JUDGMENT P.P. Gupta 1. By means of this writ petition, filed under Article 226 of the Constitution of India, the petitioner, Mahmood Ahmad Siddiqui, has prayed for quashing of the order of termination dated 8-5-1978 and the order dated 11-3-1980 in appeal. 2. The facts of the case, in brief, are that the petitioner was appointed as Inspector in the Branch Office at Lucknow of the Cooperative General Insurance Society Ltd. on 15-2-1971. The said Society was nationalised and was merged in the United India Fire and General Insurance Co. Ltd. under the General Insurance (Emergency Provisions) Act, 1971. The petitioner was confirmed on the post of Inspector with effect from 1-1-1972. On 15-4-1974 the office of the Unit Co-operative General was closed and the employees thereof were required to work at the office of the United India Fire and General Insurance Co. Ltd. at Allahabad. The petitioner also started working there. Even after the transfer, the petitioner and other employees retained their permanent status and the petitioner continued to work as Inspector. On 29-4-1976, the Central Government framed General Insurance (Rationalisation of Pay Scales and other conditions of service of Development Staff) Scheme, 1976, (hereinafter referred to as the Scheme). Under the said Scheme, the petitioner was categorised as Field Worker under Paragraph 4 (5) of the Scheme. The said Scheme provided that the Field Workers were eligible for being considered for categorisation as Inspector Grade I or Grade II, as the case may be, depending on their scheduled premium income for the year 1976. If the scheduled premium income of a Field Worker for the year 1976 was not less than Rs. 45,000/-, he was allowed to continue for the year 1977 as a Field Worker. If his performance for the year 1977 conformed the standard laid down in sub-para (2) of para 5 of the Scheme, he was to be categorised as Inspector Grade I or Grade II, as the case may be, with effect from 1st day of January, ?1978. Presumably, because the performance of the petitioner for the year 1977 did not conform to the standard laid down under the Scheme, his services were terminated on 8-5-1978 in accordance with sub-para (4) of para 5 of the Scheme. He preferred an appeal, which was also dismissed on 11-3-1980. 3. Aggrieved from the said order of termination the petitioner has come up before this Court. 4. He preferred an appeal, which was also dismissed on 11-3-1980. 3. Aggrieved from the said order of termination the petitioner has come up before this Court. 4. The only contention raised on behalf of the petitioner was that the impugned order of termination was violative of principles of natural justice, inasmuch as he was not given any notice prior to the termination to offer his explanation and, therefore, he was denied the right of hearing. The learned counsel for the petitioner and the learned Standing Counsel for the respondents were heard at length and the record of the case was perused. It is an undisputed fact that the petitioner was working as Inspector with the respondents on which post he was confirmed on 1-1-1972. It is also not disputed that the terms and conditions of his employment were regulated by the Scheme which was framed in the year 1976 and under the J said Scheme the petitioner was designated as a Field Worker. Depending I on the performance, the Field Workers were to be categorised as Inspector Grade I or Grade II under para 5 of the said Scheme. Sub-para (3) of para 5 further provided that if the Field Worker whose scheduled premium income for the year 1976 was not less than Rs. 45,000/-, was to continue for the year 1977 as a Field Worker. If, however, his performance for the year 1977 conformed to the standard laid down in sub-para (2) he was to be categorised as Inspector Grade I or Grade II, as the case may be with effect from 1st day of January, 1978. Sub-para (4) of para 5 further provided that the services of such of the Field Workers, who could not be allowed to continue as Field Workers under clause (a) of sub-para (3) or could not be categorised as Inspector Grade I or Grade II under clause (b) of sub-para (2), shall after a review of their performance for the relevant year, be liable to termination immediately on expiry of the period of 30 days from the date on which notices were served on them. For the sake of convenience and proper understanding, sub-paras (3) and (4) of para 5 of the Scheme are reproduced below : "(3) (a). A Field Worker whose scheduled premium income for the year 1976 is not less than Rs. For the sake of convenience and proper understanding, sub-paras (3) and (4) of para 5 of the Scheme are reproduced below : "(3) (a). A Field Worker whose scheduled premium income for the year 1976 is not less than Rs. 45,000/- shall be allowed to continue for the year 1977 as a Field Worker. (b) If the performance of a Field Worker referred to in clause (a), for the year 1977 conforms to the standard laid down in sub-paragraph (2), he shall be categorised accordingly with effect from 1st day of January, 1978. (4) The services of such of the Field Workers who cannot be allowed to continue as Field Workers under clause (a) of sub-paragraph (3) or who cannot be categorised as Inspector Grade I or Inspector Grade II under clause (b) of sub-paragraph (2), shall, after a review of their performance for the relevant year, be liable to termination immediately on expiry of the period of 30 days from the date on which notices were served on them." 5. The contention of the respondents was that despite the petitioner having teen allowed to continue to work as Field Worker for the year 1977, he could not achieve the standards laid down in sub-para (2) and so in accordance with sub-para (4), after review of the case for the year 1977, his services were terminated. It is also the case of the respondents that since the Scheme itself provided for the termination of the services of the petitioner, after a notice of 30 days, no show-cause notice was necessary nor the petitioner was entitled to be heard. Further it was also contended that if at all a notice was necessary, the same was given to the petitioner on 2-11-1977 (Annexure 8' to the writ petition). 6. Undisputedly, the petitioner was a confirmed whole time employee working in the Development Staff as Inspector. Therefore, by virtue of sub- para (1) of para 2 of the Scheme, the provisions of the Scheme applied to him. Sub-para (4) of para 5, contemplates termination of Field Officers, who after a review of their performance, cannot be categorised as Inspectors Grade I or Grade II under clause (b) of sub-para (2) of the Scheme. 'Review' means, "to examine critically.' It is not a pure and simple examination. It contemplates revision with a critical angle. Sub-para (4) of para 5, contemplates termination of Field Officers, who after a review of their performance, cannot be categorised as Inspectors Grade I or Grade II under clause (b) of sub-para (2) of the Scheme. 'Review' means, "to examine critically.' It is not a pure and simple examination. It contemplates revision with a critical angle. Therefore, while criticising, an opportunity of being heard is to be given to the person concerned. Therefore, right of hearing is inherent in a review the petitioner was not given an opportunity to exercise this right. It is further fortified from the provision of making a representation in appeal against the decision of the Committee, as provided under the proviso to para 6 of the Scheme, which runs as provided that no such decision shall be made unless the person concerned had been given an opportunity of making representation in the matter. The respondents' own conduct in giving a notice dated 2-11-3977 (Annexure 8' to the writ petition) confirms that a notice, while reviewing performance, was necessary. No such notice while reviewing performance of the petitioner for the whole year of 1977 was given in the instant case. 7. The petitioner was a confirmed employee of the Corporation. Even if the Scheme permitted termination of such an employee on 30 days' notice it was incumbent on the Corporation to have served a show cause notice on the petitioner in accordance with the rules of natural justice. In the case of Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly, AIR 1986 SC 1571 , which was also a case of statutory Corporation, the Rule 9 (i) conferred upon the Corporation the power to terminate the services of a permanent employee by giving three months' notice in writing or in lieu thereof to pay the equivalent of three months' basic pay and dearness allowance. While considering this rule, the Honourable Supreme Court observed that it conferred an absolute, arbitrary and unguided power upon the Corporation, which violates one of the two great rules of natural justice audi alteram partem rule. It was further held that the principles of natural justice are implicit in Article 14 of the Constitution and if the agencies or instrumentalities of the State do not observe the rules of natural justice, ie. It was further held that the principles of natural justice are implicit in Article 14 of the Constitution and if the agencies or instrumentalities of the State do not observe the rules of natural justice, ie. audi alteram partem, the same will be violative of Article 14 of the Constitution, meaning thereby that employees of such Corporation which is instrumentality of the State are also entitled to the benefit of rules of natural justice and their services cannot be terminated without giving them an opportunity of hearing. In this case it was held that termination of services of permanent employees by giving three months' notice, as contained in the terms of appointment was violative of public policy. 8. There is no denial of fact that the respondent No. 3 is a Corporation, which is "the State" within the meaning of Article 12 of the Constitution. The action of the respondents must, therefore, be in conformity with Article 14 of the Constitution. The principles of natural justice are part of the guarantee contained under Article 14 of the Constitution. In the case of Union of India v. Tulsi Ram Patel, AIR 1988 SC 1416, it has been held that violation of rule of natural justice results in arbitrariness which is the same as discrimination, where discrimination is the result of State action, it is violation of Article 14; therefore, a violation of principles of natural justice by a State action is a violation of Article 14. Sub-para (4) of para 5 of the Scheme is, therefore, both arbitrary and unreasonable and it also wholly ignores and sets aside the audi adulteram partem rule. It is, therefore, violative of Article 14 of the Constitution. It is obligatory on the respondents to serve a show cause notice on its employee before terminating his services in accordance with sub-para (4) of para 5 of the Scheme. Therefore, I do not find any force in the arguments advanced on behalf of the respondents that no show cause notice was necessary to be given to the petitioner before terminating his services in accordance with sub-para (4) of para 5 above. It is next to be seen whether the letter dated 2-11-1977 (Annexure 8' to the writ petition) could be said to be a show cause notice to the petitioner. It is next to be seen whether the letter dated 2-11-1977 (Annexure 8' to the writ petition) could be said to be a show cause notice to the petitioner. This letter mentions that after taking into consideration his performance for the past three years, it has become necessary to take some drastic action against him. The matter had, therefore, been recommended for termination of his services to the Head Office and if he had any point to make out in his favour, he was required to do so within two weeks of the receipt of the letter, failing which the recommendation will be sent to the Head Office. It was emphasised that this was sufficient compliance of the rule of natural justice, inasmuch as that the petitioner was afforded adequate opportunity to make a representation. To my mind, this cannot be a substitute to the notice, which was necessary to be given while terminating the services of the petitioner in accordance with the rules of natural justice. Under sub-para (4) of para 5, the services could be terminated, if after a review of the performance for the relevant year it was found that the Field Worker could not be allowed to continue as Field Worker under clause (a) of sub-para (3) or he could not be categorised as Inspector Grade I or Inspector Grade II under clause (b) of sub-para (2) of para 5 It is clear that the review of the performance of a Field Worker was to be made for the whole year. In the case of the petitioner the relevant year was 1977 as per clause (b) of sub-para (3) of para 5 of the Scheme. The letter, which, according to the respondents, was a notice is dated 2-11-1977. Still two months were left in the year 1977. Under sub-para (4) of para 5 the performance was to be reviewed for the whole year. This letter was written to the petitioner after reviewing his performance, at the most, upto October, 1977 while writing this letter dated 2-11-1977 to the petitioner; the whole year of 1977 was not taken into consideration. This letter can, at best, be in the nature of show cause notice served on the petitioner prior to termination of the services after taking into consideration his performance for the first three quarters of the year 1977 and not for the whole year. This letter can, at best, be in the nature of show cause notice served on the petitioner prior to termination of the services after taking into consideration his performance for the first three quarters of the year 1977 and not for the whole year. It cannot, therefore, be a substitute for the show cause notice while terminating his services. If a notice, after review of the performance for the entire year of 1977, was given to the petitioner, he could have shown that his performance and target achievement was as per sub-para (2) of para 5, or he could have offered some reasonable explanation for not achieving the prescribed target. In these circumstances, the letter dated 2-11-1977 (Annexure 8 to the writ petition) cannot be said to be a show cause notice to the petitioner for giving him a right of being heard against his termination. 9. In view of the above discussion, it is clear that the petitioner was entitled to a notice before his services could be terminated without giving him an opportunity of hearing. Since no such opportunity, in accordance with the Scheme and also in accordance with the rules of natural justice, was afforded to him, the impugned order of termination cannot be sustained. However, his claim for bring designated as Inspector Grade I or Grade II may be considered on merits in accordance with the provisions of sub-paras (2) and (3) of para 5 of the said Scheme. If, after reviewing his case for the whole year of 1977, the respondents come to the conclusion that the petitioner cannot be categorised as Inspector Grade I or Grade II under clause (b) of sub-para (2), it shall be open for them to take appropriate action in accordance with the Scheme applicable on the terms and conditions of service of the petitioner but only after giving a right of hearing to him. 10. In the result, the petition is allowed. The impugned orders dated 8-5-1978 and the order dated 11-3-1980 in appeal are hereby quashed. The petitioner will be deemed to be in service from the date of his termination the respondents are directed to re-instate the petitioner and to pay all the arrears of salary and allowances due to him from the date of his termination- there will be no order as to costs. Petition allowed.