The judgment established that a society registered under the Societies Registration Act can be considered an instrumentality of the State under Article 12 of the Constitution of India if it is under financial, administrative, and functional control of the Government. It also clarified the test for determining stigmatic and punitive nature of termination orders.

M.M.S UNDRESH, J

1. In view of the common issues involved in both appeals, they have been taken up together for disposal.

2. The brief facts of the case in a nutshell are as follows:

i. The 1st appellant is a Society registered under the Societies Registration Act. It was established in the year 1990 being an autonomous Centre of the Ministry of Environment and Forests, Government of India. It was promoted by the Bombay Natural History Society, which is also an autonomous and a registered society. The 1st appellant is governed by its own Memorandum of Association having its own Rules and Regulations framed by it. As per the Rules and Regulations, the membership of the appellant society would consist of eminent Ornithologist, Environmentalist, Administrators and Social and Physical Scientist.

ii. The principal object of the appellant society is to "develop an institution of excellence in the fields of Ornithology and Natural History". The appellant society has a large number of research projects in various parts of the country including the Andaman and Nicobar Islands. The executive organ of the appellant society is the governing council which shall function under the direct supervision and control of the society.

iii. As per the rules and regulations, the membership of the appellant society consists of nominees of the Bombay Natural History Society, the Secretary and Finance Advisor of the Ministry of Environment and Forests, Government of India, Ex-officio the Secretary, Environment and Forest Department, Government of India, Ex-officio, Chief Executives of Research Institutions / Universities such as the Centre for Ecological Sciences, Indian Institute of Science, Bangalore, the Wild Life Institute of India, Dehradun, the Bombay Natural History Society, the Bharathiar University, Coimbatore, as well as the other members co-opted by the governing council. The President of the Bombay Natural History Society is also the President of the appellant society and the Chairman of the governing council is a nominee of the above mentioned society. The Director is appointed by the governing council and he is the Chief Executive and the Member Secretary of the appellant society.

.iv. In so far as the financial control is concerned, there shall be a Finance Committee which was include the Financial Advisor of the Ministry of Environment and Forest, Government of India to assist the governing council in financial matters. The budget of the society shall be scrutinised by the Finance Department and approved by the governing council before the same is sent to the Government of India. Rule 13 speaks about the power of the Central Government in financial matters and also in relation to expenditure pertaining to adoption of pay-scale allowances and revisions thereof as well as the creation of posts carrying higher scale. Likewise Rule 18 speaks about the maintaining of the accounts as prescribed by the Central Government in consultation with the Comptroller and Audit General of India. The accounts will have to be forwarded to the Central Government and it is open to audit by the accounts by the Comptroller and Audit General of India. The Comptroller and Audit General of India will exercise the same power against the appellant society as in the case of auditing of other Government accounts. Rule 21 deals with alteration, extension or amendment of the object or purpose of the appellant society subject to the prior approval of the Ministry of Environment and Forest, Government of India.

.v. The appellant society had appointed the respondents on probation for a period of two years by the proceedings dated 19.02.1992 and 110. 1993 respectively. The respondent in W.A.No.2837 of 2002 was appointed a System Analyst and the respondent in W.A.No.2838 of 2002 was appointed a Senior Scientist. It has been stated at the time of appointment by the appellants that the period of probation will be extended at the discretion of the appellants and t