Arbitrary termination rules violating Article 14 can be struck down, with reinstatement, back wages, terminal benefits and tax relief on arrears.

Rule 24 of the Service Rules, which authorised termination without inquiry or hearing, was treated as arbitrary and inconsistent with Article 14 because it was identical to a provision already struck down by the Supreme Court. A termination made solely under that rule was therefore unsustainable. On the consequential reliefs, the text states that reinstatement with continuity of service, full back wages and terminal benefits followed, subject to the appellant's resignation from the date of the order while preserving monetary claims up to that date. The back wages were to be treated as salary spread over the relevant period, and tax relief was to be sought under Section 89(1) of the Income-tax Act, 1961 read with Rule 21A of the Income-tax Rules, 1962.

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Issues: (i) Whether rule 24 of the Service Rules, under which the termination order was made, was invalid as being inconsistent with Article 14 of the Constitution of India; and (ii) what consequential reliefs, including reinstatement, back wages, terminal benefits, and income-tax treatment of the lump-sum back wages, were to follow.

Issue (i): Whether rule 24 of the Service Rules, under which the termination order was made, was invalid as being inconsistent with Article 14 of the Constitution of India.

Analysis: The rule was found to be identical to the provision already struck down by the Supreme Court as conferring arbitrary power of termination without inquiry or hearing. On that footing, the rule could not survive scrutiny under Article 14 and the termination order passed solely under that rule was unsustainable.

Conclusion: Rule 24 was declared invalid and the termination order was set aside, in favour of the appellant.

Issue (ii): What consequential reliefs, including reinstatement, back wages, terminal benefits, and income-tax treatment of the lump-sum back wages, were to follow.

Analysis: Once the termination was set aside, the normal consequence was reinstatement with full back wages and attendant benefits on the footing of continuous service. The existing transfer to New Delhi remained effective, but the appellant agreed to resign as of the date of the order, while preserving monetary claims up to that date. The back wages were treated as salary spread over the relevant period, and the respondent was directed to seek relief under the income-tax provisions governing spread-over of salary arrears.

Conclusion: The appellant was entitled to full back wages and terminal benefits up to the date of the order, deemed resigned from that date, and the respondent was directed to make the necessary tax application under Section 89(1) of the Income-tax Act, 1961 read with Rule 21A of the Income-tax Rules, 1962.

Final Conclusion: The appeal succeeded with setting aside of the impugned termination, grant of monetary and service-related consequential reliefs up to the date of resignation, and directions for tax treatment of the arrears.

Ratio Decidendi: A termination rule conferring arbitrary power to end service without inquiry or hearing is void for violating Article 14, and a termination made solely under such a rule cannot stand; consequential relief ordinarily includes reinstatement with continuity of service and back wages, subject to the final directions of the Court.

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