K.M. Yusuf, J.
1. The petitioner has challenged the Memo dated 1st August, 1986 issued by the Custodian and Chief Executive Officer, respondent No. 4, terminating his services. The case of the petitioner is that in 1972 he was appointed as Production Manager (Research & Development) in Eastern Distilleries (P) Ltd., now known as Eastern Distilleries & Chemicals Ltd., respondent No. 3. Soon he was confirmed to the post of Bio-Chemist (Research & Development) with the condition that his services will be subject to termination of one month's notice in writing on either side or one month's salary in lieu of notice. The Company was engaged in the manufacture and production of Industrial Alcohol Spirit and was taken over by the Central Government Under Section 18A of the Industries (Development & Regulation) Act, 1951. The further case of the petitioner is that the respondent No. 3 is an agency or instrumentality of the Government and is an authority under Article 12 of the Constitution as the management and control of the said respondent is completely vested in the State Government and is fully financed by the Government. Immediately on receiving the impugned memo the petitioner protested in writing for the withdrawal or cancellation of the said impugned notice or termination of service but to no effect. It is also the case of the petitioner that he being a confirmed employee his services cannot be terminated except on the ground of mis-conduct and that the agreement on the basis of which his services have been terminated is unfair and unreasonable as against public policy.
2. The respondents Nos. 3 and 4 by an Affidavit-in-Opposition denied the contention of the petitioner. In the Affidavit serious allegations have been made about the activities of the petitioner who was found to be non-co-operative and working against the interest of the Undertaking and also of some subversive activities. This caused resentment among the workers and they submitted representations to the authorities. It is further stated in the Affidavit that the petitioner was found to be disobedient to his superior officers and was carrying on benami business detriment to the interest of the Undertaking. There is also allegation against him of sabotage. It is further stated in the Affidavit that the Advisory Board of the respondent No. 3 considered the case of the petitioner on 1st August, 1986 and decided to terminate his services with effect from that very date in terms of the Letter of Appointment. In the Affidavit-in-Reply all the allegations made in the Affidavit-in-Opposition were denied by the petitioner and termed as conspiracy against him.
3. Mr. Ghosh, the learned Advocate appearing for the petitioner, submitted that sheer injustice has been done to the petitioner by terminating his services and offering him only one month's salary in lieu of one month's notice which is against public policy and recent pronouncement of the Supreme Court. If the petitioner in any way be guilty of any act of in subordination or mis-conduct then he ought to have been proceeded with in accordance with law and after proper enquiry action would have been taken against him, but this was not done and he was summarily dismissed with out giving any opportunity of hearing and without disclosing the charges against him which are disclosed only in the Affidavit-in-Opposition in this Hon'ble Court and those charges are very much denied and rebutted by the petitioner.
4. To me it appears from the records that the Director Incharge of the respondent No. 3 by his Memo dated 1st November, 1972 offered the petitioner the job of the Production Manager (Research & Development) on some terms and conditions one of which was Clause 3 which is quoted as under :
'You will be on probation for 6/12 months during which period, if your performance and attainment do not come up to the expectation of the Management, about which the Management will be the sole judge to determine your performance, your services will be liable for termination with seven days' notice in lieu of seven days' pay thereof.'
5. The Director In charge asked the petitioner that if the petitioner is inclined he should signify his acceptance of the terms and conditions enumerated in this Memo by signing the duplicate carbon copy of the said Memo and send it to him. Thereafter the impugned Memo, dated 1st September, 1973 was issued to the petitioner by the Director In charge confirming his appointment as Bio-Chemist (Research & Development) and also underlying the duties with ten items of terms and conditions of the service including a new Clause 9 which was not a part of the Memo, dated 1st November, 1972. The said Clause 9 is quoted as under:
'Your services will be subject to termination by one month's notice in writing on either side, or one month's salary in lieu of notice.'
6. After serving the Eastern Distilleries and Chemicals Ltd., the respondent No. 3, for about 14 years the petitioner was served with a notice dated 1st August, J986 terminating his services with immediate effect and paying him a cheque equal to one month's salary of Rs. 2900.83 in lieu of one month's notice along with the salary cheque for July 1986.
7. It is an admitted position that the respondent No. 3, the Eastern Distilleries and Chemicals Ltd., was taken over by the Union Government Under Section 18A of the Industries (Development & Regulation) Act, 1951 to better serve the interest of the general public and thereafter it became a Government Undertaking under the State of West Bengal with full financial responsibility borne by the State Government thus coming under Part III of the Constitution and State within the meaning of Article 12.
8. A perusal of the contract dated 1st September, 1973 made between the parties takes one to Section 23 of the Indian Contract Act which is reproduced as under :
'The consideration or object of an agreement is lawful, unless-it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law, or is fraudulent; or involves or implies injury to the person or property of another; or the Court regards it as immaterial, or oppose to public policy.
In each of these cases, the consideration or object of an agreement is said to be lawful. Every agreement of which the object or consideration is unlawful is void.'
8a. In a landmark judgment relating to service contracts in the case of Central Inland Water Transport Corporation Ltd. and Anr. v. Brojo Nath Ganguly and Anr. reported in : (1986)IILLJ171SC the Supreme Court held that the Rules empowering the Government Corporation to terminate ser vices of its permanent employees by giving notice or pay in lieu of notice period is opposed to public policy and violative of Article 14 and Directive Principles contained in Articles 39(a) and 41 of the Constitution. Though the Contract Act does not define the expression 'public policy' it connotes some matter which concerns the public good and the public interest. Practices which were considered perfectly normal at one time have today become obnoxious and oppressive to public conscience. The Supreme Court had observed that in deciding any case which may not be covered by authority Courts have before them the beacon light of the Preamble to the Constitution. Lacking precedent, the Court can always be guided by that light and the principles underlying the Fundamental Rights and the Directive Principles enshrined in the Constitution.
9. Clause 9 of the terms and conditions as set out in the Memo of agreement dated 1st September, 1973 apparently appears void Under Section 23 of the Contract Act as being opposed to public policy and also ultra vires Article 14 of the Constitution to the extent that it confers upon the respondent No. 3 the right to terminate the employment of a permanent employee of the Company after serving for 14 years by giving him one month's notice in writing or by paying him the equivalent of one month's salary in lieu of such notice. Clause 9 does not state in what circumstances a permanent employee can be removed from service. Such an act is altogether arbitrary and unreasonable and 'wholly ignores audi alteram partem rule.' It is also violative of Directive Principles contained in Articles 39(a) and 41 of the Constitution.
10. The principle enunciated by the Supreme Court is that the Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. Inequality of bargaining power is sharp disparity in the economic strength and the contracting parties. In the instance case the petitioner's inequality and weakness as one of the contracting parties need no elucidation.
11. This memorable verdict of the Supreme Court, in fact, is the pronouncement on a common judgment in two Appeals of the Calcutta High Court reported in 1986 Lab.I.C. 494. The time has come when it can safely be said that the law is to play its allotted role of serving the needs of society, and it must reflect the ideas and ideologies of that society, it must keep in tune with the heartbeats of the society and the needs and aspirations of the people. The famous essayinst of the 19th century, Sydney Smith, once said: 'When I hear any man talk of an unlaterable law, I am convinced that he is an unalterable fool.'
12. In a similar situation the Supreme Court in the case of West Bengal State Electricity Board v. Desh Bandhu Ghosh reported in : (1985)ILLJ373SC observed : '... a naked 'hire and fire' rule, the time for banishing which altogether from employer-employee relationship is fast approaching. Its only parallel is to be found in the Henry VIII clause so familiar to administrative lawyers.' It is well known that the committee on Ministers' Powers in its report of 1932 referred to King Henry VIII as 'impersonation of executive autocracy'.
13. This marathon judgment is further strengthened by yet another decision of the Supreme Court reported in : (1986)IILLJ509SC (O. P. Bhandari v. Indian Tourism Development Corporation Ltd.) which is wholly based on the case of Central Inland Water Transport Corporation Ltd. (supra).
14. The learned Advocate appearing for the respondents Nos. 3 and 4 has placed a decision of a Division Bench of Calcutta High Court consisting of G. N. Ray, J. and myself in the case of Steel Authority of India Ltd. and Anr. v. Dilip Kumar Debnath reported in F.L.R. 1988(57) page 898 were in the Division Bench held on the basis of a Supreme Court decision reported in : (1985)ILLJ267SC (Workman of Hindustan Steel Ltd. and Anr. v. Hindustan Steel Ltd. and Anr.) that dismissing an employee without holding any enquiry whatsoever and without affording a reasonable opportunity of being heard to the delinquent employee is reminiscent of the days of hire and fire and it is unfortunate that a Public Sector Undertaking still keep such a provision in Standing Order. Though this case has been cited by the learned Advocate for the respondents Nos. 3 and 4 it goes against his own clients.
15. The petitioner is very much bound to be aggrieved the way his ser vices were terminated at a stroke of pen by virtue of a very unreasonable and unjust contract of service, a particular term of which, i.e., Clause 9 is totally against public policy. If the petitioner is at all guilty of any misconduct or misbehaviour he ought to have proceeded with departmentally in accordance with law and must have been given a reasonable opportunity to defend himself. In this case natural justice has been deliberately violated on the plea of a particular clause of the agreement which has been condemned by the Hon'ble Supreme Court in unequivocal terms in the aforesaid two decisions.
16. In that view of the matter I make the Rule absolute. The impugned Memo dated 1st August, 1986 is quashed and Clause 9 of the terms and conditions as contained in Memo dated 1st September, 1973 is declared as void Under Section 23 of the Contract Act as opposed to public policy and violative of Article 14 of the Constitution. The respondents shall forthwith allow the petitioner to join his duties to the post at the place he occupied on 31st July, 1986. The respondents are further directed to pay all his arrears of salaries since 1st August, 1986 with all such increments which have fallen due in accordance to the Mamo dated 1st September, 1973 and other benefits if any within a period of four weeks from date and there shall be no break in the continuity of the petitioner's service. Liberty, how ever, is given to the respondents to proceed against the petitioner in accordance with law for the alleged misconduct or misbehaviour after he has joined his duties and all the outstanding dues are paid to him. As the petitioner has been wrongfully dismissed and had to be pushed to the stage of starvation I am inclined to inflict costs assessed at 100 G. M.s to be paid by respondents Nos. 3 and 4 to the petitioner.
17. Mr. Bagchi, the learned Advocate appearing for the respondent Nos. 3 and 4, prays for an order of stay of the judgment. Such prayer is refused.