Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3298 OF 2009
[Arising out of SLP (Civil) No. 20202 of 2006]
Swaran Singh Chand …Appellant
Versus
Punjab State Electricity Board & Ors. …Respondents
J U D G M E N T
S.B. SINHA, J :
1. Leave granted.
2. The core question, in this appeal, arising out of a judgment and order
dated 17.08.2006 passed by the High Court of Punjab and Haryana in CWP
No. 10549 of 2004, is as to whether an order of compulsory retirement being
a stigmatic one would be valid in law.
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3. Appellant was directed to be compulsorily retired on attaining the age
of 55 years in terms of a circular letter dated 14.08.1981 laying down
guidelines for compulsory retirement, the relevant portion whereof reads as
under:
“(i) Although the entire service record of an
employee has to be considered, premature
retirement should not be ordered if during the last
5 years the work and conduct of the employee has
been good or better than that.
(ii) Ordinarily, no retirement should be ordered
within a period of one year preceding the date of
superannuation of the Government employee.
(iii) If an adverse entry relating to integrity exists
in the confidential reports during the 10 years
preceding the review, or if after its recording there
has been no change in the class, status or the post
of the officer, that single entry should be
considered sufficient for ordering premature
retirement.
(iv) If the adverse report on integrity relates to
the distant past or is more than 10 years old, the
subsequent record of the employee should be
scrutinized carefully. If the subsequent reports
vouch-safe the integrity of the employee in
unambiguous terms, the inference is that he has
improved his conduct and it should not be
necessary to order his premature retirement. A
similar view can be taken if an employee has been
promoted after the recording of the adverse
remarks.”
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4. Admittedly, the said order of retirement dated 29.09.2003 was based
on the aforementioned circular letter. It reads as under:
“Whereas Shri Swaran Singh Chand, UDC S/o Sh.
Gurbachan Singh presently working in the office
of Sr.Xen, Focal Point Spl. Division, Ludhiana has
attained the age of 55 years on 14.10.01 because
his date of birth is 15-10-1946.
Whereas as per PSEB Services (Premature
Retirement) Regulations, the case of Shri Swarn
Singh Chand UDC was considered on 17.9.2003
by the High Empowered Integrity Committee
(HEIC) which has been set up to screen the cases
of non-gazetted employees of Central Zone for
retention in service beyond the age of 50/55 years.
The Committee took note of ACRs, disciplinary
Cases, personal record and his reputation.
Report of disciplinary cases of above noted
employee (as derived from his personal file) is as
under :-
CE/Op/Central Zone, Ludhiana stopped one
increment without future effect vide this office
order 81 dated 5.2.96 in the case of charge sheet
No.C-653 dated 30.5.95 issued to him for
embezzlement of Board’s Cash of Rs.3069/- from
M/s Falcon Industry having A/C No.J537.
The assessment of ACRs of the above official was
scrutinized and observed that the following ACRs
are below average with adverse remarks:
(1) 28.10.93 to 31.3.94 below average integrity
doubtful with adverse remarks of the following
nature
i) Trust worthy Not Good
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ii) Habits Not Good
iii) Knowledge of work Not Good
iv) Knowledge of rules/Codes Less knowledge
v) Relations with Co-employees
and other Sections of the
office and with Public Not Good
vi) Integrity Doubtful
vii) Overall Assessment Below Average
viii) Capable for next Promotion No
(2) 1.4.94 to 20.10.94 Below Average with adverse
of following nature :
i) Control over subordinate employees No
ii) Relations with employees & Public No
iii) Knowledge of work No
iv) Capable of next Promotion No
v) Not Good in Office Work
5. Appellant indisputably preferred an appeal thereagainst. In the
Memorandum of Appeal, he questioned the legality of the said order inter
alia contending:
(i) Although a disciplinary proceeding for imposing major penalty had
been initiated, a minor punishment was imposed without holding a
departmental proceeding.
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(ii) ACRs of the relevant period had been recorded within a period of
11 ½ months only for the purpose of upholding the chargesheet.
(iii) He, having been promoted to the post of Upper Division Clerk by
an office order No. 135 dated 6.11.2001, the Appointing Authority
could not have taken into consideration his ACRs prior to the said
period.
The said appeal was rejected by the appellate authority, stating:
“I have gone through the relevant record/
comments of field officers and it is found that
there is no point in his pleading that he was
promoted as UDC recently. In promotion cases,
different criteria are followed. In promotions on
seniority-cum-merit, incumbent is required to
qualify only minimum bench marks on the basis of
ACRs of last 5 years and punishment awarded in
disciplinary cases. In cases for extension in
service, past 10 years’ record of the concerned
employee is put to be screened by the HEIC
constituted for the purpose. The appellant has
mostly average record including his ACR for
28.10.93 to 31.3.94 as Below Average with
Integrity as ‘Doubtful’. Further his ACR for
1.4.94 to 20.10.94 was also below average. In the
disciplinary case relating to embezzlement of
Rs.3069/-, his one AGI without future effect, was
stopped. Therefore, the decision of the competent
authority is found to be based on facts and record
and there is no justification to intervene in the
recommendations made by HEIC of Central Zone,
with regard to his extension in service being not
approved on the basis of which, the competent
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authority, viz CE/Op. (Central), Ludhiana has
ordered his premature retirement.
Appeal rejected.”
6. Indisputably, therefore, not only a minor punishment inflicted on him
had been taken into consideration while passing the impugned order, but it
was also based inter alia on the premise that his integrity was doubtful.
7. Before the High Court, appellant had inter alia raised a contention that
the appellate authority had not taken into consideration the contentions
raised by him before it. By reason of the impugned judgment, a Division
Bench dismissed the said writ petition opining that the action taken by the
respondents could not be held to be unconscionable, stating:
“An employee who reaches the age of 55 years can
only be permitted to continue in service beyond the
aforesaid age on the basis of the assessment of the
work by the competent authority. The view taken
by the respondent is neither arbitrary nor contrary
to any statutory rules.”
8. The law relating to compulsory retirement is no longer res integra.
An order of compulsory retirement inter alia can be passed when the officer
concerned is found to be a dead wood. [See M.P. State Co-op. Dairy Fedn.
Ltd. & Anr. v. Rajnesh Kumar Jamindar & Ors., 2009 (6) SCALE 16]
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9. Although for the said purpose, the principles of natural justice are not
required to be complied with and even adverse entries made in the
confidential record including uncommunicated entires may be taken into
consideration but the same should not be passed in place of or in lieu of a
disciplinary proceedings. If an order of compulsory retirement is stigmatic
in nature, the same would be bad in law.
10. It is furthermore well-settled that when the State lays down the rule
for taking any action against an employee which would cause civil or evil
consequence, it is imperative on its part to scrupulously follow the same.
Mr. Justice Frankfurter in Vitarelli v. Seaton [359 US 535] stated:
“An executive agency must be rigorously held to
the standards by which it professes its action to be
judged. … Accordingly, if dismissal from
employment is based on a defined procedure, even
though generous beyond the requirements that bind
such agency, that procedure must be scrupulously
observed. … This judicially evolved rule of
administrative law is now firmly established and, if
I may add, rightly so. He that takes the procedural
sword shall perish with that sword.”
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[See also H.V. Nirmala v. Karnataka State Financial Corporation
(2008) 7 SCC 639]
11. The guidelines issued by the State are binding on it. Appellant had
been compulsorily retired with effect from 29.09.2003. Salary for three
months from the said date was paid, i.e., upto December, 2003. His actual
date of retirement was 31.10.2004. The impugned order, therefore, was
passed although not strictly within a period of one year preceding the date of
superannuation but near about the same. Thus, spirit of Clause (ii) of the
guidelines issued by order dated 14.08.1981 should have also been taken
into consideration. So far as Clause (iii) of the said guidelines is concerned,
there is a change of post as he had been promoted to a higher post in 2001.
As he had been promoted despite recording of the adverse remarks, the said
fact also should have been taken into consideration. If adverse report on
integrity relates to a distant past or more than ten years old, yet again it
should not have been considered.
12. This Court in Baikuntha Nath Das and Another v. Chief District
Medical Officer, Baripada and Another [(1992) 2 SCC 299] laid down the
law inter alia as under:
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“(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.”
13. It is a well-settled principle of law that an order of compulsory
retirement would be held to be stigmatic inter alia, in the event the employer
has lost confidence [See Chandu Lal v. Management of M/s. Pan American
World Airways Inc. (1985) 2 SCC 727 at 730, para 8], or he has concealed
his earlier record [See Jagdish Parsad v. Sachiv, Zila Ganna Committee,
Muzaffarnagar and Another (1986) 2 SCC 338 at 342-343, para 9].
He can, however, be subjected to compulsory retirement inter alia if
he has outlived his utility [See The State of Uttar Pradesh v. Madan Mohan
Nagar, AIR 1967 SC 1260 at 1262].
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In Allahabad Bank Officers’ Association and Another v. Allahabad
Bank and Others [(1996) 4 SCC 504], it was held:
“17. The above discussion of case-law makes it
clear that if the order of compulsory retirement
casts a stigma on the government servant in the
sense that it contains a statement casting aspersion
on his conduct or character, then the court will
treat that order as an order of punishment,
attracting provisions of Article 311(2) of the
Constitution. The reason is that as a charge or
imputation is made the condition for passing the
order, the court would infer therefrom that the real
intention of the Government was to punish the
government servant on the basis of that charge or
imputation and not to exercise the power of
compulsory retirement. But mere reference to the
rule, even if it mentions grounds for compulsory
retirement, cannot be regarded as sufficient for
treating the order of compulsory retirement as an
order of punishment. In such a case, the order can
be said to have been passed in terms of the rule
and, therefore, a different intention cannot be
inferred. So also, if the statement in the order
refers only to the assessment of his work and does
not at the same time cast an aspersion on the
conduct or character of the government servant,
then it will not be proper to hold that the order of
compulsory retirement is in reality an order of
punishment. Whether the statement in the order is
stigmatic or not will have to be judged by adopting
the test of how a reasonable person would read or
understand it.”
14. The question came up for consideration before a Division Bench of
this Court in State of Gujarat v. Umedbhai M. Patel [(2001) 3 SCC 314]
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wherein Balakrishnan, J. (as the learned Chief Justice then was),
summarized the law, thus:
“11. The law relating to compulsory retirement has
now crystallised 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 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.”
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15. In a slightly different context, viz., in a case of probation, this Court in
Jaswantsingh Pratapsingh Jadeja v. Rajkot Municipal Corporation and
Another [(2007) 10 SCC 71] opined as under:
“24. In this case, however, the period of probation
as provided for under the statute had expired and
his misconduct had been taken note of. Such
misconduct was not founded only upon absence
from duty, but also upon carelessness, negligence
on the part of the appellant and lack of devotion
amongst others.
Upon taking into consideration some precedents operating in the field,
it was concluded:
“28. From the discussions made hereinbefore, it is
evident that termination of services of the
appellant purporting to discharge him simpliciter
cannot be accepted, being stigmatic in nature. The
form of the order terminating the services coupled
with the background facts clearly leads to the
conclusion that the order impugned in the writ
petition by the appellant was punitive.”
16. The learned counsel appearing on behalf of the respondent would
contend that the principles of natural justice are not required to be complied
with in a case of compulsory retirement, particularly, when no mala fide is
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alleged. Allegation against the delinquent was not only that he lacked
integrity but also unfit to be retained in service. Those comments, in our
opinion, are stigmatic in nature.
It is also not a case where there had been a steady decline in the
performance of the employee.
17. The learned counsel appearing on behalf of the respondent would
contend that in this case malice has neither been alleged nor been proved. In
support of his contention reliance has been placed on Purushottam Kumar
Jha v. State of Jharkhand and Others [(2006) 9 SCC 458] wherein Thakker,
J. speaking for the Bench, stated the law, thus:
“23. It is well settled that whenever allegations as
to mala fides have been levelled, sufficient
particulars and cogent materials making out prima
facie case must be set out in the pleadings. Vague
allegation or bald assertion that the action taken
was mala fide and malicious is not enough. In the
absence of material particulars, the court is not
expected to make “fishing” inquiry into the matter.
It is equally well established and needs no
authority that the burden of proving mala fides is
on the person making the allegations and such
burden is “very heavy”. Malice cannot be inferred
or assumed. It has to be remembered that such a
charge can easily be “made than made out” and
hence it is necessary for the courts to examine it
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with extreme care, caution and circumspection. It
has been rightly described as “the last refuge of a
losing litigant”. (Vide Gulam Mustafa v. State of
Maharashtra; Ajit Kumar Nag v. GM (PJ), Indian
Oil Corpn. Ltd.)”
18. In a case of this nature the appellant has not alleged malice of fact.
The requirements to comply with the directions contained in the said circular
letter dated 14.08.1981 were necessary to be complied with in a case of this
nature. Non-compliance whereof would amount to malice in law. [See
Managaer, Government Branch Press and Another v. D.B. Belliappa (1979)
1 SCC 477, Smt. S.R. Venkataraman v. Union of India and Another (1979) 2
SCC 491 and P. Mohanan Pillai v. State of Kerala and Others (2007) 9 SCC
497]
19. Thus, when an order suffers from malice in law, neither any averment
as such is required to be made nor strict proof thereof is insisted upon. Such
an order being illegal would be wholly unsustainable.
20. For the reasons aforementioned, the impugned order is set aside. The
appeal is allowed. However, in the facts and circumstances of the case,
there shall be no order as to costs.
………………………….J.
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[S.B. Sinha]
..…………………………J.
[Dr. Mukundakam Sharma]
New Delhi;
May 06, 2009