P.R.Gokulakrishnan, C.J.:-

(1) This letters patent appeal is against the oral order passed by the learned single judge of our high court in special civil application no. 2973 of 1986. The appellant filed the aforesaid special civil application for issue of a writ of certiorari or any other appropriate writ order or direction quashing and setting aside the order terminating the services of the appellant with effect from 13 june 1986 the appellant has further prayed for a direction to continue him in service as special officer (security) with continuity of service as if his services are never terminated. There is a further prayer in the special civil application for issue of a writ of mandamus or any other appropriate writ declaring that the action of the respondent - corporation offering to the appellant the amount of rs. 1 700 as basic pay for the post of special officer (security) is violative of articles 14 and 16 of the constitution of india and is null and void and as such the respondent - corporation should be directed to pay the petitioner the basic pay at the rate of rs. 2 675 plus rs. 250/and to pay the difference in salary starting from the date of employment of the appellant till date with interest at the rate of 12%.

(2) The appellant is a retired military officer having 30 years of service. During his military service he had two extensions granted by the army authorities. After the retirement the appellant was recruited as special officer (security) with the respondent - company. By letter dated 4 - 8 - 1984 the respondent - company made an offer for contract of service for a period of two years stating that the appellant will be paid a fixed pay of rs. 1 700 per month. Apart from this fixed pay the respondent offered dearness allowance house rent allowance and reimbursement of local travel expenses to the appellant herein and all these offers are incorporated in the said letter. It is the further case of the appellant that in order to accept this offer he resigned from the army during the extended period of his service on 7 - 9 - 1984 and joined the respondent - corporation on 24 by letter dated 5 - 10 - 1984 the appellant wanted fixation of higher pay and also type `d quarters. In august 1985 a review committee assessed the performance of the appellant. On 10 - 9 - 1985 the appellant once again wrote to the company to refix his salary. On the very same date the decision was taken to terminate the services of the appellant for his unsatisfactory performance as special officer (security). On 3 the managing director gave interview and said that the work of the appellant was unsatisfactory. Nevertheless the managing director gave option to the appellant to retire voluntarily. On 14 - 5 - 1986 the chief manager (personnel and administration) of the company terminated the contract of service of the appellant herein with effect from 13 - 6 - 1986. It is as against this order of termination the appellant has come forward with the special civil application along with the prayers referred above. The learned single judge of our high court after taking into consideration the contentions raised by the learned counsel appearing for the appellant herein negatived all his contentions and dismissed the special civil application at the admission stage itself. Aggrieved by the said order the appellant has come forward with the abovesaid letters patent appeal.

(3) Mr. S. D. Shah the learned counsel appearing for the appellant raised 16 three contentions stating that those contentions were also raised before the learned single judge and that the same was not answered nor dealt with specifically by the learned single judge. The contentions are:

(i) in a government - owned undertaking an instrumentality or agency of government that is `state can there be employment on contract basis (terms and conditions of contract such as salary and duration of contract differing) as against permanent and regular posts ?

(ii) has government right to bargain terms and conditions of employment inclusive of tenure of employment with a needy prospective employee so as to accord different and unilaterally favourable contract to government thereby violating equality of opportunity in the matter of employment guaranteed by articles 14 and 16 of the constitution of india ?

(iii) can there be different/distinct salary or basic pay to different individuals or employees working on the same post and discharging same duties ?

In order to support his contentions nos. (ii) and (iii) mr. S. D. Shah pointing out ex. M which is attached to the special civil application no. 2973 of 1986 contended that the incumbents to the post prior to his appointment were one group captain a. P. Joseph and lt. Col. K. G. R. Menon. Group captain a. P. Joseph had the contractual appointment for a period between 19 - 5 - 1976 and 29 - 2 - 84. His starting pay was rs. 1 800 and ultimately it was raised to rs. 2 0 as far as lt. Col. K. G. R. Menon is concerned he had the contractual appointment between 14 - 5 - 1976 and 31 and had a fixed pay of rs. 1 600 initially. With effect from 1 lt. Col. K. G. R. Menon drew 3 pay of rs. 2 675 comparing the pay drawn by the abovesaid two persons mr. S. D. Shah contended that the appellant has been differentiated and his pay was fixed at rs. 1 700 without any rational basis. The appellant according to mr. S. D. Shah having no bargaining power against the mighty company has to simply accept this unequal pay for the onerous job he undertook to perform. In short it is contended the principle of equal pay for equal job has been violated and thereby the pay fixed to the appellant offends articles 14 and 16 of the constitution. The learned counsel further submitted that there is absolutely no averment in the reply affidavit to the effect that group captain a. P. Joseph and lt. Col. K. G. R. Menon got rise in the pay due to the increments granted to them. On the other hand the learned counsel contended that the reason for the pay rise stated in exhibit m referred above is due to the nature of work they have to perform. Mr. S. D. Shah on the basis of the abovesaid facts submitted that the appellant has to perform the same work as was done by lt. Col. K. G. P. Menon and as such his pay should be equal to that of the pay drawn by lt. Col. K. G. R. Menon. In this connection mr. S. D. Shah cited various decisions which we will refer presently. The first decision cited by mr. S. D. Shah is the one reported in dhirendra chamoli and another v. State of u. P. (1986) 1 scc 637 this is a case in which nehru yuvak kendra engaged casual workers on daily wage basis. Even though these casual workers were doing the same work as is performed by class iv employees appointed on regular basis they were not being given the same salary and allowances as were being paid to class iv employees. Repelling the argument on the side of the central government the supreme court observed: 17 the fact that these employees accepted employment with full knowledge that they will be paid only daily wages and they will not get the same salary and conditions of service as other class iv employees cannot provide an escape to the central government to avoid the mandate of equality enshrined in article 14 of the constitution. This article declares that there shall be equality before saw and equal protection of the law and implicit in it is the further principle that there must be equal pay for work of equal value. These employees who are in the service of the different nehru yuvak kendras in the country and who are admittedly performing the same duties as class iv employees must therefore get the same salary and conditions of service as classs iv employees. It makes no difference whether they are appointed in sanctioned posts or not. So long as they are performing the same duties they must receive the same salary and conditions of service as class iv employees. The next case cited by mr. S. D. Shah is the one reported in surinder singh and another v. Engineer - in - chief c. P. W. D. And others (1986) 1 scc 639. This case equated the daily wage workers to the regular and permanent employees for the purpose of fixing the equal pay for them. The supreme court in this decision also held that government and public sector undertakings who are supposed to function as model employers should pay equal pay for the work of equal value. The next case cited by mr. S. D. Shah is the one reported in randhir singh v. Union of india and others (air 1982 sc 879). In this decision the supreme court has observed that the principle of equal pay for equal work is not expressly declared by our constitution to be a fundamental right but it certainly is a constitutional goal. It further laid down that the principle of equal pay for equal work is deducible from articles 14 16 and 39 (d) and may be properly applied to cases of unequal scales of pay based on no classification or irrational classification though those drawing the different scales of pay do identical work under the same employer. In this decision the supreme court held that the principle of equal pay for equal work is not an abstract doctrine but one of substance. Continuing the supreme court observed that:

It is well known that there can be and there are different grades in a service with varying qualifications for entry into a particular grade the higher grade often being a promotional avenue for officers of the lower grade. The higher qualifications for the higher grade which may be either academic qualifications or experience based on length of service reasonably sustain the classification of the officers into two grades with different scales of pay. The principle of equal pay for equal work would be an abstract doctrine not attracting article 14 if sought to be applied to them.

Citing the abovesaid decisions mr. S. D. Shah strenuously contended that there is discrimination in fixing the pay for the equal work done by this appellant and as such it clearly offends article 14 of the constitution.

(4) Mr. Shelat the learned counsel appearing for the respondent on notice pointed out that the appellant is on contractual appointment for a limited period that the appellant is a new recruit and hence new pay - scale alone is applicable and as such the pay - scale offered and accepted alone is applicable to him and thai the post held by the appellant is all isolated post for which no scale of pay has been prescribed. It is further contended by mr. Shelat 18 that in case of appointment by contract there cannot be any question of discrimination as alleged by the appellant herein. The bye - laws of the corporation according to mr. Shelat enable the respondent to appoint on contractual basis. In this connection he also cited the decision reported in satish chandra anand v. The union of india (air 1953 sc 250). In that case the supreme court had occasion to consider the rights of a personnel who was employed on a contract basis. The short facts of that case are that a civil servant who had been engaged on the basis of a special contract for a certain term was on the expiry of the term re - appointed by a further contract on a temporary basis. In accordance with the government rules which formed part of the contract he was discharged from service after notice. The petitioner filed a petition under article 32 (1) seeking redress for breach of his fundamental rights under articles 14 and 16 it was argued that the rights infringed were those conferred by article 311 in those circumstances the supreme court held:

(i) article 311 had no application because there was neither a dismissal nor a removal from service nor a reduction in rank. As article 311 had no application no question of discrimination arose.

(ii) article 16 (1) was equally inapplicable. The petitioner had not been denied any opportunity of employment or of appointment. He had been treated just like any other person to whom an offer of temporary employment was made. There can be no grievance against an offer of temporary employment on special terms as opposed to permanent employment.

(iii) there was no compulsion on the petitioner to enter into the contract he did. Having accepted the offer he still had open to him all the rights and remedies available to other persons similarly situated to enforce any rights under his contract which had been denied to him assuming there were any and to pursue in the ordinary courts of the land such remedies for a breach. The remedy of a writ was therefore misconceived.

In the light of the abovesaid decisions we can consider the relevant facts of the present case. Without repetition of the facts which we have already extracted in paragraph supra suffice it to say that the appellant after retirement from the military service got extension in the military service itself. While he was on extension he was recruited on a contractual basis with the respondentcompany with effect from 24th september 1984 the appellant is a retired army officer with 32 years of commissioned service. He accepted the appointment as special officer (security) purely on a contractual basis. The company after evaluating the merits of the candidate offered a fixed pay of rs. 1 700 this was agreed to by the appellant herein. From the facts of the case it is also clear that for the particular post personnel are selected on contractual basis and the pay was fixed after evaluating the merits of the personnel recruited. One group captain a. P. Joseph was employed on contractual basis from 19 - 5 - 1976 to 29 - 2 - 84 on a fixed pay of rs. 1 800 another officer by name lt. Col. K. G. R. Menon was appointed from 14 - 5 - 1976 to 31 on a fixed salary of rs. 1 600 thus the fixation of the salary in those cases clearly revealf that the administration after evaluating the merits of the candidates fixed the pay. Though the post is shown as a permanent one the candidate recruited for the particular post which is an isolated post is on contractual basis. It is for the company to fix the salary and offer the 19 same and such type of method is adopted as stated in the affidavit - in - reply taking into consideration the interests of the company. It is also on record that the respondent - company discussed the performance of the appellant in august 1985 and reached the conclusion that the performance of the appellant was far from satisfactory and below the required minimum standard. The company also felt that the appellant lacked initiative and he was totally ineffective. Hence the respondentcompany in the interests of the company decided to terminate the services of the appellant by it decision taken on 10th september 1985 it is also mentioned in the reply affidavit that the appellant had long talk with the management on 3rd october 1985 and after such discussion the appellant on his own volition offered to tender his resignation. The only request according to the management the appellant made was that he may be continued in service uptil his daughter finishes the course in the xiith standard. Subsequent to the discussion on 3rd october 1985 the appellant handed over the letter of resignation on 19th october 1985 and the letter of resignation is dated 17 - 10 - 1985. The letter of resignation reads as follows:

Sir with due respects i wish to apprise you of my intention to resign from the post of special officer (security) in the ipcl after my daughters final examinations (who is studying in twelfth class in ipcl school) are over. I will be informing you the firm date from which the one month notice will come into effect from 17th october 1985 till 11th february 1986 the appellant did not whisper anything with regard to the resignation letter he has handed over and strangely he now puts forth the contention that such a resignation letter was given by him under duress. Such a contention put forth by the appellant has to be stated only to be rejected. It is strange that a special officer (security) after giving the resignation letter as early as 17th october 1985 alleges that such a letter was handed over by him under duress and that such an allegation comes as late as february 11 1986 the allegation in our opinion is not at all believable. From the averment in the reply affidavit it is clear that the decision to terminate the services of the appellant was taken is back as september 1985 and the same was not implemented owing to the fact that the appellant requested the respondent to continue him in service till his daughter finishes her final examinations in the xiith standard. Hence it is not correct to state that simply because the appellant demanded higher pay and other benefits the management thought it fit to terminate his service.

(5) Form the above narrated facts it is clear that the appellant was appointed on a contractual basis as per the bye - laws of the corporation and his performance was evaluated as not satisfactory by the respondent - company. With due deference to the request made by the appellant he was permitted to resign. After having had discussion with the management of the company and after having handed over the resignation letter it is really regrettable to note that such an officer who had wide experience both in the military and also as a security personnel cows forward with an allegation that under duress he executed the resignation letter and that he has been sent out only on the ground that he demanded more pay for the post he occupied.

(6) The supreme court having come to know that in certain spheres the 20 labour is being exploited in spite of the fact that they do the same work as that of the workers who are similarly situated but getting the same wages came heavily upon the management whether it be the government or a public sector undertaking stating that such behaviour is arbitrary and offends article 14 of the constitution of india. The appellant in the present case cannot be equated to the position of those for whom the supreme court has correctly rendered justice invoking the equality clause enshrined in article 14 of the constitution. In the first place the respondent - company was evaluating the merits of the personnel selected for this post and was fixing pay differently as is seen from the facts of this case. Secondly the retired military officer was provided this post temporarily on purely contractual basis. Thirdly his work was evaluated and was found to be unsatisfactory and the appellant himself in order to save his face submitted his resignation letter. Fourthly such a post in an officer cadre is an isolated post and there is no question of invoking the equally clause enshrined in article 14 of the constitution. Fifthly there is no similarly situated person in that company as that of the appellant wherefrom he can spell out that the appellant has been treated differently for the work he was rendering. Sixthly the pay increase for the previous incumbents to this post was given the basis of their merit experience and the years of service they rendered with the respondent - company. No doubt there is no mention in the affidavit - in - reply that the pay increase is by giving increments to the previous incumbents to this office but nevertheless a reading of the annexure to the special civil application indicates that such an increase was made gradually during their period of service. No doubt mr. S. D. Shah contends that such increase is given not by way of increment but due to the present nature of the work which work the appellate also carries out as at present. We are of the view that even for identical nature of the work the fresh recruit cannot be equated to that of a person who has put in more number of years service in that particular job. The previous incumbents slowly reached the grade up till rs. 2 675 salary per month. Hence the argument of mr. S. D. Shah on this count cannot be appreciated. For all these reasons we are of the view that the decision cited by mr. S. D. Shah cannot be applicable to the facts of the present case and hence there is no question of offending article 14 or article 16 as regards the pay - scale fixed for the appellant herein.

(7) The next submission made by mr. S. D. Shah is that there cannot be any employment on contract basis for permanent and regular post if the post is permanent and regular the management of the company cannot be allowed to fill it on contract basis lest it will lead to unhealthy bargain and arbitrariness in fixing the conditions of service. Mr. S. D. Shah further submitted that the respondentcompany is the instrumentality of the state coming under the definition a article 12 and as such the appellant holds the status of that post and cannot be compelled to abide by the contractual obligations. For this proposition number of decisions were cited by mr. S. D. Shah.

(8) In the decision in roshan lal tandon v. Union of india reported in air 1967 sc 1889 the supreme court considering articles 309 310 and 311 in relation to the terms of service in the railway administration held:

It is true that the origin of government service is contractual. There 21 is an offer and acceptance in very case. But once appointed to his post or office the government servant acquires a status and his rights and obligations are no longer determined by consent of both parties but by statute or statutory rules which may be framed and altered unilaterally by the government. In other words the legal position of a government servant is more one of status than of contract the hall - mark of status is the attachment to a legal relationship of rights and duties imposed by the public law and not by mere agreement of the parties. The emolument of the government servant and his terms of service are governed by statute or statutory rules which may be unilaterally altered by the government without the consent of the employee. In the language of jurisprudence status is a condition of membership of a group of which powers and duties are exclusively determined by law and not by agreement been the parties concerned.

In the decision in dinesh chandra sangma v. State of assam and others reported in air 1978 sc 17 the supreme court has observed:

Article 310 (2) of the constitution is a special provision which deals with a special situation where a contract is entered between the government and a person appointed under the constitution to held a civil post. But simpply because there may be in a given case a contractual employment as envisaged under article 310 (2) of the constitution the relationship of all other government servants as a class and the government cannot be said to be contructual. It is well - settled that except in the case of a person who has been appointed under a written contract employment under the government is a matter of status and not of contract even though it may be said to have started initially by a contract in the sense that the offer of appointment is accepted by the employee. In the decision in w. B. S. E. Board v. Desh bandhu ghosh reported in air 1985 sc 722 the supreme court had occasion to consider regulations 33 and 34 of the west bengal state electricity boards regulations. Regulation 34 envisaged that a permanent employees service may be terminated by serving three months notice or on payment of salary for the corresponding period in lieu thereof. This provision was struck down both by the high court and the supreme court holding that such a regulation on the face of it is totally arbitrary and confers on the board a power which is capable of vicious discrimination in the decision in moti ram v. N. E. Frontier railway reported in air 1964 5c 600 the supreme court had occasion to consider a case of removal from service which was under the railway board. In that decision the supreme court observed that:

Termination of the services of a permanent servant otherwise than on the ground of superannuation or compulsory retirement must per se amount to his removal within the meaning of article 311 of the constitution.

The supreme court interpreting rules 148 (3) and 149 (3) further observed that:

The termination of the permanent servants tenure which is thus authorised by the said rules is no more and no less than their removal from service within article 311 and so article 311 (2) must come into play in respect of such cases. That being so the rules which do not require compliance with the procedure prescribed by article 311 (2) must be struck down as invalid. 22 in yet another decision in c. I. W. T. Corpn v. B. N. Gangly reported in 1986 (1) scale 799 the supreme court had occasion to consider as to whether a government company as defined in section 617 of the companies act 1956 is the state and as to whether an unconscionable term in a contract of employment is void under section 23 of the indian contract act 1872 as being opposed to public policy and when such a term is contained in a contract of employment entered into with a government company is also void as infringing article 14 of the constitution in case of a government company is the state under article 12 of the constitution. In that case the supreme court held that the comthe company will come under definition of article 12 since it is an instrumentality or agency of the state and observed:

The principle is that the courts will not enforce and will when called upon to do so strike down an unfair and unreasonable contract or an unfair and unreasonable clause in a contract entered into between parties who are not equal in bargaining power. It is difficult to give an exhaustive list of all bargains of this type. No court can visualize the different situations which can arise in the affairs of men.

To counter this argument of mr. S. D. Shah mr. S. N. Shelat the learned counsel appearing for the respondent - company submits that article 311 310 or 309 will not apply to the facts of this case since the appellant is not a civil servant coming under the purview of those articles. The respondent according to mr. Shelat is governed by its bye - laws and its bye - laws clearly arm the corporation with power to appoint officers on contractual basis. Citing the very same decision referred by mr. S. D. Shah i. E. Roshan lal v. Union of india (air 1967 sc 1889) mr. Shelat contended that no doubt legal position of a government servant is more one of status than of contract and such a legal relationship of rights and duties are imposed by public law and not by mere agreement of parties but in this case the respondent is only an instrumentality of the state coming under the purview of article 12 and that itself will not attract articles 309 310 and 311 for the services rendered under the respondent. In our view all the abovesaid decisions cited by mr. S. D. Shah directly pertain to a civil servant under the government. For such services there is constitutional protection and as such the contractual obligation is superseded by the protection given under the constitution. That is why the supreme court held that to hold a post under the government is more one of status than of contract even though it may be said to have been started initially by a contract in the sense that the offer of appointment is accepted by the employee. As far as the present case is concerned the respondent cannot be considered as the state proper except coming under that definition for the purpose of article 12 and hence the articles 309 310 and 311 are not attracted for the services under this company. Even in government employment there may be cases where appointment is made on a written contract wherein such services will be governed by contractual obligations between the parties. In the present case the respondent - company as discussed in paragraph supra clearly appointed the appellant on contractual basis and his services were terminated as per the conditions of service. Further the appellant himself has submitted his resignation accepting to quit the office. In those circumstances we do not think that there is any relevance in quoting the abovesaid decisions to sup 23 port the contentions of the appellant. As far as the present post with the respondent is concerned the recruitment is made only on the contractual basis all along and even though the post may be permanent but the personnel who handle the post are being appointed only on contractual basis. This may be due to various factors such as to find out an efficient personnel from various services to serve as special officer (security). From the facts of the case we also find that retired military personnel are being recruited for such post. If that be the case the wisdom of the administration when especially they have the power to appoint such personnel on contractual basis cannot be questioned unless it is arbitrary and shocks the moral conscience of the court.

(9) As far as the present case is concerned we do not find anything wrong in the respondent - company appointing a personnel on a contractual basis against a regular post. On the facts and circumstances of the present case there is absolutely no ground made out that the bargain between the management and the appellant is unconscionable and has resulted in unfair and undue advantage to the management concerned. Though the respondent - company is the instrumentality of the state it cannot be equated with the state for the purpose of applying articles 309, 310 and 311 of the constitution. Hence the post held under the respondent on the facts and circumstances of the present case is not a matter of status as that of a government servant but it is a contract of service validly entered into between the appellant and the respondent herein. For all these reasons we are of the view that the respondent though it government owned undertaking coming under the definition of `state as per article 12 of the constitution can employ against a permanent post a personnel on a contract basis.

(10) In these circumstances we do not find any merits in this letters patent appeal and accordingly the same is dismissed.

(11) The present arrangement now existing will continue for a period of six weeks in order to enable the appellant to get necessary orders from the supreme court but on condition that in case he is not able to get any order favourable to him the amount paid as salary for the above period of six weeks will be returned to the management. 23 july 1986 lpa dismissed