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PETITIONER: INDIAN AIRLINES CORPORATION

       Vs.

RESPONDENT: SUKHDEO RAI

DATE OF JUDGMENT27/04/1971

BENCH: SHELAT, J.M. BENCH: SHELAT, J.M. DUA, I.D. BHARGAVA, VISHISHTHA

CITATION:  1971 AIR 1828            1971 SCR  510  1971 SCC  (2) 192

ACT: Air Corporation Act, 1953-Sections 44, 45-Regulation  framed under  the Act providing terms and conditions of service  of employees--Termination of service in breach of  regulations- Relationship  between Corporation and its employees that  of master and servant--Therefore, only entitled to damages. Regulations-Framed  under Air Corporation  Act,  1953-Status of. Master  and  Servant-Employees  of  statutory   corporation- Regulations  framed  under  statute only  embody  terms  and conditions of service.

HEADNOTE: The  appellant  is  a  Corporation  set  up  under  the  Air Corporation  Act, 1953.  The Act authorises the  corporation to   appoint   officers  and,  other  employees   and   make regulations providing the terms and conditions of service of such officers and employees. The respondent employed as a motor driver was dismissed from the  service of the Corporation in breach of the  procedural safeguards provided under the regulations.  He filed a  suit for  a declaration that the dismissal was illegal and  void. The trial court granted the declaration.  On appeal the High Court  affirmed the decree holding that the Corporation  was under  a statutory obligation to observe the procedure  laid down  in the regulations and that not having been  done  the order  of dismissal was illegal and void and the  respondent continued  to be in the employment of the Corporation as  if there  was  no  termination of  service.   On  the  question whether the declaration given by the trial court and  upheld by the High Court could be granted, HELD:     (1)  When  there is a purported termination  of  a contract  of  service, a declaration that  the  contract  of service still subsisted would not be made in the absence  of special circumstances, because of the principle that  courts do  not  ordinarily grant specific performance  of  service. This is so, even in cases where the authority appointing  an employee was acting in exercise of statutory authority.  The relationship  between the person appointed and the  employer would,  in  such cases, be contractual i.e.,  as  between  a master and servant, and the termination of that relationship

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would  not  entitle the servant to a  declaration  that  his employment had not been validly determined. [512H] Francis  v. Municipal Councillors of Kuala Lumpur, [1962]  3 All E.R. 633, Barber v. Manchester Regional Hospital  Board, [1958] 1 All E.R. 322 and Ridge v. Baldwin, [1964] A.C.  40, referred to. But the court would grant a declaration of nullity where the action complained of is ultra vires or where the appointment is to an office or status. [513E-F] Vine  v. National Dock Labour Board, [1957] A.C.  488,  Bool Chand  v. The Chancellor, [1968] 1 S.C.R. 434 and  Vidyodaya University v. Silva, [1964] 3 All E.R. 865, referred to. 511 (ii) The fact that the appellant Corporation was one set  up under  and was regulated by a statute would not  take  away, without   anything  more,  the  relationship   between   the Corporation  and its employees from the category  of  purely master and servant relationship. [514E] Vidyodaya  University v. Silva, [1964] All E.R. 865 and  Dr. S. B. Dutt v.  University  of  Delhi,  [1959]  S.C.R.  1236, referred to. (iii)The  employment  of  the respondent is not  one  to  an office  or  status and neither the Act nor  the  rules  made under s. 44 by the Central Government   lay     down     any obligation or restriction as to the power of the Corporation to  terminate the employment of its employees or any  proce- dural  safeguards subject to which only such power could  be exercised. [516E] (iv) This  Court  has held that there are only  three  well- recognised  exceptions to the general rule under the law  of master  and  servant where a declaration  would  be  issued, viz.,  (i)  cases of public servants falling  under  article 311(2)  of  the Constitution; (ii) cases falling  under  the industrial  law  and  (iii) cases where  acts  of  statutory bodies are in breach of a mandatory obligation imposed by  a statute. [517B] S.   R. Tewari v. District Board, Agra, [1964] 3 S.C.R.  55, Bank  of  Baroda v. Mehrotra, [1970] 2 L.L.J. 54,  Ram  Babu Rathaur v. Life insurance Corporation, A.I.R. 1961 All. 502, Life  Insurance Corporation v. N. Banerjee, (1971] 1  L.L.J. 1,  Dr.  Gupta  v.  Nathu, [1963] 1  S.C.R.  721,  Kruse  v. Johnson, [1898] 2 Q.B.D. 91 and Rajasthan State  Electricity Board v.  Mohan Lal, [1967] 3 S.C.R. 377, referred to. Life  Insurance Corporation of India v. Mukherjee, [1964]  5 S.C.R. 528, distinguished. Barot v. S. T. Corporation, [1966] 3 S.C.R. 40, explained. (V)  Though  made under the power conferred by statute,  the regulations  merely  embody  the  terms  and  conditions  of service in the Corporation but do not constitute a statutory restriction   as  to  the  kind  of  contracts   which   the Corporation  can  make with its servants or the  grounds  on which  it  can  terminate  them.  That  being  so,  and  the Corporation   having  undoubtedly  power  to   dismiss   its employees,   the  dismissal  of  the  respondent  was   with jurisdiction  and although it was wrongful in the  sense  of its  being  in  breach of the  terms  and  conditions  which governed  the relationship between the Corporation  and  the respondent, it did subsist. [520D] (vi) The present case, therefore, did not fall under any  of the  three  well-recognised  exceptions laid  down  by  this Court; hence the respondent was only entitled to damages and not to the declaration that his dismissal was null and void. [520E]

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JUDGMENT: CIVIL APPELLATE JURISDICTION Civil Appeal No. 1171 of 1967. Appeal from the judgment and decree dated September 27, 1966 of  the Calcutta High Court in Appeal from Appellate  Decree No. 195 of 1964. G.   B.  Pai,  O.  C.  Mathur,  J.  B.  Dadachanji,  C.   S. Sreenivasa Rao and Bhajan Ram Rakhini, for the appellant. Urmila  Kapoor,  Janardan  Sharma  and  R.  K.  Khanna,  for respondent. 512 The Judgment of the Court was delivered by shelat J.-Prior to August 1953, the respondent was  employed as a motor driver in Airways (India) Ltd.  On the passing of the  Air  Corporation  Act, XXVII of  1953,  and  consequent thereupon of the taking over of the existing air  companies, including  the  Airways  (India)  Ltd.,  by  the  appellant- Corporation,  he  became  the  employee  of  the  appellant- Corporation.   On  January  13, 1956, he  was  suspended  on certain  charges.   On being found guilty of  those  charges after an enquiry had been held, he was dismissed by an order dated February 6, 1956. The  respondent filed a suit alleging that the  enquiry  had been  conducted in breach of the procedure laid down by  the Regulations  made  by the Corporation under sec. 45  of  the Act, and that therefore, the dismissal was illegal and void. The  Trial  Court  accepted the  contention  and  granted  a declaration   that  his  service  continued  as  the   order dismissing him was null and void.  That decree was upheld by the  first appellate court.  In a second appeal in the  High Court,  it was conceded that the Regulations applied to  the respondent’s case, and that the procedure therein laid  down for  terminating  his service was not  complied  with.   The Corporation’s contention, however, was that the only  relief to which the respondent was entitled to was damages and that a  declaration, such as the one granted by the Trial  Court, could not be given.  The High Court rejected that contention holding,   that  the  Corporation  was  under  a   statutory obligation  to  observe  the  procedure  laid  down  in  the Regulations,  and  that not having been done, the  order  of dismissal was illegal and void and the respondent  continued to  be in the employment of the Corporation as if there  was no  termination  of  service.  This  appeal,  founded  on  a certificate  granted by the High Court, is directed  against its aforesaid judgement and decree. It being an admitted fact that the respondent’s service  was terminated  in breach of the procedural safeguards  provided in  the  Regulations,  the  question  for  determination  is whether  in cases, such as the one before us, a  declaration given by the Trial Court and upheld by the High Court  could be granted. It  is  a  well  settled principle  that  when  there  is  a purported   termination   of  a  contract  of   service,   a declaration,  that the contract of service still  subsisted, would  not be made in the absence of  special  circumstances because of the principle that courts do not ordinarily grant specific performance of service.  This is so, even in  cases where  the  authority appointing an employee was  acting  in exercise of statutory authority The relationship between the person appointed and the employer would in such cases 513 be  contractual, i.e., as between a master and servant,  and the  termination of that relationship would not entitle  the servant  to a declaration that his employment had  not  been validly determined. (see A. Francis v. Municipal Councillors

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of  Kuala Lumpur and Barber v. Manchester Regional  Hospital Board (2). "Cases of dismissal fall into three classes", said Lord Roid in Ridge v. Baldwin. (3) firstly, dismissal of a servant  by his  master,  secondly, dismissal from  office  held  during pleasure,  and  thirdly, dismissal from office  where  there must  be something against a man to warrant  his  dismissal. It is in the third category of cases that an employee cannot be dismissed without first letting him know what is  alleged against  him  and hearing his defence  or  explanation.   He added   that  in  a  case  of  purely  master  and   servant relationship, the servant is not entitled to say that he was not heard by his master before his dismissal.  Such a  ques- tion  of  being  heard  or not  can  only  arise  where  the authority  employing the servant is under some statutory  or other  restriction as to the kind of contract which  it  can make  with  its  servants or the grounds  on  which  it  can dismiss them.  Ile question, therefore, would be whether the relationship between the Corporation and the respondent  was any  thing else than that of master and servant, or  whether the  Corporation  was  under some  statutory  limitation  or obligation  by  reason of which it could not  terminate  his service  except by complying with such an  obligation.   The decision   in  Vine  v.  National  Dock  Labour  Board   (4) illustrates a case where the court would grant a declaration of  nullity.  That was a case of lack of power in the  Board to  delegate its disciplinary function to a committee  which dismissed the employee-an action which was held ultra vires, and  therefore,  a  nullity.   A  similar  consequence  also follows  where  the appointment is to an office  or  status, such as the vice-chancellorship of a university, as was  the case  in Bool Chand v. The Chancellor (5), where this  Court held  that the tenure of office held by the appellant  could not  be terminated without informing him of the  allegations made  against him and without hearing him or giving  him  an opportunity to give an explanation. There  is, on the other hand, the case of Vidyodava  Univer- sity  v.  Silva  (6)  where  a  teacher  appointed  by   the University  was  found not to be holding such an  office  or status  and  where it was held that the  University,  though established   under  a  statute,  was  under  no   statutory obligation  or restriction, subject to which only  it  could terminate the service of the teacher.  The service (1)  [196213 All E.R. 633. (3)  [1964] A.C. 40 at 65. (5)  [1968]1 S.C.R. 434. 33-1S.C.India 71 (2)  [1958] 1 All E.R. 322. (4)  [1957] A.C. 488. (6)  [1964] 3 All E.R. 865. 514 of  the respondent was brought to an end by a resolution  of the University Council set up under the statute establishing the  University.   The  resolution  was  admittedly   passed without hearing the teacher.  Under the statute, the Council was   empowered  to  institute  professorships   and   every appointment was to be by an agreement in writing between the University  and the professor and was to be for such  period and on such terms as the Council might resolve.  Under  sec. 18(e)  of the Act, the Council had the power to  dismiss  an officer  or  a teacher on grounds of incapacity  or  conduct which  in  the opinion of not less Than  two-thirds  of  the members  of the Council rendered him unfit to be an  officer or a teacher of the University.  Such a resolution with  the requisite majority was passed.  The Act gave no right to the

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teacher  of being heard by the Council.  The  Privy  Council held  that  the mere circumstance that  the  University  was established  by the statute and was regulated  by  statutory enactments  contained  in  the Act did  not  mean  that  the contracts  of employment made with teachers, though  subject to sec. 18(e), were other than ordinary contracts of  master and  servant,  and therefore, the procedure of  being  heard invoked  by the respondent was not available to him  and  no writ  could be issued against the University. (see also  Dr. S. B. Dutta. v. University of Delhi (1) The fact, therefore, that the appellant-Corporation was one set up under and  was regulated by Act XXVII of 1953 would not take away,  without anything more, the relationship between it and its employees from the category of purely master and servant relationship. Are  there then in the Act any provisions which impose  upon the  Corporation  any statutory  restriction  or  obligation which limits its power of terminating that relationship ? The Act was passed to facilitate acquisition by the Air Cor- porations of undertakings belonging to certain existing  air companies and to make further and better provisions for  the operation  of  air  transport  services.   By  sec.  3,  two corporations,   the   Indian   Airlines   and   Air    India International,  were  set  up as  bodies  corporate,  having perpetual succession.  Sec. 8(1) provides that for  purposes of  discharging  its  functions under the Act  each  of  the corporations shall appoint a general manager and subject  to such  rules  as may be prescribed in this  behalf  may  also appoint  such  number of officers and employees  as  it  may think necessary.  Its second sub-section provides that:               "Subject  to  the provisions  of  section  20,               every   person   employed  by  each   of   the               Corporations   shall   be  subject   to   such               conditions of service and shall be entitled to               such  remuneration  and privileges as  may  be               determined               (1)   [1959] S.C.R. 1236, at 1244.               515               by  regulations  made by  the  Corporation  by               which he is employed."               Sec. 20 provides that:               "Every   officer  or  other  employee  of   an               existing air company-employed by that  company               prior  to  the first day of  July,  1952,  and               still in its employment immediately before the               appointed   date  shall-become  as  from   the               appointed  date an officer or other  employee,               as  the  case may be, of  the  Corporation  in               which  the  undertaking has vested  and  shall               hold his office or service therein by the same               tenure, at the same remuneration and upon  the               same  terms and conditions and with  the  same               rights  and  privileges  as  to  pensions  and               gratuity  and other matters as he  would  have               held  the same under the existing air  company               if its undertaking had not vested in the  Cor-               poration  and shall continue to do  so  unless               and until his employment in the Corporation is               terminated or until his remuneration, terms or               conditions    are   duly   altered   by    the               Corporation." Sec. 44(1) empowers the Central Government to make rules  to give  effect  to the provisions of the Act  and  sub-s.  (2) thereof empowers it, in particular and without prejudice  to the  generality of that power, to make rules,  inter  alia, providing the terms and conditions of service of the general

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manager  and  such other categories of officers  as  may  be specified  from  time  to  time  under  s.  8(1).   Sec.  45 authorises each of the two Corporations with the approval of the Central Government and by notification in the Government gazette to make regulations not inconsistent with the Act or the  rules made under s. 44 "for the administration  of  the affairs  of  the  Corporation  and  for  carrying  out   its functions"  and  in  particular  providing  the  terms   and conditions of service of officers and other employees of the Corporation  other than the general manager and officers  of any other categories referred to in s. 44. The  effect of these provisions, briefly, is, (1) that  sec. 8(1)  authorises  the Corporation to  appoint  officers  and other  employees, (2) that under s. 8(2) the Corporation  is empowered,  subject  to  s. 20, to lay down  the  terms  and conditions  of service of such officers and employees as  it may determine by regulations made under s. 45, and (3)  that by  virtue  of  s.  20 the officers  and  employees  of  the existing  air companies, whose undertakings were taken  over by  the Corporations, became, by whom the operation  of  the Act,  the  employees of the Corporation in On  a  Particular undertaking  was vested.  The section ensures that on  their so 516 becoming  the  employees of the Corporation  they  would  be governed  by  the same terms and conditions  of  service  by which  they were governed immediately before  the  appointed date   until  the  Corporation  altered  those   terms   and conditions   by  regulations  The  power  to   appoint   its employees.  except  to the extent of the  employees  of  the existing  air companies becoming by operation of s.  20  its employees, is vested in each of the two Corporations Each of them has also the power to lay down the terms and conditions of service of its employees by regulations and thereby  even alter  the terms and conditions, which those who  became  by operation  of  law  its employees had  in  their  respective existing  companies, and which, until such alteration,  were ensured  to them.  Indeed, the power of the  Corporation  to terminate the employment of its officers and other employees was no where disputed; the only dispute raised was as to the manner  in which it could be exercised.  It is necessary  to observe  in  this connection  that neither the Act  nor  the rules made under sec. 44 by the Central Government lay  down any  obligation  or  restriction  as to  the  power  of  the Corporation to terminate the employment of its employees  or any procedural safeguards, subject to which only, such power could be exercised.  The reason is that under the scheme  of the  Act  such  procedural safeguards and  other  terms  and conditions  of  service  were  to be  provided  for  in  the regulations made by the Corporation under sec. 45. The employment of the respondent not being one to an  office or  status and there being no obligation or  restriction  in the  Act  or the rules subject to which only  the  power  to terminate  the respondent’s employment could  be  exercised, could  the  respondent contend that he was  entitled  to  a, declaration that the termination of his employment was  null and void ? A  case  of an analogous nature arose in U. P.  State  Ware- housing  Corporation  Ltd. v. Tyagi.  (1)  The  Agricultural Produce  (Development  and  Warehousing)  Corporation   Act, XXVIII  of 1956, with which the Court there  was  concerned, provided   for   the   incorporation   and   regulation   of corporations   for   development     and   warehousing    of agricultural  produce  on cooperative principles.   See.  28 empowered  State  Governments to set up  such  corporations.

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Sec. 52 authorised the appropriate Government to make  rules and  ss. 53 and 54 gave power to the Board set up under  the Act  and the corporations respectively to  make  regulations consistently  with the provisions of the Act and  the  rules The  respondent  there was dismissed  from  service  without following  the  procedure  laid down  in  regulation  16(3). There was no (1)  [1970] 2 S.C.R. 250. 517 question  or  doubt about the power of  the  Corporation  to terminate   his  service.   The  question  was,  whether   a declaration  to the effect that the termination was  invalid and  void  on  the ground of  non-compliance  of  regulation 16(3), could be granted in the suit filed by the respondent. This Court, after examining a number of decisions,  followed the  decision  in S.  R. Tewari v. District Board  Agra  (1) which  laid down that there were only three well  recognized exceptions  to the general rule under the law of master  and servant  where such a declaration would be  issued,  namely, (1)  cases of public servants falling under Art.  311(2)  of the  Constitution,  (2) cases falling under  the  industrial law,  and  (3) cases where acts of statutory bodies  are  in breach  of a mandatory obligation imposed by a statute,  and held  that the case before it did not fall under any one  of the  said three exceptions, that the dismissal was  wrongful inasmuch as it was in breach of the terms and conditions  of employment embodied in the regulations and not one of breach of  a statutory restriction or obligation, subject to  which only the power to terminate the relationship depended.  (see also  Bank of Baroda v. Mehrotra (2) In S. R. Tewari’s  case (1)  this  Court noticed with approval the decision  of  the High  Court  of  Allahabad  in  Ram  Babu  Rathaur  v.  Life Insurance Corporation (3) that though the Corporation was  a statutory  body, the relations between it and its  employees were governed by contract and were of master and servant and not  subject  to  any  statutory  obligation  although   the Corporation  had framed under its power under the Act  regu- lations containing conditions of service in the Corporation. A similar view has recently been taken by the High Court  of Calcutta in Life Insurance Corporation v. N. Banerjee (4). Counsel for the respondent, however, sought assistance  from the  decision in the Life Insurance Corporation of India  v. Mukherjee (5).  That decision is clearly distinguishable and can, therefore, give no assistance.  Prior to the passing of the  Life  Insurance Corporation Act,  1956  the  respondent there  was  an employee of one of  the  insurance  companies taken over under the Act.  Under his contract of employment, his service was liable to be terminated without notice if he was  found  guilty of fraud, misappropriation etc.  but  was entitled  to  30 days’ notice if it was terminated  for  any other reason.  His service was terminated admittedly without giving him an opportunity to be heard.  With the transfer of the controlled business from the insurer to the Corporation, the  employees  of the former became the  employees  of  the latter and (1) [1964] 3 S.C.R. 55.     (2) [1970] II L.L.J. 54. (3) A.I.R. 1961 All. 502.   (4) [1971] 1 L.L.J. 1. (5)  [1964] 5 S.C.R. 528. 518 were  governed under S. 11 (1) of the Act by the same  terms and  conditions  as  before.  But under sec.   11  (2),  the Central  Government had the power to alter those  terms  and conditions.   Under  this power, the  Government  issued  an order  reducing the remuneration payable to the  development officers and revising their other terms and conditions.  Cl.

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(10)  of this order empowered the Corporation inter alia  to terminate the services of such an officer, (a) after  giving him  an  opportunity  of  showing  cause,  or  (b)   without assigning  any  reason but with the prior  approval  of  the Chairman  of the Corporation and after giving three  months’ notice.  Cl. (11) of the order provided that the actual  pay admissible  to an officer would be determined in  accordance with the regulations which the corporation would make  under the power reserved to it by the Act.  It is thus clear that, except for the pay and allowances admissible to an  officer, the  Order  was a self-contained code as regards  the  other terms  and  conditions  of  service  including  disciplinary action.   In the meantime, two circulars had been issued  by the  managing  director  which  provided  that  in   certain circumstances  the services of an officer could be  termina- ted.   As  contemplated by cl. (II) of the said  Order,  the Corporation  framed  regulations under sec. 49 of  the  Act. Regulation  4(3) incorporated the said circulars as part  of the   regulations  for  purposes  of  determining  the   pay admissible  to and the fitment of the development  officers. Thus,  the circulars became part of the  regulations  though when  they  were issued they were merely  administrative  in character  and  without  any  sanction  of  the  Act.    The Corporation  claimed that under regulation 4(3),  which  in- corporated the said circulars, it had the power to terminate the  service  of  Mukherjee without  assigning  any  reason. Negativing  that contention, this Court held that  s.  11(2) was paramount and would override any provision of the  Order passed  by the Central Government if it was contrary to  it. Next would come the Order, and lastly the regulations  which were subject to the Act and the Order, and therefore, if the regulations  were to be inconsistent with the provisions  of S. 11(2) or the said Order, the regulations would be to that extent invalid.  Therefore, even if the regulations provided for  termination  of  services they would have  to  be  read subject  to the Order of the Government,  and  consequently, the  order terminating the service of an officer would  have to  be in consonance with the provisions of the said  Order. Consequently, an order terminating the service of an officer without  giving  him  an  opportunity  of  being  heard,  as provided  by  cl. (10) of the said Order, would  be  without power, and therefore, invalid.  The Court held the  impugned dismissal  as  invalid also for the reason  that  regulation 4(3)  provided for determination of pay and  allowances  and the  fitment  of officers in accordance with  the  principle laid down in the said circulars, and therefore, the  service of an officer could not be determined under the guise of 519 fitment.  That could, therefore, be done only under cl. (10) of the Order and in accordance with the procedure laid  down in  that clause.  The order declaring the dismissal  invalid thus  was based on the ground that the regulations  and  the Order  of the Central Government must be  read  harmoniously and when so read, the Central Government’s Order gave  power to  terminate the service of an officer after following  the procedure  there laid down, and consequently,  the  impugned dismissal  made  inconsistently with the provisions  of  the said  Order  was  without  jurisdiction,  and  therefore,  a nullity.   It  is  clear that this  decision  was  based  on different  facts and on different principles and  cannot  be legitimately invoked by the respondent.  But the decision in Barrot  v. S. T. Corporation (1) would seem to  support  the respondent.    There,  the  order  of  termination  of   the appellant’s service by the Corporation, a body set up  under the  Road Transport Corporations Act, 1950, was held  to  be

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bad  in law on account of its being in contravention of  cl. 4(b) of the Regulations containing service conditions framed by  the Corporation under the power given to it by the  Act. But the question whether the said Regulations constituted  a statutory  obligation  subject to which only  the  power  to terminate  the employment could be exercised or not, or  the question whether they took the employment out of master  and servant   relationship  was  not  canvassed.   Neither   the decision  in S. R. Tewari’s case (2) nor any  other  similar decision  was  also it seems, brought to the notice  of  the Court. Nor  can  counsel derive any aid, from the decision  in  Dr. Gupta v. Nathu (3) where the Court was dealing with a by-law made by the Central Government under powers conferred on  it by  the  Forward  Contracts  (Regulation)  Act,  1952  which compulsorily   amended  the  bye-laws  of  the   association recognized under the Act and which vested certain powers  on authorities  external  to the association.  The  bye-law  in question  was not limited in its application to the  members of the association but to all those who entered into forward contracts  and were governed by its by-laws.  But all  rules and regulations made by authorities ill pursuance of a power under  a statute do not necessarily have the force  of  law. In Kruse v. Johnson. (4) while considering the validity of a bye-law made by a country council.  Lord Russell described a bye-law having the force of law as one affecting the  public or  some  section of the public, imposed by  some  authority clothed with statutory powers, ordering something to be done or  not  to  be done and accompanied by  some  sanction or penalty for its non-observance.  It validly made such a bye- law has the force of law within the sphere of its (1)  [1966] 3 S.C.R. 40. (3)  [1963] 1 S.C.R. 721. (2)  [1964] 3 S. C. R. 55. (4)  [1898] 2 Q.B. 91, at 96. 520 legitimate  operation.  The function of such bye-laws is  to supplement   the  general  law  by  which  the   legislature delegates  its own power to make them.  In  Rajasthan  State Electricity Board v. Mohan Lal (1) where this Court held the Board,  set  up under the Electricity (Supply)  Act,  54  of 1948,  as  a  State within the meaning of  Art.  12  of  the Constitution  against which mandamus could issue under  Art. 226,  emphasised the fact that the Act contained  provisions which   empowered  the  Board  to  issue   directions,   the disobedience of which was punishable as a penal offence.  As observed earlier, under sections 8(2) and 20, the appellant- Corporation  has  been  given the power to  employ  its  own officers  and  other  employees  to  the  extent  it  thinks necessary  on terms and conditions provided by it  in  regu- lations  made  under sec. 45.  The regulations  contain  the terms  and conditions which govern the relationship  between the  Corporation and its employees.  Though made  under  the power conferred by the statute, they merely embody the terms and  conditions  of service in the Corporation  but  do  not constitute  a  statutory  restriction  as  to  the  kind  of contracts  which the Corporation can make with its  servants or  the grounds on which it can terminate them.  That  being so,  and  the Corporation having undoubtedly  the  power  to dismiss  its employees, the dismissal of the respondent  was with jurisdiction, and although it was wrongful in the sense of  its  being in breach of the terms and  conditions  which governed  the relationship between the Corporation  and  the respondent,  it did subsist.  The present  case,  therefore, did  not fall under an of the three well  recognized  excep-

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tions,  and therefore, the respondent was only  entitled  to damages  and not to the declaration that his  dismissal  was null and void. In  our view, the High Court was in error in  upholding  the declaration  granted by the Trial Court.  The appeal by  the Corporation,  therefore,  succeeds and is allowed  with  the result that the judgment and decree passed by the High Court is  set aside.  In the circumstances of the  case,  however, there will be no order as to costs. K. B. N.                       Appeal allowed. (1) [1967] 3 S.C.R. 377. 521