Full Judgment Text
Civil Appeal No.13398 of 2015
NONREPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 13398 OF 2015
ChairmancumM.D. ITI Limited …Appellant
versus
K. Muniswamy & Ors. ...Respondents
J U D G M E N T
ABHAY S. OKA, J.
FACTUAL ASPECTS
1. This Civil Appeal raises a very narrow controversy. The
issue concerns the interpretation of clause 17(7)(iii) of the
Certified Standing Orders (for short, ‘the Standing Orders’) under
the Industrial Employment (Standing Orders) Act, 1946 in
respect of the appellant – company. The appellant – company is
a Public Sector Undertaking (PSU) of the Government of India.
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On 11 June 1998, by a circular, an amendment was made to
Signature Not Verified
Digitally signed by
Indu Marwah
Date: 2023.03.02
17:00:33 IST
Reason:
Rule 35 of the ITI Conduct, Discipline and Appeal Rules, 1975
(for short, ‘the said Rules’). Amended clause 2(d) of Rule
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35 of the said Rules provided that an employee completing
the age of 58 years, will continue in service till the
completion of the age of 60 years, subject to medical fitness
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at the end of each year. On 22 August 2001, the
Department of Public Enterprises issued an Office
Memorandum (O.M.) directing that the Hon’ble Ministerin
charge of the concerned administrative Ministry would have
the authority to approve the rollback of the retirement age
for all PSUs, on the basis of the decision of the Board of
Directors of the concerned PSU. The Board of Directors of
the appellant – company proposed to roll back the age of
retirement from 60 to 58 years. The said proposal was
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approved by the concerned Ministry on 20 November
2001.
A writ petition was filed by the respondents before the High
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Court of Karnataka for challenging the rollback. The writ
petition was partly allowed by the learned Single Judge by
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setting aside the circular dated 27 March 2002 by which the
effect was given to the decision of rollback by carrying out
necessary amendments to the said Rules and in particular, to
Rule 35. The learned Single Judge directed the appellant to take
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note of various factors as indicated in the judgment while
considering the issue of the reduction in the retirement age from
60 to 58 years. Pending the decision of the appellant, a
direction was issued to the appellant to continue its employees
till the age of 60 years. However, it was clarified that those who
have already attained the age of 58 years, will not get any relief.
Both parties filed writ appeals for challenging the judgment of
the learned Single Judge. By the impugned judgment, a
Division Bench of the High Court held that the learned Single
Judge was not right in setting aside the decision to roll back the
age of retirement. However, it was held that the rollback cannot
have the effect of affecting the existing rights of employees and
the company recognised in terms of clause 17(7)(iii) of the
Standing Orders.
SUBMISSIONS
3. The submission of the learned counsel appearing for the
appellant is that clause (17)(7)(iii) does not confer any right on
any of the employees. His submission is that the said clause
gives discretion to the appellant–employer to consider the case
of any employee to permit him to serve up to the age of 60
years, subject to medical fitness at the end of each year. This
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clause does not confer any right on any employee to be
considered for continuation till the age of 60 years. His
submission is that the said clause enables the appellant to
continue the employment of certain employees, if after
considering the exigencies of work, the appellant was desirous
of continuing with their employment. The learned counsel also
invited our attention to material placed on record indicating
reasons for effecting rollback from 60 to 58 years. The learned
counsel, therefore, submitted that the direction issued in
paragraph 28 of the judgment, needs to be set aside.
4. The learned counsel appearing for the respondents
and/or intervenors urged that all that paragraph 28 of the
impugned judgment directs is that the effect should be given to
clause 17(7)(iii) and therefore, there is no reason for this Court
to interfere with the said direction.
OUR VIEW
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5. On 11 June 1998, the appellant amended Rule 35 of the
said Rules by which, the age of retirement of the employees
was extended to 60 years. Considering the losses suffered by
the appellant, in the year 2001, the appellant engaged services
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of M/s. Price Waterhouse Coopers to make recommendations
regarding restructuring the company. Based on the figures of
manpower cost incurred by the appellant, the said consultant
recommended that the age of retirement should be reduced to
58 years, which will achieve the objective of reduction of
manpower cost. In fact, the recommendation of the consultant
was also to reduce the age of retirement to 55 years by March,
2003. According to the case of the appellant, in December
2001, the issue of rollback of the age of retirement was
discussed with the recognised Unions and office bearers of the
Officers’ Association. The Division Bench of the High Court in
the impugned judgment has held that the decision of the
appellant to roll back the age of retirement from 60 to 58 years
cannot be faulted. This part of the impugned judgment has
not been assailed by the respondents. Therefore, what remains
for consideration is only the interpretation of clause 17(7)(iii) of
the Standing Orders. For ready reference, we are quoting sub
clause (7) of clause 17 of the Standing Orders, which reads
thus:
“17.ServiceTermination ofby the
Company:
1……………
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Civil Appeal No.13398 of 2015
2……………
3……………
4……………
5……………
6……………
The age of Superannuation shall be
7. (i)
58 years but the Company, however, may
require an employee to retire at any time
after he attains the age of 55 years on
three months’ notice without assigning
any reasons;
(ii) The employee may also at any time
after attaining the age of 55 years
voluntarily retire after giving three
months’ notice to the Company.
(iii) The employee who attains the age
of 58 years may be continued in
service upto the age of 60 years subject
to medical fitness at the end of each
year . ”
(emphasis added)
6. First part of subclause (7) lays down that the age of
superannuation shall be 58 years. However, it gives an option
to the appellant to retire an employee after he or she attains
the age of 55 years on three months’ notice without giving any
reasons. It also gives an option to employees to take voluntary
retirement on completion of the age of 55 years. The word
‘may’ has been used in subclause (7)(iii) of clause 17. It is
only an enabling provision that enables the appellant to
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continue an employee in service who has attained the age of 58
years, up to the age of 60 years, provided he or she is medically
fit. This clause does not entitle any employee to seek
continuation after completion of 58 years of age as a matter of
right. The aforesaid clause does not create any right in any of
the employees to seek their continuation after 58 years.
However, discretionary power has been conferred on the
appellant to continue an employee who has attained 58 years
of age, till completion of the age of 60 years.
7. Paragraph 28 of the impugned judgment reads thus:
“Therefore, while holding that the roll back
from 60 to 58 years cannot be interfered
with by this Court in exercise of judicial
review power, we make it clear that the
roll back cannot have the effect of
affecting the existing rights recognised
in the employees and the company in
terms of clause 17(7) of the Standing
Orders. Point No.3 is answered
accordingly.”
(emphasis added)
On a plain reading of clause 17(7)(iii), it does not create
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any right in favour of any employee. The use of the word ‘may’
indicates that it gives discretion to the appellant to continue
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some of the employees after completing the age of 58 years, till
they complete 60 years of age.
9. Therefore, we hold that clause 17(7)(iii) of the Standing
Orders only enables the appellant – company to continue any
employee in service till he or she attains the age of 60 years
subject to medical fitness at the end of each year. We also
make it clear that the aforesaid clause does not confer any
right on the employees to seek extension till the completion of
60 years. To this extent, paragraph 28 of the impugned
judgment stands modified.
10. The appeal is partly allowed on the above terms with no
order as to costs. Pending applications, if any, stand disposed
of.
……..…………………J.
(Abhay S. Oka)
……..…………………J.
(Rajesh Bindal)
New Delhi;
March 2, 2023.
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