JUDGMENT An Order of Termination dated February 16, 1990 (Annexure 'D' of writ petition) terminating the service of the petitioner with effect from 01.03.90 from the service of West Bengal Tea Development Corporation Ltd. (hereinafter referred to as the Corporation) has been challenged in this writ proceeding. 2. The Corporation is a Government of West Bengal undertaking. In the writ petition; in Paragraph 3, it has been stated that all the shares of the Corporation are owned by the State Government. It has been stated that the Corporation is under the direct control of the Commerce and Industry Department, Government of West Bengal and the Departmental Secretary is an ex-officio member of the Board of Directors of the Corporation. It has been stated that the Corporation is a 'state' within the meaning of Article 12 of the Constitution of India. In Paragraph 4 of the writ petition it has been stated that the State Government is directly involved with the financial liability of the Corporation and all initial capital investment was made by the State Government. It has been stated that the functions, procedure, disbursement of money, employment of recruits and all incidental matters relating to the management of tea gardens under the Corporation are consonance with the normal Government rules and regulations. It has been stated that the corporation was established by the State Government with the sole purpose to take over the management and ownership of the sick tea gardens not only to provide employment to the innumerable employees of the State Government but also to generate necessary funds for the Corporation. 3. The learned Advocate for the Corporation submitted that an affidavit in-opposition was filed on behalf of the respondent No.1 but the said affidavit was not available in the record of the case. The learned Advocate for the respondent No.1 has filed a xerox copy of the affidavit-in-opposition which was flied on behalf of the Corporation. For the proper adjudication of the matter the said xerox copy of the affidavit-in-opposition has been accepted by the Court and has been treated as original. The learned Advocate for the petitioner has no objection for accepting the said xerox copy of the affidavit, in opposition. 4. In the said affidavit-in-opposition the Corporation has not dealt with Paragraph 4 of the writ petition. Therefore, the statements made in Paragraph 4 of the writ petition remain uncontroverted. The learned Advocate for the petitioner has no objection for accepting the said xerox copy of the affidavit, in opposition. 4. In the said affidavit-in-opposition the Corporation has not dealt with Paragraph 4 of the writ petition. Therefore, the statements made in Paragraph 4 of the writ petition remain uncontroverted. In the said affidavit-in-opposition while dealing with Paragraph 3 of the writ petition no specific denial was made denying that all the shares of the Corporation are owned by the State Government. There is also no specific denial denying that the Corporation is under the direct control or the Commerce and Industry Department, Government of West Bengal, and the Departmental Secretary is an ex-officio member of the Board of Directors of the Corporation. Uncontroverted statements made in Paragraphs 3 & 4 of the writ petition clearly show that the tests collated in the decision of the Constitution Bench of the Hon'ble Supreme Court in (1) Ajoy Hasia Etc. v. Khalid Mujib Sehravaredi, AIR 1981 SC 407, for determining whether a particular body is an instrumentality of the State are fully satisfied. Therefore, it is satisfactorily established that the Corporation is an instrumentality of the State within the meaning the expression ‘other authority’ under Article 12 of the Constitution and is amenable to the writ jurisdiction and also subject to part-III & part-IV of the Constitution of India. By virtue of order of appointment dated 27th March, 1989 the petitioner was appointed in the service of the Corporation on contractual basis on one of the Estates under the Corporation on the terms and conditions mentioned in the said order, of appointment (Annexure ‘A’ of the writ petition). Clause 6 of the terms and conditions contained in the aforesaid order of appointment reads as follows : - “Your initial period of contract shall be for two years, which may be renewed at the discretion of the appropriate authorities, with the provision of two months notice of termination of service. Similarly, you may resign after giving two months’ salary or two months’ notice in lieu of the notice period.” A proper reading of the above quoted Clause 6 shows that the petitioner could resign from the service of the Corporation after giving two months' notice or two months' salary in lieu of the notice period. But the Corporation could terminate the service of the petitioner only after giving two months' notice. But the Corporation could terminate the service of the petitioner only after giving two months' notice. There was no provision for terminating the service of the petitioner by paying two months' salary in lieu of the notice period. 5. From Clause 9 of the terms and conditions contained in the aforesaid order of appointment it appears that the appointment of the petitioner in the service of the Corporation was with effect from the morning of 6th April, 1989. Thus the admitted position is that the petitioner was appointed in the service of the Corporation with effect from 6th April, 1989 and his service was terminated with effect from 01.03.90. 6. In the order of termination dated February 16,1990 it was, Inter alia, stated “you will be paid two months' salary in lieu of notice period as required the terms and conditions of your appointment with this Corporation.” It has been noticed earlier that the order of appointment did not contain any term or condition which authorised the Corporation to terminate the service of the petitioner by paying two months' salary in lieu of notice period. 7. In (2) State of U.P. v. Renu Sagar Power Co., 1988(4) SCC 59 , Justice Mukherjee observed (see page 104, para 86) as follows :- “The exercise of power whether legislative or administrative will be set aside if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary. Similarly, if the power has been exercised on a non-consideration or non-application of mind to relevant factors the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administrative) is exercised on the basis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated.” The above quoted view of Mukherjee, J. was referred to and followed in (3) Shri Sitaram Sugar Co. Ltd. v. Union of India, AIR 19S0 SC 1277, para 51. 8. In the instant case, it is apparent on the face of the order of termination that there is manifest error in the exercise of power to terminate the service of the petitioner. Ltd. v. Union of India, AIR 19S0 SC 1277, para 51. 8. In the instant case, it is apparent on the face of the order of termination that there is manifest error in the exercise of power to terminate the service of the petitioner. Though under the terms and conditions contained in the order of appointment the Corporation cannot terminate the service of the petitioner by paying two months' salary in lieu of the notice period yet the service of the petitioner was sought to be terminated by staling “you will be paid two months' salary in lieu of the notice period." Even two months salary was also not tendered to him along with the order of termination. therefore, exercise of the power terminating the service of the petitioner is manifestly arbitrary and is liable to be set aside. The power to terminate the service of the petitioner was exercised on the basis of a provision which did not exist, such exercise of power stands vitiated. 9. In (4) L.I.C. of India v. Consumer, Education and Research Centre reported in 1995 (5) SCC 482 , the Supreme Court in Paragraph 26 of the reported decision observed as follows :- “This Court has rejected the contention of an instrumentality or the State that its action is in the private law field and would be immuned from satisfying the tests laid under Article 14. The dichotomy between public law and private law rights and remedies, though may not be obliterated by any strait-jacket formula. it would depend upon the factual matrix. The adjudication of the dispute arising out of a contract would, therefore, depend upon facts and circumstances in a given case. The distinction between public law remedy and private law field cannot be demarcated with provision. Each case will be examined on its facts and circumstances to find out the nature of the activity, scope and nature of the controversy. The distinction between public law and private law remedy has now become too thin and practicably obliterated.” 10. The case of the Corporation, as appears from the said affidavit-in-opposition, is that the petitioner's appointment was a simple contract with the Clause of termination of the same with two months' salary in lieu of two months' notice period. It has already been noted earlier in this judgment that this is not the correct approach. The case of the Corporation, as appears from the said affidavit-in-opposition, is that the petitioner's appointment was a simple contract with the Clause of termination of the same with two months' salary in lieu of two months' notice period. It has already been noted earlier in this judgment that this is not the correct approach. There was no clause in the order of appointment conferring power upon the Corporation to terminate service of the petitioner with two months' salary in lieu of two months' notice period. The Corporation further stated in the affidavit-in-opposition that the appointment of the petitioner being a contract the respondent No. 1 has every right to terminate the same in terms of the contract, such termination cannot amount to be dismissal of the petitioner from service. The respondent further stated that the petitioner in his own sweet-will without any influence and pressure had entered into the said contract for appointment as a manager and such being the position the petitioner cannot claim the benefit of protection of service as is available to regular employees of the State Government when dismissed. The respondent's case is that the petitioner cannot in writ Court seek any protection against dismissal which the regular employee of the State Government enjoys under the Constitution of India. The Corporation further stated that the petitioner's appointment being a mere contract and the petitioner not being a permanent and/or temporary employee of the respondent No.1, the contract of appointment was terminated in terms of the contract, and the respondent does not need concurrence from the Government in this regard. It is further case of the corporation that the petitioner accepted the termination of the contract and by letter dated February 23, 1990 requested, inter alia, for 15 days' time to vacate the garden quarter, so that the petitioner should arrange to shift his belongings and pay his dues to the local shops to whom the petitioner owed. The respondent stated that the petitioner further requested payment of his due salary in the garden. 11. In Paragraph 6 of the affidavit-in-opposition the Corporation stated, Inter alia, as follows:- “Due to the petitioner's absence from the garden without notice and his whereabouts not known the respondent No.1 did not forward the petitioner's salary of February 1990, the salary covering the notice period was tendered to the petitioner after due adjustment of dues but the same was refused. The petitioner with malicious and ulterior motive accepted the salary for the month of February 1990 but refused to accept the salary of covering the notice period to impress this Hon'ble Court that the respondent termination of the contract was bad.” Thus it appears that the stand of the Corporation is contradictory. Once it is said that since the Corporation did not know the whereabouts of the petitioner, the salary of February 1990 could not be forwarded to the petitioner. Again the Corporation stated that the petitioner with malicious and ulterior motive accepted the salary for the months of February 1990 but refused to accept the salary cove ling the notice period to impress this Court that the “respondent termination of the contract was bad.” In view of this contradictory stand taken by Corporation the above quoted statement of the Corporation cannot be relied upon. 12. It is now well-settled that the definition of State in Article 12 which includes are authority within the Territory of India or under control of the Government of India is limited in its application only to part III and by virtue of Article 36, to part-IV; it does not extend to the, other provision of the Constitution. See (5) A.I.S.S.E. Assocn. v. Defence Minister-cum-Chairman, B.O.G., S.S. Socy., AIR 1989 SC 88 , para 8. Thus the Corporation being a ‘State’ within the meaning of Article 12 of the Constitution is subject to part-III and part• IV of the Constitution. 13. In L.I.C. of India v. Consumer, Education and Research Centre (supra) in Paragraph 27 of the reported decision the Supreme Court observed as follows :- “In the sphere of contractual relations the State, its instrumentality, public authorities or those whose acts bear insignia or public element, action to public duty or obligation are enjoined to act In a manner i.e. fair, just and equitable, after taking objectively all the relevant options into consideration and in a manner that is reasonable, relevant and germane to effectuate the purpose for public good and in general public interest and it must not take any irrelevant or irrational factors into consideration or appear arbitrary in its decision. Duty to act fairly is part of fair procedure envisaged under -Articles 14 and 21. Every activity of the public authority or those under public duty or obligation must be informed by reason and guided by the public interest.” 14. Duty to act fairly is part of fair procedure envisaged under -Articles 14 and 21. Every activity of the public authority or those under public duty or obligation must be informed by reason and guided by the public interest.” 14. It has already been stated hereinabove that the action of the corporation terminating the service of the petitioner stating that the petitioner would be paid two months' salary in lieu of two months' notice period is wholly arbitrary and erroneous and stands vitiated. Such action of the Corporation also violated Articles 14 and 21 of the Constitution of India. 15. In view of the discussions made hereinabove the order of termination dated 16th February, 1990 (Annexure ‘D’ of the writ petition) is hereby quashed and set aside. The respondents are directed to pay the petitioner his salary and allowances from 1.3.90 to 5th April. 1991. This Court cannot pass any order directing the Corporation to retain the petitioner in service beyond two years from 6th April, 1989. This Court directs the respondents Nos. 1 & 2 to pay the petitioner his salary and allowances as directed hereinabove within six weeks from the date of this judgment. The writ petition is allowed to the extent mentioned hereinabove. There shall be no order as to costs. All parties are to act on the operative part of this judgment on the usual undertakings.