'Washed-Off Theory' Doesn't Apply While Deciding If Employee Is Fit To Be Retained : Supreme Court

The Supreme Court on Thursday (August 6) held that while assessing the employee's suitability for retention in service, the employer is not obligated to take a decision based on the recent service record of the employee; rather, the decision shall be guided by the entire service record of the employee.

This means the "washed-off theory", which wipes out adverse entries once an employee is promoted, has no application when assessing an employee's suitability for retention in service.

“…while the “washed-off theory” may operate in matters relating to promotion, it has no application where the competent authority assesses the suitability of an employee for continued retention in service.”, observed a bench of Justice Prashant Kumar Mishra and Justice Shree Chandrashekhar, while upholding the compulsory retirement of the ex-CISF personnel, who challenged his compulsory retirement on the ground that compulsory retirement assessments shall not be based on the "entire service record”.

The appellant joined the Central Industrial Security Force (CISF) as an Assistant Sub-Inspector in 1982. He was promoted twice, first to Sub-Inspector in 1990, and later to Inspector in 2003.

Upon attaining the age of 50 years, his case was placed before the Internal Screening Committee for assessment of suitability for retention in service. The Committee found him unfit, a view affirmed by the Review Committee, leading to his compulsory retirement.

Being aggrieved, he filed the Writ Petition before the Delhi High Court. The High Court upheld the order of compulsory retirement, noting that the appellant's efficiency had slackened in the last two years of the period under review.

Aggrieved, the appellant approached the Supreme Court, contending that an order of his compulsory retirement was vitiated as the authority considered his entire service record, which is impermissible post-promotion. In essence, the Appellant argued for the applicability of the washed-off theory in matters of compulsory retirement. According to him, adverse material preceding his promotion cannot form the consideration while assessing his suitability for retention in service.

Rejecting the Appellant's argument, the judgment authored by Justice Mishra, relying on Rajasthan State Road Transport Corporation and Others v. Babu Lal Jangir, (2013) 10 SCC 551, held that the washed-off theory applies in matters of promotion, not in a matter of compulsory retirement; therefore, consideration of an entire service record is quintessential while assessing employee's suitability for a retention in a service,

“…after the promotion of an employee the adverse entries prior thereto would have no relevance and can be treated as wiped off when the case of the government employee is to be considered for further promotion. However, this “washed-off theory” will have no application when the case of an employee is being assessed to determine whether he is fit to be retained in service or requires to be given compulsory retirement.”, the Court said in Babu Lal Jangir (supra).

Applying the law, the Court said “the Committee was, therefore, justified in considering the appellant's entire service record, including adverse material preceding the appellant's promotion.”

In terms of the aforesaid, the appeal was dismissed.

Cause Title: SUSHIL SHARMA VERSUS UNION OF INDIA AND OTHERS

Citation : 2026 LiveLaw (SC) 768

Click here to download judgment

Appearance:

For Appellant(s) Dr. Sumant Bharadwaj, Adv. Dr. Vedant Bharadwaj, Adv. Ms. Mridula Ray Bharadwaj, AOR Mr. D.m.sharma, Adv. Mrs. Amrita Behera, Adv. Mrs. Pooja Gupta, Adv. Mr. Anshu Singh, Adv. Ms. Anshita Sharma, Adv. Mr. Aradhya Agarwal, Adv.

For Respondent(s) Mr. Vikramjit Banerjee, A.S.G. Mr. Nachiketa Joshi, Adv. Mr. Praneet Pranav, Adv. Mr. Raman Yadav, Adv. Mr. Yogesh Vats, Adv. Dr. N. Visakamurthy, AOR