JUDGMENT

S.C. Agrawal, J.-This appeal, by special leave, raises the question regarding validity of Rule 27(iv) of the U.P. State Mineral Development Corporation Limited Employees Service Rules, 1978 (hereinafter referred to as the Rules ), as amended vide the Amendment Rules of 1988 with effect from May 15, 1988, which provides for compulsory retirement of an employee of the U.P. State Mineral Development Corporation (hereinafter referred to as the Corporation ).

2. The Corporation, a company registered under the Companies Act, 1956, is an undertaking of the Government of Uttar Pradesh. The respondent joined the Corporation on January 18, 1977. Initially he was appointed on the post of Marketing Officer. He was redesignated as Marketing Manager on April 16, 1977. He was confirmed on the post of Marketing Manager by order dated June 2, 1984 with effect from March 14, 1978. He started officiating as Chief Marketing Manager under order dated March 12, 1984. By order dated August 20, 1988, the respondent was compulsorily retired from service from the date of the issuance of the said order. It was directed that in lieu of three months notice he would be entitled to the payment of a sum