# CEN'lKAL INLAND WATER. 'IIANSPORT peals that the A B c D . E F G H A c D G H [1986] 2 s.c.k. said writ petitions should stand transferred to and heard by ~ it along with the said appeals. The said appeals and writ petitions were, thereupon, heard together and by a common judgment delivered on August 9, 1985, the Division Bench held that the Corporation was a "state" within the meaning of Article 12 of the Constitution and that the said Rule 9(i) was ultra vires Article 14 of the Constitution. Consequently the Division Bench struck down the said Rule 9(i) as being void. y It also quashed the impugned orders of termination dated February 26, 1983. Hence the appeals by special leave by the Court. Arguments for the Appellants :- -t- ... 1. A government company stands on a wholly different ~ .. footing from a statutory corporation for while a statutory corporation is established by a statute, a Government company is incorporated like any other company by obtaining a certificate of incorporation under the Companies Act and, therefore, a Government company cannot come within the scope of the term "The State" as defined in Article 12 of the Constitution. 2. A statutory corporation is usually established in order to create a monopoly in the State in respect of a particular activity. A Government company is, however, not established for this purpose; 3. The Corporation does not ~ve the monopoly of inland -1'- - water transport but is only a trading company as is shown by the objects clause in its Memorandum of Association; and 4. Assuming a Government company is "the State" within the meaning of Article 12, a contract of employment entered into by it is like any other contract entered into between two parties and a term in that contract cannot be struck down under Article 14 of the Constitution on the ground that it is arbitrary or unreasonable or unconscionable or one-sided or unfair. Arguments on behalf of the Respondents :- C.I.W.T.CORPN. v. B.N. GaNGULY 283 : -j._ 1. The definition of the expression nthe State11 given in Article 12 is wide enough to include within its scope and reach a Government company. 2. A State is entitled to carry on any activity, even a trading activity, through any of its instrumentalities or agencies, whether such instrumentality or agency be one of the 4 departments of the Government, a statutory corporation, a i statutory authority or a Government company incorporated under the Companies Act. 3. Merely because a Government company carries on a trading activity or is authorised to carry on a trading -) activity does not mean that it is excluded from the definition i..,. ~ of the expression "the State" contained in Article 12. .. - .i -=== ) 4. A Government company being 11the Sta~e" within the meaning of Article 12 is bound to act fairly and reasonably and if it does not do so its action can be struck down under Article 14 as being arbitrary. 5. A contract of employment stands on a different footing from other contracts. A term in a contract of employment entered into by a private employer which is unfair, unreasonable and unconscionable is bad in law. Such a term in a contract of employment entered into by the State is, therefore, also bad in law and can be struck dow under Article 14. Dismissing the appeals, the Court, HELD : 1.1 The word "State" has different meanings depending uf>on the context in which it is used. The expression "The State" when used in Parts Ill & IV of thE~ Constitution is not confined to only the federating States or the Union of India or even to both. By the express terms of Article 12, the expression "the State" includes : (i) the Government of India; (ii) Parliament of India; (iii) the Government of each of the States which constitute the Union of India; (iv) the Legislature of each of the States which constitute the Union of India; (v) all local authorities within the territory of India; (vi) all local authorities under the control of the Government of India; (vii) all other authorities within the A B c D E F G H, A c D F " 2t;4 SUPWil::. CUUl\T KEPORTS 11986 J 2 S. C. R. territory of India; and (viii) all other authorities under the ~ control of the Government of India. [306 D; 309 A-B] 1. 2 Where an interpretation clause defines a word to mean a particular thing, the definition is explanatory and prima facie restrictive and whenever an interpretation clause defines a term to include something the definition is extensive. While an explanatory and restrictive definition confines the meaning of the word defined to what is stated in the interpretation clause, so that wherever the word defined is used in the particular statute in which that interpretation clause occurs, it will bear only that meaning unless where, as is usually provided, the subject or context otherwise requires an extensive definition expands or extends the meaning of the word defined to include within it what would otherwise not have been comprehended in it when the word defined is used in its ordinary s.ense. Article 12 uses the word "include~", it thus extends the meaning of the expression "the State" so as to include within it also what otherwise may not have been comprehended by that expression when used in its ordinary· legal sense. [310 F-H; 311 A-B] 1. 3 The definition of the expression "the State" in t--- Article 12, is however, for the purposes of Parts III and IV of the Constitution, whose contents cleary show that the expression "the State" in Article 12 as also in Article 36 is not confined to its ordinary and constitutional sense as extended by the inclusive portion of Article 12 but is used in the concept of the State in relation to the Fundamental Rights --r- -· guaranteed by Part III of the Constitution and the Directive Principles of State Policy contained in ~art IV 3 o 7 f the .J Constitution which principles are declared by Article to be fundamental to the governance of the country and enjoins upon the State to apply making laws. [311 C-E] 1. 4 Article 298 of the Constitution expands the G executive power of the Union of India and of each of the States which collectively constitute the Union to carry on any trade or business. By extending the executive power of the ')..- Union and of each of the States to the carrying on of any \----.. _ trade or business Article 298 does not, however, convert -........_ either the Union of India or any of the States which H collectively form the Union into a Merchant buying and selling .., .• C.I.W.T.CU~PN. v. B.N. GA~GULY 285 I -~ goods or carrying on either trading or business activity, for the executive power of the Union and of the States whether in the field of trade or business or in any other field, is always subject to constitutional limitations and particularly the provisions relating to Fundamental Rights in Part Ill of the Constitution and is exercisable in accordance with and for the furtherance of the Directive Principles of State Policy 'i prescribed by Part IV of the Constitution. [322 E-{;] The State is an abstract entity and it can, therefore only act through its agencies or instrumentalities, whether such agency or instrumentality be hwoan or juristic.· The trading and business activities of the State constitute -t "public enterprise". The structural forms in which the ~ ~ Government operates in the field of public enterprise are many and varied. These may consist of Government departments, statutory bodies, statutory corporations, Government companies etc. The immunities and privileges possessed by bodies so set up by the Government in India cannot, however, be the same as those possessed by similar bodies established in the private sector because the setting up of such bodies is referable to ... . the executive power of the Government under Article 298 to -~ carry on any trade or business. (322 H; 323 A-B; 324 C-Dl Snkhdev Singh & Ors. v. Bbagatraa Sardar Singh iagbuvaosbi & Anr., [1975] 3 s.c.R. 619 referred to • 1.5 The whole process of judicial interpretation lies in -')-· extending or applying by analogy the ratio decidendi of an earlier case to a subsequent case which differs it in certain essentials, so as to make the principle laid down in the -t earlier case fit in with the new set of ci.rcumstances. The sequitur of the above assumption would be' that the Court should tell the suitor that there is no precedent governing his case and, therefore, it cannot give him any relief. This would be to do gross injustice. Had this not been done, the law would have never advanced. (348 D-Fl ~ 1.6 Authorities constituted under and corporations established by statutes have been held to be instrumentalities and agencies of the Government in a long catena of decisions of the Supreme Court. The observations in several of these decisions are general in nature and take in their sweep all A B c D E F G H A B c 2B6 SUPI:<.f..\1£ COUI:<.T KEPOt{TS [ 1986 ] 2 S. C. R. ' instrumentalities and agEncies of the State; whatever be the .4.- fonn which such instrumentality or agency may have assumed. If there is an instrumentality or agency of the State which has assumed the garb of a Government company as defined in section 617 of the Companies Act, it does not follow that it thereby ceases to be an instrumentality or agency of the State. For the purposes of Article 12 one must necessarily see through the corporate veil to ascertain whether behind that veil is y the face of an instrumentality or agency of the State. The corporation squarely falls within these observations and it also s2.tisfies the various tests which have been laid down. Merely because it has so far not the monopoly of inland water transportation is not sufficient to divest it of its character , of an instrumentality or agency of the State. It is nothing 1-- but the Government operating behind a corporate veil, carrying , out a governmental activity and governmental functions of vital public importance. There can thus be no doubt that the corporation is "the State" within the meaning of Article 12 of the Constitution. [349 A-F] 1.7 The Central Inland Water Transport Corporation is not only a Government company as defined in section 617 of the Companies Act 1956, but is wholly owned by the three r-- Governments - Central Government and the Governments of West E Bengal and Assam_ jointly. It is financed entirely by these tlrree' Gq'~rnments and is completely under the control of the Central Government, and is managed by the Chairman and Board of Directors appointed by the Central Government and removable by it. In every respect it is thus a veil behind which the -1 .. Central Government operates through the instrumentality of a F Government company. The activities carried on by the Corpora- .~ tion are of vital national importance. There can thus be no doubt that the corporation is a Government undertaking in the public sector. The corporation itself has aonsidered that it is a Government of India Undertaking. The complete heading of the impugned Rule is "The Central Inland Water' Transport G Corporation Ltd. (A Government of India Undertaking) Service, Discipline and Appeal Rules, 1979." In the face of so much evidence it is ridiculous to describe the corporation as ,~ a trading company. The activities of the corporation are of great ic.portance to public interest, concern and welfare and are activities of the nature carried on by a modern State and H particularly a modern welfare State. [343 E-G; 346 E-G] C.I.W.T.CORPN. V• B.l'l. GANGULY 287 ~ Sukhdev Singh & Ors. V• Bbagat Raa Sardar Singh Kaghuvanchi & Aor.~ [1975] 3 S.C.R, 619; Ramana Da.yaraa Sbetty v. 1he International Airport Authority of India & Anr., [ 1979 J 3 S.C.R. 1014; Managing Director, Uttar Pradesh Ware Housing Corporation & Anr. v. Vinay Narain Vajpayee, [ 1980 l 2 s. c. R. 773; Ajay Rasia etc. V• Kbalid ~jib Sehravardi & Ors. etc., [1981] 2 S.C. R. 79; Prakash Rekhi v. Union of India & Anr., [1981] 2 s.c.R. 111; B.s. Minbas v. Indian Statistical 1 Institute & Ors., (1983] 4 s.c.c. 582; Mao.ohan Singh Jaitla v. ec.mssiooer, Union Territory of CbancUgarh & Ors., [1984] Supp. s.c.c. 540; Worben of Hindustan Steel Ltd. & Aor. V• Hindus tao· Steel Lt:d. & Ors., [1984] Supp. s.c.c. 554, 560; P.L Ramadwodra lyer & Ors. v. Union of India & Ors. • [1984] ~ 2 S.C.R. 141; A.L. Kalra V• Project and EquiJlEil~ Corporation of Iuclia Ltd.. [1984] 3 s.c.R. 316 and West Bengal State Electricity Board & Ors. v. Desh Bandhu Qlosh & Ors., [ 1985] 3 s.c.c. 116 followed. Praga Tools <4rPoration V• C.A. I.mual & Ors., ·[1969] 3 s.c.R. 773; State of Bihar v. Union of India & Anr •• [1970] 2 s.c.R. 522; S.L. Agarwal v. General Manager, Hindustan Steels Ltd., (1970] 3 s.c.R. 363; Sabbajit Tewary V• Union of India & "'f Ors.,. (1975] 3 S.C.R. 616; and S.C. Ihanoa v. ~cipal Corporation Delhi & Ors., (19811 3 s.c.c. 431 distinguished. Rai Sahib Raa Jewaya ICapur & Ors. V• State of Punjab, (1955] 2 S.C.R. 225; Rajasthan State Electricity Board, Jaipur v. Mohan La1 & Ors., [1967] 3 s.c.R. 377; Glrugobinda Basu v. ),S-»kari Prasad. Qlosa1 & Ors., (1964] 4 s.c.R. 311, 315; ltylands V• Fletcher, [1868] L.R. 3 H.L. 330 and ~noghue V• .. \ B c D E ~Stevenson, [1932} A.C. 562 referred to. F 2.1 The word nunconscionable" is defined when used with reference to actions as 11showing no regard for conscience; irreconcilable with what is right or reasonable". An unconscionable bargain would, therefore, be one which is irreconcilable with what is right or reasonable. If a contract or term thereof is unconscionable at the time the contract is .....(made, the Court may refuse to enforce the contract. An wtconscionable bargain could be brought about by economic duress even between parties who may not in economic terms be situate differently. [355 A; 360 A-B] G A B c D E F G H 288 SUPREME COURT REPORTS [1986] 2 S.C. R .. Pickering V• llfraco.be, [1868] L.R. 3 C.P. 235; . Occidental Worldwide Inveat.ent Corpn. v. Skibs A/S Avant!, [1976] 1 Llyod 's Rep. 293; North Ocean Shipping Co. lht. v. llyaddai Coostruction Co. Ltd., [1979] Q.B. 705; Pao On v. Lau D.a IDag, [1980) A.C. 614; and Universe Tanksbipa of Hanrori.a v. International haDSport Workers Federation, [ 1981] 1 C. R. 129 reversed in [1981} 2 w.L.R. 803 referred to. 2.2 According to the doctrine of distributive Justice, distributive fairness and justice in the possession of wealth and property can be achieved not only by taxation but also by regulatory control of private and contractual transactions even though this might involve some sacrifice of individual liberty. [360 C-D) When our Constitution states that it is being enacted to ..J give to all the citizens of India "Justice, Social, economic. and political", when clause (I) of Article 38 of thL. Constitution directs the State to strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which social, economic and political justice shall inform all the institutions of the national life, when clause (2) of Article 38 directs the State ) in particular, to mnimise the inequali_ties in income, not only amongst individuals but also amongst group of people residing in different areas or engaged in different vocations and when Article 39 directs the State that it shall, in particular, direct its policy towards securing that the citizens men and women equally, have the right to an adequate means o~ livelihood and that the operation of the economic system doe~· not result in the concentration of wealth and reasons of production to the coumon detriment and that there should equal J· pay for equal work for both men and women, it is the doctrine of distributive justice which is speaking through the words of the Constitution. (361 C-F l Lingappa Pocbanga Appel1iBI' v. State of .Habarashtra & Aar., [1985} 1 s.c.c. 479 referred to. >- 2. 3 Another theory 'Which has made its emergence in recent years in the sphere of the law of contracts in the test of reasonableness or fairness of a clause in a contract where there is inequality of bargaining power. In such cases it is C.I.W.T.CORPN. V• B.N. GANGULY 289 ~recognised that the freedom of contract is absent. In such cases, judicial review is permitted and consequential relief allowed. [361 F-G 1 Gillespie Brothers & Co. ~. V• Boy Bowles Transport Ltd •• [1973] 1 Q.B. 400; Lloyds Bank Ltd. v. Buody, [1974] 3 All. E.R. 757; A. Schroeder bic Publishing (h. lbl. v. ~Mcaulay (Fomerely Iastone), [19741 1 W.L.R. 1308; and f Jataon & Aor. v. Patent Steall Carpet eo. Ltd., [1978] 1 Q.B. 69 referred to. 2. 4 Article 14 of the Constitution guarantees to all persons equality before the law and the equal protection of ~· the laws. This 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. The above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creating of the parties or not. It ( will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It ·will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or r standard form or to accept a set of rules as part of the contract, however, unfair unreasonable or unconsionable a clause in that contract or form or rules may be. nus { principle will not apply when the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial transaction. In today's complex world of giant corporations with their vast infrastructural organisations and with the State through its instrumentalities and agencies entering into almost every branch of industry and ~ coumerce, there can be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. The Court must judge each case on its own facts and circumstances when called upon to do so by a party under section 31(1) of the Specific ~lief Act, 1963. [370 A-Gl A B c D E F G A B c E· F G H 290 SUPREME COURT REPORTS [ 1986 J 2 S.C. R. 2.5 In the vast majority of cases, however, such, contracts with unconscionable term are entered into by the weaker party under pressure of circumstances, generally economic, which results in inequality of bargaining power. Such contracts will not fall within the four corners of the definition of "undue influence11 as defined by section 16(1) of the Indian Contract Act. The majority of such contracts are in a standard or prescribed form or consist of a set of rules. , They are not contracts between individuals containing terms meant for those individuals alone. Contracts in prescribed or standard forms or which embody a set of rules as part of the contract are entered into by the party with superior bargaining power with a large number of persons who have far less bargaining power or no bargaining power at all. Such contracts which affect a large number of persons or a group or_ groups of persons, if they are unconscionable, unfair and unreasonable are injurious to the public interest. To sar such a contract is only voidable would be to compel each person with whom the party with superior bargaining power had contracted to go to Court to have the contract adjudged voidable. This would only result in multiplicity of litigation which no Court should encourage and also would not be in public interest. Such a contract or such a clause in a contract ought, therefore, to be adjudged void under section 23 o~ the Indian Contract Act, as opposed to public policy. (371 C-Hl 2.6 The Indian Contract Act does not 4efine the expression 11public policyn or "opposed to public policy". From~ the very nature of things, such expressions are incapable of ?recise definition. Public policy, however, is not the policy of a particular government. It connotes some matter which ~ concerns the public good and the public interest. The concept of what is for the public good or in the public interest or what would be injurious or harmful to the public good or the public interest has varied from time to time. As new concepts take the place of old, transactions which were once considered against public policy are now being upheld by the courts and similarly where. there has been a well-recognized head of public policy, the courts have not shirked from extending it· to new transactions and changed circumstances and have at times not even flinched from inventing a new head of public policy. The principles governing public policy must be and are C.I.W.T.CORPN. v. B.N. GANGULY 291 " capable on proper occasion, of expansion or modification. Practices which were considered perfectly normal at one time have today become abnoxious and oppress! ve to public conscience. If there is no head of public policy which covers a case, then the court must in consonance with public conscience and in keeping with public good and public interest declares such practice to be opposed to public policy. Above all, in deciding any case which may not be covered by r authority Indian Courts have before them the beacon light of the Preamble to the Constitution. Lacking precedent, the Court can always be guided by that light and the principles underlying the Fundamental Rights and the Directive Principles enshrined in our Constitution. [372 A-D; 373 C-E] ~ ~ The normal rule of Common Law has been that a party who seeks to enforce an agreement which is opposed to public policy will be non-suited. The types of contracts to which the principle formulated in this case applies are not contracts which are tainted with illegality but are contracts which contain terms which are so unfair and unreasonabl~ that they shock the conscience of the Court. They are opposed to public policy and required to be adjudged void. [373 F; 374 D-E] ( A. Schroeder lblic Publishiug Co. Ltd. v.- Macaulay (Fomerely lnstone), (1974] 1 W.L.R. 1308; Janson V• lkiefontein Consolidated KiDes Limited, [19021 A.C. 484, 500; Richardson v. Mellish, [18241 2 Bing. 229, 252; S•C• 130 E.R. 294, 303 and [1824-34] All E.R. Reprint 258, 266; Eoderby IOwn )'--Football Club Ltd. V• Football Association U.d., [1971] Ch. 591~ 606; and ledar liath Metani & Ors. v. Prahlad .Rai & Ors., ~· [1960] 1 S.C.R. 861 referred to. 3.1 Rule 9(i) of the Central Inland Water Transport Corporation Ltd. (A Government of India Undertaking) - Service, Discipline and Appeal Rules, 1979 confers upon the corporation the power to terminate the service of a permanent employee by giving him three months' notice in writing or in lieu thereof to pay him the equivalent of three months' basic ..( pay and dearness allowance. A clause such as Rule 9(1) in a contract of employment affecting large sections of the public is harmful and injurious to the public interest for it tends to create a sense of insecurity in the minds of those to whom it applies and consequently it is against the public good. A B c D E F G H '• . ' A B c F H ,. ' 292 .. SUPREME . COURT REPORTS [19861 2 s.c.R. i \ Such a clause, which apply be described as "the Henry VIII .~ clause", therefore, '. is ·. opposed to public policy · and being ' opposed to public policy it is void under section 23 ·of the Indian Contract Act. It. confers absolute and arbitrary POtier upon the corporation. It does not even state who on behalf of the Corporation is to exercise ·that power. There ate no guidelines whatever laid down ·to indicate in what circumstances the power given by rule 9(1) is to be exercised by the Corporation. No opportunity whatever of an hearing is at all to be afforded to the permanent employee whose services is being terminated in the exercise of this power. Even where the corporation could proceed under Rule 36 and dismiss an employee on the ground of misconduct after holding a regular disciplinary inquiry, it is free to resort instead to Rule 9(i) in order to avoid the hassle of an inquiry. [375 H; · 376 A-B; G-H; 377 E-F1 West Bengal State Electricity Board & Ors. v. De.sh Bandbu Gbosh & Ors., (1985] 3 s.c.c. 116; Union of India etc. v. 'lhl.sirBlll Patel etc., [19851 3 s.c.c. 398 and Swadeshi COtton Hilla V• Union of India, {1981} 2 S.C.R. 533, 591. 3.2 The power conferred by Rule 9(1) is not only arbitrary but is also discriminatory, for it enables the corporation to discriminate between employee and employee. It can pick up one employee and apply to him clause (i) of Rule 9. It can pick up another employee and apply to him clause (ii) of Rule 9. lt can pick up yet another employee and apply to him sub-clause (iv) of clause (b) of Rule 36 read with Rule 38 and to yet another employee it can apply Rule 37. All this the corporation can do when the same circumstances exist as would justify the corporation in holding under Rule 38 a regular disciplinary inquiry into the alleged misconduct of the employee. In the instant case, both the contesting IW:!spondents had» in fact been asked to submit their explanation to the charges made against them. Sen Gupta had been informed that a disciplinary inquiry was proposed to be h.eld in · his case. The charges made against both the Respondents were such that a disciplinary inquiry could easily have been held. It was, however, not held but instead resort was had to rule 9(1). [378 C-E} · Employees cannot be equated with goods which can be bought and sold. It is equally not possible to equate a contract of employment with a mercantile transaction between ~:------------------------~~----------------~ C.I.W.T.CORPN. v. B.N. GANGULY 293 two businessmen and much less to do so when · the contract of employment is between a powerful employer and a weak employee. (379 E-F] . . : . . . 3.2 It is true that there .is mutuality in clause.9(i)- the same mutuality as in a contract between the lion and the ; lamb that both will be free to roam about in the jungle and r"l;'? each other will be at liberty to devour the other. When one } considers . the ·unequal · position of the corporation and its l employees, the argument of mutuality becomes laughable. \ . [380 A-B] ; t..:' . 1 ~ I ' · ' l' (~ f i ! . 3.3 Rule 9(i) is both arbitrary and unreasonable and it also wholly ingonre and sets aside the audi alteram partem rule, it, therefore, violates Article 14 of the Constitution to the· extent that it confers upon the corporation the right to terminate the employment of a permanent employee by giving him three months • notice in writing or by paying him the equivalent of three months' basic pay and dearness allowance in lieu of such notice. (381 D; 387 B-e] · ~ ... As the corporation is "t~ State" within the meaning of I · Article 12, it was amenable to the writ jurisdiction of the · ~ High Court under Article 226. It is now well-established that an instrumentality or agency of the State being ••the Stateu ' under Article 12 of the Constitution is subject to the Constitutional limitations, and its actions are State actions and must be judged in the light of the Fundamental Rights guaranteed by Part III of the Constitution. The actions of an A B c D E 1 s instrumentality or agency of the State must, therefore, .be in .'~.( conformity with Article 14 of the Constitution. [380 D-F] F Sukbdev siogb & Ors. V• Bbagatram Sardar Singh Bagbuvanahi & Anr •• {1975] 3 s.c.R. 619; Ra-ana ~Byaraa Shetty . v. The Ioternatioo.al Airport Authority of ludia & Ora. • [1979] 3 s.c.R. 1014; Ajay Haaia etc. V• .Khal.id ~jib Sehravardi & ars. etc •• [1981] 2 s.c.R. 79; and Union of India v. TUlsiram G Patel etc •• [1985] 3 s.c.c. 398 referred to. Radbakrislma Agarwal & Ora. v. State of Bihar & Ors., (1977] 3 s.c.R. 249 distinguished. OBSERVATION ' ! ' . I . J .. . l I ) ) l \; I; !! Jl ;, ...... .....~ . A. B c D F G H 294 SUPI®1E COURT REPORTS [ 1986] 2 S.C. R. the purposes of both Part III and Part IV of the Constitution, - State actions, including actions of the instrumentalities and agencies of the State, must not only be in conformity with the Fundamental Rights guaranteed by Part III but must also be in accordance with the Directive Principles of State Policy prescribed by Part IV. Clause (a) of Article 39 provides that the State shall, in particular, direct its policy towards "securing that the citizens, men and women, eually have the , right to adequate means of livelihood." Article 41 requires the State, within the limits of its economic capacity and development, to "make effective provision for securing the right to work. 11 An adequate means of livelihood cannot be secured to the citizens by taking away without any reason the means of livelihood. The mode of making "effective provision for securing the right to work" cannot be by giving employment-.4 to a person and then without any reason throwing him out of employment. The action of an instrumentality or agency of the State, if it frames a service rule such as clause (a) of Rule 9 or a rule analogous thereto would, therefore, not only be violative of Article 14 but would also be contrary to the Directive Principles of State Policy contained in clause (a) of Article 39 and in Article 41. [385 F~; 386 A-B] (2) Rule S' also confers upon a permanent employee the right to resign from the service of the Corporation. By entering into a contract of employment a person does not sign a bond of slavery and a permanent employee cannot be deprived of his right to resign. A resignation by an employee, would, however, normally require to be accepted by the employer in..., order to be effective. It can be that in certain circumstances an employer would be justified in refusing to accept the f employee • s resignation as, for instance, when an employee wants to leave in the middle of a work which is urgent or important and for the completion of which his presence and participation are necessary. An employer can also refuse to accept the resignation when there is a disciplinary inquiry pending against the employee. In such a case, to permit an employee to resign would be to allow him to go away from the_ service and escape the consequences of an adverse finding>- against him in such an inquity. There can also be other grounds on which. an employer would be justified in not accepting the resignation of an employee. The Corporation ought to make suitable provisions in that behalf in the said Rules • [ 386 D-<; l C.I.~.T.CORPN. v. B.N.