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PETITIONER: P.   BALAKOTAIAH

       Vs.

RESPONDENT: THE UNION OF INDIA AND OTHERS(and connected appeals)

DATE OF JUDGMENT: 03/12/1957

BENCH: AIYYAR, T.L. VENKATARAMA BENCH: AIYYAR, T.L. VENKATARAMA BOSE, VIVIAN DAS, SUDHI RANJAN (CJ) DAS, S.K. SARKAR, A.K.

CITATION:  1958 AIR  232            1958 SCR 1052

ACT:    Railway   Services-Rules   for   safeguarding    national security-Constitutionality-Employee  engaged  in  subversive activity-Termination  of  Service-Validity-Railway  Services (Safeguarding  of  National  Security) Rules,  1949,  R.  3, 7--Constitution of India, Arts. 14,19(1)(c), 311.

HEADNOTE:    The Services of the appellants who were Railway servants, were terminated for reasons of national security under S.  3 of the Railway Services (Safeguarding of National  Security) Rules,  1949.  Notices served on them under that section  to show cause charged them as follows:-    "Whereas in the opinion of the...... General Manager, you are reasonably suspected to be a member and office secretary of the B. N. Rly., Workers’ Union (Communist sponsored)  and were  thickly associated with communists such as Om  Prakash Mehta,  B.  N. Mukherjee, R. L. Reddi, etc.,  in  subversive activities  in  such manner as to raise  doubts  about  your reliability  and  loyalty  to the State in  that,  though  a Government  employee, you attended private meetings  of  the Communists, carried on agitation amongst the Railway workers for  a  general strike from November 1948  to  January  1949 evidently   to  paralyse  communication  and   movement   of essential supplies and thereby create disorder and confusion in  the  country and that, consequently, you are  liable  to have  your  services  terminated under rule 3  Of  the  said Rules".   Orders  of suspension were passed on  them.   They made  their representations.  The committee of  Advisers  on enquiry and after examining them found that the charges were true and the General Manager acting on its report terminated the services of the appellants, giving them a month’s salary in  lieu  of notice.  The appellants moved  the  High  Court under  Art. 226 of the Constitution and contended  that  the Security Rules contravened Arts. 14, 19(1)(c) and 311 of the Constitution  and  as  such  the  orders  terminating  their services  were  void.   The High Court did  not  decide  the Constitutional validity of the Security Rules and  dismissed the petitions on other grounds.

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  Held, that the words ’subversive activities’occurring  in Rule  3  Of the Railway Services (Safeguarding  of  National Security)  Rules, 1949, in the context of the  objective  of national security which they have in view, are  sufficiently precise in import to                             1053 sustain  a  valid  classification and  the  Rules  are  not, therefore,invalid  as  being  repugnant to Art.  14  of  the Constitution.     Ananthanarayanan v. Southern Railway, A. I. R. 1956 Mad. 220, disapproved.     The  charge  shows  that action was  taken  against  the appellants  not  because  they  were  Communists  or   trade unionists  but  because  they  were  engaged  in  subversive activities.   The  orders terminating their  services  could not,.   therefore,   contravene   Art.   19(1)(c)   of   the Constitution  since they did not infringe any of the  rights of the appellants guaranteed by that Article which  remained precisely what they were before.     Article  311  of the Constitution can  apply  only  when there  is  an  order  of dismissal  or  removal  by  way  of punishment.   As the terms of employment of  the  appellants provided that their services could be terminated on a proper notice and R. 7 Of the Security Rules preserved such  rights as benefits of pension, gratuities and the like to which  an employee  might be entitled under the service  rules,  there was neither premature termination nor forfeiture of benefits already acquired so as to amount to punishment.  The  order’ terminating  the services under R. 3 Of the  Security  Rules stood on the same footing as an order of discharge under  R. 148 of the Railway Establishment Code and was neither one of dismissal nor removal within the meaning of Art. 311 of  the Constitution.  Article 311 had, therefore, no application.     Parshotam  Lal Dhingra v. Union of India,  Civil  Appeal No. 65 Of 1957, relied on.     Satish Chandra Anand v. Union of India, [1953] S. C.  R. 655,  Shyam Lal v. The State of Uttar Pradesh and the  Union of  India,  [1955]  1 S. C. R. 26 and  State  of  Bombay  v. Saubhagchand  M.  Doshi,  Civil  Appeal  No.  182  Of  1955, referred to.     Although the Rules are clearly prospective in character, materials  for taking action against an employee  thereunder may be drawn from his conduct prior to the enactment of  the Rules.     The Queen v. St. Mary, Whitechapel, (1848) 12 Q. B.  120 and The Queen v. Christchurch, [1848] 12 Q. B. 149, referred to.

JUDGMENT:     CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 46 to 48 of 1956.     Appeals  from the judgment and order dated November  16, 1951,  of the former Nagpur High Court in  Misc.   Petitions Nos. 45,1568 and 1569 of 1951.    H.     J. Umrigar, D. L. Jayawant and Naunit Lal, for the appellants in C. A. Nos. 46 and 47 of 56.    D.     L. Jayawant and Naunit Lal, for the appellant in C. A. No. 48 of 56. 1054    R.     Ganapathi  Iyer and R. H. Dhebar, for the  respon- dent (In all the appeals).    1957.   December 3. The following Judgment of  the  Court was delivered by

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   VENKATARAMA AIYAR J.-These appeals are directed  against the  orders of the High Court of Nagpur dismissing the  writ petitions filed by the appellants herein, and as they  arise out  of  the  same  facts and  raise  the  same  points  for determination,  they  were  heard  together,  and  will   be disposed of by a common judgment.    The facts in Civil Appeal No. 46 of 1956-the facts in the connected  appeals  are  similar and do not  require  to  be stated-are  that the appellant was employed in 1939  in  the Bengal Nagpur Railway as a clerk in the workshop at  Nagpur. In  1946 when the State took over the administration of  the Railway,  it  gave option to the employees  to  continue  in service  on  the terms set out in a document dated  July  5, 1946.   The appellant accepted those terms and continued  in service  on  the  conditions  mentioned  in  that  document. Acting  in exercise of the powers conferred by  ss.  241(2), 247  and  266(3) of the Government of India Act,  1935,  the Governor-General   promulgated  certain  rules  called   the Railway Services (Safeguarding of National Security)  Rules, 1949,  hereinafter  referred to as the Security  Rules,  and they came into force on May 14, 1949.    It  will  be  convenient at this stage  to  set  out  the Security  Rules,  in  so far as they are  material  for  the purpose  of  these appeals, as it is the validity  of  these rules that is the main point for determination by us.  Rules 3, 4, 5 and 7 are as follows:    3.     "  A  member of the Railway Service  who,  in  the opinion  of  the  competent authority is engaged  in  or  is reasonably suspected to be engaged in subversive activities, or  is  associated with others in subversive  activities  in such manner as to raise doubts about his reliability, may be compulsorily  retired  from  service, or  have  his  service terminated  by  the competent authority after  he  has  been given due notice or pay in                             1055 lieu  of  such notice in accordance with the  terms  of  his service agreement:    Provided  that a member of the Railway Service shall  not be  so retired or have his service so terminated unless  the competent  authority  is  satisfied that  his  retention  in public  service  is prejudicial to  national  security,  and unless,  where  the  competent authority is the  Head  of  a Department,  the prior approval of the Governor-General  has been obtained.    4.     Where  in the opinion of the competent  authority, there are reasonable grounds for believing that a member  of the Railway Service is liable to compulsory retirement  from service  or to have his service terminated under Rule 3,  it shall-    (a)    by an order in writing, require the said member of Railway  service  to  proceed  on  such  leave  as  may   be admissible to him and from such date as may be specified  in the order;    (b)    by  a notice in writing inform him of  the  action proposed to be taken in regard to him under Rule 3;    (c)    give him a reasonable opportunity of showing cause against that action ; and    (d)    before  passing a final order under Rule  3,  take into  consideration any representation made by him  in  this behalf.   5. Nothing  contained in the Rules in Chapter XVII of  the State Railway Establishment Code, Volume 1, shall apply  to, or  in respect of, any action taken or proposed to be  taken under these rules.   7. Any  person compulsorily retired from service or  whose

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service is terminated under Rule 3 shall be entitled to such compensation,  pension,  gratuity  and/  or  Provident  Fund benefits  as  would have been admissible to  him  under  the Rules applicable to his service or post on the date of  such retirement  or  termination  of  service  if  he  had   been discharged  from  service due to the abolition of  his  post without any alternative suitable employment being provided."   On July 6, 1950, the General Manager of the Bengal  Nagpur Railway issued a notice to the appellant 1056 under R. 3 of the Security Rules stating that in view of the facts recited therein, there was reason to believe that  the appellant  was engaged in subversive activities and  calling upon  him  to  show cause why his  services  should  not  be terminated.   He was also placed under suspension from  that date.  On July 29, 1950, the appellant sent his  explanation denying  the allegations contained in the notice dated  July 6,  1950.  The matter was then referred to the Committee  of Advisers, who held an enquiry on September 8,1950, and after hearing  the  appellant found that the charges  against  him mentioned  in the notice were true.  Acting on this  report, the General Manager terminated the services of the appellant on  April 3, 1951, giving him one month’s salary instead  of notice.   Meantime, on February 3,1951, the appellant had filed  the writ  petition,  out of which Civil Appeal No.  46  of  1956 arises, in the High Court of Nagpur challenging the validity of  the  notice  dated  July  6,  1950,  and  the  order  of suspension following thereon.  The order of dismissal  dated April  3, 195 1, having been passed during the  pendency  of this  Petition,  the appellant had his petition  amended  by adding  a prayer that that order also was bad.  The  grounds urged  in  support of the petition were  that  the  Security Rules under which action was taken were in contravention  of Arts.  14, 19 (1)(c) and 311 of the Constitution, and  that, in consequence, the orders passed in exercise of the  powers conferred  thereby were void.  The respondents resisted  the application  on the ground that the rules in  question  were valid,  and that the orders passed thereunder were not  open to attack.    The  petition was heard along with others, in  which  the same  questions  were raised, and by  their  judgment  dated November  16,  1951,  the learned Judges held  that  it  was unnecessary  to decide whether the Security Rules were  void as,  assuming  that they were, the  orders  terminating  the services of the petitioners could be sustained under R.  148 of the Railway Establishment Code.  Sub-rules (3) and (4) of R. 148 which bear on this point, are as follows: 1057    R.     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 summary dismissal or  discharge  under the   provisions  of  service  agreements,   retirement   on attaining  the  age of superannuation,  and  termination  of service due to mental or physical incapacity.    (4)  In  lieu of the notice prescribed in this  rule,  it shall  be  permissible  on the part  of  the  Railway  Admi- nistration to terminate the service of a Railway servant  by paying him the pay for the period of notice." The  learned  Judges  held that  the  appellants  were  non- pensionable railway servants within sub-r.(3), that they had been  paid  one month’s wages instead of notice  under  sub- r.(4), and that, accordingly, the impugned orders were intra

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vires  the  powers of the respondents under R.  148,  sub-r. (3).   In the result, the petitions were dismissed, and  the present appeals have been preferred against these orders  on a  certificate under Art. 132 (1) and Art. 133(1)(c) of  the Constitution.    The  appellants  complain that the ground  on  which  the judgment proceeds was not put forward by the respondents  in their pleadings and should not have been allowed to be taken by them, and that on the points actually in issue, it should have  been  held that the Security Rules were  repugnant  to Arts.  14,  19(1)  (c) and 311  of  the  Constitution,  and, therefore,  void.   They further contend that  even  if  the Security  Rules  were  valid,  the  orders  terminating  the services were not justified by them, and that further, those orders  were bad for the reason that they had not been  made by the competent authorities.  The appellants also sought to raise  the  contention  that the enquiry  conducted  by  the authorities  was  defective, and that there  was  no  proper hearing  as provided by the rules, but we declined  to  hear them  on  that  point,  as that  was  not  raised  in  their petitions. 1058 The points for decision in these appeals are:     (I)   Whether the orders terminating the services of the appellants  can  be  upheld  under R.  148  of  the  Railway Establishment Code;     (II)Whether the Security Rules are bad as infringing (a) Art.  14,  (b)  Art.  19(1)(c)  and  (c)  Art.  311  of  the Constitution;     (III)Whether  the  impugned orders are not  valid,  even according to the Security Rules; and     (IV)  Whether  those  orders  were  not  passed  by  the competent authorities.   (1).    On the first question, it appears clearly from the record  that the authorities purported to take  action  only under  the Security Rules. - The notice dated July 6,  1950, was  avowedly issued under R. 3 of those rules.  It  was  in the  scrupulous  observance  of  the  procedure   prescribed therein that the explanations of the appellants in answer to the charges were taken, and the matters were referred to the Committee  of  Advisers  for enquiry.  And  above  all,  the orders terminating the services of the appellants, in terms, recite  that they were made under R. 3 of the rules, as  for example,  the  notice  dated April 3,  1951,  given  to  the appellant  in  Civil Appeal No. 46 of 1956,  which  runs  as follows: "I  have  considered your representation to me in  reply  to this  office letter No. Con/T/2 I /MP/82 dated 6-7-1950  and am  of the opinion that you are engaged and associated  with others in subversive activities in such mariner as to  raise doubts  about  your reliability and am satisfied  that  your retention  in  public  service is  prejudicial  to  national security.   I  have decided with the prior approval  of  the President that your services should be terminated under Rule 3   of  the  Railway  Services  (Safeguarding  of   National Security) Rules, 1949.  " It should be added that while the appellants stated in their petitions that action had been taken against them under  the Security  Rules, and that those rules were ultra vires,  the respondents did not plead that                             1059 action  was taken under R. 148 of the Railway  Establishment Code.   They  only contended that the  Security  Rules  were valid.   In view of the above,the criticism of  Mr.  Umrigar for  the appellants that the judgment under appeal  proceeds

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on a ground which was, not merely, not in the  contemplation of the authorities When they passed the orders in  question, but was not even raised in the pleadings in  Court,  is  not without substance. It is argued that when an authority passes an order which is within  its  competence, it cannot fail  merely  because  it purports  to be made under a wrong pro. vision if it can  be shown to be within its powers under any other rule, and that the validity of an order should be judged on a consideration of  its  substance and not its form.  No  exception  can  be taken  to,  this  proposition,  but  it  has  not  been  the contention  of the respondents at any stage that the  orders in question were really made under R. 148(3) of the  Railway Establishment  Code, and that the reference to R. 3  of  the Security  Rules in the proceedings might be  disregarded  as due  to  mistake.  In the Court below,  the  learned  Judges rested  their conclusion on the ground that cl. (10) of  the service  agreement  dated  July 5, 1946,  provided  that  in respect of matters other than those specifically dealt  with therein-discharge  is one of such other matters-the  Railway rules applicable to persons appointed on or after October 1, 1946 were applicable, that R. 148(3) was one of such  rules, and  that  the appellants who were  non-pensionable  railway servants  were governed by that rule, and were liable to  be discharged  in  accordance therewith.   But  this  reasoning ignores  that under cl. (10) of the service  agreement,  the Security Rules stand on the same footing as the rules in the Railway  Establishment Code and constitute equally  with  R. 148  the conditions of service on which the appellants  held the  employment,  and there must be convincing  reasons  why orders passed statedly under R. 3 should be held not to have been  passed under that rule.  Before us, a different  stand was taken by the respondents.  They did not 1135 1060 dispute  that the action was really taken under R. 3 of  the Security Rules, but they argued that the power to  terminate the service under r. 3 was not something ;different from and independent of the power to discharge, conferred by R.  148, and  that an order passed under R. 3 was, on its own  terms, one made under R. 148(3).  The basis for this contention  is the provision in R. 3 that the service may be terminated  in accordance  with  the service agreement,  after  giving  due notice or. pay in lieu of such notice.    The  appellants controvert this position.   They  contend that  the power to terminate the service under the  Security Rules  is altogether different from the power  to  discharge under  R.  148, that the reference in R. 3  to  the  service agreement  is  only in respect of the notice  to  be  given, there  being  different  periods fixed under  the  rules  in relation  to  different classes of employees, and  that,  in other  respects, the Security Rules run on their own  lines, and that action taken thereunder cannot be shunted on to  R. 148.     We  find  ’considerable difficulty in  acceding  to  the argument of the respondents.  The Security Rules apply to  a special  class  of employees, those who are engaged  or  are likely   to   engage  in  subversive  activities,   and   in conjunction  with  the instructions which were  issued  when they  were  promulgated,  they form  a  self-contained  code prescribing   a  special  and  elaborate  procedure  to   be followed,  when action is to : be taken thereunder.  We  see considerable force in the contention of the appellants  that the of  the service agreement in R. 3 has reference only to  the

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nature  of  the notice to be given.  If  the  interpretation which  the respondents seek to put on the Security Rules  is correct,  then  it is difficult to see what purpose  at  all they  serve.  Mr. Ganapathy Iyer for the respondents  argues that  they are intended to afford protection to persons  who might   be   charged  with  being  engaged   in   subversive activities.   If  that is their purpose, then if  action  is taken thereunder but the procedure prescribed therein is not followed,  the  Order  must  be  held  to  be  bad,  as  the protection  intended  to  be given has been  denied  to  the employee,                             1061 and R. 148 cannot be invoked to give validity to such order. Indeed, that has been held in Sambandam v. General  Manager, S.  I. Ry. (1) and Prasadi v. Works Manager, Lillooah (2)  ; and that is also conceded by .Mr.  Ganapathy Iyer.  If  then the power to terminate the service under the Security  Rules is  different from the power to discharge under R. 148  when the procedure prescribed therein is not followed, it must be equally  so  when, as here, it has been  followed,  for  the complexion of the rules cannot change according as they  are complied  with or not.  That means that the  Security  Rules have an independent operation of their own, quite apart from R.  148.   We do not, however, desire to express  any  final opinion  on this question, as Mr. Ganapathy Iyer is  willing that  the  validity  of  the orders  in  question  might  be determined  on the footing that they were passed under R.  3 of  the Security Rules, without reference to R.  148.   That renders  it necessary to decide whether the  Security  Rules are unconstitutional, as contended by the appellants.    (Ila).   The  first  ground that  is  urged  against  the validity of the Security Rules is that they are repugnant to Art.  14.  It is said that these rules prescribe  a  special procedure  where  action  is proposed to  be  taken  against persons  suspected of subversive activities, and  that  when the  services  of  an employee are  terminated  under  these rules,  the  consequence is to stamp him as  unreliable  and infamous,  and there is thus discrimination, such as is  hit by  Art. 14.  It is admitted that if the persons dealt  with under   these  rules  form  a  distinct  class   having   an intelligible  differentia which bears a reasonable  relation to  the  purposes  of  the rules, then  there  would  be  no infringement of Art.14. But it is argued that the expression "  subversive  activities"  which forms  the  basis  of  the classification  is vague and undefined in that  even  lawful activities   could  be  roped  therein,  and  that  such   a classification  cannot be said to be reasonable.   Reference was  made to the charges which were served on the  appellant in  Civil Appeal No. 46 of 1956 as showing how  even  lawful activities (1)  I.L.R. [1953] Mad. 229. (2)  A.I.R. 1957 Cal. 4. 1062 could  be brought under the impugned rules.  The notice,  so far as it is material, runs as follows:-    "  Whereas  in  the opinion  of  the............  General ,Manager,  you are reasonably suspected to be a  member  and office   secretary  of  the  B.  N.  Rly.   Workers’   Union (Communist  sponsored)  and  were  thickly  associated  with communists  such as Om Prakash Mehta, B.N. Mukherjee, R.  L. Reddy,  etc., in subversive activities in such manner as  to raise doubts about your reliability and loyalty to the State in that, though a Government employee, you attended  private meetings of the Communists, carried on agitation amongst the Railway  workers for a general strike from November 1948  to

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January   1949  evidently  to  paralyse  communication   and movement of essential supplies - and thereby create disorder and confusion in the country and that, consequently, you are liable to have your services terminated under rule 3 of  the said Rules."    It  is argued that it is not unlawful to be a  member  of the Communist Party or to engage in trade union  activities, and if this could form the basis of action under the  rules, the   classification  must  be  held  to  be   unreasonable. Reliance  was  placed on the decision of this Court  in  The State of West Bengal v. Anwar Ali Sarkar (1), wherein it was held that a power conferred on the executive to select cases for trial by special courts under a procedure different from that  of the ordinary courts with the object of  ensuring  " speedy trial " could not be upheld under Art. 14 as a  valid classification, and on the decision of the Madras High Court in  Ananthanarayanan v. Southern Railway(2), wherein it  was hold that the words " subversive activities " in R. 3 lacked definiteness.    Now,  the  principles  applicable  for  a   determination whether there has been a proper and valid classification for purposes  of Art. 14 have been the subject of  consideration by  this  Court in a number of cases, and they  were  stated again  quite recently in Budhan Choudhry and others  v.  The State of Bihar(3), and there is no need to repeat them.  The only point that (1) [1952] S.C.R. 284.       (2) A.I.R. 1956 Mad. 220. (3)  [1955]1 S.C.R. 1045, 1049.                             1063 calls  for decision in these appeals is whether the  classi- fication of persons on the basis of subversive activities is too  vague to be the foundation of a  valid  classification. Mr.  Umrigar insists that it is, but his elaborate  argument amounts  to  no  more  than  this  that  the  expression   " subversive  activities  "  may take in quite  a  variety  of activities,  and that its contents are therefore  wide.   It may be that the connotation of that expression is wide,  but that  is  not to say that it is vague  or  indefinite.   But whatever the position if the words "subversive activities  " had stood by them selves, they are sufficiently qualified in the  Security Rules to be definite.  Those rules  have,  for their  object,  the  safeguarding of  national  security  as recited in the short title.  That is again emphasised in  R. 3,  which provides that a member of the Railway  service  is not  to  be retired or his services  terminated  unless  the authorities  are  satisfied " that his retention  in  public service  is  prejudicial  to national  security  ".  In  our judgment, the words " subversive activities " in the context of  national  security  are sufficiently  precise  in  their import to sustain a valid classification.  We are unable  to agree  with  the opinion expressed  in  Ananthanarayanan  v. Southern Railway (supra) at p. 223 that the language of R. 3 is  indefinite,  even when read with the  words  "  national security".   We  are  also  unable to agree with the  argument  of  the appellants  based on the charges made against the  appellant in  Civil Appeal No. 46 of 1956 in the notice dated July  6, 1950,  that the expression "subversive activities " is  wide enough  to  take  in lawful activities  as  well,  and  must therefore  be  held  to  be  unreasonable  for  purposes  of classification  under  Art.  14.  The notice,  it  is  true, refers  to  the appellant being a member  of  the  Communist Party and to his activities in the trade union.  It is  also true  that it is not unlawful to be either a Communist or  a trade  unionist.   But  it is not  the  necessary  attribute

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either  of  a Communist or a trade unionist that  he  should indulge in subversive activities, and when action was  taken against the appellant under the rules, it was not because he was a 1064 Communist or a trade unionist, but because he was engaged in subversive activities.  We hold that the Security Rules  are not illegal as being repugnant -to ,a Art. 14.    (IIb).  It is next contended that the impugned orders are in  contravention of Art. 19(1)(c), and are therefore  void. The  argument  is  that action has been  taken  against  the appellants -under the rules, because they are Communists and trade  unionists, and the orders terminating their  services under R. 3 amount, in substance, to a denial to them of  the freedom to form associations, which is guaranted under  Art. 19(1)(c).   We  have already observed that that is  not  the true  scope of the charges.  But apart from that, we do  not see how any right of the appellants under Art. 19(1)(c)  has been  infringed.   The  orders  do  not  prevent  them  from continuing  to  be  Communists or  trade  unionists.   Their rights  in  that  behalf remain after  the  impugned  orders precisely what they were before.  The real complaint of  the appellants is that their services have been terminated;  but that involves, apart from Art. 31 1, no infringement of  any of  their  Constitutional rights.  The  appellants  have  no doubt  a fundamental right to form associations  under  Art. 19(1)(c), but they have no fundamental right to be continued in  employment  by the State, and when  their  services  are terminated  by  the  State  they  cannot  complain  of   the infringement of any of their Constitutional rights, when  no question  of violation of Art. 311 arises.  This  contention of the appellants must also be rejected.    (IIc).   ’it is then contended that the  procedure  pres- cribed by the Security Rules for the hearing of the  charges does not satisfy the requirements of Art. 311, and that they are,  in  consequence, void.  But Art. 311  has  application only when there is an order of dismissal or removal, and the question is whether an order terminating the services of the employees  under R. 3 can be said to be an order  dismissing or  removing them.  Now, this Court has held in a series  of decisions  that it is not every termination of the  services of an employee that falls within the operation of Art. 311,                             1065 and  that it is only when the order is by way of  punishment that  it is one of dismissal or removal under that  Article. Vide  Satish Chandra Anand v. Union of India (1), Shyam  Lal v.  The State of Uttar Pradesh and the Union of  India  (2), State of Bombay v. Saubhagchand M. Doshi (3), and  Parshotam Lal Dhingra v. Union of India (4).  The question as to  what would amount to punishment for purposes of Art. 311 was also fully  considered in Parshotam Lal Dhingra’s  case  (supra). It was therein held that if a person had a right to continue in office either under the service rules or under a  special agreement, a permature termination of his services would  be a  punishment.  And, likewise, if the order would result  in loss of benefits already earned and accrued, that would also be punishment.  In the present case, the terms of employment provide  for  the  services being  terminated  on  a  proper notice, and so, no question of permature termination arises. Rule  7  of the Security Rules preserves the rights  of  the employee to all the benefits of pension, gratuities and  the like,  to  which  they would be entitled  under  the  rules. Thus,  there is no forfeiture of benefits already  acquired. It  was  stated  for the appellants that a  person  who  was discharged  under  the  rules  was  not  eligible  for   re-

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employment,   and  that  that  was  punishment.    But   the appellants  are  unable to point to any rule  imposing  that disability.   The order terminating the services under R.  3 of the Security Rules stands on the same footing as an order of  discharge  under  R.  148, and  it  is  neither  one  of dismissal  nor  of removal within the meaning of  Art.  311. This contention also must be overruled.    (111)  It  is  next contended by  Mr.  Umrigar  that  the charges  which  were  made against the  appellant  in  Civil Appeal No. 46 of 1956 in the notice dated July 6, 1950, have reference  to  events which took place prior to  the  coming into force of the Security Rules, which was on May 14, 1949, and that the order terminating the services of the appellant based  thereon is bad as giving retrospective  operation  to the rules, (I)  [1953] S.C.R. 655- (2)  [1955] 1 S.C.R. 26, (3)  Civil Appeal No. 182 Of 1955. (4)  Civil Appeal No. 65 of 1957. 1066 and  that the same is not warranted by the terms there-  of. Now, the rules provide that action can be taken under  them, if the employee is engaged or is reason;ably suspected to be engaged in subversive activities.  Where an authority has to form an opinion that an employee is likely to be engaged  in subversive  activities,  it  can  only be  as  a  matter  of inference  from the course of conduct of the  employee,  and his  antecedents  must furnish the best  materials  for  the same.   The  rules are clearly prospective  in  that  action thereunder   is  to  be  taken  in  respect  of   subversive activities  which  either  now exist or  are  likely  to  be indulged in, in future, that is to say, which are in esse or in  posse.   That  the materials for taking  action  in  the latter  case  are drawn from the conduct  of  the  employees prior  to the enactment of the rules does not  render  their operation  retrospective.   Vide the  observations  of  Lord Denman  C. J. in The Queen v. St. Mary, Whitechapel (1)  and The Queen v. Christchurch (2).  This contention must also be rejected.    (IV)   Lastly, it was contended that the impugned  orders were  not  passed  by the competent  authorities  under  the Security  Rules, and that they were, therefore, void.   This contention is based on the fact that the authority competent to  pass  the orders under R. 3 is, as regards  the  present appellants,  the  General  Manager, and  that  the  impugned orders  were  actually communicated to them  by  the  Deputy Manager.   But it has been found as a fact that  the  orders had  been actually passed by the General Manager,  and  that finding must be accepted.    In  the result, the appeals fail, and are dismissed  with costs.   The  appellants  who were  permitted  to  file  the appeals  in  forma  pauperis will also pay  the  court  fees payable to the Government.                      Appeals dismissed. (1)  [1848] 12 Q. B. 120; 116 E.R.811. (2)  [1848] 12 Q.B, 149; 116 E.R. 823, 825. 1067