A statutory corporation has the power to terminate the services of its employees under Rule 13 or Regulation 17, depending on the nature of the case. The termination of service under Rule 13 is valid if the Corporation has a bona fide loss of confidence in the employee and the termination is not mala fide or a colourable exercise of power.

( 1 ) THIS case raises a point of widespread application. The question is about the powers of the statutory corporations to terminate the services of their employees.

( 2 ) THE petitioner joined the Indian Airlines Corporation on 20th October, 1955 as an office assistant. Since then he had been working there. In October, 1973 there was a general strike in the Corporation. On 24th November, 1973 the Corporation declared a lock-cue. On 18th December, 1973 lock-out was lifted. But in December, 1973 the Corporation demanded an undertaking from its employees and those who were prepared to give an undertaking in the prescribed form could join service.

( 3 ) ON 24th December, 1973 the petitioner gave an undertaking in the form demanded. But he however added the following in the undertaking:

"i save all my previous claims, on reciprocal basis and in accordance with the law of the land". Apparently this undertaking was not accepted and he was not taken back in service.

( 4 ) IN March, 1974 the petitioner brought a writ petition (No. 357 of 1974) with regard to his claim for promotion.

( 5 ) ON 20th June, 1974 he filed the present writ petition. Here he claimed that the undertaking given by him on 24th December, 1973 should have been accepted and he should have been taken back in service. He also claimed that the lock-out declared by the Corporation was illegal.

( 6 ) THIS writ petition came up for admission during vacation before S. N. Shanker, J. On 25th June, 1974 he issued notice for 13th August, 1974 to the Corporation to show cause why the petition be not admitted. On a miscellaneous application moved by the petitioner lie passed the following order :

"in the meantime it will be open to the petitioner to join service subject to his rights in this writ petition".

( 7 ) ON 26th June, 1974 the petitioner went to the Corporation. He told them that he wanted to join. The Corporation asked him to give a fresh undertaking. He gave it. On 27th June, 1974 he was allowed to join duty.

( 8 ) ON 24th July, 1974 the Corporation passed the following order:

"i A CHAIRMAN and MANAGING DIRECTOR Indian Airlines, Airlines House, New Delhi. 24th July, 1974. No. CH-4935 Shi-i K. S. Bansal, Office Assistant, Indian Airlines Hqrs. New Delhi. This is to inform you that with effect from 25th July, 1974 your services will no longer be required by the Corporation and stand terminated by virtue of Rule 13 of the Service Rules applicable to you. You will be paid 30 days basic pay in lieu of the notice contemplated under the said Rule. The Accounts Department has been advised to settle your accounts immediately. sd/- P. C. Lal CHAIRMAN".

( 9 ) ON 7th August, 1974 the petitioner amended the writ petition in view of the order of termination of his services. Now the claim in the present writ petition is that the order dated 24th July, 1974 terminating petitioner s services be declared a nullity.

( 10 ) THE principal question in this writ petition is whether the order dated 24th July, 1974 is mill and void. This order has been passed in terms of Rule 13. Rule 13 reads as under : the services of an employee are terminable at 30 days notice on either side or basic pay in lieu". The Corporation has framed rules in exercise of the powers conferred on it by section 45 of the Air Corporations Act, 1953. Rule 13 is one of the rules framed by them which were published in the Gazette of India on 12th of March, 1960.

( 11 ) IN exercise of the powers conferred by section 45 of the Act, the Corporation has also framed regulations. These were published in the Gazette of India on 25th November, 1961. Regulation No. 17 is in these terms :

"17. Any one or more of the following punishments may, for good and sufficient reasons and as hereinafter provided, be imposed on an employee of the Corporation:- (a) Censure to be conveyed in writing with reasons for the same. (b) Fine, as provided in the Payment of Wages Act and applicable to employees governed by the Factori