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PETITIONER: STATE BANK OF BIKANER & JAIPUR & OTHERS

       Vs.

RESPONDENT: JAG MOHAN LAL

DATE OF JUDGMENT13/09/1988

BENCH: SHETTY, K.J. (J) BENCH: SHETTY, K.J. (J) OZA, G.L. (J)

CITATION:  1989 AIR   75            1988 SCR  Supl. (2)1026  1989 SCC  Supl.  (1) 221 JT 1988 (3)   739  1988 SCALE  (2)1081

ACT:     Labour  and  Services: State Bank of  Bikaner  &  Jaipur (Officers)  Service  Regulations, 1979:  Regulation  No.  19 Extension  of Service beyond age of  superannuation--Whether discretionary.

HEADNOTE:     Regulation  19(1) of the State Bank of Bikaner &  Jaipur (Officers’)     Service  Regulations  1979  requires   the officers to retire from the service of the Bank on attaining the  age  of fifty-eight years or on  completion  of  thirty years of service whichever occurs first. A note added  below that  regulation  states  that  the  existing  practice   of utilising  the  service  of officers beyond  58  years  will continue in respect of those who joined service before  l9th July,   1969.   The  proviso   thereto,   however,   confers discretion  on the competent authority to extend the  period of  service of  such retiring officers in the  interest  of the bank.     The respondent, an officer of the said Bank, who retired from  service on September 30, 1982 on attaining the age  of superannuation  of  58 years was not  granted  extension  of service.  The  sought relief from the   High  Court  under Article  226  of  the Constitution. The  Bank  resisted  the Petition  on  the ground that his continued utility  in  the service  of  the Bank was found restricted By the  time  the petition  came  up  for  consideration  the  respondent  had attained  60 years of age. The single Judge.    therefore, dismissed  the petition without going into the  merits.  The Division Bench, however, accepted the appeal and gave relief to  the   respondent on the view that the extension  of  the petitioner  could have  been refused only if he  was  found unsuitable on the ground of continued utility or good health or  integrity  and  not  whether it  was  desirable  in  the interest  of  the Bank. Since the Bank applied  a  different criteria altogether it held the order arbitrary and based on collateral grounds.     Allowing the appeal of the Bank by Special leave,     HELD:  1.1  The High Court has  misconstrued  the  legal right claimed by the respondent. [1031B]     1.2  In  the  scheme provided  in  Regulation  19(1)  an

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officer  of  the Bank has a legitimate right  to  remain  in                                                   PG NO 1026                                                   PG NO 1027 service  till  he attains the age  of   superannuation.  But beyond that age, he has no such right unless his service  is extended  by  the Bank. The further rights  of  parties  are regulated by the proviso thereto. [1031F-G]     1.3 The proviso preserves discretion to the Bank. It  is a   discretion   available  with   every   employer,   every management,  State or otherwise. If the Bank considers  that the  service of an officer is desirable in the  interest  of the Bank, it may allow him to continue in service beyond the age  of  superannuation.  If the  Bank  considers  that  the service of an officer is not required beyond superannuation, it  is  an  end of the matter. It is no  reflection  on  the officer. It carries no stigma. [1032C-D]     State  of Assam v Basanta Kumar Das, [1973] 3  SCR  l58; Kailash  Chandra v. Union of India, [1962] I SCR  374;  B.N. Mishra  v.  State  [1965] l SCR 693 and  State  of  Assam  v Pramadhar, [1971] l SCR 503,referred to.     2.  The Bank, however, is required to consider the  case of  individual  officers with due regard  to  (i)  continued utility,  (ii)  good  health,  and  (iii)  integrity  beyond reproach  of  the officer. If the officer lacks one  or  the other,  the  bank  is not bound to  give  him  extension  of service. 11032D-E]     In the instant case the Bank had shown to the High Court that  the case of the respondent was considered and  he  did not fit in the said guidelines. The High Court does not  sit in  an  appeal against that decision. The High  Court  under Article 226 cannot review that decision.11032E]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 3175  of 1986.     From  the  Judgment  and Order dated  17.8.1985  of  the Rajasthan High Court in D.B.S.A. No. 161 of 1985.     Satish Chandra and A.V. Rangam for the  Appellants.     V.M. Tarkunde and S. K. Jain for the Respondent.     The Judgment of the Court was delivered by                                                   PG NO 1028     JAGANNATHA  SHETTY, J. By obtaining special  leave,  the State Bank of Bikaner & Jaipur ("Bank") has appealed to this Court  against the judgment dated September 17, 1985 of  the Division  Bench  of Rajasthan High Court  in  Special  Civil Appeal  No. 161 of 1985. The question raised in this  appeal is  as  to the nature of right of the respondent to  get  an extension of service beyond the age of superannuation.     The  respondent was an officer of the Bank. His  service conditions were regulated by what is termed as State Bank of Bikaner & Jaipur (Officers’) Service Regulations, 1979.  The regulations  came  into force with effect  from  October  1, 1979. Regulation No. 19 provides for the age of  retirement. It  also  preserves discretion to the Bank . to  extend  the period  of service of any officer beyond the age  of  retire ment. The relevant portion of Regulation 19 reads:     "Age of Retirement:     19(1)  An officer shall retire from the service  of  the Bank on attaining the age of fifty eight years or up to  the completion of thirty years’ service, whichever occurs first.      Note:  However, the existing practice of utilising  the service   of  officers  beyond  the  age  of  58  years   by considering  individual  cases for grant of  extension  will

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continue only in respect of employees who joined the service as  workmen  or  as officers before  the  19th  July,  1969. Further, such employees may be granted extension in  service instead of re-employment as is the case in the State Bank of Mysore  and State Bank of Saurashtra. A suitable diary  note should be made in this regard and carried over-looked at the time when the case of emplotees who joined on or after  19th July,  1969  come  up  for  consideration  (RER/32/80  dated 20.5.1980).     Provided  that  the  competent  authority  may,  at  its discretion,  extend the period of service of an officer  who has  attained the age of fifty-eight years or has  completed thirty  years’  service  as the case  may  be,  should  such extension be deemed desirable in the interest of the Bank.     The  aforesaid  ’note’ to Regulation 19  refers  to  the existing  practice in the Bank and that ’note’ was added  by notification dated May 20, 1980.                                                   PG NO 1029     By  letter dated June 14, 1979, the Bank  intimated  the respondent  that he was granted extension of service  up  to September  28, 1982 that is, till he completed 58  years  of age. By further letter dated July l, 1982 the respondent was informed that he would be attaining superannuation age of 58 years on September 30, 1982 and would stand retired on  that date.  Accordingly, he was retired from service with  effect from September 30, 1982.     After an unsuccessful attempt for reconsideration of the case.  the  respondent took up the  matter  before  Managing Director  of the Bank. There also he could not  succeed.  He was informed that his case did not fit in the guidelines  of the Bank.     The  respondent  moved the High Court for  relief  under Article  226  of  the Constitution. The  Bank  resisted  the petition contending inter alia:     "The extension is considered on three parameters--     (i) continued utility;     (ii) good health, and     (iii) integrity beyond reproach.     since,  in  the case of the officials whose  names  have been submitted in the list-D, all the three tests have  been fulfilled, their services were extended. In the case of  the petitioner?  his services were not extended because  in  the view  of the competent authority, his continued  utility  in the  service of the Bank was found to be restricted.  It  is submitted  that  it is not open to the petitioner  to  claim that  he  should be granted extension in the  service  as  a matter of right. In this context, it is submitted that  when orders  were issued to the petitioner on the  4th  February, 1981  posting  him as Branch Manager of a  local  branch  at Jaipur.  the petitioner instead of acting in  a  responsible manner  and  taking over charge of the  branch,  immediately proceeded  on  leave and went on extending it from  time  to time.  Ultimately,  the respondent Bank had  to  cancel  the posting on  the 1st May, 1981. Moreover, the guidelines  for granting  extension  stipulated  that  continuance  of   the officer’s  service in his existing grade/capacity  would  be                                                   PG NO 1030 useful  to  the  Bank in all its field of  activities  in  a manner  that  the Bank is not restricted  in  continuing  to entrust him with the responsibilities relating to the normal placement  commensurate with his seniority and grade and  as the  petitioner did not satisfy this criteria, the Bank  did not grant him extension in service."     But by the time the petition came up for  consideration, the Respondent attained 60 years of age. The learned  single

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Judge without going into the merits of the matter  dismissed the  petition. He observed that it would be  unnecessary  to enter into the merits since the respondent has completed  60 years. The matter was taken up in appeal before  a  Division Bench  of  the High Court. The Division Bench  accepted  the appeal and gave relief to the respondent. It was commented:     "The  order  of  refusing  to  give  extension  to   the petitioner  appellant  was  because the  extension  was  not deemed  desirable in the interest of the Bank vide Annex.  . letter  dated July 29, 1982. Hence it is obvious that  while considering  the case of the petitioner the Bank  took  into consideration  the criteria whether his extension  shall  be desirable in the interest of the bank and the 13ank did  not apply  its  mind  as  to whether  his  services  were  found unsuitable on the ground of continued utility and health  or integrity. It appears that the Bank keeping in mind the note which was added to sec. 19(1) and only relying  on the first proviso  Resolution  19(1)  they have decided  the  case  of petitioner for extension of service This clearly shows  that there was no serious application of  mind while dealing  with the  case  of  extension  of  the  petitioner  is  based  on collateral  grounds  and it also arbitrary as the  Bank  has applied  different  criteria which ought not  to  have  been applied  in  the case of the petitioner. The  Bank  has  not formed  the  opinion for not extending the services  of  the petitioner  on any material or relevant  consideration,  but has  applied  in  the  different  criteria  altogether  and, therefore.  the order is based on collateral  and  arbitrary grounds.  The  extension of the petitioner could  have  been refused  only  if he was found unsuitable on the  ground  of continued  utility  or  good health  or  integrity  and  not whether it was desirable in the interest of the Bank. ’ And observed:                                                  PG NO  1031     "It  is true that the right of extension of  service  is not  a  legal  right, but it is  a  benefit.  However,  this benefit is not a concession, but is a privilege to which  an officer is entitled after years of hard work in the Bank."     It seems to us that the High Court has misconstrued  the legal  right  claimed by the respondent. The  right  to  get extension  of service beyond the age of  superannuation  has received  consideration of this Court in several  cases.  In State of Assam v. Basanta Kumar Das, [l973] 3 SCR 158, after reviewing  almost all the earlier decisions Kailash  Chandra v.  Union of India, [1962] 1 SCR 374; B.N. Misra  v.  State, [1965]  1 SCR 693 and State of Assam v. Pramadhar, [1971]  1 SCR 503. this Court said (at 165):     "A  Government  servant  has no  right  to  continue  in service  beyond  the  age of superannuation  and  if  he  is retained  beyond  that age, it is only in  exercise  of  the discretion of the Government. xxxx        xxxxx        xxxxx       xxxx xxxx             xxxxx             xxxxx the fact that certain persons were found fit to be continued in  service does not mean that others who were not so  found fit  had  been discriminated against. Otherwise,  the  whole idea  of  continuing only efficient people in  service  even after they had completed 55 years becomes only meaningless."     What  do we have here in this case to distinguish  those principles or not to apply those principles? In our opinion, there is none. In the scheme provided herein the  respondent or  any other officer of the Bank has a legitimate right  to remain in service till he attains the age of superannuation. But beyond that age, he has no such right unless his service is  extended by the Bank. The further rights of parties  are

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regulated by the proviso to Regulation 19(1). It reads:     "Provided  that  the  competent  authority  may  at  its discretion,  extend the period of service ot an officer  who has  attained the age of fifty eight years or has  completed thirty  years’  service  as the case  may  be,  should  such extension be deemed desirable in the interest of the Bank. "                                          (Emphasis supplied)                                                   PG NO 1132     Look  at  the  language  of  proviso  and  the   purpose underlying.  The  Bank  may in  its  discretion  extend  the service  of any officer. On what ground? For  what  purpose? That  has  been also made clear in the  proviso  itself.  It states  "should  such extension be deemed desirable  in  the interest of the Bank". The sole purpose of giving  extension of  service  is, therefore, to promote the interest  of  the Bank and not to confer any benefit on the retiring officers. Incidentally  the extension may benefit  retired  officials. But  it  is incorrect to state that it is  a  conferment  of benefit   or  privilege  on  officers.  The  officers   upon attaining the age of superannuation or putting the  required number  of  years  of service do not earn  that  benefit  or privilege.  The High Court has completely misunderstood  the nature  of  right and purpose of the  proviso.  The  proviso preserves  discretion  to  the  Bank.  It  is  a  discretion available  with every employer, every management,  State  or otherwise.  If  the Bank considers that the  service  of  an officer  is  desirable in the interest of the Bank,  i˜  may allow  him  to  continue  in  service  beyond  the  age   of superannuation. If the Bank considers that the service of an officer is not required beyond superannuation, it is an  end of  the  matter.  It is no reflection  on  the  officer.  It carries no stigma.     The  Bank, however, is required to consider the case  of individual  officers  with  due  regard  to  (i)   continued utility;  (ii)  good  health;  and  (iii)  integrity  beyond reproach  of  the officer. If the officer lacks one  or  the other,  the  Bank  is not bound to  give  him  extension  of service. In this case, the Bank has shown to the High  Court that  the case of Respondent was considered and he  did  not fit  in the said guidelines. The High Court does not sit  in an appeal against the decision. The High Court under Article 226 cannot review that decision.     It was however, argued for the respondent that the  Bank falls  within  the  concept of State’  for  the  purpose  ot enforcement  of  fundamental rights.  The  Bank,  therefore, cannot  extend  the service of some and reject the  case  of others similarly situated. The concept of Article 14 of  the Constitution  is relied upon. The argument in  our  opinion, proceeds on a wrong premise. ’The Bank has no obligation to extend  the services of all officers even if they are  found suitable  in every respect. The interest of the Bank is  the primary consideration for giving extension of’ service. With due  regard to exigencies of service, the Bank in  one  year may  give  extension to all suitable retiring  officers.  In another year, it may give extension to some and not to  all. In  a subsequent year, it may not give extension to any  One of the officers.  The Bank may have a lot of fresh  recruits in  One  year.  The Bank may not need the  services  of  all retired  persons in another year. The Bank may  have  lesser                                                  PG NO  1033 work load in a succeeding year. The retiring persons  cannot in  any year demand that "extension to all or none".  If  we concede  that  right  to retiring  persons,  then  the  very purpose  of  giving extension in the interest  of  the  Bank would be defeated. We are, therefore, of opinion that  there

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is  no scope for complaining arbitrariness in the matter  of giving extension of service to retiring persons.     In  the  result, we allow the appeal and set  aside  the judgment  of  the High Court. In the  circumstances  of  the case, we make no order as to costs. P.S.S.                                       Appeal allowed.