'Compulsory Retirement Is Not Punishment': SC Clarifies Rules For Retiring Government Employees, Says It Does Not Imply Misconduct

New Delhi: The Supreme Court has held that an order of compulsory retirement is neither punitive nor stigmatic in character and does not cast any aspersion on the conduct of an employee, nor does it imply any finding of misconduct.

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A bench of Justices Manmohan and Shree Chandrashekhar, which upheld the Chhattisgarh government's order of compulsory retirement to five of its 14 employees, said it was based on subjective satisfaction of the competent authority that the employee's continued retention in service is no longer conducive to public interest.

"...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," it said.

"The ultimate assessment as to whether an officer has become dead wood or whether his continuance would be detrimental to administrative efficiency falls within the domain of the executive. However, such satisfaction cannot be found upon mere conjecture or whim. It must rest upon objective and relevant material available on record," it held.

The top court on Friday upheld that the April 12, 2023 order of the Chhattisgarh High Court upholding the single-judge bench's order affirming the 2017 government circular to compulsorily retire the employees, and rejected their contention that other similarly placed employees were not retired.

"An employee cannot successfully assail an order of compulsory retirement merely by contending that another officer possessing a comparable service record was not subjected to similar action," it said, adding that the evaluation of an employee's utility, integrity, efficiency and overall service profile is essentially an individualised exercise undertaken by the competent authority based on the materials pertaining to that particular employee.

The bench said 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. This court has consistently held that an illegality or omission committed in favour of one person cannot furnish a valid basis for extending the same benefits to another. If a wrong has been committed in an earlier case, it cannot be relied upon to perpetuate a similar wrong in subsequent cases," it said.

The top court further said that where the government itself prescribes norms or criteria governing the exercise of the power, judicial review extends only to examining whether such norms or criteria have been duly observed.

"It follows, therefore, that an order of compulsory retirement must be supported by relevant material such as Annual Confidential Reports, integrity assessments, performance evaluations and other service-record entries bearing upon the employee's utility and suitability for continued retention," it said.

The bench said judicial review in such cases does not entail a re-appreciation or re-weighing of the material by the court as though it were sitting in appeal over the administrative decision.

"The court is concerned only with whether relevant material existed, whether such material was taken into consideration by the competent authority, and whether the conclusion drawn therefrom is one which a reasonable person could have arrived at. So long as these requirements are satisfied, the court will not substitute its view for that of the authority entrusted with the decision-making process," it said.

It added that the principle is well settled that judicial interference with an order of compulsory retirement is warranted only where the decision is shown to be based on no evidence, suffers from non-application of mind, is manifestly arbitrary or perverse or is vitiated by malafides.

With regards to the aggrieved employees, the top court said due process was followed in retiring them compulsorily and the recommendations made by the screening committee were founded upon an objective evaluation of the utility, efficiency and suitability of the employees concerned, with a view to maintaining administrative standards and ensuring efficiency in public service.

"Consequently, this court is satisfied that the parameters and standards applied while considering the cases of the appellants for compulsory retirement were uniformly applied to all similarly situated employees and that no element of discriminatory treatment or selective application of criteria has been established," it said.

The bench said the parameters had been applied uniformly and comprehensively to all eligible employees and only after their examination that the Screening Committee identified five employees, whose overall service-record assessment fell below the prescribed benchmark and whose recent confidential reports disclosed patterns indicative of unsatisfactory performance, declining efficiency or lack of utility in public service.

It said the remaining nine employees, having satisfied the prescribed standards, were found fit for continued retention in service. 

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