could without any previous notice terminate their services if the Corporation was satisfied that the employee was unfit medically or if he was guilty of any insubordina tion intemperance or other misconduct or of any breach of any rules pertaining to this service or conduct or non performance of his duties
The letters of appointment fur ther stipulated that they would have been subject to the rules and regulations of Corporation
Rule 9i of the Corporation s Service Discipline and Appeal Rules of 1979 had provided that the services of permanent employee could be terminated on three months  pay plus DA to the employee or on deduction of a like amount from his salary as the case might be in lieu of the notice
By confidential letter the respondent Ganguly was asked to reply within 24 hours to the allegations of negligence made against him
After having his representation and detailed reply a notice under 182 Rule 9i was served on him terminating his services with immediate effect by paying three months  pay
Similarly a charge sheet was issued to the respondent Sengupta intimat ing that a disciplinary inquiry was proposed against him under the Rules and calling upon him to file his written statement of defence
Sengupta denied the charges made against him and asked for inspection of documents and copies of statements of witnesses mentioned in the said charge sheet
But a notice was serviced on him under Rule 9i terminating his services with immediate effect of paying three months  salary
Both Ganguly and Sengupta filed Writ Petitions before High Court
A Division Bench of that Court allowed the same
The Corporation filed appeals before this Court
The main questions for determination therein were i whether the appellant Corporation was an instrumentality of the State as to be covered by Article 12 and 36 of the Constitution and ii whether an unconscionable term in a contract of employment entered into with the Corporation was void under Section 23 of the Contract Act and violative of Article 14 of the Constitution and as such whether Rule 19i which formed part of the contract of employment be tween the Corporation and its employees to whom the said Rules applied was void This Court confirmed the judgment of the High Court with modification in the declaration made and dismissed the Corporation s appeal to this Court
This Court held that the appellant was State within the meaning of Article 12 of the Constitution
This Court further held that an unconscionable bargain or contract is one which is irreconcilable with what is right or reasonable or the terms of which are so unfair and unreasonable that they shock the conscience of the Court
This Court was of the view that the doctrine of distributive justice is another jurisprudential concept which has affected the law of contracts
According to that doctrine distributive fairness and justice in the possession of wealth and property could be achieved not only by taxation and regulatory control of private and contractu al transactions even though this might involve some sacri fice of individual liberty
This Court referred to articles 38 and 39 of the Constitution so far as the test of reasona bleness was concerned
The test of reasonableness or fair ness of a clause in a contract where there was inequality of bargaining power is another theory recognised in the sphere of law of contacts
It was reiterated in that decision that the Courts will not enforce and will when called upon to do so strike down an unfair and unreasonable contract or a clause in the contract
Reference was made to the observa tions of Lord Diplock in A Schroeder Music Publishing Co Ltd vs Macaulay formerly Instone 1974 i WLR 1308 and that test was 183 Whether the restrictions are both reasonably necessary for the protection of the legitimate interests of the promisee and commensurate with the benefits secured to the promiser under the contract For the purpose of this test all the provisions of the contract must be taken into consideration Justice Madon of this Court in the said decision found that this was in consonance with right and reason intended to secure social and economic justice and conformed to the mandate of the equality clause in Article 14 of the Consti tution
It was further recognised that there might be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power
These cases can neither be enumer ated nor fully illustrated
The Court must judge each case on its own facts and circumstances
The above principle would apply this Court reiterated where the inequality of bargaining power is the result of the disparity in the economic strength of the contracting parties or where the inequality is the result of circumstances whether of the creation of the parties or not or where the weaker party is in a position in which he could obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them or where a man had no choice or rather no meaningful choice but to give his assent to a contract or to sign on the dotted line in pre scribed or standard form or to accept a set of rules as part of the contract however unfair unreasonable and uncon scionable clause in that contract or form or rules might be
This Court however reiterated that this principle would not apply where the bargaining power of the contracting parties is equal or almost equal
This principle would not apply where both parties are businessmen and the contract is a commercial transaction
The contracts of this type to which the principle formulated above applied were not con tracts which were tainted with illegality but were contracts which contained terms which were so unfair and unreasonable that they shock the conscience of the Court
In the vast majority of cases such contracts are entered into by the weaker party under pressure of circumstances generally economic which results in inequality of bargaining power
Such contracts will not fall within the four corners of the definition of undue influence given in Section 161 of the Contract Act even though at times they are between parties one of whom holds a real or apparent authority over the other
Contracts in prescribed or standard forms or which embody a set of rules as part of the contract are entered into by the party with superior bargaining power with large number of persons or 184 a group of persons if they are unconscionable unfair and unreasonable are injurious to the public interest should be adjudged void according to Justice Madon under Section 23 of the Contract Act on the ground of being opposed to public policy
Public policy it was reiterated is not the policy of any particular Government
It connotes some matter which concerns the public good and the public interest
The principles governing public policy must be and are capable on proper occasion of expansion or modification
If there is no head of public policy which covers a case then the Court must in consonance with public conscience and in keeping with public goods and public interest declare such practice to be opposed to public policy
In any case which is not covered by authority courts should be guided by the Preamble to the Constitution and the principles underlying the Fundamental Rights and the Directive Principles
Rule 9i can aptly be called the Henry VIII Clause this Court opined therein
It confers an absolute arbitrary and un guided power upon the Corporation to exercise that power
This Court was concerned with the Central Inland Water Transport Corporation Ltd Service Discipline and Appeal Rules framed by the Corporation
The relevant provisions of the said Rule 9 relating to permanent employees therein were as follows 9
Termination of employment for Acts other than misdemea nour 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 allowances 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 inter est of the Company without assigning any reason
A perma nent employee whose services are terminated under this clause shall be paid 15 days  basic pay and dearness allow ance for each completed year of continuous service in the Company as compensation
In addition he will be entitled to encashment of leave to his credit This Court found that Rule 9i can be called the Henry VIII 185 Clause 
It confers an absolute arbitrary and unguided power upon the Corporation
It does not even say who on behalf of the Corporation was to exercise that power
While the Rules provided for four different modes in which the services of a permanent employee could be terminated earlier than his attaining the age of superannuation namely Rules 9i 9ii 36ivb read with 38 and 37 Rule 9i is the only rule which does not state in what circumstances the power conferred by that rule is to be exercised
Thus even where the Corporation could proceed under a regular disci plinary inquiry it is free to resort instead to Rule 9i in order to avoid the trouble of an inquiry
No opportunity of a hearing was at all intended to be afforded to the permanent employee whose service was being terminated in the exercise of that power
It violated audi alteram partem rule of natural justice also which was implicit in Article 14 of the Constitution
It is not covered by any of the situations which would justify the total exclusion of the audi alteram parterm rule
The view that the Board of Directors would not exercise this power arbitrarily or capriciously as it con sisted of responsible and highly placed persons ignored it was held the fact that however highly placed a person might be he must necessarily possess human frailties and power tends to corrupt and absolute power corrupts absolutely
 It was however held that Rule 9i was also discriminatory for the Corporation was given power to discriminate between employee and employee
It was stated that it could back up one employee and apply to him Rule 9i
It could pick up another employee and apply to him Rule 9ii
It was further reiterated that the Corporation was a large organisation
The said Rules formed part of the contract of employment between the Corporation and its employees who were not workmen
These employees had no powerful Union to support them
They had no voice in the framing of the said Rules
They had no choice but to accept the said Rules as part of their contract of employment
There was gross disparity between the Corporation and its employees whether they be workmen or officers
The Corporation could afford to dis pense with the services of an officer and will find many others to take his place but an officer cannot afford to lose his job because if he does so there are not many jobs waiting for him
It was therefore held that clause 9i of the said regulation was against right and reasons and it was wholly unconscionable
It had been entered into between parties between whom there was gross inequality of bargain ing power
Rule 9i was a term of the contract between the Corporation and all its officers it was noted
It affected a large number of persons and it squarely fell within the principle stated earlier
The Government and its agen cies and instrumentalities constitute the largest employer in the country
A 186 clause such as Rule 9i in a contract of employment it was noted affecting large sections of the public was harmful and injurious to the public interest for it tended to create a sense of insecurity in the minds of those to whom it applied and consequently against public good
Such a clause therefore was opposed to public policy and as such it is void under Section 23 of the Contract Act it was held
It was further held that it was not possible to accept the contention that this was a contract entered into by the Corporation like any other contract entered into by it in the course of its trading activities and the Court there fore ought not to interfere with it
The employees could not be equated with goods which could be bought and sold nor could a contract of employment be equated with a mercan tile transaction between two businessmen much less when the contract of employment was between a powerful employer and a weak employee
Although it was reiterated that the aforesaid rule 9i was supported by mutuality inasmuch as it con ferred an equal right upon both the parties but considering the unequal position of the Corporation and its employees there was no real mutuality this Court opined
It was reiterated that the Corporation being covered by Article 12 its actions must also be in accordance with the Directive Principles prescribed by Part IV of the Constitution
Refer ence may be made to paragraph 39 of the aforesaid decision where this Court noted that in the working of the Constitu tion it was found that some of the provisions of the Con stitution were not adequate for the needs of the country or for ushering in a Welfare State and the constituent body empowered in that behalf amended the Constitution several times
By the very first amendment made in the Constitution namely by the Constitution First Amendment Act 1951 clause 6 of Article 19 was amended with retrospectitive effect
Under this amemdment sub clause g of Article 191 which guarantees to all citizens the right to carry on occupation trade or business was not to prevent the State from making any law relating to the carrying on by the State or by a Corporation owned or controlled by the State of any trade business industry or service whether to the exclusion complete or partial of citizens or otherwise
This amendment also validated the operation of all existing laws insofar as these had made similar provisions
Article 298 of the Constitution as originally enacted provided that the executive power of the Union and of each State was to extend subject to any law made by the appropriate legis lature to the grant sale disposition or mortgage of any property held for the purposes of the Union or of such State as the case may be and to the purchase or acquisition of property for those purposes respectively and to the making of contracts
and it further provided that all property acquired for the purposes of the Union or of 187 State was to vest in the Union or in such State as the case might be
This Court referred to the decision of this Court in Sukhdev vs Bhagatrarn Sardar Singh Raghuvanshi   the Governing power wherever located must be subject to the fundamental constitutional limitations
 The High Court in the judgment under appeal was unable to accept the plea of alternative remedy and allowed the Writ Petition and declared regulation 9b of the Regula tions to be illegal and ultra vires and as a consequence thereof the orders terminating the services of respondents Nos 1 to 4 were quashed and these respondents were deemed to be in the service of DTC and back wages and all other benefits by way of annual increments were directed to be paid
Learned Solicitor General of India contended before us that in the facts and the circumstances of this case there was sufficient guideline in the Regulation 9b and the power of termination properly read would not be arbitrary or violative of Article 14 of the Constitution
It may be mentioned that under the general law of contract of employ ment which was commonly known as the law of master and servant  which is not termed as law of employer and employ ee whether the contract of service is for a fixed period or not if it contained a provision for its termination by notice it could be so terminated
If there was no provision for giving notice and the contract was not for a fixed period the law implied an obligation to give a reasonable notice
Where no notice in the first case or no reasonable notice in the second case was given and the contract was wrongfully terminated such wrongful termination would give rise to a claim for damages
In this connection reference may be made to the observations of this Court in the five judge bench decision in Union of India  Anr
vs Tulsi Ram Patel 1985 Supp
2 SCR 131 at p 166
This is also the position at common law
See Chitty on Contract 26th Edition Vol
II p 808 or 25th Edition Vol
II p 712 paragraph 3490
In this connection reliance may also be placed at paragraphs 607 and 608 of Volume No 16 4th Edition of Halsbury s Law of England
Under the Industrial Law subject to the relevant statu tory provision the services of an employee could be termi nated by reasonable notice
In such a case it was always open to the Industrial Tribunal to examine whether the power of termination by reasonable notice was exercised bona fide or mala fide
If however the industrial Court was satis fied that the order of discharge was punitive that it was mala fide or that it amounted to victimisation or unfair labour practice the 188 industrial court was competent to set aside the order and in proper cases direct the reinstatement of the employee
Reference may also be made to the observations of this Court in Tata Oil Mills Co Ltd vs Workmen  Anr  at 130
If however the exercise of such power was challenged on the ground of being colourable or mala fide or on account of victimisation or unfair labour practice the employer must disclose to the Court the ground of his im pugned action so that the same may be tested judicially
See the observations of this Court in L Michael  Anr
vs Ms Johnston Pumps India Ltd  at 498
The relationship between a statutory corporation and its employees is normally governed by the relevant rules regu lations and standing orders
A statutory Corporation is State within the meaning of Article 12 of the Constitution and its action is subject to judicial review in certain cases and certain circumstances
In the facts and circum stances of these cases we have proceeded on that basis and we are of the opinion that it is the correct basis
The exercise of such power under regulations similar to the one impugned which has been upheld in various types of cases are instructive in their variety
It may be mentioned that the exercise of power under the very same Regulation 9b was upheld by the Court in a matter wherein in an action by the employee of DTC this Court in Delhi Transport Corpora tion Undertaking vs Balbir Saran Goel  at 764 held that even if the employees of the respondent thought that he was a cantankerous man and it was not de sirable to retain him in service it was open to them to terminate his services in terms of Regulation 9b and it was not necessary to dismiss by way of punishment for mis conduct
Reliance was placed on this decision by the High Court in the Judgment under appeal
The High Court in our opinion rightly pointed out however that the decision was on a different basis and could not be availed of in deciding controversy involved in the present determination
In Air India Corporation Bombay vs VA Rebellow  Anr   this Court dealing with the power of the Air India to terminate the services of a person who was alleged to have misbehaved with air hostesses observed on page 6 16 of the report that the anxiety of the Legislature to effective ly achieve the object of duly protecting the workmen against victimisation of unfair labour practice consistently with the preservation of the employer s bona fide right to main tain discipline and efficiency in the industry for securing the maximum production in peaceful harmonious atmosphere is obvious from the 189 overall scheme of these sections
This Court on page 620 of the report observed that the record merely disclosed that the appellant had suspicion about the complainant s suit ability for the job in which he was employed and this led to loss of confidence in him with the result that his services were terminated under Regulation 48
Loss of confidence in such circumstances could not be considered to be mala fide it was held
Similarly in Municipal Corporation of Greater Bombay vs PS Malvenkar  Ors  at page 1006 where it was alleged that the services of an employee of Bombay Municipal Corporation were unsatisfactory this Court held that the powers of dismissal after an inquiry and the powers of simpliciter termination are to distinct and independent powers and as far as possible neither should be construed so as to emasculate the other or to render it ineffective
One is the power to punish an employee for misconduct while the other is the power to terminate sim pliciter the service of an employee without any other ad verse consequence
It may be mentioned that the case of civil servants is however governed by their special constitutional position which accords them status the legal relationship between the Government and its servants is something entirely different something in the nature of status
It is much more than a purely contractual relationship voluntarily entered into between the parties
The duties of state are fixed by the law and in the enforcement of these duties society has an interest
In the language of jurisprudence status is a condition of membership of a group of which powers and duties are exclusively determined by law and not by agreement between the parties concerned
See the observa tions of this Court in Roshan Lal Tandon vs Union of India  at 195 D E
But even then the services of a temporary civil servant although entitled to the protection of Article 311 of the Constitution is subject to termina tion by notice
But beside the above the government may find it necessary to terminate the services of a temporary servant if it is not satisfied with his conduct or his suitability for the job andor his work
See the observa tions of this Court in Champak Lal Chiman Lal Shah vs The Union of India at 204
The services of a temporary government servant further
may be terminated on one month s notice whenever the government thinks it neces sary or expedient to do so for administrative reasons
It is impossible this Court observed to define before hand all the circumstances in which the discretion can be exercised
The discretion was necessarily left to the Government
See observations of this Court in Ram Gopal Chaturvedi vs State of M P  at 475 190 The aforesaid position of a government servant has been analysed in depth by the decision of this Court in Union of India vs Tulsi Ram Patel supra where it was reiterated that the doctrine of pleasure is not a relic of the feudal ages or based upon any special prerogative of the Crown but is based on public interest and for the public good because it is as much in public interest and for public good that government servants who are inefficient dishonest or cor rupt or have become a security risk should not continue in service and that the protection afforded to them by the Acts and the Rules made under Article 309 and by Article 311 of the Constitution be not abused by them to the detriment of the public interest and public good
It was reiterated on page 190 of the report that if in a situation as envisaged in one of the three clauses of the second proviso to Clause 2 of Article 311 arises and the relevant clause is proper ly applied and the disciplinary inquiry dispensed with the concerned government servant cannot be heard to complain that he is deprived of his livelihood
This Court reiterated that the livelihood of an individual is a matter of great concern to him and his family but his livelihood is a matter of his private interest where such livelihood is provided by the public exchequer and the taking away of such livelihood is in the public interest and for the public good and the former must yield to the latter public policy it was reit erated requires public interest needs and public good demands that there should be such a doctrine
It was further reiterated that the rules of natural justice are not immuta ble but flexible
These rules can be adopted and modified by statutes and statutory rules and also by the constitution of the Tribunal which has to decide a particular matter and the rules by which such Tribunal is governed
Not only can the principles of natural justice be modified but in exceptional cases they can even be excluded
See the observations of this Court at page 237 G of the aforesaid report
Reference was also made to the observations of this Court at pages 214 215 of the aforesaid report
Thus the Constitution Bench laid down that even where a government servant enjoys constitutional status there can be exclusion of inquiry in the cases prescribed for termination of employment
It must however be borne in mind that in some recent cases this Court has taken the view that a regulation pro viding for the termination of the service of an employee of the public corporation by notice only or pay in lieu thereof is invalid under Article 14 of the Constitution
We have referred to the decisions of the Workmen of Hindustan Steel s case supra West Bengal State Electricity Board s case supra and Central Inland Water Transport Corpora tion s case supra
Mr 191 Ashok Desai learned Solicitor General of India submitted that the decisions in the West Bengal State Electricity Board s supra and Central Inland Water Transport Corpora tion s case supra were incorrectly decided and the deci sion proceeded on the theory of unconscionable bargains and that termination by notice is against public policy
He however drew our attention to Gheru Lal Parekh vs Mahadeo das Maiya  Others 1959 Supp
2 SCR 406 and 440 where it was held that though theoretically it may be permissible to evolve a new head under exceptional circumstances in a changing world it is advisable in the interest of stability of society not to make any attempt to discover new heads of avoidance of such clauses in these days
Furthermore as stated above learned Solicitor General submitted that in the ordinary law of contract termination of employment by reasonable notice on either side has never been regarded as unconscionable
Therefore the learned Solicitor General submitted that this part of the above judgments was errone ous and should be overruled
It must however be noted that in a later judgment of this Court which followed this line of reasoning it was recognised that a public corporation requires protection from employees who are inefficient or those who lacked probity or even made faulty policy decisions
Reference was made to the decision of this Court in OP Bhandari vs 1
TDC  Ors
  where this Court held that so far as some of the higher placed employees are concerned described as gold collar  employees public sector under takings may be exposed to irreversible damage on account of faulty policy decisions or on account of lack of efficiency or probity of such employees and its very existence might be endangered beyond recall
A public corporation may not be able to cut the dead wood and get rid of a managerial cadre employee in case he is considered to be wanting in perform ance or integrity
Reference may be made to page 343 para graph 5 supra of the report
It may be mentioned that in Moti Ram Deka s case supra at p 707 of the said report a similar rule was considered by seven learned Judges in the context of government servants in Railway
The majority judgment did not express opinion on the question of the Railway rule being bad on the ground of unguided and uncana lised power
In his judgment Mr Justice Das Gupta held that the rule gave no guidance and was therefore violative of Article 14
See page 769 of the report
On this point Mr Justice Shah as the learned Chief Justice then was in his judgment observed at page 799 800 of the aforesaid report In considering the validity of an order an assumption that the power may be exercised mala fide and on that ground 192 discrimination may be practised is wholly out of place
Because of the absence of specific directions in Rule 148 governing the exercise of authority conferred thereby the power to terminate employment cannot be regarded as an arbitrary power exercisable at the sweet will of the author ity when having regard to the nature of the employment and the service to be rendered the importance of the efficient functioning of the rail transport in the scheme of our public economy and the status of the authority invested with the exercise of power would appropriately be exercised for the protection of public interest on grounds of adminis trative convenience
Power to exercise discretion is not necessarily to be assumed to be a power which will invali date the conferment of power
Conferment of power has neces sarily to be coupled with the duty to exercise it bona fide and for effectuating the purpose and policy underlying the rules which provide for the exercise of the power
If in the scheme of the rule a clear policy relating to the circum stances in which the power is to be exercised is discerni ble the conferment of power must be regarded as being made in furtherance of the scheme and is not open to attack as infringing the  equality clause
It may be remembered that the rules relating to termination of employment of temporary servants and those on probation and even those relating to compulsory retirement generally do not lay down any specific directions governing the exercise of the powers conferred thereby
The reason is obvious the appointing authority must in all these cases be left with discretion to determine employment having regard to the exigencies of the service suitability of the employee for absorption or continuance in the cadre and the larger
interest of the public being served by retaining the public servant concerned in service
 Learned Solicitor General submitted that the question is whether it is the very existence of power which is bad or the exercise is bad in any specific case
It was submitted that the Court would be entitled to obtain guidance from the preamble the policy and the purpose of the Act and the power conferred under it and to see that the power is exer cised only for that purpose
It was submitted that even if a statute makes no clarification Court would ascertain if the statute laid down any principle or policy
In such a case the statute will be upheld although a given exercise may be struck down in particular cases
See 193 the observations of this Court in Shri Ram Krishna Dalmia vs Justice Tandolkar  at 299
The guidance in the statute for the exercise of discretion may be found from the preamble read in the light of surrounding circumstances or even from the policy or the purpose of the enactment or generally from the object sought to be achieved
See the observations of this Court in Jyoti Prasad vs The Adminis trator for the Union Territory of Delhi  at 139
Even a term like public interest  can be sufficient guidance in the matter of retirement of a government employ ee
See the observations of this Court in Union of India vs Col JN Sinha  Anr at 461 and such a provision can be read into a statute even when it is not otherwise expressly there
Learned Solicitor General draw our attention to the observations of this Court in NC Dalwadi vs State of Gujarat paragraphs 9 and 10 at page 619
It is well settled and the learned Solicitor General made a point of it that the Court will sustain the presumption of constitutionality by considering matters of common knowledge and to assume every state of facts which can be conceived and can even read down the section it was submitted if it becomes necessary to uphold the validity of the provision
Reliance was placed on the decision of this Court in Commissioner of Sales Tax MP Indore  Ors
vs Radhakrishan  Ors
  at 257
In the case of Olga Tellis  Ors
vs Bombay Munici pal Corporation  Ors 1985 Suppl
2 SCR 51 at 89 this Court has held that considering the scheme of the act a section which enabled the Commissioner to remove encroach ment without notice must be read to mean that notice would be given unless circumstances are such that it is not rea sonably practicable to give it
This Court further held that the discretion is to be exercised in a reasonable manner so as to comply with the constitutional mandate that the proce dure accompanying the performance of a public act must be fair and reasonable
We must lean in favour of that inter pretation because it helps to sustain the validity of the law
Learned Solicitor General submitted that the appeal involved herein the power of Delhi Transport Corporation a statutory corporation regarding termination of service simpliciter under Regulation 9b
These Regulations were framed as mentioned under Section 53 of the Delhi Road Transport Authority Act 1950
The said Act was replaced by the Delhi Municipal Corporation Act 1957 but the regula tions have been saved and even though in 1971 a new Corpora tion viz the Delhi Transport Corporation the appellant was constituted 194 under the Road Transport Corporation Act 1950 the regula tions have been continued
The guidelines for the exercise of such power according to the Solicitor General could be found in the statutory provisions of the 1950 Act under which the regulations have been framed the preamble Sections 19 and 20 equivalent to Sections 18 and 19 of the Road Transport Corporation Act 1950 Section 53 equivalent to 45 of the Road Transport Corporation Act 1950 the context of Regulation 9b read with 9a and 15
Even for the exercise of this power reasons could be recorded although they need not be communi cated
This will ensure according to the Solicitor General a check on the arbitrary exercise of power and effective judicial review in a given case
The present regulations are parallel to but not identical with the exceptions carved out under Article 3112 proviso
It was submitted that even the power of termination simpliciter under Regulation 9b can only be exercised in circumstances other than those in Regulation 9a ie not where the foundation of the order is misconduct 
The exercise of such power can only be for purposes germane and relevant to the statute
It was submit ted by the learned Solicitor General that these would in clude several cases which have been held by Courts to give rise to termination simpliciter including where the employee shows such incompetence or unsuitability as to make his continuance in employment detrimental in the interest of the Corporation where the continuance of the employee is a grave security risk making his continuance detrimental in the interest of the Corporation if there is a justifiable lack of confidence which makes it necessary in the interest of the Corporation to immediately terminate the services
These are illustrative and not exhaustive
It was submitted by the learned Solicitor General that the above guidelines of recording reasons and confining action under Regulation 9b for purposes germane and rele vant to the statute would prevent arbitrary action by the Corporation while enabling it to run its services efficient ly and in public interest
Thus there is no vice of arbi trariness in the regulation
The judgment of the High Court therefore cannot and should not be upheld according to the learned Solicitor General
In Civil Appeal No 2876 of 1986 the learned Attorney General urged that the settled rule judicially evolved in matters of constitutional adjudication is that in order to sustain the constitutionality of legislation the words of a statute may be qualified its operation limited and condi tions limitations and obligations may be implied or 195 read into the statute in order to make it conform to consti tutional requirements
The underlying rationale according to the learned Attorney General of this rule of interpreta tion or the doctrine of reading down of a statute is that when a legislature whose powers are not unlimited enacts a statute it is aware of its limitations and in the absence of express intention or clear language to the contrary it must be presumed to have implied into the statute the requi site limitations and conditions to immunise it from the virus of unconstitutionality
From what the learned Attorney General submitted and what appears to be the correct that every legislature intends to act within its powers
There fore in a limited Government the legislature attempts to function within its limited powers
It would not therefore be expected to have intended to transgress its limits
In Re The Hindu Women s Rights to Property Act  the question before the Federal Court was about the meaning of the word property  in the Act
The Court limited the opera tion of the word property  to property other than agricul tural land because otherwise the Central Legislature would have had no competence to enact the statute
The Court observed at pages 26 and 27 of the Report as follows No doubt if the Act does affect agricultural land in the Governors  Provinces it was beyond the competence of the Legislature to enact it and whether or not it does so much depend upon the meaning which is to be given to the word property  in the Act
If that word necessarily and inevita bly comprises all forms of property including agricultural land then clearly the Act went beyond the powers of the Legislature but when a Legislature with limited and re stricted powers makes use of a word of such wide and general import the presumption must surely be that it is using it with reference to that kind of property with respect to which it is competent to legislate and to no other
The question is thus one of construction and unless the Act is to be regarded as wholly meaningless and ineffective the Court is bound to construe the word property  as referring only to those forms of property with respect to which the Legislature which enacted the Act was competent to legis late that is to say the property other than agricultural land   See also the observations of Chief Justice Gwyer at pages 27 to 29 of the Report on how legislations of legisla ture with limited powers should be construed
See also the observations of this Court in RMD 196 Chamarbaugwalla vs Union of India   at p 935 and 938
There section 2d of defined prize competition  as meaning any competition in which prizes are offered for the solution of any puzzle
As defined the statute covered not only competition in which success depended on chance but also those which involved substantial degree of skill
It was conceded that the Act would be violative of Article 191g of the Constitution if competitions which involved substantial degree of skill were included in the statutory definition
See the observa tions of this Court at p 935 of the report
This Court rejected the argument of the petitioners therein that since the language of the definition of prize competition was wide and unqualified it was not open to the Court to read into it a limitation which was not there
This principle was reiterated and applied by this Court in the case of Kedar Nath Singh vs State of Bihar 1962 Supp
2 SCR 769
The question before this Court was about the validity of section 124A of the Indian Penal Code
This Court in order to sustain the validity of the section on the touch stone of Article 191a of the Constitution of India limited its applica tion only to acts involving intention or tendency to create disorder or disturbance of law and order or incitement to violence
This Court held that it was well settled that if certain provisions of law construed in one way would make them consistent with the Constitution and another interpre tation would render them unconstitutional the Court would lean in favour of the former construction
The provisions of the sections read as a whole along with the explanations make it reasonably clear that the sections aim at rendering penal only such activities as would be intended or have a tendency to create disorder or disturbance of public peace by resort to violence
Reference may also be made to the decision of this Court in RL Arora vs State of Uttar Pradesh  where the question was about the Constitutionality of sec tion 41aa of the 
This Court upheld the validity of the section following the principle of interpreting the said rule in a way which would be consistent with the Constitution
See the observations of this Court at p 797 of the said report
The technique of reading down has been adopted in numer ous cases to sustain the validity of the provision
For example in Jagdish Pandey vs The Chancellor University of Bihar  Anr  1 at pages 236 37 this Court made resort to section 4 of the Bihar State Universities Act 1962
It was observed that section 4 so read literally it did appear to give uncanalised powers to the Chancellor to 197 do what he liked on the recommendation of the Commission with respect to teachers covered by it
But this Court was of the opinion that the legislature did not intend to give such an arbitrary power to the Chancellor and was of the opinion that section 4 should be read down and if it is read down there was no reason to hold that the legislature was conferring a naked arbitrary power on the Chancellor and that power cannot be struck down as discriminatory under Article 14 of the Constitution
See the observations of this Court in Sunil Batra vs Delhi Administration  Ors  There the constitutionality of section 30 sub section 2 and section 56 of the was in question
Krishna Iyer J speaking for this Court at p 511 para 34 of the report observed that the Court does not rush in  to demolish provisions where judicial endeavour amelioratively interpretational may achieve both constitutionality and compassionate resurrection
This salutary strategy the learned Judge observed of sustaining the validity of the law and softening its application was of lovely dexterity
The semantic technique of updating the living sense of a dated legislation is in our view perfectly legitimate
Semantic readjustments are necessary to obviate alegicidal sequel and a validation oriented approach becomes the phi losophy of statutory construction sometimes
Similar obser vations were made in NC Dalwadi vs State of Gujarat supra
In Tinsukhia Electric Supply Co Ltd vs State of Assam  Ors   this Court upheld the valid ity of sections 9 and 10 of the Act by reading in several matters by necessary implication in order to sustain the validity of the sections
In Charan Lal Sahu  Ors
vs Union of India 1989 Supp
SCALE 1 at pages 53 and 54 paras 101 as well as p 61 para 114 it was observed that this principle of reading down has been adopted in US Supreme Court in several cases
See also United States of America vs Edward A Rumely 97 Lawyers Edition 770 at 775
The princi ple as enunciated in Rumely s case supra has been approved by this Court in Shah  Co vs State of Maharashtra  at 477 78
This principle of reading down or placing limited construction has been adopted by courts in England in deciding the validity of bye laws and regula tions
See Reg
vs Sadlers Co   at 460 and 463 and Faramus vs Film Artists Association at 542
The courts must iron out the creases as said Lord Denning in Seaford Court Estates This Court has also on numerous occasions followed this practice
See the observations of this Court in M Pentiah and Ors
vs Veera Mallappa and Ors   Bangalore Water Supply and Sewerage Board etc
vs A Rajappa  Ors  See also HM Seervai s Constitutional Law of India  3rd Edn
I pages 119 120
In the background of this the learned Attorney General also 198 drew our attention that the present regulation as mentioned hereinbefore should be read and construed in the said manner and the reasons and conditions of its exercise can be spelt out and it may be so construed
He submitted that it should be spelt out that the regulation requires reasons to be there reasons which are germane and relevant
The principles of natural justice or holding of an enquiry is neither a universal principle of justice nor inflexible dogma
The principles of natural justice are not incapable of exclusion in a given situation
For example Article 3112 of the Constitution which essentially em bodies the concept of natural justice itself contemplates that there may be situations which warrant or permit the non applicability of the principles underlying Article 3112 of the Constitution
Reference may be made to the second proviso to Article 311 of the Constitution
This court has also recognised that the rule of audi alteram partera can be excluded where having regard to the nature of the action to be taken its object and purpose and the scheme of the relevant statutory provision fairness in action does not demand its application and even warrants its exclusion
If importing the right to be heard has the effect promptitude or the urgency of the situation so demands natural justice could be avoided
See the observations of this Court in Maneka Gandhi s case at p 681 of the report supra
This Court in Tulsi Ram Patel s case supra had in terms ruled that not only therefore can the principles of natural justice be modified but in exceptional cases they can even be excluded
But the principles of natural justice must not be displaced save in exceptional cases
Consequent ly the learned Attorney General submitted that the words where it is not reasonably practicable to hold an enquiry may be imported into the regulations
It was submitted by the learned Attorney General that the exclusion of audi alteram partera rule in circumstances which are circum scribed and coupled with the safeguard of recording of reasons which are germane and relevant the termination in such a situation would not render the regulation unreasona ble or arbitrary
Then it could not be said that the power was uncanalised or unguided if the regulation is construed and read down in the manner indicated above according to the learned Attorney General
The reading down the learned Attorney General conceded cannot however be done where there was no valid reason and where it would be contrary to proclaimed purpose
See the observations of this Court in Minerva Mills Ltd  Ors
vs Union of India  Ors
   at p 239 and 259
On behalf of the workmen of the respondent DTC Shri 199 Ramamurthi submitted that the Constitutional questions of great public importance arising in the present appeal have to be examined in the light of the law laid down by the Full Court in the case of RC Cooper vs Union of India  at 577 and by larger Constitution Benches in the cases of Maneka Gandhi vs Union of India supra Moti Ram Deka vs Union of India supra State of West Bengal vs Union of India supra and the Constitution Bench decisions in the cases of Olga Tellis and Others vs Bombay Municipal Corporation and Others supra Fertilizer Corporation Kamgar Union Regd Sindri and Others vs Union of India and Others 1981 2 SCR at 60 61 Union of India vs Tulsiram Patel and Others supra Sukhdev Singh  Others vs Bhagat Ram Sardar Singh Raghuvanshi and Another supra and Ajay Hasia etc
vs Khalid Mujib Sehravardi  Ors etc  at 100 102
According to Shri Ramamurthi these deci sions are authority for the following propositions a The declarations in the provisions contained in the Fundamental Rights Chapter involve an obligation imposed not merely upon the State but upon all persons to respect the rights declared unless the context indicates otherwise against every person or agency seeking to infringe them
See the observations of this Court in State of West Bengal vs Union of India 1964 1 SCR 371 at page 438 b Part III of the Constitution weaves a pattern of guarantee on the texture of basic human rights
The guaran tees delimit the protection of those rights in their allot ted field
They do not attempt to enunciate distinct right
See RC Cooper s case supra at p 577 of the report
The extent of protection against impairment of a fundamental right is determined not by the object of the Legislature nor 2by the form of the action but by its direct operation upon the individual s rights
c Any person who is deprived of his right to live lihood except according to just and fair procedure estab lished by law can challenge the deprivation as offending the right to life conferred by Article 21
See the observations of this Court in Olga Tellis s case supra at 80 81 and 85 of the report
Therefore the holding to the contrary in AV Nachane  Anr
vs Union of India  Anr  is no longer good law
In any event Counsel is right that the observations made at p 259 of the report supra were in a different context and the challenge 200 based on Articles 191g and 31 does not appear to have any substance in resolving the present controversy before us
Mr Ramamurthi submitted that provision of any Rule that service shall be liable to termination on notice for the period prescribed therein contravenes Article 14 of the Constitution as arbitrary and uncontrolled power is left in the authority to select at its will any person against whom action will be taken
See the observations of this Court in Moti Ram Deka s case supra at p 770 and 751 of the re port
It was submitted that Articles 14 19 and 21 of the Constitution are inter related and the law must therefore now be taken to be well settled that Article 21 does not exclude Article 19 and even if there is a law providing a procedure for depriving a person of personal liberty this will equally apply to life and there is consequently no infringement of fundamental right conferred by Article 21 such law in so far as it abridges or takes away any funda mental right under Article 19 would have to meet the chal lenge of the Article
See the observations of this Court in Maneka Gandhi s case supra
Article 191g it was urged confers a broad and general right which is available to all persons to do work of any particular kind and of their choice
See the observations in Fertilizer Corporation Kamgar Union s case supra at p 60 61 of the report
According to Mr Ramamurthi there is a distinction between Public Employment or service and pure master and servant cases
He referred to the observations of this Court in India Tobacco Co Ltd vs The Commercial Tax Offi cer Bhavanipore  Ors at 657 followed in AL Kalra vs The Project and Equipment Corporation of India Ltd  at 664 Whenever therefore according to Shri Ramamurthi there is arbitrariness in State Action whether it be of the Legislature or of the Executive or of an authority under Article 12 article 14 immediately springs into action and strikes down such State action
In fact the concept of reasonableness and nonarbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the Constitution
See the observations of this Court in Bandhua Mukti Morcha vs Union of India  Ors at 101
A violation of a principle of natu ral justice by State action is a violation of Article 14 of the Constitution which can be excluded only in exceptional circumstances
See the observations of this Court in Tulsi Ram Patel s case supra at 229 and at 233 of the report
It was therefore submitted that a clause authorising the 201 employer to terminate the services of an employee whose contract of service is for an indefinite period or till the age of retirement by serving notice violates the fundamen tal rights guaranteed under Articles 14 191 g and 21 of the Constitution for Article 21 is violated when right to livelihood is taken away by termination of service of a person employed for an indefinite period or till the age of retirement except for proved misconduct
Assuming it was argued that in such a case right to livelihood can be taken away by termination of service by giving notice nonetheless it could be validly done only according to Shri Ramamurthi if i There is a fair and just procedure by way of 1 recording of reasons and 2 notice to show cause ii And the right to terminate is restricted to exceptional grounds
When the service of a person employed for an indefinite period or till the age of retirement is terminated Shri Ramamurthi assets then Article 14 is violated when there is no guidance for the exercise of power and reasons are not required to be recorded and principles of natural justice are abrogated
Similarly Article 191g is violated according to him for the reasons that there is no guidance no requirement of reasons to be recorded and there is viola tion of the principles of natural justice
Shri Ramamurthi reminded us that before India became independent in 1947 the was ap plicable only to British India on its own force
By Merged State Laws Act 1949 it was extended to the new provinces and merged States to the States of Manipur Tripura by Vindhya Pradesh by Union territories Law Act 1950
It was also extended to the States merged in the States of Bombay and Punjab by Bombay Act 4 of 1950 and Punjab Act 5 of 1950
With the promulgation of the Constitution the Indian Con tract Act 1872 extends to the whole of India except the State of Jammu  Kashmir
Shri Ramamurthi asserted the what ever might have been the position in regard to the provinces comprised in British India before independence as far as other areas forming part of the Union of India under the Constitution are concerned only the is applicable
By article 372 of the Constitution this Act has been continued in operation even after the Constitu tion came into force subject to the other provisions of the Constitution
202 A contract of service according to Shri Ramamurthi is a species of contract and will therefore be governed by the provisions of the 
This Act has been held to be an Amending as well as a Consolidating Act
Therefore there can be no question of common law of Eng land as made applicable in India during the British Rule being the basis for deciding any question relating to con tract of employment after 1950
In any event any provisions of either the  or of the English Common Law Applicable in British India before the Constitu tion came into force would be void by reason of Article 13 of the Constitution if it infringed any of the fundamental rights contained in Part III of the Constitution pleaded Mr Ramamurthi before us
Under Section 2h of the an agreement including an agreement of service becomes a contract only when it is enforceable by law
If it is not enforceable in law it would be void by reason of section 2g of the Contract Act
The question for consideration would therefore be whether a clause in an agreement of service when it is for an indefinite period or till the age of retirement providing for termination by giving notice would be enforceable It was submitted by the workers  union that it would not be enforceable if it vio lates the fundamental rights guaranteed by Articles 14 191g and 21 of the Constitution
See the observations of this Court in Moti Ram Deka s case supra at 709 of the Report
It was submitted that the broader submission was that under our Constitution there can be no contract of employment providing for termination of service by an em ployer of an employee by giving notice when the employment is for indefinite period or till the age of retirement
In any event such a clause cannot find a place either in the contract of service or in the statutory provisions governing the conditions of service in the case of public employment under the state  as defined in Article 12 of the Constitu tion
Shri Ramamurthi urged that the observations contained in the judgment of this Court in Tulsiram Patel s case supra at 166 of the report regarding the ordinary law of master and servant cannot be construed as laying down the proposi tion that under the Indian law even if a contract of serv ice is for an indefinite period or till the age of retire ment it can still be terminated by giving reasonable period of notice
In any event even in the Common Law of England a distinction is made between public employment and pure master and servant cases See the observations of this Court in Sukhdev Singh s case supra at page 657 of the report
Mr Ramamurthi submitted that the doctrine of pleasure 203 advanced by the learned Solicitor General of India was confined to employment under the Union of India and States dealt with under Part XIV Chapter I of the Constitution and cannot and do not extend to employment under local or other authorities referred to under Article 12 of the Constitu tion
There cannot be any pleasure by such authority in respect of employment of the permanent employee
It was submitted by Shri Ramamurthi further that even in cases of employment under the Union and the States the pleasure doctrine is limited by the express provisions of Article 311 of the Constitution
For that reason according to him it has lost some of its majesty and power
He referred us to the observations of this Court in Moti Ram Deka s case supra at p 704 and Tulsi Ram Patels s case supra at page 196
In dealing with the question of validity of rules autho rising the Government to terminate the services of temporary servants as upheld by this court in Champaklal Chimanlal Shah s case supra and Ram Gopal Chaturvedi s case supra it was submitted that it is important to note that the validity of the rules was challenged on the ground of denial of equality of opportunity in employment under the State guaranteed by Article 16 of the Constitution
In that con text this Court observed at p 20 1 supra of the report that there can also be no doubt if such a class of tempo rary servants could be recruited there could be nothing discriminatory or violative of equal opportunity if the conditions of service of such servants are different from those of permanent employees
It is thus apparent that this Court it was submitted had no occasion to consider the reasonableness of a provision for termination of service on giving notice under Article 14 of the Constitution and therefore this decision can be of no assistance to the appellants
Shri Ramamurthi submitted that since audi alteram partem is a requirement of Article 14 in view of recent decisions of this Court and conferment of arbitrary power itself is contrary to Article 14 the rule in question can according to Shri Ramamurthi no larger be sustained as valid
As far as the decision in Ram Gopal Chaturvedi s case supra was concerned Shri Ramamurthi submitted that the reasons given for rejecting the argument that the rule confers an arbitrary and unguided power are not valid for in Moti Ram Deka  case supra where the view of two learned judges of this Court who had held similar power to be arbi trary had not ever been noticed
The observation that it is impossible to define before hand all the circumstances in which the discretion can be exercised and the discretion had necessarily to be left to the Government has not taken into consideration the circumstance 204 that the denial of audi alteram parlem which is a require ment of Article 14 can be only in exceptional circumstances and therefore such circumstances have necessarily to be spelt out
This Court had no occasion according to Shri Ramamurthi to consider the cumulative impact of the funda mental rights guaranteed by Article 14 191g and 21 of the Constitution
Shri Ramamurthi sought to urge before us that industrial law recognises the right of the employer to exercise bona fide the power to terminate the services of workman by giving notice except in case of misconduct which is unlike the law of master and servant
Shri Ramamurthi urged that it is important to note that in all cases under industrial law decisions have been rendered by industrial tribunal when disputes had been raised by workmen challenging the action of the employer terminating their services by giving notice under the terms of the contract of service or the Certified Standing Orders
The question was never raised nor could it be raised before the Tribunals that the very term in the contract of service or in Standing Orders would have to stand the test of Articles 14 191g and 21 of the Con stitution
Further a constitution bench of this Court had rejected the contention that Industrial Tribunals should make a distinction between public sector and private sector industries
Reliance was placed on the observations of this Court in Hindustan Antibiotics Ltd vs The Workmen  Ors at 669
On the consideration of the rele vant material placed before us we are asked to come to the conclusion that the same principles evolved by industrial adjudication in regard to private sector undertakings will govern those in the public sector undertakings having a distinct corporate existence
Therefore all the decisions referred to by the appellant it was argued and interven ers were all concerned with applying the industrial law even though some Of them dealt with employees working in statutory corporations or public sector undertakings
It was therefore submitted by Shri Ramamurthi that these decisions could afford no assistance to the Court in decid ing the issues raised in the present case where the validi ty of a term of employment permitting the employer to terminate the services of a permanent employee by simply giving notice is challenged on the ground that such a term violates fundamental rights guaranteed by Articles 14 191g and 21 of the Constitution
It was submitted fur ther that the constitutional guarantees under Articles 14 and 21 of the Constitution are for all persons and there can be no basis for making a distinction between workmen  to whom the Industrial Disputes Act and other industrial laws apply and those who are outside their purview
The laws applicable to the former 205 can only add to and not detract from the rights guaranteed by Part III of the Constitution
It was important to note that all the decisions so far rendered by this Court striking down rules and regulations or a provision in the contract of service authorising termination of service of permanent employees by giving notice relate to cases of non workman and we were referred to the decisions in West Bengal State Electricity Board s case supra Central Inland Water Transport Corporation Ltd s case supra and OP Bhandari s case supra
There is the theory that possibility of abuse of power is no ground for striking down the law
Attention may be drawn to the observations of this Court in The Collector of Customs Madras vs Nathella Sampathu Chetty  at 825 and Commissioner of Sales Tax Madhya Pradesh vs Radhakri shan  Ors
supra
However these decisions it was sub mitted on behalf of the respondents would have no relevance for the present case because the power to terminate the services of a person employed to serve indefinitely or till the age of retirement can be exercised only in cases of proved misconduct or exceptional circumstances having regard to the Constitutional guarantee available under Articles 14 191g and 21 of the Constitution
Unless the exceptional circumstances are spelt out the power to terminate the services would cover both permissible and impermissible grounds rendering it wholly invalid it was urged
This was particularly so because the requirement of audi alteram partem which is a part of the guarantee of Article 14 is sought to be excluded
There can be no guidance available in the body of the law itself because the purpose for which an undertaking is established and the provisions dealing with the same in the law can provide no guidance regarding excep tional circumstances under which alone the power can be exercised
The question involved Shri Ramamurthi empha sised in these cases is not the exercise of power which an employer possesses to terminate the services of his employee but the extent of that power
Shri Ramamurthi drew our attention to the award and referred to paragraph 56 of the Shastri Award and other provisions of the award defining misconduct and also para graph 522 of the Award dealing with the procedure for termi nation of employment and 523 onwards
Mr Ramamurthi further submitted that provisions of Regulation 9b of the Delhi Road Transport Authority Conditions of Appointment and Service Regulations 1952 cannot be rendered constitutional by reading the requirement of recording reasons and confin ing it to cases where it is not reasonably practicable to hold an enquiry 206 and reading it down further as being applicable to only exceptional cases would not be permissible construction and proper
Shri Ramamurthi drew our attention to the true scope of Regulation 9b of the aforesaid Regulations in the light of the judgment of this Court in Balbir Saran Goel s case supra
This rule it has to be borne in mind according to him has been interpreted as applicable to all cases of termination including termination for misconduct as defined in the Standing Orders
In the aforesaid decision at p 761 of the report
this Court observed that Regulation 9b clearly provides for termination of serv ices in two modes the first is where the services may be terminated without any notice or pay in lieu of notice
This can be done among other reasons for misconduct
The second mode is of terminating the services owning to reduction of establishment or in circumstances other than those mentioned in clause a which relate to termination without notice
When termination is made under clause b one month s notice or pay in lieu thereof is to be given to the employee
Thus it is clear that if the employer chooses to terminate the services in accordance with clause b after giving one month s notice or pay in lieu thereof it cannot amount to termination of service for misconduct within the meaning of clause a
It is only when some punishment is inflicted of the nature specified in Regulation 15 for misconduct that the procedure laid down therein for an enquiry etc
becomes applicable
 If this was the true scope of the Regulation Shri Ramamurthi contended then it was obvious that it leaves the choice entirely to the DTC Management either to proceed against the person for misconduct by holding an enquiry or for the same misconduct terminate his services by giving one month s notice
It is the conferment of such a power that has been held to be unguided and arbitrary in all decisions from Moti Ram Deka s case supra to the more recent deci sions of this Court such as West Bengal Electricity Board s case supra etc
Therefore it was submitted that the argument based on the assumption that Regulation 9b was confined to cases under than misconduct really overlooked the interpretation placed upon this Regulation by this Court
Shri Ramamurthi further submitted that if regulation 9b con 207 fers this arbitrary power of leaving it to the DTC manage ment to pick and choose then it is plain that there is nothing in the provisions of the Act or the regulations from which the DTC management can find any guidance
It was therefore the submission of the respondents that in order to conform to the Constitutional guarantees contained in Articles 14 191g and 21 of the Constitution as inter preted by this Court the first and foremost the regulation will have to make a distinction between cases where services are sought to be terminated for misconduct and cases of termination on grounds other than what would constitute misconduct
As far as termination or dismissal on ground of misconduct is concerned ordinarily the detailed procedure for establishing misconduct had to be followed
In cases where it is not possible to follow the detailed procedure then at least the minimum procedure of issuing a show cause notice should be followed after recording reasons why it is not practicable to hold a full fledged enquiry
In cases where even this requirement of the elementary principles of natural justice is not to be followed then the regulation must itself indicate those cases in which principles of natural justice can be totally abrogated after recording reasons
As far as termination of service of a permanent employee on grounds which do not constitute misconduct is concerned assuming that this is held to be permissible it can be only in very exceptional cases and that too after observing at least the elementary principle of natural justice of asking for explanation before terminating the services and also recording reasons
Shri Ramamurthi urged that to read all this into the regulations would literally mean re writing the regulations which is not permissible under any of the decisions or the law
As one of the cases cover termination under The Punjab Civil Services Rules 1952 Shri Ramamurthi drew our atten tion to some of the provisions of these rules
He drew our attention to rule 312 which provides that unless in any case it be otherwise provided in those rules a Government employee on substantive appointment to any permanent post acquired a lien on that post and ceased to hold any lien previously acquired on any other post
He also drew our attention to rule 315a which provided that except as provided in clause b and c of that rule and in note under rule 313 a Government employee s lien on a post may in no circumstances be terminated even with his consent if the result would be to leave him without a lien or a suspended lien upon a permanent post
Clause b of rule 315 provided that notwithstanding the provisions of rule 314a the lien of a Govern 208 ment employee holding substantively a permanent post shall be terminated while on refused leave granted after the date of compulsory retirement under rule 621 or on his appoint ment substantively to the post of Chief Engineer of the Public Works Department
And clause c of this rule provid ed that a Government employee s lien on a permanent post shall stand terminated on his acquiring a lien on a perma nent post whether under the Central Government or a State Government outside the cadre on which he is borne
Note under rule 313 speaks about a Government employee holding substantially the post of a Chief Engineer of the Public Works Department taking leave immediately on vacating his post he then shall during the leave be left without a lien on any permanent post
The expression vacate  used in the note refers only to vacation as a result of completion of tenure of attainment of superannuation
Mr RK Garg appearing for the respondents in CA No 4073 of 1986 stated that the Attorney General had rightly pointed out that employee s services were terminated under Para 522 of the Shastri Award merely because he had failed to mention a loan of Rs 15 lakhs taken from another Branch of the Bank
Mr Garg pointed out that the loan had been repaid
The failure to mention this loan had deprived the appellant of his livelihood
The use of this power claimed under Para 522 of the Shastri Award was not defended by the Attorney General in this case
We had fairly conceded that he might not support this termination when the case is heard on merits
But that does not derogate from the wide ampli tude of this uncontrolled arbitrary power claimed by the management under Para 522 of the Shastri Award
Powers claimed under Para 522 must therefore be examined in the background of the facts and circumstances of this Appeal
It was submitted that this Court must hold that nothing in Para 522 of the Shastri Award confers on the management power so far as they can get rid of permanent employees of the Banks merely after service of notice on the imaginary belief that they were doing so for efficient Management of the Banks
Mr Garg reminded us that it is common knowledge that all despots act as tyrants in the firm belief that the intolera ble indignities and atrocities they inflict were necessary in public interest and to save the Society
Mr Garg submit ted that the rule of law cannot be preserved if absolute uncontrolled powers are tolerated and fundamental rights or Directive Principles are allowed to be reduced to a dead letter
Mr Garg urged that the fundamental requirements of natural justice are not dispensible luxury
The express language of Para 522 of 209 the Shastri Award is totally destructive of this require ment
The express language as mentioned hereinbefore of Para 522 of the Shastri Award provides 1 In cases not involving disciplinary action for miscon duct and subject to clause 6 below
The employment of a permanent employee may be terminated by three months  notice or on payment of three months  pay and allowances in lieu of notice
The services of a probationer may be terminated by one month s notice or on payment of a month s pay and allow ances in lieu of notice Rule 1483 reads 3 Other non pensionable railway servants shall be liable to termination on notice on either side for the periods shown below
Such notice is not however required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of Clause 2 of Arti cle 311 of the Constitution retirement on attaining the age of superannuation and termination of service due to mental or physical incapacity
 Note The appointing authorities are empowered to reduce or waive at their discretion the stipulated period of notice to be given by an employee but the reason justifying their action should be recorded
 Rule 3484 reads In lieu of the notice prescribed in this rule it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice Rule 1493 reads Other railway servants The services of other railway servants shall be liable to termination on notice on either side for the periods shown below
Such notice is not howev er required in cases of dismissal or removal as a discipli nary measure after compliance with the provisions 210 of clause 2 of Article 311 of the Constitution retirement on attaining the age of superannuation and termination of service due to mental or physical incapacity
 It was urged by Mr Garg that the services of a perma nent bank employee cannot be terminated without charge of misconduct  and without an enquiry and the aforesaid para graph gives no indication as to on what conditions this arbitrary uncontrolled power can be used to get rid of one or more permanent employees for efficient management of Banks on subjective opinions or suspicion not tested in enquiry into facts
It was further urged that this provision provides for insecurity of tenure for lakhs of permanent employees Articles 14 191g and 21 of the Constitution and the integrated protection of these Fundamental Rights excludes the doctrine of pleasure and insists on security of tenure during good behaviour
The right to livelihood cannot be rendered precarious or reduced to a glorious uncertainty it was urged by Mr Garg
Mr Garg submitted that the right to hire and fire was the prerogative claimed by the employer in the days of uncontrolled laissez faire
 This was the doctrine of pleasure of the Crown in case of Government servants who held office during the pleasure of the King who had absolute powers over his sub jects
Articles 14 191g and 21 secure the rights of the citizen and act as limits on the powers of the State in Democratic Republic of India
Unjust arbitrary uncon trolled power of premature termination of services of permanent employees should not be tolerated according to Mr Garg by the Constitution of free India
In case of Government servants Articles 3111 and 3112 of the Constitution expressly restrict the doctrine of pleasure contained in Article 310
Article 14 also insists on natural justice as was provided in Article 3112 in order to prevent arbitrary use of power of termi nation
Articles 191g and 21 read together require just fair and reasonable procedure for termination of services for good cause
Without these safeguards employees are reduced to the status of slaves of their masters
Employers are no longer masters as in the days of slavery of feudal relations Mr Garg tried to emphasise
He submitted that Article 14 of the Constitution did not permit permanent railway employees to be exposed to termination of their services on notice without charge of misconduct or a reason able opportunity to answer the charge
Rules 148 and 149 of the Railway Establishment Code which have been set only hereinbefore have the same effect as is the effect of para 522 of the Shastry Award and both these Rules were declared unconstitutional in Moti Ram Deka s case supra by a seven 211 Judges  Bench according to Mr Garg
Rules 148 and 149 were found violative of Article 14 for two reasons it was submitted i Railway servants in the matter of termination of service could not form a separate Class from other Govern ment servants As per majority view in the Judgment of Justice Gajendragadkar in Moti Ram Deka 5 case  729 731
ii Rule 148 conferred unguided uncontrolled power of termination and therefore was hit by Article 14
As per Justice Subba Rao and Justice Das Gupta in Moti Ram Deka s case supra
Mr Garg sought to urge that this binding decision of seven Judges  Bench in Moti Ram Deka s supra was applied in Gurdev Singh Sidhu vs State of Punjab  Anr  at 592 593 by the Constitution Bench of five Judges to strike down a Service Rule which permitted compulsory retirement on completion of 10 years  services on the ground of inefficiency  etc
This Court held that Compulsory retirement could not be tolerated even after 10 years of service in view Of such retirement being not based on rele vant considerations including expected longivity of life of the employees in India
If the power of removal by way of compulsory retirement even after ten years was held uncon stitutional in Gurdev Singh s case supra para 522 of the Shastri Award was far more arbitrary unjust and unreasona ble it was urged before us
It was reiterated before us that in view of the binding decision of seven Judges in Moti Ram Deka s Case and its application by five Judges in Case of compulsory retirement after 10 years in Gurdev Singh s Case supra it is not open to the employees to submit that similar powers claimed under paragraph 522 of the Shastri Award even without 10 years  service for removal without charge of misconduct  and without enquiry can be upheld as constitutional on any grounds whatsoever
It cannot be upheld as constitutional on any grounds whatsoever
It cannot be done without over ruling Moti Ram Deka s case or without an express constitu tional provision like second Proviso a b or C to Article 3112 which was adoptedby the Constituent Assem bly not by a court of law it was reiterated before us
212 It was submitted that no principle of interpretation permits reading down a provision so as to make it into a different provision altogether different from what was intended by the legislature or its delegate
R MDC s case supra
It was urged that it was established law that on reading down a provision Court cannot preserve a power for a pur pose which is just the opposite of what the legislature had intended
Para 522 of the Shastri Award was not at all intended to be used within limits expressed or implied
The Court must not legislate conditions such as were adopted by the Constituent Assembly in case of second Proviso to Arti cle 3112 in the Constitution of India
Even Parliament could not graft such limitations on Article 3112 if second Proviso to Article 311 was not there in the Constitu tion
This Court cannot and ought
it was submitted not to arrogate powers to legislate what was patently outside even the competence of Parliament of India
It was submitted that in Tulsi Ram Patel s Case the majority decision could not hold second Proviso to Article 3112 unconstitutional
In order to give effect to the express language of second Proviso to Article 3112 Court denied the protection of Article 14 to permit the President to terminate the services without following principles of natural justice  in cases covered by the said Proviso
In every other case natural justice is the command of Article 3112 of the Constitution was submitted
The operation of Articles 14 191g and 3112 of the Constitution does not permit Courts to lay down essential legislative policy such as was laid down by the Constituent Assembly to over ride 3112 of the Constitution
Mr Garg therefore submitted that the requirement of defining misconduct  in the Standing Orders and providing by meticulous provisions for a just fair and reasonable enquiry into charges of misconduct  are the mandatory requirement of Industrial Employment Standing Orders Act
U P State Electricity Board vs Hari Shankar Jain Shri Garg urged that the ILO Conventions accepted by India
required all employers to frame Standing Orders
He further urged that the demands of natural justice which form part of Article 14 of the Constitution have been raised to the status of public policy  controlling section 23 of the 
On that basis clauses in 213 contract of employment which provide for removal from serv ice on the will of the employer have been condemned as The Henry VIII Clause  see the observations of this Court in Central Inland Water Transports case supra against the ethos of the Constitution of Socialist Democratic Republic of India
In this connection reference was made to the decision of this Court in Central Inland Water Transport s case supra and Maneka Gandhi s case supra
In India Shri Garg submitted
workers have a right to participate in the management
The participation in the management cannot exclude the power to be heard  and thus participate in a decision to remove a permanent employee
Government alone has power to refer to the industrial tribunal Shri Garg submitted
He was against any reading down which is contrary to the principles of interpretation
He referred to the observations of the Privy Council in Nazir Ahmed s case AIR 1936 PC 253
He submitted that if two provisions exist firstly to remove from service after holding an enquiry on a charge of a misconduct  and secondly without serving a charge sheet or holding an enquiry all provisions for hold ing enquiry will be rendered otiose and will be reduced to a mere redundancy
Such an interpretation will expose workers to harsher treatment than those guilty of misconduct who will enjoy greater protection than those who have committed no misconduct
Such powers are patently discriminatory
Reference under section 10 of the Industrial Disputes Act would serve no purpose submitted Mr Garg
Court has a duty according to him
to correct wrongs even if orders have been made which are later found to be violative of any fundamental right and to recall its orders to avoid injus tice
He referred to the decision of this Court in AR Antulay vs RS Nayak and Anr  He remind ed us that no draft had been submitted by the Attorney General or the Solicitor General which could be added as a proviso to para 522 of the Shastri Award by this Court as a piece of judicial legislation to amend the impugned para 522
Substantive provision of para 522 could not be con trolled or curtailed effectively so that its operation could be confined within narrow constitutional limits
Mr Garg reminded us that it is not the duty of the court to condone the constitutional delinquencies of those limited by the Constitution if they arrogate uncontrolled unconstitutional powers which are neither necessary nor germane for supposed efficiency of services in the Banks as a business enter prise
Mr Garg submitted that in a system governed by rule of law discretion when conferred upon executive authorities must be confined within clearly defined limits
The rule of law from this point means that decisions should be made by the application of known 214 principles and rules and
in general such decisions should be predictable and the citizen should know where he is
Law can only reach its finest moments when it has freed man from the unlimited discretion of ruler
He referred to the obser vations of this Court in SC Jaisinhhani vs Union of India and Ors  at p 718 19
On behalf of the Interveners in Civil Appeal No 2876 Mr PP Rao submitted that the aforesaid decision in Tulsi Ram Patel s case supra was an authority for the proposi tion that but for clause b of the second proviso to Arti cle 3112 of the Constitution the principles of natural justice could not have been excluded from the scope of Article 14 of the Constitution
It was urged by him that the said second proviso to Article 3112 being itself a consti tutional provision such exclusion was upheld by this Court in the said Tulsi Ram Patel s case supra
page 237 and at last para to p 242
Mr Rao drew our attention to the well settled rule of interpretation and submitted that where two interpretations are possible one of which would pre serve and gave the constitutionality of the particular statutory provision while the other would render it uncon stitutional and void the one which saves and preserves its constitutionality should be adopted and the other should be rejected
Fie further submitted that unless the provision of the Constitution itself excludes the principles of natu ral justice they continue to be applicable as an integral part of the right to equality guaranteed by the Constitu tion
It was further reiterated that as the employees of the DTC were not Government employees Article 3112 of the Constitution was not applicable
Consequently the second proviso thereof was also not applicable with the result that Article 14 of the Constitution fully applied to them and it included the principles of natural justice as held in Tulsi Ram Patel s supra itself at p 233 last paragraph
Mr Rao submitted that it is not permissible to read down statutory provisions when the avowed purpose is to confer power on an authority without any limitation whatever
That would be reading down contrary to the expressed or manifest intention of the legislature
He drew our attention to the observations of this Court in Minerva Mills Limited vs Union of India  Ors  at 261
Therein at p 259 of the report it was reiterated that the principles of reading down could not be distorted even when words of width are used inadvertently
In the instant case Mr Rao submit ted reading down would amount to distortion of the right to equality conferred by Article 14 which was regarded as a basic feature of the Constitution
Nothing short of an amendment of the Constitution could cut down the scope of the basic 215 principle of equality submitted Mr Rao then referred to us Kesavananda Bharati vs State of Kerala 1973 Supp 1 SCR 1 and submitted that any constitutional amendment which impairs the doctrine of equality would be liable to be declared unconstitutional on the ground of violation of the basic structure of the Constitution
In the instant case Mr Rao submitted regulation 9b deliberately conferred wide power of termination of service without giving a reasonable opportunity to an employee even if he is a regular or permanent employee in addition to regulation 15 which provided for dismissal or removal after a disciplinary enquiry
Therefore the intention of the regulation making authority was clear and unambiguous
The provision is not capable of two interpretations
Consequent ly the question of reading down did not arise
Mr Rao drew our attention to the observations of the Supreme Court of America in Elliott Ashton Welsh II vs United States 26 Lawyers  Edition 2nd 308 at 327
Mr Rao submitted that the decisions referred to by the learned Attorney General were not applicable to the instant case
He submitted that the decision of the Federal Court in Re The Hindu Women s Rights to Property Act s case supra involved the interpretation of a single word in the context of legislative competence
That was not the context of the present controversy submit ted Mr Rao
Mr Rao submitted that RMD Chamarbaughwal la s case supra was a case on severability
That was a case where the word competition  was interpreted
In the present case the suggested reading down involves according to Mr Rao not interpretation of any single word in regula tion 9b but adding a whole clause to it which amounted to rewriting the provisions
Courts have refused to rewrite legislation to make up for the omissions of the legislature
Reliance was placed by Mr Rao on Nalinakhya Bysack vs Shyam Sunder Halder  Ors   at p 544 545
Mr Rao referred to the observations of this Court in Kedar Nath Singh vs State of Bihar supra involving the interpreta tion of section 124A IPC in the context of Article 191a of the Constitution
The content of Article 191a was not cut down
In the present case the suggested reading down would inevitably drain out Article 14 of its vitality
Shri Rao drew our attention to the decision of this Court in RL Arora vs State of Uttar Pradesh supra and submitted that the said decision did not involve cutting down the scope of a fundamental right
He also drew our attention to the decision of this Court in Jagdish Pandey vs The Chancellor University of Bihar supra which did not involve reading down so as to sacrifice the principle of natural justice 216 which are considered an essential part of the rule of law
In Municipal Committee Amritsar  Anr
vs State of Punjab  Ors
   this Court was concerned with the intention of the legislature and interpreted the Act con sistent with the said intention
In the instant case
the intention was to confer power of termination of services of all categories of employees without any further enquiry
Sunil Batra vs Delhi Administration supra was again a decision where this Court found that the intention of the legislature was not to confer arbitrary power
In the in stant case the intention was different
NC Dalwadi vs State of Gujarat
supra was a case of giving reasonable interpretation to a provision which was capable of such an interpretation
In the scheme of DTC Regulations
regulation 9b was not susceptable to two interpretations
submitted Mr Rao
According to Mr Rao the principle of reading down was not applicable where the intention of the law maker was to confer too wide a power intended to be exercised without giving an opportunity to the affected party to be heard
It was therefore submitted that the principle of reading down was not applicable and if applied would amount to cutting down the scope of Article 14 and subjecting permanent em ployees of the DTC to a tremendous sense of insecurity which is against the philosophy and scheme of the Constitution
Mr Nayar appearing in Civil Appeal No 1115 of 1976 Shri Samara Singh vs Zila Parishad Ferozepure for the respondent drew our attention to the fact that the appellant Shri Satnam Singh was appointed by the respondent vide letter of appointment dated 9th March
1961 the appel lant ceased to work for the respondent when his services were terminated simpliciter vide Resolution dated 26th November 1965
He therefore had worked for the respondent only for a short period of less than four years
The serv ices of the appellant ceased on the basis of the contract
the terms of which were mutually agreed between the parties
In case he had continued to work he would have reached the age of superannuation in the year 1984
His total emoluments with effect from 1st November 1964 to 30th September 1984 would have been approximately Rs246464
Mr Nayar filed a detailed statement and stated that the appellant ceased to work for the respondent with effect from 26th November 1964 when he was discharged from service
In this case it is necessary to bear in mind that the appellant Shri Satnam Singh was appointed by the respond ent Zila Parishad Ferozepure by letter of appointments dated 9th March
The Board approved his terms of appointment and the same were duly 217 accepted by the appellant
The relevant clause of Contract between the parties for present purposes was clause 4 which was as follows His services will be terminated on one month s notice on either side provided it will be open to pay him his salary for the period by which the notice falls short of one month
Similarly if he wishes to resign he may do so by depositing with the District Board his salary for the period by which the notice given by him fails short of one month
 The appellant however was continued to be governed by the Statutory Rules known as District Board Rules 1926
According to the respondent the appellant did not cooperate inasmuch as he was not available in the Headquarters and presumably left without permission and without handing over important record and documents of the District Board etc
But the appellant s version as stated in the grounds of appeal was entirely different
He urged that it was on account of vindictive attitude on the part of some of the employees of the respondent which had produced his termina tion order without enquiry
The District Board resolved that in terms of condition 4 of the terms of appointment his services should be terminated on one month s notice or pay in lieu thereof
Mr Nayar submitted that rule 1i of District Board Rules 1926 Part V also gave right to both the parties to terminate the contract of employment on one month s notice etc
The said rule reads as follows In the absence of a written contract to the contrary every officer or servant employed by a District Board shall be entitled to one month s notice before discharge or to one month s wages in lieu thereof unless he is discharged during the period of probation or for misconduct or was engaged for a specified term and discharged at the end of it
 The services of the appellant were terminated vide Resolution dated 26th November 1964 of the Board and he was discharged by allowing him one month s salary in lieu of notice
The termination order was dated 14th December 1964
The appellant Shri Satnam Singh filed a suit for declara tion in the Court of Senior Sub Judge Ferozepure challeng ing the order of termination dated 14th December 1964 as illegal void ultra vires etc
The Senior Sub Judge Ferozepure vide judgment and decree dated 9th January 1969 held 218 that the discharge of the appellant amounted to dismissal and as clearly no enquiry was held against him the termina tion simpliciter was bad in law
The respondent Zila Pari shad filed an appeal in the Court of 3rd Additional District Judge Ferozepure who vide order dated 22nd December 1969 affirmed the decision of the trial Judge and dismissed the appeal of the respondent
The respondent filed regular appeal in the High Court of Punjab and Haryana at Chandi garh inter alia pleading that the appellant was validly discharged in terms of his appointment order and rule 1i Part V A of the District Board Rules 1926
The learned Single Judge of the High Court considered the matter in detail and referred to various judgments of this Court and held that it could not be said that the action of termination prima facie amounted to an order of dismissal even though the appellant was at the time a con firmed employee of the respondent
The learned Single Judge found that the respondent had a contractual right to termi nate the services of the appellant by giving a month s notice or a month s salary in lieu of notice
According to Shri Garg the removal of the appellant from service was in accordance with the terms governing his appointment
Merely because on the 7th of November 1964 the respondent re solved to charge sheet the appellant for acts of omission and commission and ordered an enquiry and such an enquiry never commenced would certainly not be enough reason to hold that the termination of the appellant s services was ordered by way of punishment and therefore amounted to his dismissal argued Mr Nayar
It was submitted by Mr Nayar that the appellant had conceded that condition No 4 was legally good but he had argued that it was not meant to be effective after the appellant had been confirmed
Aggrieved by the order mentioned above the appellant had filed Letters Patent Appeal before the Division Bench of the High Court
The Division Bench of the High Court by an order dated 13th September 1972 referred the question of law for the decision of the full bench
The full bench of the High Court refrained the question of law as under Whether the termination of services of a permanent Dis trict Board Employee by giving him one month s notice or pay in lieu thereof in terms of the conditions of his appoint ment andor rule 1 in part V A of the District Board Rules 1926 is bad in law and cannot be made 219 The majority of the learned Judges inter alia held that the appellant not being a government servant cannot have the protection of Article 311 of the Constitution as he was not a civil servant under the Central Government of the State Government
He was an employee of the District Board and his tenure of appointment was governed by the provisions of the District Board s Act 1883 and the rules flamed thereunder as well as by the terms and conditions of his appointment
The condition No 4 gave mutual right to the District Board as well as to the appellant to terminate the service by giving one month s notice or pay in lieu of notice etc
The condition in the appointment letter shall not be deemed to have been abrogated by the Punjab Civil Services Rules
The Court held further that the condition stated in the letter of appointment of the appellant contin ued to bind the parties even after the appellant s confirma tion and his services could be terminated by an order of discharge simpliciter in accordance with the condition No 4 thereof as this condition was almost in the same terms as Rule I in Part V A of the Rules
It was further held by the full bench of the High Court that the Punjab Civil Service Rules had no over riding effect and these rules were to apply in respect of matters for which no provision had been made anywhere else because of the phrase used so far as may be
Rule 81 of the Business Rules reads as under In all matters relating to the conditions of service of its employees the Board shall so far as may be follow the rules from time to time in force for servants of the Punjab Gov ernment
 The finding of the Letters Patent Bench in this regard was as under According to Rule 81 ibid the Punjab Civil Services Rules were to apply in respect of matters for which no provision had been made anywhere else because of the phrase used so far as may be
Naturally if a provision was made anywhere else which went counter to the Punjab Civil Services Rules the application of the latter rules It thus follows that the Punjab Civil Services Rules were not to apply to the appel lant in respect of matters for which specific provision was made in his letter of appointment which constituted the contract of service between him and the District Board as he joined 220 service on those termsafter accepting the same
 The learned Chief Justice of Punjab  Haryana High Court however dissented
The answer to the question therefore was given in the negative vide order dated 3rd April 1974
The Division Bench of the High Court which heard the matter after the question of law was answered by the Full Bench dismissed the appeal of the appellant vide order dated 28th October 1974 and this appeal to this Court arises from this order
The appellant in Civil Appeal No 111576 who appeared in person before us reiterated the relevant facts and urged that his removal was bad and the rule under which he was removed may be quashed
It may be mentioned that as regards letter of Shri Kuldip Singh Virk to the Senior Superintend ent of Police Ferozepure regarding the charges of corrup tion against the appellant a case under section 52 of the Prevention of Corruption Act was registered
The appellant was tried for the said alleged offence and acquitted of the charges by the Special Judge Ferozepure
A further case was registered under sections 381 409 of IPC against the appellant
Accordingly the appellant was tried by the Judicial Magis trate Ferozepure
The charge was framed by the Judicial Magistrate against the appellant
Against the aforesaid the appellant filed a petition in the High Court and the charge and the proceedings in question were thereupon quashed by the High Court in JulyAugust 1967
There were three more cases tried by the Special Judge Ferozepure and acquitted
The appellant filed a document in this Court claiming the monetary claim on the basis that his termination was wrongful
According to the appellant he was entitled to recover Rs48306190 paise
However
according to the statement filed by Shri Nayar learned counsel for the respondents in this case the appellant was entitled to withdraw from the District Board Rs24646446 paise in case he would have been in service before his date of super annuation ie 30th September 1984
There is no evidence from either side as to whether the appellant had worked somewhere else though the appellant did not work with the respondent because of his suspension
The appellant had however stated that he did not so work
In that view of the matter if the contentions or  the appellant are accepted that the clause under which the terms of employment of the appellant was agreed and under which the termination was effected without any enquiry and further in view of the fact that the learned trial Judge before whom the appellant had filed the suit first and decreed the suit declaring the 221 appellant to be entitled to be in service the appellant in our opinion
should rightly be granted a monetary claim for Rs48306190 paise and further interest at 6 from 30th September 1984
This would be in consonance with justice and equity in the facts and the circumstances of this case
This order however will have to be passed if we accept the contention on behalf of the appellant herein on the con struction of the clause
In the matter of Ms Indian Airlines which is the subject matter of the Application for Intervention No 1 of 1990in Civil Appeal No 2846 of 1986 Mr Lalit Bhasin on behalf of the interveners contended that there has been distinction between the discharge simpliciter and dismissal from service by way of punishment
According to Mr Bhasin the effect of the judgments of this Court in the Central Inland Water s case supra and West Bengal s supra was to take away the right of the employer to terminate the serv ices of an employee by way of discharge simpliciter
Accord ing to Mr Bhasin this Court had recognised the existence of the inherent right of an employer to terminate the serv ices of an employee in terms of the contract of employment and also under the various labour enactments
Attention of this Court was invited to the provisions of the  which applies to all industrial establishments whether in the public or private sector
Under and as a part of the said Act model standing  orders are set out and Standing Order No 13 provides for simple termination of employment by giving one month s notice etc
Similarly there are provi sions under various Shops and Establishments Acts of differ ent States providing for termination of employment of perma nent employee after giving one month s notice or pay in lieu of notice
Attention of this Court was invited to section 30 of Delhi Shops and Establishments Act
The Industrial Disputes Act itself makes distinction between discharge and dismissal and attention of this Court was invited to section 200 of the Industrial Disputes Act which defines retrenchment 
This section expressly ex cludes termination of services as a result of nonrenewal of contract of employment
Section 2s of the Industrial Disputes Act defines workman  to include any person who has been dismissed discharged or retrenched
Section 2A distin guishes discharge dismissal and retrenchment
It is pertinent to point out that the Original Regula tion 13 of Indian Airlines Employees Service Regulations was set out as under 222 13
The services of an employee are terminable at 30 days on either side or basic pay in lieu Provided however the Corporation will be at liberty to refuse to accept the termination of his service by an em ployee where such termination is sought in order to avoid disciplinary action contemplated or taken by the Management
 After the decisions of this Court in Central Inland Water s case supra Indian Airlines initiated steps to amend its Regulation 13 and bring it in line with Article 3112 of the Constitution as directed by this Court in Hindustan Steels Lid  case supra
It appears that the Board of Directors of Indian Airlines had accordingly ap proved of the amendments to Regulation 13 and the amended Regulation reads as under a The services of an employee may be terminated without assigning any reasons to himher and without any prior notice but only on the following grounds not amounting to misconduct under the Standing Orders namely i If heshe is in the opinion of the Corporation the Board of Directors of Indian Airlines incompetent and unsuitable for continued employment with the Corporation and such incompetence and unsuitability is such as to make hisher continuance in employment detrimental to the inter est of the Corporation OR If hisher continuance in employment constitutes in the opinion of the Corporation the Board of Directors of Indian Airlines a grave security risk making hisher continuance in a service detrimental to the interests of the Corporat ion OR if in the opinion of the Corporation the Board of Directors of Indian Airlines there is such a justifiable lack of confidence which having regard to the nature of duties performed would make it necessary in the interest of the Corporation to immediately terminate hisher services
223 b The employee can seek termination of hisher employment by giving 30 days notice or basic pay in lieu Provided however the Corporation will be at liberty to refuse to accept the termination of hisher service by an employee where such termination is sought in order to avoid disciplinary action contemplated or taken by the Management According to Mr Bhasin in the amended Regulation 13 Indian Airlines had taken care to set out the circumstances in which the services of an employee can be terminated by way of discharge and without holding enquiry
Mr Bhasin urged that these are eventualities which do not constitute misconduct and yet retention of an employee in the service by the management for any one of the grounds mentioned in the aforesaid Regulation might be considered as detrimental for the management or against public interest
Mr Bhasin submitted that the power has been vested with the Board of Directors and not with any individual
According to Mr Bhasin plain reading of Regulation 13 as amended would clearly establish that the vice
if any or arbitrariness is completely removed and sufficient guidelines are made avail able to the highest functionary namely the Board of Direc tors to exercise the restricted and limited power now avail able to the employer under these Regulations
Similar submissions have been made on behalf of Air India who are interveners
Submissions made hereinbefore were alternative submissions
The original Regulation 48 of Air India Employees Service Regulations was as follows Termination   The services of an employee may be terminated without as signing any reason as under a of a permanent employee by giving him 30 day s notice in writing or pay in lieu of notice b of any employee on probation by giving him 7 days  notice in writing or pay in lieu of notice c of a temporary employee by giving him 24 hours  notice in writing or pay in lieu of notice
224 Explanation  For the purposes of the regulation the word pay shall include all emoluments which would be admissible if he were on Privilege leave
 After the decisions of this Court declaring the afore said Regulation as void in Civil Appeal No 19 of 1982 in the Case of Manohar P Kharkar  Anr vs Kaghu Raj  Anr Air India amended the aforesaid Regulation which now reads as under a The services of a permanent employee may be terminated without assigning any reasons to himher and without any prior notice but only to the following grounds not amounting to misconduct under Service Regulation 42 namely i if heshe is in the opinion of the Corporation the Board of Directors of Air India incompetent and unsuitable for continued employment with the Corporation and such incompetence and unsuitability is such as to make hisher continuance in employment detrimental to the interests of the Corporation OR If hisher continuance in employment constitutes in the opinion of the Corporation the Board of Directors of Air India agrave security risk making hisher continuance in service detrimental to the interests of the Corporation OR If in the opinion of the Corporation the Board of Direc tors of Air India there is such a justifiable lack of confidence which having regard to the nature of duties performed would make it necessary in the interest of the Corporation to immediately terminate hisher services
b The services of an employee on probation may be termi nated without assigning any reason to himher but on giving 30 days notice in writing or pay in lieu thereof
c The services of a temporary employee may be terminated without assigning any reason to himher but on giving 15 days notice in writing or pay in lieu thereof
225 Explanation For the purpose of this Regulation the word pay shall include all emoluments which would be admissible if he were on privilege leave
 The question regarding justification of the action taken by the management was touched by this Court but since the action was based on the old Regulation 48 it had to be quashed
It was submitted on behalf of the Air India that care had been taken to suit the circumstances in which the services of an employee could be terminated by way of dis charge simpliciter and without holding enquiry
These are eventualities which do not constitute misconduct and yet retention of an employee in the service of the management for any one of the grounds mentioned in the said Regulation might be considered as detrimental for the management or against public interest
It was submitted that the said regulation 48 has to be read with Regulation 44A which reads as under 44Ai Notwithstanding anything contained in these Regu lations and if in the opinion of the Corporation the Board of Directors of Air India it is not possible or practica ble to hold an enquiry under the relevant provisions of these Regulations the Corporation may if satisfied that the employee has been guilty of any misconduct any one of the punishment mentioned in Regulation 43 on the employee concerned
Provided that before exercising his extra ordinary power the Board shall give 30 days prior notice to the employee concerned of the act of misconduct that the reasons why it is not possible or practicable to hold an enquiry into such misconduct and the punishment proposed by the Board and the employee shall be entitled to make a full written represen tation to the Board in response to such notice
ii No action shall be taken under the Regulation until the Board has taken into consideration the representation made by the concerned employee under the proviso to Section i within the notice period
 The original regulation 44 was also modified
According to the interveners the cumulative reading of regulation 48 as amended and regulation 44 as amended would clearly establish that the vice if any of arbitrariness is com pletely removed and sufficient guidelines are 226 made available to the Board of Directors to exercise the restricted and limited power now available to the employer under these Regulations
In CMP No 30309 of 1988 on behalf of the New India Assurance Co the intervention application was filed
It was stated that in the courts below the writ petition No 835 of 1975 was filed by the employee challenging his termi nation and the appeal filed thereon were decided on grounds available to the petitioner at that time
A special leave petition was filed by the employee concerned which has now become CA No 655 of 1984
After the judgment in the Central Inland Water s case supra an additional ground is now being taken to contend that a contract entered into way back in the sixties when the employee concerned was an employee of the Orissa Cooperative Insurance Society Ltd Cuttack could not be enforced now and the same ought to be declared void in view of the Central Inland Water s case supra
The intervention was allowed on 24th January 1990 and Smt
Shyamla Pappu Senior Advocate submitted written sub missions
It was submitted that adjudication on the merits and the consideration of the facts and circumstances of the case may be left to the Bench hearing the matter after the decision of the question of law referred to the Constitution Bench
In this connection it may however be noted that the General Insurance was nationaIised under the provisions of the General Insurance Provisions Nationalisation Act 1972 and the said Act came into force on 20th September 1972
Prior to this was passed under the provisions of which Act all under takings of all Insurers vested in the Central Government with effect from I3th May 1971
This was pending nationali sation which took place in 1972 as aforesaid
Section 71 of the said Act which provided for the takeover of former employees reads as under Every whole time officer or other employee of an existing Insurer other than an Indian Insurance Company who was employed by that insurer wholly or mainly with his general insurance business immediately before the appointed day shall on the appointed day become an officer or other employee as the case may be of the Insurance Company in which the Undertaking to which the service of the officer 227 or other employee relates has vested and shall hold his office or service on the same terms and conditions and with the same rights to pension gratuity and other matters as would have been admissible to him if there had been no such vesting and shall continue to do so until his employment in the Indian Insurance Company in which the undertaking or part has vested is terminated or until his remuneration terms and conditions are duly altered by that Indian Insur ance Company
 The original terms and conditions had not been altered and the employees like the appellant in CA No 85584 continued to be governed by the original terms and condi tions of the contract at the time of termination
The origi nal terms and conditions of employment therefore continued in force
The contract of service was entered into when the appellant joined the Orissa Cooperative Insurance Society Ltd way back in 196 1 and at the time of take over by the Central Government was the Divisional Manager of the said society
After the take over by the Central Government of general insurance in 1972 a great deal of reorganisation had to be effected in order to tone up the system of general insurance which had become unwieldy due to the mushroom growth of societies with no control whatsoever when insur ance was in private hands
It was submitted by Smt
Shyamla Pappu that there are many such cases where action was taken soon after nationali sation of general insurance in 1972
If such orders are set aside today Smt
Shyamla Pappu posed the question what would be the result Would the order set aside at this stage give the employee a right to be reinstated  If the answer to the above is in the affirmative would it be conducive to efficiency in the conduct of a public utility such as general insurance Smt
Pappu raised the question
Would it not hamper the Company s business considering that the reductionreorganisation of staff was essential for the effective functioning of the public service Smt
Pappu asked the question would the public service not be saddled with unnecessary andor incompetent staff thus burdening the public utilityservice with unmanageable costs and staff that is ineffective  It was urged that the New India Assur ance Company had a clause in the contract at the relevant time which was as follows in the event of the society not having any further need of any employees services whether permanent or temporary which shall be decided by the board the Principal Officer 228 shall give 30 days notice in writing for termination of his services or in lieu thereof pay such employee a sum equiva lent to one month pay including allowance upto the period of notice
 The above clause covered cases of retrenchment aboli tion of posts and other situations which had been adjudicat ed upon by this Court
If however the Central Inland Water s case supra is applied Smt
Shyamla Pappu submit ted then the management of the Intervene r Company will be powerless even in a case of abolition of posts or retrench ment or any other allied situation
It is seen that the power to terminate an employee is co existent with the power to appoint
Shyamla Pappu relied on the General Clauses Act and submitted that the Central Inland Water s case supra was erroneous in so far as it made a complete nega tion of this power
Then it was submitted by her that in case of an employer who had made all the necessary investi gation and the employee concerned has been fully heard before the order 01  termination and if the decision of Central Inland Water s case was applied then even such a case would be a case of illegal termination considering that there would be no power to terminate
It was submitted that the Central Inland Water s case had to be read down because paras 77 92 and 93 of the report take in even private employment
The sweep of the judgment cannot hold good and had to be curtailed
According to Smt
Pappu what then was the position of terminations effected when the law was different It cannot be said that they are entitled to relief now
It should be clarified that the judgment of this Court would apply pro spectively it was submitted
Past cases might be treated as concluded in view of the law prevailing at that time and also in view of the contentions urged by the parties in the courts below at various stages
In the event this Court comes to the conclusion that even old cases would be covered by the judgment now rendered the orders already passed may be upheld and a post decisional hearing might be directed so that the management concerned has the opportunity of showing that there existed good reasons for termination though the same were not communicated to the employee concerned because the law then existing did not require such a communication
In the interest of justice we should allow such a course
In the light of the provisions and in the facts and the circumstances of the case it is therefore necessary to consider the validity of the power of termination of employ ment by the employers or authorities of the employees with out holding any enquiry in the circum 229 stances noted in the several civil appeals and applications herein
In these civil appeals
the question of actual user of power is not the main issue
but the validity of clauses or regulations containing the aforesaid power
The instances of actual user of power however are not wholly irrelevant on the question of the validity or extent of the power because these explain the extent and content of power andor occa sion for such user
Firstly
we have to
in view of the facts and the circumstances of the Civil Appeal No 2876 of 1986 consider the amplitude of the power under clause b of Regulation 9 of the Regulations concerned
We have noted the contents of that Regulation
We have also noted the amplitude of the expression of that power as was canvassed before the High Court in the matter under appeal and as noticed by the decision of this Court in Delhi Transport Undertaking vs Balbir Saran Goel s case supra
A survey of the several authorities of law and the development of law from time to time would lead one to the conclusion that the philosophy of the Indian Constitution as it has evolved from precedent to precedent
has broaden the horizons of the right of the employees and they have been assured security of tenures and ensured protection against arbitrariness and discrimination in discharge or termination of his employ ment
This is the basic concept of the evolution from the different angles of law of master and servant or in the evolution of employer and employee relationship
It is true that
the law has travelled in different channels govern ment servants or servants or employees having status have to be differentiated from those whose relationships are guided by contractual obligations
But it has to be borne in mind that we are concerned in these matters with the employees either of semi Government or statutory corporations or public undertakings who enjoy the rights
privileges
limitations and inhibitions of institutions who come within the ambit of Article 12 of the Constitution
It is in the background of these parameters that we must consider the question essentially and basically posed in these matters
The basic and the fundamental ques tion to be judged is
in what manner and to what extent the employees of these bodies or corporations or institutions could be affected in their security of tenure by the employ ers consistent with the rights evolved over the years and rights emanating from the philosophy of the Constitution as at present understood and accepted
We have noted the exhaustive and the learned analysis of the background of the diverse facts projected in the several cases and appeals before us
230 Efficiency of the administration of these undertakings is very relevant consideration
Production must continue services must be maintained and run
Efficacy of the serv ices can be manned by the disciplined employees or workers
Discipline decency and order will have to be maintained
Employees should have sense of participation and involvement and necessarily sense of security in semi permanent or quasi permanent or permanent employment
There must be scope for encouragement for good work
In what manner and in what measure
this should be planned and ensured within the framework of the Constitution and power mingled with obli gations and duties enjoined with rights are matters of constitutional adjustment at any particular evolved stage of the philosophy of our Constitution
We have noted several decisions numerous as these are and the diverse facts as we have found
We have noted that in some cases arbitrary action or whimsical action or dis criminatory action can flow or follow by the preponderance of these powers
The fact that the power so entrusted with a high ranking authority or body is not always a safe or sound insurance against misuse
At least it does not always ensure against erosion of credibility in the exercise of the power in particular contingency
Yet discipline has to be maintained efficiency of the institution has to be ensured
It has to be recognised that quick actions are very often necessary in running of an institution or public service or public utility and public concern
It is not always possible to have enquiry because disclosure is difficult evidence is hesitant and difficult often impossible
In those circum stances what should be the approach to the location of power and what should be the content and extent of power possession and exercise of which is essential for efficient running of the industries or services  It has to be a matter both of balancing and adjustment on which one can wager the salvation of rights and liberties of the employees concerned and the future of the industries or the services involved
Bearing in mind the aforesaid principles and objects it appears to us that the power to terminate the employment of permanent employment must be there
Efficiency and expedien cy and the necessity of running an industry or service make it imperative to have these powers
Power must therefore
with authorities to take decision quickly objectively and independently
Power must be assumed with certain conditions of duty
The preamble the policy purpose of the enacting provision delimit the occasions or the contingencies for the need for the exercise of the power and these should limit the occasions 231 of exercise of such powers
The manner in which such exer cise of power should be made should ensure fairness avoid arbitrariness and mala fide and create credibility in the decisions arrived at or by exercise of the power
All these are essential to ensure that power is fairly exercised and there is fair play in action
Reasons good and sound must control the exercise of power
We have noted the rival submissions
Learned Attorney General of India and the learned Solicitor General and others appearing those who sought for sustaining the power by the employers or the authorities contend that for effi ciency of the industry for the attainment of the very purpose for which institutions are created there should be power to terminate the employment of undesirable ineffi cient corrupt indolent disobedient employees in those cases where holding of enquiry or prolonging these employees for that purpose would be detrimental difficult and frus trating
It is in this context that we should examine the power under the aforesaid Regulation 9b
The power must be there the power must be utilised by person or authority high ranking enough or senior enough who can be trusted or who can be presumed to be able to act fairly objectively and independently
The occasion for the exercise of the power must be delimited with precision clarity or objectiv ity
And those occasions must be correlated to the purpose for which the powers are sought to be exercised
In concrete terms for the running of the industry or the service efficiently quickly and in a better manner or to avoid deadlocks or inefficiency or friction the vesting of the power in circumstances must be such that will evoke credita bility and confidence
Reasons must be there reasons must be perspectable reasons must be relevant and the reasons must be of authority independently fairly and objectively arrived at
Notice of hearing may or may not be given opportunity in the form of an enquiry may or not be given yet arbi trariness and discrimination and acting whimsically must be avoided
These power must therefore be so read that the powers can be exercised on reasons reasons should be re corded reasons need not always be communicated must be by authorities who are competent and are expected to act fair ly objectively and independently
The occasion for the use of power must be clearly circumscribed in the above limits
These must also circumscribe that the need for exercise of those power without holding a detailed or prolonged enquiry is there
As we have noted a good deal of controversy was that these 232 inhibitions or limitations or conditions are not there in the amplitude or the extent of the power enumerated or stated in Regulation 9b of the aforesaid Regulations concerned or of similar provisions that we have examined in these cases
We have noted the argument learned and interesting on the question of judicial law making imputing to the legisla tures what these have not articulated
Should the courts say or can say what the legislatures have not said  We have noted the controversy of how should legislation of limited legislatures Parliaments or rule making bodies who are not expected or enjoined to make rules or laws contrary to or in derogation or the constitutional prohibitions and inhibi tions be read
We have been tempted to read down in the path of judicial law making on the plea that legislature could not have intended to give powers to the authorities or employers which would be violative of fundamental rights of the persons involved in the exercise of those powers and therefore should be attributed those powers on conditions which will only make these legal or valid
Our law making bodies are not law into themselves and cannot create or make all laws
They can only confer powers or make laws for the conferment of powers on authorities which are legal and valid
Such powers conferred must conform to the consitu tional inhibitions
The question therefore is is it possible or desirable to read down the power conferred under Regulation 9b or similar regulations permitting employer or the authority to terminate the employment of the employ ees by giving reasonable notice or pay in lieu of notice without holding enquiry with the conditions indicated or mentioned hereinbefore Will it or will it not amount to making laws of stating which the legislature or the law making body has not stated We have been reminded that judges should not make laws
But the question is can the judges articulate what is inarticulate and what can be reasonably and plainly found to be inherent on the presumption that a legislature or a law making body with the limited authority would act only within limitations so as to make the legislation or law valid and the legislature must be presumed to act with certain amount of knowledge and fairness protecting the rights of people concerned and aiming at fairness in action We have noted the rival contentions
We have noted the submission that Mr Garg Mr Ramamurthi and others invited us not to read down and against legislating positively with conditions
But the question is are those conditions which we are invited to attribute to 233 the legislature or the law making bodies contrary to or against the manifest intention of the legislature Legislation both statutory and constitutional is enacted it is true from experience of evils
But its general language should not therefore necessarily be confined to the form that evil had taken
Time works changes brings into existence new conditions and purposes and new awareness of limitations
Therefore a principle to be valid must be capable of wider application than the mischief which gave it birth
This is particularly true of the constitutional constructions
Constitutions are not ephemeral enactments designed to meet passing occasions
These are to use the words of Chief Justice Marshall designed to approach immortality as nearly as human insti tutions can approach it   
In the application of a Constitutional limitation or inhibition our interpretation cannot be only of what has been  but of what may be 
See the observations of this Court in Sunil Batra vs Delhi Administration supra
Where therefore in the interpreta tion of the provisions of an Act two constructions are possible one which leads towards constitutionality of the legislation would be preferred to that which has the effect of destroying it
If we do not read the conferment of the power in the manner we have envisaged before the power is liable to be struck down as bad
This we say in spite of the argument by many including learned Solicitor General of India and Smt
Shyamla Pappu that in contractual obligations while institutions or organisations or authorities who come within the arebit of Article 12 of the Constitution are free to contract on the basis of hire and fire  and the theory of the concept of unequal bargain and the power conferred subject to constitutional limitations would not be applica ble
We are not impressed and not agreeable to accept that proposition at this stage of the evolution of the constitu tional philosophy of master and servant framework or if you would like to call it employer or employee relationship
Therefore these conferments of the powers on the employer must be judged on the constitutional peg and so judged without the limitations indicated aforesaid the power is liable to be considered as arbitrary and struck down
Whenever a statute comes up for consideration it must be remembered that it is not within human powers to foresee the manifold sets of facts which may arise and even if it were it is not possible to provide for them in terms free from all ambiguity
The English language and for that matter any language in use today is not an instrument of mathematical precision
It has been said that our literature would have been much the poorer if it were
Leaving how 234 ever
the question of richness or poverty of our literature apart we must proceed on the assumption that human mind cannot foresee everything
It has therefore been said that when a question arises whether the power has been properly conferred and even if so the extent of it
Lord Denning has opined that a Judge in such a situation cannot simply fold his hand and blame the draftsmen and look for new enactment
Lord Denning invites us to set to work on the construction task of finding the intention of the Parliament or the law making body and we must
however
do this not only from the language of the statute
because
as we have seen
language is an imperfect medium and very often thoughts are perpetu ally in search of broken language 
But the judge must also do it from a consideration of the social conditions which give rise to it and o the mischief which it was intended to remedy and also in the light of the constitutional inhi bitions and then supplant the written words and add to it end give force and life  to the intention and purpose of the legislature or the law making authority
A judge must not alter the material of which a law or an instrument is woven but he can and should iron out the creases and if one may venture to say make articulate the inarticulate premise but make articulate only which follow from necessary compul sions of the situations and the constitutional position
See in this connection the observations of Lord Denning in The Discipline of Law at p 12
It is true that judicial jealously of legislature in law making has long been outdrawn but the strict construction remains still an established rule
It is generally accepted principle that judges in interpreting statutes should give effect to the legislators  intent
By doing so
the courts do recognise their subordinate position and their obligation to help the legislature to achieve its purpose
But in that effort
creativity is essential
There have been differences of opinion on the practices that the courts may employ in attempting to discover the legislative intent
In the begin ning conventional practice was only to look to the words of the statutes
Now the entire spectrum has to be examined
It has been said that judges are not unfettered glossators
is true that there is no actual expression used ena bling the legislation or the statute in question indicating the limitations or conditions as aforesaid
But it must proceed on the premise that the law making authority intend ed to make a valid law to confer power validly or which will be valid
The freedom therefore to search the spirit of the enactment or what is intended to obtain or to find the intention of the Parliament gives the Court the power to supplant and supplement the expressions used to say what was left unsaid
This is a power which 235 is an important branch of judicial power the concession of which if taken to the extreme is dangerous but denial of that power would be ruinous and this is not contrary to the expressed intention of the legislature or the implied pur pose of the legislation
It was not as Shri Ramamurthi tried to argue that legislature wanted to give an uncontrolled and absolute power to discharge employees on the part of the employers without any enquiry in all circumstances
That cannot be and that was not intended to be as can be implied from all the circumstances
In the aforesaid view of the matter I would sustain the constitutionality of this conferment of power by reading that the power must be exercised on reasons relevant for the efficient running of the services or performing of the job by the societies or the bodies
It should be done objective ly the reasons should be recorded it should record this and the basis that it is not feasible or possible reasonably to hold any enquiry without disclosing the evidence which in the circumstances of the case would be hampering the running of the institution
The reasons should be recorded it need not be communicated and only for the purpose of the running of the institution there should be factors which hamper the running of the institution without the termination of the employment of the employee concerned at that particular time either because he is a surplus inefficient disobedient and dangerous
Construction or interpretation of legislative or rule provisions proceeds on the assumption that courts must seek to discover and translate the intention of the legislature or the rule making body
This is one of the legal fictions upon the hypothesis of which the framework of adjudication of the intention of a piece of legislation or rule proceeds
But these are fictional myths to a large extent as experi ence should tell us
In most of the cases legislature that is to say vast majority of the people who are supposed to represent the views and opinions of the people do not have any intention even if they have they cannot and do not articulate those intentions
On most of these issues their is no comprehension or understanding
Reality would reveal that it is only those who are able to exert their view points in a common parliamentary jargon the power lobby gets what it wants and the machinery is of a bureaucratic set up who draft the legislation or rule or law
So there fore what is passed on very often as the will of the people in a particular enactment is the handy work of a bureaucrat ic machine produced at the behest of a power lobby control ling the corridors of power in a particular situation
This takes the mythetical 236 shape of the intention of the people  in the form of legis lation
Again very often the bureaucratic machine is not able to correctly and properly transmute what was intended to be conveyed
In such a situation is it or is it not better one would ponder to ask whether the courts should attribute to the law making body the knowledge of the values and limitations of the Constitution and knowledge of the evils that should be remedied at a particular time and in a situation that should be met by a particular piece of legis lation and the court with the experience and knowledge of law with the assistance of lawyers trained in this behalf should endeavour to find out what will be the correct and appropriate solution and construe the rule of the legisla tion within the ambit of constitutional limitations and upon reasonable judgment of what should have been expressed
In reality that happens in most of the cases
Can it be con demned as judicial usurpation of law making functions of the legislature thereby depriving the people of their right to express their will This is a practical dilemma which Judges must always in cases of interpretation and construction face and a question which they must answer
I have noted the guidelines for the exercise of the power preamble relevant sections from which the reasons should be inferred and recorded although they need not be communicate
These should be recorded in order to ensure effective judicial review in a given case
Termination simpliciter under Regulation 9b or similar powers can be exercised only in circumstances other than those in regula tion 9a
The exercise of such powers can only be for purposes germane and relevant to the statute
There are several illustrations of that namely the employee is incompetent or unsuitable so as to make his continuance in the employment detrimental to the interest of the institu tion where the continuance of the employee is a grave security risk making his continuance detrimental to the interest of the Corporation and where because of the conduct of the employee there is lack of confidence in the employee which makes it necessary in the interest of the Corporation to immediately terminate the services of the employee
These however are illustrative and not exhaustive
There fore each case of the conferment of the power involved should be decided on the aforesaid basis
I am conscious that clear intention as indicated in a legislation cannot be permitted to be defeated by means of construction
It has been said that if the legislature has manifested a clear intention to exercise an unlimited power it is impermissible to read down the amplitude of that power so as to make it limited
I do not agree
Our 237 legislatures are limited by the constitutional inhibitions and it is time in my opinion that we should read their Acts and enactments with the attribute that they know their limits and could not have intended to violate the Constitu tion
It is true that where there are clear unambiguous and positive terms in a legislation the Court should be loath to read down
It should proceed with a straight forward method of striking down such legislations
But where the statute is silent or not expressive or inarticulate the Court must read down in the silence of the statute and in the inarticulation of its provisions the constitutional inhibitions and transmute the major inarticulate premise into a reality and read down the statute accordingly
It is true perhaps as has been said that in the history of constitutional law statutes are seldom read down to mean what they say and intend
It is begging the question
If the statutes are seldom read down to mean what they say and intend
It is begging the question
If the statute does not specifically say in such circumstances as to how do we find the intention to transgress the constitutional limita tions
At least the relevant provisions of the relevant statutes and the rules mentioned hereinbefore are in my opinion on these points not expressive enough to betray an intention transgress constitutional limitations
I am afraid that reference to Elliott Ashton Welsh II vs United States   is inept in the background of the principles we are confronted with
The plain thrust of legislative enactment has to be found out in the inarticu late expressions and in the silence of the legislation
In doing so to say what the legislature did not specifically say is not distortion to avert any constitutional colli sion In the language of the relevant provisions with which we are confronted I do not find that intention of the legislature to flout the constitutional limitations
I am also unable to accept the contention of Mr Garg as well as Mr Ramamurthi that it is clear as a result of the constitutional position of the security of tenure of the employees as well as the expressed language of the provi sions of several enactments that there is no valid power of the termination of employment of the permanent employees without holding an enquiry or giving an opportunity to the employees to rebut the charges on the grounds of termination in all circumstances
It was contended as I have noted by Shri RK Garg that no principle of interpretation permitted reading down a provision so as to make it into a different provision altogether different from what was intended by the legislature or its delegate
Reference was made to the decision of this Court in RMDC s case supra
I am unable to accept this contention
It is not that the reading down is used for a purpose which is just the opposite which the legislature had intended
238 Legislature had not intended arbitrary or uncontrolled or whimsical power
Indeed it considered
This is not the proper way to read that power in the said Regulation 9b
Para 522 of the Shastri Award read properly must be cir cumscribed with the conditions indicated above as a neces sary corollary or consequence of that power
It is also not reading to the legislature conditions which were not there in the second proviso Article 3112 of the Constitution
In view of the ratio of the five judge Bench decision of this Court in Tulsiram s case supra which had examined all the relevant decisions I am unable to accept the submission of Shri RK Garg and Mr Ramamurthi
Absolute powers it is true cannot be regulated without essential legislative policy but here properly read absolute power was not there
Power that was only constitutionally valid that power can be presumed to have been given and if that pre sumption is made conditions indicated above inevitably attach
We are not concerned with the concept of industrial democracy sought to be propounded by Mr Garg in this case
The validity and the propriety of having industrial democra cy is not in issue
What is in issue is demonstrable fair play and justice as sought for by Mr Garg in the exercise of the power which must be conceded as an essential at tribute for proper functioning of the institution
It is true that no drafts as such have been submitted by the learned Attorney General or by the learned Solicitor General nor by any counsel appearing for the management
But these conditions which we have noted are necessary corol lary flowing from the conferment of the power of termination in a constitutional manner for the smooth proper and effi cient running of the industry
In the aforesaid view of the matter 1 am unable to accept the submissions of Mr Garg and Mr Ramamurthi
The power must be there the power must be read down in the manner and to the extent indicated above in my opinion of terminating the services of permanent employees without holding any enquiry in the stated contingencies and this would be by either virtue of the silence of the provision indicating the contingencies of termination or by virtue of constitutional inhibitions
That reading would not violate the theory that judges should not make laws
In the aforesaid view of the matter I direct that whenever question of exercise of the power of termination of permanent employees by reasonable notice without holding any enquiry arises the extent of 239 the power should be read in the manner indicated above and we reiterate that such powers can be exercised for the purposes of the Act which will be determinable by the pream ble and by relevant enacting provisions and the contingen cies for the exercise of the power must be specified and powers should be exercised by authority competent and inde pendent enough and should be articulated by reasons stated even if not communicated
These are the limitations inherent and latent in the framework of our Constitution and the power with these limitations is valid
Having regard to the aforesaid view I will have to dispose of the appeals in terms of the aforesaid principles
Next the question arises what would be the position of the rights and liabilities determined as anterior to or before our reading these powers to be conditioned as afore said
Having regard to the finality of the position of law and having regard to the theory that parties have adjusted their rights on the understanding of the law as it was in our opinion justice of the situation would be met if we declare and hold that pending litigations should be examined in the light of the aforesaid principles and dispose of in the aforesaid light namely where issues of damages or consequences of termination by virtue of exercise of the power are still pending adjudication in any forum and have not been finally adjudicated these should be re examined by the appropriate authorities before whom these issues are pending in the light of these principles that is say the exercise of the power should be judged on these conditions and in the light of those conditions
If in the light of these conditions the exercise of the power is valid the termination should be held to be valid if on the other hand there was exercise without compliance with these conditions the termination would be invalid and conse quences in law of damages or reinstatement or others will follow
But previous terminations where the lis is no longer pending before any authority will not be reopened
To that extent
I will declare this to be the law prospectively
I had after circulating the draft judgment herein the advantage of the views of my learned brothers
They do not agree with me
With respect
I am definitely of the opinion that time has come for the judicial interpretation to play far more active creative and purposeful role in deciding what is according to law
Law as evolved in India today in my opinion makes the limitations on user of power quite clear and distinct in this branch
These are constitutional limitations
Therefore every provision in any legislation by limited legislatures in 240 my opinion should be judged bearing in mind that the legis lature and the law making authorities were aware and are bound by these constitutional limitations
These inhibitions must be read into these provisions so that law becomes effective purposeful and legal
In that view of the matter I am of the opinion that we should approach the question of constitutional limitations or inhibitions in our interpreta tion in deciding in each individual cases by not what has been  but what may be 
This is the role and purpose of constitutional interpretation by the apex Court of the country
I know that this view of mine is not shared in this decision by my learned brothers
I respect their views but I would like to hope that one day or the other this Court would be mature enough to fulfil what is purposeful and I believe to be the true role and purpose of the Court in interpretation in the light of constitutional inhibitions
Having had the advantage of the views of my learned broth ers I regret with respect I cannot join them in their views
I am the loser for the same but I will fondly hope only for the time being
I believe that we must do away with the childish fic tion  that law is not made by the judiciary
Austin in his Jurisprudent at page 65 4th edn
has described the BIack stone s principle of finding the law as the childish fic tion 
Chief Justice K Subba Rao in IC Golak Nath  Ors
vs State of Punjab  Ant 
  at p 811 has referred to these observations
This Court under Article 14 1 of the Constitution is enjoined to declare law
The ex pression declared  is wider than the words found or made 
To declare is to announce opinion
Indeed the latter in volves the process while the former expresses result
Interpretation ascertainment and evolution are parts of the process while that interpreted ascertained or evolved is declared as law
The law declared by this Court is the law of the land
To deny this power to this Court on the basis of some outmoded theory that the Court only finds law but does not make it is to make ineffective the powerful in strument of justice placed in the hands of the highest judiciary of this country
See the observations of Chief Justice K Subba Rao in 1
C Golak Nath  Ors 
vs State of Punjab  Anr
 supra at pp
81314
I would therefore plead for a more active and creative role for the courts in declaring what the law is
In the aforesaid light in Civil Appeal No 2876 of 1986 having regard to the facts and the circumstances and the attitude taken by the Delhi Transport Corporation I do not interfere with the order of the High Court
The appeal shall therefore fail
241 Having regard to the facts and the circumstances and the observations above
Civil Appeal No 655 of 1984 ML Kamra vs Chairman cum Managing Director New India Assurance Co  will be placed before a division bench of this Court to be disposed of in accordance with law and the light of the observations made herein
For the reasons that I have indicated above in Civil Appeal No 1115 of 1976 Satnam Singh vs Zilla Parishad Ferozepur  Anr  with the facts herein where apparently no reasons were recorded the appeal of Satnam Singh suc ceeds and in the interest of justice the monetary relief should be given to the appellant which is quantified at Rs48306190 paise Rupees four lakhs eighty three thou sand and sixty one and ninety paise
I have indicated before the basis on which this quantification has been made
For the same reasons Civil Appeal No 4073NL of 1986 Mahesh Kumar Giroti vs Regional Manager Region 11 Region al Office State Bank of India Bareilly  Ors Civil Appeal No 331 of 1987 The Delhi Transport Corporation  Anr
vs Shri Hans Raj Civil Appeal No 328 of 1987 The Delhi Transport Corporation  Anr
vs Shri Rohtash Singh Special Leave Petition No 75 12 of 1987 Delhi Transport Corporation vs Shri Mohinder Singh  Anr and Civil Appeal No 330 of 1987 The Delhi Transport Corporation  Anr
vs Shri Prem Singh should be placed before the divi sion bench of this Court to be disposed of in accordance with the observations made herein and in accordance with law
The appeals I would dispose of accordingly
Intervention of the parties are allowed and the CMPs
are disposed of in the aforesaid terms
RAY J I have had the privilege of deciphering the judgment rendered by the learned Chief Justice
As the question involved in these groups of appeals for decision is very important it is deemed necessary to express my views on this important matter
The pivotal question which arises for consideration is whether Regulation 9b of the Regulations framed under section 53 of the Delhi Road Transport Act 1950 which provides for termination of services of permanent employees on giving simply one month s notice or pay in lieu thereof without recording any reason therefore in the order of termination is arbitrary illegal discriminatory and viola tive of Audi Alteram Partern Rule and so constitutionaly invalid and void
It is 242 also necessary to consider in this respect whether the said Rule 9b can be interpreted and read down in such a manner to hold that it was not discriminatory nor arbitrary nor does it confer unbridled and uncanalised power on the trans port authority to terminate however the services of any employee including permanent employee without any reason whatsoever by the Delhi State Transport Authority
It is also necessary to consider whether such a power can be exercised without conforming to the fundamental right em bodied in the Article 14 as interpreted by this Court in EP Royappa s case that arbitrariness is the anti thesis of equality enshrined in Article 14 of the Constitution
In other words whether such a regulation has to comply with the observance of fundamental rights guaranteed by Part III of the Constitution and whether such a power is to be exer cised in furtherance of and in consonance with the Directive Principles embodied in Article 38 and 39 of the Constitu tion
It is convenient to set out the relevant provisions of Regulation 9b framed by the Delhi Road Transport Authority under the 1950 Act
9b Termination of services b Whether the termination is made due to reduction of establishment or in circumstances other than those mentioned in a one month s notice or pay in lieu thereof will be given to all categories of employees
On a plain reading of this Regulation it is apparent that the authority has been conferred the power to terminate the services of any employee whether permanent or temporary by giving the month s notice or pay in lieu thereof without recording any reason whatsoever in the purported order of termination of services
Thus a regular temporary or perma nent employee of the State Transport Authority can be dis missed or removed from service at the whims and caprices of the concerned authority without any reason whatsoever and undoubtedly this evidence that such unbridled indiscrimi nate and uncanalised power to terminate the services even of a permanent employee without assigning any reason and with out giving any opportunity of hearing as far play and jus tice demands a reasonable procedure is per se arbitrary and discriminatory
It has been contended by the Attorney Gener al appearing on behalf of the State that such a power is not uncanalised or unbridled and arbitrary in as much as firstly such power has been conferred on the responsible authority namely DTC 243 for public purposes and secondly the Regulation 9b is to be read down so as to make it constitutionally valid
It will be seen that there is guidance for exercise of this power in the regulation itself
It has also been submitted in this connection by the learned Attorney General that a provision of the Constitution has to be presumed to be valid unless it is proved by the other side challenging the con stitutional validity of such a provision that the same is arbitrary and so void
Several authorities have been cited at the Bar on this point
It is profitable to refer to the earlier pronouncements of this Court on this crucial question
Rules 1483 and 1493 in contravention of the provision of Article 14 of the Constitution were challenged before this Court in the case Moti Ram Deka etc
vs General Manager NEF Railways Maligaon Pandu etc
  Rule 1483 of the Railways Establishment Code is set out here under 1483 Other non pensionable railway servants The service of other non pensionable railway servants shall be liable to termination on notice on either side for the periods shown below
Such notice is not however required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of clause 2 of Arti cle 311 of the Constitution retirement on attaining the age of superannuation and termination of service due to mental or physical incapacity
 In this case the service of Moti Ram Deka a peon em ployed by the Railway and Sudhir Kumar Das a confirmed clerk whose services have been terminated under Rule 1483 of the said Rules challenged the termination of their serv ices before the Assam High Court which rejected the same and ultimately it came up to this Court on Special Leave
It was held by the Majority that Rules 1483 and 1493 are in valid in as such as they are inconsistent with the provi sions of article 3112 as they purport to removal from serv ice of permanent servants without compliance with the proce dure prescribed by Article 3112
It was also held that the Rule 1483 contravenes article 14 as it does not give any guidance for exercise of the discretion by the authority concerned and hence it is invalid
It is necessary to refer in this connection to the pronouncement of this Court in the case of Parshotam Lal Dhingra vs Union of India  where it has been held that protection of Article 311 is 244 available only where dismissal removal or reduction in rank is sought to be inflicted by way of punishment and not otherwise
Thus even the probationer or temporary employee if removed from service or dismissed from service as a penal measure having civil consequences has to conform to the procedure prescribed by Article 3112 of the Constitution
Even a probationer who has no right to the post cannot be removed from service as a penal measure without complying with Article 3112 of the Constitution
In the case of Shyam Lal vs The State of Uttar Pradesh and Anr  it was held by this Court that a compulsory retirement from service under the Civil Services Classification Control and Appeal Rules does not amount to dismissal or removal within the meaning of Article 311 of the Constitution and therefore does not fall within the provision of the said Act
In the case of Shri Ram Krishna Dalmia vs Shri Justice SR Tendolkar  Others  the constitutionali ty of the Commission of Enquiry Act 1952 was challenged
It was held that the Act was valid and intra vires and that the notification was also valid excepting the words as and by way of securing redress or punishment in CI
10 thereof which went beyond the Act
It has been further held that it is now well settled that while Article 14 forbids class legislation it does not forbid reasonable classification for the purposes of legis lation
Thus to pass the test of permissible classification two conditions must be fulfilled namely that i That the classification must be rounded on an intelligible differen tia which distinguishes persons or things that are grouped together from others left out of the group and ii that that differentia must have a rational relation to the object sought to be achieved by the statute in question
It has also been held that it must be presumed that the legislature understands and correctly appreciates the need of its own people that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds
This Court observed in Jyoti Pershad vs The Administra tor For the Union Territory of Delhi  while holding that Section 19 of the  was not obnoxious to the equal protec tion of laws guaranteed by Art 14 of the Constitution there was enough guidance to the competent 245 authority in the use of his discretion under Section 191 of the Act
The restrictions imposed by Section 19 of the Act could not be said to be unreasonable
It has been further observed that 1 If the statute itself or the rule made under it applies unequally to per sons or things similarly situated it would be an instance of a direct violation of the Constitutional Guarantee and the provision of the statute or the rule in question would have to be struck down
2 The enactment or the rule might not in terms enact a discriminatory rule of law but might enable an unequal or discriminatory treatment to be accorded to persons or things similarly situated
This would happen when the legislature vests a discretion in an authority be it the Government or an administrative official acting either as an executive officer or even in a quasi judicial capacity by a legisla tion which does not lay down any policy or disclose any tangible or intelligible purpose thus clothing the authori ty with unguided and arbitrary powers enabling it to dis criminate
In State of Orissa vs Dr Miss Binapani Dei  Ors  the respondent joined service of the State Government in 1938
In the service record certain date of birth was recorded
In 196 1 Government held enquiry as to date of birth and she was asked to show cause why a certain date of birth should not be taken as a date of birth
The enquiry report was not disclosed to her and she was not given any opportunity to meet the evidence
The Government refixed her date of birth and ordered that she will be compulsorily retired
It was held that such a enquiry and decision were contrary to the basis concept of justice and cannot have any value
It is true that the order is adminis trative in character but even an administrative order which involves civil consequences as already stated must be made consistently with the rules of natural justice after inform ing the first respondent of the case of State the evidence in support thereof and after giving an opportunity to the first respondent of being heard and meeting or explaining the evidence
No such steps were admittedly taken the High Court was in our judgment right in setting aside the order of the State
In AK Kraipak and Others vs Union of India and Others it has been held at page 268 269 Paragraph 13 The dividing line between an administrative power and a 246 quasi judicial power is quite thin and is being gradually obliterated
For determining whether a power is an adminis trative power or a quasi judicial power one has to look to the nature of the power conferred the person or persons on whom it is conferred the framework of the law conferring that power the consequences ensuing from the exercise of that power and the manner in which that power is expected to be exercised
Under our Constitution the rule of law per vades over the entire field of administration
Every organ of the State under our Constitution is regulated and con trolled by the rule of law
In a welfare State like ours it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate
The concept of rule of law would lose its vitality if the instrumentalities of the State are not charged with the duty of discharging their functions in a fair and just manner
The requirement of acting judicially in essence is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously
The procedures which are considered inherent in the exercise of a judicial power are merely those which facilitate if not ensure a just and fair decision  
What was considered as an administrative power some years back is now being considered as a quasi judicial power   In the case of Union of India vs Col JN Sinha and Anr 1
JN Sinha was compulsorily retired by an order of the President of India dated 13869 under Section 56j of the Fundamental Rules from Government service without assigning any reason in the order
The High Court on a writ petition against the impugned order held that there was violation of principles of natural justice
On an appeal on Special Leave this Court held Rules of natural justice are not embodied rules nor can they be elevated to the position of fundamental rights
As observed by this Court in Kraipak and Ors
vs Union of India the aim of rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice
These rules can operate only in areas not covered by any law validly made
If a statutory provision can be read consist ently with the principles of natural justice the courts should do so because it must be presumed that the legisla 247 ture and the statutory authorities intend to act in accord ance with the principles of natural justice
But on the other hand a statutory provision either specifically or by necessary implication excludes the application of any or all the principles of natural justice then the court cannot ignore the mandate of the legislature or the statutory authority and read into the concerned provision the princi ples of natural justice
Whether the exercise of a power conferred should be made in accordance with any of the principles of natural justice or not depends upon the ex press words of the provisions conferring the power the nature of the power conferred the purpose for which it is conferred and the effect of the exercise of that power
 It was held that Fundamental Rule 56j does not in term require that any opportunity should be given to the con cerned servant to show cause against the compulsory retire ment
The order of the President is therefore not bad as the authority bona fide forms that opinion
In the case of Air India Corporation vs VA Rebello  Anr  the service of the respondent was terminated under Regulation 48 of the Air India Employees  Service Regulations
The said Regulation 48 reads as under CHAPTER VIII Cessation of Service X X X X X X X X X X X X X X X X X X 48
Termination The service of an employee may be terminat ed without assigning any reason as under a of a permanent employee by giving him 30 days  notice in writing or pay in lieu of notice b of an employee on probation by giving him 7 days  notice in writing or pay in lieu of notice c of a temporary employee by giving him 24 hours  notice in writing or pay in lieu of notice
In this case the complainant VA Rebello was dismissed from service under Regulation 48 by paying salary of 30 days in lieu of notice
The order does not suggest any misconduct on behalf of the 248 complainant and it is not possible to hold that the order was passed on any misconduct
This has been challenged by the complainant by filing a complaint before the National Industrial Tribunal
Under Section 33 A of the the order was challenged as amounting to dismissal from service
The Tribunal held in its award that the discharge of the respondent is not a discharge simplic iter but in breach of section 33 A of and as such directed the complaint to be considered on the merits
On appeal by Special Leave this Court while considering the purpose and scope of Section 331 and 332 of the  held following its decision in The Workmen of Sudder Office Cinnamara vs The Management as follows That if the termination of service is a colourable exercise of the power vested in the management or as a result of victimisation or unfair labour practice the Industrial Tribunal would have jurisdiction to intervene and set aside such a termination
In order to find out whether the order of termination is one of termination simpliciter under the provisions of contract or of standing orders the Tribunal has ample jurisdiction to go into all the circumstances which led to the termination simpliciter
The form of the order of termination is not conclusive of the true nature of the order for it is possible that the form may be merely a camouflage for an order of dismissal for misconduct
It is therefore open to the Tribunal to go behind the form of the order and look at the substance
If the Tribunal comes to the conclusion that though in form the order amounts to termination simpliciter but in reality cloaks a dismissal for misconduct it will be open to it to set aside the orders as a colourable exercise of power by the management
 The same principles have also been reiterated in the later decision of this Court in Tara Oil Mills Co Ltd vs Workmen  Anr  It has been observed in this case That the position of the industrial workman is different from that of a Government servant because an industrial employer cannot hire and fire his workmen on the basis of an unfettered right under the contract of employment that right now being subject to industrial adjudication and there is also on the other hand no provision of the Consti tution like articles 3 10 and 311 requiring consideration in the 249 case of industrial workmen
 It has been further observed That Regulation 48 which has been set out earlier as its plain language shows does not lay down or contemplate any defined essential pre requisite for invoking its operation
Action under this Regulation can be validly taken by the employer at his sweet will without assigning any reason
He is not bound to disclose why he does not want to continue in service the employee concerned
It may be conceded that an employer must always
have some reason for terminating the services of his employee
Such reasons apart from misconduct may inter alia by want of full satisfaction with his overall suitability in the fact that the employer is not fully satisfied with the overall result of the performance of his duties by his employee does not necessarily imply misconduct on his part In the case of Maneka Gandhi vs Union of India 1
The petitioner was issued a passport on June 1 1976 under the Passport Act 1967
On the 4th July 1977 the petitioner received a letter dated 2nd July 1977 from the Regional Passport Officer Delhi intimating to her that it was decided by the Government of India to impound her passport under section 103c of the Act in public interest
 The petitioner was required to surrender her passport within 7 days from the receipt of that letter
The petitioner immediately addressed a letter to the Regional Passport Officer requesting him to furnish a copy of the statement of reasons for making the order as provided in Section 105 reply was sent by the Government of India Ministry of External Affairs on 6th July 1977 stating inter alia that the Government decided in the interest of the general public not to furnish her copy of the statement of reasons for the making of the order
The petitioner challenges the action of the Government in impounding her passport by a writ petition
Sub section 1 of Section 10 empowers the Passport Authority to vary or cancel the endorsement on a passport or travel document or to vary or cancel it on the conditions subject to which a passport or travel document has been issued having regard to inter alia the provisions of section 61 or any notification under Section 19
Sub section 2 confers powers on the Passport Authority to vary or cancel the conditions of the passport or travel document on the application of the holder of the passport or travel document and with the previous approval of the Central Government Sub section 3 pro 250 vides that the Passport Authority may impound or cause to be impounded or revoke a passport or travel document on the grounds set out in cla to h
The order impounding the passport in the present case was made by the Central Govern ment under cl
c which reads as follows c If the passport authority deems it necessary so to do in the interest of the sovereignty and integrity of India the security of India friendly relations of India with the foreign country or in the interest of the general public
 It was held that the right to travel and go outside the country is included in the right to Personal Liberty
In order to apply the test contained in articles 14 and 19 of the Constitution we have to consider the objects for which the exercise of inherent rights recognised by article 21 of the Constitution are restricted as well as the procedure by which these restrictions are sought to be imposed both substantive and procedural laws and actions taken under them will have to pass the test imposed by articles 14 and 19 whenever facts justifying the invocation of either of these Articles may be disclosed
Violation for both articles 21 and 191g may be put forward making it necessary for the authorities concerned to justify the restriction imposed by showing satisfaction of tests of validity contemplated by each of these two Articles
The tests of reason and justice cannot be abstract
They cannot be divorced from the needs of the nation
The tests have to be pragmatic otherwise they would cease to be rea sonable
The discretion left to the authority to impound a passport in public interest cannot invalidate the law it self
The orders under Section 103 must be based upon some material even if the material concerns in some cases of reasonable suspicion arising from certain credible asser tions made by reliable individual
In an emergent situation the impounding of a passport may become necessary without even giving an opportunity to be heard against such a step which could be reversed after an opportunity is given to the holder of the passport to show why the step was unnecessary
It is well settled that even if there is no specific provision in a statute or rules made thereunder for showing cause against action proposed to be taken against an indi vidual which affects the right of 251 that individual the duty to give reasonable opportunity to be heard will be implied from the nature of the function to be performed by the authority which has the power to take punitive or damaging action
An order impounding a passport must be made quasi judi cially
This was not done in the present case
It cannot be said that a good enough reason has been shown to exist for impounding the passport of the petitioner
The petitioner had no opportunity of showing that the ground for impounding it given in this Court either does not exist or has no bearing on public interest or that the public interest can be better served in some other manner
The order should be quashed and the respondent should be directed to give an opportunity to the petitioner to show cause against any proposed action on such grounds as may be available
Even executive authorities when taking administrative action which involves any deprivation of or restriction on inherent fundamental rights of citizens must take care to see that justice is not only done but manifestly appears to be done
They have a duty to proceed in a way which is free from even the appearance of arbitrariness unreasonableness or unfairness
They have to act in a manner which is patent ly impartial and meets the requirements of natural justice
It is also pertinent to refer in this connection the pronouncement of this Court in the case of EP Royappa vs State of Tamil Nadu and Anr  Equality and arbitrariness are sworn enemies one belongs to the rule of law in a public while the other to the whim and caprice of an absolute monarch
Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment
The principle of reasonableness which legally as well as philosophically is an essential element of equality or non arbitrariness pervades Article 14 like a brooding omni presence and the procedure contemplated by Article 21 must answer the test of reasonableness in order to be in conformity with Article 14 it must be right and just and fair and not arbitrary fanciful or oppressive
 In the case of Municipal Corporation of Greater Bombay vs Malvenkar and Ors  the services of respondent No 2 a permanent clerk in the Bombay Electric Supply and Transport Undertaking which is run by the appel lant were terminated from the 252 close of work on January 23  1968 as her record of service was unsatisfactory
The order of termination stated that the respondent No 2 should be paid one month s wages in lieu of notice and would also be eligible for all the benefits as might be admissible under the Standing Orders and Service Regulations of the Undertaking
The respondent No 2 made an application before the Labour Court under Section 424 of the Bombay Industrial Relations Act contending that the order terminating her services was invalid as it was not passed by the competent authority as envisaged by the Stand ing Order and that the so called Executive Assistant to the General Manager had no authority to terminate her services because no validly sanctioned post of that designation existed on 20th or 23rd January 1968
It was also contended that the aforesaid oders besides being mala fide was viola tive of the principles of natural justice in as much as the same was passed without holding any enquiry
The Labour Court dismissed the application
The respondent s appeal before the President of the Industrial Court was however allowed
The Industrial Court held that the impugned orders bore only the initials of the Central Manager and therefore it was passed by an authority which was lacking in authori ty the wording unsatisfactory service record cast a stigma and was patently punitive attracting the non observ ance of Standing Order No 26 which did not create an abso lute right in the management to terminate the services of an employee for misconduct without holding an enquiry or giving her a fair opportunity of being heard
A Writ application filed by the appellant was dismissed holding inter alia that the appellant was dismissed holding inter alia that the fact that Standing Order 26 required reasons to be mentioned in the order terminating the services of an employee did not mean that an order of dismissal on the ground of misconduct could be converted into an order of discharge simpliciter by mentioning therein the nature of misconduct
While allowing the appeal on Special Leave it was held by this Court that under Standing Order 26 powers have been given to the Management in a particular case and this ques tion has to be determined having regard to the substance of the matter and not its form
One is the power of holding disciplinary enquiry under clause 3 of Standing Order 231 read with standing Order 23 and the other is the power to terminate the services of an employee by one calendar month s written notice or pay in lieu thereof under Standing Order 26
The question is as to which power has been exer cised by the Management in a particular case and this ques tion has to be determined having regard to the substance of the matter and not its form
There are two distinct and independent powers and as far as possible neither should 253 be construed so as to emasculate the other or to render it ineffective
One is the power to punish an employee for misconduct while the other is the power to terminate sim pliciter the service of an employee without any other ad verse consequences
Proviso i to clause 1 of Standing Order 26 requires that the reason for termination of the employment should be given in writing to the employee when exercising the power of termination of services of the employee under Standing Order 26
The Management is required to articulate the reason which operated in its mind for terminating the services of the employee
But merely because the reason must obviously not be arbitrary
capricious or irrelevant it would not necessarily in every case make the order of termination punitive in character so as to require compliance with the requirements of clause 2 of Standing Order 21 read with Standing Order 23
It was further held that the service of the respondent was not satisfactory was undoubtedly based on past incidents set out in the record but for each of these incidents punishment is one form or another had already been meted out to her and it was not by way of punishment for any of these incidents but because as gathered from these incidents her record of service was unsatisfactory that her service was terminated by the man agement under Standing Order 26
The appellant produced satisfactory evidence to show that the impugned order termi nating the service of the respondent was justified and hence the impugned order must be sustained despite its having been passed without complying with the requirements of clause 2 of Standing Order 21 read with Standing Order 23
This decision has been made in the special facts and circum stances in that particular case
In the case of Manohar P Kharkhar And Anr
vs Raghuraj  Anr the petitioners challenged the order of termination of services dated 294
1981 under Regulation 48 of Air India Employees  Service Regulations
The petitioner No 1 was The Director of Engineering and the Head of the Engineering Department while the petitioner No 2 was Deputy Director of Engineering Maintenance and the Head of the Maintenance Division of the Air India Corpora tion
The Chairman and Managing Director of the said Corpo ration lost confidence in their ability and suitability to hold such important posts of Head of Departments which were reasonable for maintenance of the Air Crafts safety of the Air Crafts and safety of the passengers carried therein and the order of termination were based on the note of The Chairman dated 294
Loss of confidence was the result of the negligence and failure to discharge their duty culmi nating in the admitted sabotage in the case of Makalu an air craft 254 for the flight of VVIP
On this occasion the petitioners services were terminated on April 29 1981 by the Chairman who recorded in its record the ground of loss of confidence
This order was challenged as arbitrary and capricious and Regulation 48 was violative of Article 14 of the Constitu tion as it contained to guidelines for choosing between employees and employees occasion to occasion for the con templated action
In negativing the contentions it was held after exhaus tively analysing the note dated 2941981 that sheer un suitability and unfitness to hold office is not a misconduct in its generic sense or in its artificial meaning under Regulation 42
Regulations 42 to 44 have no application
Confidence in the petitioners  suitability was lost due to such overall inefficiency of the departments under the petitioners
Conclusions could not be different even if it assumed that the note contemplated finding of the petition ers guilty of gross inefficiency and negligence
Inefficien cy by itself did not amount to misconduct in its generic sense
It was further held that the petitioners have no right to the post and do not possess any security of tenure
It was also held that if the Corporation choose to act under Regulation 48 and the action is not mala fide arbitrary or capricious the question of its having acted in colourable exercise of its power could not arise
It was further held that the power conferred under Regulation 48 to terminate the services of permanent employees on 30 days notice with out assigning any reason is not violative of Article 14 of the Constitution
Accordingly the writ petition was dis missed and the rule was discharged
This decision however has not duly considered the ratio of the decision made by this Court in L Michael  Anr
vs Johnaton Pumps India Ltd  and also in the case of Air India Corporation vs VA Rebello supra as well as the ratio of the decision in the case of Sukhdev Singh  Ors
vs Bhagat Ram Sardar Singh Raghuvanshi  Anr 1975 1 SCC421
In the case of SS Muley vs JRD Tata  Ors constitutionality came up for consideration and this Court held the said Regulation 48 to be discriminatory and void as it gives unrestricted and unguided power on the Authority concerned to terminate the services of a permanent employee by issuing a notice or pay in lieu thereof without giving any opportunity of hearing to the employee concerned and thereby violating the principles of natural justice and also Article 14 of the Constitution
255 In West Bengal State Electricity Board  Ors
vs Desh Bandhu Ghosh and Others 1985 3 SCC 116 the first respond ent a permanent employee of the West Bengal State Electric ity Board filed the writ petition out of which the appeal arises in the Calcutta High Court to quash an order dated March 22 1984 of the Secretary West Bengal State Electric ity Board terminating his services as Deputy Secretary with immediate effect on payment of three months  salary in lieu of three months  notice
The order was made under Regulation 34 of the Board s Regulations which enables the Board to terminate the services of any permanent employee by serving three months  notice or on payment of salary for the corre sponding period in lieu thereof
 The Regulation 34 reads as follows 34
In case of a permanent employee his services may be terminated by serving three months  notice or on payment of salary for the corresponding period in lieu thereof
 This order of termination was challenged on the ground that Regulation 34 was arbitrary in nature and it was pat ently discriminatory
The High Court struck down the first paragraph of Regulation 34 and quashed the order of termina tion of service of the first respondent
In the case of Workmen of Hindustan Steel Ltd and Anr
vs Hindustan Steel Ltd and Ors  Standing Order 32 which provided for conferment of power in the General Manager to terminate the services of an employee if satisfied for reasons recorded in writing that it was inex pedient or against the order of security to employ the workman the workman could be removed or dismissed from service without following the procedure laid down in Stand ing Order 31
Special Procedure in certain cases
Where a workman has been convicted for a criminal offence in a Court of law or where the General Manager is satisfied for reasons to be recorded in writing that it is inexpedi ent or against the interests of security to continue to employ the workman the workman may be removed or dismissed from service without following the procedure laid down in Standing Order 31 The appellant an Assistant in the 1st Respondent under taking was removed from service on the ground that it was no longer expe 256 dient  to employ him
The management dispensed with the departmental enquiry after looking into the secret report of one of their officers that the appellant had misbehaved with the wife of an employee and that a complaint in respect thereof had been lodged with the police
The Tribunal held that as the employer dispensed with the disciplinary enquiry in exercise of the power conferred by Standing Order 32 it could not be said that the dismissal from service was not justified and the respondent was quite competent to dismiss him from service without holding any enquiry
It was held that the reasons for dispensing with the enquiry do not spell out what was the nature of the miscon duct alleged to have been committed by the appellant and what prompted the General Manager to dispense with the enquiry
As there was no justification for dispensing with the enquiry imposition of penalty of dismissal without the disciplinary enquiry as contemplated by Standing Order 31 is illegal and invalid
It was further held that  A Standing Order which confers such arbitrary
uncanalised and drastic power to dismiss an employee by merely stating that it is inexpedient or against the interest of the security to continue to employ the workman is violative of the basic requirement of natural justice inasmuch as that the General Manager can impose penalty of such a drastic nature as to affect the livelihood and put a stigma on the character of the workman without recording reasons why disciplinary inquiry is dis pensed with and what was the misconduct alleged against the employees
It is time for such a public sector undertaking as Hindustan Steel Ltd to recast SO 32 and to bring it in tune with the philosophy of the Constitution failing which it being other authority and therefore a State under article 12 in an appropriate proceeding the vires of SO 32 will have to be examined
It is not necessary to do so in the present case because even on the terms of SO 32 the order made by the General Manager is unsustainable
 In the case of Tata Oil Mills Co Ltd vs Workmen  Anr supra the service of Mr Banerjee an employee of the appellant was terminated on the ground that the appel lant had lost confidence in him and in lieu of notice he was paid one month s salary
The Union to which Mr Banerjee belonged took up his cause and on the failure of he par ties to reach a settlement the matter was referred to the Industrial Tribunal by the Government
It was contended before the Tribunal by the appellant that the order of termination of services of Mr 257 Banerjee was an order of discharge which it was competent to make under R 401 of the Service Rules whereas the re spondent contended that the termination was not a discharge simpliciter but was in substance dismissal and that the Tribunal was entitled to consider the propriety of the appellant s action
The Tribunal held that it had jurisdiction to look into the reasons behind the discharge of an employee
On the examination of the evidence the Tribunal found that no mala fides on the part of the employer had been proved and that the termination of service did not amount to victimisation or unfair labour practice
Even so it held that the dis charge was not justified and directed the reinstatement of Mr Banerjee
This Court held that in the matter of an order of dis charge of an employee the form of the order is not decisive
An Industrial Tribunal has jurisdiction to examine the substance of the matter and decide whether the termination is in fact discharge simpliciter or it amounts to dismiss al which has put on the cloak of discharge simpliciter
The test always has to be whether the act of the employer is bona fide or whether it is a mala fide and colourable exer cise of the powers conferred by the terms of contract or by the standing orders
In OP Bhandari vs Indian Tourism Development Corpora tion Ltd and Others  The question of constitutionality of Rule 31v of the Indian Tourist Devel opment Corporation Rules came up for consideration before this Court in this case
Rule 31 is quoted below 31
Termination of services The services of an employee may be terminated by giving such notice or notice pay as may be prescribed in the contract of service in the following manner v of an employee who has completed his probationary period and who has been confirmed or deemed to be confirmed by giving him 90 days  notice or pay in lieu thereof
 It has been observed by this Court This rule cannot co exist with Articles 14 and 161 of the Constitution of India
The said rule must therefore die so that the fundamental rights guaranteed by the aforesaid 258 constitutional provisions remain alive
For otherwise
the guarantee enshrined in Articles 14 and 16 of the Constitu tion can be set at naught simply by framing a rule authoriz ing termination of an employee by merely giving a notice
In order of uphold the validity of the rule in question it will have to be held that the tenure of service of a citizen who takes up employment with the State will depend on the pleas ure or whim of the competent authority unguided by any principle or policy
And that the services of an employee can be terminated though there is no rational ground for doing so
even arbitrarily or capriciously
To uphold this right is to accord a magna carta to the authorities in vested with these powers to practice uncontrolled discrimi nation at their pleasure and caprice on considerations not necessarily based on the welfare of the organisation but possibly based on personal likes and dislikes personal preferences and prejudices
An employee may be retained solely on the ground that he is asycophancy and indulges in flattery whereas the services of one who is meritorious but who is wanting in the art of sycophancy and tempermen tally incapable of indulging in flattery may be terminated
The power may be exercised even on the unarticulated ground that the former belongs to the same religious faith or is the disciple of the same religious teacher or holds opinions congenial to him
The power may be exercised depending on whether or not the concerned employee belongs to the same region
or to the same caste as that of the authority exer cising the power of course without saying so
Such power may be exercised even in order to make way for another employee who is favourite of the concerned authority
Pro vincialism casteism nepotism religious fanaticism and several other obnoxious factors may in that case freely operate in the mind of the competent authority on deciding whom to retain and whom to get rid of
And these dangers are not imaginary ones
They are very much real in organisations where there is a confluence of employees streaming in from different States
Such a rule is capable of robbing an employee of his dignity and making him a supine person whose destiny is at the mercy of the concerned authority whom he must humour notwithstanding the constitutional guarantee enshrined in Articles 14 and 16 of the Constitu tion of India
To hold otherwise is to hold that the funda 259 mental right embedded in Articles 14 and 161 is a mere paper tiger and that is so ethereal that it can be nullified or eschewed by a simple device of framing a rule which authorizes termination of the service of an employee by merely giving a notice of termination
Under the circum stances the rule in question must be held to be unconstitu tional and void
 This decision followed the observations of this Court in Central Inland Water Transport Corporation Limited And Another vs Brojo Nath Gangtdy and Another and West Bengal State Electricity Board vs Desh Bandhu Ghosh and Ors Supra
In Central Inland Water Transport Corporation Limited and Another vs Brojo Nath Ganguly and Another the appellant Corporation is a Government Company incor porated under the Companies Act
The Majority shares of the Corporation are held by the Union of India and the remaining shares are held by the State of West Bengal and Assam
Article 47 provided for appointment and reappointment of the auditors of the Corporation to be made by the Central Gov ernment on the advice of the Comptroller and AuditorGeneral of India and the nature of control to be exercised by the Comptroller and Auditor General in the matter of audit and accounts
Article 51 A entitled the President to call for returns accounts etc
of the Corporation
The respondents in the two appeals were in the service of the said company
Their appointment letters were in a stereotype form under which the Corporation could without any previous notice terminate their services
A Scheme of Arrangement was en tered into between the Corporation and that company for dissolution of the latter and takeover of its business and liabilities by the former
The Scheme inter alia stipulated that the Corporation shall take as many of the existing staff or labour as possible and that those who could not be taken over shall be paid by the concerned company all moneys due to them under the law and all legitimate and legal compensations payable to them either under Industrial Dis putes Act or otherwise legally admissible and that such moneys shall be provided by the Government of India to the transferor Company who would pay these dues
The two re spondents were in the service of the said company and their services were taken over by the Corporation after the Scheme of Arrangement was sanctioned by the High Court
The re spondent Ganguly was appointed as the Deputy Chief Accounts Officer and was later promoted as Manager Finance the respondent Sengupta was appointed as Chief Engineer River Services and was 260 later promoted as General Manager River Services
Rule 9i of the Corporation s Service Discipline and Appeal Rules of 1979 provided that the services of a perma nent employee could be terminated on three months  notice on either side or on payment of three months  pay plus DA to the employee or on deduction of a like amount from his salary as the case may be in lieu of the notice
A notice under Rule 9i was served on him terminating his services with immediate effect by paying three months  pay
Both Ganguly and Sengupta filed writ petition before High Court and a Division Bench of that Court allowed the same
The Corporation filed appeals before Supreme Court
The impugned questions for determination were i whether the appellant Corporation was an instrumentality of the State so as to be covered by Articles 12 and 36 of the Constitution and ii whether an unconscionable term in a contract of employment entered into with the Corporation was void under Section 23 of the Contract Act and violative of Article 14 and as such whether Rule 9i which formed a part of the contract of employment between the Corporation and its employees to whom the said Rules applied was void This Court held that it being a Government Company within the meaning of Article 12 of the Constitution has to comply with the rights embodied in Part III of the Constitution and the Directive Principles in Part IV of the Constitution
It was further held that by extending the executive power of the Union and each of the States to the carrying on any trade or business
Article 298 does not convert either the Union of India or any of the States which collectively form the Union into a merchant buying and selling goods or carrying on either trading or business activity for the executive power of the Union and the States whether in the field of trade or business or in any other field is always subject to constitutional limitations and particularly the provisions relating to Fundamental Rights in Part III and is exercisa ble in accordance with and for the furtherance of the Direc tive Principles of State Policy
Rule 9i can aptly be called the Henry VIII Clause 
It confers an absolute
arbitrary and unguided power upon the Corporation
It does not even state who on behalf of the Corporation is to exercise that power
While the Rules provide for four different modes in which the services of a permanent employee can be terminated earlier than his at taining the age of superannuation namely Rules 9i 9ii
36ivb read with Rules 38 and 37
Rule 9i is the only rule which does not state in what circumstances the power conferred by the rule is 261 to be exercised
Thus even where the Corporation could proceed under Rule 36 and dismiss an employee on the ground of misconduct after holding a regular disciplinary inquiry it is free to resort instead to Rule 9i in order to avoid the hassle of an inquiry
No opportunity of a hearing is at all to be afforded to the permanent employee whose service is being terminated in the exercise of this power
It thus violates audi alteram partent rule of natural justice also which is implicit in Article 14
It is not covered by any of the situations which would justify the total exclusion of the audi alteram partem rule
The view that the Board of Directors would not exercise this power arbitrarily or capriciously as it consists of responsible and highly placed persons ignores the fact that however highly placed a person may be he must necessarily possess human frailties and power tends to corrupt and absolute power corrupts abso lutely Rule 9iis also discriminatory for it enables the Corporation to discriminate between employee and employee
It can pick up one employee and apply to him Rule 9i
It can pick up another employee and apply to him Rule 9ii
It can pick up yet another employee and apply to him Rule 36ivb read with Rule 38 and to yet another employee it can apply Rule 37
All this the Corporation can do when the same circumstances exist as would justify the Corporation in holding under Rule 38 a regular disciplinary inquiry into the alleged misconduct of the employee
This court in Delhi Transport Undertaking vs Balbir Saran Goel  considered the question whether the services of a permanent employee under Delhi Transport Undertaking could be terminated under Regulation 9b of the Regulation without complying with the procedure prescribed by Regulation 15 and ii whether although the order was made in perfectly harmless and innocuous terms purporting to be within Regulation 9b it was a mere camouflage for inflicting punishment for breach of Standing Order 17
as the respondent approached the High Court without exhausting the Departmental remedies and held that the order was not proved to be made mala tide on the part of the authority terminating the service nor the question of mala fide was gone into by the Courts below
Regulation 9b empowered the authorities to terminate the service after giving one month s notice or pay in lieu thereof
The order was held to have been made unequivocally in terms of the Regulation 9h as the employee was a con tankerous person and it was desirable to retain him in service
The order was upheld
The question 262 whether Regulation 9b was illegal and void as it conferred arbitrary and uncanalised power to terminate the service of a permanent employee without recording any reason and with out giving any opportunity of hearing before passing the purported order as required under Article 14 of the Consti tution was neither raised nor considered in this case
In L Michael  Anr
vs Ms Johnston Pumps India Ltd supra the services of the appellant an employee of the respondent were terminated by the latter giving him one month s notice as per
the standing orders without assigning any reasons for the termination
An industrial dispute was referred to the Labour Court
The management alleged that the employee misused his position by passing an important and secret information about affairs of the company to certain outsiders that even after he was transferred to another section he made attempts to elicit information from the section with a view to pass it on to outsiders and that therefore the management lost confidence in the employee and terminated his services by a bona fide order
The Labour Court confirmed the order
On appeal this Court set aside the order holding that the Labour Court has misled itself on the law
This Court directed reinstatement of the employee with all back wages
The manner of dressing up an order does not matter
The Court will lift the veil to view the reality or substance of the order
The Tribunal has the power and indeed the duty to X ray the order and discover its true nature if the object and effect if the attendant circumstances and the ulterior purpose be to dismiss the employee because he is an evil to be eliminated
But if the management to cover up the ina bility to establish by an inquiry illegitimately but inge niously passes an innocent looking order of termination simpliciter such action is bad and is liable to be set aside
Loss of confidence is no new armour for the manage ment otherwise security of tenure ensured by the new industrial jurisprudence and authenticated by a catend of cases of this Court can be subverted by this neo formula Loss of Confidence in the law will be the consequence of the Loss of Confidence doctrine
An employer who believes and suspects that his employee particularly one holding a position of confidence has betrayed that confidence can if the conditions and terms of employment permit 263 terminate his employment and discharge him without any stigma attaching to the discharge
But such belief or suspi cion or  the employer should not be a mere whim or fancy
It should be bona fide and reasonable
It must rest on some tangible basis and the power has to be exercised by the employer objectively  in good faith
which means honestly and with due care and prudence
If the exercise of such power is challenged on the ground of being colourable or mala fide or an act of victimisation or unfair labour prac tice
the employer must disclose to the Court the grounds of his impugned action so that the same may be tested judicial ly
This Court in the case of workmen of Hindustan Steel Ltd and Ant
vs Hindustan Steel Ltd and Ors
 supra while considering the constitutionality of Standing Order 32 of the Hindustan Steel Ltd which conferred power on the General Manager to remove or dismiss a workman without following the procedure for holding a disciplinary enquiry laid down in Standing Order 31 observed that It is time for such a public sector undertaking as Hindu stan Steel Ltd to recast SO 32 and to bring it in tune with the philosophy of the Constitution failing which it being other authority and therefore a State under Article 12 in an appropriate proceeding the views of SO 32 will have to be examined
 It is convenient to refer in this context relevant passage in paragraph 4 in Chitty on Contracts 25th Edition Volume 1 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 interest 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 264 terms of an employee s contract of employment may be deter mined 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
 This Court has observed in Central Inland Water Trans port Corporation Ltd and Anr
vs Brojo Nath Ganguly and Anr supraas under 
Article 14 of the Constitution guarantees to all persons equality before the law and the equal protection of the laws
The principle deducible from the above discus sions on this part of the case is in consonance with right and reason intended to secure social and economic justice and conforms to the mandate of the great equality clause in Article 14
This principle is that the courts will not enforce and will when called upon to do so strike down an unfair and unreasonable contract or an unfair and unreason able clause in a contract
entered into between parties who arc not equal in bargaining power  
It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them The Court has
therefore the jurisdiction and power to strike or set aside the unfavourable terms in a contract of employment which purports to give effect to unconscienable bargain violating article 14 of the Constitution Thus on a conspectus of the catena of cases decided by this Court the only conclusion follows is that Regulation 9b 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 Govern ment carries on various trades and business activity through the instrumentality of the State such as Government Company or Public Corporations
Such Government Company or 265 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 Consti tution
Furthermore the procedure prescribed by their Rules or Regulations must be reasonable fair and just and not arbitrary fanciful and unjust
Regulation 9b 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 es sence 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 procedure ly
Considering from all aspects Regulation 9b 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
Regula tion 9b does not expressly exclude the application of the audi alteram partern  rule and as such the order of termi nation of service of a permanent employee cannot be passed by simply issuing a month s notice under Regulation 9b 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 purport ed order is made
It will be profitable to refer in this connection the observations of this Court in the case of Union of India and Anr
vs Tulsiram Patel and Ors 1985 Supp
2 SCR 131 where the constitutionality of provisions of article 311 par ticularly the 2nd proviso to clause 2 of the said Article came up for consideration
This Court referred to the find ings in Roshan Lal Tandon vs Union of India  wherein it was held that though the origin of a Govern ment service is contractual 266 yet when once appointed to his post or office the Govern ment servant acquires a status and his rights and obliga tions are no longer determined by the consent of both the parties but by statute or statutory rules which may be framed and altered unilaterally by the Government
In other words the legal position of a Government servant is more one of status than of contract
The hall work of status is the attachment to a legal relationship of rights and duties imposed by the public law and not by mere agreement of the parties
It has been observed that article 14 does not govern or control article 311
The Constitution must be read as a whole
article 3112 embodies the principles of natural jus tice including audi alteram partem rule
Once the applica tion of clause 2 is expressly excluded by the Constitution itself there can be no question of making applicable what has been so excluded by seeking recourse to Article 14 of the Constitution
In the case of Sukdev Singh  Ors
vs Bhagatrarn Sardar Singh Raghuvanshi  Anr
supra Mathew J pointed out that The governing power wherever located must be subject to the fundamental constitutional limitations
 This has been referred to and relied upon in Central Inland Water Transport Corporation Ltd and Anr
vs Brojo Nath Ganguly and Anr
supra and a similar Rule 9i was termed as Henry VIII clause as it confers arbitrary and absolute power upon the Corporation to terminate the service of a permanent employee by simply issuing a notice or pay in lieu thereof without recording any reason in the order and without giving any opportunity of hearting to the employee
Thus the Rule 9i of the Services Discipline and Appeal Rules 1979 was held void under Section 23 of the  as being opposed to public policy and is also ultra vires of Article 14 of the Constitution to the extent that it confers upon the Corporation the right to terminate the employment of a permanent employee by giving him three months  notice in writing or by paying him the equivalent of three months  basic pay and dearness allowance in lieu of such notice
Regulation 9b of the impugned Regulation framed under the Delhi Transport Corporation Act which is in pare materia with the said Rule 9i is void under Section 23 of the Contract Act as being opposed to public policy and is also ultra vires of Article 14 of the Constitution
Another crucial question is to consider how far the impugned provisions of Regulation 9b framed under the Delhi Road Transport 267 Act can be read down in order to save it from unconstitu tionality
Several decisions have been cited at the bar in order to impress upon the Court that the impugned provisions have been made for public purposes and for public interest and as such it should be read down in a manner that will save the said provisions from the on slaught of constitu tional invalidity
In the case of Commissioner of Sales Tax Madhya Pra desh Indore and Ors
vs Radhakrishnan and Ors
  it has been held by this Court that for sustaining the presumption of constitutionality the court may take into consideration matters of common knowledge matters of common report the history of the times and may assume every state of facts which can be conceived and can even read down this section
It is convenient to mention here the meaning and scope of the word reading down  and Severance  dealt with on page 7 para B in Australian Federal Constitutional Law by Colin Howard which reads as follows The High Court presumes the validity of legislation to the extent that it will not of its own motion raise questions of constitutionality
Legislation is treated as valid unless the parties to litigation challenge it on constitutional grounds
The techniques of construction known as reading down and severance are corollaries of this presumption
Reading down puts into operation the principle that so far as it is reasonably possible to do so legisla tion should be construed as being within power
It has the practical effect that where an Act is expressed in language of a generality which makes it capable if read literally of applying to matters beyond the relevant legislative power the court will construe it in a more limited sense so as to keep it within power
XX XX XX XX XX XX It does not necessarily follow that because a statute cannot be read down it is wholly invalid
The presumption of valid ity leads naturally to the view that where a statute cannot be held wholly valid it should be held valid at least to the 268 extent that it is reasonably possible or practicable to do so
Where reading down is not available the court next decides where there is a case for severing the invalid parts of the statute from the parts which standing alone are valid
If this can be done the court declares only the invalid parts to be beyond power and leaves the remainder operative
In Re The Hindu Women s Rights to Property Act 1937 and The Hindu Women s Rights to Property Amendment Act 1938 and in Re a Special Reference under Section 2 13 of the Government of India Act 1935 the question arose whether the Hindu Women s Rights to Property Act 1937 Central Act XVIII of 1937 and the Hindu Women s Rights to Property Amendment Act 1938 Central Act XI of 1938 are applicable to agricultural land and what was the meaning of the word property 
It was observed that When a Legislature with limited and restricted powers makes use in an Act of a word of such wide and general import as property the presumption must be that it is using it with reference to that kind of property with respect to which it is competent to legislate and to no other
The word proper ty in the Hindu Women s Right to Property Act must accord ingly be construed as referring to property other than agricultural land
There is a general presumption that a Legislature does not intend to exceed its jurisdiction
 In the case of RMD Chamarbaugwalla vs The Union of India  the petitioners who had been promoting and conducting prize competitions in the different States of India challenged the constitutionality of sections 4 and 5 of the 42 of 1955 and rr 11 and 12 framed under section 20 of the Act on the grounds that prize competition as defined in section 2d of the Act included not merely competitions that were of a gambling nature but also those in which success depended to a substantial degree on skill and the sections and the rules violated their funda mental right to carry on business and were unsupportable under Act
196 of the Constitution that they constituted a single inseverable enactment and consequently
must fail entirely
It was held that validity of the restrictions imposed by sections 4 and 5 and rr 11 and 12 of the Act as re gards gambling competitions was no longer open to challenge under article 196 of the Constitution in view of the decision of this Court that gambling did not 269 fall within the purview of article 191g of the Constitu tion
It has been further observed that When a question arises as to the interpretation to be put on an enactment what the Court has to do is to ascertain the intent of them that make it and that must of course
be gathered from the words actually used in the statute
To arrive at the real meaning it is always necessary to get an exact conception of the aim scope and object of the whole Act  
To decide the true scope of the present Act therefore we must have regard to all such factors as can legitimately be taken into account in ascertaining the intention of the legislature such as the history of the legislation and the purposes thereof the mischief which it intended to suppress and the other provisions of the statute and construe the language of section 2d in the light of the indications furnished by them Having regard to the circumstances it was held that the law which the State Legislatures moved Parliament to enact under article 2521 was one to control and regulate prize competitions of a gambling character and as such it was held that the Act was valid It has been further observed that where the legislation falls in part within the area allotted to it and in part outside it it is undoubtedly void as to the latter
In the case of R 1
Arora vs State of Uttar Pradesh and Ors  challenge was thrown to the constitu tionality of the amendments made to Ss 40 41 and section 7 by the Land Acquisition Amendment Act Act 31 of 1962 on the ground that it contravened article 312 inasmuch as it makes acquisition for a company before July 20 1962 as being for a public purpose even though it may not be so in fact
Section 7 was also challenged on the ground that it contra venes article 14 inasmuch as it makes an unreasonable discrimi nation in the matter of acquisition for a company before July 20 1962 and after that date insolaf as the former acquisitions are validated on the basis of their being deemed to be for a public purpose while the latter acquisi tions are not so deemed and have to satisfy the test of public purpose
it has been held that if the language of a provision of law is capable of only one construction and if according to that construction 270 the provision contravenes a constitutional provision it must be struck down
A literal interpretation is not always the only interpretation of a provision in a statute and the court has to look at the setting in which the words are used and the circumstances in which the law came to be passed to decide whether there is something implicit behind the words actually used which would control the literal meaning of the words used
It has been further held following the observa tions in The Mysore State Electricity Board vs Bangalore Woollen Cotton and Silk Mills Ltd  Ors 1963 Supp
2 SCR 127 that it is well settled that if certain provisions of law construed in one way will be consistent with the Constitution and if another interpretation would render them unconstitutional the court would bear in favour of the former construction
In the case of Jagdish Pandey vs The Chancellor Univer sity of Bihar  Anr  1 the challenge was to the constitutionality of section 4 of Bihar State Universities University of Bihar Bhagalpur and Ranchi Amendment Act 13 of 1962 as discriminatory and violative of article 14 of the Constitution
It has been urged that section 4 confers uncana lised powers on the Chancellor without indicating any crite rion on the basis of which the power under section 4 can be exercised
It has been observed that  
There is no doubt that if one reads section 4 literal ly it does appear to give uncanalised powers to the Chancel lor to do what he likes on the recommendations of the Com mission with respect to teachers covered by it
We do not however think that the Legislature intended to give such an arbitrary power to the Chancellor
We are of opinion that section 4 must be read down and if we read it down there is no reason to hold that the legislature was conferring a naked arbitrary power on the Chancellor
 Seervai in his book Constitutional Law of India  Third Edition has stated at p 119 that   the Court are guided by the following rules in discharging their solemn duty to declare laws passed by a legislature unconstitutional 1 There is a presumption in favour of constitutionality and a law will not be declared unconstitutional unless the case is so clear as to be free from doubt to doubt the 271 constitutionality of a law is to resolve it in favour of its validity                6 A Statute cannot be declared unconstitutional merely because in the opinion of the Court it violates one or more of the principles of liberty or the spirit of the Constitu tion unless such principles and that spirit are found in the terms of the Constitution
 On a proper consideration of the cases cited hereinbe fore as well as the observations of Seervai in his book Constitutional Law of India  and also the meaning that has been given in the Australian Federal Constitutional Law by Coin Howard it is clear and apparent that where any term has been used in the Act which per se seems to be without jurisdiction but can be read down in order to make it con stitutionally valid by separating and excluding the part which is invalid or by interpretting the word in such a fashion in order to make it constitutionally valid and within jurisdiction of the legislature which passed the said enactment by reading down the provisions of the Act
This however does not under any cicumstances mean that where the plain and literal meaning that follows from a bare reading of the provisions of the Act Rule or Regulation that it confers arbitrary uncanlised unbridled unrestricted power to terminate the services of a permanent employee without recording any reasons for the same and without adhering to the principles of natural justice and equality before the law as envisaged in Article 14 of the Constitution cannot be read down to save the said provision from constitutional invalidity by bringing or adding words in the said legisla tion such as saying that it implies that reasons for the order of termination have to be recorded
In interpreting the provisions of an Act it is not permissible where the plain language of the provision gives a clear and unambigu ous meaning can be interpreted by reading down and presuming certain expressions in order to save it from constitutional invalidity
Therefore on a consideration of the above decisions it is impossible to hold by reading down the impugned provisions of Regulation 9b framed under section 53 of the Delhi Road Transport Act 1950 read with Delhi Road Transport Amendment Act 1971 that the said provision does not confer arbitrary unguided unrestricted and uncanalised power without any guidelines on the authority to terminate the services of an employee without conforming to the prin ciples of natural justice and equality as 272 envisaged in Article 14 of the Constitution of India
I am therefore constrained to uphold the judgment of the Delhi High Court in CWP No 1422 of 1985 and dismiss Civil Appeal No 2876 of 1986
I allow Civil Appeal No1115 of 1976 and agree with the order proposed to be passed thereon by the learned Chief Justice
The other appeals as referred to in detail in the judgment of the learned Chief Justice be placed before the Division Bench of this Court to be dis posed of in accordance with the observations made herein
I agree with conclusion arrived of by my learned brother K Ramaswamy J SHARMAJ
I have gone through the judgments prepared by the learned Chief Justice and by my other learned Brothers
In view 01 the elaborate consideration by them of the ques tions raised by the parties from both points of view
I proceed to indicate my conclusions without further discus sion
I agree with the learned Chief Justice that the rights of the parties in the present cases cannot be governed by the general principle of master and servant and the manage ment cannot have unrestricted and unqualified power of terminating the services of the employees
In the interest of efficiency of the public bodies however
they should have the authority to terminate the employment of undesira ble inefficient corrupt
indolent and disobedient employ ees
but it must be exercised fairly objectively and inde pendently and the occasion for the exercise must be delim ited with precision and clarity
Further there should be adequate reason for the use of such a power
and a decision in this regard has to be taken in a manner which should show fairness
avoid arbitrariness and evoke credibility
And this
in my view is possible only when the law lays down detailed guidelines in unambiguous and precise terms so as to avoid the danger of misinterpretation of the situation
An element of uncertainty is likely to lead to grave and undesirable consequences
Clarity and precision are
there fore
essential for the guidelines
Examining in this back ground I am of the view that Regulation 9b of the Delhi Road Transport Authority Condition of Appointment and Service Regulation 1952 cannot be upheld for lack of adequate and appropriate guidelines
For these reasons Civil Appeal No 2876 of 1986 is dismissed
I also agree that the Civil Appeal No 111576 should be allowed in the terms indicated in the judgment of the learned Chief Justice
The other cases shall be placed before a division bench for final disposal
273 SAWANT
I had the advantage of reading the judg ments of the learned Chief Justice and BC Ray and K Ramaswamy JJ
While with respect I agree with the conclu sion of the learned Chief Justice in Civil Appeal No 111576 with utmost respect to him I am unable to share his view of law on the subject in Civil Appeal No 287686
I am in respectful agreement with the view on the point expressed by Ray and Ramaswamy JJ
in the said Civil Ap peal
I give my separate reasons for the same
The only question involved in all these matters is whether the absolute power given to the Management of the public undertakings under their respective rulesregulations to terminate the services of an employee without assigning any reason is constitutionally valid
It is not necessary to refer to the facts and service rules in each case
It will be sufficient if I reproduce hereinbelow the relevant service regulation of one of the public undertakings viz Delhi Transport Corporation DTC  for short the validity of which is in question in the present case
The said regulation being Regulation 9b of the Delhi Road Transport Authority Conditions of Appoint ment  Service Regulations 1952 hereinafter referred to as the Regulations reads as follows Termination of service a Except as otherwise specified in the appointment orders the services of an employee of the Authority may be terminated without any notice or pay in lieu of notice i During the period of probation and without assigning any reasons thereof ii For misconduct ii On the completion of specific period of appointment iv In the case of employees engaged on contract for a specific period on the expiration of such period in accord ance with the terms of appointment
b Where the termination is made due to reduc tion of establishment or in circumstances other than those mentioned at a above one month s notice or pay in lieu 274 thereof will be given to all categories of employees
c Where a regulartemporary employee wishes to resign from his post under the Authority he shall given threeone month s notice in writing or pay in lieu thereof to the Authority provided that in special cases the General Manager may relax at his discretion the condition regard ing the period of notice of resignation or pay in lieu thereof
 It will be obvious from the provisions of clause b the above that it applies not only in the case of retrenchment of employees on account of reduction in the establishment but also in circumstances other than those mentioned in clause a
The circumstances mentioned in clause a are i probationary period ii misconduct iii completion of specific period of appointment and iv expiration of contractual period of appointment when the appointment is contractual
In other words when the management decides to terminate the services of an employee but not for his mis conduct or during his probation or because his tenure of appointment contractual or otherwise has come to an end it is free to do so without assigning any reason and by merely giving either a notice of the specific period or pay in lieu of such notice
Reduced to simple non technical language clause b contains the much hated and abused rule of hire and fire reminiscent of the days of laissez faire and unrestrained freedom of contract
There is no dispute that although the language differs the substance of the relevant rules of the other public undertakings which are before us is the same and hence what applies to Regulation 9b of the Regulations will apply equally to the relevant rules of the other undertakings as well
The contentions advanced before us on behalf of the managements of the undertakings acknowledge at the very outset that such a service rule without anything further was not only ultra vires the Constitution but was indefensible in law even otherwise being opposed to the principles of natural justice vesting as it does the naked arbitrary power in the management
The contention however was that the rule had to be read down to imply that the power vested by it could be exercised only in certain circumstances and for valid reasons and not otherwise
It was further contended that the rigour of the rule is mitigated because the power granted by it is exercised by a high ranking officer
It was also urged that the exercise of the said power can be con trolled by holding that it is open to scrutiny by the court in individual cases
In other words the contention was that the rule by itself 275 is innocent and legal and its movements are properly con trolled being under elderly care
Its occasional wayward behaviour in unguarded moments can be corrected by chastise ment by the courts
But the rule it was solemnly urged was necessary since otherwise the management of the undertakings will be well high impossible
The controversy before us thus lies in a narrow compass viz whether the rule whatever its admitted demerits should continue to blot the statute book because it is necessary and will be used in certain circumstances only and its use in any other circumstances can be checked by the Court
It can at once be discerned that at the bottom of all the lengthy ardent arguments lies an anxiety not to specify the circumstances under which the power given by the rule will be exercised on the spacious plea that such circum stances cannot be stated in advance and in the interests of the administration of the undertakings it is best that they are not so stated
For once I thought that the framers of our Constitution had committed an irretrievable mistake by ignoring the interests of the Union and the State Govern ments and enumerating such circumstances in the second proviso to Article 3112 of the Constitution
But then I was mistaken
The interests of the public undertakings appear to be more important than those of the Governments
May be they are super Governments
By claiming the privilege not to enumerate even the broad guidelines as contained in Article 3112 the managements of the undertakings are indeed wearing a supercrown
The posture adopted by them is all the more obdurate and untenable in law when they ask the court to read down the rule and read in it circumstances under which the power can be used but maintain that they will under no circumstances mend it nor should they be asked to do it by incorporating in it those very circumstances
With this prologue to the controversy I may now examine the contentions advanced before us
It is contended that it is necessary to retain the rule in its present ambiguous form because it is not possible to envisage in advance all the circumstances which may arise necessitating its use
When we asked the learned counsel for the manage ments whether there were any circumstances which would not be governed by the broad guidelines given in the second proviso to subclause 2 of Article 311 of the Constitution and why at least such intelligible guidelines should not be incorporated in the rule we received no reply
We could appreciate the embarrassment of the counsel and as stated earlier
there lies the nub of the matter
What this Court in the various decisions has struck down is a similar rule in its present naked form without any guideline whatsoever broad or 276 otherwise
It was never the argument on behalf of the em ployees nor indeed is it to day before us that all the possible circumstances in which the rule may be used should be enumerated in it
Their argument has been that at least the broad circumstances under which its exercise may become necessary should be incorporated to avoid an arbitrary use or rather the abuse of power and to guarantee the security of employment
That argument has been accepted by this Court in the past by holding that such a rule is violative of the Constitution and was not necessary to safeguard the inter ests of the undertakings or the interests of the public
The decisions which appear to take an inconsistent view show on close analysis that either they were not dealing with the validity of the rule or were rendered when the dimensions of both Articles 14 and 21 were not expanded as they have been subsequently
In the year 1990 it is not necessary for me to discuss in detail the authorities which have widened the horizons of Article 14 of the Constitution
Some of these precedents are directly on the point in as much as the validity of similar service rules was considered there
It is enough if I summarise the position of law as it obtains to day
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 impoli tic to leave any aspect of its life to be governed by dis cretion when it can conveniently and easily be covered by the rule of law
The employment under the public undertakings is a public employment and a public property
It is not only the under takings 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 endan 277 gered and efficiency is impaired
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 ill afford to be con signed to the limbo of undefined premises and uncertain applications
That will be a mockery of them
Both the society and the individual employees there fore have an anxious interest in service conditions being well defined and explicit to the extent possible
The arbi trary rules such as the one under discussion which are also sometimes described as Henry VIII Rules can have no place in any service conditions
These are the conclusions which flow from Sukhdev Singh  Ors
vs Bhagatram Sardar Singh Raghuvanshi  Anr   Maneka Gandhi vs Union of India 1978 2 SCR 621 The Manager Government Branch Press  Anr
vs DB Felliappa   Managing Director Uttar Pra desh Warehousing Corporation  Anr
vs Vinay Narayan Vajpay ee   AL Kalra vs The Project  Equipment Corporation of India Limited   Workmen of Hindustan Steel Ltd  Anr
vs Hindustan Steel Ltd  Ors
   West Bengal State Electricity Board  Ors
vs Desh Bandhu Ghosh  Ors 1985 2 SCR 1014 Olga Tellis  Ors
vs Bombay Municipal Corporation  Ors
etc 1985 Supp 2 SCR 51 Union of India  Anr
vs Tulsiram Patel  Ors 1985 Supp 2 SCR 13 1 Central Inland Water Trans port Corporation Ltd  Anr
vs Brojo Nath Ganguly  Anr
  OP Bhandari vs Indian Tourism Development Corporation Ltd  Ors   NC Dalwadi vs State of Gujarat  MK Agarwal vs Gurgaon Gramin Bank  Ors 1987 Supp
SCC 643 and Daily Rated Casual Labour employed under P  T Department through Bhartiya Dak Tar Mazdoor Manch etc
vs Union of India  Ors 7
Since before us the rule in question which admitted ly 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 au thorities 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
278 8
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 au thorities 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 dissent ing opinion in Moti Ram Deka etc
vs General Manager NEP Railways Maligaon Pandu etc
  had given vent to it Das Gupta J in his concurring judgment but dealing with the same point of unguided provisions of Rule 1483 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
The reliance placed on the decision in Shri Ram Krishna Dalmia vs Shri Justice SR Tendolkar  Ors  to 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 appro priate 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 proposi tion 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 remem bered that in this case the contention was that although the appropriate government was given power to appoint Com mission of Inquiry into any definite matter of public impor tance 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 argu ment by pointing out that definite matter of public impor tance constituted sufficient guideline to the government
It was not therefore a case of no guideline but of the absence of details of the guideline
279 Of similar nature is the reliance placed on the decision in The Collector of Customs Madras vs Nathella Sampathu Chetty  Anr  for 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 conten tion there that the burden thrown under provisions of Sec tion 178A of the on the possessor of the goods to show that they were not smuggled was violative of Article 191f and g of the Constitution
The obser vations 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 adminis tered 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 reasonable ness 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 Consti tution 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 196 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
In Tata Oil Mills Co Ltd vs Workmen  Anr   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 280 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 as sailed 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
The other authorities relied on behalf of the appellants have similarly no relevance to the point
In Jyoti Pershad vs The Administrator for the Union Territory of Delhi   the Slum Clearance Act which was challenged there contained enough guidelines for the exer cise of the power
In Municipal Corporation of Greater Bombay vs PS Malvenkar  Ors   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
In Organo Chemical Industries  Anr
vs Union of India  Ors
   Section 143 of the Provident Fund Act which was challenged was held to be valid since the Act contained enough guide lines for imposing penal damages
In Champaklal Chimanlal Shah vs The Union of India  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
In Ram Gopal Chaturve di vs State of Madhya Pradesh   it was a case of termination of a temporary Government servant s services
In Air India Corporation Bombay vs VA Rebellow  Anr   the challenge was to the termina tion of services on the ground that it was done in colour able 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
In Hira Nath Mishra  Ors
vs The Principal Rajendra Medical College Ranchi and Anr
  it was the case of the expulsior 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 confi dential complaint received from 36 girl students residing in the girls  hostels alleging that the students in question d 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
281 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 differ ent circumstances
I have not been able to appreciate the relevance of this decision to the point in issue
I may now deal with the second contention vehemently urged on behalf of the appellants
The contention was that if it is possible to save a legislation by reading it down to read in it words expressions or provisions it should not be struck down
In order to save the present rule it was urged on behalf of the appellants that the Court should read in it circumstances under which alone it can be used
What precise circumstances should be read in it however was not stated by the learned counsel
I am afraid that the doctrine of reading down a statute has been wrongly pressed into service in the present case
The authorities relied upon by the learned counsel for the appellants not only do not help the appellants but go against their case
It would be better if I first deal with the authorities cited at the Bar for they will also bring out the correct meaning and application of the said doctrine as well as its limitations
In Re The Hindu Women s Rights to Property Act 1937 and the Hindu Women s Rights to Property Amendment Act 1938 etc
 19411 FCR 12 what fell for consideration was whether the said two Act which were the Central pieces of legislation operated to regulate succession to agricultural land in the then Governors  Provinces
Admittedly under the scheme of the then Government of India Act 1935 after April 1 1937 the Central Legislature was precluded from dealing with the subjects numerated in List II of the 7th Schedule so far as the Governors  Provinces were concerned
Laws with respect to the devolution of agricultural land could be enacted only by the Provincial Legislatures Entry No 21 of List II and wills intestacy and succession save as regards agricultural land appeared as Entry No 7 of List III ie the Concurrent List
Hence it was obvious that the said Acts enacted as they were by the Central Legisla ture could not have dealt with succession to agricultural land so far as the Governors  Provinces were concerned
It is in these circumstances that the Federal Court read the two Acts of 1937 and 1938 as being not operative to regulate succession to agricultural land in the Governors  Provinces but operative to regulate devolution by survivorship of property other than agricultural land
It will thus be obvious that the limited purpose for which the doctrine of reading down was called into play in that case was to ex clude from the purview of the Act a subject which was not within the competence of the legislature which had enacted it
282 In Nalinakhya Bysack vs Shyam Sunder Haldar  Ors
  the expression decree for recovery of pos session in Section 181 of the West Bengal Premises Rent Control Temporary Provisions Act XVII of 1950 fell for consideration and the controversy was whether it included also an order for recovery of possession made under Section 43 of the Presidency Small Cause Court Act 1882 and hence a person against whom an order under the latter provision was made was not entitled to claim relief under the former provision
In that connection the Court observed as follows It must always be borne in mind as said by Lord Halsbury in Commissioner for Special Purposes of Income Tax vs Pem sel LR 189 1 AC 53 1 at p 549 that it is not competent to any Court to proceed upon the assumption that the Legisla ture has made a mistake
The Court must proceed on the footing that the Legislature intended what it has said
Even if there is some defect in the phraseology used by the Legislature the Court cannot as pointed out in Crawford vs Spooner   4 MIA 179 aid the Legislature s defective phrasing of an Act or add and amend or by con struction make up deficiencies which are left in the Act
Even where there is a casus omissus it is as said by Lord Russel of Killowen in Hansraj Gupta vs Official Liquidator of Dehra Dun Mussoorie Electric Tramway Co Ltd 1933 LR 60 IA 13 AIR 1953 PC 63 for others than the Courts to remedy the defect
In our view it is not right to give to the word decree a meaning other than its ordinary accepted meaning and we are bound to say in spite of our profound respect for the opinions of the learned Judges who decided them that the several cases relied on by the respondent were not correctly decided In RMD Chamarbaugwalla vs The Union of India   more or less a similar situation arose
The Parlia ment had enacted the to provide for the control and regulation of the prize competitions and Section 2 of the Act had defined Prize Competitions to mean any competition whether called a crossword prize competition a missing word competition a picture prize competition or by any other name in which prizes are offered for the solution of any puzzle based upon the build ing up arrangement combination or permutation of letters words or figures
The validity ofthe restrictions imposed by the Act was challenged as going beyond Article 196 of the Constitution
The Court took a recourse to the 283 doctrine of reading down and held that the definition of prize competition given in Section 2d of the Act had in view only such competitions as were of gambling nature and no others
The Court further held there that in interpreting an enactment the Court should ascertain the intention of the legislature not merely from a literal meaning of the words used but also from such matters as the history of the legis lation its purpose and the mischief which it seeks to suppress
In Kedar Nath Singh vs State of Bihar 1962 Supp
2 SCR 769 the challenge was to the constitutional validity of Section 124A of the Indian Penal Code
Two views were before this Court with regard to the ambit of the said section
One which held that words deeds or writings constituted the offence of sedition under the said section only when they had the intention or tendency to disturb public tranquility to create public disturbance or to promote disorder
The other view was that it was not an essential ingredient of the offence of sedition under the said section that the words deeds or writings should be intended to or be likely to incite public disorder
The latter view of the section would have rendered it unconstitutional
It is in these circumstances that this Court held that the former view  should be taken which would render the said section consti tutional
The Court in that connection also further held that keeping in mind the reasons for the introduction of the said section and the history of sedition the former view was the correct interpretation of the ambit of the said section
In RL Arora vs State of Uttar Pradesh  Ors
   the validity of Sections 40 and 41 of the Land Acquisition Act 1894 and of Section 7 of the Amending Act was similarly upheld by placing on them construction which would render them constitutional
The relevant provisions were construed to mean that where land is acquired for the construction of a building or work which subserves the public purpose of the industry or work in which a company is engaged or is about to be engaged it can be said that the land was acquired for a public purpose
In Jagdish Pandey vs The Chancellor University of Bihar  Anr
  Section 4 of the Bihar State Uni versities University of Bihar Bhagalpur and Ranchi Amendment Act 13 of 1962 was called in question as being violative of Article 14 of the Constitution on the ground that the said section did not make any provision for giving the teacher a hearing before passing the order thereunder
By that section every appointment dismissal etc
of any teacher of a college affiliated to the University but not belonging to 284 the State made on or after 27th November 1961 and before 1st March 1962 was to be subject to such order as the Chancellor of the University may on the recommendation of the University Service Commission established under Section 48 of the said Act pass with respect thereto
The Court held that the said section was not invalid on the ground of unchannelised power given to the Chancellor because it never authorised the Chancellor to scrutinise the relevant ap pointments for satisfying himself that they were in accord ance with University Act and its Statutes etc
The Court further held that although the said section did not make a provision for giving the teacher a hearing before passing order thereunder such hearing must be read in the said section which the Commission had to give according to the principles of natural justice before making its recommenda tions to the Chancellor
In Shri Umed vs Raj Singh  Ors   one of the questions which fell for consideration was whether the expression to withdraw or not to withdraw from being a candidate referred to the stage of withdrawal of candida ture under Section 37 and whether it applied to a situation where a contesting candidate announced that he does not wish to contest the election or declared his intention to sit down after the last date for withdrawal of candidature under Section 37 had passed
Over ruling its earlier decision in Mohd Yunus Salim s case AIR 1974 SC 12 18 the Court held that the function of the Court is to gather the intention of the legislature from the words used by it and it would not be right for the Court to attribute an intention to the legislature which though not justified by the language used by it accords with what the Court conceives to be reason and good sense and then bend the language of the enactment so as to carry out such presumed intention of the legisla ture
For the Court to do so would be to overstep its lim its
The Court also held that the words used by the legisla ture must be construed according to their plain natural meaning and in order to ascertain the true intention of the legislature the Court must not only look at the words used by the legislature but should also have regard to the con text and the setting in which they occur
The word context has to be construed in a wide sense to mean all the provi sions of the Act which bear upon the same subject matter and these provisions have to be read as a whole and in their entirety each throwing light and illumining the meaning of the other
In Sunil Batra etc
vs Delhi Administration  Ors it was held that under Section 302of the which provided that a prisoner under sentence of death shall be confined in a 285 cell apart from all other prisoners did not mean that he has to be confined cellularly or separately from the rest of the prisoners so as to put him in a solitary confinement
The said expression had a restricted meaning and it only meant that such a prisoner has to be kept in a separate cell but one which is not away from the other cells
Thus the said expression viz shall be confined in a cell apart from all other prisoners in the said provision was read down to exclude solitary confinement
In Excel Wear etc
vs Union of India  Ors
   one of the questions before this Court was whether the Court could read in Section 25 O 2 of the that it was incumbent on the authority to give reasons in his order for refusing permission to close down the undertaking
The Court answered it in the negative
Although in the discussion that follows explicit reasons for the same are not found it is legitimate to presume that the Court did not accept the said contention because of the clear and explicit language of the said section
In Minerva Mills Ltd  Ors
vs Union of India  Ors
   the majority judgment has discussed the limitations of the doctrine of reading down which is rele vant for our purpose
In that case it was contended on behalf of the State that Article 31C should be read down so as to save it from the challenge of unconstitutionality and it was urged that it would be legitimate to read into that Article the intendment that only such laws would be immu nised from the challenge under Article 14 and 19 as did not damage or destroy the basic structure of the Constitution
The Court opined that to do so in that case would involve a gross distortion of the principle of reading down depriving that doctrine of its only or true rationale when words of width are used inadvertently According to the Court the device of reading down is not to be resorted to in order to save the susceptibilities of the law makers nor indeed to imagine a law of one s liking to have been passed
One must at least take the Parliament at its word when especially it undertakes a constitutional amendment    
If the Parliament has manifested a clear intention to exercise an unlimited power it is impermissi ble to read down the amplitude of that power so as to make it limited
The principle of reading down cannot be invoked or applied in opposition to the clear intention of the legislature
We suppose that in the history of the constitu tional law no constitutional amendment has ever been read down to mean the exact opposite of what it says and intends
In fact to accept the argument that we should read down Article 31C so as to make it 286 conform to the ratio of the majority decision in Kesavananda Bharati is to destroy the avowed purpose of Article 31C as indicated by the very heading Saving of certain laws under which Articles 31 3 lB and 31C are grouped
Since the amendment to Article 31C was unquestionably made with a view to empowering the legislatures to pass laws of a particular description even if those laws violate the discipline of Articles 14 and 19 it seems to us impossible to hold that we should still save Article 3 iC from the challenge of unconstitutionality by reading into that Article words which destroy the rationale of that Article and an intendment which is plainly contrary to its proclaimed purpose The Court then dealt with the argument of the learned Additional Solicitor General who contended that it was still open to the Court under Article 3 IC of the Constitution to decide whether the law enacted pursuant to it secured any of the Directive Principles of the State Policy and whether the object of the Directive Principles could not be secured without encroaching upon the Fundamental Rights and the extent to which encroachment was necessary and whether such encroachment violated the basic structure of the Constitu tion
The Court opined that this argument was open to the same criticism to which the argument of Attorney General was open and that it would be sheer adventurism of a most extraordinary nature to undertake the kind of judicial enquiry which according to the learned Additional Solicitor General the courts are free to undertake The Court fur ther held that in the very nature of things it was difficult for a court to determine whether a particular law gave effect to a particular policy and whether a law was adequate enough to give effect to that policy
It was pointed out by the Court that it was not possible for the Court to set aside the law so enacted as invalid merely because in the opinion of the Court the law was not adequate enough to give effect to that policy
The Court further pointed out that the only question open to judicial review was whether there was a direct and reasonable nexus between the impugned law and the provisions of the Directive Principles
The reasonableness was to be examined with regard to such nexus and not with regard to the impugned law
Hence it was not open to the Court to undertake the kind of enquiry suggested by the Additional Solicitor General
That would involve an extensive judicial review which was impermissible in law The Court then pointed out that where the express words of the statute are clear and intended to give power without limitation the statute cannot be saved by reading into them words and intendment of a diametrically opposite meaning and content
The Court opined that provisions such as these provide a 287 striking illustration of the limitations of the doctrine of reading down
In Union of India  Anr
vs Tulsiram Patel etc
  the majority judgment asserts that when the statute expressly excludes the rule of audi alteram partem there is no scope for reintroducing it by a side door to provide the enquiry which has been expressly prohibited
In Elliott Ashton Welsh II vs United States   26 L ed
2nd 308 while making useful observations on the doctrine of reading down and of recasting the statute in his concurring opinion Harlan J stated as follows When the plain thrust of a legislative enactment can only be circumvented by distortion to avert an inevita ble constitutional collision it is only by exalting form over substance that one can justify this veering off the path that has been plainly marked by the statute
Such a course betrays extreme skepticism as to constitutionality and in this instance reflects a groping to preserve the conscientious objector exemption at all cost
I cannot subscribe to a wholly emasculated con struction of a statute to avoid facing a latent constitu tional question in purported fidelity to the salutary doctrine of avoiding unnecessary resolution of constitution al issues a principle to which I fully adhere
It is of course desirable to salvage by construction legislative enactments whenever there is good reason to believe that Congress did not intend to legislate consequences that are unconstitutional but it is not permissible in my judgment to take a lateral step that robs legislation of all meaning in order to avert the collision between its plainly intended purpose and the commands of the Constitution
It must be remembered that although this Court will often strain to construe legislation so as to save it against constitutional attack it must not and will not carry this to the point of perverting the purpose of a statute  or judicially rewriting it
To put the matter another way this Court will not consider the abstract question of whether Congress might have enacted a valid statute but instead must ask whether the statute that Con gress did enact will 288 permissibly bear a construction rendering it free from constitutional defects
The issue comes sharply into focus in Mr Justice Cardozo s statement for the Court in Moore Ice Cream Co vs Rose  379 77 L ed
1245 1270 A statute must be construed if fairly possi ble so as to avoid not only the conclusion that it is unconstitutional but also grave doubts upon that score  
But avoidance of a difficulty will not be pressed to the point of disingenuous evasion
Here the intention of the Congress is revealed too distinctly to permit us to ignore it because of mere misgivings as to power
The problem must be faced and answered
 If an important congressional policy is to be perpetuated by recasting unconstitutional legislation as the prevailing opinion has done here the analytically sound approach is to accept responsibility for this decision
Its justification cannot be by resort to legislative intent as that term is usually employed but by a different kind of legislative intent namely the presumed grant of power to the courts to decide whether it more nearly accords with Congress  wishes to eliminate its policy altogether or extend it in order to render what Congress plainly did intend constitutional
It is thus clear that the doctrine of reading down or of recasting the statute can be applied in limited situa tions
It is essentially used firstly for saving a statute from being struck down on account of its unconstitutionali ty
It is an extention of the principle that when two inter pretations are possible one rendering it constitutional and the other making it unconstitutional the former should be preferred
The unconstitutionality may spring from either the incompetence of the legislature to enact the statute or from its violation of any of the provisions of the Constitu tion
The second situation which summons its aid is where the provisions of the statute are vague and ambiguous and it is possible to gather the intentions of the legislature from the object of the statute the context in which the provi sion occurs and the purpose for which it is made
However when the provision is cast in a definite and unambiguous language and its intention is clear it is not permissible either to mend or bend it even if such recasting is in accord 289 with good reason and conscience
In such circumstances it is not possible for the Court to remake the statute
Its only duty is to strike it down and leave it to the legisla ture if it so desires to amend it
What is further if the remaking of the statute by the courts is to lead to its distortion that course is to be scrupulously avoided
One of the situations further where the doctrine can never be called into play is where the statute requires an extensive additions and deletions
Not only it is no part of the court s duty to undertake such exercise but it is beyond its jurisdiction to do so
Judged in the context of the above principles I am of the view that the doctrine cannot be availed of for saving the present regulation In the first instance the regulation is a part of the service regulations of the employees made by the Delhi Road Transport Authority in exercise of the powers conferred by sub section 1 read with clause c of sub section 2 of Section 53 of the Delhi Road Transport Act 1950 hereinafter referred to as the Act
The object of the Act is to provide for the establishment and the regulation of Road Transport Authority for the promotion of a co ordinated system of road transport in the State of Delhi
There is nothing either in the object of the service regulations of which the present regulation is a part or in the object of the Act which has a bearing on the said Regulation 9b
If anything the object of the Act would require framing of such service regulations as would ensure dedicated and diligent employees to run the undertak ing
The dedication of the employees would pre suppose security of employment and not a constant hanging of the Democle s sword over their head and hence would in any case not bear the existence of such regulation
Secondly the language of the regulation is so crystal clear that no two interpretations are possible to be placed on it and hence it is not permissible to read in it any meaning other than what is clearly sought to be conveyed by it
Thirdly the context of the said regulation makes it abundantly clear that it is meant to be a naked hire and fire rule and the authority has been vested with unguided and arbitrary power to dispense with the services of any category of the employees
Sub clause a of the said Regulation 9 mentions elaborately the circumstances in which the services of an employee can be terminated without any notice or pay in lieu of such notice
Sub clause b follows closely on its heel and states in clear language that when the termination is made due to reduction of establishment or in circumstances other than those mentioned in subclause a one month s notice or pay in lieu thereof is all that is necessary to be given for terminating an employee s services
The intention of the rule making authority therefore is more than clear
It 290 was to give an absolute free hand without any limitations whatsoever to terminate the services of any employee
Both the language of the regulation as well as the context in which it is cast leave no scope for reading into it any further provision
What is more the kind of recasting which is suggested on behalf of the appellants would not only distort the intention of the rule making authority but would also require extensive amendment to it of a very vague nature
The appellants suggest firstly that we should read into the regulation a provision that the concerned employee would be given a hearing
The suggestion itself begs the question Hearing for what Is he to be heard with regard to his misconduct If so it will require that he should first be intimated of the misconduct of which he is guilty
But that kind of a situation is taken care of by sub clause a of the said regulation
There is therefore no need of a separate provision for the same
If on the other hand the services of an employee are to be terminated on grounds other than those mentioned in sub clause a then those grounds being unknown to the employee cannot be met by him even if he is given a hearing
The reading in the rule of a mere provision of a hearing is therefore meaningless
The other suggestion made on behalf of the appellants is still more objectionable
The suggestion was that we should read in the rule all circumstances where it is not possible or necessary to hold an enquiry
1 thought that such situations are capable of being formulated easily and conveniently at least in general terms as is done by the Constitution makers in the second proviso to Article 3112
In fact one of the public undertakings viz Indian Airlines has come out with such regulation being amended Regulation 13 of its Employ ees  Service Regulations and the same has been placed on record by them
What is necessary to note in this connection is that the reading of such circumstances in the existing regulation would require its extensive recasting which is impermissible for the Court to do
1 know of no authority which supports such wide reading down of any provision of the statute or ruleregulation
For all these reasons the doctrine of reading down is according to me singularly inapplicable to the present case and the arguments in sup port of the same have to be rejected
I am therefore of the view that there is no sub stance in this appeal
I would rather that the long departed rule rests in peace at least now
Hence I dismiss Civil Appeal No 287686 with costs
1 allow Civil Appeal No 1115 of 1976 and agree with the order proposed to be passed therein by the learned Chief Justice
291 The rest of the civil appeals and Special Leave Peti tion Civil No 7612 of 1987 be referred to the Division Bench for disposal in accordance with the opinion expressed in Civil Appeal No 2876 of 1986 hereinabove
The applica tion for intervention are allowed
K RAMASWAMY J 1
These batch cases concern a refer ence
the correctness of the ratio rendered in Central Inland Water Transport Company Limited vs Brojonath Ganguly  for short Brojo Nath
The facts in CA No 288686 lie in a short compass and sufficient for deciding the controversy are stated thus 2
The Delhi Transport Corporation a statutory body terminated the services of its three permanent employees the Conductor R 2 Asstt
Traffic Incharge R 3 and the Driver R 4 for their alleged inefficiency by exer cising the power of Regulation 9b of Delhi Road Transport Authority Conditions of appointment and Services Regula tion 1952 for short the Regulation framed under section 53 of the Delhi Road Transport Act 1950 read with Delhi Transport Amendment Act 1971 for short the Act
The first respondent union assailed the validity of the Regula tion which the High Court of Delhi struck it down as offend ing Articles 14 and 16 of the Constitution
The High Court solely relied on the ratio in Brojo Nath whose correctness is the subject of the reference My learned brother My Lord the Chief Justice extensively stated the argument of the counsel on either side
Therefore to avoid needless burden on this judgment I consider it redundant to reiterate them once over
Regulation 9b of the Regulations read thus Termi nation of Services Whether the termination is made due to reduction of establishment or in circumstances other than those mentioned in a above one
month s notice or pay in lieu thereof will be given to all categories of employees as is similar to Rule 9 of the Rules in Brojo Nath s case supra which this Court declared to be Henry VIII clause conferring an absolute arbitrary and unguided power upon that Corporation and was held to be ultra vires of the provisions of the Constitution and was void under section 23 of the 
As stated earlier the correctness thereof is the primary question in these appeals
Sri Ashok Desai the learned Solicitor General vehe mently contended that under ordinary law of master and servant the 292 Corporation is empowered by the Contract of Service to terminate the services of its employees in terms thereof
The declaration in Brojo Nath s case that such a contract is void under section 23 of the or opposed to public policy offending the Fundamental Rights and the Directive Principles is not sound in law
He contends that as a master the Corporation has unbridled right to terminate the contract in the interests of efficient functioning of the Corporation or to maintain discipline among its employ ees
The termination if is found to be wrongful the only remedy available to the employees is to claim damages for wrongful termination but not a declaration as was granted in Brojo Nath s case
In support thereof he cited passages from Chitti on Contract Halsbury s Laws of England and the ratio in Union of India vs Tulsiram PateI 1985 Supp
2 SCR 131  AI He also placed strong reliance on Industrial Law and the decisions of this Court cited by my learned brother the Chief Justice
Alternatively he contended that the relevant regulations would be read down so as to be consistent with articles 14 and 161 read with article 191g of the Constitution and the authority invested with such power could in an appropriate case report to terminate the services of an employee expeditiously without recourse to an elaborated enquiry and opportunity of hear ing
The latter contention of reading down the relevant rules received support from the learned Attorney General Sri Soli J Sorabjee and other counsel appearing for the employ ers
Ms MK Ramamurthi RK Garg and PP Rao learned counsel appearing for the employees resisted these conten tions
The main controversy centres round the question whether the employer Statutory Corporation or instrumental ity or other authority under article 12 of the Constitution has unbridled power to terminate the services of a permanent employee by issue of notice or pay in lieu thereof without inquiry or opportunity in exercise of the power in terms of contract which include statutory Rules or Regulations or instructions having force of law
It is undoubted that under ordinary law of master and servant whether the contract of service is for a fixed period or not if it contains a provisions for termination of service by notice in terms thereof it can be so determined and if the contract finds no provisions to give notice and the contract of service is not for a fixed period law implies giving of a reasonable notice
Where no notice or a reasonable notice was issued before terminating the contract the termination of the contract of service is wrongful and the aggrieved employee is entitled at law to sue for damages
But this common law principle could be applied to the employees appointed by a Statutory Corporation or authority or an instrumentality within 293 the meaning of Article 12 of the Constitution is the square question
It is not disputed that Delhi Road Transport Corporation is a Statutory Corporation under the Act and the Regulations are statutory and its employees are entitled to the fundamental Rights enshrined in Part III of the Consti tution
It is well settled law by a heed role of decisions of this Court that the Corporation or a Statutory Authority or an instrumentality or other authority under article 12 of the Constitution is not free like an ordinary master a private employer to terminate the services of its employ ees at its whim or caprices or vagary
It is bound by the Act and the Regulation and the paramount law of the land the Constitution
Nature of the Power Statutory Authority to terminate the services of its employees
In Sukhdev Singh vs Bhagatram     the Constitution Bench of this Court put a nail in the coffin of the play of the private master s power to hire and fire his employees and held that Regula tions or Rules made under a Statute apply uniformly to everyone or to all members of the same group or class
They impose obligations on the statutory authorities who cannot deviate from the conditions of service and any deviation will be enforced through legal sanction of declaration by Courts to invalidate the actions in violation of the Rules or Regulations
The statutory bodies have no free hand in framing the terms or conditions of service of their employ ees
The Regulations bind both the authorities and also the public
The powers of the statutory bodies are derived controlled and restricted by the Statutes which create them and the Rules and Regulations framed thereunder
The Stat ute thereby fetters on the freedom of contract
Accordingly declaration was granted that dismissal or removal of an employee by statutory Corporation in contravention of statu tory provision as void
Mathew J in a separate but concur rent judgment held that a Public Corporation being the creation of a Statute is subject to statutory limitations as a State itself
The preconditions of this Part II viz that the corporation is created by Statute and the existence of power in the corporation is to invade a statutory right of the individual
Therefore the governing power must be subject to fundamental statutory limitations
The need to subject the power centres to the control of the Constitution requires an expansion of concept of State action
The duty of State is affirmative duty seeing that all essentials of life are made available to all persons
The task of State today is to make the achievement of good life both by remov ing obstacles in the path of such achievement and by assist ing individual in realis 294 ing his ideal of self perfection
The employment under public corporation is a public employment and therefore the employee should have the protection which appurtains to public employment
emphasis supplied
The Court must therefore adopt the attitude that declara tion is a normal remedy for a wrongful dismissal in case of public employees which can be refused in exceptional circum stances
The remedy of declaration should be a remedy made an instrument to provide reinstatement in public sector
This principle was extended to numerous instances where the termination of services of the employees of a statutory corporation was affected in violation of the principles of natural justice or in transgression of the statutory rules etc
In UP State Warehousing Corporation vs NV Vajpayee at p 780 F to G and 783G to 784A this Court held that statutory body cannot terminate the services of its employees without due enquiry held in accordance with the principles of natural justice
The persons in public employment are entitled to the protection of Articles 14 and 16 of the Constitution when the service was arbitrarily terminated
The question therefore is whether the statuto ry corporations are entitled to be invested with absolute freedom to terminate the services of its employees in terms of the contract of service
In Ramana vs International Airport Authority of India   1979 SC
p 1628 this Court held that expression of welfare and social service functions necessitates the State to assume control over natural and economic resources and large scale natural and commercial activities
For the attainment of socio economic justice there is vast and notable increase of frequency with which ordinary citizens come into relationship of direct encoun ters with the State
The Government in a welfare state is the regulator and dispenser of social services and provider of large number of benefits including jobs etc
Thousands of people are employed in CentralState Government Services and also under local authorities
The Government therefore cannot act arbitrarily
It does not stand in the same posi tion as a private individual
In a democratic Government by rule of law the executive Government or any of its officers cannot held to be possessed of arbitrary power over the interests of the individuals
Every action of the Government must be informed with reason and should be free from arbi trariness
That is the very essence of rule of law
It was further held It was therefore be taken to be the law that where the Government is dealing with the public whether by way of 295 giving jobs or entering into contracts   the Government cannot act arbitrarily at its sweet will and like a private individual deal with any person it pleases but its action must be in conformity with standard of norm which is not arbitrary irrational or irrelevant
The power of discretion of the Government in the matter of grant of largess including award of jobs      must be conditioned and structured by rational relevant and non discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases the action or the Government would be liable to be struck down unless it can be shown by the Government that the departure was not arbitrary but was based on some valid principle which in itself was not irrational unreasonable or discriminatory
 This statement of law though was made in the context of contractual relations it is a general law with width and amplitude which permeates the entire spectrum of actions legislative as well as executive
The Constitution is the permanent law of the land and its preamble is an integral part thereof
It assures Social and Economic Justice and also accords equality of opportuni ty and status as well as equality before law assuring digni ty of the individual
The Constitution Forty Second Amend ment Act introduced Socialism in the Preamble and made explicit of what is latent in the Constitutional Scheme
Article 14 accords equal protection of law and equality before law
Article 161 provides right to an appointment or employment to an office or post under the State
Article 191g assures right to occupation or avocation
article 21 assures right to life and any deprivation is as per the procedure established by law
In General Manager Southern Railway vs Rangachari 1962 SCR page 586 it was held that matters relating to employment would include salary increments leave gratuity pension age of superannuation etc
Similarly in respect of appointments such matters would include all the terms and conditions of service per taining to the said office
All those matters are included in the expression matters relating to employment or ap pointment within the meaning of article 161 of the Constitu tion
This was reiterated in State of MPv
Shardul Singh 19701 3 SCR page 302 at 305 306 that conditions of service include holding of posts right from the time of appointment till his retirement beyond it like pension etc
The middle class lower middle class and lower classes  educated 296 youths generally if not mainly depend on employment or appointment to an office or posts under the States which include corporations statutory body or instrumentality under article 12 of the Constitution as source to their liveli hood and means to improve their intellectual excellence and liner facets of life individually and collectively as a member of the society so that himself and his dependents are economically sound educationally advanced and socially dignified so that the nation constantly rises to standards of higher level in an egalitarian social order under rule of law as is obligated under article 51AJ 
Right to life scope of 9
The right to life a basic human right assured by article 21 of the Constitution comprehends something more than mere animal existence ie dignity of the individual
Field J in Munn vs Illinois  and 154 held that by the term life as here used something more is meant than mere animal existence
The inhibition against its deprivation extends to all those limbs and faculties by which life is enjoyed
The deprivation not only of life but of   if it a efficacy be not lettered away by Judicial decision
In Kharak Singh vs State of UP 1964 1 SCR 332 this Court approved the definition of life given by Field J in his dissenting opinion
In Olga Tellis vs Bombay Munici pal Corporation 1985 2 Suppl
SCR page 51 at 79 this Court further laid that an equally important facet of the right to life is the right to livelihood because no person can live without the means of livelihood
If the right to livelihood is not treated as a part of the Constitutional right to life the easiest way of depriving a person of his right to life would be to deprive him of his means of live lihood to the point of abrogation  
That which alone can make it possible to live leave aside which makes life liveable must be deemed to be an integral component of the right to life  
The motive force which propels their desertion of their hearths and homes in the village is the struggle for survival that is the struggle for life
So unimpeachable is the nexus between life and the means of livelihood
Right to life does not only mean physicaI exist ence but includes basic human dignity vide Menaka Gandhi vs Union of India 1978 2 SCR 621 John Stuart Mill in his Consideration of Representative Govt  said years ago that the power of the State is to promote virtue and intelli gence of the people
In State of Maharashtra vs Chunder Bhan   Chinnappa Reddy J held that public employment opportunity is a national wealth in which all citizens are equally entitled to share and Varadarajan J held that public employment is the property of the nation which has to be shared equally
This rule 297 was laid when rule 151iib  of BCS Rules to pay subsistence allowance during period of suspension  Rs 1 per month pending departmental enquiry was challenged and declared the rule as ultra vires by operation of articles 14 16 21 and 3112
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 articles 14 161 191g and 21
Could statutory law arbitrarily take away or abridged or abrogated it In Board of Trustees Port of Bombay vs Dilip Kumar    this 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 liner 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
In Workmen of Hindustan Steels Ltd vs Hindustan Steel Ltd  Ors  it was held that the standing order 31 which confers arbitrary uncanalised and drastic power on the Manager to dismiss an employee without enquiry apart from being in violation of basic requirement of natu ral justice is such a drastic nature as to effect the livelihood and put a stigma on the character of the workman
In Francis Corallie vs UT of Delhi    this Court held that it is for the Court to decide in exercise of its constitutional power of judicial review whether the deprivation of life or personal liberty in a given case is by procedure which is reasonable fair and just and fair treatment
The tests of reason and jus tice cannot be abstract nor can be divorced from the actual ities of life and the needs of the Society
The tests ap plied must be pragmatic and purposive lest they cease to be reasonable
Reasonableness must be meaningful and effica cious in content as well as in form
The procedure provided in Rule 9b or allied rules therefore must not be just fair and reasonable so as to be in conformity with articles 14 and 21 is the cry of the case
The position of the public employee is whether status The distinguishing feature of public employment is status
In Roshanlal Tandon vs Union of India  at 195 196 the Constitution Bench held that the legal position of a Government servant is more one of status than of contract
The hall mark of status 298 is the attachment to a legal relationship of rights and duties imposed by the public law and not by mere agreement of the parties
The employment of the Government servant and his terms of service are governed by statute or statutory rules
Once he is appointed to the post or office the Government servant acquires a status and his rights and obligations are no longer determined by consent of both parties but by Statute or Statutory Rules
The relationship between the Government and its servants is not like an ordinary contract of service between a master and servant
The legal relationship is in the nature of status
The duties of statute are fixed by the law and in the enforce ment of the duties society has an interest
Status is a condition of membership of a group of which powers and duties are exclusively determined by law and not by agree ment between the parties concerned
In Calcutta Dock Labour Board vs Jarfar Imam it was held that the statutory scheme of employment confers on the worker a status
An unlawful act is an interference with status
This view was followed in Sirsi Municipality vs Cecelia Kom Francis Tellis  Beg J as he then was held that the principles applicable to the relation of a Private Master and servant unregulated by statute could not apply to the cases of a public statutory body exercising powers of punishment lettered or limited by statute and relevant rules of procedure
This Court in a recent decision extended all the benefits of pay scales to all the Central Government Corporate Sector employees
It is thus I hold that the employees of the corporations statutory authority or instrumentality under article 12 have statutory status as a member of its employees
The rights and obligations are governed by the relevant statutory provisions and the em ployer and employee are equally bound by that statutory provisions
Nature of the right of a permanent employee to a post In Purushottam Lal Dhingra vs Union of India  at 84 1 843 it was held that the appointment to a perma nent post may be substantive or on probation or on officiat ing basis
A substantive appointment to a permanent post in a public service confers normally substantive right to the post and he becomes entitled to hold a lien on the post
He is entitled to continue in office till he attains the age of superannuation as per rules or is dismissed or removed from service for inefficiency misconduct or negligence or any other disqualification in accordance with the procedure prescribed in the rules and fair and reasonable opportunity of being heard or on compulsory retirement or in certain circumstances subject to the conditions like re employment on abolition of post
In Motiram Daka vs General Manager 1964 5 299 SCR 683 at 718 721AIR 1964 SC 600 at 608  609 majority of seven Judges  Bench held that a permanent post carries a definite rate of pay without a limit of time and a servant who substantively holds a permanent post has a title to hold the post to which he is substantively appointed and that in terms means that a permanent servant has a right to hold the post until of course he reaches superannuation or until he is compulsorily retired under the relevant rule
If for any other reason that right is invaded and he is asked to leave the 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 penalty and amounts to removal
In other words termination of service of a permanent servant otherwise than on superannuation of compulsory retirement must per se amount to his removal and so by Rule 1483 or Rule 1493 of Rly
Establishment Rules if such a termination is brought about the rule clearly contravenes article 3112 and must be held to be invalid
A permanent employment assures security of tenure which is essential for the efficiency and incorruptibility of public administration
In Guruder Singh Sidhu vs State of Pepsu  another Constitu tion Bench held that for efficient administration of the State it is absolutely essential that permanent public servant should enjoy a sense of security of tenure
The safeguard which article 3112 affords is no more than this that in case it is intended to dismiss or remove or reduce them in rank a reasonable opportunity should be given to them of showing cause against the action proposed to be taken in regard to them
In Motiram Daka s case supra it was further held that in a modern democratic State the efficiency and incorruptibility of public administration is of such importance that it is essential to afford to civil servants adequate protection against capricious action from their superior authority
If a permanent civil servant is guilty of misconduct he should no doubt be proceeded against promptly under the relevant disciplinary rules subject of course to the safeguard prescribed by article 3112 but in regard to honest straight forward and effi cient permanent civil servants it is of utmost importance even from the point of view of the State that they should enjoy a sense of security which alone can make them inde pendent and truly efficient
The sword of damocles hanging over the heads of permanent railway servants in the form of Rule 1483 or Rule 1493 would inevitably create a sense of insecurity in the minds of such servants and would invest appropriate authorities with very wide powers which may conceivably be abused
Thereby this Court laid emphasis that a permanent employee has a right or lien on the post he holds until his tenure of service reaches superannuation so as to earn pension at the evening of his life unless it is determined as 300 per law
An assurance of security of service to a public employee is an essential requisite for efficiency and incor ruptibility of public administration
It is also an assur ance to take independent drive and initiative in the dis charge of the public duties to alongate the goals of social justice set down in the Constitution
This Court in Daily Rated Casual Labour vs Union of India 1 SCC 122 at 130 131 further held that the right to work the right to free choice of employment the right to just and favourable conditions of work the right to protection against unemployment etc and the right to security of work are some of the rights which have to be ensured by appropriate legislative and executive measures
It is true that all these rights cannot be extend ed simultaneously
But they do indicate the socialist goal
The degree of achievement in this direction depends upon the economic resources willingness of the people to produce and more than all the existence of industrial peace throughout the country
Of those rights the question of security of work is of most importance
If a person does not have the feeling that he belongs to an organisation engaged in pro duction he will not put forward his best effort to produce more
emphasis supplied That sense of belonging arises only when he feels that he will not be turned out of employ ment the next day at the whim of the management
It is for this reason it is being repeatedly observed by those who are in charge of economic affairs of the countries in different parts of the world that as far as possible security of work should be assured to the employees so that they may contrib ute to the maximisation of production
It must therefore be held that a permanent employ ee of a statutory authority corporation or instrumentality under article 12 has a lien on the post till he attains super annuation or compulsorily retired or service is duly termi nated in accordance with the procedure established by law
Security of tenure ensures the benefit of pension on retire ment
Dismissal removal or termination of hisher service for inefficiency corruption or other misconduct is by way of penalty
He she has a right to security of tenure which is essential to inculcate a sense of belonging to the serv ice or organisation and involvement for maximum production or efficient service
It is also a valuable right which is to be duly put an end to only as per valid law
How to angulate the effect of termination of service Law is a social engineering to remove the existing irabal ance and 301 to further the progress serving the needs of the Socialist Democratic Bharat under rule of law
The prevailing social conditions and actualities of life are to be taken into account to adjudging whether the impugned legislation would subserve the purpose of the society
The arbitrary unbrid dled and naked power of wide discretion to dismiss a perma nent employee without any guidelines or procedure would tend to defeat the constitutional purpose of equality and allied purposes referred to above
Courts would take note of actu alities of life that persons actuated to corrupt practices are capable to maneuver with higher echolons in diverse ways and also camouflage their activities by becoming syco phants or chronies to the superior officers
Sincere honest and devoted subordinate officer unlikely to lick the boots of the corrupt superior officer
They develop a sense of self pride for their honesty integrity and apathy and inertia towards the corrupt and tent to undermine or show signs of disrespect or disregard towards them
Thereby they not only become inconvenient to the corrupt officer but also stand an impediment to the on going smooth sipbony of cor ruption at a grave risk to their prospects in career or even to their tenure of office
The term efficiency is an elusive and relative one to the adept capable to be applied in diverse circumstances
if a superior officer develops likes towards sycophant tough corrupt he would tolerate him and found him to be efficient and pay encomiums and corruption in such eases stand no impediment
When he finds a sincere devoted and honest officer to be inconvenient it is easy to cast himher off by writing confidential with delightfully vague language imputing to be not upto the mark  wanting public relations  etc
Yet times they may be termed to be security risk to their activities
Thus they spoil the career of the honest sincere and devoted officers
In stances either way are gallore in this regard
Therefore one would be circumspect pragmatic and realistic to these actualities of life while angulating constitutional validity of wide arbitrary uncanalised and unbriddled discretionary power of dismissal vested in an appropriate authority either by a statute or a statutory rule
Vesting arbitrary power would be a feeding ground for nepotism and insolence in stead of subserving the constitutional purpose it would defeat the very object in particular when the tribe of officers of honesty integrity and devotion are struggling under despondence to continue to maintain honesty integrity and devotion to the duty in particular when moral values and ethical standards are fast corroding in all walks of life including public services as well
It is but the need and imperative of the society to pat on the back of those band of honest hard working officers of integrity and devotion to duty
It is the society s interest to accord such officers security of service and avenues of promotion
302 That apart the haunting fear of dismissal from service at the vagary of the concerned officer would dry up all springs of idealism of the employee and in the process coarsens the conscience and degrades his spirit
The nobler impulses of minds and the higher values of life would not co exist with fear
When fear haunts a man happiness van ishes
Where fear is justice cannot be where fear is freedom cannot be
There is always a carving in the human for satisfaction of the needs of the spirit by arming by certain freedom for some basic values without which life is not worth living
It is only when the satisfaction of the physical needs and the demands of the spirit coexists there will be true efflorescence of the human personality and the free exercise of individual faculties
Therefore when the Constitution assures dignity of the individual and the right to livelihood the exercise of the power by the executive should be cushioned with adequate safeguards for the rights of the employees against any arbitrary and capracicous use of those powers
Contract of service must be consistent with the Constitu tion
From the above perspective vis a vis constitutional social goals and rights of the citizens assured in the preamble Parts III  IV ie the trinity the question whether the statutory corporation or the instrumentality or the authority under article 12 of the Constitution is validly empowered to terminate the services of a permanent employee in terms of the contract of employment or rules without conducting an enquiry or an opportunity of show cause of proposed order of termination of the service
The operating in British India was extended to the merged States in 1949  1950 except to the State of Jammu  Kashmir
Therefore after Bharat attained independ ence on August 15 1947 the is applica ble to all States except Jammu  Kashmir
By operation of Article 372 of the Constitution the continues to be in operation subject to the provisions of the Constitution
The is an amending as well as consolidating Act as held in Ramdas Vithaldas Durbar vs
section Amerchand  Co 43 Indian Appeals 164
Thereby common law principles applicable in England if they are inconsist ent with or derogation to the provisions of the or the Constitution to that extent they stand excluded
Any law muchless the provisions of Contract Act are inconsistent with the fundamental rights which guaran teed in Part III of the Constitution by operation of Arti cles 13 of the Constitution are void
Section 2h of the defines an agreement including an agreement of service and becomes a Contract only when it is enforceable by 303 law
If it is not enforceable it would be void by reason of section 2g thereof
The question therefore is whether the contract of service or Regulation 9b in derogation to the Fundamental Rights guaranteed in of the Consti tution is valid in law and would be enforceable
Contract whether changeable with changing times
The law of contract like the legal system itself involves a balance between competing sets of values
Freedom of contract emphasises the need of stability certainty and predictability
But important as is values are they are not absolute and there comes a point where they face a serious challenge against them must be set the values of protecting the weak oppressed and the thoughtless from imposition and oppressed
Naturally at a particular time one set of value tends to be emphasised at the expense of the other as the time changes the values get changed and the old values are under replacement and new values take their due place
Though certainty and predictability in ordinary commercial contract law is emphasised and insisted upon the need for progress of the society and to removing the disa bilities faced by the citizens and their relations when encounter with the State or its instrumentalities are in conflict with the assured constitutional rights demand new values and begin to assert themselves for no civilised system of law can accept the implications of absolute sanc tity of contractual obligations and of their immutability
In paragraph 4 of Chitty on Contracts 25th Edition Volume I it is stated that freedom of contract is a rea sonable 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 interest of the commu nity at large
In Anson s Law of Contract at p 6  7 stated the scope of freedom of contract in the changing circumstances thus Today the position is seen in a very different light
Freedom of contract 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 econom ic interests of the community at large
In the more compli cated social and industrial conditions of a collectivist society it has ceased to have much idealistic attraction
It is now realised that economic equality often does not exists in any real sense and that individual interests have to be 304 made to subserve those of the community hence there has been a fundamental change both in our social outlook and in the policy of the legislature towards contract and the law today interferes at numerous points with the freedom of the par ties to make what contract they like
The relation between employers and employed for example have been regulated by statutes designed to ensure that the employees condition of work are safe that he is properly protected against redun dancy and that he knows his terms of service
The public has been protected against economic pressure by such measures as the Rent Acts the supply of goods implied terms at the consumer Credit Act and other similar enactments
These legislative provisions will override any contrary terms which the parties may make for themselves
Further the legislature has intervened in the Restrictive Trade Practice Act 1956 and the Fair Trading Act 1973 to promote competi tion in industry and to safeguard the interests of consum ers
This intervention is specially necessary today when most contracts entered by ordinary people are not the result of individual negotiation
It is not possible for a private person to settle the terms of his agreement with a British Railways Board or with a local electricity authority
The standard form  contract is the rule
He must either accept the terms of this contract in toto or go without
Since however it is not feasible to deprive onself of such necessary services the individual is compelled to accept on those terms
In view of this fact it is quite clear that freedom of contract is now largely an illusion
The trinity of the Constitution assure to every citizen Social and Economic Justice Equality of Status and of opportunity with dignity of the person
The State is to strive to minimise the inequality in income and eliminate inequality in status between individuals or groups of peo ple
The State has intervened with the freedom of contract and interposed by making statutory law like Rent Acts Debt Relief Acts Tenancy Acts Social Welfare and Industrial Laws and Statutory Rules prescribing conditions of service and a host of other laws
All these Acts and Rules are made to further the social solidarity and as a step towards establishing an egalitaran socialist order
This Court as a court of constitutional conscience enjoined and a jealously to project and uphold new values in establishing the egali tarian social order
As a court of constitutional function ary exercising equity juris 305 diction this Court would relieve the weaker parties from unconstitutional contractual obligations unjust unfair oppressive and unconscienable rules or conditions when the citizen is really unable to meet on equal terms with the State
It is to find whether the citizen when entered into contracts or service was in distress need or compelling circumstances to enter into contract on dotted lines or whether the citizen was in a position of either to take it or leave it and if it finds to be so this Court would not shirk to avoid the contract by appropriate declaration
Therefore though certainty is an important value in normal commercial contract law it is not an absolute and immutable one but is subject to change in the changing social condi tions
In Brojonath s case Madan J elaborately consid ered the development of law relating to unfair or unreasona ble terms of the contract or clauses thereof in extenso and it is unnecessary for me to traverse the same grounds once over
The learned Judge also considered the arbitrary unfair and unbridled power on the envil of distributive justice or justness or fairness of the procedure envisaged therein
The relevant case law in that regard was dealt with in extenso in the light of the development of law in the Supreme Court of United States of America and the House of Lords in England and in the continental countries
To avoid needless burden on the judgment I do not repeat the same reasoning
I entirely agree with the reasoning and the conclusions reached therein on all these aspects
Whether State can impose unconstitutional Conditions
The problem also would be broached from the angle whether the State can impose unconstitutional conditions as part of the contract or statute or rule etc
In 1959 60 73 Harvard Law Review in the Note under the Caption Unconsti tutional Condition  at page 1595 96 it is postulated that the State is devoid of power to impose unconstitutional conditions in the contract that the power to withhold lar gess has been asserted by the State in four areas ie 1 regulating the right to engage in certain activities 2 Administration of Government welfare programme 3 Govern ment employment and 4 Procurement of contracts
It was further adumberated at pages 1602 1603 thus The sovereign s constitutional authority to choose those with whom it will contract for goods and services is in effect a power to withhold the benefits to be deprived from economic dealings with the government
As government 306 activity in the economic sphere increases the contracting power enables the government to control many hitherto unreg ulated activities of contracting parties through the imposi tion of conditions
Thus regarding the government as a private entrepreneur threatens to impair constitutional rights  
The Government unlike a private individual is limited in its ability to contract by the Constitution
The federal contracting power is based upon the Constitu tion s authorisation of these acts necessary and proper  to the carrying out of the functions which it allocates to the national government Unless the objectives sought by terms and conditions in government contracts requiring the surren der of rights are constitutionally authorised the condi tions must fall as ultra vires exercise of power
 Again at page 1603 it is further emphasised thus When conditions limit the economic benefits to be derived from dealings with the government to those who forego the exercise of constitutional rights the exclusion of those retaining their rights from participation in the enjoyment of these benefits may be a violative of the prohibition implicit in the due process clause of fifth amendment and explicit in the equal protection clause of the fourteenth amendment against unreasonable discrimination in the Govern mental bestow of advantages
Finally disabling those exer cising certain rights from participating in the advantages to be derived from contractual relations with the government may be a form of penalty lacking in due process
To avoid invalidation for any of the above reasons it must be shown that the conditions imposed are necessary to secure the legitimate objectives of the contract ensure its effective use or protect society from the potential harm which may result from the contractual relationship between the govern ment and the individual
Professor Guido Calabresi of Yale University Law School in his Retroactivity Paramount power and Contractu al Changes  196 1 62 71 Yale Law Journal P 119 1 at 1196 stated that the Government can make contracts that are necessary and proper for carrying out any of the specific clauses of the Constitution or power to spend for general welfare
The Federal Government has no power inherent or sovereign other than those specifically or explicitly granted to it by 307 the Constitution
At page 1197 it is further stated thus The Government acts according to due process standards for the due process clause is quite up to that task without the rule
Alterations of Government contracts are not desirable in a free country even when they do not constitute a tak ing  of property or impinge on questions of fundamental fairness of the type comprehended in due process
The gov ernment may make changes but only if war or commerce re quire them and not on the broader and more ephemeral grounds that the general welfare would be served by the change
Any other rule would allow the Government to which almost at will
These principles were accepted and followed by the Andhra Pradesh High Court in V Raghunadha Rao vs State of Andhra Pradesh dealing with AP Stand ard specification Clauses 11 29 59 62b and 73 and declared some clauses to be ultra vires of Articles 14 191g and 21 of the Constitution and Sections 23 and 27 of the Contract Act
In Brojonath s case supra after elaborate consid eration of the doctrine of reasonableness or fairness of the terms and conditions of the contract vis a vis the relative bargaining power of the contracting parties this Court laid down that the principles deductable from the discussion made therein is in consonance with right or reason intended to secure socio economic justice and con forms to mandate of the equality clause in Article 14
The principle laid was that courts will not enforce and will when called upon to do so strike down an unfair and unrea sonable contact or an unfair and unreasonable clause in a contract entered into between parties who are not equal in bargaining power  
It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them
It will also apply where a man has no choice or rather no meaningful choice but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract however unfair unreasonable and unconscienable a clause in that contract or form or rules may be
This principle however will not apply where the bargaining power of the contracting parties is equal or almost equal or where both parties are businessmen and the contract is a commercial transaction
308 22
In today s complex world of giant corporations with their vast infra structural organisations and with the State through its instrumentalities and agencies has been entering into almost every branch of industry and commerce and field of service there can be myriad situations which result in unfair and unreasonable bargains between parties possess wholly disproportionate and unequal bargaining power
These cases can neither be enumerated nor fully illustrated
The court must judge each case on its own facts and circum stances
Public policy whether changeable
This Court also angulated the question from the perspective of public policy or contract being opposed to public policy
The phrases public policy opposed to public policy or contrary to public policy are incapable of precise definition
It is valued to meet the public good or the public interest
What is public good or in the public interest or what would be injurious or harmful to the public good or the public interest vary from time to time with the change of the circumstances
New concepts take place of old one
The transactions which were considered at one time as against public policy were held by the courts to be in public interest and were found to be enforceable
Therefore this Court held in Brojonath s case that there has been no well recognised head of public policy the courts have not shirked from extending it to new transactions and changed circumstances and have at times not even flinched from inventing a new head of public Lord Wright in his legal Essays and Addresses Vol
III p 76 and 78 stated that public policy like any other branch of the common law ought to be and I think is governed by the judicial use of precedents  
If it is said that rules of public policy have to be moulded to suit new condi tions of a changing world that is true but the same is true with the principles of the cannon law generally Lord Lindley held in Janson vs Driefontein Mines Ltd 1902 ACp 484 and 507 that a contract or other branch which is against public policy ie against the general interest of the country is illegal
In Anson s Law of Contract 24th Edition by AG Guest at p 335 stated the scope of variability of public policy attune to the needs of the day and the march of law thus At the present time however there is an increasing recog nition of the positive function of the Courts in matters 309 of public policy The law relating to public policy cannot remain immutable
It must change with the passage of time
The wind of change blows upon it 
Some aspects of public policy are more susceptible to change than others during the policy of the law has on certain subjects been worked into a set of tolerably definite rules
The principles applicable to agreements in restraint of trade for example have on a number of occasions been modified or extended to accord with prevailing economic conditions and this process still continues
In law of Contract by GH Treitei 7th Edition at p 366 on the topic scope of the public policy  it is stated thus Public policy is a variable notion depending on changing manners morals and economic conditions
In theory this flexibility of the doctrine of public policy could provide a judge with an excuse for invalidating any contract which he violently disliked
On the other hand the law does adapt itself to change in economic and social conditions as can be seen particularly from the development of the rules as to contracts in restraint of public policy has often been recognised judicially
Thus Lord Haldane has said What the law recognises as contrary to public policy turns out to vary greatly from time to time
 And Lord Denning has put a similar point of view with a good man in the saddle the unruly horse can be kept in control
It can jump over obsta cles
 The present attitude of the Courts represents a compromise between the flexibility inherent in the notion of public policy and the need for certainty in commercial affairs
From this perspective it must be held that in the absence of specific head of public policy which covers a case then the court must in consonance with public con science and in keeping with public good and public interest invent new public policy and declare such practice or rules that are derogatory to the constitution to be opposed to public policy
The rules which stem from the public policy must of necessity be laid to further the progress of the society in particular when social change is to bring about an egalitarian social order through rule of law
In deciding a case which may not be covered by authority courts have before them the beacon light of the trinity of the Constitu tion and the play of legal light and shade must lead on the path of justice social 310 economical and political
Lacking precedent the court can always be guided by that light and the guidance thus shed by the trinity of our Constitution
Public policy can be drawn from the Constitution
Sutherland in his Statutes and Statutory Construc tion Third Edition Vol
3 paragraph 5904 at page 13 1 132 has stated that the most reliable source of public policy is to be found in the federal and state constitutions
Since constitutions are the superior law of the land and because one of their outstanding features is flexibility and capaci ty to meet changing conditions constitutional policy pro vides a valuable aid in determining the legitimate bound aries of statutory meaning
Thus public policy having its inception in constitutions may accomplish either a restrict ed or extended interpretation of the literal expression a statute
A statute is always presumed to be constitu tional and where necessary a constitutional meaning will be inferred to preserve validity
Likewise where a statute tends to extend or preserve a constitutional principle reference to analogous constitutional provisions may be of great value in shaping the statute to accord with the statu tory aim or objective
Article 14 sheds the light to public policy to curb arbi trariness
26A In Basheshar Nath vs The Commissioner of Income Tax  Anr 1959 Suppl
1 SCR 528 SR Das CJ held that Article 14 is founded on a sound public policy recognised and valued in all States and it admonishes the State when it disregards the obligations imposed upon the State
26B In EP Royappa vs State of Tamil Nadu  Ant  Bhagwati
J as he then was held that Article 14 is the genus while Article 16 is a specie
Arti cle 16 gives effect to the doctrine of equality in all matters relating to public employment
The basic principle which
therefore informs both Articles 14 and 16 is equali ty and inhibition against discrimination
Equality is a dynamic concept with many aspects and dimensions and it cannot be cribbed cabined and confined within traditional and doctrinaire limits
From a positivistic point of view
equality is antithetic to arbitrariness
In fact equality and arbitrariness are sworn enemies one belongs to the rule of law in a republic while the other to the whim and ca price of an absolute monarch
Where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore 311 violative of Article 14 and if it affects any matter relat ing to public employment it is also violative of Article 16
Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment
In Menaka Gandhi s case it was further held that the principle of reasonableness which legally as well as philosophically is an essential element of equality or non arbitrariness pervades Article 14 like a brooding omnipresence
In Rama na s case it was held that it is merely a judicial formula for determining whether the legislative or
executive action in question is arbitrary and therefore constituting denial of equality
If the classification is not reasonable and does not satisfy the two conditions namely rational rela tion and nexus the impugned legislative or executive action would plainly be arbitrary and the guarantees of equality under Article 14 would be breached
Wherever therefore there is arbitrariness in State action whether it be of legislature or of the executive or of an authority under Article 12 Article 14 immediately springs into action and strikes down such State action
 In fact the concept of reasonableness and non arbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the constitution
In Volga Tellies Case it was held that the Constitu tion is not only paramount law of the land but also it is a source of sustenance of all laws
Its provisions are con ceived in public interest and are intended to serve public purpose
Therefore when the provisions of an Act or Regula tions or Rules are assailed as arbitrary unjust unreasona ble unconstitutional public law element makes it incumbent to consider the validity there of on the envil of inter play of articles 14  161 191g and 21 and of the inevitable effect of the impugned provision on the rights of a citizen and to find whether they are constitutionally valid
Interplay of articles 14 161 191g  21 as guarantors of public employment as a source of right to livelihood
It is well settled constitutional law that different Articles in the Chapter on Fundamental Rights and the Direc tive Principles in Part IV of the Constitution must be read as an integral and incorporeal whole with possible overlap ping with the subject matter of what is to be protected by its various provisions particularly the Fundamental Rights
By the Full Court in RC Cooper vs Union of India  it was held that the law must not impair the guarantee of any 312 of the fundamental rights in Part III
The law authorising to impose reasonable restrictions under Article 191 must be intended to advance the larger public interest
Under the Constitution protection against impairment of the guarantee of the fundamental rights is determined by the nature of the right interest of the aggrieved party and the degree of harm resulting from the state action
Impairment of the right of the individual and not the object of the State in taking the impugned action is the measure of protection
To concentrate merely on the power of the State and the object of the State action in exercising that power is therefore to ignore the true intent of the constitution
The nature and content of the protection of the fundamental rights is measured not by the operation of the State action upon the rights of the individual but by its objects
The validity of the State action must be adjudged in the light of its opera tion upon the rights of the individuals or groups of the individual in all their dimensions
It is not the object of the authority making the law imparing the right of the citizen nor the form of action taken that determines the protection he can claim it is the effect of the law and of the action upon the right which attract the jurisdiction of the court to grant relief
In Minerva Mills Ltd vs Union of India  the fundamental rights and directive principles are held to be the conscience of the Constitution and disregard of either would upset the equibalance built up therein
In Menaka Gandhi s case it was held that different articles in the chapter of Fundamental Rights of the Consti tution must be read as an
integral whole with possible overlapping of the subject matter of what is sought to be protected by its various provisions particularly by articles relating to fundamental rights contained in Part III of the Constitution do not represent entirely separate streams of rights which do not mingle at many points
They are all parts of an integrated scheme in the Constitution
Their waters must mix to constitute that grand flow of unimpeded and impartial justice social economic and political and of equality of status and opportunity which imply absence of unreasonable or unfair discrimination between individuals or groups or classes
The fundamental rights protected by Part III of the constitution out of which Articles 14 19 and 21 are the most frequently invoked to test the validity of executive as well as legislative actions when these actions are subjected to judicial scrutiny
Fundamental Rights are necessary means to develop one s own personality and to carve out one s own life in the manner one likes best subject to reasonable restrictions imposed in the paramount interest of the Society and to a just fair and reasonable procedure
The effect of restriction or deprivation and not of the form adopted to deprive the right is the conclusive test
It is already seen that the right to a public employ 313 ment is a constitutional right under article 161
All matters relating to employment include the right to continue in service till the employee reaches superannuation or his service is duly terminated in accordance with just fair and reasonable procedure prescribed under the provisions of the Constitution or the Rules made under proviso to Article 309 of the Constitution or the statutory provision or the Rules regulations or instructions having statutory flavour made thereunder But the relevant provisions must be conformable to the rights guaranteed in Parts III  IV of the Constitu tion Article 21 guarantees the_ right to live which in cludes right to livelihood to a many the assured tenure of service is the source the deprivation thereof must be in accordance with the procedure prescribed by law conformable to the mandates of Articles 14 and 21 as be fair just and reasonable but not fancyful oppressive or at vagary
The need for the fairness justness or reason ableness of the procedure was elaborately considered in Menaka Gandhi s case supra and it hardly needs reiteration
Principles of natural justice in Part of Article 14
The Menaka Gandhi s case is also an authority for the proposition that the principles of natural justice is an integral part of the guarantee of equality assured by Arti cle 14 of the Constitution
In Union of India  Anr
vs Tulsiram Patel  Ors 1985 Suppl
2 SCR 13 1 at 233 this Court held that the principles of natural justice have thus come to be recognised as being a part of the guarantee contained in Article 14 because of the new and dynamic interpretation given by this Court to the concept of equali ty which is the subject matter of that Article
Shortly put the syllogism runs thus Violation of a rule of natural justice results in arbi trariness which is the same as discrimination where dis crimination is the result of the State action it is a violation of article 14 therefore a violation of a principle of natural justice by a State action is a violation of Art 14
Article 14 however is not the sole repository of the principles of natural justice
What it does is to guarantee that any law or State action violating them will be struck down
The principles of natural justice however apply not only to the legislation and State action but also where any tribunal authority or body of men not coming within the definition of State  in article 12 is charged with the duty of deciding a matter
In such a case the principles of natural justice require that it must decide such a matter fairly and impartially
 314 In Moti Ram Deka s case this Court already held that the rule making authority contemplated by Article 309 cannot be validly exercised so as to curtail or affect the rights guaranteed to public servants under article 3112
Article 3112 is intended to afford a sense of scrutiny to public servants who are substantively appointed to a permanent post and one of the principle benefits which they are entitled to expect is the benefit of pension after rendering public service for the period prescribed by the Rules
It would we think not be legitimate to contend that the right to earn a pension to which a servant substantively appointed to a permanent post is entitled can be curtailed by Rules framed under article 309 so as to make the said right either ineffec tive or illusory
Once the scope of article 3111 and 2 is duly determined it must be held that no rule framed under article 309 can trespass on the rights guaranteed by article 311
This position is of basic importance and must be borne in mind in dealing with the controversy in question
In AK Kraipak  Ors etc
vs Union of India  Ors this Court held that Rules of natural justice aims at securing justice or to prevent injustice
They operate only in the areas not covered by any law valid ly made
In Union of India vs Col JN Sinha and Anr 197 1 1 SCR 791 it was held that principles of natural justice do not supplant the law but supplement it
If a statutory provision either specifically or by necessary implication excludes the application of any rules of natural justice then the court cannot ignore the mandate of the legislature or the statutory authority and read into the concerned provision of the principles of natural justice
In that case this Court held that principles of natural justice cannot be read into Fundamental Rule and no opportunity need be given before compulsorily retiring an employee as that implication does not arise by reason of express statutory language
The principle of natural justice embodied as an integral part of equality clause
Article 14 is the general principle while article 3112 is a special provision applica ble to all civil services under the State
Article 3112 embodies the principles of natural justice but proviso to Clause 2 of article 311 excludes the operation of principles of natural justice engrafted in article 3112 as an exception in the given circumstances enumerated in three clauses of the proviso to article 3112 of the Constitution
Article 14 read with articles 161 and 311 are to be harmoniously inter preted that the proviso to article 3112 excludes the applica tion of the principles of natural justice as an exception and the applicability of article 3112 must therefore be circumscribed to the civil services and to be construed accordingly
In respect of all other 315 employees covered by article 12 of the Constitution the dynamic role of article 14 and other relevant Articles like 21 must be allowed to have full play without any inhibition unless the statutory rules themselves consistent with the mandate of articles 14 16 19  21 provide expressly such an exception
Article 191g empowers every citizen right to avoca tion or profession etc which includes right to be contin ued in employment under the State unless the tenure is validly terminated consistent with the scheme enshrined in the fundamental rights of the Constitution
Therefore if any procedure is provided for deprivation of the right to employment or right to the continued employment till the age of superannuation as is a source to right to livelihood such a procedure must be just fair and reasonable
This Court in Fertilizer Corporation Kamgar Union Regd Sindri  Ors
vs Union of India  Ors
  at 60 61 held that article 191g confers a broad and general right which is available to all persons to do works of any partic ular kind and of their choice
Therefore whenever there is arbitrariness in state action whether it be of the legisla ture or of the Executive or of an authority under article 12 articles 14 and 21 spring into action and strikes down such an action
The concept of reasonableness and nonarbitrariness pervades the entire constitutional spectrum and is a golden thread which runs through the whole fabric of the Constitu tion
Therefore the provision of the statute the regula tion or the rule which empowers an employer to terminate the services of an employee whose service is of an indefinite period till he attains the age of superannuation by serving a notice of pay in lieu thereof must be conformable to the mandates of articles 14 191g and 21 of the Constitution
Otherwise per se it would be void
In Motiram Deka s case Gajendragadkhar J  as he then was after invalidating the rules 1493 and 1483 under article 3112 which impari materia Rule 9b of the Regulation also considered their validity in the light of article 14 and held thus Therefore we are satisfied that the challenge to the validity of the impugned Rules on the ground that they contravene article 14 must also succeed
 This was on the test of reasonable classification as the principle then was applied
Subba Rao J as he then was in a separate but concurrent judgment apart from
invali dating the rule under Article 3112 also held that the Rule infringed Article 14 as well though there is no elaborate discussion in that regard
But Das Gupta J considered 316 elaborately on this aspect and held Applying the principle laid down in the above case to the present rule I find on the scrutiny of the Rule that it does not lay down any principle or policy for guiding the exercise of discretion by the authority who will terminate the service in the matter of selection or classification
Arbitrary and uncontrolled power is left in the authority to select at its will any person against whom action will be taken
The Rule thus enables the authority concerned to discriminate between two railway servants to both of whom R 1483 equally applied by taking action in one case and not taking it in the other
In the exercise of the discretion by the authority the rule has therefore to be struck down as contravening the requirements of article 14 of the Constitu tion
Even in Tulsiram Patel s case supra this Court declared that it must satisfy the test of justness fairness and reasonableness of the procedure prescribed
But the proviso to article 3112 was upheld for the reason that the Constitution itself made proviso an exception to the prin ciple of audi alteram partem engrafted in article 3112 of the Constitution
As a fact it expressed thus As the making of such laws and the framing of such rules are subject to the provisions of the Constitution if any such act or rules violates any of the provisions of the Constitution it would be void
Thus as held in Moti Ram Deka s case  if any such act or rule tres passes on the rights guaranteed to government servants by article 311 it would be void
Similarly such acts and rules cannot abridge or restrict the pleasure of the President or the Governor of a State exercisable under article 3 101 further than what the Constitution has expressly done
In the same way such Act or rule would be void if it violates any fundamental right guaranteed by part III of the Consti tution
 Gurdev Singh s case declares the rules that empowered to order compulsory retirement of the Government employee after putting ten years of service as ultra vires
In SS Muley vs
JRD Tata my learned brother Sawant J as he then was held that Regulation 48 which empowered the employer uncanalised unrestricted and arbi trary power to terminate the service of an employee with notice or pay in lieu thereof without any opportunity of 317 hearing as violative of principles of natural justice under article 14 of the Constitution
In Superintendent of Post Office vs
K Vasayya 1984 3 Andhra Pradesh Law Journal 9 the respondent Vasayya was denied of the appointment as a Clerk on the ground that the Confidential Reports submitted by the Police disclosed adverse comments on the conduct of the respondent
When the appointment was denied on that basis it was held that though the selection to a public office is a privilege and no vested right has been accrued till the candidate is appoint ed in the context of fair play in action subserving the mandate of article 14 held at p 45 thus Often times convenience and justice are not on speaking terms
It is the actual administration of law and not only the manner in which it is done that reflects the action of the State in assuring the equal protection to a citizen
In adopting the procedure as held by Frankfurther J in Joint Anti Facist Refugee Commission vs Mc
Grath 34  that a conclusion satisfies one s private conscience does not attest its reliability
The validity and moral authority of a conclusion largely depends on the mode by which it was reached
Secrecy is not congenial to truth
Seeking and self righteousness gives too slander an assurance of right ness
No better instrument has been devised for arriving at the truth than to give a person in jeopardy of a serious loss a notice of the case against him and an opportunity to meet it nor has a better way been found for generating the feeling so important to a popular Government that justice has been done
 Bradley J in United States vs Samuel D singleton  has held that No State shall make or enforce any law which abrogate the privileges or immunities of citizens of the United States
 In Ramana s case supra it has been held that is indeed unthinkable that in a democracy governed by the rule of law the executive Govt
or any of its offi cers should possess arbitrary power over the interests of the individual   318 The procedure adopted should match with what justice de mands
History shows that it is always subtle and insidious encroachments made ostensibly for a good cause that imper ceptibly but surely erode the foundations of liberty
 Doughlas J in Joint Anti Facist Refugee Commission s case supra held that This is a Government of laws not of men
The powers being used are the powers of the Government over the reputation and fortunes of citizens
In situations far less severe or important than those a party is told the nature of the charge against him Harry W Jones in his Rule of law and Welfare State at 146 stated that What is needed then is to make the welfare state itself a source of new rights and to surround the rights in public benefaction with legal safeguards both procedural and substantive comparable to those enjoyed by the traditional right of property in our law
 Accordingly it was held that prior opportunity of hearing before denying appointment is a mandate of article 14 of the Constitution
In West Bengal Electricity Board  Ors
vs DB Ghosh  Ors 1985 2 SCR 1014 in similar circumstances it was held that the regulation as Herry VIII Clause as ultra vires of article 14 of the Constitution
The same principle was reiterated in Brojonath s case
In Workman of Hindustan Steel Ltd  Anr
vs Hindustan Steel Ltd  Ors
  the standing order that empowers the manager to dispense with the enquiry and to dismiss an employee without any obligation to record reasons was held to be drastic power but directed to amend the standing orders consistent with proviso to article 3112 of the Constitution
This Court in OP Bhandari vs Indian Tourism Development Corpn
Ltd  Ors  struck down the similar rule on the same doctrine of hire and fire  and that it is impermissible under the constitu tion of the scheme to sustain the doctrine of hire and fire 
In Chandrabhan s case Rule 151iib of Bombay Service Rule was held to be void
In APSRT Corpn
vs 319 Labour Court AIR 1980 AP 132 a Full Bench of Andhra Pradesh High Court held that the legislature is not compe tent to make law abridging the right to work
In RMD Chamarbaugwalla vs State of Punjab  it was held that any Act violating fundamental rights is void
In Kanhialal vs District Judge  Ors this Court held that termination of the service of a tempo rary employee without affording opportunity is penal in character and violates article 3112 and was void
In MK Agarwal v Gurgaon Gramin Bank  Ors 1987 Suppl
643 this Court struck down regulation 102a of the Gurg aon Gramin Bank Staff Services Rules 1980
In this light it is not open to the State to contend that look here though Constitution enjoins and admonishes us saying that it is no longer open to the State to make law or rule violating the rights created under articles 14 and 21 the citizen with a view to secure public employment from us had contracted out of the constitutional rights and agreed to abide by rules including the termination of hisher services at any time at our will without notice or opportunity even for misconduct negligence inefficiency corruption or rank nepotism so we are free to impose the said punishment
 Even in the case of minority institutions when the employ ees are dismissed on the principle of hire and fire this Court held it to be impermissible vide All Saints High School vs Government of AP   938 e to f Frank Anthoney Public School vs Union of India   269 b to e Christian Medical College Hospital Employ ees  Union  Anr
vs Christian Medical College Veilore Association  Ors   562
In Moti Ram Deka s case this Court held that rules 1483 and 1493 trespassed upon the rights guaranteed to government servants by article 3112 and would be void
In Kameshwar Prasad vs State of Bihar 1962 Suppl
3 SCR 369
Rule 4A of the Bihar Government Servants  Conduct Rules 1956 in so far as it prohibited any form of demon stration was struck down by this Court as being violative of sub clauses a and b of clause 1 of article 19
In OK Ghosh vs EZX Joseph 1963 Suppl
1 SCR 789 this Court struck down Rule 4A of the Central Civil Services Conduct Rules 1955 on the ground that it violated sub clause c of clause 1 of article 19 of the Constitution and that por tion of Rule 4A which prohibited participation in any demon stration as being violative of sub clauses a and b of clause 1 of Article 19
It must therefore be hold that any act or provision therein Rules or Regulations or 320 instructions having statutory force violating fundamental rights under Articles 14 161 191g and 21 are void
Thus it could be hold that article 14 read with 161 accords right to an equality or an equal treatment consist ent with the principles of natural justice
Any law made or action taken by the employer corporate statutory or instru mentality under Article 12 must act fairly justly and reasonably
Right to fair treatment is an essential inbuilt of natural justice
Exercise of unbridled and uncanalised discretionary power impinges upon the right of the citizen vesting of discretion is no wrong provided it is exercised purposively judiciously and without prejudice
Wider the discretion the greater the chances of abuse
Absolute discretion is destructive of freedom
than of man s other inventions
Absolute discretion marks the beginning of the end of the liberty
The conferment of absolute power to dismiss a permanent employee is antithesis to justness or fair treatment
The exercise of discretionary power wide of mark would bread arbitrary unreasonable or unfair actions and would not be consistent with reason and justice
The provisions of a statute regulations or rules that empower an employer or the management to dismiss remove or reduce in rank of an employee must be consistent with just rea sonable and fair procedure
It would further be held that right to public employment which includes right to continued public employment till the employee is superannuated as per rules or compulsorily retired or duly terminated in accord ance with the procedure established by law is an integral part of right to livelihood which in turn is an integral facet of right to life assured by article 21 of the Constitu tion
Any procedure prescribed to deprive such a right to livelihood or continued employment must be just fair and reasonable procedure
In other words an employee in a public employment also must not be arbitrarily unjustly and unrea sonably be deprived of hisher livelihood which is ensured in continued employment till it is terminated in accordance with just fair and reasonable procedure
Otherwise any law or rule in violation thereof is void
Need for harmony between social interest and individual right 34
Undoubtedly efficiency of the administration and the discipline among the employees is very vital to the successful functioning of an institution or maximum produc tion of goods or proper maintenance of the services
Disci pline in that regard among the employees is its essential facet and has to be maintained
The society is vitally interested in the due discharge of the duties by the govern ment employees or 321 employees of corporate bodies or statutory authorities or instrumentalities under article 12 of the Constitution
As held in Tulsiram Patel s case the public are vitally interested in the efficiency and integrity of the public service
The government or corporate employees are after all paid from the public exchequer to which everyone contributes either by way of direct or indirect taxes
The employees are charged with public duty and they should perform their public duties with deep sense of responsibility
The collective responsi bility of all the officers from top most to the lowest maximises the efficient public administration
They must therefore be held to have individual as well as collective responsibility in discharge of their duties faithfully honestly with full dedication and utmost devotion to duty for the progress of the country
Equally the employees must also have a feeling that they have security of tenure
They should also have an involvement on their part in the organi sation or institution corporation etc
They need assurance of service and they need protection
The public interest and the public good demand that those who discharge their duties honestly efficiently and with a sense of devotion and dedication to duty should receive adequate protection and security of tenure
Equally inefficient dishonest and corrupt or who became security risk should be weeded out so that successful functioning of the industry or manufacture of the goods or rendering or services would be available at the maximum level to the society and society thereby re ceives optimum benefit from the public money expanded on them as salary and other perks
Therefore when a situation envisaged under statute or statutory rule or regulation or instructions having statutory force to remove or dismiss an employee the question arises whether they need at least minimum protection of fair play in action
34A In Vasayya s case when a similar contention was raised I have stated at p 47 in Para 130  13 1 that
The Audi alteram partem rule must be flexible malleable and an adaptable concept to adjust and harmonise the need for speed and obligation to act fairly
When the rights of the Government are widely stressed the rights of the person are often threatened when the latter are ever emphasised Government becomes weak to keep order
Therefore the rule can be tailored and the measure of its application cut short in reasonable proportion to the exigencies of the situation
The administrative agency can develop a technique of deci sion worthy being called ethos of adjudication
Meaningful statutory standards realistic procedural requirements and discriminatory techniques of judicial review are among the tools to control the discretionary 322 power
It makes no difference whether the occasion for the exercise of power is personal default or act of policy
Good administration demands fair consultation in each case and this the law can and should enforce
The insistence of the observance of fundamental fairness in the procedure becomes a balancing balm to alleviate apprehension of arbitrary decision by the executive Government while assuring opportu nity to disabuse the prima facie impression formed against the person to usher in a era of largest good to largest number of people with proper checks and balances between needs of the State and the rights of the individual
The brooding omni benevolence and omnicompetency of the need for expediency and claim for justness interplay ethos of fair adjudication in action
34B Therefore it is no well tuned solace to say that in a court of law at the fag end of the currier or after superannuation in the interregnum which often over takes the litigation that the employee would be meted out with jus tice a grave uncertainty and exposing to frustrating pro crastination of judicial process and expenses and social humiliation
Before depriving an employee of the means of livelihood to himself and his dependents ie job the procedure prescribed for such deprivation must therefore be just fair and reasonable under articles 21 and 14 and when infringes article 191g must be subject to imposing reasona ble restrictions under article 195
Conferment of power on a high rank officer is not always an assurance in particular when the moral standards are generally degenerated that the power would be exercised objectively reasonably conscien tiously fairly and justly without inbuilt protection to an employee
Even officers who do their duty honestly and conscientiously are subject to great pressures and pulls
Therefore the competing claims of the public interest as against individual interest of the employees are to be harmoniously blended so as to serve the societal need con sistent with the constitutional scheme
Statutory Construction 35
Statutory construction raises a presumption that an Act or a provision therein a constitutionally valid unless it appears to be ultra vires or invalid
The legislature subject to the provisions of the Constitution has undoubt edly unlimited powers to make law
In fairness to the learned Attorney General he agrees that the impugned provi sions are per se invalid
But he attempted to salvage them by resorting to the doctrine of reading down
323 Reading a provision down when permissible
The question emerges whether the doctrine of reading down would be applied to avoid a void law vesting with arbitrary power with a naked hire and fire draconian rule
It is difficult to give acceptance to extreme contention raised by Sri Garg and Sri Rama Murthy that the Courts cannot in the process of interpretation of the Statute would not make law but leave it to the legislature for necessary amendments
In an appropriate case Judges would articulate the inarticulate major premise and would give life and force to a Statute by reading harmoniously all the provisions ironing out the freezes
But the object is to alongate the purpose of the Act
In this regard 1 respectfully agree with my learned brother my Lord the Chief Justice on the prin ciple of statutory construction
The question is whether Legislature intended to confer absolute power or would it be construed in such a way that would supplant the law but not supplement law made by the Legislature
35A Natural construction
The golden rule of statutory construction is that the words and phrases or sentences should be construed according to the intent of legislature that passed the Act
All the provisions should be read together
If the words of the statutes are in themselves precise and unambiguous the words or phrases or sentences themselves alone do then no more can be necessary than to expound those words or phrases or sentences in their natural and ordinary sense
But if any doubt arises from the terms employed by the legislature it has always been held a safe means of collecting the inten tion to call in aid the ground and cause of making the statute and to have the recourse to the preamble which is a key to open the minds of the makers of the statute and the mischiefs which the Act intend to redress
In determining the meaning of statute the first question to ask always is what is the natural or ordinary meaning of that word or phrase in its context
It is only when that meaning leads to some result which cannot reasonably be supposed to have been the intent of the legislature then it is proper to look for some other possible meaning then the court cannot go fur ther
Craie s Statute Law Seventh Edition in Chapter 5 at page 64 it is stated that where the words of an Act are clear there is no need for applying any of the principles of interpretation which are merely presumptions in cases of ambiguity in the statute
The safer and more correct course of dealing with the question of construction is to take 324 the words themselves and arrive if possible at their meaning without in the first place refer to cases
Where an ambiguity arises to supposed intention of the legislature one of the statutory constructions the court profounded is the doctrine
of reading down
Lord Reid in Federal Steam Navigation Co vs Department of Trade and Industry at p 100 as also extracted by Cross Statutory Interpretation Butterworths  Edition 1976 at page 43 in preposition 3 has stated thus the judge may read in words which he considers to be neces sarily implied by words which are already in the statute and he has a limited power to add to alter or ignore statutory words in order to prevent a provision from being unintelli gible absured or totally unreasonable unworkable or totally irre concileabIe with the rest of the statute
 At page 92 of the Cross Statutory Interpretation the author has stated that The power to add to alter or ignore statutory words is an extremely limited one
Generally speaking it can only be exercised where there has been a demonstrable mistake on the part of the draftsman or where the consequence of applying the words in their ordinary 6r discernible secondary meaning would be utterly unreasona ble
Even then the mistake may be thought to be beyond correction by the court or the tenor of the statute may be such as to preclude the addition of words to avoid an unrea sonable result
 Therefore the Doctrine of Reading Down is an internal aid to construe the word or phrase in statute to give reasonable meaning but not to detract distort or emasculate the language so as to give the supposed purpose to avoid unconstitutionality 35C
This Court in Saints High School Hyderabad vs Govt
of AP  held that this Court has in several cases adopted the reading down the provisions of the Statute
The reading down of a provi sion of a statute puts into operation the principle that so far as is reasonably possible to do so the legislation should be construed as being within its power
It is the principle effect that where an Act is expressed in language of a generality which makes it capable if read literally of applying to matters beyond relevant legislative power the Court would construe it in a more limited sense so as to keep it within the power
 325 Similarly restricted meaning was ascribed by Maxwell in his Interpretation of the Statutes XII Edn
at p 109 under the caption Restriction of operation that sometimes to keep the Act within the limits of its scope and not to disturb the existing law beyond what the object requires it is construed as operative between certain purposes only even though the language expresses no such circumspection of field of operation
It is thus clear that the object of reading down is to keep the operation of the statute within the purpose of the Act and consitutionally valid
In this regard it is equally of necessity to remind ourselves as held by this Court in Minerva Mills  case that when the effect of article 31 was asked to be read down so as to save it from unconstitu tionality this Court held that it is not permissible to read down the statutory provisions when the avowed purpose is to confer power on an authority without any limitation whatever and that at p 259D and G it was held that the principle of reading down cannot be used to distort when words of width are used even advertantly
In Elliott Ashton Welsh II vs United States
 26 Lawyer s Edition 2nd 308 at 327 Herfan J at 327 held that when the plain thrust of a legislative enactment can only be circumvented by distortion to avert constitutional collision it can only by exalting form over substance that one can justify veering of the path that has been plainly marked by the Statute
Such a course betrays extreme skepticism as to constitutionality and in this instance reflects a groping to preserve conscientious objecter exemption at all costs I cannot subscribe wholly to emasculated construction of a statute to avoid facing con stitutional question in purported fidelity to the statutory doctrine of avoiding unnecessary resolution of constitution al issues
 36A In Nalinakhya Bysack vs Shyam Sunder Haldar  Ors  at 544 45 this Court has refused to rewrite legislation to make up omissions of the Legislature
In Moti Ram Deka s case when Rule 1483 and Rule 1493 of the Railway Establishment Code were sought to be sus tained on the principle of reading down  this court held thus There is one more point which still remains to be consid ered and that is the point of construction
The learned Addl
Solicitor General argued that in construing the im pugned R 1483 as well as R 1493 we ought to take into account the fact that the Rule as amended has been so 326 framed as to avoid conflict with or non compliance of the provisions of article 3112 and so he suggests that we should adopt that interpretation of the Rule which would be consistent with article 3112
The argument is that the termi nation of services permissible under the impugned rules really proceeds on administrative grounds or considerations of exigencies of service
If for instance the post held by a permanent servant is abolished or the whole of the cadre to which the post belonged is brought to an end and the railway servant s services are terminated in consequence that cannot amount his removal because the termination of his service is not based on any consideration personal to the servant
In support of this argument the Addl
Solici tor General wants us to test the provision contained in the latter portion of the impugned rules
We are not impressed by this argument
What are not impressed by this argument
What the latter portion of the impugned Rules provide is that in case a railway servant is dealt with under that portion no notice need be served on him
The first part of the Rules can reasonably and legitimately take in all cases and may be used even in respect of cases falling under the latter category provided of course notice for the speci fied period or salary in lieu of such notice is given to the railway servant
There is no doubt that on a fair construc tion the impugned Rules authorise the Railway Administra tion to terminate the services of all the permanent servants to whom the Rules apply merely on giving notice for the specified period or on payment of salary in lieu thereof and that clearly amounts to the removal of the servant in ques tion
Therefore we are satisfied that the impugned rules are invalid inasmuch as they are inconsistent with the provisions contained in article 3112
The termination of the permanent servant s tenure which is authorised by the said Rules is no more and no less than their removal from serv ice and so article 3112 must come into play in respect of such cases
That being so the Rule which does not require compliance with the procedure prescribed by article 3112 must be struck down as invalid
I am therefore inclined to hold that the Courts though have no power to amend the law by process of inter pretation but do have power to mend it so as to be in confirmity with the intendment of the legislature
Doctrine of reading down is one of the principles of 327 interpretation of statute in that process
But when the offending language used by the legislature is clear precise and unambiguous violating the relevant provisions in the constitution resort cannot be had to the doctrine of read ing down to blow life into the void law to save from uncon stitutionality or to confer jurisdiction on the legislature
Similarly it cannot be taken aid of to emasculate the pre cise explicit clear and unambiguous language to confer arbitrary unbridled and uncanalised power on an employer which is a negation to just fair and reasonable procedure envisaged under Articles 14 and 21 of the Constitution and to direct the authorities to record reasons unknown or unintended procedure in the manner argued by the learned counsel for the appellants
At the cost of repetition it is to reiterate that when the authority intends to take disciplinary action for imposing penalty of dismissal removal or reduction in rank of an employee an elaborate procedure has been provided in Regulation 15 to conduct an enquiry into misconduct after giving reasonable opportunity
Residuary power has been avowedly conferred in Regulation 9b with wide discretion on the appropriate authority to take actions on similar set of facts but without any guidelines or procedure at the absolute discretion of the same authority
The language of Regulation 9b is not capable of two interpretations
This power appears to be in addition to the normal power in Regulation 15
Thereby the legislative intention is manifest that it intended to confer such draconian power couched in language of width which hangs like Damocles sword on the neck of the employee keeping every employee on tenterhook under constant pressure of uncertainty precarious tenure at all times right from the date of appointment till date of superannuation
It equally enables the employer to pick and choose an employee at whim or vagary to terminate the serv ice arbitrarily and capriciously
Regulation 9b thereby deliberately conferred wide power of termination of services of the employee without following the principle of audi alteram partem or even modicum of procedure of representation before terminating the services of permanent employee
It is well settled rule of statutory construction that when two interpretations are possible one which would preserve and save constitutionality of a particular Statute would be preferred to the other that would render it unconstitutional and void
When the language is clear unambiguous and specific and it does not lead to the constructions it is not permissible to read into those provisions something which is not intended
It is undoubtedly true as rightly contended by 328 Mr Ashok Desai the learned Solicitor General that the power to take appropriate and expeditious action to meet the exigencies of weeding out inefficient corrupt indolent officers or employees from service should be provided and preserved to the competent authority
Any action taken without any modicum of reasonable procedure and prior oppor tunity always generates an unquenchable feeling that unfair treatment was meted out to the aggrieved employee
To pre vent miscarriage of justice or to arrest a nursing grievance that arbitrary whimsical or capricious action was taken behind the back of an employee without opportunity the law must provide a fair just and reasonable procedure as is exigible in a given circumstances as adumbrated in proviso to article 3112 of the Constitution
If an individual action is taken as per the procedure on its own facts its legality may be tested
But it would be no justification to confer power with wide discretion on any authority without any procedure which would not meet the test of justness fair ness and reasonableness envisaged under articles 14 and 21 of the Constitution
In this context it is important to empha sise that the absence of arbitrary power is the first essen tial of the rule of law upon which our whole constitutional system is based
In a system governed by rule of law dis cretion when conferred upon executive authorities must be confined within defined limits
The rule of law from this point of view means that decisions should be made by the application of known principles and rules and in general such decisions should be predictable and the citizen should know where he is
If a decision is taken without any princi ple or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law
See Dicey Law of the Constitution 10th Edn Introduction cx
Law has reached its finest moments stated Douglas J in United States vs Wunderlick  then it has freed man from the unlimited discretion of some rules   where discre tion is absolute man has always suffered
It is in this sense that the rule of law may be said to be the sworn enemy of caprice
Discretion as Lord Mansfield stated it in classic terms in the case of John Wilkes means should discretion guided by law
It must be governed by rule not by humour it must not be arbitrary vague and fanciful as followed in this Court in SG Jaisinghani vs Union of India
  40
In an appropriate case where there is no sufficient evidence available to inflict by way of disciplinary meas ure penalty of dismissal or removal from service and to meet such a situation it is not as if that the authority is lacking any power to make Rules or regulations to give a notice of opportunity with the grounds or the material on records on 329 which it proposed to take action consider the objections and record reasons on the basis of which it had taken action and communicate the same
However scanty the material may be it must form foundation
This minimal procedure should be made part of the procedure lest the exercise of the power is capable of abuse for good as well as for whimsical or capricious purposes for reasons best known to the authority and not germane for the purpose for which the power was conferred
The action based on recording reasoning without communication would always be viewed with suspicion
There fore 1 hold that conferment of power with wide discretion without any guidelines without any just fair or reasonable procedure is constitutionally anathema to articles 14 161 191g and 21 of the Constitution
Doctrine of reading down cannot be extended to such a situation
It is undoubted that in In re Hindu Women s Right to Property Act involve the interpretation of single word property in the context to legislative compe tency but that cannot be extended to the facts of these cases
RMD Charnarbaugwalla s case is of severability and of a single word competition
The interpretation therein also cannot be extended to the facts of these cases
Even the case of KN Singh vs State of Bihar 19621 Suppl
2 SCR 769 involve interpretation of Section 124A IPC in the context of freedom of speech enshrined under article 191a of the Constitution
The interpretation was put as to subserve the freedom under article 191a
RL Arora vs State of UP  does not involve of the doctrine of reading down so as to cut down the scope of Fundamental Right
Similarly Jagdish Pandey vs Chancellor of the Bihar 1 also does not concern with application of doctrine of reading down so as to sacrifice the principle of natural justice which are considered as essential part of rule of law
In Amritsar Municipality vs State of Punjab  the court ascertained the intention of the Legislature and interpreted the Act con sistent with the said intention
Sunil Batra vs Delhi Admn
  is also a decision where it was found that the intention of the Legislature was not to confer arbitrary power
NC Dalwadi vs State of Gujarat is also a case giving reasonable interpretation of the inten tion of the provisions of the Statute and is not capable of the meaning
In Charanlal Sahu vs Union of India 1989 Suppl
Scale 1 at p 61 on which strong reliance was placed by both the learned Attorney General and Solicitor General is a case capable of two interpretations to Sec 4
The decisions cited by Shri Ashok Desai ie Delhi Transport 330 Undertaking vs Balbir Saran Goel   Air India Corporation vs Rebellow   Municipal Corporation of Greater Bombay vs PS Malvankar  concern the industrial Iaw wherein the validity of rules on the touch stone of the reasonableness fairness or justness was not considered
The prevailing doctrine of reasonable classification and nexus had their play to uphold the validity of the provisions
It is undoubtedly true as contended by Sri Bhasin learned counsel for the intervener that it is open to the authorities to terminate the services of a temporary employ ee without holding an enquiry
But in view of the match of law made viz that it is not the form of the action but the substance of the order is to be looked into it is open to the Court to lift the veil and pierce the impugned action to find whether the impugned action is the foundation to impose punishment or is only a motive
A larger Bench of seven Judges of this Court in Shamsher Singh vs State of Punjab elaborately considered the question and laid down the rule in this regard
The play of fair play is to secure justice procedural as well as substantive
The substance of the order the effect thereof is to be looked into
Whether no misconduct spurns the action or whether the services of a probationer is terminated without imputation of misconduct is the test
Termination simpliciter either due to loss of confidence or unsuitability to the post may be a relevant factor to terminate the services of a proba tioner
But it must be hedged with a bonafide over all consideration of the previous conduct without trained with either mala fide or colourable exercise of power or for extraneous considerations
Such actions were upheld by this Court
The action must be done honestly with due care and prudence
In view of the march of law made by article 14 in particular after Maneka Gandhi s case it is too late in the day to contend that the competent authority would be vested with wide discretionary power without any proper guidelines or the procedure
The further contention that the preamble the other rules and the circumstances could be taken aid of in reading down the provisions of the impugned rules or the regulations is also of no assistance when it is found that the legislative intention is unmistakably clear unambiguous and specific
Thus considered I have no hesitation to conclude that the impugned regulation 9b of the Regula tions are arbitrary unjust unfair and unreasonable offend ing articles 14 161 191g and 21 of the Constitution
It is also opposite to the public policy and thereby is void under Section 23 of the 
331 44
It is made clear that as suggested by this Court in Hindustan Steel Case that it is for concerned to make appro priate rules or regulations and to take appropriate action even without resorting to elaborate enquiry needed consist ent with the constitutional scheme
The correctness of the decision in Tulsiram Patel s case though was doubted in Ram Chunder vs Union of India it is unneces sary to go into that question
For the purpose of this case it is sufficient to hold that proviso to article 3112 itself is a constitutional provision which excluded the applicabil ity of article 3112 as an exception for stated grounds
It must be remembered that the authority taking action under either of the clauses b or c to proviso are enjoined to record reasons though the reasons are not subject to judi cial scrutiny but to find the basis of which or the ground on which or the circumstances under which they are satisfied to resort to the exercise of the power under either of the two relevant clauses to proviso to article 3112 of the Con stitution
Recording reasons itself is a safeguard for preventing to take arbitrary or unjust action
That ratio cannot be made applicable to the statutory rules
Accordingly I hold that the ratio in Brojonath s case was correctly laid and requires no reconsideration and the cases are to be decided in the light of the law laid above
From the light shed by the path I tread I express my deep regrets for my inability to agree with my learned brother the Hon ble Chief Justice on the applicability of the doctrine of reading down to sustain the offending provi sions
I agree with my brothren BC Ray and PB Sawant JJ
with their reasoning and conclusions in addition to what I have laid earlier
The appeal is accordingly dismissed but without costs
Similarly Civil Appeal No 1115 of 1976 is allowed and the monetary relief granted is reasonable but parties are directed to bear their own costs
Rest of the matters will be disposed of by the Division Bench in the light of the above law
In view of the majority judgment Civil Appeal No 2876 of 1986 Delhi Transport Corporation vs DTC Mazdoor Con gress is dismissed
Civil Appeal No 11 15 of 1976 Satnam Singh vs Zilla Parishad Ferozepur  Ant is allowed and the other cases snail be placed before a division bench for final disposal
CA 287686 is dismissed NPV CA 111576 isallowed


Summary:
With a view to nationalise the road transport services under Ch
IV A of the IV Of 1939 inserted into it by the amending Act 100 of 1956 the General Manager of Andhra State Transport Undertaking published a scheme under section 68C of the Act in the Official Gazette and invited objections thereto
By an order of the Chief Minister the objections were received and heard by the Secretary to the Home Department who was in charge of Transport but were decided by the Chief Minister
The State Government approved of the scheme and published it in the Official Gazette
The petitioners who were plying their buses on various routes in the Krishna District as permit holders under the Act apprehending that their routes would be taken over by the newly established State Corporation in implementation of the scheme applied to this Court for the protection of their fundamental rights to carry on their business
It was contended inter alia on their behalf i that Ch
IVA of the Act was a piece of colourable legislation whose real object was to take over their business under cover of cancellation of permits in contravention of article 31 of the Constitution 2 that the scheme itself was ultra vires the Act for the reason amongst others that the State Government whose duty it was to act judicially in approving the scheme had transgressed certain fundamental principles of natural justice
Held Per curiam that the question of colourable legislation was in substance really one of legislative competence of the legislature that enacted it
The legislature could only make laws within its legislative competence
Its legislative field might be circumscribed by specific legislative entries or limited by fundamental rights created by the Constitution
The legislature could not over step the field of its competency directly or indirectly
It would be for the Court to scrutinize if the legislature in purporting to make a law within its sphere in effect and substance 320 reached beyond it it had infact the power to the law its motive in making it would be irrelevant
K C Gajapaji Narayan Deo vs The  State of Orissa 1954 SCR i followed
The State of Bihar vs Maharajadhiraja sir Kameshwar singh of darbhangha considered So judged it could not said that CH
IVA of the Act was a colourable piece of legislation
The power vested in the Regional  Transport Authority by section 68F of the Act involved no transfer of business of the existing permit holders to the State Transport Undertaking nor could the latter be said thereunder to take over any assets of the former
Section 68G of the Act in providing for compensation for un expired period of the permit did not imply that CH
IVA of the Act involved any transfer of property or possession so as to entitle the permit holder to any compensation under article 312 Of the Constitution
Chapter 1VA of the Act did not therefore infringe the fundamental right of the petitioners under  article 31 Of the Constitution
Per Das C J Bhagwati and Subba Rao jj
While the purpose of section 68C of the Act was no doubt to provide a scheme of road transport service on the lines prescribed by it the scheme proposed might affect the rights of individual permit holders by excluding them partially or completely from the business in any particular route or routes and the procedure prescribed by section 68D and Rules 8 and 10 framed under the Act required that the Government should hear both the objectors and the State Transport Undertaking before approving or modifying the scheme
There was no doubt therefore that the State was deciding a lis and it was to do so judicially
Province of Bombay vs Kusaldas section Advani   Nagendra Nath Bora vs Commissioner Hills Division and Express Newspapers Ltd vs The Union of India  relied on
Franklin vs Minister of Town and Country Planning 19481 A C 87 held inapplicable
It was a fundamental principle of natural justice that the authority empowered to decide a matter must have no bias in it and another no less fundamental was that where the Act provided for a personal hearing the authority that heard the matter must also decide it
The procedure followed in the instant case whereby the Home Secretary in charge of Transport himself a party to the dispute heard the objections and the Chief Minister decided them violated those principles and the order of the State Government approving the scheme thereforemust be quashed
Per Sinha and Wanchoo jj
The sole object of Ch
IVA of the Act was to nationalise the road transport services and the inquiry envisaged by it was of a limited character
That inquiry 321 was meant to find out whether the scheme propounded was in public interest as required by section 68C of the Act and not to adjudicate rival claim of permit holder on the one hand and the State Transport Undertaking on the other  for on approval of the scheme exclusion of private transport as proposed by the scheme was bound to follow as a matter of course
There could therefore be no lis and the Government in approving or modifying the scheme under Ch
IVA and the Rules framed thereunder must be held to act in its normal administrative capacity
No objections could be taken in the instant case to the procedure adopted by the Government in empowering the Secretary to hear objections while the Chief Minister decided them and the Secretary could in no sense be a party to any dispute
Province of Bombay vs Kusaldas section Advani   Nagendra Nath Bora vs Commissioner Hills Division  and Express Newspapers Ltd vs The Union of India  referred to
Franklin vs Minister of Town and Country Planning 19481 AC 87 applied
Robinson vs Minister of Town and Country Planning 1947 I All E R 851 referred to