JUDGMENT

VENKATARAMIAH, CJI.:- The appellant was appointed as a Headmaster of a school which was being run by the Calangute Don Bosco Educational & Welfare Foundation in 1974 in the State of Goa (which was at the relevant time a Union Territory). Disciplinary proceedings were started against him in accordance with the Grant-in-Aid Code which was in force at that time, since the school was a recipient of the grant as per the Code. The findings of the Dispute Settlement Committee were approved by the Director of Education of the Government of Goa by his Order dated July 12, 1984 who permitted the termination of the services of the appellant. The Principal of the Don Bosco High School, therefore, terminated the services of the appellant as Headmaster by his letter dated July 26, 1984 and the said order of termination was challenged by the appellant before the High Court of Bombay, Panaji Bench, Goa in Writ Petition No. 92 of 1986 (reported in 1988 (1) Lab LN 762). The petition was dismissed by the High Court on the ground that the petition was not maintainable under Art. 226 of the Constitution of India against the Management of the School, which was a private body. Aggrieved by the decision of the High Court the appellant has filed this appeal by special leave.

2. The school in question was a private school and was a recipient of the grant-in-aid under the Grant-in-Aid Code issued by the Government in exercise of its executive power. The relevant rule of the Grant-in-Aid Code, i.e. Rule 74.2 on which the Management relied read thus:

"74.2 (i) The services of an employee appointed to a permanent post shall not be terminated except in accordance with the procedure prescribed hereinunder. No order of termination, dismissal or imposition of any other penalty shall be passed against such employee unless he has been informed in writing of the grounds on which action is proposed to be taken and has been given an adequate opportunity to defend himself. The grounds on which the action is proposed to be taken shall be reduced to a form of a specific charge/ charges which shall be communicated to the employee together with statement of allegation on which each charge is based.

....................................................

(iii) Management shall refer the case to the Director of Education in writing, stating the date of the effect of the intended termination with a copy endorsed to the employee concerned for his acknowledgement. The letter endorsed to the employee shall enclose a copy of allegation with complete substantiating evidence and other documents relevant to the case. The letter be issued to the employee at least one calendar month prior to the date of effect of intended termination. The issue of the letter shall be subject to rule 74.1(3).

(v) The Director shall refer the case to the Disputes Settlement Committee within seven days of the receipt of the letter in the Directorate of Education. The Disputes Settlement Committee shall give a hearing to both the parties and also consider the written statements, if any, submitted by either or both the parties, and give its decision within fifteen days from the date of reference. In case any party fails to present the case, the Disputes Settlement Committee shall take an ex parte decision.

(vi) The decision of the Dispute Settlement Committee shall be final and binding on both the parties provided that it shall be open to either party to prefer an appeal to the Administrative Tribunal established under the Goa, Daman and Diu Administrative Tribunal Act, 1965 within thirty days of the Tate of receipt of the decision of the Disputes Settlement Committee."

3. Rule 74.2 provides that the service of an employee appointed to a permanent post shall not be terminated except in accordance with the procedure prescribed thereunder and no order of termination, dismissal or imposition of any other penalty shall be passed against such employee unless he has been informed in writing of the grounds on w