20 Sep 2010

Compulsory Retirement: The concept understood

In a recently reported decision [Leela Sharma v. Govt of NCT, (2010) 170 DLT 170] the Delhi High Court examined the concept of 'compulsory retirement' to hold that it was one of the vital tools for the Government to ensure that inefficient public servants are discharged and thus the administrative machinery rests its functions upon efficient workmen. 

Approving the concept, the Bench inter alia observed as under;
11. The concept of compulsory retirement came into force to remove a public servant whose services are no longer useful to the general administration or in public interest; if it is felt that for better administration, for augmenting efficiency it is necessary to chop off the deadwood. The order of compulsory retirement has to be made having regard to the entire service record of the officer. Even un-communicated entries in the confidential record can be taken into consideration. The order of compulsory retirement is not to be treated as a punishment and carries no stigma. However, it has been held that the order of compulsory retirement shall not be passed as a shortcut to avoid departmental enquiry when such course is more desirable. The rule of compulsory retirement has been held to hold the balance between the rights of the individual Government servant and the interest of the public. The rule is intended to enable the Government to energise its machinery and to make it efficient by compulsorily retiring those who, in its opinion, should not be there in public interest. Fundamental Rule 56(j) has been held to confer absolute right to retire any Government servant on his attaining the age of 55 years if the authority is of the opinion that it is in the public interest to do so. The Supreme Court in Bishwanath Prasad Singh Vs. State of Bihar held that the object of such compulsory retirement is to weed out the worthless who have lost their utility by their insensitive, unintelligent or dubious conduct impeding the flow and promoting stagnation. It was held that the country needs speed, sensitivity, probity, non-irritative public relation and enthusiastic creativity which can be achieved by eliminating the deadwood, the paper-logged and callous
12. It is thus clear that an order of compulsory retirement is an important tool to keep any organization vibrant and to prevent its clogging and decay by the sheer weight of long standing employees who have ceased to be the dynamos to propel the organization further and for achieving its goals. The same enables the employer to, after the employee has worked for a certain number of years and / or has attained a certain age but before the age of superannuation, remove him. It is often found that certain employees after putting in considerable number of years of service lose their sheen and no longer remain productive. Their continuance in service is of no use to the organization.
13. In my opinion the objective of compulsory retirement is laudable. During the hearing, it was put to the counsel for the petitioner as to whether, considering the importance of the Schools, is it not desirable to have the concept of compulsory retirement in Schools. The importance of the Schools cannot be undermined; they play a vital role in shaping the future/next generation and hence the destiny of the community and the country. The onus of so shaping and igniting the minds rests in the hands of teaching faculty of the school. Often it is found and is human nature that persons who have the requisite qualification and validly join the noble profession of teaching, either fail to perform or though successful performers initially, over the years lose the zeal to so shape the destiny of children they are dealing with. Should the schools be forced to continue such persons, just to protect the tenure of service of the said persons and that too at the cost of the future citizens? The answer necessarily has to be in the negative.
Have a look at the decision.

Post script Rejoinder

After we had originally published this post, we came across a decision of the Supreme Court which further explains the implications underlying an order of compulsory retirement. In as much as we find these observations relevant for our readers, we are published the same in this post itself.

The Supreme Court in Pyare Mohan Lal v. State of Jharkhand observed as under;

8. In Baikuntha Nath Das & Anr. Vs. Chief District Medical Officer, Baripada & Anr., AIR 1992 SC 1020, this Court has laid down certain criteria for the Courts, on which it can interfere with an order of compulsory retirement and they include mala fides, if the order is based on no evidence, or if the order is arbitrary in the sense that no reasonable person would form the requisite opinion on the given material, i.e. if it is found to be a perverse order. The Court held as under:–
“(i) An order of compulsory retirement is not a punishment. It implies no stigma nor 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 the 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. That circumstance by itself cannot be a basis for interference.”
9. Similar view has been reiterated by this Court in Posts and Telegraphs Board & Ors. Vs. C.S.N. Murthy, AIR 1992 SC 1368; Sukhdeo Vs. Commissioner Amravati Division, Amravati & Anr., (1996) 5 SCC 103; I.K. Mishra Vs. Union of India & Ors., AIR 1997 SC 3740; M.S. Bindra Vs. Union of India & Ors., AIR 1998 SC 3058; and Rajat Baran Roy & Ors. Vs. State of West Bengal & Ors., AIR 1999 SC 1661. This Court observed that there was a very limited scope of judicial review in a case of compulsory retirement and it was permissible only on the grounds of non-application of mind; mala fides; or want of material particulars. Power to retire compulsorily a Government servant in terms of Service Rules is absolute, provided the authority concerned forms a bona fide opinion that compulsory retirement is in public interest. 
10. In State of Gujarat & Anr. Vs. Suryakant Chunilal Shah, (1999) 1 SCC 529, this Court held that while considering the case of an employee for compulsory retirement, public interest is of paramount importance. The dishonest, corrupt and dead-wood deserve to be dispensed with. How efficient and honest an employee is, is to be assessed on the basis of the material on record, which may also be ascertained from confidential reports. However, there must be some tangible material against the employee warranting his compulsory retirement.
11. In State of U.P. & Anr. Vs. Bihari Lal, AIR 1995 SC 1161, this Court held that if the general reputation of an employee is not good, though there may not be any tangible material against him, he may be given compulsory retirement in public interest and judicial review of such order is permissible only on limited grounds. The Court further held that:
“…..What is needed to be looked into, is the bona fide decision taken in public interest to augment efficiency in the public service.”
12. In State of U.P. & Ors. Vs. Vijay Kumar Jain, AIR 2002 SC 1345, this Court while dealing with the issue observed as under: 
“Withholding of integrity of a government employee is a serious matter. In the present case, what we find is that the integrity of the respondent was withheld by an order dated 13-6-1997 and the said entry in the character roll of the respondent was well within ten years of passing of the order of compulsory retirement. During pendency of the writ petition in the High Court, the U.P. Services Tribunal on a claim petition filed by the respondent, shifted the entry from 1997-98 to 1983-84. Shifting of the said entry to a different period or entry going beyond ten years of passing of the order of compulsory retirement does not mean that vigour and sting of the adverse entry is lost. Vigour or sting of an adverse entry is not wiped out, merely it is relatable to 11th or 12th year of passing of the order of compulsory retirement. The aforesaid adverse entry which could have been taken into account while considering the case of the respondent for his compulsory retirement from service, was duly considered by the State Government and the said single adverse entry in itself was sufficient to compulsorily retire the respondent from service. We are, therefore, of the view that entire service record or confidential report with emphasis on the later entries in the character roll can be taken into account by the Government while considering a case for compulsory retirement of a government servant. 
13. In Jugal Chandra Saikia Vs. State of Assam & Anr., AIR 2003 SC 1362, this Court held that where the screening committee is consisting of responsible officers of the State and they have examined/assessed the entire service record and formed the opinion objectively as to whether any employee is fit to be retained in service or not, in the absence of any allegation of mala fides, there is no scope of a judicial review against such an order.
14. In Nawal Singh Vs. State of U.P. & Anr., AIR 2003 SC 4303, a similar view has been reiterated. The Court observed as under: 
“At the outset, it is to be reiterated that the judicial service is not a service in the sense of an employment. Judges are discharging their functions while exercising the sovereign judicial power of the State. Their honesty and integrity is expected to be beyond doubt. It should be reflected in their overall reputation. Further, the nature of judicial service is such that it cannot afford to suffer continuance in service of persons of doubtful integrity or who have lost their utility. If such evaluation is done by the Committee of the High Court Judges and is affirmed in the writ petition, except in very exceptional circumstances, this Court would not interfere with the same, particularly because the order of compulsory retirement is based on the subjective satisfaction of the authority.
……Further, it is impossible to prove by positive evidence the basis for doubting the integrity of the judicial officer. In the present-day system, reliance is required to be placed on the opinion of the higher officer who had the opportunity to watch the performance of the officer concerned from close quarters and formation of his opinion with regard to the overall reputation enjoyed by the officer concerned would be the basis.
…..the lower judiciary is the foundation of the judicial system. We hope that the High Courts would take appropriate steps regularly for weeding out the dead wood or the persons polluting the justice delivery system”.
15. In Chandra Singh & Ors. Vs. State of Rajasthan & Anr., AIR 2003 SC 2889, this Court after examining the entire evidence on record came to the conclusion that the compulsory retirement awarded to the appellant therein, Chandra Singh, a Judicial Officer, was not in consonance with law. However, considering the report of the Committee and taking note of the adverse remarks made against him, the Court refused to grant him any relief. The relevant part of the judgment reads as under: 
“It will bear repetition to state that in terms of Rule 53 of the Pension Rules, an order for compulsory retirement can be passed only in the event the same is in public interest and/or three months’ notice or three months’ pay in lieu thereof had been given. Neither of the aforementioned conditions had been complied with…. 
We have, therefore, no option but to hold that the actions on the part of the High Court or the State in compulsorily retiring the appellants herein were illegal.
Article 235 of the Constitution of India enables the High Court to assess the performance of any judicial officer at any time with a view to discipline the black sheep or weed out the deadwood. This constitutional power of the High Court cannot be circumscribed by any rule or order. We can usefully refer to some of the leading cases on Article 235:
1. State of Assam v. Ranga Mohd., AIR 1967 SC 903 (five Judges)
2. Samsher Singh v. State of Punjab, AIR 1974 SC 2192 (seven Judges) 
3. High Court of Judicature at Bombay v. Shirishkumar Rangrao Patil, AIR 1997 SC 2631.
xxx xxx xxx
In the instant case, we are dealing with the higher judicial officers. We have already noticed the observations made by the Committee of three Judges. The nature of judicial service is such that it cannot afford to suffer continuance in service of persons of doubtful integrity or who have lost their utility.”
16. In Shiv Dayal Gupta Vs. State of Rajasthan & Anr., (2005) 13 SCC 581, this Court examined the case of the compulsory retirement of a Judicial Officer and came to the conclusion that the Review Committee had made an overall assessment considering the entire service record of the said officer and came to the conclusion that continuance of the said officer in service would be a liability to the Department and adverse to public interest as his ACRs. revealed that he was poor in writing the judgments and was advised to improve the same. His judicial work was found unsatisfactory and he had been advised to improve the same. His integrity was found doubtful in the year 1983. He had earlier been superseded while being considered for promotion in 1983 and he had been given an adverse entry in 1993 that he failed to inspire confidence in subordinate staff and lawyers and had a low rate of disposal. On the basis of the aforesaid adverse entries, he was given compulsory retirement vide order dated 9.11.2000. This Court refused to interfere with the said order in view of the fact that he could not raise proper allegations of mala fides or establish that the order of compulsory retirement was passed without application of mind. While deciding the said case, the court placed reliance upon the judgment of this Court in Vijay Kumar Jain (supra).
17. In M.P. State Cooperative Dairy Federation Ltd. & Anr. Vs. Rajnesh Kumar Jamindar & Ors., (2009) 15 SCC 221, this Court held that judicial review of an order of compulsory retirement is permissible if the order is perverse or arbitrary, as also where there is non-compliance of statutory duty by statutory authority but the court should not go into the factual findings. The factors not germane for passing an order of compulsory retirement should not be taken into consideration. The criteria and rules adopted by the employer must be adhered to, to determine whether the employee had become liable for compulsory retirement. An authority discharging a public function must act fairly.
18. Thus, the law on the point can be summarised to the effect that an order of compulsory retirement is not a punishment and it does not imply stigma unless such order is passed to impose a punishment for a proved misconduct, as prescribed in the Statutory Rules. (See Surender Kumar Vs. Union of India & Ors., (2010) 1 SCC 158).  The Authority must consider and examine the over-all effect of the entries of the officer concerned and not an isolated entry, as it may well be in some cases that in spite of satisfactory performance, the authority may desire to compulsorily retire an employee in public interest, as in the opinion of the said Authority, the post has to be manned by a more efficient and dynamic person and if there is sufficient material on record to show that the employee “rendered himself a liability to the institution”, there is no occasion for the Court to interfere in the exercise of its limited power of judicial review.
 See Also

1. Voluntary Retirement: The concept understood

No comments: