Compulsory retirement issued in lieu of disciplinary proceedings or based on stigmatic grounds is arbitrary and legally unsustainable.

The Petitioner joined the Respondent-Corporation as a Clerk in 1977 and rose to the rank of Administrative Officer by 2012.

Her employment was governed by the Bombay Municipal Corporation (Service) Regulations, 1989, which set the retirement age at 58.

On June 7, 2014, the Respondent issued a notice compulsorily retiring the Petitioner effective September 10, 2014 (before she reached 58), citing frequent absenteeism and a pending departmental inquiry related to a 2000 charge sheet.

The Petitioner challenged this notice as being arbitrary, stigmatic, and in violation of the prescribed procedural guidelines for continuation of service beyond age 55.

1. Whether the notice of compulsory retirement dated June 7, 2014, was issued in compliance with Regulation 205 of the BMC (Service) Regulations, 1989, and the associated procedural guidelines.

2. Whether the impugned notice was stigmatic in nature and used as a substitute for disciplinary proceedings.

Regulation 205 of the Bombay Municipal Corporation (Service) Regulations, 1989, which allows for compulsory retirement after age 55 only if the authority forms an opinion that it is in "public interest".

Principle from Swaran Singh Chand v. Punjab State Electricity Board (2009), holding that if an order of compulsory retirement is stigmatic or used in lieu of disciplinary proceedings, it is bad in law.

Baldev Raj v. State of Punjab (1984), which establishes that "public interest" cannot be a pretext for getting rid of an employee without objective material or to circumvent a court decision.

The court found that the Respondent failed to follow the mandatory procedure of convening a specific Scrutiny Committee to evaluate the Petitioner's fitness based on "Good" or "Very Good" confidential reports; instead, the Petitioner’s records showed no adverse entries and actually reflected high performance.

Crucially, the court observed that the impugned notice specifically mentioned a pending departmental inquiry and the right to take action based on future court results, rendering the order "stigmatic" rather than a retirement in the public interest.

The court reasoned that using compulsory retirement as a "short cut" to avoid or conclude disciplinary proceedings is an abuse of power and constitutes "malice in law".

The Respondent's new arguments regarding compassionate entry into service were rejected as they were not part of the original pleadings or the Committee's consideration.

The High Court quashed and set aside the notice dated June 7, 2014; directed the Respondent-Corporation to treat the Petitioner as having continued in service until the age of 58 and to grant all consequential benefits within three months; Rule was made absolute with no order as to costs.