Termination clause with objective safeguards upheld, but its invocation failed against the respondent under the governing regime.

Regulation 13 of the Indian Airlines (Flying Crew) Service Regulations was examined against principles of natural justice and arbitrariness. The Supreme Court held that a termination clause is not invalid merely because it permits discharge without notice or inquiry, where it is confined to objectively defined contingencies such as incompetence, unsuitability, security risk, and justified loss of confidence, and is exercised by the highest managerial authority; the provision was therefore intra vires. The Court further held that the regulation did not apply to the respondent under the later statutory regime, so reinstatement was unavailable, and monetary compensation was upheld in lieu of employment loss.

---

---

Issues: (i) Whether Regulation 13 of the Indian Airlines (Flying Crew) Service Regulations was unconstitutional as conferring arbitrary and unguided power to terminate services without notice or inquiry. (ii) Whether Regulation 13 applied to the respondent and, if not, what relief should follow.

Issue (i): Whether Regulation 13 of the Indian Airlines (Flying Crew) Service Regulations was unconstitutional as conferring arbitrary and unguided power to terminate services without notice or inquiry.

Analysis: Regulation 13 was examined in the light of the settled law on termination clauses, natural justice, and loss of confidence. The provision was held to contain objective safeguards, as it was confined to specified contingencies such as incompetence, unsuitability, security risk, and justifiable loss of confidence, and the power was vested in the highest managerial authority. The Court applied the principles developed in earlier service law decisions and held that such a clause, by itself, was not to be struck down as arbitrary or violative of natural justice.

Conclusion: Regulation 13 was held to be intra vires and not unconstitutional.

Issue (ii): Whether Regulation 13 applied to the respondent and, if not, what relief should follow.

Analysis: The Court held that the regulations framed under the earlier statutory regime did not survive in their application to the respondent after the repeal and transfer legislation, and therefore Regulation 13 could not be invoked against her. At the same time, the Court considered the respondent's long service and the surrounding facts and upheld monetary compensation instead of reinstatement, treating that relief as sufficient to meet the ends of justice.

Conclusion: Regulation 13 was held not applicable to the respondent, and the monetary relief was upheld with enhanced compensation.

Final Conclusion: The appeals succeeded only in part: the impugned regulation was sustained in law, but the respondent was denied reinstatement and was granted compensation in lieu of employment loss.

Ratio Decidendi: A termination clause conferring power on the highest authority is not invalid merely because it permits discharge without notice if it is confined to objectively defined contingencies and remains subject to judicial review; however, its invocation must still be legally available under the governing statutory regime.

---