JUDGMENT : Y. Venkatachalam, J.—Invoking Article 226 of the Constitution of India, the petitioner-association herein has filed the present writ petition seeking for a writ of declaration declaring Clause 12(a) of the MFL Service Policy, dated March 8, 1985, as illegal and null and void and not binding on the members of the petitioner-association. 2. In support of the writ petition, the petitioner herein has filed an affidavit wherein they nave narrated all the facts and circumstances that forced them to file the present writ petition and requested this Court to allow their writ petition as prayed for. Per contra, on behalf of the respondent, a counter-affidavit has been filed rebutting all the material allegations levelled against them, one after the other, and ultimately requested this Court to dismiss the writ petition for want of merits. 3. Heard the arguments advanced by learned counsel appearing for the parties. I have perused the contents of the affidavit and the counter-affidavit together with all other relevant material documents available on record in the form of typed set of papers. I have also taken into consideration the various points raised by learned counsel appearing for the respective parties during the course of their arguments. 4. In the above circumstances, the only point that arises for consideration in this writ petition is, as to whether there are any valid grounds to allow this writ petition or not 5. The brief facts of the case of the petitioner-association, as seen from their affidavit, are as follows. 6. The petitioner-association is a registered body and represents the supervisory categories of employees employed in the respondent-company. The petitioner-association has been taking up various issues with the respondent in regard to matters connected with the terms and conditions of service of the supervisory staff. The non-supervisory staff coming within the definition of "workman" are covered by the provisions of the Industrial Disputes Act and the Industrial Employment (Standing Orders) Act and they are represented by (heir unions registered under the Trade Unions Act. The respondent is a "public sector undertaking" and is a Government company and is substantially owned and controlled by the Ministry of Agriculture of the Government of India. The policy decisions and administration of the business of the respondent-company are directed by the nominee of the Government on the Board of Directors. The respondent is a "public sector undertaking" and is a Government company and is substantially owned and controlled by the Ministry of Agriculture of the Government of India. The policy decisions and administration of the business of the respondent-company are directed by the nominee of the Government on the Board of Directors. The Chairman and Managing Director is also a nominee of the Government of India. The respondent-company, being an agency and instrumentality of the Central Government, is, therefore, a "State" within the meaning of Article 12 of the Constitution and amenable to the writ jurisdiction of this Court under Article 226 of the Constitution of India. It is stated by the petitioner-association that in the matter of appointments and promotions the respondent ought to be controlled and guided by the corporate objectives of the company. Many senior employees/officers were overlooked and superseded by juniors and raw hands and the seniority of service, past experience, qualifications and ability were ignored. Appointments and promotions came to be regulated by the respondent more by subjective and personal factors and extraneous reasons and considerations other than any rational or objective standards. Aggrieved by the injustice done to them, individual employees/officers formed the petitioner-association and have been obliged to take recourse to litigation. Two officers filed W.Ps. Nos. 9404 of 1987 and 10917 of 1987 questioning their supersession and overlooking their seniority of service. The petitioner-association also filed W.P. No. 13066 of 1987 to quash the MFL Service Policy as regards promotion rules and seeking a direction for formulation of an agreed promotion policy in the respondent-company as regards supervisory category. The said writ petition was also withdrawn subsequently. In the wake of several litigations, the respondent-company came forward to bring to the fore the existence of an alleged MFL Service Policy, although there has been no publication of any such policy at any time before known to the members of the petitioner-association. The said service policy purported to be effective from December 11, 1984, and alleged to be "applicable and to be binding on all employees" except those governed by the MFL Standing Order framed under the Industrial Employment (Standing Orders) Act, and other categories. This means that such service policy is said to be applicable to the officers and supervisory staff category, who are members of the petitioner-association. This means that such service policy is said to be applicable to the officers and supervisory staff category, who are members of the petitioner-association. Among other things, the said MFL Service Policy would appear to lay down a clause/rule regarding "termination of service" and the said clause reads as follows: "12. Termination: A permanent employee may be terminated at 90 days' notice in writing by the company or by paying 90 days' pay plus clearness allowance, in lieu of notice. A permanent employee desiring to resign shall do so by giving 30 days notice to the company. Alternatively, the competent authority may deduct 30 days pay plus dearness allowance from the monies due to the employee, who leaves the employment without giving required notice." 7. As stated above, such officers who are obliged to seek justice in the Courts, and to vindicate themselves and who are taking leading part in the activities of the association are faced with veiled threats from the respondent and that it may take recourse to the aforesaid Service Rule/Policy, which provides for discharge simpliciter after giving 90 days notice or pay in lieu thereof. Members of the petitioner-association run the imminent risk of the misuse or arbitrary exercise of such power under the said service policy as to discharge simpliciter. According to the petitioner-association, the said clause in the service policy regarding "discharge simpliciter" now sought to be enforced by the respondent is not a term or contract of service nor a condition of service, binding upon the members of the petitioner-association. It is contended by the petitioner that the introduction of such a clause in the service policy unilaterally and arbitrarily contrary to the contract of service, is illegal and unauthorised and it is void and opposed to public policy u/s 23 of the Indian Contract Act. They contend that the said clause relating to discharge simpliciter in the MFL Service Policy, simply by giving 90 days' notice or payment of salary in lieu of such notice, invests the authorities of the respondent with uncontrolled discrimination at their whims and fancies and at their sweet will and pleasure and caprice, not necessarily based on the welfare of the organisation; but possibly on personal likes and dislikes, personal preferences and prejudices. Therefore, it is contended by the petitioner that the impugned clause on the MFL Service Policy of the respondent is illegal and is liable to be quashed and set aside, being contrary to law and null and void. They also contend that the respondent being "other authority" and "State" under Article 12 of the Constitution of India, cannot enforce such an illegal condition of service which offends any of the provisions in Part III and Part IV of the Constitution of India. Thereafter, the respondent insisted in its bulletin that in the event of the petitioner-association withdrawing its writ petition, the respondent would come forward to discuss the issue directly and would try to settle the same. Accordingly, they withdrew the previous writ petition. However, the respondent was postponing the issue for sometime and in the meanwhile the petitioner- association filed another writ petition with regard to the Assistant Safety Officer. After filing the said writ petition the respondent got irritated and went back on its promise to settle the issues. The respondent is now adopting a negative attitude and is not willing to discuss with the petitioner-association on any issue. The members of the petitioner-association apprehending that the respondent may exercise the arbitrary powers under the said clause of the Service Policy impugned herein, have filed the present writ petition. 8. Per contra, it is contended by the respondent that the respondent-company is a Government company and the shareholders of the company are the National Iranian Oil Company, general public and Government of India and it is not a "State" for the purpose of invoking Article 12 of the Constitution of India. The respondent-company has its own policies which are being followed without any violation. They have recruitment/promotion policies and any person is promoted/recruited only by following these policies and that the allegation that there has been no publication of the respondent's Service Policy, is denied. This respondent has written down policies for various matters connected with its administration/personnel and manual containing a set of policies which is provided to every department/region for ready reference and the same is readily available to all its employees any time for reference. They state that even Rule 12 (now it is Clause 5.10.1) which is referred by the petitioner is included in the appointment orders given to the employees of the respondent-company. They state that even Rule 12 (now it is Clause 5.10.1) which is referred by the petitioner is included in the appointment orders given to the employees of the respondent-company. According to them, every employee is required to sign and return the copy of this appointment order in token of acceptance of the terms and conditions of appointment, and hence, all the employees are well aware about the service policy of this respondent-company. It is their case that the respondent-company is run by a professional management and has never been vindictive towards any of their employees. Though the company has a number of unions, the respondent has been dealing with them in a fair and dispassionate way and also providing them all other facilities like notice board, office rent, furniture and other facilities. Therefore, it is contended by them that the petitioner-association has approached this Court with unclean hands. According to them, Rule 12 (now Clause 5.10.1) is a normal service condition in practice in many organisations and it is a mutually accepted condition of contract of employment between this respondent and its employees. There is no illegality and is, therefore, not void or opposed to public policy as alleged u/s 23 of the Indian Contract Act and nowhere in the affidavit the petitioner has stated as to how the clause is illegal and opposed to public policy and that itself proves that the petitioner has approached this Court without any rhyme or reason. The respondent states that though this rule has been in vogue for the past thirty years, no employee has been discharged under the said rule. According to them, the petitioner's statement that they are under imminent threat is nothing but falsehood without any iota of truth. Therefore, it is stated by them that the writ petition is devoid of merits and it has to be dismissed. 9. Having seen the entire material available on record and from the facts and circumstances of this case and also from the claims and counter-claims made by the parties, the petitioner-association is aggrieved only with the particular clause of the MFL Service Policy dated March 8, 1985. The said clause is 12(a). 9. Having seen the entire material available on record and from the facts and circumstances of this case and also from the claims and counter-claims made by the parties, the petitioner-association is aggrieved only with the particular clause of the MFL Service Policy dated March 8, 1985. The said clause is 12(a). The said clause is challenged by the petitioners on the grounds that the said rule 12(a) of the MFL Service Policy of the respondent impugned in this writ petition is illegal, ultra vires, void and inoperative and that, therefore, it is liable to be quashed and set aside, that the respondent being an "agency" and instrumentality of the State, its employees are entitled to the protective benefits under Part in and Part IV of the Constitution of India. They contend that any term or condition of service like the impugned clause which confers arbitrary powers and which is capable of vicious discrimination, is illegal as it is violative of the constitutional provisions and is, therefore, liable to be struck down. They also state that this aspect of the matter is covered by the decisions of this Court in W.P. No. 2976 of 1985 and W.P. No. 2977 of 1985. It is also their categorical case that the power conferred on the respondent under the impugned clause is not only arbitrary but also discriminatory. They contend that the impugned clause cannot be regarded as a term or contract between the employees and the respondent as the employees are not party to it and there is no privity of contract. According to them, even, assuming that the impugned clause can be assumed as contractual term, it will be still void as one reached between unequal parties and also opposed to public policy u/s 23 of the Indian Contract Act as held by the Supreme Court in Central Inland Water Transport Corporation Limited and Another Vs. Brojo Nath Ganguly and Another, (1986) 3 SCC 156 . 10. Further, in support of the contentions of the petitioner-association, learned counsel appearing for the petitioner relied on Supreme Court decision reported in Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly, (supra). It is significant to note that, that is a landmark case relating to service contracts. Brojo Nath Ganguly and Another, (1986) 3 SCC 156 . 10. Further, in support of the contentions of the petitioner-association, learned counsel appearing for the petitioner relied on Supreme Court decision reported in Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly, (supra). It is significant to note that, that is a landmark case relating to service contracts. In the said case on interpretation of the relevant service rule, the Supreme Court held that the rule empowering the Government Corporation to terminate services of its permanent employees by giving notice, or pay in lieu of notice period, is opposed to pubic policy and violative of Article 14 and Directive Principles contained in Articles 39(a) and 41. In the said case, a sub-clause in a rule provided for termination of services of the officers by giving three months' notice. The said clause in the rule was struck down by the High Court and the Supreme Court also approved the decision of the High Court by observing that "considering the inequality in the bargaining power of the parties the clause in the contract of employment was void u/s 23 of the Contract Act as opposed to public policy besides being ultra vires Article 14". From the above, it is very clear that the above judgment of the Supreme Court squarely applies to the facts of the case on hand. 11. Therefore, for all the aforesaid reasons and, in the facts and circumstances of this case and also in view of my above discussions with regard to the various aspects of this case and also in the light of the above Supreme Court judgment, I am of the clear view that the petitioner-association herein has clearly made out a case that they are entitled to the relief asked for by them in this writ petition and that, therefore, the impugned clause in this writ petition has to be struck down as illegal, null and void and not binding on the members of the petitioner association. Thus, the writ petition succeeds and the same has to be allowed as prayed for. 12. In the result, the writ petition is allowed as prayed for. No costs. Consequently, the impugned clause, viz., 12(a) of the MFL Service Policy, dated March 8, 1985, is hereby declared as illegal, null and void and not binding on the members of the petitioner-association. W.M.P.No. 531 of 1992 is dismissed.