Compulsory Retirement Order Not Punitive Or Stigmatic, So No Hearing Of Employee Needed : Supreme Court

A bench of Justice Manmohan and Justice Shree Chandrashekhar observed so while dismissing appeals filed by two Chhattisgarh Legal Metrology Department employees who were compulsorily retired in 2017.

The appellants, Chatur Singh Dhruw and Manharan Lal Sahu, were appointed as Peons (Class IV) in the Legal Metrology Department, Raipur, in 1989 and 1993 respectively. They were later promoted as Assistant Grade-III in 2012 and 2013 respectively, and their services were regularised in 2015.

In 2017, the General Administration Department issued a circular directing review of the service records of government servants who had completed 50 years of age or 20 years of qualifying service. The criteria of reviewing included honesty and integrity, physical capacity, reputation and work capacity based on complete service records, and an overall evaluation less than B grade, along with whether the work of the last five years was decreasing.

A Screening Committee reviewed 14 clerical employees and recommended five for compulsory retirement. In 2017, the appellants were compulsorily retired under Fundamental Rule 56 and Rule 42(1)(b) of the Chhattisgarh Civil Services (Pension) Rules, 1976. Thereafter, a plea was filed before the Chhattisgarh High Court (Single Judge) which declined to interfere, subsequent to which the Division Bench also affirmed the dismissal.

Aggrieved by the High Court's dismissal, the appellants approached the Supreme Court.

Before the Supreme Court, the appellants argued that the criteria were not uniformly applied and that similarly placed employees were spared. It was contended that the orders were punitive and stigmatic and were used to bypass disciplinary proceedings. Relying on Dev Dutt v Union of India and Sukhdev Singh v Union of India, it was argued that the entire service record was not considered, and that the adverse entries were never communicated. Further reliance was placed on Baikuntha Nath Das v Chief District Medical Officer to submit that promotion and regularisation had wiped out earlier adverse entries.

Per contra, Additional Advocate General Rajat Nair submitted that the review was conducted strictly as per the circular. It was submitted that all 14 eligible employees were assessed on a uniform numerical scale (A+ = 5 to D = 1), and that five fell short of the benchmark.

Perusing the submissions, the Supreme Court observed as follows:

“It is now trite law that an order of compulsory retirement is neither punitive nor stigmatic in character. Such an order does not cast any aspersion upon the conduct of the employee nor does it imply any finding of misconduct. Consequently, the rule of audi alteram partem, as well as the protection afforded under Article 311(2) of the Constitution, have no application to an order of compulsory retirement made in accordance with the relevant service rules.”

Relying on Nand Kumar Verma v State of Jharkhand, it stated that the subjective satisfaction of the authority cannot be found upon mere conjecture or whim and must rest upon objective and relevant material available on record. It also observed that judicial review “does not entail a re-appreciation or re-weighing of the material by the Court as though it were sitting in appeal.” It was further remarked that the Court is concerned only with whether relevant material existed, whether it was considered, and whether the conclusion is one which a reasonable person could have arrived at.

With regard to the discrimination argument, the Court held as follows:

“An employee cannot successfully assail an order of compulsory retirement merely by contending that another officer possessing a comparable service records was not subjected to similar action. The evaluation of an employee's utility, integrity, efficiency and overall service profile is essentially an individualized exercise undertaken by the competent authority on the basis of the materials pertaining to that particular employee. The fact that action was taken against one employee while another similarly situated employee was left untouched does not, by itself, render the action unconstitutional or discriminatory. The doctrine of equality enshrined in Article 14 of the Constitution embodies a positive concept and does not countenance the claim of negative equality.”

The bench added that the mere fact that another officer who may appear similarly placed was not compulsorily retired “cannot, by itself, constitute a valid defence to an otherwise lawful order of compulsory retirement.”

The Court further held that the parameters were in any event uniformly applied. It noted from the affidavit of the Principal Secretary that none of the nine retained employees showed the combination of adverse factors found in the appellants, and that the Committee had recommended the retirement of three other employees on the same basis.

The Court further noted that the Committee first evaluated the entire service record of each employee against the Grade B benchmark. The Confidential Reports of the preceding five years were examined only as an ancillary and corroborative exercise to detect declining performance, consistent with the Circular.

Further, the bench rejected the argument that promotion effaced adverse entries, and held that the principle in Baikuntha Nath Das is “confined to those entries which pre-date the promotion and are deemed to have been overlooked by the employer while conferring such promotion,” and cannot “obliterate or neutralise entries recorded after promotion.” It noted that both appellants had already assumed the promoted post before the 2013 to 2017 reports were recorded.

“This Court is, therefore, of the view that neither the promotions granted to the Appellants nor their subsequent regularisation had the effect of effacing or diminishing the relevance of the below-benchmark gradings and adverse assessments recorded thereafter,” the bench observed.

The bench noted that the order merely recorded that the appellants, having completed the requisite service, were retired in public interest with the State government's approval. They contained “no allegation of misconduct, any finding of culpability or any expression capable of casting a stigma.” It further stated that the Screening Committee's internal deliberations do not make the orders stigmatic, since the Court ought to have regard to the order itself. It also noted that no departmental inquiry was either pending or contemplated against the appellants which means that the argument that compulsory retirement was a device to circumvent disciplinary proceedings was wholly unsupported by the record.

With regards to the argument that adverse entries were never communicated, the Court relied on Baikuntha Nath Das, which held that “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 also taken into consideration.” It further observed that Dev Dutt and Sukhdev Singh were rendered “in the context of promotion, career progression and the requirement of communicating entries that may adversely affect an employee's promotional prospects” and “operate in a distinct field,” and cannot be “mechanically extended” to compulsory retirement.

The Supreme Court found that no case of arbitrariness, mala fides, perversity or violation of any constitutional or statutory guarantee has been made out before it by the appellants. It accordingly affirmed the High Court's orders and dismissed the appeals.

“For all the aforesaid reasons, this Court is satisfied that the process culminating in the compulsory retirement of the Appellants was undertaken in accordance with the applicable statutory provisions and the Circular dated 25th April 2017 and that the prescribed parameters were uniformly applied. Further, the decision of the competent authority was founded upon relevant and cogent materials and that no case of arbitrariness, mala fides, perversity or violation of any constitutional or statutory guarantee has been made out warranting interference by this Court.

51. Consequently, the impugned judgments dated 12th April 2023 are affirmed and the Appeals stand dismissed. There shall be no order as to costs. Pending application(s), if any, shall stand disposed of.”

Appearances:

For Appellant: Mr. Kaustubh Shukla, Adv.; Mr. Shivam Shukla, Adv.; Ms. Neelam Singh, AOR; Mr. Yashwardhan Rai, Adv.; Mr. Vipul Kumar, Adv.; Ms. Pushpanjali Singh, Adv.; Ms. Gursmirat Kaur, Adv.

For Respondents: Mr. Rajat Nair, A.A.G.; Mrs. Prerna Dhall, Adv.; Mr. Ambuj Swaroop, Adv.; Mr. Shashi Kant, Adv.; Mr. Avinash Singh, Adv.; Mr. Prashant Singh, AOR