Dear Suresh,
The employee has resigned before you could terminate him. It is immaterial whether he came to know that the management was going to terminate his services or not. The factual position, as I understand, is as under:
1. The management had decided to Terminate an employee.
2. He resigned before the termination could happen.
3. Your query is, can you now terminate his services.
The answer is No. You may like to accept his resignation and relieve him of his charge on an early date, maybe with immediate effect. The decision is yours. If you releive him earlier than the date when his notice period gets over, you will be obliged to pay him salary for the revelant period.
Trust this answers your query.
Cheers !!!!
Vasant Nair