( 1 ) THE first appellant Modern Food Industries (India) Ltd. also known as Modern Bakeries (India) Ltd. a Government Company registered under the Companies Act 1956 having its registered office at New Delhi and Units spread all over the country including Ahmedabad has filed this appeal against the order of R. C Mankad J. dated 8/10/1987 in Special Civil Application No. 1326 of 1980 (Reported in M. D. Juvekar v. Modern Bakeries (India) Ltd. 1987 (2) GLR 1375) whereby he set aside the order terminating the services of the respondent and directed his reinstatement in service with effect from 21/04/1980 the date of termination of his service with full back wages and continuity in service. Appellant No. 2 is the Chairman-cum-Managing Director of appellant No. 1. Appellant No. 3 is the General Manager of appellant No. 1 of the Ahmedabad Unit situate at Naroda Industrial Estate Ahmedabad.

( 2 ) THE appellants have raised three contentions in this appeal. They are: (1)WHETHER the Modern Food Industries (India) Ltd. a Government Company incorporated under the Companies Act falls within the definition of `the State under Art. 12 of the Constitution of India. Whether clause 2. 18 of the Staff Regulations is illegal and void on the ground of being unconscionable and opposed to public policy i. e. contrary to Sec. 23 of the Contract Act as also violative of Arts. 14 and 16 of the Constitution of India ? (2)WHETHER this High Court was competent to entertain the petition brought by the respondent-employee who was posted at the date of the termination of his service at the Calcutta Unit of the appellant No. 1 Company merely because communication of the termination order was received by him at Ahmedabad while on leave.

( 3 ) THE learned single Judge has come to the conclusion that the appellant No. 1 Company was the State within the meaning of Art. 12 of the Constitution; that Regulation 2. 18 of the Staff Regulations was illegal and void as violative of Sec. 23 of the Contract Act and ultra vires Arts. 14 and 16 (1) of the Constitution and that this High Court had jurisdiction to entertain the petition as the consequence of the termination order fell on the respondent at Ahmedabad where he was served with the impugned order. The appellants being aggrieved by these findings recorded by the learned single Judge have preferred this appeal.

( 4 ) THE respondent who holds the degree of Bachelor of Arts (Poona University) and Diploma in Marketing and Advertising entered service of the first appellant-Company as Sales Assistant on 23/10/1967 The appointment letter carried the following conditions on which the appellants have placed reliance:"the appointment is terminable by one months notice on either side without assigning any reasons. The appointing authority however reserves the right to terminate the service forthwith or before the expiration of the stipulated period of the notice by making payment of a sum equivalent to pay and allowance for the period of notice or the unexpired portion thereof. "in course of time the respondent came to be promoted as Sales Manager and was posted at Kanpur in about April 1973 and later care to be confirmed on successful completion of the probation period. In 1975 he came to be transferred to Ahmedabad. It was the respondents case that when he was transferred to Ahmedabad the sales position of the Ahmedabad Unit was bleak and due to his untiring efforts the position had materially improved. However in 1977-78 he received several complaints from customers and merchants regarding the quality of the bread manufactured by the appellant-Company. He drew the attention of the concerned authorities to these complaints and wrote several letters to the General Manager of the Ahmedabad Unit in that behalf but to no avail. On the contrary as a result of the complaints incurred the wrath of the Chairman-cum-Managing Director appellant No. 2 resulting in unwarranted harassment. It was his contention that atte