Compulsory retirement cannot be used punitively by treating unadjudicated misconduct as proved.

The Petitioner, a Deputy General Manager in the Food Corporation of India (“FCI”), was implicated in a CBI case alleging acceptance of a ₹50,000 bribe from a rice miller. He was arrested on 11 January 2023 and placed under deemed suspension under Regulation 66 of the FCI (Staff) Regulations, 1971.

Following a meeting convened after the CBI action, FCI directed that officers above 50 years involved in the alleged incidents be reviewed under Regulation 22(2), while officers below 50 years would face disciplinary proceedings under Regulation 58.

The Review Committee considered the Petitioner’s case on 6 March 2023. Although the Committee examined his service record, APARs and vigilance profile, it stated that he had “used his position for personal gains,” accepted a bribe, committed “gross misconduct,” and engaged in “corrupt activities”.

The CBI charge-sheet was filed only on 11 March 2023, after the Review Committee had made its recommendation.

On 17 April 2023, the Managing Director prematurely retired the Petitioner under Regulation 22(2), recording only that retirement was in the interest of FCI and public interest. His representation was rejected on 6 July 2023 after the Representation Committee affirmed the Review Committee’s conclusion regarding his “doubtful integrity”.

The Petitioner challenged the orders, contending that Regulation 22(2), a non-punitive power, had been used to punish him for unproved corruption allegations.

1. Whether FCI’s decision to prematurely retire the Petitioner under Regulation 22(2) was a bona fide assessment of his continued retention in public interest, or a punitive action based on treating the unadjudicated corruption allegations as established misconduct?

2. Whether the Review Committee and Representation Committee properly considered the Petitioner’s entire service record, including his favourable APARs, earlier retention under Regulation 22(2), and integrity assessments?

3. What relief and consequential directions should follow if the premature-retirement order is invalid?

Regulation 22(2)(A)(i) of the FCI (Staff) Regulations, 1971 empowers the Appropriate Authority to retire an employee prematurely, upon forming an opinion that doing so is in the public interest, by giving three months’ notice or pay in lieu thereof.

The power is non-punitive and must be exercised bona fide, on relevant material, and for assessing whether the employee’s continued retention is administratively undesirable; it cannot be used as a substitute for disciplinary proceedings or to impose punishment for unproved misconduct.

The Court relied on Union of India v. Col. J.N. Sinha, Baikuntha Nath Das v. District Medical Officer, Baldev Raj Chadha v. Union of India, Pramod Kumar Bajaj v. Union of India, Allahabad Bank Officers’ Association v. Allahabad Bank, State of Gujarat v. Umedbhai M. Patel, Nisha Priya Bhatia v. Union of India, M.S. Bindra v. Union of India, State of Orissa v. Ram Chandra Das, S. Ramachandra Raju v. State of Orissa, and K. Kandaswamy v. Union of India.

These authorities establish that doubtful integrity and pending allegations may constitute relevant material for prospective assessment of suitability, but an authority cannot treat an unadjudicated allegation as proved or use compulsory retirement to punish the employee.

The entire service record, including recent favourable reports, must also be considered.

Regulation 66 governs the continuation and review of suspension, while Regulation 22(2)(A)(ii)–(iii) permits the Court to regulate the intervening period and monetary consequences when premature retirement is set aside.

The Court accepted that the CBI material was sufficiently serious to permit FCI to reopen the Petitioner’s case and assess whether his continued retention was consistent with public interest; FCI was not required to await the outcome of the criminal proceedings.

However, the Review Committee did not merely treat the allegations as material raising doubt about the Petitioner’s integrity. It expressly found that he had used his position for personal gain, accepted a bribe, committed gross misconduct and engaged in corrupt activities, and stated that such cases should be dealt with “in the strictest manner to set an example”.

The reference to setting an example indicated a punitive and deterrent purpose, rather than a prospective assessment of suitability.

The formal retirement order’s neutral wording did not cure the defect because the Review Committee’s reasoning formed the basis of the decision.

The case therefore resembled R.K. Panjetha v. Haryana Vidyut Prasaran Nigam Ltd., where the authority fixed responsibility for unadjudicated misconduct, rather than Punjab State Power Corporation Ltd. v. Hari Kishan Verma, where pending proceedings were considered only as part of an overall suitability assessment.

The Representation Committee also failed to address the Petitioner’s specific objection that Regulation 22(2) had been used punitively and simply affirmed the earlier conclusion.

Accordingly, the power under Regulation 22(2) had been exercised for a collateral punitive purpose and was legally unsustainable.

The Petitioner was restored to FCI service, but immediate restoration to his former sensitive functions was not directed. FCI was required, within two weeks of reinstatement, to take a fresh decision under Regulation 66 on whether he should remain under suspension; until then, he was not required to assume active charge.

FCI was directed to decide within four weeks whether it would initiate disciplinary proceedings and, if so, issue a charge memorandum within that period. Such proceedings were to be concluded within nine months, subject to exclusions for court stays or delay attributable to the Petitioner.

The Petitioner was granted continuity of service and consequential notional benefits from 18 April 2023. If disciplinary proceedings were initiated, monetary benefits for the intervening period would abide by their outcome; if proceedings were not initiated within the prescribed period, the intervening period would be treated as duty for all purposes, including pay and allowances.

The judgment did not exonerate the Petitioner, and both the departmental and criminal proceedings were left to proceed independently on their merits.