UNION OF INDIA ETC. v. M. E. REDDY AND ANR (2)

Citation: [1980] 1 S.C.R. 736

Court: Supreme Court of India

Bench: S. MURTAZA FAZAL ALI, A.P. SEN

Case summary

C) This Court clearly held that compulsory retirement does not amount to removal or termination nor does it involve any stigma. In these peculiar circumstances, therefore, this Court held that the termination of the Munsif even though he was a temporary servant cast a stigma...

Judgment text

UNION OF INDIA ETC. • v. M. E. REDDY AND ANR. September 19, 1979 [S, MURTAZA FAZAL ALI AND A. P. SEN, JJ] Compulsory retiten1ent-Order passed in terms of Section 16(3) of tTte All India Services (Death-cu1n-Retirement) Rules, 1958, whether in violatfon of Articles 311(2) of the Constitution. I The responde. nt in the two appeals was compulsorily. retired by an order dated 20-4-74 under Rule 16(3) of the All ]ndia Services (Death-cnm-Retlrement) Rules, 1958. The respondent challenged the said order by filing a Writ Petition before the Andhra Pradesh High Court. A single Judge Oil' ! bat Court allowed the petition. The said decision was affirmed by the Division Bench in appeal. Allowing the appeals by certificate the Court, HELD: 1.

An aoalysis of Rule '16(3) of the All India Services (Death· cum-Retirement) Rules, 1958 clearly shows that the following essential ingredients of the Rule mnst be satisfied before an order of compulsorily retiring a Government servant is passed : (i) that the member of the service must have completed 30 years of qualifying service or the age of 50 years (as modified by notification dated 16-7-1969); (ii) that the Government has an: absolute right to retire the Government servant concerned because the word "require" confers an unqualified right on the Central Government servant; (iii) that the order must be passed in public interest; and (iy) that three months' previous notice in writing shall be given to the Government servant y ,. concerned before the order is passed. [742 G·H, 743 A-Bl ;;. The provision gives an absolute right to the GOvemment and not merely discretion, and, therefore impliedly it excludes the rules of natural justice. [743 B] , 2.

Compulsory retirement after the employee has put in a sufficient number of years of service having qualified for full pension is neither a pnnishment nor a stigma so as to attract the provisions of Article 311(2) of the Constitution. In fact, after an employee bas served for 25 or 30 years 'II! d is retired on full pensionary benefits, it cannot be said that be suffered any real prejudU:e. [743 C.. D] 3. The objecl of Rule 16(3) is to weed out the dead wood in order I<> maintain a high standard of efficiency and initiative in the State service. It is aot necessary that a good officer may continue to be efficient for all times to come. It may be that there may be some officers who may possess a betlel' initiative and higher standard of efficiency and if given chance the work of the Government might show marked improvement. . In such a case conipufsory retirement of an officer who fulfils the conditions of Rule 16(3) is undoubted! ,.

in pliblic interest and is not passed by way of punishment. Sjn11Iarly, ~ :may be cases of officers who are corrupt or of doubtful integrity and ,v m and Ors. [1978] 1 SCR 721 ancL S. R. Ve11katan11nan v. Union of India and A11r. , [19i9] 2 SCR 202; distinguished. Cln'. tf Security Officer, Eastern Railway & Anr. v. Ajay Chandra Bagchi (191'. fl 2 SLR 660 (Calcutta); overruled. Jn: the instaat case (a) ~here is no legal error in the- impugned order passed by Che Government of India, retiring Mr. Reddy. The onfer is not arbitrary as cOdld. be seen from the material on the reconf. The Government of India acir4 onable opportunity to the Government servant to pr~sent his case. The contention, therefore, that the adverse remarks did not contain specific instances and were, therefore, contrary to the rules, cannot be sustained.

Equally unsustainable is the 'corolli;ry that because of that omission the appellant could not make an adeqnate representation and that therefore the confidential reports are vitiated". "It may well be that in spite of the work of the appellant being satisfactory, as he claimed it was, there may have been other relevant factors, such as the hi~tory of the appellant's entire service and confidential reports throughl out the period of his service, upon which the appropriate authority may still decide to order appellant's retirement under F. R. 56 (j)". (I) [1971] 2 S. C. R. 55. In this case the Court followed and endorsed the decision of this Court in the case of J. N. Sinha (supra). Here we might mention that the appellants were fair and candid enough to place the entire confidential personal file of Reddy before us starting from the date he joined the Police Servic;e and after perusing the same we are unable to agree with Mr. Krishnamurthy Iyer that the officer had a spotless career.

The assessment made by his superior officers from the very beginning of his service until the impugned order was passed show that at best Reddy was merely an average officer and that the reports show that he was found to be sometimes tactless, impolite, impersonated and suffered from other infirmities though not all of them were of a very serious natnre so as to amount to an adverse entry which may be communicated to him. We might also mention that before passing an order under rule 16 (3) it is not an entry here or an entry there which has to be taken into consideration by the Government but tl)e overall picture of the officer during the Jong years of his service that he pnts in has to be considered from the point of view of achieving higher standard of efficiency and dedication so as to be retained even after the officer has put in the requisite number of years of service. Even in the.

last entry which was sought to be expanded through a representation made by Reddy and other entries made before it appears that the integrity of Reddy was not above board. Even in the case of State of Ut/ar Pradesh v. Chandra Mohan Nigam & Ors. (') on which great reliance has been placed by Mr. Krishnamurthy Iyer, it was observed thus :- "We should hasten to add that when integrity of an officer is in question that will be an exceptional circumstance for which. orders may be passed in respect of such a person under rule 16(3), at any time, if other conditions of that rule are fuJfilled, apart ffom the choice of disciplin- . ary action which will also be open to Government".

Thus, even according to the decision rendered by this Court in the aforesaid case the fact that an officer is of doubtful integrity stands on a separate footing and if he is compulsorily retired that neither involves any stigma nor any error in the order, We might also refer to an observation made by the Single Judge of the High Court whose judgment was confirmed by the Division Bench, who appears to have misconstrued a judgment of this Court and by the process of such miscoaception seems to have ignored the later decisions of this Court given by small Benches on the exact question at (1) [1978] 1 S. C. R. 521. UNION v. M. E. REDDY (Fazal Aii, !. ) 751 issue. The learned Judge relied on the decision in the case of Ac, Madan Mohan Prasad v. State of Bihar & Ors.

(') in support of the view that the order of retirement even if it is in public interest violates Article 311 (2) of the Constitution even though no punishment was intended, The learned Judge observed as follows:- "In Madan Mohan v. State of Bihar (supra) the Supreme B. Court considered the validity of retirement order of a Judicial Officer who for the reason that he worked for seventeen years asserted was permanent member of the service when ! tis retirement was ordered under Bihar pension Rules of 1950 questioned the order under Art. 32 of the Constitution of India that it was a punishment within the meaning of Art. 311 (2) of the Constitution of India". and then relies on certain observations of this Court in order to hold that the termination of service of the officer casts a stigma on his character and attracts Article 311 (2) bf the Constitution.

The learned Judge further relied on a decision of this Court in support of the pro- D· position that a judgment rendered by 5 Judges of the Supreme Court would prevail over a judgment of a smaller Bench. So far this part of the oLservation is concerned, there can be no doubt. But the learned Judge appears to have completely misconstrued the decision in Madan Mohan's case (supra) wltich was not a case of compul~ory retirement at all, nor was it a case where the officer concerned was R retired under a rule like rule 56(j) or 16(3) as we have indicated in this case. On the other hand, in that case what happened was that the officer was appointed as a temporary Munsif and under the terms of the notification by which he was appointed it was provided that the appointment of temporary Munsif could be terminated by giving one month's notice. The High Court it appears, was r,ot satisfied with the work of Munsif and accordingly decided to terminate his services.

But the Cltief Minister in one of his speeches on the floor of the House had made certain observations implying that the ~ervices of the Munsif were being terminated on account of inefficiency and misconduct. In these peculiar circumstances, therefore, this Court held that the termination of the Munsif even though he was a temporary servant cast a stigma and, therefore, attracted Article 311 of the Constitution. In this connection, the Court observed as follows :- "It seems to us that on the facts of this case, the order dated January 15, 1972 violates Article 311 (Z) of the Constitution. The petitioner had first been holding a ternporary post and then a permanent post for nearly seventeen (I) [1973] 4 S. C. C. ! 66=(1973) IS. L. R. 630. 752 SUPRP. ME COURT REPORTS [1980] 1 S. C. R. years.

The Chief Minister's statement in the Assembly that his services were not satisfactory and the Government was considering serving show-cause notice and the fact that his services were terminated without any enquiry being held would inevitably lead the public to believe that his services had been terminated on account of inefficiency or misconduct. This did cast a stigma on his character". It is, therefore, manifest that the facts of this case and the points involved were absolutely different from the facts of the present case. The aforesaid case relied upon by the High Court would have abso::lutely no application to the present case where Reddy was neither a temporary servant nor was his service terminated. The Single Judge of the High Court was, therefore, absolutely wrong in equating the principles of compulsory retirement under rule l 6(3) with termination of the services of a temporary employee under the rules. Similarly, the case of J. N.

Sinha (supra) was followed and relied on by later decisions of this Court in the case of N. V. Puttabhatta v. The State Mysore & Anr. (') as also in the case of State of Assam and Anr. etc. v. Basanta Kumar Das etc. etc. (') Again, in the case of Tara Singh etc. etc. v. State of Rajasthan & Ors. (') it was pointed out that compulsory retirement under the provisions similar to rule 16(3) cannot amount to a stigma, and the incidents of compulsory retirement were adroitly summed up by Ray, C. J. who observed as follows :- "The right to be in public employment is a right to hold it according to rules. The right to hold is defeasible according to rules. The rules speak _of compulsory retirement. .. There is guidance in the rules as to when such compulsory retirement is made.

When persons complete 25 years of service and the efficiency of such persons is impaired and yet it is desirable not to bring any charge of inefficiency or incompetency, the Government passes orders of such compulsory retirement. The Government servant in such a case does not lose the benefits which a Government servant has already earned. These orders of compulsory retirement are made in public interest. This is the safety valve of making such orders so that no arbitrariness or bad faith creeps in'~. (I) [1973] l S. C. R. 304. (2) [1973] 3. S. C. R. 158, 167. (3) (19751 3 S. C. R. 1002. "There is no stigma in any of the. impeached orders of compulsory retirement". The learned Chief Justice pointed out that having regard to the safeguards coutained in the rules particularly the fact that the retirement was in public interest the safety valve of safeguarding malafide or arbitrariness in the order was clearly contained in the provision itself. !. N.

Sinha's case (supra) was endorsed and followed in this case also. In a recent decision of this Court in the case of Mayenghocirt 'Rahamohan Singh v. The Chief Commission~r (Admn. ) Manipur & Ors. (') the Court observed as follows :- "Compulsory retirement is not a punishment. There is no stigma in compulsory retirement". "The affidavit evidence is that the order of compulsory retirement was made in public interest. The absence of recital in the order of compulsory retirement that i! is made in public interest is not fatal as long as power to make compulsory retirement in public interest is there and the power in fact is shown in the facts and circumstances of the case to have been exercised in public interest". In this case, the Court was considering the scope of rule 56(j) which, as already indicated, is couched in the same terms as rule 16(3). Learned counsel for Reddy heavily relied on the decision of this Court in the case of State of Uttar Pradesh v. Chandra Mohan Nigam & Ors.

(supra) and contended that as the Government of India while passing the impugued order had not considered the report of the Review Committee the ordar is vitiated by an error of Jaw. We have gone through this decision and we are unable to agree with the contentions put forward by learned counsel for Reddy. The decision , referred to above is not an authority for holding that the decision of the Review Committee is binding on the Govermnent of India. All that is necessary is that the Govermnent of India should, before passing an order under rule 16(3) consider the report of the Review Committee which is based on full and completed analysis of the history of the service of the employee concerned. In the instant case, it is clearly pleaded by the appellants in the High Court that the report of the Review Committee was in fact consjdered by the Govermnent of India before passing the irnpugued order.

The confidential file placed before us also clearly shows that on the note sheet the notes by the (! ) [1977] I S. C. R. 1022. 754 SlJ! 'REME COURT REPORTS [1980] 1 s. c. R. Secretary on the recommendations of the Review Committee the Home Minister, Mr. K. Brahmananda Reddy has appended his signatures and has passed the order that Reddy should be compulsorily retired. Furthermore, in Nigam's case (supra) referred to above what had weighed with the Court was that after the Review Committee had submitted its report to the Government, the Government ordered a second Review Committee just in order to enable :he Review Committee to give an adverse report against the officer concerned. Such a course of action was condemned and deprecated by this Court. In the instant case, however, there is no allegation by Reddy that any second Committee. was ever appointed.

Even so in Nigam's case (supra) this Court did not depart from the ratio laid down in Sinha's case (supra) and followed by later cases but observed as follows:- "As _stated earlier, even in the case of compulsory retirement under rule 16(3), an ·order may be challenged in a court if it is arbitrary or mala fide. If, however, the Government reaches a decision to prematurely retire a Government servant, bona fiPe the order, per se, cast any stigma on the employee nor does the employee forfeit any benefit which he has already earned by his service, nor does it result in any civil consequences". The Court at page 531 of-the Report clearly pointed out that the instructions issued by the Government for constituting the Review Committee were not mandatory. We have already indicated above that this Court made it absolutely clear that where a person was retired under Rule 16(3) on the ground that his integrity was in question, the observations made by this Court wonld have no application.

In the instant case, it has been clearly averred by the appellants that the integrity of Reddy was not beyond suspicion and the remarks were not expressly expunged by the Chief· Minister. Reliance was also placed by learned counsel for Reddy on a recent decision of this Court in the case of Smt. S. R. Venkataraman v. Union of India & Anr. (') The facts of this case, however, are clearly distinguishable from the facts of the present case. In that case there was a finding of fact by this Court that the order of retirement was mala fide and amounted to victimisation and the allegation made by the appellant before this Court were not only not disputed but counsel for the Union of India went to the extent of saying that be was not in a position to support the impugned order which was (! ) [1979] 2 s. c. R. 202. UNION v. M. E. REDDY (Fazal Ali, !. ) 755 unfair.

It was in the background of these circumstances that the Court held that the order was malafide and observed as follows :- "The ap~llant has pointed out in this connection that her service record was examined in March, 1976 by the Departmental Promotion Committee, with which the Union Public Service Commission was associated, and the Committee considered her fit for promotion to the selectio. n grade subject to clearance in the departmental proceedings v·bich were pending against her, and that she was retired because of bias and animosity. Our attention has also been invited to the favourable entry which was made in her confidential report by the Secretary of the Ministry. Mr. Lekhi, learned counsel for the Union of India, produced the relevant record of the appellant for our perusal. While doing so he frankly conceded that there was nothing on the record which could justify the order of the appellant's pre,mature retirement.

He went to the extent of saying that the Government was not in a position to support that unfair order". "The influence of extraneous matters will be undoubted where the authority making the order has admitted their influence. It will therefore be a gross abuse of legal power to punish a person or destroy her service career in a manner not warranted by law by putting a rule which makes a useful provision for the premature retirement of government servants only in the 'public interest', to a purpose wholly unwarranted by it, and to arrive at quite a contradictory result. An administrative order which is based on reasons of fact which do not exist must therefore pe held to be infected with an abuse of power". These observations, however, do not apply to the facts of the present case. Lastly, Mr. Krishnamurthy lysr, learned counsel for Reddy heavily relied on a decision of the Calcutta High Court in the case of Chief Security Officer, Eastern Railway &: Anr. v.

Ajoy Chandra Bagchi(') On a perusal of this decision we are of the opinion that this case was not correctly decided as it is directly opposed to the ratio dccidendi of l. N. Sinha's case (supra) where this Court held that the rule in question expressly excludes the principles of natural justice and, there- . fore, it is manifest that the Calcutta High Court was in error in basing (l) (1975) 2 S. L. R. 660. IA its decision on rules of natural justice. The Calcutta High Court in this case had observed as follows :- "Thus even if the Railway authorities had absolute right to retire the Respondent petitioner subject to the requirements as mentioned hereinbefore and in terms of paragraph 3 of Chapter XVII of the Regulations read with item 6 of , the instructions in the Form in Appendix XVIII in the admitted position of the case, viz.

, certain adverse entries I were taken into consideration in having him compulsorily retired, the action as taken is thus certainly against all princii ples of natural justice and norms of fair play and as such the action so taken cannot be supported: The said right under paragraph 3 of Chapter XVII read with item 6 of the instructions in the Form in Appendix XVIII can be used and those principles can be applied or resorted to subject to the principles of natural justice, which incidentally is the restraint put on the pretended misuse of power". The High Court seemed to rely on certain adverse entries which were taken into consideration when the order of retirement was passed. We have already pointed out relying on the dictum of this Court laid down by Hidayatullah, C. J. that the confidential reports can certainly be considered by the appointing authority in passing the order of retirement even if they are not communicated to the officer concerned.

· Thus, the two grounds on which the Calcutta decision was based are not supportable in law. For these reasons, therefore, we hold that the decision of the Calcutta High Court referred to above was wrongly I decided and is hereby overruled. On a consideration of the authorities mentioned above we are satisfied that there is no legal error in the impugned order passed by the Government of India retiring Reddy. It was, however, contended by connsel for Reddy that reading the order as a whole it contains an odour of victimisation, so as to make the order arbitrary. We are, however, unable to find any material on the record to show that the or! ler was in any way arbitrary. The Government of India acied on the •' orders passed by the Home Minister concerned who had considered ' the report of the Review Committee in its various aspects. There is nothing to show that Reddy was victimised in any way. On the other hand, the history of his service shows that he was always given his due.

He was taken in the I. P. S. and allotted the year 1952. He was promoted to the selection grade also at the proper time. The order of snspension was withdrawn and the departmental enquiry was dropped and the officer was reinstated and later promoted as D. I. G. These facts completely militate against the concept of victimisation. It appears that on an overall consideration of the entire history of the ser;ice of Reddy and the various stages through which he had passed it was considered· in the interest of administration. and to ensure better initiative and efficiency to retire him in public interest. We are also unabie to find any element of arbitrariness in the impugned order. For these reasons, therefore, the first contention raised by learned counsel for Reddy must be rejected. · It was then contended that the order was mala fide and passed because Respondent No. 3, the C.

hicf Minister of Andhra Pradesh bore selious animus against Reddy and wanted him to do certain· things which he refused to do, hence he was compulsorily retired. Apqrt from the fact that all the allegations regarding mala fide &tood withdrawn as indicated in the earlier part of the judgment it is alleged in the counter affidavit and this averment has not been disputed before us that on 5-1-1970 the following Memo was filed on behalf of Reddy before the High Court : "The petitioner withdraws the writ petition including the allegations against the Hon'ble Chief Minister of Andhra Pradesh. The writ petition may kindly be dismissed as withdrawn". Furthermore, the counter affidavit at p. 73 Vol. IV contains a letter . submitted by the Second Government Pleader on 5-12-1970 the relevant part of which runs thus :- "I have discussed. the matter with the Advocate for the petitioner.

He agrees to withdraw the writ petition as also the allegations made thereunder against the Hou'ble Chief Minister and is prepared to file· a Memo. Copy of which is enclosed_ herewith". Once Reddy had withdrawn the allegations of malafidc against respondent No. 3 in the High Court, it is not open to him to revive those allegations in these proceeding when the impugned order is passed. . ,, . • 1he impugned order as held by us . is a bona fide order and does not suffer from any legal infirmity, and, therefore, we cannot permit Reddy to play a game of hid_('. and seek with the Court by withdrawing the allega:ions oI ma/a fide against respondent No. 3 in the High Court and then reviving t! 1em when after some time an adverse order against him was pa~sed. Moreover, if respondent No. 3 was really inimically disposed towards Reddy he would not have either dropped the departmental enquiry or reinstated him, or have promoted him to the· rank 12-625 SCI/79 758 SUPREME COl!

RT REPORTS [1980] 1 s. c. R.. I of D. I. G. Furthermore, the Chief :Minister Mr. K. Brahmananda Reddy has himself filed a personal affidavit before tl1e HighCourt which is contained at page 235 Vol. III wherein he has categorically denied all the allegations made against him by Reddy. The assertions made in the affidavit are fully supported by circumstantial evidence and the conduct of Reddy himself. For these reasons, therefore, the second contentiGn regarding the impugned order· being ma/a fide is also rejected. The result is that all the contentions raised by counsel for Reddy fail. We are clearly of the opinion that the High Court committed a clear error of,law in quashing the impugned order which was fully justified by rule 16(3), and did not suffer from any legal' infirmity and waif also in consonance with the law laid down by this Court _, starting from Shyamlal's case upt-0 Sinha's and Nigam's case (S'Upra) discussed above..

We, therefore, allow the appeals, set aside the order of the High Court and restore the impugned order retiring Reddy. In the peculiar circumstances of the cas6 there will b6. no order as to costs. S. R. Appeals allowed.