http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

CASE NO.: Appeal (civil)  1468 of 2008

PETITIONER: Mundrika Dubey & Ors

RESPONDENT: State of Bihar & Ors

DATE OF JUDGMENT: 21/02/2008

BENCH: TARUN CHATTERJEE & HARJIT SINGH BEDI

JUDGMENT: J U D G ME N T  

CIVIL APPEAL NO 1468 / 2008 (arising out of SLP ) No. 7972/2006)

HARJIT SINGH BEDI,J.

1.      Leave granted. 2.      This appeal is directed against the order dated December  7, 2005 of the Division Bench of the Patna High Court  whereby the judgment of the learned Single Judge dated  October 12, 2004 dismissing the Writ Petition has been  confirmed.  The facts of the case are as under: 3.      The appellants were appointed as Class IV employees i.e.  Peons in the respondent-Bank in the year 1971.  They have  been compulsorily retired by the Bank vide order dated     June 5, 2004 made purportedly under Rules 232 and 235 of  the Bihar Rajya Shakari Bhumi Vikas Bank Samiti  (hereinafter referred to as the "Rules").  Aggrieved against the  order dated June 5, 2004, the appellants filed several writ  petitions in the Patna High Court raising pleas, inter-alia,  that the action taken by the Bank was not justified under  Rule 232 as they had not been retired compulsorily on the  ground of inefficiency  and that  Rule 235 was not a source of  power so as to justify an order of compulsory retirement as it  only dealt with the grant of contributory provident fund and  gratuity to those employees who had reached the age of 50  years and had completed 30 years of service at the time of  retirement.    In response to the notice issued by the High  Court, the respondent-Bank filed its reply.  It was, inter-alia,  pointed out that the Bank was grossly over-staffed and  being   inefficiently run with the result that it had sustained huge  losses that had brought it to a precarious financial position,  and that before the action had actually been taken against  the appellants, a committee had been set-up which had  examined  the entire structure of the Bank and as a follow- up a large number of offices and Branch Offices had been  closed and  a consequent re-structuring made of those which  still continued to operate.  It was further highlighted that the  over-staffing of the Bank was evident as against the total  requirement of 166 Peons, 507 had in fact been appointed  and that the decision to compulsorily retire the appellants  had been taken with hesitation and  as one of the measures  necessary to ensure the survival of the Bank. It was also  pointed out that the Board of Directors in its meeting held on  December 24, 2003 had examined the relevant facts and  concluded that in the first phase, compulsory retirement  should be ordered of lower grade employees who had

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

completed 30 years of service and 50 years of age.  A copy of  these proceedings have been appended as Annexure P-1 to  the Paper Book. 4.      The learned Single Judge in his judgment dated October  12, 2004 accepted the explanation tendered by the  respondent insofar as the factual aspect was concerned and  also observed that Rule 232 was not applicable in such a  case whereas Rule 235 was in fact applicable and accordingly  dismissed the Writ Petition, as already  mentioned above.    The appeal filed before the Division Bench of the High Court  was also dismissed. 5.      Ms. Priya Hingorani, the learned counsel for the  appellants has forcefully argued that Rule 235 on which the  respondents had placed reliance for dispensing with the  services of the appellants by way of compulsory retirement  was not in fact a source of power as it only  dealt with the  payment of gratuity and provident fund to a certain category  of employees and that it was only under Rule 232 that an  employee could be compulsorily retired and that too on the  ground of inefficiency and as it was not the case of the  respondent-Bank that the appellants were inefficient, the  impugned action was unjustified.  It has also been urged that  the appellants had put in more than 30 years of service with  the Bank and if any re-structuring was to be made so as to  make Bank’s working more efficient, it would have been  appropriate to dispense with the staff at the top i.e. senior  officers of the Bank rather than the low paid Class IV  employees such as the appellants. 6.         These arguments have been controverted by               Shri Shravan Kumar, the learned senior counsel for the  respondents who has pointed out that Rule 235 was itself the  source of power and operated in a field different from Rule  232 and that it was not for this Court to interfere so as to   determine as to which employee should  be retrenched first,  and who later, as this was a matter for the internal  administration of the Bank.   7.      We have heard the learned counsel for the parties and  gone through the record.  Rules 232 and 235 are reproduced  hereinbelow: "Rule 232: The Bank may, any bank  employee who has committed 21 years of  duty and 25 years of total service  calculated from the date of his first  appointment to retire from the Bank’s  services if it is considered that the  efficiency or conduct of the employee is not  such as to justify his retention in service.   Where any bank employee is so required to  retire, no claim to any special  compensation shall be entertained.

Rule 235: A person who retires  voluntarily or is required to be retired  compulsorily in bank’s interest on  reaching the age of 50 years completing  30 years of service shall be entitled to  contributory provident fund and gratuity  as admissible."

8.      Concededly the action against the appellants has not  been taken under Rule 232 which deals with the compulsory  retirement of an employee who has put in 21 years of duty  and 25 years of total service if it is considered that the  efficiency or the conduct of the employee does not justify his  retention in service.   Rule 235 however talks about

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3  

compulsory retirement in the Bank’s interest of those who  have reached the age of  50 years and have completed 30  years of service and also talks about the benefit of  contributory provident fund and gratuity, as admissible to  such employees.  Undoubtedly, action under Rule 232 can  only be taken if the employee concerned is inefficient or is  guilty of misconduct whereas the scope of Rule 235 is much  wider and compulsory retirement can be ordered in the  Bank’s interest.  The fact that the two Rules operate in  different fields is also clear from the varying qualifying  service and that those who retire under Rule 235 are given  some additional financial benefits as a solatium for having to  go despite the fact that their efficiency has in no manner  been impaired and merely because Rule 235 also talks about  the payment of contributory provident fund and gratuity it  does not take away the right to retire compulsorily those who  have reached the age of 50 years and have completed 30  years of service and whose retirement is in the Bank’s  interest.  We therefore endorse the observations of the High  Court that the action taken was justified under Rule 235, as  correct. 9.      We are equally of the opinion that it is not for this Court  to opine as to who should be retained in service and who  should be retired and at what stage and situation as this is a  matter to be left to the exclusive discretion of the employer.   The facts of the case show that the Bank was not only heavily  over staffed but was also running into huge losses and  substantial pruning which would undoubtedly be hurtful,  was required for its survival.

10.     We accordingly find no merit in the appeal.  Dismissed  with no order as to costs.