Premature retirement after prior retention requires genuine changed circumstances; stale adverse material cannot justify a second review.

The Respondent was selected in 1998 for appointment as Assistant General Manager (Technical) with the Food Corporation of India (“FCI”). Although candidates junior to him were appointed earlier, he joined service on 26.09.2003 pursuant to directions of the High Court of Orissa.

The High Court of Orissa subsequently directed that he be granted notional promotion, seniority and retiral benefits from the date on which his juniors were promoted; this relief was affirmed by the Division Bench on 10.05.2023.

FCI had amended its Staff Regulations and issued Circular No. EP-01-2021-24 dated 09.07.2021 prescribing guidelines for review of employees for premature retirement under Regulation 22(2A) of the Food Corporation of India (Staff) Regulations, 1971.

The Respondent had previously been reviewed in February 2017 and retained in service. He was promoted as General Manager in 2019, and his subsequent APARs recorded “Very Good” and “Outstanding” performance, with his integrity assessed as “Nothing Adverse Reported/Noticed” and later “Beyond Doubt”.

On 19.05.2023, nine days after the Division Bench judgment of the High Court of Orissa, FCI prematurely retired the Respondent under Regulation 22(2A), upon payment of three months’ pay and allowances in lieu of notice. His representation was rejected on 20.07.2023.

The learned Single Judge set aside both orders and directed FCI to treat the Respondent as having continued in service with consequential monetary and retiral benefits.

FCI challenged that decision in the present intra-court appeal.

Whether FCI’s order prematurely retiring the Respondent under Regulation 22(2A) was founded on relevant material and validly exercised in accordance with the Staff Regulations and the governing Circular?

Whether, after the Respondent had previously been retained in service and subsequently promoted, FCI could rely on old disciplinary proceedings and other past material without demonstrating genuine “changed circumstances” for a second review?

Whether the timing and circumstances of the premature-retirement order demonstrated a colourable or collateral exercise of power to defeat the Respondent’s judicially granted promotion and seniority benefits?

Regulation 22(2A) of the Food Corporation of India (Staff) Regulations, 1971 permits premature retirement in public interest, but the power remains subject to judicial review.

The competent authority’s subjective satisfaction must be based on relevant material, comply with the applicable rules and instructions, and not be arbitrary, perverse, based on non-application of mind, or colourable.

Under Clause 7 of Circular No. EP-01-2021-24 dated 09.07.2021, a second review after an employee has previously been retained in service requires genuine “changed circumstances” and a decision reflecting “visible meticulousness”.

Clause 10(iv) of the Circular protects officers with high-performance ratings from being arbitrarily categorised as ineffective.

Past adverse material may not be resurrected years later where it had already been considered, followed by retention and promotion, absent fresh and relevant adverse material.

The Division Bench held that although judicial review of compulsory-retirement decisions is limited, the Court may intervene where the decision lacks relevant material, reflects non-application of mind, or constitutes a colourable exercise of power.

The Respondent had already been reviewed and retained in February 2017 and was thereafter promoted as General Manager in 2019. FCI failed to identify any fresh adverse material after that promotion. Reliance on disciplinary proceedings from 2012, which had culminated in minor penalties and had preceded the Respondent’s retention and promotion, was therefore treated as impermissible reliance on stale material.

The Review Committee also failed to account for the Respondent’s recent “Very Good” and “Outstanding” APAR gradings and the express certification that his integrity was “Beyond Doubt.” This disregard of the Respondent’s performance record was inconsistent with Clause 10(iv) of the Circular and demonstrated non-compliance with the governing guidelines.

FCI’s reliance on a broader institutional review following CBI trap cases could not replace the requirement of individual consideration based on fresh, concrete material relating to the Respondent.

Finally, the order’s issuance only nine days after the Respondent secured judicial relief concerning promotion and seniority supported the inference that the power had been exercised for a collateral purpose—to circumvent or frustrate the effect of the judicial directions.

The appeal was dismissed, the learned Single Judge’s judgment was affirmed, and the orders dated 19.05.2023 and 20.07.2023 were set aside.

FCI was required to treat the Respondent as having continued in service and to grant all consequential monetary, service and retiral benefits.

Pending applications were disposed of, with no order as to costs.