Termination of service in rule of Law:
Termination without assigning any reason or opportunity of hearing is arbitrary and violative of equality clause in Article 14 of the Constitution:
Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952 which confers powers on the authority to terminate the services of a permanent and confirmed employee by issuing a notice terminating the services or by making payment in lieu of notice without assigning any reasons in the order and without giving any opportunity of hearing to the employee before passing the orders is wholly arbitrary, uncanalised and unrestricted violating principles of natural justice as well as Article 14 of the Constitution. There is no guide- line in the Regulations or in the Delhi Road Transport Authority Act, 1950 as to when or in which cases and circumstances this power of termination by giving notice or pay in lieu thereof can be exercised. [264G, 285C]
Termination of service by Government Companies:
Government Companies or Public Corporations which carry on trade and business activity of State being State instrumentalities, are State within the meaning of Article 12 of the Constitution and as such they are subject to the observance of fundamental rights embodied in Part 111 as well as to conform to the directive principles in Part IV of the Constitution. In other words, the Service Regulations or Rules framed by them are to be tested by the touchstone of Article 14 of the Constitution. Furthermore, the procedure prescribed by their Rules or Regulations must be reasonable, fair and just and not arbitrary, fanciful and unjust. [264H, 265A-B]
Termination of service violative of natural justice:
The ‘audi alteram partem’ rule which, in essence, enforces the equality clause in Article 14 of the Constitution is applicable not only to quasi-judicial orders but to administrative orders affecting prejudicially the party-in- question unless the application of the rule has been expressly excluded by the Act or Regulation or Rule which is not the case here. Rules of natural justice do no supplant but supplement the Rules and Regulations. Moreover, the Rule of Law, which permeates the Constitution of India, demands that it has to be observed both substantially and procedurally. Rule of law posits that the power to be exercised in a manner which is just, fair and reasonable and not in an unreasonable, capricious or arbitrary manner leaving room for discrimination.