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Facts:
The corporation was incorporated by the union government, it was under complete control of the central government as all shares were owned by them. Respondent work in a company that was dissolved by the court's order and they were then inducted into plaintiff Corporation upon the latter's Terms and Condition. He was appointed as Deputy Chief Accounts Officer of the corporation and was promoted as Deputy Financial Adviser and Chief Accounts Officer. Respondent was terminated without any notice under rule 9(i) laid by the corporation which states the terms and conditions for termination of employee’s services on three months’ notice or salary. Respondent filed a suit in Calcutta High Court on the grounds that rule 9(i) is arbitrary and unconscionable. The decision of the court was in favor of the respondent. Plaintiff filed a special leave petition in the Supreme court of India, and the decision by the court was against the petitioner. The court stated rule 9(i) void under section 23 of The Indian Contract Act, 1872.
ISSUES INVOLVED:
JUDGEMENT:
REASONING:
CONCLUSION:
Justice D.P. Madon (supreme court judge) dismissed the appeal and gave judgment against the defendants stating that rule 9(i) is invalid, arbitrary, and unconscionable and opposes public policy under Section 23 of Indian Contract Act, 1872.
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