Holding

Compulsory retirement is not a punishment and may be ordered only after a full consideration of the officer's service record; it cannot be used as a shortcut to avoid disciplinary enquiry, and the order in this case was punitive and therefore set aside.

Summary

The respondent, an Executive Engineer in Gujarat, was suspended pending disciplinary proceedings and was compulsorily retired under Rule 161(1)(i)(aa) of the Bombay Civil Services Rules, 1959. The High Court set aside the retirement order, holding it punitive because it was passed without a completed enquiry and without adverse entries in the confidential service record. On appeal, the Supreme Court reiterated that compulsory retirement is not a punishment under Article 311 and may be invoked only when the officer's services are no longer useful, after considering the entire service record, including confidential entries. The Court emphasized that such retirement cannot be used as a shortcut to avoid departmental enquiry and must not be punitive. Finding no adverse entries and noting that the enquiry was pending, the Court upheld the High Court's decision and dismissed the appeal, directing the State to comply with the directions within three months.

Issues considered

Whether an order of compulsory retirement under the Bombay Civil Services Rules is punitive and therefore violative of Article 311 of the Constitution.
Whether compulsory retirement can be imposed without the completion of a disciplinary enquiry.
Whether the entire service record, including confidential entries, must be considered before ordering compulsory retirement.
Whether principles of natural justice apply to a compulsory retirement order.
Whether the State's invocation of Rule 161(1)(i)(aa) was valid in the facts of the case.

Legislation cited

Constitution of Indias. Article 310, s. Article 311

Subjects

compulsory retirementservice lawdisciplinary proceedingspunitive orderpublic interestnatural justiceconfidential recordBombay Civil Services RulesArticle 311Article 310

Judgment

A STATE OF GUJARAT
v.
UMEDBHAI M. PATEL

FEBRUARY27, 2001

B [S. RAJENDRA BABU AND K.G. BALAKRISHNAN, JJ.]

Service Law :

Bombay Civil Se1vices Rules, 1959-Rule J6(l)(l){i)(aa)-Employee
compulsorily retired while disciplinary proceedings were pending against him-
c High Cou11 set aside the orderjinding it punitive in nature-On appeal Held,
compulsory retirement shall not be imposed as a puniti1•e measure-Ordinarily
an order of co1npulso1y rezi re111ent is not treated as a punishment-floH1ever, it
should not be passed as a sho11 cut to avoid a depa11nzental enquiry-High
Cou11 rightly set aside the impugned orda as the authorities did not wait for
D the conclusion of the enquiry and dispensed 1vith his se111ices for extraneous
reasons, and there 1vere no adverse entries in his service record to suppo11 the
same.

Respondent was placed under suspension pending disciplinary pro-
ceedings. An order for compulsory retirement was passed by the appel-
E lant invoking Rule 16l(l)(l)(i)(aa) of the Bombay Civil Services Rules,
195'1 against him. This order was set aside by the Division Bench holding
it to be punitive in nature, passed "ithout due investigation and "1thout
giving reasonable opportunity of hearing to the respondent. Hence this
appeal.
F
Appellant contended that the impugned order is n"t punitive; that
the services of the respondent were dispensed in public interest; and that
the State Govt. has suffered pecuniary losses due to him.

Respondents contended that the impugned order was passed on
G specific allegations and the same was illegal.

Dismissing the appeal the Court

HELD : t. Whenever the services of a public servant are no longer
useful to the general administration, the officer can be compulsorily re-
H tired for the sake of public interest. Ordinarily, the order of compulsory
170
STATE v. U.M. PATEL 171
retirement is not to he treated as a punishment coming under Article 311 A
of the Constitution; 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; any adverse
entries made in the confidential record shall he taken note of and be given
due weightage in passing such order, even uncommunicated entries in the
B
confidential record can also be taken into consideration; the order of
compulsory retirement shall not be passed as a short cut to avoid depart·
mental enquiry when such course is more desirable, if the officer was
given a promotion despite adverse entries made in the confidential record,
that is a fact in favour of the officer; compulsory retirement shall not be
imposed as a punitive measure. [176-C-G] c
State ofOrissa & Ors. v. Ram Chandra Das, [1996] 5 SCC 331; State of
Gujarat & Anr. v. Suryakant Chuni/a/ Sha/, [1999) 1 SCC 529; Baikuntha
Nath Das & Anr. v. Chief District Medical Officer, Baripada & Anr., (19~9) 2
SCC 299; Allahabad Bank Officer's Association & Anr. v. Allahabad Bank &
Ors., [1996] 4 SCC 504; Union of India & Ors. v. Dula/ Dutt, (1993) 2 SCC
D
179 and J.D. Srivastava v. State of MP. & Ors., (1984] 2 SCC 8, relied on.

2. There were absolutely no adverse entries in respondent's confi·
dential record. He had successfully crossed the efficiency bar at the age of
50 as well 55. He was placed under suspension pending disciplinary E
proceedings. The State Govt. had sufficlent time to complete the enquiry
against him hut the enquiry was not completed within a reasonable time.
Even the Review Committee did not recommend his compulsory retire-
ment. The respondent bad only less than two years to retire from service. If
the impugned order is viewed in the light of these facts, it could be said that
the order of compulsory retirement was passed for extraneous reasons. As F
the authorities did not wait for the conclusion of the enquiry and decided
to dispense with his services merely on the basis of the allegations which
had not been proved and in the absence of any adverse entries in his
service record to support the order of compulsory retirement, the Division
Bench of the High Court was right in setting aside the order of compulsory G
retirement. 177-A-C)

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1561 of2001.

From the Judgment and Order dated 24.3.2000 of the Gujarat High
Court in S.C.A. No. 6626 of 1987. H
172 SUPREME COURT REPORTS [2001] 2 S.C.R.
A R.P. Bhatt, Ms. Hemantika Wahi and Ms. Ann Sawhney for the Appel-
lant.

S.K. Dholakia, Ms. Promila and Ashish Dholakia for the Respondent.

The Judgment of the Court was delivered by
B
K.G. BALAKRISHNAN, J. Leave granted.

The respondent, during the relevant time, was an Executive Engineer
working in the Narmada Development Department of the State of Gujarat. He
was placed under suspension on 22.5.1986 pending disciplmary proceedings.
c An enquiry was initiated against him alleging that he had corurnitted acts of
misuse of power in connection with the purchase of Tarpauline. While the
respondent was continuing under suspension, the Govt. of Gujarat passed an
order of compulsory retirement by invoking Clause (aa) (i) (1) of Rule 161
(1) of the Bombay Civil Services Rules, 1959, with effect from 13.2.1987.
The respondent was due to retire on superannuation by the end of August
D 1988, his date of birth being 17.8.1930. In the order of compulsory retirement,
it was stated that the case relating to continuance of the respondent in Govt.
service beyond the age of 50 and 55 years was reviewed. The respondent
challenged the order of his compulsory retirement before the High Court of
Gujarat and by the impugned judgmen~ the Division Bench of the High Court
E set aside that order on the ground that the same was punitive in nature and
was passed with an oblique purpose to punish the respondent for the charges
wltich were neither investigated nor had the respondent been given reasonable
opportunity of hearing. This judgment is challenged before us.

We heard the learned counsel for the appellant-State as also learned
F counsel for the respondent. Elaborate arguments were advanced by the coun-
sel for the appellant-State that the impugned order is not punitive in nature
and that the services of the respondent were dispensed with in public interest.
It was argued that the respondent's services were no longer useful and that
he had corurnitted acts whereby the State Govt. suffered pecuniary losses. It
G was also contended that the order of compulsory retirement passed by the
State Govt. Is not by way of punishment and the respondent is entitled to get
all the benefits.

Learned counsel for the respondent, on the other hand, supported the
impugned judgment and contended that the. order of compulsory retirement
H was passed on the specific allegations, for which the respondent was under
STATE v. U.M. PATEL [K.G. BALAKRISHNAN, J.] 173
suspension awaiting formal enquiry, and under that circumstance, the A
._,. impugned order of compulsmy retirement was patent! y illegal. Reliance was
r- placed on various decisions of this Court.

This Court, in a number of cases, had occasion to consider the law
relating to compulsory retirement and has laid down various principles. In
State of Orissa & Ors v. Ram Chandra Das, [1996] 5 SCC 331, this Court B.
held in paragraph 3 of the judgment as follows :

"It is needless to reiterate that the settle~ legal position is that the
Government is empowerod and would be entitled to compulsorily
retire a government servant in public interest with a view to improve c
efficiency of the administration or to weed out the people of doubtful
integrity or who are corrupt but sufficient evidence was not available
to take disciplinary action in accordance with the rules so as to
inculcate a sense of discipline in the service. But the Government,
before taking such decision to retire a government employee compul-
sorily from service. has to consider the entire record ofthe government D
servant including the latest reports."

[Emphasis supplied]

In State of Gujarat & Anr. v. Suryakant Chunilal Shah, [1999] I SCC
E
529, the State Govt. challenged the judgment of the Division Bench of the
Gujarat High Court by which the order passed by the Single Judge was set
aside. The Division Bench held that the order of compulsory retirement was
bad and thereupon the State of Gujarat filed an appeal. In t11at case, two
criminal complaints had been filed against the respondent-Asst!. Food Con-
trailer; one alleging that he had illegally issued cement permits to some bogus F
institntions; and second tliat he had fabricated some rubber stamps of the
Government for the purpose of issuing illegal permits. But, tl1ere were no
adverse entries in his confidential records and his integrity was not doubted
at any stage. However, the authorities thought that the investigation and
subsequent prosecution of the respondent would take long time and it would
G
he better to dispense with his services by compulsorily retiring him. The
Review Committee, therefore, recommended his compulsory retirement. This
Court, in paragraph 28 of the judgment, held as under:
~-
"There being no material before the Review Committee, inasmuch as
there were no adverse remarks in the character roll entries, the H
174 SUPREME COURT REPORTS (2001] 2 S.C.R.
A integrity was not doubted at any time, the character roll entries
subsequent to the respondent's promotion to the post of Assistant
Food Controller (Class II) were not available, it could not come to i
the conclusion that the respondent was a man of doubtful integrity nor
could have anyone else come to the conclusion that the respondent
was a fit person to be retired compulsorily from service. The order,
B
in the circumstances of the case, was punitive having been passed for
the collateral pwpose of his immediate ren,oval rather than in public
interest."

In Baikuntha Nath Das & Anr. v. Chief District Medical Officer, Baripada
C & Anr., (1992] 2 SCC 299, following the decision in Union of India v. J.N.
Sinha, (1970)] 2 SCC 458, this Court held thus:

"(i) An orderof compulsory retirement is not a punishment. It implies
no stigma or any suggestion of misbehaviour.

D (ii) The order has to be passed by the government on forming the
opinion that it is in the public interest to retire a govenunent servant
compulsorily. The order is passed on the subjective satisfaction of the
government.

(iii) Principles of natural justice have no place in the context of an
E order of compulsory retirement. This does not mean that judicial
scrntiny is excluded altogether. While the High Court or this Court
would not examine the matter as an appellate court, they may inter-
fere if they are ·satisfied that the order is passed (a) mala fide or (h)
that it 1s based on no evidence or (c) that it is arbitrary -- in the sense
F that no reasonable person would form the requisite opinion on the
given material; in short, if it is found to be a perverse order.

(iv) The government (or the Review Committee, as the case may be)
shall have to consider the entire record of service before talcing a
decision in the matter -- of course attaching more importance to
G 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
H based upon merit (selection) and not upon seniority.
k
STATE v. U.M. PATEL [K.G. BALAKRISHNAN, J.] 175

(v) An order of compulsory retirement is not liable to be quashed by a A
Court merely on the showing that while passing it uncornmunicated adverse
~ remarks were also taken into consideration. The circumstance by itself cannot
be a basis for interference."
-. In Allahabad Bank Officers' Association & Anr. v. Allahabad Bank &
B
Ors., (1996] 4 SCC 504, this Court, in paragraph 5 of the judgment on page
508, held as under:

"The power to compulsorily retire a government servant is one of the
facets of the doctrine of pleasure incorporated in Article 310 of the
Constitution. The object of compulsory retirement is to weed out the c
dead wood in order to maintain efficiency and initiative in the service
and also to dispense with the services of those whose integrity is
doubtful so as to preserve purity in the administration .

....................
D
....................
While misconduct and inefficiency are factors that enter into the
account where the order is one of dismissal or removal or of retirement,
there is this difference that while in the case of retirement they merely
E
~
furnish the background and the enquiry, if held - and there is no duty
to hold an enquiry - is only for the satisfaction of the authorities who
have to take action, in the case of dismissal or removal they form the
very basis on which the order is made, as pointed out by tl1is Court in
Shyam Lal v. State of U.P., AIR (1954) SC 369".
F
In Union of India & Ors. v. Dula! Dutt, [1993] 2 SCC 179, this Court
reiterated the view held right from the case of R.L Butail v. Union of India,
[1970] 2 SCC 876 and Union of India v. J.N. Sinha, [1970] 2 SCC 458 "that
an order of a compulsory retirement is not an order of punishment. It is actually
a prerogative of the Government but it should be based on material and has G
to be passed on the subjective satisfaction of the Government. Very often,
on enquiry by the Court, the Government may disclose the material but
it is very much different from the saying that the order should be a
-* speaking order. No order of compulsory retirement is required to be a speaking
order."
H
176 SUPREME COURT REPORTS [2001] 2 S.C.R.
A Jn another decision in J.D. Srivastava v. State of M.P. & Ors., [1984] 2
SCC 8, in paragraph 7 of the judgment, it was observed by this Court as under:

"But being reports relating to a remote period, they are not quite
relevant for the purpose of determining whether he should be retired
compulsorily or not in the year 1981, as it would be an act bordering
B on perversity to dig out old files to find out some material to make
an order against an officer."

The law relating to compulsory retirement has now crystallized into
definite principles, which could be broadly summarised thus:

c (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 nuder Article 311 of the Constitution.
D
(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
E 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
F cut to avoid depaitrnental enquiry when such course is more desir-
able.

(vii) If the officer was given a promotion despite adverse entries made ..i.
in the confidential record, that is a fact in favour of the ollicer.

G (viii) Compulsory retirement shall not be imposed as a punitive
measure.

Jn the instant case, there were absolutely no adverse entries in respond-
ent's confidential record. In the rejoinder filed in this Court also, nothing has
been averred that the respondent's service record revealed any adverse en-
H tries. The respondent had successfully crossed the efficiency bar at the age of
STATE v. U.M. PATEL [K.G. BALAKRISHNAN, J.] 177
50 as well 55. He was placed under suspension on 22.5.1986 pending disci- A
plinary proceedings. The State Govt. had sufficient time to complete the en-
quiry against him but the enquiry was not completed within a reasonable time.
Even the Review Committee did not recommend the compnlsory retirement of
the respondent. The respondent had only less than two years to retire from
service. If the impugned order is viewed in the light of these facts, it could be
B
said that the order of compulsory retirement was passed for extraneous reasons.
As the authorities did not wait for the conclusion of the enquiry and decided
to dispense with the services of the respondent merely on the basis of the
allegations which had not been proved and in the absence of any adverse
entries in his service record to support the order of compulsory retirement, we
are of the view that the Division Bench was right in holding that the impugned c
order was liable to be set aside. We find no merit in the appeal, which is
dismissed accordingly. However, three months' time is given to the appellant-
State to comply with the directions of the Division Bench, failing which the
respondent would be entitled to get interest at the rate of 18% for the delayed
payment of the pecuniary benefits due to him.
D
A.Q. Appeal dismissed.

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