Holding

When promotion is by seniority alone, adverse entries do not lose their sting, and the government’s absolute power under Rule 56(c) to retire a servant in public interest is valid.

Summary

Lalsa Ram, a direct‑recruit Naib Tehsildar, was promoted to Deputy Collector solely on seniority. The Uttar Pradesh government later ordered his compulsory retirement under Rule 56(c) of the U.P. Fundamental Rules, relying on several adverse entries in his service record that pre‑dated his promotion. The Allahabad High Court set aside the retirement, holding that the adverse remarks lost their sting after promotion. The Supreme Court reversed, observing that when promotion is by seniority and not by merit‑based selection, adverse entries do not lose their sting and may be considered. It held that Rule 56(c) gives the government an absolute right to retire an employee upon attaining 50 years of age, provided the decision is made in public interest after considering the whole service record. Consequently, the High Court’s order was quashed and the compulsory retirement upheld.

Issues considered

Whether adverse entries in a government servant's service record lose their effect after a promotion that is based solely on seniority.
Whether the government can validly order compulsory retirement under Rule 56(c) of the U.P. Fundamental Rules in public interest, considering adverse entries.
Scope of judicial review of a compulsory retirement order and applicability of principles of natural justice.

Legislation cited

Uttar Pradesh Fundamental Ruless. Rule 56(2), s. Rule 56(c)

Subjects

compulsory retirementservice lawadverse entriesseniority promotionRule 56public interestjudicial reviewnatural justicegovernment servant

Judgment

+
A STATE OF U.P. AND ANR.
v.
LALSARAM

FEBRUARY 23, 2001

B [G.B. PATTANAIK AND U.C. BANERJEE, JJ.]

Service Law :

U.P. Fundamental Rules: Rules 56(c) and 56(2).

C Compulsory retirement-Government servant promoted as Deputy Col-
lector on the basis ofseniority only-Subsequently, the said Government serv-
ant tvas compulsorily retired in public interest on the basis of adverse entries
in his service record prior to promotion-Validity of-Held: Adverse remarks
lose their sting if pro1notion is made on merits-But if promotion is made on
D seniority only adverse remarks do not lose their sting-Rules provide an
absolute right to compulsorily retire a Government servant-Compulsory re-
tirement being in public interest, no inteiference is called for-Fundamental
Rules, R.56.

The respondent was appointed as a direct recruit Naib Tehsildar and
E was promoted as Deputy Collector on the basis of seniority only. Subse·
-~
quently, the respondent was compulsorily retired from service under Rule
56(c) of the U.P. Fundamental Rules on the basis of adverse entries in his
service records prior to his promotion. However, the High Court quashed
the order of compulsory retirement. Hence this appeal.
F On behalf of the respondent it was contended that the adverse
remarks lost their sting upon promotion of the respondent and could not,
therefore, from a basis for the compulsory retirement of the respondent.

Allowing the appeal, the Court
G HELD : 1. In the event of there being a promotion by the Depart·
mental Promotion committee upon assessment of the service career and
annual confidential reports,_ the adverse entries lose their sting • in the
event, however, the promotion is offered only on the ground of seniority
without any assessment of the entire career situation, question of adverse
H entries losing their sting does not and cannot arise. In the contextual facts
108
+
STATE v. LALSA RAM 109
if it was promotion by way of selection and not by seniority, no exception A
_,,
could be taken therefor but the facts in the present context depict other·
i wise since the respondent was promoted by seniority only. [114·F·G]

BaikunthaNath Das v. Chief District Medical Officer, Baripada, [1992)
2 sec 299, followed.
B
State of Punjab v. Gunlas Singh, [1998) 4 SCC 92; Prabodh Sagar v.
Punjab State Electricity Board, [2000) 5 SCC 630; I.K. Mishra v. Union of
India, [1997) 6 SCC 228 and Pusts and Telegraphs Board v. C.S.N. Munhy,
[1992) 2 sec 317, relied on.
2. Rule 56(c) of the U.P. Fundamental Rules read with sub-rule (2) c
provides an authority to the Government with an absolute right to retire
an employee on the date on which he attains the age of 50 years. The option
for the Government servant to voluntarily retire, however, has been attrib-
uted to the concerned employee at any time after attaining the age of 45
years or after he has completed the qualifying service of 20 years. The D
fundamental Rules thus confer a right absolute to retire an employee on the
happening of certain event namely the latter attaining 50 years of age - the
right being absolute. [115-E-F)

--;
3. The Appointing Authority upon consideration of the entire service
record as required under the Rules and having formed its opinion that the E
'f
compulsory retirement of the respondent being in public interest issued the
order and in the wake of the aforesaid, question of any interference of this
Court does not and cannot arise. Interference in these matters by the
courts in exercise of its jurisdiction under the constitutional mandate is
very restricted and the courts shall have to tread on the issue with utmost F
care and caution by reason of very limited scope of interference. [116-G)

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4040of1999.

From the Judgment and Order dated 15 .3.99 of the Allahabad High Court
in C.M.WP. No. 20567 of 1998. G
Y.P. Singh, C. Siddharth, Mukesh K. Sharma and Ajay K. Agrawal for
the Appellants.
_..
Shashindra Tripathi and Ms. Mridula Ray Bharadwaj for the Respond-
ent. H
no SUPREME COURT REPORTS [2001] 2 S.C.R.
A The Judgment of the Court was delivered by
·~
BANERJEE, J. The challenge in this appeal, by the grant of special
leave, is to a judgment of the Allahabad High Court allowing a writ petition ~
upon having an order of compulsory retirement dated 18th May 1998, set
aside and quashed.
B
Before adverting to the contentions raised in the matter, a brief factual
reference would be convenient at this juncture. The petitioner was appointed
as a direct recruit Naib Tehsildar on 19th !Jay, 1955. The records depict that
in April, 1980 the petitioner was promoted to the rank of Tehsildar and
subsequently in March, 1995, to the rank of Deputy Collector. The petitioner
c joined the post as such in April, 1995 at Pitthorgarh District. Further in 1998,
the petitioner however was served with an order of compulsory retirement in
terms of the report of the Screening Committee dated 2nd January, 1998. The
Screening Committee reported as below :

" ........................
D
3. In the case of Sh. Lalsa Ram the Officer mentioned against S. No.
62 of the Enclosure A. The Screening Committee on considering
thoroughly his relevant service records and the entries available in his

E
character rolls, formed that Sh. La!sa Ram was given adverse entry
in 1967-68 (from 14.4.67 to 21.9.67), in 1967-68 (27.9.67 to 31.3.68),
1981-82, 1982-83 and in 1991-92, and a particular adverse entry on
16.12.82 and censure entry on 18.8.86. Thus the service of Sh. La!sa
-;'
-
Ram constantly deteriorated.
Under the above circumstances, the Screening Committee as a result
of its study, formed the following officers unfit to continue in service
F
in public interest and the committee recommended that they should
be compulsorily retired.
(1) ..................... ..

(2) ...................... .
G
(3) Sh. Lalsa Ram From 1994.
"
Incidentally. the Screening Committee consisted of the Chief Secretary,
Chairman Board of Revenue and Secretary Appointment Department - indeed
H a high-level Committee.
STATE v. LALSA RAM [BANERJEE, J.] 111
It is on the report as above, the order of compnlsory retirement dated A
18th May, 1998 was passed and the High Court has the following to observe
in this regard :

"....... On a close scrutiny we noticed that during the last five years'
preceding action of compulsory retirement there has been no adverse
B
entry in the account of the petitioner. The Screening Committee
attempted to rely on the entries which related to the period of 1967-
68 and some of the entries for the pe1iod of 1981-82. There is only
one entry for the years 1991-92. This report otherwise records appre-
ciation for the petitioner. But says further that some times there were
complaints against the petitioners. The sole entry is not in close c
proximity and can not be the basis or foundation for the impugned
action of compulsory retirement of the petitioner. The action, accord-
ing to us, is without any basis and the same, therefore, can not be
sustained.''
D
The learned Advocate appearing in support of the Appeal on behalf of
the State Government very strongly urged that the High Court has fallen into
an error in not considering the totality of the service record. It has been the
contention there has been a systematic failure to discharge his duties in a
manner as was expected of the petitioner and diverse complaints are available
on record against the petitioner. E

Incidentally, Rule 56, in particular sub-rule (c) of the U.P. Fundamental
Rnles is the governing rule in the matter of compnlsory retirement. Rule 56(c)
reads as below :
F
"56 (a) .................... ..

56 (b) .................... ..

56(c) Notwithstanding anything contained in clause (a\ or clause (b),
the appointing authority may, at any time, by notice to any Govern- G
ment servant (whether permanent or temporary), without assigning
any reason, require him to retire after he attains the age of fifty years
or such Government servant may by notice to the appointing authority
voluntarily retire at any time after attaining the age of forty five years
or after he has completed qualifying service of twenty years." H
112 SUPREME COURT REPORTS [2001] 2 S.C.R.
A Rule 56(2) of the Fundamental Rules ought als0 to be considered and
the same reads as below :

"(2) In order to be satisfied whether it will be in the public interest
to require a Government servant to retire under clause (c) the appoint-
ing authority may take into consideration any material relating to the
B Government servant and nothing herein contained shall be construed
to exclude from consideration.

(a) any entries relating to any period before such Government
,>
servant was allowed to cross any efficiency bar or before he was
promoted to any post in an officiating or substantive capacity
c or on an ad hoc basis; or

(b) any entry against which a representation is pending, provided
that the representation is also taken into consideration along
with the entry; or
D (c) any report of the Vigilance Establishment constituted under the
Uttar Pradesh Vigilance Establishment Act, 1965."

The rules governing the service conditions thus envisages a right to
retire any Government employee on the date on which he completes 50 years
subject however to sub-rule 2 (a), (b) and (c) as noticed hereinbefore.
E
The decision of this Court in the case of Baikuntha Nath Das and
Another v. Chief District Medical Officer, Baripada and Another, [1992] 2
sec 299 has been one of the key judgments on the subject wherein a three
Judge Bench of this Court very lucidly laid down the following principles
F upon consideration of the available judicial precedents. The principles
being:

"(i) An order of compulsory retirement is not a punishment. It im-
plies no stigma nor any suggestion of misbehaviour.

G (ii) The order has to be passed by the Government on forming the
opinion that it is in the public interest to retire a government
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
H order of compulsory retirement. This does not mean that judi-
STATE v. LALSA RAM [BANERJEE, J.] 113
cial scrutiny is excluded altogether. While the High Court or A
this Court would not examine the matter as an appellate court,
they may interfere if they are satisfied that the order is passed
(a) malafide or (b) that it is based on no evidence or (c) that
is arbitrary - in the sense that no reasonable person would form
the requisite opinion on the given material; in short, if it is found B
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 taking
a decision in the matter - of course attaching more importance
to record of and performance during the later years. The record C
to be so considered would naturally include the entries in the
confidential records/character rolls, both favourable and ad-
verse. 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 merits (selection) D
and not upon seniority.

(v) An order of compulsory retirement is not liable to be quashed
by a Court merely on the showing that while passing it
uncommunicated adverse remarks were taken into considera-
tion. That circumstance by itself cannot be a basis for interfer- E
ence."

The principles adumbrated in the decision of Baikuntha Nath's case
(supra) has been adopted by this Court in the case of State of Punjab v.
Gurdas Singh, [1998] 4 SCC 92 wherein this Court categorically observed
that before the decision to retire a government employee pre-maturely is F
taken, the authorities are required to consider the whole record of service
and any adverse entry prior to earning of promotion or crossing of efficiency
bar or picking up higher rank is not wiped out and can be taken into
consideration while considering the overall performance of the employee
during the whole of his tenure of his service and the same also includes G
even uncommunicated adverse entry as well. Similar also is the situation
in a very recent decision of this Court in the case of Prabodh Sagar v.
Punjab State Electricity Board & Others, [2000] 5 SCC 630 wherein one
..>- of us (myself) being a party, upon consideration of the Punjab State
Electricity Board Services (Premature Retirement) Regulations, 1982 ob- H
114 SUPREME COURT REPORTS [2001] 2 S.C.R.
A served that the Board has, upon consideration of the Regulation 3(i)(e) has
an absolute power to retire an employee prematurely though upon fulfillment
of the condition. >--

The Uttar Pradesh Fundamental Rules governing the service conditions
of t11e respondent herein, in particular, 56(c), 56((2)(a), (b) and (c) specifically
B provide that n0thing in the rules should be construed to exclude from con-
sideration of any entry relating to any period before a government servant was
allowed to cross any efficiency bar or he was promoted to any post in an
officiating or a substantive capacity or on an ad hoc basis. The important
words used : nothing herein contained shall be construed to exclude from
c consideration : the exclusion thus is prohibited in terms of the rule. The
concerned authority by reason wherefor has thus a liberty to consider even
entries relating to the period before the government servant was allowed to
cross any efficiency bar or before he was promoted. It is true that one of the
guiding principles as enunciated above in Baikuntha Nath' s case (supra) with
regard to performance during the later years ought to be attached more
D
importance but that does not exclude the consideration of the entire record
of service.

The respondent herein very strongly adverted to the promotion offered
and contended that even assuming there were adverse report and remarks by
E reason of the promotion being made available, the adverse remarks lost its
sting and as such the same does not and cannot be said to be a factor which
must have weighed with the concerned authority directing compulsory retire-
ment. Admittedly and the law being well settled on this score that in the event
of there being a promotion by the Departmental Promotion Committee upon
assessment of the service career and annual confidential reports the adverse
F entires loose its sting - in the event however, the promotion is offered only
on the ground of seniority without any assessment of the entire career situation,
question of adverse entries loosing its sting does not and cannot arise. In the
contextual facts if it was promotion by way of a selection and r..ot by seniority,
no exception could be taken therefore but the facts in the present context
G depict otherwise since the respondent herein was promoted by seniority only.
The fourth principle as enunciated by this Court in Baikuntha Nath's case
(supra) thus cannot be of any assistance to the respondent herein. A similar
situation arose in the case of I.K. Mishra v. Union of India & Ors., [1997] 6
SCC 228 wherein this Court upon analysis of the factual aspect has the follow-
H ing to state :
STATE v. LALSA RAM [BANERJEE, J.] 115
"No doubt the appellant has sent by the respondents to appear in A
S.A.S. examination in the year 1972-73 after having been found that
the appellant complied with the conditions for appearing in the said
examination and further the appellant passed the S.A.S. Part II
Examination but merely the facts that the appellant was sent to appear
in the examin:ri1un and was declared successful in the said examina-
B
tion are not the end of the matter. In fact passing of the S.A.S.
examination entitles an auditor to be considered for promotion to the
higher post by the Departmental Promotion Committee. In the present
case after the appellant was declared successful in the S.A.S. exami-
nation, the Departmental Promotion Committee after considering the
service record of the appellant did not recommend his case for further c
promotion. Applying principle No. 4 as noted in the case of Baikuntha
Nath Das the appellant having not been promoted to the higher post
the adverse remarks in h;s character roll remained incact. Since the
appellant was not promoted to the higher post by the Departmental
Promotion Committee it is not correct to contend that the adverse
D
materials in the annual confidential report of the appellant lost their
sting and those materials could not form the basis of order compul-
sorily retiring the appellant from service."

Rule 56 © of the U.P. Fundamental Rules read with sub-rule (2) as
noted herein before provides an authority to the Board with an absolute right E
to retire an employee on the date on which he attains the age of 50 years. The
option for tl1e government servant to voluntarily retire hov.,rever has been
attributed to the concerned employee at any time after attaining the age of
45 years or after he has completed qualifying service of 20 years. The
fundamental rules thus confer a right absolute to retire an employee on the
F
happening of certain event namely the latter attains 50 years of age - the right
being absolute and in the even the same is not contra to the conditions as
embodied in Rule 56 of the Fundamental Rules, question of violation of any
legal right of the respondent herem does not and cannot arise. The factum of
the doctrine of natural justice being not available to an employee so retired
compulsorily stands well settled and we need not dilate there;m. G

Rule 56 © seems to be in pari maleria with Rule 3 of the Punjab Civil
> Services (Premature Retirement) Rules, 1975 and this Court while consider-
ing the same in the case of Gurdas Singh (supra) in para 6 observed :

"It will be thus seen that these Rules give absolute right to retire any H
+
116 SUPREME COURT REPORTS [2001] 2 S.C.R.
A government employee on the date on which he completes 25 years <
.._
of qualifying service or attains fifty years of age or as on any date
thereafter to be specified in the notice by giving that employee prior
notice of three months in writing. This right has to be exercised if in
the opinion of the appropriate authority it is in public interest to retire
any employee under the Rules."
B
Incidentally, the five guiding principles as laid down inBaikunthaNath's
case (supra) by this Court stands accepted in another three-Judges Bench's
judgment of this Court in Posts and Telegraphs Board v. C.S.N. Murthy, [1992]
2 SCC 317 wherein this Court observed that whether the conduct of the
c employee is such as to justify a conclusion of compulsory retirement but the
same is primarily for the deparunental authorities to decide. The nature of the
delinquency and whether it is of such a degree as to require the compulsory
retirement, the courts have no authority or jurisdiction to interfere with the
exercise of power if arrived at bona fide on the basis of the material available
D on record : Usurpation of authority is not only unwarranted but contrary to all
norms of service jurisprudence.

This Courton the basis as above in Gurdas Singh's case (supra) observed
that is on this perspective the matter shall have to be considered as to whether
it is in public interest to retain him in the service and the whole record of the
E service of the employee shall have to be considered including any
uncornmunicated adverse entry as well provided however, the service Condi-
tions/Regulations do not run counter thereto. We also do record our concur-
rence therewith and record that the same holds good excepting however the
issue mala fides. The iswe of mala fides has not been or even raised in the
F pleadings of the matter in issne and as such we are not called upon to delve
into the same. The Appointing Authority upon consideration of the entire ......
service record as required under the iules having formed its opinion that the
compulsory retirement of the respondent being in public interest issued the
order and on the wake of the aforesaid, question of any interference of this
Court does not and cannot arise. Interference in these matters by the courts in
G exercise of its jurisdiction under the constitutional mandate is very restricted
and the courts shall have to tread on the issue with uunost care and caution by
reason of very limited scope of interference. The High Court has in fact ignored
this aspect of the matter and proceeded solely on the basis of the factum of there
being no adverse entry in recent past. Needless to state that adverse entries did
H not stand extinguished by mere lapse of time but they continued to be on record
-+

STATE v. LALSA RAM [BANERJEE, J.] 117
and it is for the employer to act and rely thereon in the event of there being, A
a rule permitting an order of compulsory retirement. The High Court thus fell
into an error and as such the order under appeal cannot thus to be sustained.
111e appeal therefore succeeds and is allowed. Order of the High Court stands
set aside and quashed. There shall however be no order as to costs.

v.s.s . Appeal allowed. B

....