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CASE NO.: Appeal (civil) 1561  of  2001 Special Leave Petition (civil)  12652    of  2000

PETITIONER: STATE OF GUJARAT

       Vs.

RESPONDENT: UMEDBHAI M.  PATEL

DATE OF JUDGMENT:       27/02/2001

BENCH: K.G.Balakrishna,,, S.R.Babu

JUDGMENT:

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     K.G.  BALAKRISHNAN, J.

     Leave granted.

     The  respondent,  during  the relevant  time,  was  an Executive  Engineer  working  in   the  Narmada  Development Department  of  the State of Gujarat.  He was  placed  under suspension  on  22.5.1986 pending disciplinary  proceedings. An  enquiry  was initiated against him alleging that he  had committed  acts  of misuse of power in connection  with  the purchase of Tarpauline.  While the respondent was continuing under  suspension, the Govt.  of Gujarat passed an order  of compulsory  retirement  by invoking Clause (aa) (i)  (1)  of Rule  161 (1) of the Bombay Civil Services Rules, 1959, with effect  from 13.2.1987.  The respondent was due to retire on superannuation  by the end of August 1988, his date of birth being  17.8.1930.  In the order of compulsory retirement, it was  stated  that  the case relating to continuance  of  the respondent  in  Govt.  service beyond the age of 50  and  55 years  was reviewed.  The respondent challenged the order of his  compulsory retirement before the High Court of  Gujarat and by the impugned judgment, the Division Bench of the High Court  set aside that order on the ground that the same  was punitive in nature and was passed with an oblique purpose to punish  the  respondent for the charges which  were  neither investigated  nor  had the respondent been given  reasonable opportunity  of hearing.  This judgment is challenged before us.

     We  heard the learned counsel for the  appellant-State as  also  learned  counsel for  the  respondent.   Elaborate arguments   were   advanced   by   the   counsel   for   the appellant-State  that the impugned order is not punitive  in nature  and  that  the  services   of  the  respondent  were

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dispensed  with in public interest.  It was argued that  the respondent’s  services were no longer useful and that he had committed  acts whereby the State Govt.  suffered  pecuniary losses.   It was also contended that the order of compulsory retirement  passed  by  the State Govt.  Is not  by  way  of punishment  and  the respondent is entitled to get  all  the benefits.

     Learned counsel for the respondent, on the other hand, supported the impugned judgment and contended that the order of   compulsory  retirement  was   passed  on  the  specific allegations,  for which the respondent was under  suspension awaiting  formal  enquiry, and under that circumstance,  the impugned  order  of  compulsory   retirement  was   patently illegal.   Reliance was placed on various decisions of  this Court.

     This  Court,  in  a number of cases, had  occasion  to consider  the law relating to compulsory retirement and  has laid  down various principles.  In State of Orissa & Ors vs. Ram  Chandra  Das  (1996)  5 SCC 331,  this  Court  held  in paragraph 3 of the judgment as follows :

     "It  is  needless to reiterate that the settled  legal position  is  that the Government is empowered and would  be entitled  to  compulsorily  retire a government  servant  in public  interest  with a view to improve efficiency  of  the administration  or  to  weed  out  the  people  of  doubtful integrity  or  are corrupt but sufficient evidence  was  not available to take disciplinary action in accordance with the rules  so  as  to  inculcate a sense of  discipline  in  the service.  But the Government, before taking such decision to retire  a government employee compulsorily from service, has to  consider  the  entire record of the  government  servant including the latest reports.

     [Emphasis supplied]

     In  State  of Gujarat & Anr.  vs.  Suryakant  Chunilal Shah  (1999)  1  SCC 529, the State  Govt.   challenged  the judgment  of the Division Bench of the Gujarat High Court by which  the order passed by the Single Judged was set  aside. The  Division  Bench  held  that  the  order  of  compulsory retirement  was bad and thereupon the State of Gujarat filed an  appeal.  In that case, two criminal complaints had  been filed  against the respondent-Asstt.  Food Controller;   one alleging that he had illegally issued cement permits to some bogus  institutions;  and second that he had fabricated some rubber  stamps of the Government for the purpose of  issuing illegal  permits.  But, there were no adverse entries in his confidential  records  and his integrity was not doubted  at any  stage.   However,  the  authorities  thought  that  the investigation  and subsequent prosecution of the  respondent would take long time and it would be better to dispense with his  services  by  compulsorily retiring  him.   The  review committee, therefore, recommended his compulsory retirement. This Court, in paragraph 28 of the judgment, held as under:

     "There  being no material before the Review Committee, inasmuch  as there were no adverse remarks in the  character roll entries, the integrity was not doubted at any time, the character  roll  entries  subsequent   to  the  respondent’s promotion  to  the post of Assistant Food Controller  (Class II)  were not available, it could not come to the conclusion

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that  the  respondent  was a man of doubtful  integrity  nor could  have  anyone  else come to the  conclusion  that  the respondent  was a fit person to be retired compulsorily from service.   The order, in the circumstances of the case,  was punitive  having  been passed for the collateral purpose  of his immediate removal rather than in public interest."

     In  Baikuntha  Nath  Das & Anr.  vs.   Chief  District Medical  Officer,  Baripada  &  Anr.    (1992)  2  SCC  299, following  the  decision in Union of India vs.  J.N.   Sinha (1970) 2 SCC 458, this Court held thus:

     "(I)  An  order  of  compulsory retirement  is  not  a punishment.   It  implies  no stigma or  any  suggestion  of misbehaviour.

     (ii)  The order has to be passed by the government  on forming  the  opinion that it is in the public  interest  to retire  a  government servant, compulsorily.  The  order  is passed on the subjective satisfaction of the government.

     (iii)  Principles of natural justice have no place  in the context of an order of compulsory retirement.  This does not  mean  that  judicial scrutiny is  excluded  altogether. While  the  High Court or this Court would not  examine  the matter as an appellate court, they may interfere if they are satisfied that the order is passed (a) mala fide or (b) that it is based on no evidence or (c) that it is arbitrary -- in the sense that no reasonable person would form the requisite opinion  on the given material;  in short, if it is found to be a perverse order.

     (iv)  The government (or the Review Committee, as  the case  may  be) shall have to consider the entire  record  of service  before taking a decision in the matter -- of course attaching  more  importance  to record  of  and  performance during  the  later  years.  The record to be  so  considered would  naturally  include  the entries in  the  confidential records/character  rolls, both favourable and adverse.  If a government   servant   is   promoted  to   a   higher   post notwithstanding the adverse remarks, such remarks lose their sting,  more  so,  if  the promotion  is  based  upon  merit (selection) and not upon seniority.

     (v) An order of compulsory retirement is not liable to be  quashed  by  a Court merely on the  showing  that  while passing  it  uncommunicated adverse remarks were also  taken into  consideration.  The circumstance by itself cannot be a basis for interference."

     In  Allahabad  Bank Officers’ Association & Anr.   vs. Allahabad  Bank  &  Ors.  (1996) 4 SCC 504, this  Court,  in paragraph 5 of the judgment on page 508, held as under:

     "The power to compulsorily retire a government servant is   one  of  the  facets  of  the  doctrine   of   pleasure incorporated in Article 310 of the Constitution.  The object of  compulsory  retirement is to weed out the dead  wood  in order  to maintain efficiency and initiative in the  service and  also  to  dispense  with the services  of  those  whose integrity  is  doubtful  so  as to preserve  purity  in  the administration.  .......  .......

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     While  misconduct  and inefficiency are  factors  that enter  into the account where the order is one of  dismissal or  removal or of retirement, there is this difference  that while  in  the  case of retirement they merely  furnish  the background  and the enquiry, if held -- and there is no duty to  hold  an enquiry -- is only for the satisfaction of  the authorities  who  have  to  take  action,  in  the  case  of dismissal  or removal they form the very basis on which  the order is made, as pointed out by this Court in Shyam Lal vs. State of U.P.  [AIR 1954 SC 369]".

     In Union of India & Ors.  vs.  Dulal Dutt (1993) 2 SCC 179, this Court reiterated the view held right from the case of  R.L.   Butail vs.  Union of India (1970) 2 SCC  876  and Union  of  India vs.  J.N.  Sinha (1970) 2 SCC 458 "that  an order  of  a  compulsory  retirement  is  not  an  order  of punishment.   It is actually a prerogative of the Government but  it should be based on material and has to be passed  on the  subjective satisfaction of the Government.  Very often, on  enquiry  by the Court, the Government may  disclose  the material  but it is very much different from the saying that the  order  should  be  a   speaking  order.   No  order  of compulsory retirement is required to be a speaking order."

     In  another decision in J.D.  Srivastava vs.  State of M.P.   &  Ors.   (1984)  2  SCC 8, in  paragraph  7  of  the judgment, it was observed by this Court as under:

     "But  being reports relating to a remote period,  they are  not  quite  relevant  for the  purpose  of  determining whether he should be retired compulsorily or not in the year 1981,  as it would be an act bordering on perversity to  dig out  old  files to find out some material to make  an  order against an officer."

     The  law  relating  to compulsory retirement  has  now crystallized  into  definite  principles,   which  could  be broadly summarised thus:

     (i)  Whenever the services of a public servant are  no longer useful to the general administration, the officer can be compulsorily retired for the sake of public interest.

     (ii) Ordinarily, the order of compulsory retirement is not  to be treated as a punishment coming under Article  311 of the Constitution.

     (iii)  For  better administration, it is necessary  to chop  off dead- wood, but the order of compulsory retirement can  be passed after having due regard to the entire service record of the officer.

     (iv)  Any  adverse  entries made in  the  confidential record  shall be taken note of and be given due weightage in passing such order.

     (v)  Even  uncommunicated entries in the  confidential record can also be taken into consideration.

     (vi)  The order of compulsory retirement shall not  be passed  as  a short cut to avoid departmental  enquiry  when

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such course is more desirable.

     (vii)  If  the officer was given a  promotion  despite adverse  entries made in the confidential record, that is  a fact in favour of the officer.

     (viii) Compulsory retirement shall not be imposed as a punitive measure.

     In  the instant case, there were absolutely no adverse entries  in  respondent’s  confidential   record.   In   the rejoinder filed in this Court also, nothing has been averred that  the  respondent’s service record revealed any  adverse entries.   The  respondent  had   successfully  crossed  the efficiency  bar at the age of 50 as well 55.  He was  placed under   suspension   on   22.5.1986   pending   disciplinary proceedings.   The  State  Govt.   had  sufficient  time  to complete  the  enquiry against him but the enquiry  was  not completed  within  a  reasonable   time.   Even  the  Review Committee did not recommend the compulsory retirement of the respondent.   The respondent had only less than two years to retire from service.  If the impugned order is viewed in the light  of  these facts, it could be said that the  order  of compulsory retirement was passed for extraneous reasons.  As the  authorities  did  not wait for the  conclusion  of  the enquiry  and  decided to dispense with the services  of  the respondent  merely on the basis of the allegations which had not been proved and in the absence of any adverse entries in his  service  record  to  support the  order  of  compulsory retirement,  we are of the view that the Division Bench  was right  in  holding that the impugned order was liable to  be set  aside.   We  find  no merit in  the  appeal,  which  is dismissed accordingly.  However, three months’ time is given to  the appellant-State to comply with the directions of the Division  Bench,  failing  which  the  respondent  would  be entitled  to get interest at the rate of 18% for the delayed payment of the pecuniary benefits due to him.