Power of Corporation to terminate Service on notice.

The Petitioner was formerly an Inspector employed in the Life Insurance Corporation of India. His services having been terminated by the Divisional Manager of this Corporation, he has filed this Writ Petition for the issue of a Writ of Certiorari to quash this order of termination.

Before the Life Insurance Corporation was set up by Act of Parliament, the Petitioner was a Branch Manager in an Insurance concern, known as the General Assurance Society. He was in charge of the Coimbatore branch of this Society and was drawing a salary of Rs. 575 a month. With the coming into force of the Life Insurance Corporation by Act(XXXI of 1956) the business of the General Assurance Society was taken over by Government and vested in the Corporation and the Petitioner became an employee of the Corporation. By an order dated 16th August, 1956, the Petitioner was appointed as the Inspector at the Coimbatore Branch Office of the Corporation. By a notice served on him on 13th July, 1957 by the Respondent, the Divisional Manager of the Corporation at Coimbatore, the appointment of the Petitioner was terminated he being given a month’s notice. It is the validity of this order of termination that is challenged in this Petition.

This order of termination is impugned on the ground that the same was passed in violation of the conditions of the Petitioner’s appointment. As regards this, two points were urged by Mr. Mohan Kumaramangalam, learned counsel for the Petitioner. The first was that the termination of the Petitioner’s appointment was in substance under Regulation 41 of the Staff Regulations of the Corporation under which the termination had to be preceded by the framing of a charge, the holding of an enquiry and a finding of the guilt. It is common ground that no charges were framed against the Petitioner and no enquiry was held before the Petitioner’s appointment was terminated. In doing so, the Corporation proceeded on the basis that the termination was one under Regulation 20 of the Staff Regulation under -which the services of an employee could be terminated on a month’s notice.

The first question raised therefore, is whether the termination of the Petitioner’s appointment was really under Regulation 41 or under Regulation 20. Before however, these regulations are referred to, it is necessary to advert to the provisions of the Life Insurance Corporation Act bearing upon the employment of persons previously employed in insurance companies whose businesses were taken over. Under section 11 (1) of the Life Insurance Corporation Act (Act XXXI of 1956),

“Every whole time employee of an insurer whose controlled business has been transferred and vested in the Corporation and who was employed by the insurer wholly or mainly in connection with his controlled business immediately before the appointed day shall, on and from the appointment day become the employee of the Corporation, and shall hold his office therein by the same tenure at the same remuneration and upon the same terms and conditions and with the same rights and privileges as to pension and gratuity and other matters as he would have held the same on the appointed day if this Act had not been passed, and shall continue to do so unless and until his employment in the Corporation is terminated or until his remuneration, terms and conditions are duly altered by the Corporation”.

Sub-section (2) of this section gives power to the Central Government for varying contracts of service in order to rationalise the pay scales. Section 49 of the Act vested in the Corporation power, with the previous approval of the Central Government, to make regulations not inconsistent with the Act to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions of the Act. In particular the Corporation was enabled to make regulations providing for the method of recruitment of employees and agents of the Corporation and the terms and conditions of such employees or a