JUDGMENT : Hari Lal Agrawal, J. 1. The petitioner had filed the writ application seeking a writ in the nature of mandamus commanding the respondents not to interfere with his functioning as the General Manager of the Bharat Wagon and Engineering Co. Ltd. (Mokameh Unit), a Government of India undertaking. Although no notice in this regard was served on the petitioner, he had come across a news item published on 19.6.1980 in the Indian Nation, a local English daily, purporting to be on behalf of the Chairman and Managing Director of the aforesaid company, to the effect that his services had been terminated with effect from 18.6.1980. A copy of the said publication was filed as Annexure 10 to the writ application. A learned single Judge before whom the application was put up for admission on 24.6.1980 (the Court being in vacation on referring to the case of (1) Ramana Dayaram Shetty V. The international Airport Authority of India & Ors (A.I.R. 1979 S.C. 1028) granted stay of operation of the aforesaid ORDER :contained in Annexure 10 (only so far as the status of the petitioner was concerned). The petitioner, however, had given an undertaking not to go to the works and endeavour to function as General Manager until rule was issued in the main application after the vacation. Before the application was taken up for admission, a counter-affidavit was filed on behalf of respondent no. 1 on 2.7.1980 wherein it was stated that the petitioner's service was terminated by a resolution dated the 2nd June, 1980 passed by the Board of Directors of the Company, which was communicated to the petitioner on 18th June, 1980. A copy of the said letter dated 18th June, 1980 was made Annexure A to the counter-affidavit. As this is the letter which is now the subject matter of controversy between the parties and on which long drawn arguments have been addressed by learned counsel for both the parties, I would extract the relevant averments made in this document: The Board of Directors of our Company at a meeting held on 2nd June 1980 have decided to terminate your services by way of simple discharge and have authorised the Chairman & Managing Director to issue necessary termination ORDER :by way of simple discharge with immediate effect paying 3 months' salary in lieu of notice. 2. 2. I am accordingly notifying you under this letter that your services shall stand terminated with immediate effect by way of simple discharge and you stand relieved from your services accordingly. A demand draft No. TT/AU 022528 dated 18.6.1980 for a sum of Rs. 7,725/- (Rupees seven thousand seven hundred twenty five only) drawn on State Bank of India, Mokameh being 3 months' salary in lieu of notice is enclosed. 3. In addition to this, you will be paid all your other dues as on simple discharge. You may please collect the same from our office by prior arrangement. This led the petitioner to make an application dated 5.8.80 for amendment of the writ petition making, the aforesaid Annexure A as Annexure 14 thereto with a prayer that the said letter of termination (Annexure 14) be treated as a part of the writ petition and be quashed. The amendment matter was taken up on 8.8.1980 along with admission matter and the amendment sought for was allowed by which one paragraph was added as paragraph no. 31 in the body of the writ application and an additional prayer as prayer no. (c), for quashing the purported ORDER :of termination (Annexure 14), was also incorporated. The application was admitted on the same day but the prayer for staying the operation of the ORDER :was refused. Thus, after the amendment, the writ application is directed towards the validity or otherwise of the ORDER :of termination dated 2.6.80 communicated by the petitioner under Annexure 14. 2. The impugned ORDER :has been challenged on two main grounds, namely, (1) that the respondent company had no power to issue the ORDER :of termination and, (2) in any event, no such ORDER :could be passed without adhering to the principles of natural justice, i.e. affording the petitioned an opportunity of being heard in the matter. The other question that would arise for consideration, as mooted on behalf of the respondents in their various counter-affidavits and supplementary counter-affidavits, would be as to whether respondent no. 1 became an instrument or agent of the Central Government by virtue of Act No. 41 of 1978 namely. The Britannia Engineering Company Limited (Mokameh Unit) and the Arthur Butler and Company (Muzaffarpur) Limited (Acquisition and Transfer of Undertakings) Act, 1978, (for short, to be referred as 'the Acquisition Act'), and thereby the petitioner acquired any 'status' extending him any constitutional protection. 3. The Britannia Engineering Company Limited (Mokameh Unit) and the Arthur Butler and Company (Muzaffarpur) Limited (Acquisition and Transfer of Undertakings) Act, 1978, (for short, to be referred as 'the Acquisition Act'), and thereby the petitioner acquired any 'status' extending him any constitutional protection. 3. I will now state, very briefly, the relevant facts M/s. Britannia Engineering Co. Ltd. was incorporated in the year 1917 under the Indian Companies Act, 1913, having its registered Office at Netaji Subhas Road, Calcutta. It owned at Titagurh an engineering unit for manufacturing road rollers and other industrial machineries. It also set up in the year 1960 at Mokameh, a unit to manufacture railway wagons, steel structurals etc. The engineering unit at Titagurh, however, closed down in 1970 and on the 22nd May, 1976 its management was taken over by the Central Government and entrusted to a company managed by the Government of West Bengal. The Wagon Unit at Mokameh closed down in March, 1973 and the Central Government took over the management of this unit on the 15th February, 1976 under the Industries (Development and Regulation) Act, 1951 and the unit was reopened on the 22nd February, 1974. Similarly, another company, namely, M/s. Arthur Butler & Co. was incorporated in the year 1919 with its registered office at Calcutta and its manufacturing unit at Muzaffarpur. This company also closed down in February, 1972. It was manufacturing metre gauge railway wagons. The management of this company was also taken over by the Central Government on the 14th December, 1973 under the aforesaid Act of 1951. Both the acquired companies were engaged in the manufacture of railway wagons and other implements and foundry products. The losses in execution of the old contracts were being met by the Government by way of grant of loans to the two companies. After the take over a considerable progress in the production and performance of both the companies was noticed and inasmuch as both the units, namely, at Mokameh and Muzaffarpur, provided substantial employment their closure was thought to "render a large labour force unemployed". After careful consideration the Government decided to acquire these units as substantial Government loans had been given to the units. After careful consideration the Government decided to acquire these units as substantial Government loans had been given to the units. It is for this purpose that the Central Government thought it necessary to acquire the said undertakings to ensure "the continued manufacture of railway wagons and other goods which are essential to the needs of the country in general, and the Railways in particular and came with the Acquisition Act. 4. The petitioner was initially appointed in the Britannia Engineering Co. Ltd. after the Central Government had taken over the management of the Mokameh Unit as already stated earlier, as Material Manager, by letter dated 14.3. 1975, on probation for a period of six months and was subsequently confirmed with effect from 5.12.1975, after the completion of his probationary period. Later on, the said post of Material Manager was redesignated as Deputy General Manager by an ORDER :dated 23.2.1977. The petitioner was accordingly made incharge of production and Materials Department by the office ORDER :contained in Annexure 3. Subsequently when the post of the General Manager fell vacant on the retirement of Sri K. Prasad, the petitioner was directed to look after the work of the General Manager with effect from 30.4.1978, in addition to his own duties till further ORDER :s, vide office ORDER :dated 4.5.78 contained in Annexure 4. The post of General Manager had already been advertised by the Ministry of Industry in anticipation of the retirement of Shri K. Prasad and the petitioner along with 13 other candidates was interviewed by a Selection Board constituted by the Central Government and he, having been placed at the top of the panel prepared by the Board, was appointed the General Manager on a substantive basis vide office ORDER :no. BEW/Adm/6/1830/78, dated 19.5.1978, a copy of which is Annexure 5 to the writ application. 5. According to the scheme of the Acquisition Act the Mokameh Unit and the right, title and interest of the Britannia Engineering Co. Ltd. in relation to Mokameh Unit stood transferred to and vested in the Central Government by virtue of the provisions contained in Section 3. Section 5 of the Act authorised the Central Government to direct vesting of Mokameh Unit and the undertakings of Arthur Butler & Co. Ltd. in relation to Mokameh Unit stood transferred to and vested in the Central Government by virtue of the provisions contained in Section 3. Section 5 of the Act authorised the Central Government to direct vesting of Mokameh Unit and the undertakings of Arthur Butler & Co. in a Government company, however, notwithstanding the vesting of those companies and the units in the Central Government under the provisions of Section 3, by making a non-obstante clause providing that if the Central Government "is satisfied that a Government company, whether in existence at the commencement of this Act or incorporated thereafter, is willing to comply, or has complied, with such terms and conditions as that Government may think fit to impose". It is on account of this provision that both the units vested in M/s. Bharat Wagon and Engineering Co. Ltd. with effect from 1.4.1978, a company which was floated by the Central Government almost simultaneously with the Acquisition Act. The other provision of the Act relevant for our purpose is Section 13 dealing with the employment of the employees of the Mokameh Unit and the Arthur Butler & Co. and it contemplates that every such person who immediately before the appointed day (1.4.1978) was employed by (i) Britannia Engineering Company, in connection with the Mokameh unit, or (ii) Arthur Butler and Company, in connection with any undertaking owned by it, shall become, on and from the appointed day, an employee of the Central Government or, as the case may be of the Government company, and shall hold office or service under the Central Government or the Government company, as the case may be, with the same rights and privileges as 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 unless and until his employment under the Central Government or the Government company, as the case may be, is duly terminated or until his remuneration and other conditions of service are duly altered by the Central Government or the Government company, as the case may be." At this very stage I may also refer to the declaration made in Section 33 wherein it has been said that this Act was for giving effect to the policy of the State towards securing the principles specified in Clause (b) of Article 39 of the Constitution. Clause (b) reads as follows: 39. The State shall, in particular, direct its policy towards securing-- (a) x x x (b) that the ownership and control of the material resources of the community are so distributed as best to sub-serve the common good, x x x By adding an explanation it has further clarified that the expression "State" in Section 33 has the same meaning as in Article 12 of the Constitution. 6. The provisions contained in Section 5 of the Acquisition Act empowering the Central Government to direct vesting of the Mokameh Unit in a Government company have already been seen and accordingly the Mokameh Unit in question vested in the company M/s. Bharat Wagon and Engineering Co. Ltd. with effect from 1.4.1978, although that was born a little later on 8.12.1978. This was done by a notification of the Government of India in the Department of Heavy Industry, dated the 13th December, 1978, published in the extraordinary issue of the Gazette of India of the same date, a copy of which is Annexure "6". It was said in this notification that in exercise of the powers conferred by Sub-section (1) of Section 5, both (1) the Britannia Engineering Co. Ltd. Mokameh Unit) and (2) the Arthur Butler & Co. (Muzaffarpur) Ltd. owned by the two companies and the right, title and interest of the said companies in relation to the undertakings which had vested in the Central Government under Section 3 of the Acquisition Act with effect from the 1st day of April, 1978 "shall instead of continuing to vest in the Central Government vest in the Government company known as 'Bharat Wagon and Engineering Company Limited' with effect from the 8th day of December, 1978" 7. In ORDER :to appreciate the controversies which I shall elaborate a little later, it will be useful to notice some of the relevant provisions contained in the Memorandum and Articles of Association of this new Government company, namely, Bharat Wagon and Engineering Co. Ltd. registered under the Companies Act. The Memorandum and Articles of Association have been signed and subscribed by three Joint Secretaries on behalf of the President of India, who hold all the shares on behalf of the President. It is, therefore, obvious that it is a company fully owned by the Government. Ltd. registered under the Companies Act. The Memorandum and Articles of Association have been signed and subscribed by three Joint Secretaries on behalf of the President of India, who hold all the shares on behalf of the President. It is, therefore, obvious that it is a company fully owned by the Government. The very first article of the Articles of Association dealing with the main objects to be pursued by the company on its incorporation, contemplates to acquire and take over from the Central Government the right, title and interest in relation to the undertakings of M/s. Arthur Butler & Co. (Muzaffarpur) Ltd. and M/s. Britannia Engineering Works (Wagon Division), Mokameh, and to carry on, manage and develop the business in all its aspects. Sub-clause (8) of Clause B of the Memorandum empowers the company to "employ, dismiss or discharge Managers, Technicians, Engineers, Artisans, Professionals, consultants, Ministerial staff and other workers, etc. required for carrying on any business or transaction which the company is authorised to carry on." Articles 6, 31 and 32 of the Articles of Association indicate that the allotment of shares, increase of share capital and control on issue of new shares are to be done only subject to the provisions of the Act and to the rights of the President of India, and under the control of the Board. Similarly, the President has been given the power to determine from time to time the number of Directors of the company and to appoint the Chairman-cum-Managing Director, all other members of the Board of Directors, Functional Directors as well as to fill up the vacancy caused by the retirement of any Director, including the power to substitute any Director or Chairman in place of the existing Director. The business of the company is generally to be managed by a Board of Director who have also been given power to "appoint and at their discretion, remove or suspend such managers, secretaries, officers, clerks, agents and servants, specialists and consultants for permanent or temporary or special services as they may, from time to time, think fit, and to determine their powers and duties and fix their specific jobs for which there may not be any strict parallel in Government Department... The petitioner has stated in paragraph 16 of the writ petition that his performance was found to be excellent and due to his hard work, honesty and integrity he received several letters of appreciation from various superiors. He has annexed a letter addressed to him by Shri A.K. Johri, Chairman and Managing Director of the company, dated 11th September, 1979 (Annexure 8) in which he conveyed his appreciation of the manner in which the petitioner and his team of officers "made arrangements for dealing with the situation arising out of the lock-out on 31st August, 1979 and conducting negotiations, leading to amicable settlement which resulted in the lock out being lifted on 10.9.79." The petitioner has also appended an extract from a confidential D.O. letter dated 11.3.1980 of the said Managing Director addressed to the Secretary, Ministry of Industries, to say that 'go-slow' by a section of the workmen was finally abandoned by the 10th February, 1980 due to the change in the political climate and continued and canning efforts made by the General Manager and the other officer on several fronts and that "at the moment the industrial climate was relaxed and cordial." From all these averments the petitioner wanted to emphasise that he was discharging his job to the satisfaction of the authorities arid, therefore, there was no occasion for the impugned ORDER :of termination. The petitioner, however, was asked by respondent no. 1 on 8.6.1980 to proceed on long leave and also to make endeavour in the meantime to find out another job, and when the petitioner did not put in his leave application, on the next day, i.e., on 9.6.1980, the Chairman of the Board is alleged to have threatened him to terminate his services after giving three months' notice. The petitioner, however, went on casual leave from the 14th to 21st June, 1980 and it is during this period that he came across the news item published in the Indian Nation dated the 19th June, 1980 terminating his services with effect from 18.6.1980. 8. The petitioner challenges the above action of the respondents as being arbitrary and having been passed in violation of the principles of natural justice. 8. The petitioner challenges the above action of the respondents as being arbitrary and having been passed in violation of the principles of natural justice. In course of the argument it was contended that the reasons disclosed by the respondents for the termination of the petitioner's services in the second supplementary counter-affidavit filed on 22.11.80, amounted to casting a stigma on him and therefore, a regular departmental enquiry was called for. It was further contended that the petitioner not being a temporary employee, there could be no occasion for passing an ORDER :in the nature of termination simpliciter and that the petitioner being in "public employment" the principles governing the relationship of master and servant would not apply to his case. 9. One counter affidavit, as already stated earlier was filed by Respondent no. 1 even before the time of admission. The stand taken by the respondent was that the employment of the petitioner was not a public employment and that respondent no. 1 had the jurisdiction to terminate his services without assigning any reason. The basic stand taken by the respondent no. 1, and which was the basis of the arguments addressed to us by the learned counsel for the respondents, was that respondent no. 1 was neither the agency nor the instrumentality of the Central Government. The petitioner was an employee of M/s. Bharat Wagon & Engineering Co. Ltd. which had its separate identity and, therefore, he cannot claim any constitutional protection available to a civil servant or a employee under a State. An explanation for issuing the termination notice in the Indian Nation has also been given by the respondent no. 1, but it is not necessary to refer to those facts. In essence, the defence set up by respondent no. An explanation for issuing the termination notice in the Indian Nation has also been given by the respondent no. 1, but it is not necessary to refer to those facts. In essence, the defence set up by respondent no. 1 is that the writ application was not maintainable on two grounds, (1) that the petitioner was not entitled to any constitutional protection being an employee of a limited company, and (2) even assuming that he could be held to be an employee of "an authority" under the control of the Government of India within the meaning of Article 12 of the Constitution, then also he could not maintain this application inasmuch as he was bound to make a representation before the Board of Directors for reconsideration of his case before coining to this Court, in other words, the petitioner has not exhausted the alternative remedy available to him. 10. A supplementary counter-affidavit was filed on behalf of respondent no. 1 on 30.7.1980 which was in particular, a reply to the petitioner's reply to the aforesaid counter-affidavit. No relevant statement has been made either in the reply of the petitioner or in the supplementary counter affidavit of respondents no. 1 touching the points raised at the time of arguments. All those are simply assertions and counter-assertions with reference to the various events leading to the passing of the impugned ORDER :of termination. Nor our attention was invited by learned counsel for either side to any statement made in these two documents in course of the arguments. However, the second supplementary counter-affidavit filed on behalf of respondent no. 1 an 22-11.1980, a passing reference of which has already been made above, contain some relevant statements. It was said in this affidavit that the petitioner was not pulling on well with the workmen of the company. His own communications from time to time clearly established that the work and production had suffered considerably and were likely to suffer more if such strained relations between the General Manager and the workmen were allowed to continue. The petitioner had lost the confidence of the workmen of Mokameh Unit; he was physically attacked by them on two occasions and was living in fear of further assault and danger to himself and his family. In the circumstances, the production of the company was being adversely affected. The workmen had already gone on 'go-slow' strike. The petitioner had lost the confidence of the workmen of Mokameh Unit; he was physically attacked by them on two occasions and was living in fear of further assault and danger to himself and his family. In the circumstances, the production of the company was being adversely affected. The workmen had already gone on 'go-slow' strike. "In such circumstances, it could not be possible to retain the petitioner any longer as head of the factory as its General Manager which was very important key position......In view of the conditions created by him his continuance as General Manager was not conducive to the company for production". It was further said that as taking of a disciplinary action and putting any remark against him might have prejudiced the petitioner, he was simply terminated so that it may not cause any harm or impair his career. 11. The petitioner has impleaded the company through its Chairman-Cum-Managing Director and the Union of India as party respondents. The Union of India has filed a formal counter-affidavit and Mr. A.K. Sinha appearing for the Union simply stated that the petitioner has unnecessarily impleaded the Union as a respondent. On behalf of respondent no. 1 two different counsel appeared. Whereas the Advocate General appeared on behalf of the company, Mr. B.C. Ghose appeared on behalf of the Chairman-Cum-Managing Director and addressed us separately. The basic stand of the argument of the learned Advocate General was that the respondent company was neither an agency nor an instrumentality of the Government of India and similarly Mr. B.C. Ghose's line of defence was that the company being a separate entity in the eye of law, being an incorporated company, was governed by the principle of 'hire and fire' and the ordinary rules governing the relationship of master and servant would apply to this case. The other line of argument was that in any view of the matter, the petitioner could not claim the status of a civil servant, namely, to continue in the service until he attained the age of superannuation and, therefore, his services could be terminated at any stage at the 'pleasure' of the employer. He however, conceded that had it been a case of 'removal' from the service, the petitioner was entitled to the protection of a departmental enquiry. 12. He however, conceded that had it been a case of 'removal' from the service, the petitioner was entitled to the protection of a departmental enquiry. 12. It has already been said that the Central Government had taken over the management of the Mokameh Unit since 15th February, 1974 under the Industries Development and Regulation Act and the petitioner was appointed about a year thereafter in March, 1976 on probation as the Material Manager. It has also been seen that complete possession of the undertaking was taken by the Central Government and the company vested as such in it. Of course, subsequently the Government thought to transfer the management to a Government company, namely, respondent no. 1. It is, therefore, manifest that the petitioner was appointed in Government Company as such and in this background it has to be seen as to whether the status of the petitioner would be the same as that of a private incorporated company or somewhat different; to put it in other words, as to whether on this account the petitioner could claim any constitutional protection. 13. In this regard it may also be useful to refer to the provisions of the Conduct, Discipline and Appeal Rules, 1977 which were framed after the take over of the management under the Regulation Act by the Central Government on 1.11.1977 to regulate the service conditions of the employees of Arthur Butler Co. Muzaffarpur and the Britannia Engineering Works. Those Rules define "misconduct" in rule 5 in a comprehensive manner giving 21 instances and illustrations. Rule 24 provides for imposition of penalties for misconduct and classifies them into two categories, namely, (1) minor penalties, and (2) major penalties. Clause (h) authorises the management the power of removal from service. An explanation appended to this rule consisting of different clauses talks of termination of service and it refers only to be applied to four classes of employees. Clause (h) authorises the management the power of removal from service. An explanation appended to this rule consisting of different clauses talks of termination of service and it refers only to be applied to four classes of employees. I would do better to extract the different contingencies covered by this provision: (vi) termination of service-- (a) of an employee on probation, during or at the end of the period of probation, in accordance with the terms of his appointment: (b) of an employee appointed in a temporary capacity otherwise than under a contract or agreement, on the expiration of the period for which he was appointed, or earlier in accordance with the terms of his appointment: (c) of an employee appointed under a contract or agreement, and (d) Of any employee on reduction of establishment. From the above provision it is apparent that the service rules governing the petitioner's employment authorised the management to pass an ORDER :of termination only in four cases, namely-(1) a probationer, (2) a temporary employee, (3) an employee appointed under an agreement or contract, and (4) in case of the employee being found surplus on reduction of the establishment. It is not the case of the respondents that the employment of the petitioner was covered by any one of the four contingencies mentioned above and I have stated already the manner in which the petitioner was employed and as to how he was confirmed on completing his probationary period. Section 13 of the Acquisition Act contemplated to continue the services of the employees in the same manner until the service conditions were altered by the Central Government or the Government company, as the case may be. It has never been the case of the respondents that there was any alteration either by the Government or the company in the service conditions etc. of its employees in any manner and all that has been asserted on behalf of the respondents is that the petitioner being not under any public employment the respondent had the jurisdiction to terminate his services at any time. 14. of its employees in any manner and all that has been asserted on behalf of the respondents is that the petitioner being not under any public employment the respondent had the jurisdiction to terminate his services at any time. 14. Before I proceed to notice the development of law which, if I may say, has been with a galloping speed with respect to the expression "all local or other authorities within the territory of India or under the control of the Government of India" occurring in Article 12 of the Constitution giving wider dimensions every time and bringing in its fold a large number of authorities, bodies and institutions, thus providing them the umbrella of 'Fundamental Rights' guaranteed under the Constitution of India. I am tempted to refer to some of the observations made in the celebrated case of (2) Parshotam Lal Dhingra v. Union of India (A.I.R. 1958 S.C. 36) which are as follows: ...Shortly put, the principle is that when a servant has right to a post or to a rank either under the terms of the contract of employment, express or implied, or under the rules governing the conditions of his service, the termination of the service of such a servant or his reduction to a lower post is by itself and prima facie a punishment, for it operates as a forfeiture of his right to hold that post or that rank and to get the emoluments and other benefits attached thereto...... One test for determining whether the termination of the service of a Government servant is by way of punishment is to ascertain whether the servant, put for such termination, had the right to hold the post. If he had a right to the post, the termination of his service will by itself be a punishment and he will be entitled to the protection of Article 311, + + + Where, however, the termination of service is founded on the right flowing from contract or the service rules then, prima facie, the termination is not a punishment and carries with it no evil consequences and so Article 311 is not attracted. But even if the Government has, by contract or under the rules, the right to terminate the employment without going through the procedure prescribed for inflicting the punishment of dismissal or removal or reduction in rank, the Government may, nevertheless, choose to punish the servant and if the termination of service is sought to be founded on misconduct, negligence, inefficiency or other disqualification, then it is a punishment and the requirements of Article 311 must be complied with. The Supreme Court while considering the case of compulsory retirement in (3) Shyamlal v. State of Uttar Pradesh (A.I.R. 1954 S.C. 369) had already noticed the distinction between 'removal and dismissal' of an employee and had observed that 'removal' generally implies that the officer is regarded as, in some manner, blameworthy and deficient, i.e., he has been guilty of some misconduct or is lacking in ability or capacity or the will to discharge his duties as he should do. The action of removal is thus founded and justified on some ground personal to the officer which involved the levelling of some imputation or charge against the officer. 15. It may be stated that the learned counsel for the petitioner did not claim any protection under Article 311 of the Constitution and fairly conceded that the petitioner could not be said to be holding civil post within the meaning of the said Article, but the whole argument was based on the footing that respondent no. 1 must be held to be state within the definition of this expression under Article 12 of the Constitution and once it was so held then the petitioner was entitled to the protection of Articles 14 and 16 in the sense that he was entitled, to the right of a hearing under the principle of natural justice. 1 must be held to be state within the definition of this expression under Article 12 of the Constitution and once it was so held then the petitioner was entitled to the protection of Articles 14 and 16 in the sense that he was entitled, to the right of a hearing under the principle of natural justice. I will not discuss, at any length the cases which were cited on behalf of the respondents on the line that the principle of natural justice was not a rule of universal application and this rule could operate only in the areas not covered by any law and where a statutory provision either specifically or by necessary implication excludes the application of any rule of natural justice, then the Court cannot ignore the mandate of Legislature or the statutory authority and read into the concerned provisions the principles of natural justice [see (4) Union of India V.J.N. Sinha and anr (A.I.R. 1971 S.C. 40) and (5) D.N. Singh and anr. v. Divisional Superintendent, Dhanbad, Eastern Railway & anr. (I.L.R. 54 Pat 623) as it is nobody's case that the petitioner's services were terminated either in accordance with any statutory rule or any condition of service governing his employment. The relevant rules authorising the management to terminate the service of an employee have already been referred to earlier and apparently the same does not cover the petitioner's case. Shelter, however, was sought to be taken by both the learned counsel, appearing for respondent no. 1 to some provisions of the Memorandum of Association of the respondent company, namely, sub-clause (8) of clause B of the Memorandum, a reference of which has already been made above, i.e., the power to employ, dismiss or discharge managers, technicians and engineers etc. 16. I will now proceed to examine as to whether the respondent company would be covered within the ambit of the expression 'State' as defined under Article 12 of the Constitution. I have already indicated that there has been a rapid development of law and a material departure from the earlier views of the Supreme Court expressed in the cases of (6) Praga Tools Corporation V.C.V. Imanual & ors (A.I.R. 1969 S.C. 1306), (7) Heavy Engineering Mazoor Union v. State of Bihar & ors (A.I.R. 1970 S.C. 82), (8) Dr. I have already indicated that there has been a rapid development of law and a material departure from the earlier views of the Supreme Court expressed in the cases of (6) Praga Tools Corporation V.C.V. Imanual & ors (A.I.R. 1969 S.C. 1306), (7) Heavy Engineering Mazoor Union v. State of Bihar & ors (A.I.R. 1970 S.C. 82), (8) Dr. S.L. Agarwal v. The General Manager, Hindustan Steel Ltd. (A.I.R. 1970 S.C. 1150) and (9) Executive Committee of Vaish Degree College, Shamli & ors v. Lakshmi Narayan & ors [ 1976 (2) SCC 58 ], where somewhat narrower view was taken. It was observed in the case of Heavy Engineering Mazdoor Union (supra) that where statutes setting up a Corporation so provide, such a Corporation can easily be identified as an agent of the State. In the absence of statutory provision, however, a commercial Corporation acting on its own behalf, even though it is controlled wholly or partly by Government Department, will be ordinarily presumed not to be a servant or agent of the State. Thereafter by the rapid expansion in the growth of the welfare activities of the Government and its embarking upon new adventures every day, the Supreme Court also gave an extended meaning to the expression 'authority'. I will, however, refer only to some of the cases as to borrow the expression of Krishna Iyer, J. in Som Prakash's case (infra), "a tour of the case law runs zig zag." 17. In the case of (10) the Manager, Govt. Branch Press & anr. v. D.B. Belliappa (A.I.R. 1979 S.C. 429), while considering the question of termination of service of a temporary Government servant in a Government Press, without repelling the argument of the application of the theory of master and servant, Sarkaria, J. made the following observation. ...The argument is wholly misconceived. It is borrowed from the archaic common law concept that employment was a matter between the master and servant only. In the first place, this rule in its original absolute form is not applicable to Government servants. Secondly, even with regard to private employment, much of it has passed into the fossils of time. ...The argument is wholly misconceived. It is borrowed from the archaic common law concept that employment was a matter between the master and servant only. In the first place, this rule in its original absolute form is not applicable to Government servants. Secondly, even with regard to private employment, much of it has passed into the fossils of time. 'This rule held the field at the time when the master and servant were taken more literally than they are now and when, as in early Roman Law, the rights of the servant, like the rights of any other member of the household, were not his own but those of his pater familias' The overtones of this ancient doctrine are discernible in the Anglo-American jurisprudence of the 18th century and the first half of the 20th century, which rationalised the employer's absolute right to discharge the employee. 'Such a philosophy, as pointed out by K.K. Mathew, J. (vide his treatise: 'Democracy, Equality and Freedom'. page 326) 'of the employer's dominion over his employee may have been in tune with the rustic simplicity of bygone days. But that philosophy is incompatible with these days of large, impersonal, corporate employers'. To bring it in tune with vastly changed and changing socio-economic conditions and modes of the day, much of this old, antiquated and unjust doctrine has been eroded by judicial decisions and legislation, particularly in its application to persons in public employment, to whom the constitutional protection of Arts. 14, 15, 16 and 311 is available. The argument is therefore over ruled. In the case of (11) Sukhdev Singh & ors v. Bhagatram Sardar Singh Raghuvanshi & anr (A.I.R. 1975 S.C. 1331) the question was as to whether the rule's and regulations framed by the Oil and Natural Gas Commission, Life Insurance Corporation and the Industrial Finance Corporation have the force of law. The Life Insurance Corporation Act as well as the Industrial finance Corporation Act conferred power on the Corporations to make regulations as to the method of recruitment of employees and the terms and conditions of service of such employees or agents. Similarly, the Oil and Natural Gas Commission Act, under Section 12 states that the functions and terms and conditions of service of employees shall be such as may be provided by, regulations under the Act. Similarly, the Oil and Natural Gas Commission Act, under Section 12 states that the functions and terms and conditions of service of employees shall be such as may be provided by, regulations under the Act. The Oil and Natural Gas Commission is owned by the Government and a statutory body and not a company which could be dissolved only by the Government. The Life Insurance Corporation is owned by the Government and the Life Insurance (Sic) is nationalised and vested in the Corporation. Similarly, the Industrial Finance Corporation is under the complete control and management of the Central Government, and the citizens cannot be shareholders. In view of these circumstances it was held that these statutory bodies were Authorities' within the meaning of Article 12 and their employees were entitled to claim protection under Articles 14 and 16. After noticing some conflicting decisions it was further observed that the expression 'other authority' was wide enough to include within its ambit every authority created by the statute and functioning within the territory of India, or under the control of the Government of India. 18. In the case of (1) Ramana Dayaram Shetty V. The International Airport Authority of India & ors (A.I.R. 1979 S.C. 1628) Bhagwati, J. indicated the various factors which may have to be considered in determining whether a corporation is an agency or instrumentality of Government; (1) whether there is any financial assistance given by the State, and if so, what is the magnitude of such assistance, (2) whether there is any other form of assistance given by the State, and if so, whether it is of the usual kind or it is extraordinary; (3) whether there is any control of the Management and policies of the corporation by the State and what is the nature and extent of such control, (4) whether the corporation enjoys State-conferred or State protected monopoly status; and (5) whether the functions carried out by the corporation are public functions closely related to governmental functions? After indicating some of the important factors, the learned Judge was constrained to observe that the above particularisation of relevant factors was not exhaustive and by its very nature it could not be, because with increasing assumption of new tasks, growing complexities of management and administration and the necessity of continuing adjustment in relations between the corporation and Government calling for flexibility, adaptability and innovative skills, it was not possible to make an exhaustive enumeration of the tests which would invariably and in all cases provide an unfailing answer to the question whether a corporation was a governmental instrumentality or agency, and that even amongst these factors which have been described, no one single factor would yield a satisfactory answer to the question and the court will have to consider the cumulative effect of these various factors and arrive at its decision on the basis of particularised inquiry into the facts and circumstances of each case. It was, perhaps, the last factor mentioned in this decision, namely, that the functions carried out by the corporation should be public functions closely related to governmental functions, on the basis of which the learned Advocate General had contended that inasmuch as the function of the respondent company was confined only to a commercial venture, namely, manufacture of railway wagons and other structures and equipments, having no connection with the function of a Government, the respondent no. 1 could not be said to be an agency or instrumentality of the Government. With respect to the learned Advocate General, I must say that his appreciation of the above and the other authorities is entirely misdirected and misconceived. 19. The Supreme Court in the case of (12) the Managing Director, U.P. Warehousing Corporation & ors V. Vijay Narayan Vajpayee (A.I.R. 1980 S.C. 840) held that the U.P. Warehousing Corporation, which was constituted under the Madhya Pradesh State Warehousing Corporation Act, was a statutory body wholly controlled and managed by the Government. The Corporation was, therefore, an 'authority' within the meaning of Article 12 of the Constitution and therefore, the employment of the respondent was a public employment and the employer being a statutory body could not terminate his services without due inquiry in accordance with the statutory regulations, if any in force, or in the absence of such regulations, in accordance with the rules of natural justice. With reference to some earlier cases, taking the narrower view it was observed by Sarkaria, J. that the authority of those case appeared to "have been eroded by the later decisions of this Court, particularly the pronouncement in Sukhdev Singh's case" (supra). It was further observed that in the case of statutory bodies, however, there was no personal allegation whatsoever because of the impersonal character of the bodies. In their case, the element of public employment and service and the support of statute require observance of rules and regulations and how such public corporations constituted under enactments, became a third arm of the Government. The employees of public corporations are not civil servants although in so far as public corporations are concerned they fulfil public tasks on behalf of Government; they are public authorities and, as such, subject to the control by Government. The public corporation being a creation of the State is subject to the constitutional limitation as the State itself. Chinnappa Reddy, J., in his separate but concurred JUDGMENT : observed that he found it very hard to discover any distinction on principle, between a person directly under the employment of the Government and a person under the employment of an agency or instrumentality of the Government or a Corporation set up under a statute or incorporated but wholly owned by the Government. The learned Judge, took into consideration the fact that all employment in public sector has grown to vast dimensions and employees in the public sector often discharge as onerous duties as civil servants and participate in activities vital to the country's economy and in the present set up, the State and the multitudinous agencies and corporations set up by it, were the principal purchasers of the produce and the produces of the country and they control a vast and complex machinery of distribution. The Government being the biggest trader in the country and owner of a large number of industries and institutions, either directly or through the corporations owned by it, now owns and manages a large number of industries and institutions. 20. The Government being the biggest trader in the country and owner of a large number of industries and institutions, either directly or through the corporations owned by it, now owns and manages a large number of industries and institutions. 20. Then again, in the case of (13) Som Prakash Rakhi v. Union of India & anr (A.I.R. 1981 S.C. 212), Bharat Petroleum Corporation Ltd. was held to be 'State' within the meaning of Article 12 of the Constitution, which was the result of the statutorily take over by force, of the Burmah Shell Oil Storage and Distributing Co. of India Ltd., under an Act of 1976 in very much similar situation in which the Britannia Engineering Works was taken over. It was held that the second respondent became the statutory successor of the petitioner's employer, and the argument that it was neither a Government Department nor a statutory corporation but was merely just a company, was rejected. It was observed in this case that Article 12 was a special definition with broader goal and far from restricting the concept of 'State' it enlarges its scope to embrace all authorities under the control of Government. The following observations made in paragraph 55 of the Report are very eloquent: ...Having regard to the directive in Art. 38 and the amplitude of the other Articles in part IV Government may appropriately embark upon almost any activity which in a non-socialist republic may fall within the private sector. Any person's employment, entertainment, travel, rest and leisure, hospital facility and funeral service may be controlled by the State. And if all these enterprises are executed through government companies, bureaus, societies, councils, institutes and homes, the citizen may forfeit his fundamental freedoms vis a vis these strange beings which are government in fact but corporate in form. If only fundamental rights were forbidden access to corporations, companies, bureaus, institutes, councils and kindred bodies which act as agencies of the Administration, there may be a break-down of the rule of law and the constitutional ORDER :in a large sector of governmental activity carried on under the guise of jural persons. It may pave the way for a new tyranny by arbitrary administrators operated from behind by Government but unaccountable to part III of the Constitution. It may pave the way for a new tyranny by arbitrary administrators operated from behind by Government but unaccountable to part III of the Constitution. We cannot accent to an interpretation which leads to such a disastrous conclusion unless the language of Art. 12 offers on other alternative. 21. Bhagwati, J. in the case of (14) Ajay Hasia etc. v. Khalid Mujib Sehravardi & ors etc. (A.I.R. 1981 S.C. 487) took a further liberal view in determining the question as to whether a body was an 'authority' falling within the definition of 'State' under Article 12, and held that, the inquiry has to be not as to how the juristic person is born but why it has been brought into existence. The corporation may be a statutory corporation created by statute or it may be a Government company or a company formed under the Societies Registration Act or any other similar statute. Whatever may be its genetical origin; it would be an 'authority' within the meaning of Article 12 if it is an instrumentality or agency of the Government and that would have to be decided, on a proper assessment of the facts in the light of the relevant factors. The above observation was made while considering the validity of admission made to the Regional Engineering College Srinagar on various grounds including, inter alia, that an arbitrary procedure for selecting candidates was applied resulting in the denial of equality to the petitioners. The aforesaid college was one of the fifteen Engineering Colleges in the country sponsored by the Government of India, and it was established and its administration and management were being carried on by a Society registered under the Jammu and Kashmir Registration of Societies Act. A plea of non-maintainability of the writ was raised on behalf of the respondents to the effect that the College being run by the Society which was not a Corporation created by the statute, it was not an 'authority' within the meaning of Article 12 pf the Constitution and, therefore, no writ could lie against it. A plea of non-maintainability of the writ was raised on behalf of the respondents to the effect that the College being run by the Society which was not a Corporation created by the statute, it was not an 'authority' within the meaning of Article 12 pf the Constitution and, therefore, no writ could lie against it. The learned Judge in paragraph 7 of the Report clearly laid down that an 'authority' falling within the expression 'other authorities' was, by reason of its inclusion within the definition of 'State' in Article 12, subject to the same constitutional limitations as the Government and was equally bound by the basic obligations to obey the constitutional mandate of the Fundamental Rights enshrined in Part III of the Constitution. Proceeding further, it was again observed that today with increasing assumption by the Government of commercial ventures and economic projects, the corporation has become an effective legal contrivance in the hands of the Government for carrying out its activities, for it is found that this legal facility of corporate instrument provides considerable flexibility and elasticity and facilitates proper and efficient management with professional skills and on business principles and it is blissfully free from 'departmental rigidity, slow motion procedure and hierarchy of officers.' 22. That was a case of a Society registered under a different law. In the case before us, however, undisputedly the respondent company itself is a Government company and simply, as was argued by the learned Advocate General, the main object of the company was a commercial venture, although, apart from the fact that from its very inception it is a nationalised undertaking, at one time it vested in the Government itself and subsequently thrown under the control of a Government company. It must, therefore, follow a fortiori that the Government is acting through the instrumentality of agency of respondent no. 1. It is also seen that the petitioner's appointment was not under any express contract nor the employer has any power under the rules governing the service of the petitioner to terminate his services in a summary manner. On the other hand, the Conduct, Discipline and Appeal Rules already referred to above, maintain taking of any such action only in four contingencies. On the other hand, the Conduct, Discipline and Appeal Rules already referred to above, maintain taking of any such action only in four contingencies. The petitioner on his appointment on a substantive basis, in these circumstances, in my opinion, acquired a status which could not arbitrarily and at its sweet will be destroyed in the manner done by the respondent company. Once the respondent company is held to be an 'authority' within the meaning of Article 12 of the Constitution, apart from its Memorandum and Articles of Association, the company being a Government company would easily and conveniently be brought under the net of the expression 'other authority', as the instrumentality and agency of the Government is apparent and imminent and juristic veil of corporate personality has been worn only for the purpose of convenience and management, which cannot be allowed to obliterate the true nature of the reality behind which is the Government. Bhagwati, J. has further said in the aforesaid case: We must therefore give such an interpretation to the expression 'other authorities' as will not stultify the operation and breach of the fundamental rights by enabling the Government to its application in relation to the Fundamental Rights by setting up authority to act as an instrumentality or agency for carrying out its function. 23. In view of the above discussions, I am unable to find out any justification for upholding the validity of the action of the respondent company for issuing the ORDER :of termination of the petitioner's services, dated 2-6-1980, contained in Annexure 14. And it being wholly unauthorised, must be held to be an arbitrary action on the part of the respondent no. 1. No material has been brought to our notice on behalf of the respondents against the efficiency or otherwise of the petitioner; rather I find that he was placed at the top by the Selection Committee in his appointment and that he was found to be a capable and competent officer only till very recently including his managerial competency to tackle the labour problem. 24. 24. Before, however, parting with this case I must also dispose of yet another ancillary argument advanced by the learned Advocate General against the maintainability of the writ application, and it was that since after the termination of the petitioner's services the respondent company has already filled up the vacancy by appointing one Shri S.N. Singh as the General Manager of the company, no ORDER :could be passed by this Court behind the back of Shri S.N. Singh. In other words, the argument was that the writ was not maintainable on account of defect of a necessary party. Although the stand of the petitioner in this regard was that the appointment of Shri Singh was only as a temporary measure, the respondents tried to establish that the appointment was made in substantive manner. It is true that no stay ORDER :was passed by this Court. It is obvious that the purported appointment in place of the petitioner was made by the respondent company with full knowledge of the pendency of the writ application. The respondent company, therefore, cannot be permitted to frustrate the relief, which otherwise the petitioner is held to be entitled to by this Court, by taking any action on its own part. In my view; apart from the fact that it would amount to act of over-reaching the Court, it is also hit by the principle of lis pendens. I therefore, do not find any substance in this argument as well. For the reasons given above, I would allow this application and quash the ORDER :dated 2.6.1980 contained in Annexure 14; at the same time, however, leaving it open to the respondents to start a regular and proper departmental proceeding against the petitioner, if so advised, to impose any penalty against him. On the facts and in the circumstances of the case, I shall leave the petitioner to bear his own costs. Application allowed.