JUDGMENT 1. THE concept of fair play is no longer in the realm of judicial consideration but a well-settled principle of law. Fair play and fair treatment being the "soul of natural justice" ought to be the most accepted methodology of all Governmental action. The observations of the Supreme Court in,the case of (1) Maneka gandhi v. Union of India, reported in AIR 1978 SC 597 seem to be very apposite in his context. The Supreme Court observed : " Natural justice is a great humanising principle intended to invest law with fairness and to secure justice -and over the years it has grown into a widely pervasive rule effecting which arises administrative action. Thus, the soul- of natural justice is the fair play re action and that is why it has received the widest recognition throughout the democratic world". 2. THE Supreme Court of New South Wales in the case of Asmand v. Public Service Board of New South Wales it Anr., reported on 1985 LR (Commonwealth) 1. 041, after noticing the American and English Law as also the development of doctrine of natural justice in the other Commonwealth countries including India observed ; " What cannot be doubted is that there has been a growing body of precedent and other support for the desirability of and sometime the obligations upon, Public Administrative ' Tribunal, at least to state reasons for their decisions effecting seriously the interest of the person seeking those reasons. Sometimes this is expressed to be based on the requirements of natural justice and fairness. Sometimes it is articulated in terms of the inherent necessities of the proper operation of judicial process. . . . . " The general duty of fairness as regards administrative action has also been accepted as a guiding principle by Megarry, J. in the case of bates v. Lord Hailsham, reported in (1972) All ER 12019. 3. FAIR play and fair treatment, ought to be given its due recognition and in the event the Governmental action suffers there from, the Law Court be within its jurisdiction to extend its judicious hand to grant relief to those who have fallen a pray for reason of the administrative ipsidixit. 4. BEFORE, however, adverting cm to the rival contentions which are interesting as well as important, a brief reference to facts ought to be noticed at this juncture. 4. BEFORE, however, adverting cm to the rival contentions which are interesting as well as important, a brief reference to facts ought to be noticed at this juncture. The petitioner is a member of the Indian Revenue Service (Income tax) having been appointed to the Revenue Service in February, 1954. Whilst working as a Commissioner of Income Tax the petitioner at the invitation of the Public Enterprises Selection Board in June, 1982 appeared at the interview for the post of Director (Finance) in Bridge and Roof India ltd. 5. BY an Office Memorandum dated 2nd August, 1982, the Under-Secretary to the Government of India, Ministry of Petroleum, Chemicals and Fertilizers, informed the petitioner that the Public Enterprises Selection Board has recommended the name, of the petitioner for the post of Finance Director in the Bridge and Roof Company, in Schedule 'c scale of pay of Rs. 2500-3000. The Under-Secretary to the Government of India has also asked the petitioner to indicate the petitioner's willingness to be absorbed on a permanent basis in the company so as to enable the Ministry to take further steps in the matter of appointment of the petitioner as Finance Director, bridge and Roof Company. Subsequently a reminder was sent to the petitioner in regard to his pennant absorption. After the intimation of the petitioner's selection and prior to the receipt of the reminder, the petitioner, as appears from records, on 31st August, 1982 addressed to. the Under-Secretary. Government of. India, Department of: Petroleum, Ministry of Energy, while exercising option for appointment on permanent absorption basis categorically pointed out that such absorption of the petitioner should be according to the terms of the Bureau of Public Enterprises regulating the procedure and policy in the matter of appointment of top posts in Public Enterprises, in the letter dated 31st August, 19s2 the petitioner specifically, stated " I assume that my absorption would enable to continue in up to the normal age of superannuation as under Government. This would mean that I will be retained in service at least till I attain the age of 58 i. e., 1. 8. 1987. " 6. THE petitioner further stated that such absorption should be in such a manner that he does not be retirement benefits. This would mean that I will be retained in service at least till I attain the age of 58 i. e., 1. 8. 1987. " 6. THE petitioner further stated that such absorption should be in such a manner that he does not be retirement benefits. On 10th November, 1982 the petitioner was informed by the Under-Secretary to the Government of India that the Government has approved the proposal for appointment of the petitioner as Director (Finance), Bridge and Roof India Ltd. on immediate absorption basis in the revised Schedule c scale of pay of Rs. 3500-4000 initially for a period of two years only. the same date another letter was sent informing the petitioner that he performance would be reviewed by the Government at the end of the first year of tenure in order to decide whether the remaining part of the enure would be confirmed. With the 2nd letter, a copy of the appointment letter issued by the Ministry was sent to the petitioner. On 11th March, 983 the petitioner was further informed that, he would be absorbed in he pay scale of Rs. 3500-4000 on immediate absorption-basis and for a period of two years in the first instance. Subsequently, on 30th September, 983 the Presidential sanction to the permanent absorption' of the petitioner is the Director (Finance) with effect from the 31st March, 1983 was sent the petitioner. 7. WHILST the 30th September letter containing the Presidential sanction d not mention any period but by the subsequent letter dated November 1, 1983 having an earlier reference to the 10th November, 1982's letter, other sanction of the President of India was conveyed to the petitioner regards the appointment of the petitioner as Director (Finance), Bridge roof India Co. In the letter dated November 30, 1983 it was specifically mentioned that the tenure of his appointment will be initially for a period two years from the date he assumes the office of Director (Finance)which is 1st April, 1983. It was further mentioned that the appointment 8. BE terminable by either side with three months' notice or on payment the company of three months salary in lieu thereof without assigning reason. On receipt of the letter of 30th November 1983, the petitioner stayed for reversion to the parent department which, however, was turned on 14-th December, 1984. It was further mentioned that the appointment 8. BE terminable by either side with three months' notice or on payment the company of three months salary in lieu thereof without assigning reason. On receipt of the letter of 30th November 1983, the petitioner stayed for reversion to the parent department which, however, was turned on 14-th December, 1984. Whilst representations were being made petitioner in the meantime obtained release and joined the Budge roof Co. On 20th September, 1985, the petitioner was informed by the Chair-man cum Managing Director of Bridge and Roof Co. to, the following effect:-" In accordance with instructions received from the Ministry of Petroleum, I am relieving you of duties as Director (Finance)of this company with immediate effect. " 9. IT is this order which is under challenge in this writ application. 10. MR. Pal appearing in support of the writ petition strenuously contended that the expression "initially for two years" in common English Parlance means and implies at least an expectation -for being continued thereafter. Whereas, Dr. Banerjee appearing for the Bridge and Roof Co. submitted that the petitioner at all material times was aware that the petitioner's employment would be for a period of two years and is terminable on the expiration of the two years period. Mr. Pal's submission as regards the fairness of the entire set of actions ought to be considered in extension, but before so doing, an interesting and important question of law, viz., the domain of public and private law field ought to be discussed at this juncture since strenuous submissions have been made on that score. Before considering the Indian Law on the subject, let us now first consider the speech of Sir John Donaldson (MR) in a recent decision of the Court of Appeal in R. v. East Berkshire Health Authority, reported in (1984)3 AII ER 425. Donaldson, (MR) observed : -"the ordinary employer is free to act in breach of his contracts of employment and if he does so his employee' will acquire certain private law rights and remedies in damages for wrongful dismissal compensation for unfair dismissal, an. order for reinstatement of re-engagement and so on. Parliament can underpin the position of public authority to dismiss, thus giving the employee 'public law' rights at least making him a potential candidate for administrative" law remedies. order for reinstatement of re-engagement and so on. Parliament can underpin the position of public authority to dismiss, thus giving the employee 'public law' rights at least making him a potential candidate for administrative" law remedies. Alternatively, it can require the authority to contract with its employees on specified terms with a view to the employee acquiring 'private law' rights under the terms of the con tract of employment. If the authority fails or refuses thus to creation. 'private law' rights for the employee, the employee will have 'public law' rights to compel compliance, the remedy being amendment requiring the authority so to contract or a declaration that the employee had those rights. If, however, the authority gives the employ the required contractual (protection, a breach of that contract not a matter of 'public law' and gives rise to no administration law remedies. " 11. LORD Denning, however, in O' Reilly v. Mackman, (1982)3 All 1680 stated the law to be as follows : -"in modern times we have come to recognise two separate fields of law, one of private law and the other of public law. Private law regulates the affairs of subjects as between themselves. Public law regulates the affairs of subjects vis-a-vis the public authorities. For centuries there were special remedies available in public law. They were the prerogative writs of certiorari mamdamus and prohibition. As I have shown, they were taken in the name of sovereign against a public authority which had failed to perform its duties to the public at large or had performed it wrongly. Any subject could complain to the sovereign and then the Kings Court, at their discretion, would give him leave to issue such one of the prerogative writs as was appropriate to meet his case. But, these writs, as their names show, only gave the remedies of. quashing, commanding or prohibiting. They did not enable a subject to recover damages against a public authority nor a declaration nor an injunction. ' This was such a defect in public law that the courts drew on the remedies available in private law, so as to see that the subjects secured justice. It was held that if a public authority fail to do its duty and in consequence, a member of public suffered parties damage there form, he could sue for damages by for an ordinary action in the courts of common law. It was held that if a public authority fail to do its duty and in consequence, a member of public suffered parties damage there form, he could sue for damages by for an ordinary action in the courts of common law. . . . . . . . . . . . . And this remedy has been applied right up to the present time in ordinary actions brought without leave. 1 always thought that this great reform should be done by statute as the Law Commission recommended. When the Rule Committee made Order 53, some of us on the Committee had doubts about whether some of it was not ultra vires, but we took the risk because it was so desirable. Now that the statute has been passed, I may say that it has in several respects altered the substance of the law for the better. . . . . . . . . . . . . . . . . . . It includes all public authorities and public officers and inded anyone acting in exercise of a public duty, including University. It also enlarges the scope of a declaration and injunction so as to apply-wherever it is just and convenient and section 31 (3) gives the remedy to anyone who has a sufficient interest, which is very wide in its scope. Those provisions rid us of a whole mass of tactical litigations which were thought previously to exist. Now that judicial review; is available to give every kind of remedy, i think it should be the normal recourse in all cases of public law where the private person is challenging the conduct of a public authority or a public body or of anyone acting in the exercise of a public duty. " 12. FROM the above enuniction, it is clear and apparent that Lord Dening's observations in O'reilly's case did not find favour with the. House of Lords in Walsh's case R. v. East Berkshire Health Authority' (Supra. The English Law alter considering the above noted two decisions have been very succinctly. dealt with in Foulkes' Administrative Law 6th Edition: wherein it has been stated : -" In R. v. East Berkshire Health Authority, ex parte Walsh was employed by. the Authority. Ministerial regulations made under the National Health Services Act provided that where conditions of service. . . dealt with in Foulkes' Administrative Law 6th Edition: wherein it has been stated : -" In R. v. East Berkshire Health Authority, ex parte Walsh was employed by. the Authority. Ministerial regulations made under the National Health Services Act provided that where conditions of service. . . of any class of officers have been the subject of negotiations by a negotiating body and have been approved by the secretary of State. . . . the conditions so approved'. belonged to a class, that of senior nursing officer, whose conditions had been so approved, and his conditions of: service therefore included the conditions in question. His employment was terminated by an employee senior to him, the district nursing officer. He sought review, under Order 53, of his dismissal on the ground that there had been breaches of the rules of natural justice in the procedure leading to his dismissal. Had he chosen the correct procedure? Hodgson, 3. accepting that there is no public law element in the 'ordinary' master-servant relationship, thought that where the servant 'holds off-ice in a great public service', the public was properly concerned that he should be treated lawfully and fairly by his employer, and this justified judicial review. The Court of Appeal disagreed. Mere employment by a public authority does not inject any element of public law, nor the fact that the employer is an 'officer or is in a higher grade'. Was there anything here that took W's status out of 'mere employment'? No. The effect of the ministerial regulations was that the authority's contracts with certain employees, including w, where required to be on certain terms. This did not take the relationship out of the ordinary master-servant relationship. Hodgson, J. had relied on Vine v. National Dock Labour Board, Ridge v. Bladwimi and Malloch v. Aberdeen Corpn., in coming to his conclusion, but in those cases statute directly restricted the authority's freedom to dismiss and in such a case the employee could acquire public law rights in respect of the power of dismissal. W's complaint had merely been that he had been dismissed in breach of the conditions referred to. If his complaint had been of the legality of the delegation by the authority of its. powers of dismissal, or if his condition of service had differed from those approved by the Secretary of State, the Order 53 procedure might have been appropriate. W's complaint had merely been that he had been dismissed in breach of the conditions referred to. If his complaint had been of the legality of the delegation by the authority of its. powers of dismissal, or if his condition of service had differed from those approved by the Secretary of State, the Order 53 procedure might have been appropriate. The gravity of W's complaint was rather that he had not been heard. The rules of natural justice can however be imported into a private contractual relationship and their import will not of itself bring with it a public law element into the relationship. Whether the employer is in breach of the rules of natural justice is one thing; whether the employer is entitled to a public law remedy is therefore another. The question then arose could the mater be allowed to proceed as if begun by writ : (This is possible under Order 53) No. The purpose of this 'anti-technicality' rule is to preserve the position of an applicant who intends to seek the same relief in private law proceedings as he had initially sought by his application for judicial review, not to allow him to amend and claim a different relief. The only reliefs sought here was certiorari, a purely public law remedy. We could not therefore be allowed to switch to an ordinary-action. " In Graham Aldous and John Alder's Application for Judicial Review -- the distinction between public law and private law has been stated to be as follows : -" Notwithstanding the judicial activism referred to above, the traditional approach of English Law has been to avoid a general theory of public law in favour of an hoc approach based on particular remedies and which envisages Governmental powers as exercised by numerous separate bodies, each with its own characteristics. On this basis, substantive numbers of judicial review has been applied to non-Governmental bodies, such an Universities and Trade Unions which are in a position to exercise power relating to matters of public concern. Conversely Governmental agencies properly exercise powers through the private law mechanisms, such as contract, property and patronage as well as by means of statute it is no longer possible to identify peculiarly Governmental functions since Government not only regulates and punishes but competes in the market. Conversely Governmental agencies properly exercise powers through the private law mechanisms, such as contract, property and patronage as well as by means of statute it is no longer possible to identify peculiarly Governmental functions since Government not only regulates and punishes but competes in the market. Nevertheless, the introduction of the Order 53 procedure has forced the courts to develop a separate concept of public law in order to decide what kinds of case are within the Order 53 jurisdiction. The main factor which determines whether 'a matter is one of public law or private law is the formal source of power, if a power derives wholly from the contract as opposed to statute it is public law power and therefore Order. 53 procedure cannot apply. On the other hand, where a body exercises contracts powers which are partially regulated by statute, the matter depends on the statutory intervention,. Thus, a wholly statutory powers seems ipsofacto to be a public law power. There are also Governmental powers which are neither statutory nor contractual. There are the real prerogative powers and there are also powers which exists solely by virtue of solely generated governmental practices concerning matters, such as telephonic survelence and passport control, where no legal recognised rights exist and therefore no need for the Government to derive its powers from any formal source. The contractual power test is concerned only with the source of particular power and not with the general status of the body exercising the power. Thus, in the absence of statutory regulation, a contract entered into by a statutory authority for public purpose is apparently a private law matter. 13. CANE's book on Interpretation to Administrative Law (1986) seems to suggest the introduction of functional criterion. It has been stated:-" The fact that some of the activities and functions of the Government agencies are subject to the rules of private law shows that: we cannot, contrary to the tentative definition of public law suggested earlier would therefore answer this question solely in terms whether we are dealing with Governmental agencies. In order to give full account of the scops of public law, it is necessary to add to the institutional criteria; a functional criterian - is it performing of public or Government function. " 14. In order to give full account of the scops of public law, it is necessary to add to the institutional criteria; a functional criterian - is it performing of public or Government function. " 14. HAVING thus dealt with the English approach on the public and private law field, let us turn on to our law in the matter. The distinction between private and public law field has in fact been recognised for more than three decades in India. In the case of Satish chandra Agarwal reported in AIR 1953 SC 250 the Supreme Court observed:-" There was no compliant en the petitioner to enter into the contract he did. He was as free under the law as any other person to accept or reject the offer which was made to him. Having accepted, he still has opened to him all I the rights and remedies available to the other persons similarly situated to enforce any right under his contract which even denied to him assuming there are any, and to pursue in the ordinary courts of the land such remedy for a breach as are open to him to exactly the same incident as other persons similarly situated. He has net been discriminated against and he has not been denied the protections of any laws which others similarly situated could claim. The 'remedy of a writ. Misconceived. " 15. TWO subsequent decisions of the Supreme Court, viz., the case of pursottamlal Dhingra v. Union of India,, reported in AIR 1958 SC 38 and the case of Roshanlal Tandon v. Union of India reported in AIR 1967 SC 1839 support the distinction between con tract and. work and states or office, 16. IN Lekhraj Satramdas v. M. M. Shah reported in AIR 1966 SC 334 the Supreme Court observed : -"in our opinion any duty or obligation falling upon a public servant out of a contract entered into by him as such public servant cannot be enforced by the machinery of a writ under Art. 226 of the Constitution. " It is on this backdrop the decision in the case of Sukhdeb Singh v. Bhagatram, AIR 1975 SC 1331 ought: also to be noted. In that decision, mathew,j. observed : "the difficulty of separating vital Government function from non-Government functions has created further difficulties. Is the distinction between Governmental and non-Governmental Junctions which plagued the courts a rational one? " It is on this backdrop the decision in the case of Sukhdeb Singh v. Bhagatram, AIR 1975 SC 1331 ought: also to be noted. In that decision, mathew,j. observed : "the difficulty of separating vital Government function from non-Government functions has created further difficulties. Is the distinction between Governmental and non-Governmental Junctions which plagued the courts a rational one? The contract is between governmental activities which are private and private activities which are Governmental. Without the adoption of a. radical lassez faire philosophy, and the definitions of State functions as they were current in the days of Herbert Spencer it is impossible sort out proper from improper functions Besides the so -called raditional functions, the modern State operated a multitude of public enterprises. Mr. Justice Helmes said, the Constitution does not Herbert spencer's social studies. This applied equally to the definition of state function for legal purpose. '" 17. THE celebrated decision of Radhakrishna Agarwal v. The State of bihar reported in - AIR 1977 SC 1496 negatived the submission it whenever a State or its agent deal with the citizen either when making transaction or after making it in exercise of -powers under the terms contract between the parties, there is a dealing between State and the citizen which involves performance of certain legal and public duties. The Supreme Court as a matter of fact categorically stated that the same cart be a sound principle of law. In he last noted decision the Supreme Court observed "when a contract is sought to be terminable', the officer of the State purporting to act under the terms an agreement. : between the parties, such action is not taken in parted exercise of a statutory power at all. " 18. ALTER however the decision of Radhakrishna Appeal (supra)Sukhdrb Singh (supra. this concept of State action has been broader interpretation of the case of Rammnna'' authority of India reputed in AIR 1979 SC 1928. some court though based on the minority view, expression case has same significance. The Supreme Court " The analogy of the concept of State and as developed in the United States may not, however, be altogether out of place, while considering this question. some court though based on the minority view, expression case has same significance. The Supreme Court " The analogy of the concept of State and as developed in the United States may not, however, be altogether out of place, while considering this question. The decisions of the Courts in the united States seem to suggest that private agency, if supported by an extraordinary assistance given by the State may be subject to the same Constitutional limitations on the State. " The Supreme Court further observed : -" There is also another factor which may be regarded as having a bearing on this issue and it is whether the operation of the corporation is an important public function. It has been held in the United States in a number of cases that the concept of private action must yield to a conception of State action where public functions are being performed Vide arthur S. Millar-: -. " The Constitutional law of the Security State, 10 stanford lw Review 620 at p. 664. It was pointed out by Dougles, J. in es. Evans v. Charlies E. Newton, (1966) 382 US 296 : 15 L Ed (2 373 that", "when private individuals or groups are endowed be the State with powers or functions Governmental in nature, the become agencies or instrumentalities. of the State". Of course, with the growth of the welfare State, it is very difficult to define what functions are Governmental and what are not, because, as polled out by Villmer, J. . J., in Pfizer v. Ministry of Health, (1964)1 ch'4, there has been, since mid-Victorian times, a revolution in Ptical thought and a totally different conception prevails today as that is and what is not within the functions of Government". Doug, J., also observed to the same effect in New York v. United state (1945) 326 US 572 : "a State's project is as much a legitimate governmental activity whether it is traditional or akin to private enter or conducted for profit". In Cf. Helvering v. Gerhardt, (1937) 04 US 405, 426, 427. A State may deem it- as essential to its economy that it owns and operates a railroad, a mill or an irrigation system as it does to own and operate bridges, street, lights, a sewage disposal plant. In Cf. Helvering v. Gerhardt, (1937) 04 US 405, 426, 427. A State may deem it- as essential to its economy that it owns and operates a railroad, a mill or an irrigation system as it does to own and operate bridges, street, lights, a sewage disposal plant. What might have been viewed in an earlier day as an improvident or even dangerous extension of State activities may today be deemed in distensible. It may be noted besides rules the so-called traditional functions, the modern state a multitude public enterprises and in discharges a host other public importance closely related to Government. 19. IN L. I. C. v. Escorts Ltd., reported in 198 (1) SCC 264, the Supreme court however sounded a different note. The Supreme Court observed that if the action of the State is related to contractual obligation or obligations arising out of the tort, the Court ma not ordinarily examine it, unless he action has some public law character attached to it. The Supreme Court further observed that broadly speaking, the Court will interfere in actions of State if they pertain to the public law domain and refrain from examining them, if they pertain to the private law field. The Supreme Court, however, itself experienced difficulty in demarcating; the frontier between the public aw domain and the private law field. 20. AT this juncture, however, the Supreme Court's statement of law escort's case ought also to be noted : -" When the State or an instrumentality of the State ventures into the corporate work and purchases the shares of a company, it assumes to itself the ordinary role of a shareholder and dons the robes of a shareholder with all the rights available to such a shareholder. " In Esscort's case the Supreme Court in para 101 observed : -" It was, however, urged by the learned Counsel for the company that Life Insurance Corporation was an instrumentality of the State and was, therefore, debarred by Article 14 from acting arbitrarily. It was, therefore, under an obligation to state to the court its reasons for the resolution once a rule Nisi was issued to it. If it failed to disclose its reason to the court, the court would presume that it had no valid reasons to give and its action was, therefore, arbitrary. It was, therefore, under an obligation to state to the court its reasons for the resolution once a rule Nisi was issued to it. If it failed to disclose its reason to the court, the court would presume that it had no valid reasons to give and its action was, therefore, arbitrary. The learned Counsel relied on the decisions of court in Sukdeb singh, Maneka Gandhi International Airport Authority and Ajay hasia. The learned Attorney-General, on the other hand, contended that actions of the State or an instrumentality of the State which, do not properly being to the field of public law, but belong to the field of private law are not liable to be subjected to judicial review. He relied on CV Reiily w. Mackman, Davy v. Spelthone, i Congress deal Partido, R. v. East Berkshire Health Authority and radhakrishna Agarwal v. State of Bihar. While we do find considerable force in the contention of the learned Attorney-General it may not be necessary for us to enter into any lengthy discussion of the topic, as we shall presently see. . . . . . While we do not for a moment doubt that every action of the State as an instrumentality of the State must be informed by reason and that, in appropriate cases, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution, we do not construe Article 14 as a charter for judicial review of State actions and to call upon the State to account for its actions in its manifold activities by stating reasons for such actions. " 21. IN the recent decision "of the Supreme Court in the case of M. C. Mehta and Anr. v. Union of India and Ors., reported in AIR 1987 SC 1086 the supreme Court observed : -" We were, during the course of arguments, addressed at great length by Counsel on both sides on the American doctrine of State action. The leamed Counsel elaborately traced the evolution of this doctrine in its parent country. v. Union of India and Ors., reported in AIR 1987 SC 1086 the supreme Court observed : -" We were, during the course of arguments, addressed at great length by Counsel on both sides on the American doctrine of State action. The leamed Counsel elaborately traced the evolution of this doctrine in its parent country. We are aware that in the American constitution since the Fourteenth Amendment is available only against the State, the courts in order to thwart racial discrimination by private parties, devised., the Theory of State action under which it was held that wherever private activity was aided, facilitated or supported by the State in a significant measure, such activity took the colour of State action and was subject to the constitution limitations of the Fourteenth Amendment. The historical context in which the doctrine of State action evolved in the United State: is irrelevant for our purpose especially since we have Article 15 (2 in our Constitution. But it is the principle behind the doctrine of state aid control and regulation so impregnating a private activity as to give it the colour of State action that is of interest to us and that also to the limited extent to which it can be Indianized and harmoniously blended with our Constitutional jurisprudence that we in no way consider ourselves bound by American exposition of constitutional law,as well-demonstrated by the fact that Rammanna shetty (supra), this court preferred the minority opinion o douglas, 3. in Jackson v. Metropolitan Edison Company, 42 L E (2d) 477 as against the. Nergesh Mirza, 1983 (1) SCR 438 this court whilst preferring the minority view in General Electric Company martha v. Gilbert, 50 L. Ed (2d) 343 said that the provisions of the American Constitution cannot always be applied to Indian conditions or to the provisions of our Constitution and whilst some of the principles adumbrated by the American decisions may prove a useful, guide, close adherence to those principles while supply in them to the provisions of our Constitution is not to be favoured because the social conditions in our country are different. The learned Counsel for Shriram stressed the in appositeness of the doctrine of State action in the Indian context because, according to his once an authority is brought within the purview of Article 12, is State for all intents and purposes and the functional dichotomy in American law where certain activities of the same author may be characterised as State action and others as private act cannot be applied here in India. But so far as this argument is of concerned, we must demur to it and paint out that, it is not correct to say that in India once a corporation' is deemed to be 'authority' it would be subject to the constitutional limitation of fundamental right. . . in the performance of all its functions and that the appellation of 'authority' would stick to such corporation, irrespective of the functional context. " 22. ON this background, the decision of the Supreme Court in the case of Central Inland Water Transport Corporation Ltd. v. Broja Nath Ganguly, reported in (1986) 3 Supreme Court Cases 156 and the decision in O. P. Bhandari v. Indian Tourism Development Corporation Ltd- ought also to be noted. As a matter of fact though the Escort's case was decided at an earlier point of time but the same was not noticed by the Supreme Court in the case of Central Inland Water Transport Corporation. In Central Inland water Transport Corporation's case the Supreme Court observed:-" It was, however, submitted on behalf of the appellants 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, therefore, ought not to interfere with it. It is not possible for us to equate employees with goods which can be bought and sold. It is equally hot possible for us to equate a contract employment with a mercantile transaction between two businessmen and much less to do so when the contract of employment is between a powerful employer and a weak employee. It is not possible for us to equate employees with goods which can be bought and sold. It is equally hot possible for us to equate a contract employment with a mercantile transaction between two businessmen and much less to do so when the contract of employment is between a powerful employer and a weak employee. It was also submitted on behalf of the appellants that Rule 9 (0 was supported mutually inasmuch as it conferred an equal tight upon both the parties, for under it just as the employer could terminate the employee's service by giving him three months notice or by paying him three months' basic pay and dearness allowance in lieu thereof, the employee could leave the service by giving three months notice and when he failed to give such notice, the corporation could deduct an equivalent amount front whatever may be payable to him. It is true that there is mutuality in Rule 9 (i)- the same mutuality as in a contract between the lion and the lamb that both will be free to roam about in the jungle and each will be at liberty to devour the other. When one considers the unequal position of the corporation, and its employees, the argument of mutuality becomes laughable. The contesting respondents could, therefore, have filed a civil suit for a declaration that the termination of their service was contrary to law on the ground that the said Rule 9 (i) was void. In such a suit, however, they would have got a declaration and possibly damages for wrongful termination of service but the civil court could not have ordered reinstatement as it would have amounted to granting specific performance of a contract of personal service. As the corporation is "the State", they, therefore, adopted the far more efficacious remedy of filing; a write petition under Article 226 of the Constitution. " As regards the decision of the Supreme Court in Radhakrishnia Agarwal (supra), the Court observed : -" We fail to see the relevance that decision has to the case before us. " Employees of a large organisation form a separate and distinct class and we are unable to equate a contract of employment in a stereo typed form entered into by "the State" with each of such employees with the "lease" executed in Radhakrishna Agarwal case. " Employees of a large organisation form a separate and distinct class and we are unable to equate a contract of employment in a stereo typed form entered into by "the State" with each of such employees with the "lease" executed in Radhakrishna Agarwal case. Further, the contract or the lease between the parties in that case was a legally valid contract. In that case what the appellants where doing was to complain of a breach of contract committed by the State of Bihar acting through its officers. The contesting respondents are not complaining of any breach of contract but their contention is that Rule 9 (i) which is a term of their contract of employment is void. They are not complaining that the action of termination of their service is in breach of Rule 9 (i. Their complaint is not merely with respect to the State action taken under rule 9 (i) but also with respect to the action of State in entering into a contract of employment with them which contains such a clause or rather forcing upon them a contract of employment containing such a clause. As we have held earlier, Rule 9 (i) is void even under the ordinary law of contracts. " 23. THE Supreme Court in Escort's case categorically recorded that they are not expressing any opinion in regard to the private and public law field excepting, however, with an indication that Article 14 cannot be construed as a charter for judicial review of State action. In Central lira land's case also the scope of private and public law field was neither considered, nor even referred to by the Supreme Court. 24. BE that as it may, after the decision in Central Inland's case, can it be said that a 3udge in the High Court would be within its jurisdiction to deal with the matter in a manner contrary to the decision of the Supreme court in the case of Central Inland Water Transport Corporation? It is on this issue also strenuous submissions have been' made by both the parties. While it is true that Central Inland's case was decided by a two-Judge Bench and that of the Escort's case by five-Judge Bench, it was contended that he two-Judges of the Supreme Court in Central Inland's case held on two broad counts. It is on this issue also strenuous submissions have been' made by both the parties. While it is true that Central Inland's case was decided by a two-Judge Bench and that of the Escort's case by five-Judge Bench, it was contended that he two-Judges of the Supreme Court in Central Inland's case held on two broad counts. Firstly, it has been held that Central Inland is an authority within the meaning of Article 12 of the Constitution and, therefore, comes under the writ jurisdiction for enforcement of rights under Chapter 3 of he Constitution and secondly, questions which have been dealt with is whether their terms of an employment being an unconscionable term was void, it was further submitted that from a close perusal of the judgment, the distinction between public law and private law aspect in regard to any action of an authority or a State does not appear to have been dealt with. On the other hand, the Constitutional Bench of five Judges in Escort's case clearly recognised the distinction between actions pertaining' to the private law domain. Judicial activism may or may not be supported. But does that mean and imply that a later decision of the Supreme Court may be by a two Judge Bench, can or ought to be discarded by reason of the fact that the Supreme Court on an earlier occasion has sounded a different note whilst dealing with a different issue? In my view, the answer ought to be in the negative. It is for the Supreme Court to review the decision of the Central Inland and not for the Judge sitting singly in the High Court to comment thereon or to by-pass the same. A Judge of the High Court is bound to follow the decision of the Supreme Court and there is no escape from it This is inspite of the fact that the High Court may have different views and different opinion on that score. The contention of the respondents is that while it is true that the Law Courts ought not to restrict itself to the old Draconian Concept of Law and the Law must keep pace with the changed structure of the society,, changed circumstances in the country and its economy but that by itself does not mean and imply that the Law courts would give a go-by to the procedural aspect absolutely. Tec finicality ought not to out weight the course of justice but that also does not clothe law Courts to go much beyond its way and grant relief. If there is another mode of enforcement of the right,- would it be justifiable and fair to allow petitioners under Art. 226 of the Constitution and thereby open a flood gate of litigation? The Civil Courts have ample jurisdiction to go into the matter of master and servant as it has been done prior to the International airport Authority's case. Satish Chandra Agarwal and Purusattamlal Dhingra cannot be said to be bad law even after the decision in the Central Inland's case. Does that mean that justice was not administered or there was any scope of restricting the concept of justice? In the event of there being a proper course open, would it be fair on the part of the Law Courts to decree the well-established principles of law? The Respondents further submitted that it is the concept of justice and the long established principles of law that ought to be dealt with in a close and harmonious way so that the concept of justice can live up to this expectation. Can it be said that the Civil Courts which have been able to give from time immemorial relief to dismissed employees all on a sudden would turn a deaf ear or would be incapable of doing justice between the parties? If justice has been administered in a particular manner for centuries, let that be allowed to continue and activism on that score may not strictly be in consonance with the concept of justice on the basis of the long established principles of law. 25. I however leave the matter at this stage and refrain myself from answering the same, but as noted above, the decision of the Supreme Court is the law of the land and by reason of the decision in Central Inland's case, it is not for this Court to observe contra but to follow the same and it is for the Supreme Court to review its own decisions as and when future occasion arises. 26. HAVING considered the law on the subject, let us now turn to the other factual aspect of the matter. 26. HAVING considered the law on the subject, let us now turn to the other factual aspect of the matter. But before so doing, judicial decency prompts the Court to record its appreciation for the assistance of the leamed solicitor-General of India in regard to this issue just discussed. Incidentally it is also to be recorded that Dr. Banerjee appearing for Bridge and Roof Co. did not agitate the issue as regards Art. 12 of the constitution. As such, I am no called upon to go into the issue. 27. ON the factual aspect it appears that on 30th August, 1974 the government of India by a Notification (General of India, Extraordinary pt. I section 1) constituted a Public Enterprise Selection Board with functions including appointments to Board level posts. The Bureau of Public Enterprise under the Ministry of Finance acts as a Co-ordinate and Evolution Agency for Public Sector Undertakings and functions including personnel policies relating to Public Undertakings. As appears from the correspondence the bureau of Public Enterprises and Public Enterprises Selection Board have laid down certain guidelines in regard to the top posts in Public Sector enterprises. The guidelines being: -I) Policy should be framed in such a way so as to allow exercise of option for permanent absorption in a cop level post for a period of live years or till the age of superannuation whichever is earlier. And ii) The Bureau of Public Enterprises of the concerned Ministry should review the performance of the appointee after one year before continuing the service of a top Executive for the remaining part of his appointment. 28. CAN it, therefore, be said that the petitioner's belief that, he would be holding the. post as was offered for a period of five years? On the face of the correspondence exchanged between the petitioner and the Appointing authority - the belief, in my view, cannot be termed to be unwarranted or unreasonable, more so, by reason of the language used in the co respondence, viz. "initially for a period of two years". The Presidential assent and other correspondence was initially, for a period of two years which cannot but mean to begin with and it cannot by any stretch be said to be a two-year period certain. "initially for a period of two years". The Presidential assent and other correspondence was initially, for a period of two years which cannot but mean to begin with and it cannot by any stretch be said to be a two-year period certain. By the letter dated 31st August, 1982, the petitioner in no uncertain terms pointed out that permanent / absorption of the petitioner should be according to the terms of the Bureau of Public Enterprise or Public Enterprise Selection Board guidelines which regulates the procedure and policies in the matter of appointment to top posts in the public Enterprises. The approval of the appointment of the petitioner as director (Finance) of the Company dated 10th November, 1982 also contained that the petitioner's case should be reviewed by the Government at the end of the first year of appointment of the petitioner, which is in line with the guide lines of the Bureau of Public Enterprises. The petitioner was asked to exercise for option for permanent absorption, it is only natural to consider that the petitioner would be occupying the post until the petitioner attains the age of superannuation. The correspondence and the confidential notes also suggest that he ought to be kept in service up to 31st July, 1987 being the date of his retirement. As a matter of fact, the Secretary, Ministry of Petroleum in his note dated 18th June, 1985 recorded:-"as against the observation of Chairman Managing Director, bridge and Roof Co., Dr. Chawdhury that Sri Majumder is unable to adjust itself to the requirements of hard work imaginative financial planning and strict monitoring of site cost essential for the proper performance". The Secretary stated : -" My predecessor who reviewed the remarks of Dr. Chowdhury did not agree with the Reporting Officer and felt that Shri Majumder has been adequate for the post held by him. When the question of extending of tenure of Shiri Majumder came before B. E. S. B., the Board felt that in view of the conflicting reports given by the cwd, Bridge and Roof Co, and my predecessor, the tenure of Shri majumder may be extended up to 30th June, 1985 and that during this period, 1 should assess the performance of Shri Majumder to consider whether he is suitable for further extension. . . . . . . . . . . With sustained efforts on his part it has become possible to complete annual accounts of the company at a much quicker pace than was being done in the post. . . . . . . . . . The Company appears to be doing well in respect of the fund management. . . . . . . . Coming from India Revenue Service, Shri Majumder has adjusted very well in the field of financial management in an Engineering company. My impression is that looking, at the size of this company and experience of Shri Majumder, he should be able to discharge the responsibility of Director (Financial) in the Bridge and Root Co, quite well and according to the requirement. Shri Majumder had been a Commissioner of Income Tax at Calcutta and joined the Bridge and Root Co. on permanent absorption basis from 1st April, 1983. He still has approximately two years service to his credit and his tenure may be extended up to 31. 7. 87, the date of his retirement. " 29. SUBSEQUENT thereto, however, on 26th Dune, 198. 5, the Secretary public Enterprises Selection Board intimated the Secretary, Ministry of petroleum the following :-"in view of your positive recommendation, the tenure of Shri k. K. Majumder as Director (Finance) may be extended from 1. 4. 85 to 31. 7. 87 (the date of his superannuation. . . . . After closely watching, their work during the last three months, the Public enterprise Selection Board in their meeting held on 21. 6. 85 recommended that these proposals may be processed further for obtaining the approval of the A C C copies of the orders when issued may kindly be sent to me for information of the PESB. " 30. IT is to be noted that the recommendation for extension of the tenure of the petitioner to the concerned Ministry as well as the Public enterprises was effected as appears from the letter dated 30th September, 1983. It is also pertinent to note that on the representation of the petitioner dated 11th Duly, 1984 the petitioner was informed that the request dated 11th Duly, 1984 the petitioner was informed that the request of the petitioner for his reversion to his parent department (income Tax) could not be accepted. It is also pertinent to note that on the representation of the petitioner dated 11th Duly, 1984 the petitioner was informed that the request dated 11th Duly, 1984 the petitioner was informed that the request of the petitioner for his reversion to his parent department (income Tax) could not be accepted. Subsequently, on 2nd March, 1984, the petitioner's term was extended by a further period of one year, i. e. ., 1984-85. This extension, the petitioner submitted and in any view rightly, clearly indicates that the petitioner would be absorbed on permanent-basis for a period of five years or till the date of superannuation whichever is earlier; On this backdrop the letter dated 20th September, 1985 addressed to the petitioner has to be considered. Since strenuous submissions have been made as to the aspect of fairness and the conduct of the respondents, the relevant extracts of the same are set out hereunder :-"in accordance with instructions received from the Ministry of Petroleum, I am relieving you of your duties as Director (Finance)of tins company with immediate effect. Please hand over charge personally to me this forenoon and make out a brief note on important matters of the company that you were personally handling up to the time of receipt of this letter. Official papers and documents in your personal custody may also be handed back to me this forenoon. The company car being used by you in terms of your entitlement as Director (Finance) of this company is hereby withdrawn but may be used for your travel to your residence or any other place of your choice in Calcutta during this day and should thereafter be released immediately with instruction and the driver to return to Howrah Works with the car. " 31. MR. Pal appearing for the petitioner strenuously contended that as records reveal, there was in fact a decision by the concerned Ministry as well as the Public Enterprise Selection Board and the question of issuance of the above noted letter does not arise. The attitude of the respondent authority in the matter of issuance of the letter was also strongly commend upon. Mr. Pal submitted that a Director of a company ought not to the dealt with in the manner as the petitioner has been dealt with. I find some justification in Mr. Pal's criticism of regards the conduct of the resident- authority. 32. Mr. Pal submitted that a Director of a company ought not to the dealt with in the manner as the petitioner has been dealt with. I find some justification in Mr. Pal's criticism of regards the conduct of the resident- authority. 32. AN Income Tax Officer after having been selected by the Public Enterprise selection Board with the concurrence of the Ministry of Petroleum and having served another Public Enterprise ought not to be dealt with in the manner as the petitioner has been dealt with. Better treatment is only expected and some opportunity., It is inconceivable that in the present day state of affairs, Dracodian concept would be introduced and person not less than the Financial Director would be asked to hand over large after he attends office in the usual course on a particular date his is not only, in my view, unwarranted but country to all recognised principles of law. The concept of "silver" and "gold collar" employees, of to be taken into account, the petitioner turns out to be a "diamond collar" employee. Is it in consonance with the rights, privileges and ethics an apart the question of decorum and decency considering that the Financial director would be dealt with in such a manner as he had been. 1 am afraid, the entire gamut of effort seems to be not only an ingenious device get rid of the person concerned, but et totally arbitrary attitude which he Law Courts cannot stand-by as a mere passive specter. Law Courts exist to remedy the wrong and if the Law Courts do not rise to the occasion, faith and belief in the judiciary would crumble down. Law Courts exist to remedy the wrong and to do so is a plain exercise of judicial power and it ought not to shark of its responsibility in the matter. The agency pointing the petitioner strongly recommends the extension up to the date i the superannuation of the petitioner. The concerned Ministry is also of the same view. Under what circumstances then this ignomimous letter as sent to the petitioner? Some force was acting behind the scene obvious-which cannot be termed to be a force in consonance with law, justice said equity. It is at this juncture that Mir. Pal's comment as to fairness a Governmental action ought to be dealt with. Under what circumstances then this ignomimous letter as sent to the petitioner? Some force was acting behind the scene obvious-which cannot be termed to be a force in consonance with law, justice said equity. It is at this juncture that Mir. Pal's comment as to fairness a Governmental action ought to be dealt with. In a Socialistic country like ours Dracodian concept of law or attitude ought not to be allowed to exist. The law in regard to the termination of service have taken a definite turn in recent years in this country. The primitive idea of master and servant do not any longer hold good. On the contrary, the Constitutional protection under Articles 14 and 16 ought to be enforced in a situation like this. Arbitrary action is an anti-thesis to law, and as such cannot be allowed to be perpetrated and the Law Courts exist to set right the wrong inflicted on the basis of such an arbitrary decision. In that view of the matter,, the order of termination of the petitioner's service from the Bridge and Roof Co. is set aside and quashed 33. IT was submitted that after the decision of the Supreme Court in the case of O. P. Bhandari v. Indian Tourism Development Corporation reported in (1986) 4 Supreme Court Cases 337, question of reinstatement of the petitioner inspite of everything does not and cannot arise. The decision of O. P. Bhandari's case (Supra), however, does not have any manner of application in the facts and circumstances of this case. The petitioner is to retire from his service on 31st July, 1987. On the date of pronouncement of this order, the petitioner,, however, will have only barely two weeks left for his retirement. As such, the reasoning in O. P. Bhandari's case1 is not attracted and decision is clearly distinguishable on facts. 34. IN that view of the matter,, the writ petition succeeds. The office order dated 20th September, 1985 being Annexure 'l' to the petition is set aside and quashed and the respondents are directed to reinstate the petitioner with immediate effect. The petitioner is deemed to be in continuous employment since 20th September, 1935 till today and would be entitle to all privilages and perquisites that was available to the petitioner immediately before the issuance of the letter dated 20th September, 1985. The petitioner is deemed to be in continuous employment since 20th September, 1935 till today and would be entitle to all privilages and perquisites that was available to the petitioner immediately before the issuance of the letter dated 20th September, 1985. Since the official vehicle was taken away from the petitioner, on and from 20th september, 1985 the petitioner would also be entitled to a sum of Rs. 2000/-per month on account of car allowance in lieu of the official vehicle until the superannuation. In terms of an earlier order of this Court, the petitioner was paid the salary in the event the petitioner was entitled to have some other allowances or benefits, the same be also made available to the petitioner. There shall, however be no order as to costs. 35. DR. Banerjee and Mrs. Bhattacharjee pray for stay of operator of this order on the assumption that being a Director of Finance of the company, one cannot rule out the possibility of the petitioner taking some decisions contrary to the policy decisions of the company. The apprehension however cannot be said to be unreasonable. Mr. Dutta's client being the petitioner and who is present in Court has given an undertaking before this Court, that he would only attend the office tomorrow and day after tomorrow as also on the last day, viz., 31st July, 1987 and will go on leave for the rest of the period. The petitioner has given an undertaking to this court that no decision whatsoever, either policy or concerning the financial position of the company, would be taken by him independently of the other directors during these three days when he would attend the office. In that view of the matter, I am not inclined to grant any stay of. operation of this order and the undertaking of the petitioner is however recorded herein.