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The second reason assigned for the impugned action was that the services of the petitioners were no longer required as the Improvement Trusts in the State of Punjab had been dissolved. By an order dated August 11, 1980, Government of Punjab in exercise of the power conferred by sec. 103 (1) of the Act dissolved with immediate effect the trusts therein set out. In all 21 Trusts were dissolved.

Each Trust had an Executive officer. If 21 Trusts were dissolved, 21 Executive officers became surplus and their services would no longer be necessary as contended on behalf of the respondents. Only 11 direct recruits of 1979 recruitment were adversely affected by the dissolution of the Trusts in that their services were dispensed with. We were not informed as to how Trusts Executive officers of other 10 Trusts were dealt with, but as petitioners have not made any grievance in that behalf, we would overlook that aspect. Petitioners on the contrary contend that dissolution of the Trusts was a device to get rid of the petitioners. It would be stretching credibility too far to hold on the material placed before us that the State Government were to the extreme length of dissolving Trusts to get rid of l I petitioners, though in the circumstances of the case it is equally difficult to disabuse our mind that such may be the underlying motive. We are however determined not to be influenced by the alleged possible motivation. The question is if the Trusts were dissolved, what happened to the assets, liabilities and the ongoing and continuing functions of the Trusts. If the assets, liabilities and ongoing functions were taken over by some other bodies, but with their own staff carried on the activities, there would have been some semblance of justification in the action of the respondent in treating the petitioners as surplus and dispensing with the services on that account. On the contrary, it becomes evident from the record and it was not disputed that except the 11 Executive of Officers- petitioners herein, all other staff of all the Trusts were retained and they carried out the functions of the Trust under the supervision of an officer appointed by the Municipal Committee or in some cases by the State Government. lt thus unquestionably appears that what was dissolved was the Board of Trustees p and not the Trusts. Only the nomenclature changed. The work continued. And this is evident from the fact that as late as August 19, 1980, Batala Improvement Trust issued a notice inviting objections from the public in respect of its development scheme. Similarly on October ll, 1980 Amritsar Improvement Trust invited applications for allotment of plots to the local displaced persons available in certain schemes framed by it. We can multiply such illustration. But we consider it unnecessary to do so. And it is impossible to believe that on mere dissolution of the Board of Trustees, all its functions were wound up. As many as 1500 officers and other members of the staff continued to work for the so-called dissolved Trusts. The only persons whose services were dispensed with as no more necessary were the 11 petitioners i. e. the direct recruits of 1979. In this background, it become difficult to escape the conclusion though we are trying our level best to do so that dissolution of the Trusts was a device to get rid of the petitioners. But on that point we say no more. Mr. Hardy pointed out that by the ordinance No. 6 of 1980 styled as Punjab Town improvement (Amendment) ordinance, 1980, sub- sec. (2) was introduced to sec. 103 which took care of the situation arising out of the dissolution of the Trusts. It provided that all properties, funds and dues vested in or realisable by the Trust and Chairman respectively shall vests in and be realisable by the State Government till they stand transferred to the Municipal Committee under sub. sec.

3. Sub-clause (c) of sub-section (2) enabled the Government to appoint a Class I officer of the State Government for the purpose of completing the execution of any scheme which the Trust may be implementing. And sub-sec. (3) provided for the consequences after all the functions Of the dissolved Trusts were discharged. We fail to see how this section can throw any light on the point under discussion? on the contrary, by the very order dissolving the Trusts, certain officers were appointed in respect of each trust to carry on the functions of the Trusts. Therefore, the Trust independent of the Board of Trustees had a corporate personality. It had a perpetual succession and its functions had to be carried out. They effect of the dissolution of the Trusts was merely dissolving the Board of Trustees. The corporate personality of the Trust remained, inviolate. But the Punjab Government took advantage of the dissolution order dissolving in effect the Board of Trustees and dispensed with the services of 11 petitioners. If the Trusts are functioning, if its schemes are being implemented, if all other staff is retained, we find it difficult to accept the submission of Mr. Hardy that the services of the petitioners were no longer required because of the dissolution of the Trusts, and therefore the same have been dispensed with.

The third reason assigned is that their continuance in service was only imposing an unnecessary burden on the State Exchequer. In fact this is actually begging the issue. After removing the petitioners, 11 other officers were asked to take over the duties of the petitioners. In the order dissolving the Trusts, it is mentioned that in exercise of the power conferred by clause (2) (c) of sec. 103 of the Act. the Governor of Punjab is further pleased to direct that the officers indicated in column 2 shall perform the functions of the Trust and the Chairman under the Act. Trust Executive officer Was the highest executive officer and his function is to be discharged by the newly appointed officer. It is therefore, difficult to accept the submission that the continued retention in service of the petitioner after the dissolution of the Trusts was imposing an unnecessary burden on the State Exchequer.

Now it the reasons for dispensing with the services of petitioners are untenable, the question is whether the action of dispensing with services of the petitioners is arbitrary. Mr. Hardy, learned counsel for the respondents contended that even if the Court is satisfied that the reasons set out in the return for dispensing with the services of the petitioners are untenable and irrelevant, nonetheless the Trusts having been dissolved the conclusion cannot be escaped that services of the petitioners as Trust Executive officer were no more necessary and therefore, this Court cannot interfere with the order dispensing with the services of the petitioners. We remain until convinced. Though there was formal dissolution of Trusts, in effect and substance the Board of Trustees was dissolved. Corporate personality of Trusts remained unaffected. Staff remained. Functions were being carried out. By the time the writ petitions came up for hearing Mr. Ramamurthi pointed out that the Trusts have been re. A constituted and that was not seriously disputed by Mr. Hardy. Further, it is crystal clear that what was dissolved was the Board of Trustees and not the Trusts because functions of the Trusts were being discharged by other officers. The entire staff of the Trusts except the 11 petitioners was retained. Schemes formulated by the Trusts were being implemented. In other words, the corporate personality remained almost inviolate. Even if we decline to examine the charge of mala fides, there are certain aspects herein discussed which cannot be overlooked and which compulsively and unerringly point in the direction that the action was arbitrary. To recapitulate these circumstances, it is crystal clear that the Board of Trustees was dissolved, the Trusts without the name of Trust continued, their functions continued, the staff excluding the 11 Trust Executive officers was retained, and in place of the officers whose services were dispensed with, some other officers were asked to take over their functions and duties, and within a short time, the Trusts were formally constituted. The only effect sought to be achieved by the bizarre exercise of first acquiring power to dissolve the trusts and then ordering their dissolution was to dispense with service of only 11 Trusts Executive officers of 1979 recruitment. And having achieved the desired result the Trusts have been reconstituted albeit without showing the fairness of recalling the discharged 11 Trust Executive officers. Therefore, without imputing any motive, the conclusion is inescapable that the action was thoroughly arbitrary and violative of the guarantee of equality of opportunity enshrined in Art. 16 read with Art. 14 of the Constitution and such thoroughly arbitrary action cannot be sustained, and deserves to be quashed.