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PETITIONER: DELHI TRANSPORT CORPORATION

       Vs.

RESPONDENT: D.T.C. MAZDOOR CONGRESS

DATE OF JUDGMENT04/09/1990

BENCH: MUKHARJI, SABYASACHI (CJ) BENCH: MUKHARJI, SABYASACHI (CJ) RAMASWAMY, K. RAY, B.C. (J) SHARMA, L.M. (J) SAWANT, P.B.

CITATION:  1991 AIR  101            1990 SCR  Supl. (1) 142  1991 SCC  Supl.  (1) 600 JT 1990 (3)   725  1990 SCALE  (2)1  CITATOR INFO :  D          1992 SC1072  (4)

ACT:     Service  Law:  Delhi Road Transport Act,  1950:  Section 53/Delhi  Road Transport Authority) (Conditions of  Appoint- ment and Service) Regulations, 1952--Regulation 9(b)/Shastri Award---Para  522/District Board Rules, 1926,  Part  V--Rule 1(1)/Indian   Airlines  Employees’   Regulations--Regulation 13/Air India Employees’ Regulations--Regulation 48--Validity of--Termination  of  service of permanent  employee  without assigning  any  reasons and holding  enquiry--Whether  arbi- trary,  unfair, unjust, unreasonable and opposed  to  public policy-Whether violative of Articles 12, 14, 16, 19, 31  and 311(2)  of the Constitution of India, principles of  natural justice  and  Section 23 of  Contract  Act,  1872--Statutory corporations--Power  to  terminate  services  of   employees without holding enquiry--Validity of.     Contract  Act, 1872: Section 23--Contract providing  for termination  of  service without notice and holding  of  en- quiry--Whether enforceable.     Constitution of India, 1950: Articles 14, 16, 19(1) (g), 21 and 311(2)--Termination of service of an employee without assigning reasons and holding enquiry--Whether violative  of Fundamental Rights and principles of natural  justice--Regu- lations/Rules-- Validity of.     Article 141.’ Expressions "declared" and "found or made" --Scope and ambit of.     Interpretation  of Statutes: Internal aid  to  construc- tion--Doctrine  of  reading  down--Scope  and  Applicability of--Provision illegal and invalid--Whether could be validat- ed    by   reading   down--Where   provision    clear    and unambiguous--Whether  permissible  to  read  down  into  the provision something which was not intended.     Public    Policy    vis-a-vis    constitutionality    of statute--Whether public policy can be drawn from the Consti- tution--Whether constitutional policy provides an  aid--Role and purpose of constitutional interpretation by apex court. 143     Administrative    Law--Discretionary     power--Exercise of--Limitations-Absence of arbitrary power--First  essential

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of Rule of Law.

HEADNOTE:     Respondents No. 2 to 4, regular employees of the  appel- lant Delhi Transport Corporation, were served with  termina- tion notices under Regulation 9(b) of the Delhi Road  Trans- port Authority (Conditions of Appointment & Service) Regula- tions, 1952 by the appellant Corporation on the ground  that they  became inefficient in their work and started  inciting other members not to perform their duties.     The three respondents and their Union, respondent No.  1 filed writ petition in High Court, challenging the constitu- tional  validity of Regulation 9(b), which gave the  manage- ment  right  to  terminate the services of  an  employee  by giving one month’s notice or pay in lieu thereof. The  Divi- sion  Bench  of the High Court struck down  the  Regulation, holding  that  the Regulation gave absolute,  unbridled  and arbitrary powers to the management to terminate the services of  any permanent or temporary employee, and such power  was violative  of  Article 14 of the  Constitution.  Hence,  the Corporation  filed the appeal before this Court, by  special leave.     The  validity of similar provisions in Para 522  of  the Shastri  Award, rule 1(i) of the District Board Rules  1926, Part V, Regulation 13 of Indian Airlines Employees’  Service Regulations,  Regulation 48 of Air India Employees’  Service Regulations and also the clause in the contract of  appoint- ment  in respect of employees of Zilla Parishad and the  New India  Assurance Company, also came up for consideration  in the  connected  appeals and applications filed  before  this Court.     It was contended on behalf of the Delhi Transport Corpo- ration  that  there was sufficient guideline  in  Regulation 9(b) and the power of termination, properly read, would  not be arbitrary or violative of Article 14 of the Constitution, 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  was exercised  only  for  that purpose, that even  a  term  like ’public interest’ could be sufficient guidance in the matter of retirement of a government employee, and such a provision could be read into a statute even when it was not  otherwise expressly  there,  that it was well-settled that  the  Court would  sustain the presumption of constitutionality by  con- sidering  matters  of common knowledge and to  assume  every state of facts which could be conceived and could even  read down  the  section,  if it became necessary  to  uphold  the validity of the provision, that the underlying 144 rationale of this rule of interpretation, or the doctrine of reading  down  of a statute being that when  a  legislature, whose  powers were not unlimited, enacted a statute, it  was 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  requisite limitations and conditions to immunise it from the virus  of unconstitutionality,  that since every legislature  intended to  act  within  its powers, in a  limited  Government,  the legislature  would  attempt to function within  its  limited powers  and  it would not be expected to  have  intended  to transgress its limits, that the guidelines for the  exercise of  the  power of termination simpliciter  under  Regulation 9(b) could be found in the statutory provisions of the  1950

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Act under which the regulations had been framed, the  pream- ble; Sections 19, 20 and 53, the context of Regulation  9(b) read  with Regulations 9(a) and 15, that even for the  exer- cise of this power, reasons could be recorded although  they need  not be communicated which would ensure a check on  the arbitrary exercise of power and effective judicial review in a given case, ensuring efficient running of services and  in public interest and the regulations in question were  paral- lel  to, but not identical with, the exceptions  carved  out under  proviso  to Article 311(2), that even  the  power  of termination simipliciter under Regulation 9(b) could only be exercised  in circumstances other than those  in  Regulation 9(a),  i.e. not where the foundation of the order was  ’mis- conduct’,  the  exercise  of such power could  only  be  for purposes  germane  and  relevant to the  statute,  that  the principles  of natural justice or holding of an  enquiry  is neither  a  universal principle of  justice  nor  inflexible dogma and the principles of natural justice were not incapa- ble  of  exclusion in a given situation,  if  importing  the right to be heard has the effect of paralysing the  adminis- trative  process or the need for promptitude or the  urgency of  the-  situation  so demands, natural  justice  could  be avoided;  that the words "where it is not  reasonably  prac- ticable to hold an enquiry" may be imported into the regula- tion, that where termination took place by the exclusion  of audi alteram partem rule in circumstances which were circum- scribed  and  coupled  with the safeguard  of  recording  of reasons  which were germane and relevant, then the  termina- tion  would not render the regulation unreasonable or  arbi- trary,  and  if the regulation was read in  this  manner  it could not be said that the power was uncanalised or  unguid- ed,  that  under ordinary law of "master  and  servant"  the Corporation  was  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 was  void  under section 23 of the Indian  Contract  Act  or opposed  to public policy offending the  Fundamental  Rights and  the  Directive Principles was not sound in  law;  as  a master, the Corporation had unbridled right 145 to  terminate  the contract in the  interests  of  efficient functioning  of  the Corporation or to  maintain  discipline among its employees, and if the termination, was found to be wrongful, the only remedy available to the employees was  to claim damages for wrongful termination but not a declaration as was granted in Brojo Nath’s case.     On  behalf of the workmen/intervenors, it was  submitted that  provision of any rule that service would be liable  to termination  on  notice for the  period  prescribed  therein contravened Article 14 of the Constitution, as arbitrary and uncontrolled  power was left in the authority to  select  at its will any person against whom action would be taken; that Articles 14, 19 and 21 were inter-related and Article 21 did not exclude Article 19 and even if there was a law providing a  procedure for depriving a person of personal liberty  and there was, consequently no infringement of fundamental right conferred  by Article 21, such law in so far as it  abridged or  took away any fundamental right under Article  19  would have  to meet the challenge of that Article, that  violation of  principle of natural justice by State action was  viola- tion  of Article 14 which could be excluded only  in  excep- tional circumstances, and, therefore, a clause which  autho- rised the employer to terminate the services of an employee, whose contract of service was for indefinite period or  till the age of retirement, by serving notice, and which did  not

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contain  any  guidance  for the exercise of  the  power  and without recording reasons for such termination, violated the fundamental  rights guaranteed under Articles  14,  19(1)(g) and 21 and principles of natural justice and was void  under Section 2(g) of the Indian Contract Act, 1872, and  unforce- able under Section 2(hi; that since audi alteram partem  was a  requirement  of Article 14. and conferment  of  arbitrary power  itself was contrary to Article 14, the rule in  ques- tion could not be sustained as valid; that the Constitution- al guarantees under Articles 14 and 21 were for all  persons and there could be no basis for making a distinction between ’workmen’  to  whom the Industrial Disputes  Act  and  other industrial  laws  applied and those who were  outside  their purview, and the law applicable to the former could only add to and not detract from the rights guaranteed by Part 111 of the  Constitution; that the power to terminate the  services of  a person employed to serve indefinitely or till the  age of  retirement  could be exercised only in cases  of  proved misconduct or exceptional circumstances having regard to the Constitutional   guarantee  available  under   Article   14, 19(1)(g)  and  21 and unless the  exceptional  circumstances were  spelt out, the power to terminate the  services  would cover  both permissible and impermissible grounds  rendering it wholly invalid, particularly because, the requirement  of audi alteram partem which was a part of the guarantee of 146 Article 14 was sought to be excluded, and there could be  no guidance available in the body of the law itself, since  the purpose  for  which an undertaking was established  and  the provisions dealing with the same in the law could provide no guidance  regarding  exceptional circumstances  under  which alone  the power could be exercised, that the  question  in- volved,  in the instant cases was not the exercise of  power which an employer possessed to terminate the services of his employee,  but the extent of that power; that provisions  of Regulation  9(b)  of  the  Delhi  Road  Transport  Authority (Conditions  of Appointment and Service) Regulations,  1952, could not be rendered constitutional by reading the require- ment of recording reasons and confining it to cases where it was not reasonably practicable to hold an enquiry and  read- ing it down further as being applicable to only  exceptional cases would not be permissible construction and proper; that the  Regulation conferred arbitrary power of leaving  it  to the  DTC  Management to pick and choose, either to  hold  an enquiry  or terminate the services for the  same  misconduct and  there was nothing in the provisions of the Act  or  the regulations  from which the Management could find any  guid- ance  and, therefore, in order to conform to  the  constitu- tional guarantees contained in Articles 14, 19(1)(g) and 21, the  regulation  would have to make  a  distinction  between cases  where services were sought to be terminated for  mis- conduct and cases of termination on grounds other than  what would  constitute misconduct; that regulation 9(b)  deliber- ately conferred wide power of termination of service without giving reasonable opportunity to an employee even if he  was regular or permanent employee, in addition to regulation  15 which provided for dismissal or removal after a disciplinary enquiry,  thus, the intention of the  regulation-making  au- thority  was  clear and unambiguous; the provision  was  not capable of two interpretations, and consequently, the  ques- tion of reading down did not arise, and reading down in  the instant cases involved not interpretation of any single word in  regulation 9(b) but adding a whole clause to  it,  which amounted  to  rewriting  the provisions,  which  courts  had refused to make up for the omission of the legislature,  and

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would  inevitably drain out Article 14 of its vitality,  and the right to equality which was regarded as a basic  feature of the Constitution, and subject permanent employees of  the DTC to a tremendous sense of insecurity which is against the philosophy  and scheme of the Constitution, that unless  the provision of the Constitution itself excluded the principles of  natural justice, they continued to be applicable  as  an integral  part  of the right to equality guaranteed  by  the Constitution,  that  as the employees of the  DTC  were  not Government employees, Article 311(2) was not applicable, and Article  14 fully applied to them, including the  principles of natural justice. 147     On behalf of the Indian Airlines Corporation and the Air India, which filed intervention applications, it was submit- ted  that there had been distinction between  the  discharge simpliciter and dismissal from service by way of punishment, that  the effect of the judgments of this Court in the  Cen- tral Inland Water’s case and West Bengal’s case was to  take away the right of the employer to terminate the services  of an employee by way of discharge simpliciter, that this Court had  recognised  the existence of the inherent right  of  an employer  to terminate the services of an employee in  terms of  the  contract of employment and also under  the  various labour  enactments,  that  a plain reading  of  the  amended Regulation 13 of the Indian Airlines Employees’  Regulations and  a cumulative reading of the amended regulations 48  and 44  of the Air India Employees Service  Regulations  clearly established that the vice, if any, of arbitrariness had been completely removed and that the power to terminate had  been vested  with the Board of Directors, and not with any  indi- vidual,  and  sufficient guidelines made  available  to  the Board to exercise the restricted and limited power available to the employer under these regulations.     On  behalf  of another intervenor, New  India  Assurance Co.,  it was submitted that the Central Inland Water’s  case was erroneous, insofar as it made complete negation of power of  the employer to terminate and rendered  the  termination illegal  even where the employer had made all the  necessary investigation  and  had given hearing to the  employee  con- cerned  before  making the order, and took in  even  private employment; therefore, the judgment of this Court should  be read down and made applicable prospectively.     In  Civil  Appeal No. 4073 of 1986 it was  contended  on behalf  of the Bank employee whose services were  terminated under  para 522 of the Shastri Award, that mere  failure  of the  employee to mention the loan taken by him from  another branch  of  the  Bank, which was  repaid  subsequently,  had deprived him of his livelihood, and his services were termi- nated without charge of ’misconduct’ and without an enquiry, and paragraph 522 of the Shastri Award gave no indication as to  on  what conditions this  arbitrary  uncontrolled  power could 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, and that this provision  provided for "insecurity of tenure" for lakhs  of permanent  employees; Articles 14, 19(1)(g) and 21  and  the integrated  protection of these Fundamental Rights  excluded the  "doctrine  of  pleasure" and insisted  on  security  of tenure "during good behaviour", and the right to  livelihood could not be rendered precari- 148 ous or reduced to a "glorious ’uncertainty", that no princi- ple of interpretation permitted reading down a provision  so as to make it into a different provision altogether  differ-

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ent  from what was intended by the legislature or its  dele- gate,  and  there could not be any reading  down  which  was contrary  to the principles of interpretation; that  if  two provisions  existed,  firstly to remove from  service  after holding an enquiry on a charge of ’misconduct’ and secondly, without  serving a charge-sheet or holding an  enquiry,  all provisions for holding enquiry would be rendered otiose  and would be reduced to a mere redundancy, that the Court had  a duty  to correct wrongs even if orders had been  made  which were  later found to be violative of any  fundamental  right and  to recall its orders to avoid injustice; that  substan- tive  provision of para 522 could not be controlled or  cur- tailed  effectively  so as to confine its  operation  within narrow  constitutional limits; that it was not the  duty  of the  court  to condone the constitutional  delinquencies  of those  limited by the Constitution if they arrogated  uncon- trolled  unconstitutional powers, which were neither  neces- sary nor germane for supposed efficiency of services in  the Banks  as a business enterprise, and that in a  system  gov- erned by rule of law, discretion when conferred upon  execu- tive  authorities  must be confined within  clearly  defined limits.     In Civil Appeal No. I 115 of 1976, the appellant-employ- ee  of  the Zila Parishad contended that his  services  were terminated  on account of the vindictiveness of some of  the employees  of the respondent, and without enquiry.  The  em- ployer  submitted that the termination order was  passed  on the  basis of the condition in the mutually agreed terms  of contract of appointment, and resolution passed by the Board, and  that  Rule 1(i) of District Board Rules, 1926,  Part  V gave  right to both the parties to terminate the  employment on one month’s notice.     On  the  questions (i) whether Regulation  9(b)  of  the Delhi  Road Transport Authority (Conditions  of  Appointment and  Service)  Regulations, 1952,  was  arbitrary,  illegal, discriminatory  and violative of audi alteram partem and  so constitutionally  invalid  and void; and  (ii)  whether  the Regulation  could  be interpreted and read down  in  such  a manner  as to hold that it was not discriminatory, or  arbi- trary and did not confer unbriddled and uncanalised power on the  authority  to  terminate the service  of  an  employee, including a permanent employee, without any reason whatsoev- er.     Dismissing Civil Appeal No. 2876 of 1986 (appeal by  the Delhi Transport Corporation), allowing Civil Appeal No. 1115 of  1976, and directing other matters to be placed before  a Division Bench, in ac- 149 cordance with the majority decision (per Ray, Sharma, Sawant and K. Ramaswamy, JJ.) this Court, HELD: Per Ray, J.:     1. I Regulation 9(b) of the Delhi Road Transport Author- ity  (Conditions  of Appointment and  Service)  Regulations, 1952 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 orders is wholly arbitrary,  uncanalised and unrestricted violating principles of natural justice  as well  as Article 14 of the Constitution. There is no  guide- line  in  the  Regulations or in the  Delhi  Road  Transport Authority Act, 1950 as to when or in which cases and circum- stances this power of termination by giving notice or pay in lieu thereof can be exercised. [264G, 285C]

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   1.2  Government Companies or Public  Corporations  which carry  on trade and business activity of State  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  111  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 the Constitution. Furthermore, the  procedure prescribed by their Rules or Regulations must be reasonable, fair and just and not arbitrary, fanciful and unjust. [264H, 265A-B]     1.3  The ’audi alteram partem’ rule which,  in  essence, enforces the equality clause in Article 14 of the  Constitu- tion 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  ex- pressly  excluded by the Act or Regulation or Rule which  is not  the case here. Rules of natural justice do no  supplant but supplement the Rules and Regulations. Moreover, the Rule of  Law, which permeates the Constitution of India,  demands that   it  has  to  be  observed  both   substantially   and procedurally.  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. [265D-E] Regulation  9(b) does not expressly exclude the  application of the 150 ’audi alteram parterm’ 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 or pay in  lieu  thereof without recording any reason in the order and without giving any hearing to the employee to controvert the allegation  on the basis of which the purported order is made. [265F]     1.4  Considering from all these aspects Regulation  9(b) is illegal and void, as it is arbitrary, discriminatory  and without any guidelines for exercise of the power. It 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  princi- ples of natural justice. It is also void under Section 23 of the Contract Act, as being opposed to public policy and also ultra vires of Article 14 of the Constitution. [265E,  265B- C, 266G]     Moti  Ram  Deka Etc. v. General Manager,  NEF  Railways, Maligaon.  Pandu,  Etc.,  [1964] 5 SCR  683;  Parshotam  Lal Dhingra v. Union of India, [1958] SCR 828; Shyam Lal v.  The State  of  Uttar Pradesh and Anr., [1955] SCR 26;  Shri  Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar & Ors., [1959] SCR  279; Jyoti Pershad v. The Administrator for  the  Union Territory of Delhi, [1962] 2 SCR 125; State of Orissa v. Dr. (Miss) Binapani Devi & Ors., [1967] 2 SCR 625; A.K.  Kraipak JUDGMENT: of India v. Col. J.N. Sinha and Anr., [1971] 1 SCR 791;  Air India  Corporation  v. V.A. Rebello & Ant.,  AIR  1972  S.C. 1343; The Workmen of Sudder Office Cinnamara v. The  Manage- ment, [1971] 2 Lab LJ 620; Tata Oil Mills Co. Ltd. v.  Work- men  &  Anr., [1964] 2 SCR 125; Maneka Gandhi  v.  Union  of India, [1978] 2 SCR 621; E.P. Royappa v. State of Tamil Nadu and Anr.. [1974] 2 SCR 348; Municipal Corporation of Greater Bombay  v. Malvenkar & Ors.,  [1978] 3 SCR 1000; Manohar  P. Kharkher and Anr. v. Raghuraj & Anr., [1981] 2 LLJ 459;  1.. Michael  & Anr. v. Johnaton Pumps India Ltd., [1975]  3  SCR 489; Sukhdev Singh & Ors. v. Bhagat Ram Sardar Singh  Raghu-

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vanshi & Anr., [1975] 1 SCC 421; S.S. Muley v. J.R.D. Tata & Ors., [1979] 2 SLR 438; West Bengal State Electricity  Board &  Ors.  v. Desh Bandhu Ghosh and Ors., [1985]  3  SCC  116; Workmen Of Hindustan Steel Ltd. and Anr. v. Hindustan  Steel Ltd.  and  Ors., [1985] 2 SCR 428; O.P. Bhandari  v.  Indian Tourism  Development Corporation Ltd. & Ors., [1986]  4  SCC 337; Central Inland Water Transport Corporation Ltd. &  Anr. v.  Brojo  Nath Ganguly & Anr., [1986] 3 SCC 156  and  Delhi Transport  Undertaking  v. Balbir Saran Goel, [1970]  3  SCR 757, referred to. 2.1 An Act can be declared to be valid wherein any term  has been 151 used which per se seems to be without jurisdiction, but  can be read’ down in order to make it constitutionally valid  by separating  and  excluding the part which is invalid  or  by interpreting  the word in such a fashion as to make it  con- stitutionally valid and within jurisdiction of the  legisla- ture  which passed the said enactment, by reading  down  the provisions  of  the Act. This however, does  not  under  any circumstances, mean that where the plain and literal meaning that  follows from a bare reading of the provisions  of  the Act,  Rule or Regulations that it confers arbitrary  uncana- lised,  unbridled unrestricted power to terminate the  serv- ices  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, it can be read down to  save the said provision from constitutional invalidity, by bring- ing or adding words in the said legislation, such as  saying that  it implies that reasons for the order  of  termination have to be recorded. [271C-F]     2.2 In interpreting the provisions of an Act, it is  not permissible where the plain language of the provision  gives a  clear and unambiguous meaning that it can be  interpreted by  reading down and presuming certain expressions in  order to save it from constitutional invalidity. Therefore, it  is impossible to hold by reading down the provisions of Regula- tion  9(b) framed under section 53 of the Delhi Road  Trans- port  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 principles  of  natural justice  and  equality  as envisaged in Article  14  of  the Constitution of India. [271F-H, 272A]     Union  of India & Anr. v. Tulsiram Patel & Ors.,  [1985] Supp. 2 SCR 131; Roshan Lal Tandon v. Union of India, [1968] 1 SCR 185; Commissioner of Sales Tax, Madhya Pradesh, Indore &  Ors. v. Radhakrishan & Ors., [1979] 2 SCC 249; 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 213 of the  Government  of India  Act, 1935, [1941] FCR 12; R.M.D.  Chamarbaugwalla  v. The  Union of India, [1957] SCR 930; R.L. Arora v. State  of Uttar Pradesh & Ors., [1964] 6 SCR 784 and The Mysore  State Electricity  Board  v. Bangalore Woollen,  Cotton  and  Silk Mills Ltd. & Ors., [1963] Supp. 2 SCR 127, Jagaish Pandey v. The  Chancellor of Bihar & Anr., [1968] 1 SCR 231,  referred to.     H.N.  Seervai: Constitutional Law of India,  Third  Edi- tion, p. 119, referred to. 152 Per Sharma, J.     1.1  The  rights  of the parties in  the  present  cases

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cannot  be governed by the general principle of  master  and servant,  and  the management cannot have  unrestricted  and unqualified power of terminating the services of the employ- ees.  In  the interest of efficiency of the  public  bodies, however,  they  should have the authority to  terminate  the employment  of undesirable, inefficient,  corrupt,  indolent and disobedient employees, but it must be exercised  fairly, objectively  and  independently; and the  occasion  for  the exercise  must  be  delimited 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 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. therefore, essential for the guidelines. [272D-F]     1.2 Regulation 9(b) of the Delhi Road Transport Authori- ty  (Condition of Appointment and Service) Regulation,  1952 cannot, therefore. be upheld for lack of adequate and appro- priate guidelines. [272G] Per Saw,ant, J.     1.1.  There is need to minimise the scope of  the  arbi- trary  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 do not go with  the posts, however high they may be. There is  only  a complaisant  presumption  that those who occupy  high  posts have  a  high sense of responsibility.  The  presumption  is neither legal nor rational. History does not support it  and reality  does  not warrant it. In particular, in  a  society pledged  to uphold the rule of law, it would be both  unwise and impolitic to leave any aspect of its life to be governed by discretion when it can conveniently and easily be covered by the rule of law. [276E-F]     1.2  Beyond the self-deluding and self-asserting  right- eous  presumption,  there is nothing to  support  the  ’high authority’ theory. This 153 theory  undoubtedly weighed with some authorities  for  some time in the past. But its unrealistic pretensions were  soon noticed and it was buried without even so much as an ode  to it. [278A-B]     1.3  The employment under the public undertakings  is  a public employment and a public property. It is not only  the undertakings but also the society which has a stake in their proper  and efficient working. Both discipline and  devotion are  necessary for efficiency. To ensure both,  the  service conditions  of those who work for them must be  encouraging, certain  and  secured,  and not vague  and  whimiscal.  With capricious service conditions, both discipline and  devotion are endangered, and efficiency is impaired. [276G-H, 277A]     1.4 The right to life includes right to livelihood.  The right  to livelihood, therefore, cannot hang on to the  fan- cies  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

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consigned  to the limb of undefined premises  and  uncertain applications. That will be a mockery of them. [277B]     1.5 Both the society and the individual employed, there- fore,  have an anxious interest in service conditions  being well-defined and explicit to the extent possible. The  arbi- trary rules which are also sometimes described as Henry VIII Rules, can have no place in any service conditions. [277C]     Sukhdev  Singh & Ors. v. Bhagatram Sardar  Singh  Raghu- vanshi  & Anr., [1975] 3 SCR 619; Maneka Gandhi v. Union  of India,  [1978]  2 SCC 621; The  Manager,  Government  Branch Press & Ant. v. D.R. Belliappa, [1979] 1 SCC 477; The Manag- ing  Director, Uttar Pradesh Warehousing Corporation &  Anr. v.  Vinay Narayan Vajpayee, [1980] 2 SCR 773; A.L. Kalra  v. The Project & Equipment Corporation of India Ltd., [1984]  3 SCR 646; Workmen of Hindustan Steel Ltd. & Anr. v. Hindustan Steel  Ltd.  &  Ors., [1985] 2 SCR 428;  West  Bengal  State Electricity Board & Ors. v. Desh Bandhu Ghosh & Ors., [1985] 2 SCR 1014; Olga Tellis & Ors. v. Bombay Municipal  Corpora- tion  & Ors. etc., [1985] Supp. 2 SCR 51; Union of  India  & Anr.  v. Tulsiram Patel& Ors., [1985] Supp. 2 SCR 131;  Cen- tral Inland Water Transport Corporation Ltd. & Anr. v. Brojo Nath Ganguly & Anr. etc., [1986] 3 SCR 156; O.P. Bhandari v. Indian Tourism Development Corporation Ltd. & Ors.. [1986] 4 SCC 337; N.C. Dalwadi v. State of Gujarat, [1987] 3 154 SCC 611; M.K. Agarwal v. 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. v. Union of India & Ors., [1988] 1 SCC 122, referred to.     2.1  The  doctrine of reading down or of  recasting  the statute  can be applied in limited situations. It is  essen- tially used, firstly, for saving a statute from being struck down on account of its unconstitutionality. It is an  exten- sion  of  the principle that when  two  interpretations  are possible--one  rendering  it constitutional  and  the  other making it constitutional the former should be preferred. The unconstitutionality may spring from either the  incompetence of  the legislature to enact the statute or from its  viola- tion  of  any  of the provisions of  the  Constitution.  The second  situation which summons its aid is where the  provi- sions  of  the  statute are vague and ambiguous  and  it  is possible to gather the intention of the legislature from the object  of the statute, the context in which  the  provision 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  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 legislature if  it so  desires, to amend it. If the remaking of the statute  by the courts is to lead to its distortion that course is to be scrupulously avoided. The doctrine can never be called  into play  where  the statute requires  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. [288F-H, 289A-B]     Re  Hindu Women’s Rights to Property Act, 1937, and  the Hindu Women’s Rights to Property (Amendment) Act, 1938 etc., [1941]  FCR 12; Nalinakhya Bysack v. Shyam Sunder  Halder  & Ors., [1953] SCR 533; R.M.D. Chamarbaugwalla v. The Union of India,  [1957] SCR 930; Kedar Nath Singh v. State of  Bihar, [1962] Supp. 2 SCR 769; R.L Arora v. State of Uttar  Pradesh & Ors., [1964] 6 SCR 784; Jagdish Pandey v. The  Chancellor, University  of Bihar & Anr., [1968] I SCR 231; Shri Umed  v.

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Raj  Singh  & Ors., [1975] I SCR 918;  Mohd.  Yunus  Salim’s case,  AIR 1974 SC 1218; Sunil Batra etc. v. Delhi  Adminis- tration  & Ors., [1978] 4 SCC 494; Excel Wear etc. v.  Union of  India  & Ors., [1979] 1 SCR 1009; Minerva Mills  Ltd.  & Ors.  v. Union of India & Ors., [1981] 1 SCR 206;  Union  of India  & Anr. etc. v. Tulsiram Patel etc., [1985] 3 SCC  398 and  Elliott Ashton Welsh, 11 v. United States, 398 US  333; 26 L.ed. 2nd 308, referred to. 155     2.2  Therefore, the doctrine of reading down  cannot  be availed of for saving the regulation in the instant case. In the first instance, the regulation is a part of the  service regulations  of the employees made by the Delhi Road  Trans- port  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,  whose object  is to provide for the establishment and the  regula- tion 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 regula- tions  or  in the object of the Act which has a  bearing  on Regulation  9(b).  If anything the object of the  Act  would require framing of such service regulations as would  ensure dedicated and diligent employees to run the undertaking. 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 regulation  is so crystal clear that no two  interpretations are possible to be placed on it and hence it is not  permis- sible  to read in it any meaning other than what is  clearly sought  to  be conveyed by it. Thirdly, the context  of  the 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  Regulation  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 estab- lishment  or in circumstances other than those mentioned  in sub-clause (a), one month’s notice or pay in lieu thereof is all that is necessary to be given for terminating an employ- ee’s  services. The intention of the rule-making  authority, therefore,  is more than clear. It 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. [289C-H, 290A]     2.3  Moreover, reading in the rule  circumstances  under which  alone  the rule can be used, and reading it  down  to read  in it words or expressions or provisions in  order  to save the legislation would not only distort the intention of the  rule-making authority but would also require  extensive amendment  of a very vague nature to it. The reading in  the regulation  of  a  provision that  the  concerned  employees should  be  given a hearing with regard to  his  mis-conduct will  require that be should first be intimated of the  mis- conduct of which he is guilty. But 156 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 prevision for the same. If. on the other hand.  the

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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 Court cannot read in  the rule all circumstances where it is not possible or necessary to  hold  an enquiry. 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 311( 2). The reading of such circumstances in the existing  regulation would require its  extensive  recasting which  is  impermissible for the Court to do.  There  is  no authority  which  supports  such wide reading  down  of  any provision  of the statute or rule/regulation. Therefore  the doctrine  of reading down is singularly inapplicable to  the present case. [281B, 290B, 291A-F]     3.  Clause (b) of Regulation 9 contains the  much  hated and abused rule of hire and fire reminiscent of the days  of laissez faire and unrestrained freedom of contract. [274E] Per Ramaswamy.J 1.     1.1  The question of security of work is of most  impor- tance. If a person does not have the feeling that he belongs to  an  organisation engaged in promotion. he will  not  put forward  his  best  effort to produce more.  That  sense  of belonging  arises  only when he feels that he  will  not  be turned  out  of employment the next day at the whim  of  the management.  Therefore, as far as possible security of  work should be assured the employees so that they may  contribute to the maximisation of production. [300D-E]      Daily  Rated Casual Labour v. Union of India, [1988]  1 SCR 598 [1988] 1 SCC 122 at 130-131, referred to.     1.2  A  permanent  employee of  a  statutory  authority, corporation  or instrumentality under Article 12 has a  lien on the post till he attained superannuation or  compulsorily retired or service is duly terminated in accordance with the procedure established by law. Security of tenure enures  the benefit  of  pension on retirement.  Dismissal,  removal  or termination of his/her 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 service or organisation  and  in- volvement for maximum production or efficient 157 service. It is also a valuable right which is to be duly put an end to only as per valid law. [300A-G]     Roshan Lal Tandon v. Union of India, [1968] 1 SCR 185 at 195-196; Calcutta Dock Labour Board v. Jarfar Imam, [1965] 3 SCR  463 and Sirsi Municipality v. Cecelia Kom Francis  Tal- lis, [1973] 3 SCR 348, referred to.     1.3  The right to life, a basic human right, assured  by Article  21 of the Constitution comprehends some thing  more than  mere animal existence; it does not only mean  physical existence,  but includes basic human dignity. The  right  to public  employment and its concomitant right  to  livelihood receive  their succour and nourishment under the  canopy  of the protective umbrella of Articles 14, 16(1), 19(1)(g)  and 21. [296A, 297B] Munn v. Illinois, [1876] 94 US 113 and 154, referred to.     Kharak  Singh v. State of U.P., [1964] 1 SCR  332;  Olga Tellis v. Bombay Municipal Corporation, [1985] 2 Suppl.  SCR page 51 at 79; Menaka Gandhi v. Union of India, [1978] 2 SCR 621;  State  of Maharashtra v. Chander Bhan,  [1983]  3  SCR 387=AIR 1983 SC 803 and Board of Trustees, Port of Bombay v. Dilip Kumar, [1983] 1 SCR 828, referred to.     1.4  The  arbitrary, unbridled and naked power  of  wide discretion  to  dismiss  a permanent  employee  without  any

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guidelines  or procedure would tend to defeat the  constitu- tional  purpose of equality and allied purposes.  Therefore, when the Constitution assures dignity of the individual  and the right to livelihood, the exercise of power by the execu- tive  should  be combined with adequate safeguards  for  the rights of the employees against any arbitrary and capricious use of those powers.     Workmen of Hindustan Steels Ltd. v. Hindustan Steel Ltd. &  Ors.,  [1985] 2 SCR 428 and Francis  Corallie  v.U.T.  of Delhi, [1981] 2 SCR 516 = AIR 1981 SC 746, referred to. 1.5  It  is well settled constitutional law  that  different Articles the Chapter on Fundamental Rights and the Directive Principles in Part IV of the Constitution must be read as an integral  and  incorporeal whole with  possible  overlapping with  the subject-matter of what is to be protected  by  its various provisions, particularly the Fundamental Rights. The fundamental  rights, protected by Part III of the  constitu- tion,  out  of  which Articles 14. 19 and 21  are  the  most frequently 158 invoked to test the validity of executive as well as  legis- lative actions when these actions are subjected to  judicial scrutiny, are necessary means to develop  one’s own  person- ality  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. Thus, the right to a public  employ- ment  is  a constitutional right under  Article  16(1).  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 includes right  to livelihood. to many. assured tenure of service  is the source. [311G; 312G-H, 313A-B]     R.C. Cooper v. Union of India, [1970] 3 SCR 530; Minerva Mills Ltd. v. Union of India, [1981] 1 SCR 2116 and Union of India  & Ant. v. Tulsiram Patel & 0rs.. [1985] Suppl. 2  SCR 131 at 233 referred to.     1.6  Article  14  is the general  principle  while  Art. 311(2) is a special provision applicable to all civil  serv- ices under the State. Article 311(2) embodies the principles of  natural  justice but proviso to clause (2) of  Art.  311 excludes  the  operation of principles  of  natural  justice engrafted  in Art. 311(2) as an exception in the given  cir- cumstances  enumerated  in these clauses of the  proviso  to Art. 311(2) of the Constitution. Article 14 read with  Arti- cles  16(1) and 311 are to be harmoniously interpreted  that the  proviso to Art. 311(2) excludes the application of  the principles  of  natural  justice as an  exception;  and  the applicability of Article 311(2) must, therefore, be  circum- scribed to the civil services and to be construed according- ly. In respect of all other 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  them- selves, consistent with the mandate of Articles 14.16.19 and 21 provide, expressly, such an exception. [317F-H, 315A]

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   Union  of India & Ant. v. Tulsiram Patel & Ors.,  [1985] Suppl.  2 SCR 131 at 233; A.K. Kraipak & Ors. etc. v.  Union of India & Ors., [1970] 1 SCR 457 and Union of India v.  Col J.N. Sinha & Ors., [1971] 1 SCR 791, referred to. 159     1.7  Article  19(1)(g) empowers every citizen  right  to avocation  or  profession etc., which includes right  to  be continued in employment under the State unless the tenure is validly terminated and consistent with the scheme  enshrined in  the  fundamental rights of  the  Constitution.  Whenever there is arbitrariness in State action--whether it be of the Legislature  or  of the Executive or of an  authority  under Article 12. Articles 14 and 21 spring into action and strike down such an action. The concept of reasonableness and  non- arbitrariness  pervades the entire  constitutional  spectrum and  is a golden thread which runs through the whole  fabric of the Constitution. [315B-D]     1.8 Thus, Article 14 read with 16(1) accords right to an equality or an equal treatment consistent with principles of natural justice. Any law made or action taken by the employ- er, corporate statutory or instrumentality under Article  12 must act fairly and reasonably. Right. to fair treatment  is an essential inbuilt of natural justice. Exercise of  unbri- dled  and uncanalised discretionary power impinges upon  the right  of  the citizen; vesting of discretion  is  no  wrong provided it is exercised purposively, judiciously and  with- out prejudice. Wider the discretion, the greater the chances of abuse. Absolute discretion is destructive of freedom than of man’s 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.  [320B- D]     1.9 The right to public employment which includes  right to continued public employment till the employee is superan- nuated  as per rules or compulsorily retired or duly  termi- nated in accordance with the procedure established by law is an integral part of right to livelihood which in turn is  an integral  part  of right to life assured by Art. 21  of  the Constitution.  Any  procedure prescribed to deprive  such  a right  to livelihood or continued employment must  be  just, fair and reasonable procedure and conformable to the mandate of  Articles  14 and 21. In other words, an  employee  in  a public employment also must not be arbitrarily, unjustly  or unreasonably deprived of his/her 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. [320E-F]     A.K.  Kraipak  &  Ors. etc. v. Union of  India  &  Ors., [1970]  1  SCR 457; Union of India v. Col.  J.N.  Sinha  and Anr., [1971] 1 SCR 791; 160 Fertilizer  Corporation Kamgar Union (Regd.), Sindri &  Ors. v.  Union  of India & Ors., [1981] 2 SCR 52 at  60-61;  S.S. Muley  v. J.R.D. Tata, [1979] 2 SLR 438  (Bombay);  Superin- tendent  of Post Office v. K. Vasayya, [1984] 3 Andhra  Pra- desh law Journal 9; West Bengal Electricity Board & Ors.  v. D.B. Ghosh & Orb’., [1985] 2 SCR 1014; Workmen of  Hindustan Steel  Ltd. & Anr. v. Hindustan Steel Ltd. & Ors., [1985]  2 SCR  428; O.P. Bhandari v. Indian Tourism Development  Corp. Ltd.  & Ors., [1986] 4 SCC 337; A.P.S.R.T. Corp.  v.  Labour Court, AIR 1980 A.P. 132; R.M.D. Chamarbaugwalla v. State of Punjab, [1957] SCR 930; Kanhialal v. District Judge &  Ors.,

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[1983] 3 SCC 32; M.K. Agarwal v. Gurgaon Gramin Bank & Ors., [1987] Suppl. SCC 643; All Saints High School v.  Government of  A.P.,  [1980]  2 SCR 924 & 938 e to  f;  Frank  Anthoney Public School v. Union of India, [1987] 1 SCR 238 & 269 b to e;  Christian  Medical College Hospital Employees’  Union  & Anr.  v.  Christian Medical College  Veilore  Association  & Ors.,  [1988] 1 SCR 546 & 562; Kameshwar Prasad v. State  of Bihar, [1962] Suppl. 3 SCR 369 and O.K. Ghosh v. EZX Joseph, [1963] Supp. 1 SCR 789, referred to. United  States  v. Samuel D. singleton, [1981]  109  US.  3, referred     1.10  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 amongst the employees is its  essential facet  and  bas  to be maintained. The  society  is  vitally interested in the due discharge of the duties by the govern- ment employees or employees of corporate bodies or statutory authorities  or instrumentalities under Art. 12 of the  Con- stitution.  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 responsibili- ty.  The collective responsibility of all the officers  from top most to the lowest maximises the efficient public admin- istration. 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. 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  organisation  or institution, corporation, etc. They need assurance of  serv- ice and protection. The public interest and the public  good demands  that  those who discharge  their  duties  honestly, efficiently and 161 with  a  sense  of devotion and dedication  to  duty  should receive  adequate protection and security of tenure.  There- fore,  before depriving an employee of the means of  liveli- hood to himself and his dependents, i.e. job, the  procedure prescribed  for  such  deprivation must be  just,  fair  and reasonable  under  Arts. 21 and 14 and when  infringes  Art. 19(1)(g) must be subject to imposing reasonable restrictions under Art. 19(5). [320G-H, 321A-D, 322D]     1.11  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, conscientiously, 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 consistent with the constitutional scheme. [322D-E]     1.12 Regulation 9(b) of the Delhi Road Transport (Condi- tions  of  Appointment and Service)  Regulations,  1952,  is arbitrary,  unjust, unfair and unreasonable offending  Arti- cles  14, 16(1), 19(1)(g) and 21 of the Constitution. It  is also opposite to the public policy and thereby is void under Section 23 of the Indian Contract Act. [330G]     1.13  Under ordinary law of master and servant,  whether the contract of service is for a fixed period or not, if  it

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contains  a provision for termination of service by  notice, in  terms thereof, it can be so determined and if  the  con- tract finds no provision 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. It  is  not disputed  that  the Delhi Road Transport  Corporation  is  a statutory Corporation under the Delhi Road Transport Act and the Regulations are statutory and its employees are entitled to  the  fundamental  rights enshrined in Part  111  of  the Constitution. The Corporation or an instrumentality or other authority  under  Article 12 is not free, like  an  ordinary master (a private employer) to terminate the services of its employees at its whim or caprices or vagary. It is bound  by the  Act and the Regulation and paramount law of  the  land, the Constitution. [292G-H; 293A-B]     1.14 Any law, much less the provisions of Contract  Act, which  are inconsistent with the fundamental rights  guaran- teed in Part III of 162 the Constitution, are void by operation of Article 13 of the Constitution.  The  law of contract, like the  legal  system itself, involves a balance between competing sets of values. Freedom  of  contract  emphasises the  need  for  stability. certainty and predictability. But, important as values  are. they  are  not absolute, and there comes a point  when  they face a serious challenge. ’This Court, as a court of consti- tutional conscience enjoined and is jealously to project and uphold  new  values in establishing the  egalitarian  social order.  As a court of constitutional functionary  exercising equity  jurisdiction,  this Court would relieve  the  weaker parties   from  unconstitutional  contractual   obligations, unjust,  unfair,  oppressive  and  unconscionable  rules  or conditions  when  the citizen is really unable  to  meet  on equal terms with the State. It is to find whether the  citi- zen, when entered into contracts of 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  appro- priate declaration. [302G, 303B, 304H, 305A-B]     Central Inland Water Transport Company Limited v. Brojo- nath Ganguly, [1986] 3 SCC 156=AIR 1986 SC 1571, affirmed.     Ramdas Vithaldas Durbar v. S. Amarchand & 60., 43 Indian Appeals.  164 and V. Raghunadha Rao v. State of Andhra  Pra- desh, [1988] 2 A.L.T. 461, referred to.     Anson’s Law of Contract, p. 6 and 7 and Professor  Guido Calabresi  of  Yale  University  Law  School  "Refractivity, Paramount  power and Contractual Changes", 1961-62  71  Yale Law Journal, P- 1191, referred to.     2.1  The golden rule of statutory construction  is  that the  words  and phrases or sentences should  be  interpreted according  to the intent of the legislature that passed  the Act.  All  the provisions should be read  together.  If  the words of the statutes are in themselves precise and unambig- uous,  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 is always safe means of collecting  the intention, to call in aid the ground and cause of making the statute,  and have recourse to the preamble, which is a  key to  open  the  minds of the makers of the  statute  and  the

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mischiefs  which the Act intends to redress. In  determining the  meaning of statute the first question to ask always  is what is the natural or ordinary meaning of that 163 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 and the court cannot go further. [323D-G]     2.2  The  Doctrine  of Reading Down  is,  therefore,  an internal aid to construe the word or phrase in a statute  to give  reasonable  meaning,  but not to  detract,  disort  or emasculate  the language so as to give the supposed  purpose to  avoid unconstitutionality. Thus, the object  of  reading down  is  to keep the operation of the  statute  within  the purpose of the Act and constitutionally valid. [324E, 325B]     2.3 It cannot be accepted that the Courts, in the  proc- ess 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 creezes.  The object is to elongate the purpose of the  Act. [323B]     2.4  The Courts, though, have no power to amend the  law by  process of interpretation, but do have power to mend  it so as to be in conformity with the intendment of the  legis- lature. Doctrine of reading down is one of the principles of 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  it  from unconstitutionality or to confer jurisdiction on the  legis- lature.  Similarly it cannot be taken aid of  to  emasculate the  precise,  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  Consti- tution  and  to direct the authorities  to  record  reasons, unknown or unintended procedure. [326H, 327A-B]     Elliott Ashton Walsh, H v. United States, 398 U.S.  333; Nalinakhya Bysack v. Shyam Sunder Haldar & Ors., [1953]  SCR 533  at  544-45; United States v. Wunderlick, 342  U.S.  93; S.C. Jaisinghani v. Union of India, [1967] 2 SCR 703; In  re Hindu  Women’s Right to Property Act, [1941] FCR,  12;  K.N. Singh v. State of Bihar, [1962] Suppl. 2 SCR 769; R.L. Arora v. State of U.P., [1964] 6 SCR 784; Jagdish Pandev v.  Chan- cellor of the Bihar, [1969] 1 SCR 231; Amritsar Municipality v.  State of Punjab, [1969] 3 SCR 447;Sunil Batra  v.  Delhi Admn.,  [1978] 4 SCC 494; N.C. Dalwadi v. State of  Gujarat, [1987] 3 164 SCC  611;  Charanlal Sahu v. Union of India,  [1989]  Suppl. Scale  1  at p. 61; Delhi Transport  Undertaking  v.  Balbir Saran  Goel,  [1970]  3 SCR 747; Air  India  Corporation  v. Rebellow,  [1972]  3 SCR 606 and  Municipal  Corporation  of Greater  Bombay  v. P.S. Malvankar, [1978] 3 SCR  1000,  re- ferred to.     Federal Steam Navigation Co. v. Department of Trade  and Industry,  [1974]  2 All E.R. 97 at p. 100 and  Saints  High School,  Hyderabad v. Govt. of A. P., [1980] 2 SCR 924,  re- ferred to. Craies Statute Law, 7th Ed. Ch. V, P. 64.     2.5  The language of Regulation 9(b) is not  capable  of

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two interpretations. This power is in addition to the normal power in Regulation 15 to conduct an enquiry into misconduct after giving reasonable opportunity. Thereby the legislative intention is manifest that it intended to confer such draco- nian  power  couched in language of width which  hangs  like Damocles  sword on the neck of the employee,  keeping  every employee  on tenter-hook under constant pressure  of  uncer- tainty,  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 service arbitrarily  and  capri- ciously.  Regulation  9(b), thereby  deliberately  conferred wide power of termination of services of the employee  with- out following the principles of audi alteram partem or  even modicum  of procedure of representation  before  terminating the services of permanent employee. [327E-G]     2.6 No doubt, the power to take appropriate and  expedi- tious  action to meet the exigencies of weeding out  ineffi- cient, corrupt, indolent officers or employees from  service should be provided and preserved to the competent  authority but  any  action  taken without any  modicum  of  reasonable procedure  and  prior opportunity always  generates  an  un- quenchable  feeling that unfair treatment was meted  out  to the aggrieved employee. To prevent 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  circumstance as adumbrated in proviso to Art. 311(2) 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, fairness and reasonable- 165 ness  envisaged under Arts. 14 and 21 of  the  Constitution. Therefore, conferment of power with wide discretion  without any guidelines, without any just, fair or reasonable  proce- dure  is  constitutionally  anathema  to  Arts.  14,  16(1), 19(1)(g)  and  21 of the Constitution. Doctrine  of  reading down cannot be extended to such a situation. [328A-C,  329B- C]     2.7  In view of the march of law, made by Article 14  it is too late in the day to contend that the competent author- ity  would be vested with wide discretionary  power  without any  proper  guidelines or the procedure. When it  is  found that the legislative intention is unmistakably clear,  unam- biguous and specific, the preamble, the other rules and  the circumstances could not be taken aid of in reading down  the provisions of the rules or the regulations of the  constitu- tional scheme. [330F-G]     3.1  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. Therefore, in the  absence  of specific head of public policy which covers a case, then the court  must  in consonance with public   conscience  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

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particular when social change is to bring about an egalitar- ian  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  Constitution viz.,  the  preamble, Part III and Part IV and the  play  of legal  light  and  shade must lead on the  path  of  justice social, economic and political. Lacking precedent, the court can  always  be guided by that light and the  guidance  thus shed  by the trinity of our Constitution.  [308C-D,  309G-H, 310A]     3.2  Since  Constitutions are the superior  law  of  the land,  and  because  one of their  outstanding  features  is flexibility  and capacity to meet changing conditions,  con- stitutional  policy provides a valuable aid  in  determining the legitimate boundaries of statutory meaning. Thus  public policy having its inception in Constitutions may  accomplish either a restricted or extended interpretation of the liter- al expression of a statute. A statute is always presumed  to be  constitutional  and where  necessary,  a  constitutional meaning  will  be inferred to preserve  validity.  Likewise, where a statute tends to extend or preserve a constitutional 166 principle, reference to analogous constitutional  provisions may be of great value in shaping the statute to accord  with the  statutory aim or objective. Therefore, when the  provi- sions  of  an Act or Regulations or Rules  are  assailed  as arbitrary,  unjust, unreasonable,  unconstitutional,  public law  element  makes it incumbent to  consider  the  validity thereof  on  the  anvil of inter play of  Arts.  14,  16(1), 19(1)(g)  and 21 and of the inevitable effect of the  provi- sion  challenged  on  the rights of a citizen  and  to  find whether they are constitutionally valid. [310C-D, 311E]     4. The absence of arbitrary power is the first essential 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. [328D-E]     5. No doubt, it is open to the authorities to  terminate the  services  of a temporary employee  without  holding  an enquiry. But in view of the march of law made, viz., that it is not the form of the action but the substance of the order which is to be looked into, it is open to the Court to  lift the  veil and pierce the action challenged to  find  whether the said action is the foundation to impose punishment or is only  a motive. 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. [330C-D] Shamsher  Singh  v. State of Punjab, [1975] 4 SCR  814,  re- ferred to.     It  is  for concerned authorities  to  make  appropriate rules  or  regulations and to take appropriate  action  even without  resorting  to elaborate enquiry  needed  consistent with the constitutional scheme. [331A]     Workmen of Hindustan Steel Ltd. v. Hindustan Steel  Ltd. & Ors., [1985] 2 SCR 428, referred to. Ram  Chander v. Union of India, [1986] 2 SCR  980,  referred to.     6. The ratio in Brojonath’s case was correctly laid down

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and requires no reconsideration. [331D] 167     Central Inland Water Transport Company Limited v. Brojo- nath Ganguly, [1986] 3 SCC 156-AIR 1986 SC 1517, affirmed. Per Mukharji, CJ., (Contra)     1.  The constitutionality of the conferment of power  to terminate  services of a permanent employee without  holding an  enquiry is sustained 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  objectively,  the  reasons should be recorded, 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 though recorded,  need  not  be communicated, it is  only  for  the purpose  of  running  of the institution.  There  should  be factors which hamper running of the institution without  the termination  of the employment of the employee concerned  at the  particular  time,  either because he is  a  surplus  or inefficient, disobedient and dangerous. [235C-E]     2.1 The philosophy of the Indian Constitution, as it has evolved,  from  precedent to precedent,  has  broadened  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 employment. This is the basic concept of the  evolu- tion 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 traveled in different  channels, government  servants or servants or employees having  status have to be differentiated from those whose relationships are guided  by contractual obligations. However, the  basic  and fundamental question to be judged is, in what manner and  to what  extent, the employees of either of semi-Government  or statutory corporations or public undertakings who enjoy  the rights, privileges, limitations and inhibitions of  institu- tions who come within the ambit of Article 12 of the Consti- tution could be affected in their security of tenure by  the employers consistent with the rights evolved over the  years and rights emanating from the philosophy of the Constitution as at present understood and accepted. [229D-G]     2.2 Efficiency of the administration of these  undertak- ings  is very vital and relevant  consideration.  Production must continue, services must be maintained and run. Efficacy of  the services can be manned only by the  disciplined  em- ployees or workers. Discipline. decency and 168 order  will  have to be maintained.  Employees  should  have sense of participation and involvement and necessarily sense of security in semipermanent 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 obligations, and  duties  enjoined with rights, are matters of constitutional adjustment at any particular evolved stage of the philosophy of our  Constitu- tion. [230A-C]     2.3  Arbitrary, whimsical or discriminatory  action  can flow  or follow in some cases by the preponderance of  these powers  to terminate. The tact that the power  is  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

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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 diffi- cult; evidence is hesitant and difficult, often  impossible. In  those  circumstances, the approach to  the  location  of power,  possession  and exercise of which is  essential  for efficient running of the industries or services, has to be a matter  both of balancing and adjustment, on which  one  can wager the salivation of rights and liberties of the  employ- ees concerned and the future of the industries or the  serv- ices involved. [330D-F]     2.4  The power to terminate the employment of  permanent employment must be there. Efficiency and expediency and  the necessity of running an industry or service make it  impera- tive  to have these powers. Power must, therefore,  be  with authorities to take decision quickly, objectively and  inde- pendently. 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  of exercise of such powers.  The  manner  in which  such exercise 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. [230G-H, 231A] Thus, for the running of the industry or the service,  effi- ciently, 169 quickly  and  in a better manner or to avoid  dead-locks  or inefficiency  or friction, the vesting of the power in  cir- cumstances  must be such that it will evoke credibility  and confidence. Notice of hearing and opportunity in the form of an  enquiry may or may not be given, yet  arbitrariness  and discrimination and acting whimsically must be avoided. These powers  must, therefore, be so read that the powers  can  be exercised on reasons, which should be recorded, though  need not  always be communicated, and must be by authorities  who are  high  ranking or senior enough and  competent  and  are expected  to act fairly, 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 powers without holding a detailed or prolonged enquiry is there. [231E, F-G]     Workmen  of  Hindustan Steel Ltd. &  Anr.  v.  Hindustan Steel  Ltd.  &  Ors., [1985] 2 SCR 428;  West  Bengal  State Electricity  Board and Others v. Desh Bandhu Ghosh and  Oth- ers, [1985] 3 SCC 116; Moti Ram Deka v. North East  Frontier Railway, [1985] 5 SCR 683; S.S. Muley v. J.R.D. Tata, [1979] 2  SLR  438; Manohar P. Kharkhar v. Raghuraj, [1981]  2  LLJ 459; Central Inland Water Transport Corporation Limited  and Anr.  v.  Brojo  Nath Ganguly and Anr., [1985]  3  SCC  156; Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi,  [1975] 3 SCR 619; Union of India & Anr. v. Tulsi Ram PateI,  [1985] Suppl.  2  SCR  131 at p. 166; Tata Oil Mills  Co.  Ltd.  v. Workmen  & Anr., [1964] 2 SCR 125 at 130; L. Michael &  Anr. v.  M/s Johnston Pumps India Ltd., [1975] 3 SCR 489 at  498; Delhi  Transport  Corporation Undertaking  v.  Balbir  Saran Goel, [1970] 3 SCR 757 at 764; Air India Corporation, Bombay v. V.A. Rebellow & Anr., [1972] 3 SCR 606; Municipal  Corpo- ration of Greater Bombay v. P.S. Malvenkar & Ors., [1978]  3

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SCR 1000 at page 1006; Roshan Lal Tandon v. Union of  India, [1968] 1 SCR 185 at 195 D-E; Champak Lal Chiman Lal Shah  v. The  Union  of  India, [1964] 5 SCR 190 at  204;  Ram  Gopal Chaturvedi v. State of M.P., [1970] 1 SCR 472 at 475;  Gheru Lal Parekh v. Mahadeodas Maiva & Others, [1959] Supp. 2  SCR 406  at 440; O.P. Bhandari v. I.T.D.C. & Ors., [1986] 4  SCC 337;  The Hindu Women’s Rights to Property Act,  [1941]  FCR 12;  Fertilizer Corporation Kamgar Union (Regd.) Sindri  and Others v. Union of India and Others, [1981] 2 SCR at  60-61; Ajay  Hasia  etc. v. Khalid Mujib Sehravardi  &  Ors.  etc., [1981] 2 SCR 79 at 100-102; A.V. Nachane & Anr. v. Union  of India  & Anr., [1982] 2 SCR 246; India Tobacco Co.  Ltd.  v. The Commercial Tax Officer, Bhavanipore & Ors., [1975] 2 SCR 619 at 657; A.L. Kalra v. The Project and Equipment Corpora- tion  of India Ltd., [1984] 3 SCR 646 at 664; Bandhua  Mukti Morcha v. Union of India & Ors., [1984] 2 170 SCR  79 at 101; Hindustan Antibiotics Ltd. v. The Workmen  & Ors.,  [1967]  1 SCR 652 at 669; The Collector  of  Customs, Madras v. Nathella Sampathu Chetty, [1962] 3 SCR 786 at 825; Commissioner of Sales Tax, Madhya Pradesh v. Radhakrishan  & Ors., (supra); Gurdev Singh Sidhu v. State of Punjab & Anr., [1964] 7 SCR 587 at 592-593; U.P. State Electricity Board v. Hari  Shankar Jain, [1979] 1 SCR 355/362-3; A.R. Antulay  v. R.S.  Nayak and Anr., [1988] 2 SCC 602; S.G. Jaisinghani  v. Union  of India and Ors., [1967] 2 SCR 703 at p. 718-19  and Kesavananda  Bharati v. State of Kerala, [1973] Supp. 1  SCR 1, referred to.     A.  Schroeder  Music Publishing Co.  Ltd.  v.  Macaulay, (formerly Instone), [1974] 1 W.L.R. 1308, referred to.       Chitty  on Contract, 46th Edition Vol. II, p.  808  or 25th Edition Vol. II p. 712 paragraph and Halsbury’s Law  of England, 4th Edition Vol. No. 16 paras 607 and 608, referred to.     3.1 Courts 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  per- sons  involved in the exercise of those powers  and,  there- fore, should be attributed those powers on conditions  which will  only make these legal or valid. Our law making  bodies are  not law unto 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  constitu- tional inhibitions. [232C-D]     3.2  Legislation, both statutory and constitutional,  is enacted  from experience of evils. But its general  language should not necessarily be confined to the form that the evil had  taken place. Time works changes, brings into  existence new  conditions  and purposes and new awareness  of  limita- tions. 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  construc- tions.  Constitutions are not ephemeral enactments  designed to  meet passing occasions, but designed to approach  immor- tality  as nearly as human institutions can approach it.  In the  application of a Constitutional limitation  or  inhibi- tion,  the interpretation cannot be only of ’what has  been’ but  of ’what may be’. Therefore. in the  interpretation  of the provisions of an Act, where two constructions are possi- ble,  the one which leads towards constitutionality  of  the legislation would be preferred to that which has the  effect of 171

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destroying  it. If the Courts do not read the conferment  of power  in  the aforesaid manner, the power is liable  to  be struck down as bad. [233B-D]     3.3  The Court must proceed on the premise that the  law making  authority  intended 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  parliament  gives  the Court  the power to supplant and supplement the  expressions used  to  say  what was left unsaid. This  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  inten- tion of the legislature or the implied purpose of the legis- lation. [234G-H; 235A]     3.4  It has been said that if the legislature has  mani- fested 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. This cannot be agreed to. Our  legis- latures are limited by the constitutional inhibitions and it is  made, that the Court should read their Acts  and  enact- ments  with  the attribute that they know their  limits  and could  not have intended to violate the Constitution. It  is true that the Court should be loath to read down where there are  clear, unambiguous and positive terms in a  legislation and should proceed with a straight forward method of  strik- ing 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. [236H, 237A-B]      3.5 The plain thrust of legislative enactment has to be found out in the inarticulate 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 collision. [237E]      In  the  language  of the relevant  provisions  of  the instant  cases, there is no intention of the legislature  to flout the constitutional limitations. [237E]      Elliot Ashto Welsh 11 v. United States, 398 US 333,  26 Ed. 2d. 308, referred to.      3.6  It  is  not that the reading down is  used  for  a purpose which is just the opposite which the legislature had intended. Legislature had not 172 intended  arbitrary  or  uncontrolled-or  whimsical   power. Indeed  it  considered. This is not the proper way  to  read that  power in the Regulation 9(b). Para 522 of the  Shastri Award, read properly, must be circumscribed with the  condi- tions  indicated  above as a necessary corollary  or  conse- quence of that power. It is also not reading to the legisla- ture  conditions which were not there in the second  proviso to Article 311(2) of the Constitution. [237H, 238A-B]     Union of India & Anr. v. Tulsiram Patel, [1985] Supp.  2 SCR 131, relied on.     No  doubt, absolute powers cannot be  regulated  without essential  legislative  policy,  but in  the  instant  cases 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 presumption is made,  conditions indicated above inevitably attach. But these conditions  are necessary corollary flowing from the conferment of the power of  termination in a constitutional manner for  the  smooth, proper and efficient running of the industry. [238C, E]

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   3.7 In the circumstances power must be there, the  power must be read down in the manner and to the extent  indicated above,  of terminating the services of  permanent  employees without holding any enquiry in the stated contingencies  and this would be either by virtue of the silence of the  provi- sion  indicating  the  contingencies of  termination  or  by virtue of constitutional inhibitions. That reading would not violate the theory that judges should not make laws.  [238F- G]     Shri Ram Krishna Dalmia v. Justice Tandolkar, [1959] SCR 279 at 299; Jyoti Prasad v. The Administrator for the  Union Territory of Delhi, [1962] 2 SCR 125 at 139; Union of  India v.  Col.  J.N. Sinha & Anr., [1970] 2 SCC 450 at  461;  N.C. Dalwadi  v. State of Gujarat, [1987] 3 SCC 611 paragraphs  9 and 10 at page 619; Commissioner of Sales Tax, M.P.,  Indore & Ors. v. Radhakrishan & Ors., [1979] 2 SCC 249 at 257; Olga Tellis  & Ors. etc. v. Bombay Municipal Corporation &  Ors., [1985]  Suppl.  2 SCR 51 at 89;  R.M.D.  Chamarbaugwalla  v. Union of India, [1957] SCR 930 at p. 935 and 938; Kedar Nath Singh v. State of Bihar, [1962] Supp. 2 SCR 769; R.L. Arora v. State of Uttar Pradesh, [1964] 6 SCR 784; Jagdish  Pandev v. The Chancellor, University of Bihar & Anr., [1968] 1  SCR 231, at pages 236-237; Sunil Batra v. Delhi Administration & Ors.,  [1978] 4 SCC 494; Tinsukhia Electric Supply Co.  Ltd. v. State of Assam & Ors., [1989] 3 SCC 709; Charan Lal  Sahu & Ors. v. Union of India, [1989] Suppl. SCALE 1, at 173 pages 53 and 54, paras 101 as well as p. 61 para 114; Shah & Co. v. State of Maharashtra, [1967] 3 SCR 466 at 477-78;  M. Pentiah  and Ors. v. Veera-Mallappa and Ors., [1961]  2  SCR 295;  Bangalore Water Supply and Sewerage Board etc.  v.  A. Rajappa & Ors., [1978] 3 SCR 207; Minerva Mills Ltd.&  Ors., v.  Union of India & Ors., [1981] 1 SCR 206, at p.  239  and 259; Elliott Ashton Welsh, 11 v. United States, 26  Lawyers’ Edition  2nd, 308 at 327; Malinakhva Bysack v. Shyam  Sunder Haldar  & Ors., [1953] SCR 533, at p. 544-545 and  Municipal Committee, Amritsar & Anr. v. State of Punjab & ors., [1969] 3 SCR 447, referred to.     United  States of  America v. Edward A. Rumely, 97  Law- yers Edition 770 at 775; Reg. v. Sadiers Co., 10 H.L.C. 404, 460  and 463; Framamus v. Film Artists Association, 1962  QB 527  at  542  and Seaford Court Estates, [1949]  2  KB  481, referred to.     H.M.  Seervaid ’Constitutional Law of India’,  3rd  Edn. Vol.  1 pages 119-120 and Lord Denning: "The  discipline  of Law", at p. 12, referred to.     3.8 Termination simpliciter under Regulation 9(b) of the Regulation 1952, Delhi Road Transport Authority  (Conditions of Appointment and Services) or similar powers can be  exer- cised  only in circumstances other than those in  Regulation 9(a).  The exercise of such powers can only be for  purposes germane  and relevant to the statute, viz., the employee  is incompetent  or unsuitable so as to make his continuance  in the  employment detrimental to the interest of the  institu- tion,  or 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,  or 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  etc., etc. Therefore, each case of  conferment  of power  involved  should be judged on  the  aforesaid  basis. [236E-G]      3.9  Having regard to the finality of the  position  of law  and having regard to the theory that parties  have  ad-

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justed  their rights on the understanding of the law  as  it was, justice of the situation would be met if pending  liti- gations are examined and disposed of in the light of  afore- said principles. Where issues of damages or consequences  of termination  by  virtue of exercise of the power  are  still pending  adjudication  in any forum and have   been  finally adjudicated, these should be re-examined by the  appropriate authorities before whom these issues 174 are  pending,  but previous terminations, where  no  lis  is pending, will not be reopened. To that extent, the law  will be prospective. [239D-F]     4. This Court. under Article 141 of the Constitution, is enjoined to declare law. The expression ’declared’ is  wider than  the words ’found or made’. To declare is  to  announce opinion. Indeed, the latter involves 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 a law. The  law  de- clared  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 instrument of justice  placed in  the  hands  of the highest judiciary  of  this  country. Therefore.  there should be a more active and creative  role for the courts in declaring what the law is. [240E-G]     1. C. Golaknath & Ors. v. State of Punjab & Anr., [1967] 2 SCR 762 @ 811,813/84, referred to.

&     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 2876  of 1986.     From the Judgment and Order dated 14.5.1986 of the Delhi High Court in Civil Writ No. 1422 of 1985.     Soli J. Sorabji, Attorney General, Ashok Desai,  Solici- tor  General, Vinod Bobade, M.C. Bhandare, M.K.  Ramamurthy, R.K. Garg, Mrs. Shyamala Pappu, P.P. Rao, Mrs. J. Wad,  Mrs. Aruna Mathur, Ms. A. Subhashini. P. Parmeshwaran, D.K. Garg, A.K.  Sil, G. Joshi, S.K. Gupta, B.R. Sabharwal, Mrs.  Seita Vidyalingam,  S.K.  Bisaria  (NP),  Salman  Kurshid,  Irshad Ahmad, V.D. Phadke, A. Sharan, Lalit Bhasin, Ms. Nina Gupta, Vineet  Kumar,  R.C. Bhatia, P.C. Kapur  (NP),  B.S.  Charya (NP), Vijay K. Verma, C.M. Nayar, H.S. Munjral and  A.V.S.L. Somayajulu (NP) for the appearing parties. Satnam Singh appellant in person in C.A. 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,  i.e. 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

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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,  i.e. 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 9(b) 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. 1422/85 in Delhi High  Court, challenging  the constitutional validity of Regulation  9(b) 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 9(b) 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 9(a) & (b) were framed in  exer- cise  of the powers conferred u/s 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 regular/temporary employee wishes to resign from his post under the authority he shall give three/one month’s notice  in writing or pay in lieu thereof to  the  Authority

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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 D.T.C. 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 9(b) had not been reinstated and the  court considered  the validity of Regulation 9(b). 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.  v. Hindustan Steel Ltd. & Ors., [1985] 2 SCR 428. In that case, Standing  Order  31 of M/s. 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

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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 Rs.1.5 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 311(2) 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 v. 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 33(1) and 34 were as follows: "33(1)  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--

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(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. 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."     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 v. North East Frontier Railway, [1985] 5 SCR  683, where  Rules 148(3) and 149(3) of the Indian Railway  Estab- lishment  Code had been challenged on the ground that  these Rules  were contrary to Article 311(2) 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 S.S. Muley  v.  J.R.D.  Tara, [1979]  2  SLR 438 by this Court that,  Justice  Sawant,  of Bombay High Court had considered at great length  Regulation 48(a) 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 v.  Raghuraj. [1981]  2 LLJ 459. 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. v. Brojo Nath Ganguly and Anr., [1986]  3  SCC 156. 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

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of  India power to issue  directions/instructions  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  9(i)  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  9(i) 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-

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sheet.  But  a notice was serviced on him  under  Rule  9(i) 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 19(i)  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.  v. Macaulay (formerly Instone), [1974] i  W.L.R.  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

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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  16(1)  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 9(i) 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

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Company as compensation. In addition he will be entitled  to encashment of leave to his credit." This  Court  found that Rule 9(i) 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 9(i), 9(ii), 36(iv)(b) read with 38 and 37, Rule 9(i) 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  9(i) 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 9(i) 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 9(i). It could  pick  up another employee and apply to him Rule 9(ii). 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 9(i) 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 9(i) 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 9(i) 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

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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  9(i)  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 19(1) 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 v. Bhagatrarn Sardar Singh Raghuvanshi,  [1975] 3 SCR  619,  "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 9(b) 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  9(b)  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

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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. v. 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. v. Workmen & Anr., [1964] 2  SCR 125  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.  v. M/s Johnston Pumps India Ltd., [1975] 3 SCR 489 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  9(b)  was upheld by the Court in a matter, wherein in an action by the employee  of D.T.C., this Court in Delhi Transport  Corpora- tion  Undertaking v. Balbir Saran Goel, [1970] 3 SCR 757  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 9(b)  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

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India Corporation, Bombay v. V.A. Rebellow & Anr., [1972]  3 SCR 606, 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  v. P.S. Malvenkar & Ors., [1978] 3 SCR 1000 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 v. Union of  India, [1968] 1 SCR 185 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 and/or his work. See  the  observa- tions  of this Court in Champak Lal Chiman Lal Shah  v.  The Union  of India, [1964] 5 SCR 190 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 v.  State of  M. P., [1970] 1 SCR 472 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  v. Tulsi Ram Patel, (supra), where it was  reiterated

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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 v.  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-

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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 O.P. Bhandari  v.  1. T.D.C.  & Ors., [1986] 4 SCC 337 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."

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   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 v. Justice  Tandolkar, [1959] SCR 279 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 v. The  Adminis- trator for the Union Territory of Delhi, [1962] 2 SCR 125 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  v. Col.  J.N. Sinha & Anr., [1970] 2 SCC 458 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  N.C. Dalwadi  v. State of Gujarat, [1987] 3 SCC 611 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,  M.P., Indore  & Ors. v. Radhakrishan & Ors., [1979] 2 SCC  249  at 257.     In the case of Olga Tellis & Ors. etc. v. 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 9(b). 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

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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 9(b)  read with  9(a)  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 311(2) proviso. It was submitted that even the  power of termination simpliciter under Regulation  9(b) can  only be exercised in circumstances other than those  in Regulation 9(a), i.e., 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 9(b) 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, [1941] FCR 12, 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

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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 R.M.D. 196 Chamarbaugwalla v. Union of India, [1957] SCR 930, at p. 935 and 938. There section 2(d) of Prize Competitions Act,  1955 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 19(1)(g) 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 v. State of Bihar, [1962] Supp. (2) SCR 769.  The question before this Court was about the validity of s. 124A of the Indian Penal Code. This Court in order to sustain the validity  of  the  section on  the  touch-stone  of  Article 19(1)(a) 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  R.L. Arora v. State of Uttar Pradesh, [1964] 6  SCR  784 where  the question was about the Constitutionality of  sec- tion  41(aa) of the Land Acquisition (Amendment) Act,  1962. This Court upheld the validity of the section following  the principle of interpreting the said rule in a way which would

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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 v. The Chancellor, University  of Bihar & Anr., [1968] 1 SCR 23 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  s. 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 v. Delhi Administration & Ors.,  [1978] 4 SCC 494. There the constitutionality of s. 30, sub-section (2) and section 56 of the Prisons Act, 1894 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 N.C. Dalwadi v.  State  of  Gujarat, (supra).  In Tinsukhia Electric Supply Co. Ltd. v. State  of Assam & Ors., [1989] 3 SCC 709, 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. v. 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 U.S.  Supreme Court in several cases. See also United States of America v. 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. v. State of Maharashtra,  [1967] 3  SCR  466  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. v. Sadlers Co., 10 H.L.C. 404, at  460  and 463 and Faramus v. Film Artists Association, 1962 QB 527  at 542.  The  courts must iron out the creases,  as  said  Lord Denning  in  Seaford Court Estates, [1949] 2  KB  481.  This Court has also on numerous occasions followed this practice. See the observations of this Court in M. Pentiah and Ors. v. Veera  Mallappa and Ors., [1961] 2 SCR 295; Bangalore  Water Supply and Sewerage Board etc. v. A. Rajappa & Ors.,  [1978] 3  SCR 207. See also H.M. Seervai’s ’Constitutional  Law  of India’, 3rd Edn. Vol. 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

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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  311(2)  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 311(2)  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 of  paral.Vsing the administrative process or the  need  for 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. v. Union of India & Ors., [1981] 1 SCR 206, 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 R.C. Cooper v. Union of India, [1970] 3 SCR  530  at 577 and by larger Constitution Benches  in  the cases  of Maneka Gandhi v. Union of India (supra), Moti  Ram Deka  v.  Union of India (supra), State of  West  Bengal  v. Union of India, (supra) and the Constitution Bench decisions in  the cases of Olga Tellis and Others v. Bombay  Municipal Corporation  and  Others,  (supra),  Fertilizer  Corporation Kamgar Union (Regd.) Sindri and Others v. Union of India and Others,  [1981] 2 SCR at 60-61, Union of India  v.  Tulsiram Patel  and Others (supra), Sukhdev Singh & Others v.  Bhagat Ram  Sardar Singh Raghuvanshi and Another (supra)  and  Ajay Hasia etc. v. Khalid Mujib Sehravardi & Ors. etc., [1981]  2 SCR 79 at 100-102. According to Shri Ramamurthi these  deci- sions are authority for the following propositions:

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      (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  v. 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  R.C. 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 A.V.  Nachane & Anr. v. Union of India & Anr., [1982] 2  SCR 246 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 19(1)(g) 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  19(1)(g),  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. v. The Commercial Tax  Offi- cer,  Bhavanipore & Ors., [1975] 2 SCR 619 at 657;  followed in  A.L. Kalra v. The Project and Equipment  Corporation  of India  Ltd., [1984] 3 SCR 646 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

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non/arbitrariness 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 v. Union of  India  &  Ors., [1984] 2 SCR 79 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, 19(1) (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 19(1)(g) 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 Indian Contract Act 1872  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 Indian  Contract  Act 1872 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 Indian Contract Act 1872. 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 Indian Contract Act, 1872, or of the  English

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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 2(h) of the  Indian Contract  Act, 1872 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 2(g) 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, 19(1)(g) 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

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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, 19(1)(g) 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, 19(1)(g) 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. v. The Workmen &  Ors., [1987]  1 SCR 652 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-

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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, 19(1)(g)  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 O.P. 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 v. Nathella Sampathu Chetty, [1962] 3 SCR 786 at  825 and  Commissioner of Sales Tax, Madhya Pradesh v.  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, 19(1)(g) 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 5.6 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 9(b) 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.

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   Shri Ramamurthi drew our attention to the true scope  of Regulation 9(b) 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  9(b) 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  9(b)  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  9(b) 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, 19(1)(g) 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.

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   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 3.12 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 3.15(a) which provided  that  except  as provided  in  clause (b) and (c) of that rule  and  in  note under rule 3.13, 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 3.15  provided that notwithstanding the provisions  of  rule 3.14(a), 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 6.21; 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 3.13 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. R.K. Garg, appearing for the respondents in C.A. 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. 1.5 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

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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 148(3) 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 348(4) 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 149(3) 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, 19(1)(g) 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

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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, 19(1)(g) 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  311(1)  and 311(2) 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 311(2), in order to prevent arbitrary use of power of termi- nation. Articles 19(1)(g) 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  [1964]  5 SCR 683,729-731).        (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 v. State of Punjab & Anr.,  [1964]  7 SCR 587 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’

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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 311(2), which was adopted.by 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. M.D.C.  ’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  311(2)  in the Constitution of India.  Even  Parliament could  not  graft  such limitations on  Article  311(2),  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 311(2)  unconstitutional.  In order to give  effect  to  the express language of second Proviso to Article 311(2),  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 311(2) of the Constitution was submitted.     The operation of Articles 14, 19(1)(g) and 311(2) 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 311(2) 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 v. Hari Shankar Jain, [1979] 1 SCR 355/362-3).     Shri Garg urged that the I.L.O. 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 Indian Contract Act. 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

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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  A.R. Antulay v. R.S. Nayak and Anr., [1988] 2 SCC 602. 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 S.C. Jaisinhhani v. Union of  India and Ors., [1967] 2 SCR 703 at p. 718-19.     On  behalf of the Interveners in Civil Appeal No.  2876, Mr. P.P. 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  311(2) 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 311(2) 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-

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tion.     It  was further reiterated that as the employees of  the DTC  were  not Government employees, Article 311(2)  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 v. Union of India & Ors., [1981] 1 SCR 206 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  v.  State of Kerala,  [1973]  Supp.  1 S.C.R.  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  9(b) 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  v. 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 R.M.D.  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 9(b) 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 v. Shyam Sunder Halder & Ors., [1953] SCR 533, at p. 544-545. Mr  Rao referred  to  the observations of this Court in  Kedar  Nath Singh  v. State of Bihar, (supra) involving the  interpreta- tion of section 124A IPC in the context of Article  19(1)(a) of the Constitution. The content of Article 19(1)(a) 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

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Court  in R.L. Arora v. 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 v. 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. v. State of Punjab & Ors.,  [1969] 3 SCR 447, 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  v. 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. N.C.  Dalwadi  v. 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 9(b)  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 v. 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 Rs.2,46,464.  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.  1961. 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."

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   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 1(i) 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  1(i), 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

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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 and/or 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 8.1 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 8.1 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 terms.after 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

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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. 1115/76, 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 s.  5(2)  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 ss. 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 July/August, 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  Rs.4,83,061.90  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 Rs.2,46,464.46  paise,  in case he would have been in service before his date of super- annuation, i.e., 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 Rs.4,83,061.90  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 M/s Indian Airlines,  which  is  the subject-matter of the Application for Intervention No. 1  of 1990:in 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 Industrial Employment (Standing Orders) Act, 1946, which

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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 s. 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 s. 2(00) 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 2(s)  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 311(2)  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 him/her and  without  any  prior notice  but only on the following grounds not  amounting  to misconduct under the Standing Orders, namely: (i)  If  he/she 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 his/her continuance in employment detrimental to the  inter- est of the Corporation;                             OR If  his/her  continuance in employment constitutes,  in  the opinion of the Corporation (the Board of Directors of Indian Airlines), a grave security risk making his/her  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 his/her services. 223 (b) The employee can seek termination of his/her  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 his/her service  by  an

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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. v. 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 him/her and  without  any prior notice but only to the following grounds not amounting to misconduct under Service Regulation 42, namely: (i)  if  he/she 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  his/her continuance  in employment detrimental to the  interests  of the Corporation;                               OR If  his/her  continuance in employment constitutes,  in  the opinion  of the Corporation (the Board of Directors  of  Air India), a/grave security risk making his/her 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 his/her services. (b)  The services of an employee on probation may be  termi- nated without assigning any reason to him/her but on  giving

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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 him/her 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  44(A)  which reads as under: "44(A)(i) 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 C.M.P. 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  C.A.  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).

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   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, General Insurance (Emergency Provisions) Act, 1971 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  7(1)  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  C.A.  No.  855/84 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 reduction/reorganisation 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 and/or incompetent staff, thus,  burdening the public utility/service with unmanageable costs and staff

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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. Smt. 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 and/or  occa- sion  for  such user. Firstly. we have to. in  view  of  the facts and the circumstances of the Civil Appeal No. 2876  of

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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 v. 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

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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 9(b). 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

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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  9(b) 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  9(b) 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

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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  v.  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

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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

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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 9(b) or similar powers can  be exercised only in circumstances other than those in  regula- tion  9(a).  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

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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 v. United States, 398  US 333; 26 L.Ed. 2d 308 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 R.K. 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 R.M.D.C. ’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  9(b). 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 311(2) 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  R.K. 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

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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

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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 I.C. Golak Nath &  Ors. v.  State of Punjab & Ant’., [1967] 2 SCR 762 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’. v. State of Punjab  & Anr., (supra at pp. 813/14). 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  (M.L. Kamra v. 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  v.  Zilla  Parishad

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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 Rs.4,83,061.90  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. 4073(NL) of  1986 (Mahesh Kumar Giroti v. Regional Manager, Region 11, Region- al  Office,  State Bank of India, Bareilly  &  Ors.),  Civil Appeal  No. 331 of 1987 (The Delhi Transport  Corporation  & Anr.  v. Shri Hans Raj), Civil Appeal No. 328 of  1987  (The Delhi  Transport Corporation & Anr. v. Shri Rohtash  Singh), Special  Leave Petition No. 75 12 of 1987  (Delhi  Transport Corporation   v.  Shri  Mohinder Singh &  Anr.),  and  Civil Appeal  No. 330 of 1987 (The Delhi Transport  Corporation  & Anr.  v. 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  C.M.Ps. 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  9(b) 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 9(b) 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 E.P. 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 9(b) framed by the Delhi Road Transport Authority under the 1950 Act. 9(b) 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

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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 D.T.C. 243 for public purposes and secondly, the Regulation 9(b) 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  148(3)  and 149(3)  in contravention of the provision of Article  14  of the  Constitution were challenged before this Court  in  the case Moti Ram Deka etc. v. General Manager, N.E.F. Railways, Maligaon, Pandu, etc., [1964] 5 SCR 683. Rule 148(3) of  the Railways Establishment Code is set out here under: "148(3) "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 148(3) 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 148(3) and 149(3)  are  in- valid  in as such as they are inconsistent with  the  provi- sions of Art. 311(2), as they purport to removal from  serv- ice of permanent servants without compliance with the proce- dure prescribed by Article 311(2). It was also held that the Rule  148(3)  contravenes Art. 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 v. Union of India, [1958] SCR 828 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

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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 311(2) 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 311(2) of the Constitution.     In  the case of Shyam Lal v. The State of Uttar  Pradesh and  Anr.,  [1955] SCR 26 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 v. Shri  Justice S.R. Tendolkar & Others, [1959] SCR 279 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 v. The  Administra- tor For the Union Territory of Delhi, [1962] 2 SCR 125 while holding  that Section 19 of the Slum Areas (Improvement  and Clearance) Act, 1956, 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  19(1) 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 v. Dr. (Miss) Binapani Dei  &  Ors., [1967] 2 SCR 625 the respondent joined service of the  State

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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 A.K. Kraipak and Others v. Union of India and Others, [1969] 2 SCC 262 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 v. Col. J.N.  Sinha  and Anr.,  [1971] 1 SCR 79 1. Col. J.N. Sinha  was  compulsorily retired by an order of the President of India dated  13.8.69 under Section 56(j) 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. v. 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

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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 56(j) 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 v. V.A. Rebello  & Anr.,  AIR  1972 SC 1343 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, V.A. 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  Industrial Disputes Act, 1947 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  Industrial  Disputes Act  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 33(1) and 33(2) of the Industrial Disputes Act, held following its  decision in The Workmen of Sudder Office Cinnamara v. The Management, [1971] 2 Lab LJ 620 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

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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.  v. Workmen  & Anr., [1964] 2 SCR 125. 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 Arts. 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 v. Union of India, [1978] 2 SCR  62 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 s. 10(3)(c) 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  10(5), 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 s. 6(1) 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

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grounds  set out in cl.(a) 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 Arts. 14 and  19 of  the  Constitution we have to consider  the  objects  for which the exercise of inherent rights recognised by Art.  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 Arts.  14  and  19, whenever facts justifying the invocation of either of  these Articles  may be disclosed. Violation for both Arts. 21  and 19(1)(g)  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 10(3) 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

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pronouncement  of this Court in the case of E.P. Royappa  v. State of Tamil Nadu and Anr., [1974] 2 SCR 348. "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 v.  Malvenkar  and Ors., [1978] 3 SCR 1000 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 42(4)  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-

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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. v.  Raghuraj &  Anr.,  [1981] 4 LLJ 459 the  petitioners  challenged  the order  of  termination of services dated 29.4.  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 29.4. 1981. 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 29.4.1981, that  sheer  un- suitability and unfitness to hold office is not a misconduct

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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. v.  Johnaton  Pumps  India Ltd.,  [1975]  3 SCR 489 and also in the case of  Air  India Corporation v. V.A. Rebello, (supra) as well as the ratio of the  decision in the case of Sukhdev Singh & Ors. v.  Bhagat Ram Sardar Singh Raghuvanshi & Anr., [1975] 1 SCC421.     In the case of S.S. Muley v. J.R.D. Tata & Ors.,  [1979] 2  SLR 438 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.  v.  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. v. Hindustan Steel Ltd. and Ors., [1985] 2 SCR 428. 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

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service without following the procedure laid down in  Stand- ing Order 31. "32. 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 S.O. 32 and to bring it in tune  with the philosophy of the Constitution failing  which it being other authority and therefore a State under Art. 12 in an appropriate proceeding, the vires of S.O. 32 will have to be examined. It is not necessary to do so in the  present case because even on the terms of S.O. 32, the order made by the General Manager is unsustainable."     In  the  case of Tata Oil Mills Co. Ltd.  v.  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. 40(1) of the Service Rules, whereas  the  re- spondent contended that the termination was not a  discharge

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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 O.P. Bhandari v. Indian Tourism Development  Corpora- tion  Ltd.  and Others, [1986] 4 SCC 337.  The  question  of constitutionality of Rule 31(v) 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 16(1) 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-

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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 16(1) 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  v. Brojo Nath Gangtdy and Another and  West  Bengal State  Electricity  Board  v. Desh Bandhu  Ghosh  and  Ors., (Supra).     In  Central Inland Water Transport  Corporation  Limited and Another v. Brojo Nath Ganguly and Another, [1986] 3  SCC 156 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).

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   Rule  9(i) 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 9(i) 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 9(i) 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  9(i) 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  9(i), 9(ii). 36(iv)(b) read with Rules 38 and 37. Rule 9(i) 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 9(i) 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  9(i)is  also  discriminatory for  it  enables  the

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Corporation  to discriminate between employee and  employee. It  can pick up one employee and apply to him Rule 9(i).  It can pick up another employee and apply to him Rule 9(ii). It can  pick  up  yet another employee and apply  to  him  Rule 36(iv)(b)  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  v.  Balbir Saran Goel, [1970] 3 SCR 757 considered the question whether the  services of a permanent employee under Delhi  Transport Undertaking could be terminated under Regulation 9(b) 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  9(b) 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  9(b) 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 9(h) 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 9(b) 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. v. M/s 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-

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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. v. 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 S.O. 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 S.O. 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. v. Brojo Nath  Ganguly  and Anr.. (supra)as 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-

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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 Art. 14 of the Constitution     Thus  on a conspectus of the catena of cases decided  by this  Court the only conclusion follows is  that  Regulation 9(b) which confers powers on the authority to terminate  the services of a permanent and confirmed employee by issuing  a notice terminating the services or by making payment in lieu of  notice  without assigning any reasons in the  order  and without  giving any opportunity of hearing to  the  employee before  passing  the  impugned order  is  wholly  arbitrary, uncanalised and unrestricted violating principles of natural justice  as well as Article 14 of the Constitution.  It  has also  been held consistently by this Court that the  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 9(b),  therefore, confers  unbridled, uncanalised and arbitrary power  on  the authority to terminate the services of a permanent  employee without recording any reasons and without conforming to  the principles of natural justice. There is no guideline in  the Regulations or in the Act, as to when or in which cases  and circumstances this power of termination by giving notice  or pay  in  lieu  of notice can be exercised. It  is  now  well settled  that  the ’audi alteram partem’ rule which  is  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 9(b) is  illegal and void as it is arbitrary, discriminatory and without  any guidelines  for  exercise of the power. Rule of  law  posits that  the power to be exercised in a manner which  is  just, fair  and reasonable and not in an unreasonable,  capricious or arbitrary manner leaving room for discrimination. Regula- tion 9(b) does not expressly exclude the application of  the

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’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 9(b)  or pay  in  lieu thereof without recording any  reason  in  the order  and  without giving any hearing to  the  employee  to controvert the allegation on the basis of which the 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.  v. Tulsiram Patel and Ors., [1985] Supp. (2)  SCR  131 where  the constitutionality of provisions of Art. 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 v. Union of India, [1968]  1  SCR 185 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 Art. 14 does not  govern or  control  Art. 311. The Constitution must be  read  as  a whole.  Art. 311(2) 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. v. 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.  v.  Brojo Nath  Ganguly and Anr. (supra) and a similar Rule  9(i)  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 9(i) of the Services Discipline  and  Appeal Rules,  1979  was held void under Section 23 of  the  Indian Contract Act, 1872, 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 9(b) of the impugned Regulation framed  under the Delhi Transport Corporation Act which is in pare materia with  the  said Rule 9(i) 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 9(b)  framed  under  the Delhi Road Transport 267

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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. v. Radhakrishnan and Ors.,  [1979]  2 SCC  249 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, [1941] FCR 12  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

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does not intend to exceed its jurisdiction."     In  the case of R.M.D. Chamarbaugwalla v. The  Union  of India, [1957] SCR 930 the petitioners who had been promoting and conducting prize competitions in the different States of India,  challenged the constitutionality of ss. 4 and  5  of the  Prize Competitions Act (42 of 1955) and rr. 11  and  12 framed  under  s. 20 of the Act on the  grounds  that  prize competition  as defined in s. 2(d) 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. 19(6) 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 ss. 4 and 5 and rr 11 and 12 of the Act  as  re- gards gambling competitions was no longer open to  challenge under Art. 19(6) of the Constitution in view of the decision of this Court that gambling did not 269 fall  within the purview of Art. 19(1)(g) 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  s.  2(d) 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  Art.  252(1) 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 v. State of Uttar Pradesh and Ors., [1964] 6 SCR 784 challenge was thrown to the constitu- tionality  of the amendments made to Ss. 40, 41 and s. 7  by the  Land Acquisition Amendment Act (Act 31 of 1962) on  the ground  that it contravened Art. 31(2) 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 Art. 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

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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  v.  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 v. The Chancellor  Univer- sity of Bihar & Anr., [1968] 1 SCR 23 1 the challenge was to the  constitutionality of s. 4 of Bihar  State  Universities (University of Bihar, Bhagalpur and Ranchi) (Amendment)  Act 13 of 1962 as discriminatory and violative of Art. 14 of the Constitution.  It has been urged that s. 4  confers  uncana- lised powers on the Chancellor without indicating any crite- rion  on  the  basis of which the power under s.  4  can  be exercised. It has been observed that: "  ......  There is no doubt that if one reads s. 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 s. 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

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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 9(b) framed under s. 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 C.W.P. No. 1422 of 1985  and  dismiss  Civil Appeal  No.  2876 of 1986. I allow Civil Appeal  No.1115  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.     SHARMA.J. 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 9(b) 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

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Appeal No. 2876 of 1986 is dismissed.     I also agree that the Civil Appeal No. 1115/76 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..J.  I had the advantage of reading  the  judg- ments  of  the  learned Chief Justice and B.C.  Ray  and  K. Ramaswamy,  JJ. While with respect I agree with the  conclu- sion  of  the  learned Chief Justice  in  Civil  Appeal  No. 1115/76,  with utmost respect to him, I am unable  to  share his view of law on the subject in Civil Appeal No.  2876/86. 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 rules/regulations to  terminate the services of an employee without  assigning any reason, is constitutionally valid.     2. 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 9(b)  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 regular/temporary employee  wishes  to resign  from  his post under the Authority  he  shall  given three/one  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

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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 9(b)  of the Regulations will apply equally to the  relevant rules of the other undertakings as well.     3.  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.     4. 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 311(2) 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  311(2),  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.     5.  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

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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.     6.  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

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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. v. Bhagatram Sardar Singh Raghuvanshi & Anr.,  [1975] 3  SCR  619; Maneka Gandhi v. Union of India, [1978]  2  SCR 621;  The  Manager, Government Branch Press & Anr.  v.  D.B. Felliappa,  [1979] 1 SCC 477; Managing Director, Uttar  Pra- desh Warehousing Corporation & Anr. v. Vinay Narayan Vajpay- ee, [1980] 2 SCR 773; A.L. Kalra v. The Project &  Equipment Corporation  of India Limited, [1984] 3 SCR 646; Workmen  of Hindustan Steel Ltd. & Anr. v. Hindustan Steel Ltd. &  Ors., [1985] 2 SCR 428; West Bengal State Electricity Board & Ors. v. Desh Bandhu Ghosh & Ors., [1985] 2 SCR 1014; Olga  Tellis &  Ors. v. Bombay Municipal Corporation & Ors. etc.,  [1985] Supp.  2 SCR 51; Union of India & Anr. v. Tulsiram  Patel  & Ors.,  [1985] Supp. 2 SCR 13 1; Central Inland Water  Trans- port  Corporation Ltd. & Anr. v. Brojo Nath Ganguly  &  Anr. etc.,  [1986]  3 SCR 156; O.P. Bhandari  v.  Indian  Tourism Development Corporation Ltd. & Ors., [1986] 4 SCC 337;  N.C. Dalwadi v. State of Gujarat, [1987] 3 SCC 611; M.K.  Agarwal v.  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.  v.  Union  of India & Ors., [1988] 1 SCC 122.     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. v. General Manager, N.E.P. Railways, Maligaon, Pandu, etc., [1964] 5 SCR 683 had  given vent  to  it, Das Gupta, J. in his concurring  judgment  but dealing  with the same point of unguided provisions of  Rule 148(3) of the Railway Establishment Code, had not  supported that view and had struck down the rule as being violative of Article  14 of the Constitution. The majority did  not  deal with  this  point at all and struck down the Rule  as  being void on account of the discrimination it introduced  between railway servants and other government servants.     The reliance placed on the decision in Shri Ram  Krishna Dalmia v. Shri Justice S.R. Tendolkar & Ors., [1959] SCR 279 to  support  the above theory is also according  to  me  not correct.  As has been pointed out there, the  Commission  of

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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 v.  Nathella  Sampathu Chetty & Anr., [1962] 3 SCR 786 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 Sea Customs Act, 1878 on the possessor  of the goods to show that they were not smuggled was  violative of Article 19(1)(f) and (g) of the Constitution. The  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 19(6)  of the Constitution and was otherwise valid.  It  was not a case of a provision which was constitutionally invalid being  saved by recourse to the spacious assumption  of  its reasonable exercise in individual cases.     In  Tata Oil Mills Co. Ltd. v. Workmen & Anr., [1964]  2

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SCR  125, 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.      9.   The  other  authorities relied on  behalf  of  the appellants  have  similarly no relevance to the  point.   In Jyoti  Pershad v. The Administrator for the Union  Territory of Delhi, [1962] 2 SCR 125, the Slum Clearance Act which was challenged  there contained enough guidelines for the  exer- cise  of  the power.  In Municipal  Corporation  of  Greater Bombay v. P.S. Malvenkar & Ors., [1978] 3 SCR 1000, 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. v. Union of India & Ors., [1980] 1 SCR 61, 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 v. The Union of India, [1964] 5 SCR 190, 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  v. State of Madhya Pradesh, [1970] 1 SCR 472, it  was  a case  of  termination of a  temporary  Government  servant’s services.  In Air India Corporation, Bombay v. V.A. Rebellow & Anr., [1972] 3 SCR 606, 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. v. The Principal, Rajendra  Medical College, Ranchi and Anr., [1973] 1 SCC 805, 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.     10. I may now deal with the second contention vehemently urged  on behalf of the appellants. The contention was  that

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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,  i.e., 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 v. Shyam Sunder  Haldar  &  Ors., [1953]  SCR 533 the expression "decree for recovery of  pos- session"  in Section 18(1) 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 v.  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  v. Spooner,  6  Moo.  PC 1; 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

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Russel  of Killowen in Hansraj Gupta v. 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 R.M.D. Chamarbaugwalla v. The Union of India,  [1957] SCR 930, more or less a similar situation arose. The Parlia- ment  had enacted the Prize Competitions Act 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 of.the restrictions  imposed by  the Act was challenged as going beyond Article 19(6)  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 2(d) 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 v. 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 R.L. Arora v. State of Uttar Pradesh & Ors., [1964] 6 SCR  784,  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 v. The Chancellor, University of Bihar &  Anr. [1968] 1 SCR 231, 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

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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 v. Raj Singh & Ors., [1975] 1 SCR 918,  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. v. Delhi  Administration  &  Ors., [1973] 4 SCC 494 it was held that under Section 30(2)of  the Prisons Act 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

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down to exclude solitary confinement.     In  Excel Wear etc. v. Union of India & Ors.,  [1979]  1 SCR 1009, one of the questions before this Court was whether the  Court could read in Section 25-O (2) of the  Industrial Disputes Act 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. v. Union of India &  Ors., [1981]  1 SCR 206, 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

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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. etc. v. Tulsiram  Patel  etc., [1985] 3 SCC 398 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 v. United States,  398  US 333;  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-

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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.  v. Rose, 289 US 373,379; 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."     11.  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.     12.  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

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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 9(b). 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 311(2). 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

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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 rule/regulation. 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.     13.  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. 2876/86 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 v. Brojonath Ganguly, [1986] 3 SCC. 156 = AIR 1986 SC 1571 (for short Brojo Nath). The  facts  in C.A. No. 2886/86 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 9(b) 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.     3. Regulation 9(b) 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  Indian Contract Act. As stated earlier, the correctness thereof  is the primary question in these appeals.     4. 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

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void, under section 23 of the Indian Contract Act 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 v. Tulsiram PateI, [1985]  Supp.  2 SCR  131 = AI 1985 SC. 1416. 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 Arts. 14 and 16(1)  read  with Art. 19(1)(g) 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. M/s. M.K. Ramamurthi, R.K. Garg, and P.P. Rao,  learned counsel  appearing for the employees resisted these  conten- tions.     5.  The  main  controversy centres  round  the  question whether the employer, Statutory Corporation or instrumental- ity or other authority under Art. 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 Art.  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.     6.  In Sukhdev Singh v. Bhagatram, [1975] 3 SCR.  619  =

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AIR 1975 SC. 1331, 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 U.P. State Warehousing Corporation v. N.V. Vajpayee, [1980] 2 SCR 737 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.     7.  In  Ramana  v. International  Airport  Authority  of India,  [1979] 3 SCR. 1014 = (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,

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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 Central/State 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.     8. 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 16(1) provides right to an  appointment or employment to an office or post under the State.  Article 19(1)(g)  assures right to occupation or avocation. Art.  21 assures  right  to life and any deprivation is  as  per  the procedure  established by law. In General Manager,  Southern Railway  v. Rangachari, [1962] S.C.R. 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 Art. 16(1) of the Constitu- tion. This was reiterated in State of M.P.v. Shardul  Singh, [19701  3  S.C.R. 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

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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 Art. 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 Art. 51A(J ). Right to life scope of     9.  The  right to life, a basic human right  assured  by Art. 21 of the Constitution comprehends something more  than mere animal existence i.e. dignity of the individual.  Field J.  in Munn v. Illinois, [1876] 94 US 113 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 v. State of U.P., [1964] 1 SCR 332 this Court approved the definition of life given by Field J. in his dissenting opinion. In Olga Tellis v. 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 v. 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  v.  Chunder Bhan, [1983] 3 SCR 387 = AIR 1983 SC 803 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 15(1)(ii)(b’) of B.C.S.  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 Arts.  14, 16, 21 and 311(2).     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  Arts.  14, 16(1), 19(1)(g) and 21. Could statutory law arbitrarily take away or abridged or abrogated it? In Board of Trustees, Port of Bombay v. Dilip Kumar, [1983] 1 SCR 828 = AIR 1983 SC 109 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

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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. v. Hindustan  Steel Ltd. & Ors., [1985] 2 SCR 428 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 v. U.T. of Delhi, [1981] 2 SCR 516 = AIR 1981  SC  746 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 9(b) or allied rules, therefore, must not be  just, fair and reasonable so as to be in conformity with Arts.  14 and 21 is the cry of the case. 10. The position of the public employee is whether status:      The  distinguishing  feature of  public  employment  is status. In Roshanlal Tandon v. Union of India, [1968] 1  SCR 185  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 v. Jarfar Imam, [1965] 3 SCR 463 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  v.  Cecelia  Kom Francis  Tellis, [1973] 3 SCR 348 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 Art. 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

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provisions. 11. Nature of the right of a permanent employee to a post     In Purushottam Lal Dhingra v. Union of India, [1958] SCR 828 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 v.  General  Manager, [1964] 5 299 SCR 683 at 718-721=AIR 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 148(3) or Rule 149(3)  of  Rly.  Establishment Rules  if  such  a termination is brought  about,  the  rule clearly  contravenes  Art.  311(2) 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 v. State of Pepsu, [1964] 7 SCR 587 =AIR 1964 SC 1585 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  Art. 311(2) 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  Art. 311(2); 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  148(3) or Rule 149(3) would inevitably create a  sense of insecurity in the minds of such servants and would invest appropriate  authorities  with very wide  powers  which  may

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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  v.  Union  of India, [1988] 1 SCR 598--[1988] 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.     12. It must, therefore, be held that a permanent employ- ee of a statutory authority, corporation or  instrumentality under Art. 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 his/her  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. 13. 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-

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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  him/her 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.     14. From the above perspective vis-a-vis constitutional, social  goals  and  rights of the citizens  assured  in  the preamble,  Parts  III & IV i.e. the  trinity,  the  question whether the statutory corporation or the instrumentality  or

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the  authority under Art. 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  Indian Contract  Act, 1872 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 Indian Contract Act is applica- ble  to all States except Jammu & Kashmir. By  operation  of Article  372  of the Constitution, the Indian  Contract  Act continues  to be in operation subject to the  provisions  of the Constitution. The Indian Contract Act is an amending  as well as consolidating Act as held in Ramdas Vithaldas Durbar v.S. 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  Indian Contract  Act 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 2(h) of  the Indian  Contract  Act 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  2(g) thereof. The question, therefore,  is  whether the contract of service or Regulation 9(b) in derogation  to the Fundamental Rights guaranteed in Part III of the Consti- tution is valid in law and would be enforceable. Contract whether changeable with changing times.     15.  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-

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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.     16.  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.     17. In Brojonath’s case, Madan, J., elaborately  consid-

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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.      18.  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 i.e.,  (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.     19.  Professor  Guido Calabresi of Yale  University  Law

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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."     20.  These principles were accepted and followed by  the Andhra  Pradesh High Court in V. Raghunadha Rao v. State  of Andhra Pradesh, [1988] 2 A.L.T. 461 dealing with A.P. Stand- ard  specification  Clauses  11, 29, 59, 62(b)  and  73  and declared  some  clauses to be ultra vires  of  Articles  14, 19(1)(g)  and 21 of the Constitution and Sections 23 and  27 of the Contract Act.     21. 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.

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   23.  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 v. Driefontein Mines  Ltd.,  [1902] A.C.p. 484 and 507 that "a contract or other branch which is against  public policy i.e. against the general interest  of the country is illegal."     24.  In  Anson’s Law of Contract, 24th Edition  by  A.G. 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 G.H. 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."

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   25.  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.     26. 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 v. The Commissioner of Income-Tax &  Anr.,  [1959] Suppl. 1 SCR 528 S.R. 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  E.P. Royappa v. State of Tamil  Nadu  &  Ant., [1974]  2  SCR 348 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

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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.     27. 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  Arts. 14’, 16(1), 19(1)(g) 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 Arts. 14, 16(1), 19(1)(g) & 21 as guarantors of public employment as a source of right to livelihood.     28. 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 R.C. Cooper v.  Union  of  India, [1970]  3 SCR 530 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 19(1)  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. v. Union of

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India, [1981] 1 SCR 206 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 Art. 16(1). 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.     29.  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.  v. 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 Art. 14, therefore, a violation of a  principle of natural justice by a State action is a violation of  Art-

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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 Art. 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 Art.  311(2).  Article 311(2)  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 Art. 309 so as to make the said right either  ineffec- tive  or illusory. Once the scope of Art. 311(1) and (2)  is duly  determined, it must be held that no rule framed  under Art. 309 can trespass on the rights guaranteed by Art.  311. This  position is of basic importance and must be  borne  in mind in dealing with the controversy in question.     30. In A.K. Kraipak & Ors etc. v. Union of India & Ors., [1970]  1  SCR  457 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 v. Col. J.N. 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.     31.  The  principle of natural justice  embodied  as  an integral part of equality clause. Article 14 is the  general principle while Art. 311(2) is a special provision  applica- ble  to all civil services under the State.  Article  311(2) embodies  the principles of natural justice but  proviso  to Clause (2) of Art. 311 excludes the operation of  principles of natural justice engrafted in Art. 311(2) as an  exception in  the given circumstances enumerated in three  clauses  of the  proviso to Art. 311(2) of the Constitution. Article  14 read with Arts. 16(1) and 311 are to be harmoniously  inter- preted that the proviso to Art. 311(2) excludes the applica- tion  of the principles of natural justice as an  exception; and  the  applicability of Art. 311(2) must,  therefore,  be circumscribed  to  the civil services and  to  be  construed accordingly. In respect of all other 315 employees covered by Art. 12 of the Constitution the dynamic role of Art. 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

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Arts. 14, 16, 19 & 21 provide, expressly such an exception.     Article 19(1)(g) 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. v. Union of India & Ors., [1981] 2 SCR 52  at  60-61 held  that Art. 19(1)(g) 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 Art.  12, Arts. 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 Arts. 14, 19(1)(g) 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  149(3)  and  148(3) under Art.  311(2)  which  impari materia  Rule 9(b) of the Regulation also  considered  their validity in the light of Art. 14 and held thus: "Therefore,  we  are  satisfied that the  challenge  to  the validity  of  the  impugned Rules on the  ground  that  they contravene Art. 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 311(2) 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. 148(3) 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 Art. 14 of  the  Constitu- tion."     32.  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 Art. 311(2) was upheld for the reason  that  the Constitution itself made proviso--an exception to the  prin- ciple of audi alteram partem engrafted in Art. 311(2) of the Constitution. As a fact, it expressed thus: "As  the making of such laws and the framing of  such  rules

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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 AIR 1964 SC 600 if any such act or  rule  tres- passes  on the rights guaranteed to government  servants  by Art.  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  Art.  3  10(1) 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 S.S.  Muley v.J.R.D. Tata, [1979] 2 SLR 438 (Bombay) 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 Art. 14 of the Constitution.     In Superintendent of Post Office v.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 Art. 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 v. Mc. Grath, 34 1  US  123 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 v. Samuel  D.  singleton, [1981] 109 US 3 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

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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", 1958 Columbia Law Review, 143 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 Art. 14  of  the Constitution.     In West Bengal Electricity Board & Ors. v. D.B. Ghosh  & Ors.,  [1985]  2 SCR 1014 in similar circumstances,  it  was held  that  the regulation as "Herry VIII  Clause  as  ultra vires of Art. 14 of the Constitution. The same principle was reiterated in Brojonath’s case.     In  Workman of Hindustan Steel Ltd. & Anr. v.  Hindustan Steel Ltd. & Ors., [1985] 2 SCR 428 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 Art.  311(2)  of the  Constitution.  This Court in O.P.  Bhandari  v.  Indian Tourism  Development  Corpn. Ltd. & Ors., [1986] 4  SCC  337 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 15(1)(ii)(b)  of  Bombay Service Rule was held to be void. In A.P.S.R.T. Corpn. v. 319 Labour  Court,  AIR (1980) A.P. 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 R.M.D. Chamarbaugwalla v. State of Punjab, [1957] SCR 930 it was held that any Act violating fundamental rights is void. In Kanhialal v. District Judge & Ors., [1983] 3 SCC 32 this Court held that termination of the service of a  tempo- rary  employee  without affording opportunity  is  penal  in character  and  violates Art. 311(2) and was void.  In  M.K. Agarwal  v, Gurgaon Gramin Bank & Ors., [1987]  Suppl.  SCC. 643 this Court struck down regulation 10(2)(a) 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 Arts. 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 his/her 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 v. Government of A.P., [1980] 2 SCR 924 & 938 e to f; Frank Anthoney Public School v. Union of India, [1987] 1 SCR 238 & 269 b to e; Christian Medical College Hospital Employ- ees’  Union  & Anr. v. Christian  Medical  College,  Veilore Association & Ors., [1988] 1 SCR 546 & 562.

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   In  Moti  Ram  Deka’s case this Court  held  that  rules 148(3)  and 149(3) trespassed upon the rights guaranteed  to government servants by Art. 311(2) and would be void.     In  Kameshwar Prasad v. 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 Art. 19.  In  O.K. Ghosh  v.  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 Art. 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, 16(1), 19(1)(g) and 21 are void.     33.  Thus it could be hold that Art. 14 read with  16(1) 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 Art. 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 his/her 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

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321 employees  of corporate bodies’or statutory  authorities  or instrumentalities under Art. 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

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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,  i.e.  job,  the procedure  prescribed for such deprivation must,  therefore, be just, fair and reasonable under Arts. 21 and 14 and  when infringes Art. 19(1)(g) must be subject to imposing reasona- ble restrictions under Art. 19(5). 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

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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.      35. 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. v. Department of Trade and Industry, [1974] 2 All E.R. 97 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  v. Govt. of A.P., [1980] 2 SCR 924 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.     36.  It is, thus, clear that the object of reading  down

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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 Art. 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  v. United States. 398 U.S. 333 (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 v. Shyam Sunder Haldar & Ors., [1953]  SCR 533 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 148(3) and Rule 149(3) 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. 148(3) as well as R. 149(3), 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  Art.  311(2), and so, he  suggests  that  we should adopt that interpretation of the Rule which would  be consistent with Art. 311(2). 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

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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 Art. 311(2). 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, Art. 311(2) must come into play in respect  of such  cases. That being so, the Rule which does not  require compliance with the procedure prescribed by Art. 311(2) must be struck down as invalid."     37.  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.     38.  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 9(b) 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 9(b) 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.     39. Regulation 9(b), 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

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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 Art. 311(2) 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 Arts. 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  v. Wunderlick,  342  U.S. 98 "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 S.G. Jaisinghani  v.  Union  of India., [1967] 2 SCR 703.     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 Arts. 14,  16(1),

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19(1)(g)  and  21 of the Constitution. Doctrine  of  reading down cannot be extended to such a situation.     41. It is undoubted that in In re Hindu Women’s Right to Property  Act, [1941] FCR 12 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. R.M.D. 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 K.N. Singh v. State of Bihar, [19621  Suppl.  2 SCR  769 involve interpretation of Section 124(A) I.P.C.  in the  context  of  freedom of  speech  enshrined  under  Art. 19(1)(a) of the Constitution. The interpretation was put  as to  subserve the freedom under Art. 19(1)(a). R.L. Arora  v. State  of  U.P., [1964] 6 SCR 784 does not  involve  of  the doctrine  of  reading down so as to cut down  the  scope  of Fundamental Right. Similarly Jagdish Pandey v. Chancellor of the  Bihar,  [1969] 1 SCR 23 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  v. State of Punjab, [1969] 3 SCR 447 the court ascertained  the intention  of the Legislature and interpreted the  Act  con- sistent with the said intention. Sunil Batra v. Delhi Admn., [1978] 4 SCC 494 is also a decision where it was found  that the intention of the Legislature was not to confer arbitrary power. N.C. Dalwadi v. State of Gujarat, [1987] 3 SCC 611 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 v. 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 i.e. Delhi Transport 330 Undertaking  v.  Balbir Saran Goel, [1970] 3  SCR  757;  Air India  Corporation v. Rebellow, [1972] 3 SCR 606;  Municipal Corporation  of Greater Bombay v. P.S. Malvankar,  [1978]  3 SCR 1000 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.     42.  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 v.  State  of Punjab, [1975] 4 SCR 814 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

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extraneous considerations. Such actions were upheld by  this Court.  The action must be done honestly with due  care  and prudence.     43.  In  view of the march of law made by  Art.  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 9(b) of  the  Regula- tions are arbitrary, unjust, unfair and unreasonable offend- ing Arts. 14, 16(1), 19(1)(g) and 21 of the Constitution. It is  also opposite to the public policy and thereby  is  void under Section 23 of the Indian Contract Act. 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  v. Union of India, [1986] 2 SCR 980 it is  unneces- sary to go into that question. For the purpose of this  case it is sufficient to hold that proviso to Art. 311(2)  itself is a constitutional provision which excluded the applicabil- ity  of Art. 311(2) 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 Art. 311(2) 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.     45.  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 B.C. Ray and  P.B.  Sawant, JJ. with their reasoning and conclusions in addition to what I have laid earlier.     46.  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 v. D.T.C. Mazdoor  Con- gress) is dismissed. Civil Appeal No. 11 15 of 1976  (Satnam Singh v. Zilla Parishad Ferozepur & Ant., is allowed and the other  cases  snail be placed before a  division  bench  for final disposal.                                C.A. 2876/86 is dismissed  N.P.V.                        &C.A. 1115/76 isallowed. 332

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