Swaran Singh Chand Vs.
Punjab State Electricity Board & Ors.  INSC 978 (6 May 2009)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 3298 OF 2009 [Arising
out of SLP (Civil) No. 20202 of 2006] Swaran Singh Chand ...Appellant Versus
Punjab State Electricity Board & Ors. ...Respondents
S.B. SINHA, J :
core question, in this appeal, arising out of a judgment and order dated
17.08.2006 passed by the High Court of Punjab and Haryana in CWP No. 10549 of
2004, is as to whether an order of compulsory retirement being a stigmatic one
would be valid in law.
was directed to be compulsorily retired on attaining the age of 55 years in
terms of a circular letter dated 14.08.1981 laying down guidelines for
compulsory retirement, the relevant portion whereof reads as under:
the entire service record of an employee has to be considered, premature
retirement should not be ordered if during the last 5 years the work and
conduct of the employee has been good or better than that.
(ii) Ordinarily, no
retirement should be ordered within a period of one year preceding the date of
superannuation of the Government employee.
(iii) If an adverse
entry relating to integrity exists in the confidential reports during the 10
years preceding the review, or if after its recording there has been no change
in the class, status or the post of the officer, that single entry should be
considered sufficient for ordering premature retirement.
(iv) If the adverse
report on integrity relates to the distant past or is more than 10 years old,
the subsequent record of the employee should be scrutinized carefully. If the
subsequent reports vouch-safe the integrity of the employee in unambiguous
terms, the inference is that he has improved his conduct and it should not be
necessary to order his premature retirement. A similar view can be taken if an
employee has been promoted after the recording of the adverse remarks."
the said order of retirement dated 29.09.2003 was based on the aforementioned
circular letter. It reads as under:
Swaran Singh Chand, UDC S/o Sh. Gurbachan Singh presently working in the office
of Sr.Xen, Focal Point Spl. Division, Ludhiana has attained the age of 55 years
on 14.10.01 because his date of birth is 15-10-1946.
Whereas as per PSEB
Services (Premature Retirement) Regulations, the case of Shri Swarn Singh Chand
UDC was considered on 17.9.2003 by the High Empowered Integrity Committee
(HEIC) which has been set up to screen the cases of non-gazetted employees of
Central Zone for retention in service beyond the age of 50/55 years.
The Committee took
note of ACRs, disciplinary Cases, personal record and his reputation.
disciplinary cases of above noted employee (as derived from his personal file)
is as under :- CE/Op/Central Zone, Ludhiana stopped one increment without
future effect vide this office order 81 dated 5.2.96 in the case of charge
sheet No.C-653 dated 30.5.95 issued to him for embezzlement of Board's Cash of
Rs.3069/- from M/s Falcon Industry having A/C No.J537.
The assessment of
ACRs of the above official was scrutinized and observed that the following ACRs
are below average with adverse remarks:
(1) 28.10.93 to
31.3.94 below average integrity doubtful with adverse remarks of the following
nature i) Trust worthy Not Good 4 ii) Habits Not Good iii) Knowledge of work
Not Good iv) Knowledge of rules/Codes Less knowledge v) Relations with
Co-employees and other Sections of the office and with Public Not Good vi)
Integrity Doubtful vii) Overall Assessment Below Average viii) Capable for next
Promotion No (2) 1.4.94 to 20.10.94 Below Average with adverse of following
i) Control over
subordinate employees No ii) Relations with employees & Public No iii)
Knowledge of work No iv) Capable of next Promotion No v) Not Good in Office
indisputably preferred an appeal thereagainst. In the Memorandum of Appeal, he
questioned the legality of the said order inter alia contending:
(i) Although a
disciplinary proceeding for imposing major penalty had been initiated, a minor
punishment was imposed without holding a departmental proceeding.
(ii) ACRs of the
relevant period had been recorded within a period of 11 = months only for the
purpose of upholding the chargesheet.
(iii) He, having been
promoted to the post of Upper Division Clerk by an office order No. 135 dated
6.11.2001, the Appointing Authority could not have taken into consideration his
ACRs prior to the said period.
The said appeal was
rejected by the appellate authority, stating:
"I have gone
through the relevant record/ comments of field officers and it is found that
there is no point in his pleading that he was promoted as UDC recently. In
promotion cases, different criteria are followed. In promotions on seniority-cum-merit,
incumbent is required to qualify only minimum bench marks on the basis of ACRs
of last 5 years and punishment awarded in disciplinary cases. In cases for
extension in service, past 10 years' record of the concerned employee is put to
be screened by the HEIC constituted for the purpose. The appellant has mostly
average record including his ACR for 28.10.93 to 31.3.94 as Below Average with
Integrity as `Doubtful'. Further his ACR for 1.4.94 to 20.10.94 was also below
average. In the disciplinary case relating to embezzlement of Rs.3069/-, his
one AGI without future effect, was stopped. Therefore, the decision of the
competent authority is found to be based on facts and record and there is no
justification to intervene in the recommendations made by HEIC of Central Zone,
with regard to his extension in service being not approved on the basis of
which, the competent 6 authority, viz CE/Op. (Central), Ludhiana has ordered
his premature retirement.
therefore, not only a minor punishment inflicted on him had been taken into
consideration while passing the impugned order, but it was also based inter
alia on the premise that his integrity was doubtful.
the High Court, appellant had inter alia raised a contention that the appellate
authority had not taken into consideration the contentions raised by him before
it. By reason of the impugned judgment, a Division Bench dismissed the said
writ petition opining that the action taken by the respondents could not be
held to be unconscionable, stating:
"An employee who
reaches the age of 55 years can only be permitted to continue in service beyond
the aforesaid age on the basis of the assessment of the work by the competent
authority. The view taken by the respondent is neither arbitrary nor contrary
to any statutory rules."
law relating to compulsory retirement is no longer res integra.
An order of
compulsory retirement inter alia can be passed when the officer concerned is
found to be a dead wood. [See M.P. State Co-op. Dairy Fedn. Ltd. & Anr. v.
Rajnesh Kumar Jamindar & Ors., 2009 (6) SCALE 16]
for the said purpose, the principles of natural justice are not required to be
complied with and even adverse entries made in the confidential record
including uncommunicated entires may be taken into consideration but the same
should not be passed in place of or in lieu of a disciplinary proceedings. If
an order of compulsory retirement is stigmatic in nature, the same would be bad
is furthermore well-settled that when the State lays down the rule for taking
any action against an employee which would cause civil or evil consequence, it
is imperative on its part to scrupulously follow the same.
Frankfurter in Vitarelli v. Seaton [359 US 535] stated:
agency must be rigorously held to the standards by which it professes its
action to be judged. ... Accordingly, if dismissal from employment is based on
a defined procedure, even though generous beyond the requirements that bind
such agency, that procedure must be scrupulously observed. ... This judicially
evolved rule of administrative law is now firmly established and, if I may add,
rightly so. He that takes the procedural sword shall perish with that sword."
[See also H.V.
Nirmala v. Karnataka State Financial Corporation (2008) 7 SCC 639]
guidelines issued by the State are binding on it. Appellant had been
compulsorily retired with effect from 29.09.2003. Salary for three months from
the said date was paid, i.e., upto December, 2003. His actual date of
retirement was 31.10.2004. The impugned order, therefore, was passed although
not strictly within a period of one year preceding the date of superannuation
but near about the same. Thus, spirit of Clause (ii) of the guidelines issued
by order dated 14.08.1981 should have also been taken into consideration. So
far as Clause (iii) of the said guidelines is concerned, there is a change of
post as he had been promoted to a higher post in 2001.
As he had been
promoted despite recording of the adverse remarks, the said fact also should
have been taken into consideration. If adverse report on integrity relates to a
distant past or more than ten years old, yet again it should not have been
Court in Baikuntha Nath Das and Another v. Chief District Medical Officer,
Baripada and Another [(1992) 2 SCC 299] laid down the law inter alia as under:
9 "(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 to be so considered would naturally include the entries in
the confidential records/character rolls, both favourable and adverse. 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
merit (selection) and not upon seniority."
is a well-settled principle of law that an order of compulsory retirement would
be held to be stigmatic inter alia, in the event the employer has lost
confidence [See Chandu Lal v. Management of M/s. Pan American World Airways
Inc. (1985) 2 SCC 727 at 730, para 8], or he has concealed his earlier record
[See Jagdish Parsad v. Sachiv, Zila Ganna Committee, Muzaffarnagar and Another
(1986) 2 SCC 338 at 342-343, para 9].
He can, however, be
subjected to compulsory retirement inter alia if he has outlived his utility
[See The State of Uttar Pradesh v. Madan Mohan Nagar, AIR 1967 SC 1260 at
10 In Allahabad Bank
Officers' Association and Another v. Allahabad Bank and Others [(1996) 4 SCC
504], it was held:
"17. The above
discussion of case-law makes it clear that if the order of compulsory
retirement casts a stigma on the government servant in the sense that it
contains a statement casting aspersion on his conduct or character, then the
court will treat that order as an order of punishment, attracting provisions of
Article 311(2) of the Constitution. The reason is that as a charge or
imputation is made the condition for passing the order, the court would infer
therefrom that the real intention of the Government was to punish the
government servant on the basis of that charge or imputation and not to
exercise the power of compulsory retirement. But mere reference to the rule,
even if it mentions grounds for compulsory retirement, cannot be regarded as
sufficient for treating the order of compulsory retirement as an order of
punishment. In such a case, the order can be said to have been passed in terms
of the rule and, therefore, a different intention cannot be inferred. So also,
if the statement in the order refers only to the assessment of his work and
does not at the same time cast an aspersion on the conduct or character of the
government servant, then it will not be proper to hold that the order of
compulsory retirement is in reality an order of punishment. Whether the
statement in the order is stigmatic or not will have to be judged by adopting
the test of how a reasonable person would read or understand it."
question came up for consideration before a Division Bench of this Court in
State of Gujarat v. Umedbhai M. Patel [(2001) 3 SCC 314] 11 wherein
Balakrishnan, J. (as the learned Chief Justice then was), summarized the law,
"11. The law
relating to compulsory retirement has now crystallised into definite
principles, which could be broadly summarised thus:
(i) Whenever the
services of a public servant are no longer useful to the general
administration, the officer can be compulsorily retired for the sake of public
(ii) Ordinarily, the
order of compulsory retirement is not to be treated as a punishment coming
under Article 311 of the Constitution.
(iii) For better
administration, it is necessary to chop off dead wood, but the order of
compulsory retirement can be passed after having due regard to the entire
service record of the officer.
(iv) Any adverse
entries made in the confidential record shall be taken note of and be given due
weightage in passing such order.
uncommunicated entries in the confidential record can also be taken into
(vi) The order of
compulsory retirement shall not be passed as a short cut to avoid departmental
enquiry when such course is more desirable.
(vii) If the officer
was given a promotion despite adverse entries made in the confidential record
that is a fact in favour of the officer.
retirement shall not be imposed as a punitive measure."
a slightly different context, viz., in a case of probation, this Court in
Jaswantsingh Pratapsingh Jadeja v. Rajkot Municipal Corporation and Another
[(2007) 10 SCC 71] opined as under:
"24. In this
case, however, the period of probation as provided for under the statute had
expired and his misconduct had been taken note of. Such misconduct was not
founded only upon absence from duty, but also upon carelessness, negligence on
the part of the appellant and lack of devotion amongst others.
Upon taking into
consideration some precedents operating in the field, it was concluded:
"28. From the
discussions made hereinbefore, it is evident that termination of services of
the appellant purporting to discharge him simpliciter cannot be accepted, being
stigmatic in nature. The form of the order terminating the services coupled
with the background facts clearly leads to the conclusion that the order
impugned in the writ petition by the appellant was punitive."
learned counsel appearing on behalf of the respondent would contend that the
principles of natural justice are not required to be complied with in a case of
compulsory retirement, particularly, when no mala fide is alleged. Allegation
against the delinquent was not only that he lacked integrity but also unfit to
be retained in service. Those comments, in our opinion, are stigmatic in
It is also not a case
where there had been a steady decline in the performance of the employee.
learned counsel appearing on behalf of the respondent would contend that in
this case malice has neither been alleged nor been proved. In support of his
contention reliance has been placed on Purushottam Kumar Jha v. State of
Jharkhand and Others [(2006) 9 SCC 458] wherein Thakker, J. speaking for the
Bench, stated the law, thus:
"23. It is well
settled that whenever allegations as to mala fides have been levelled,
sufficient particulars and cogent materials making out prima facie case must be
set out in the pleadings. Vague allegation or bald assertion that the action
taken was mala fide and malicious is not enough. In the absence of material
particulars, the court is not expected to make "fishing" inquiry into
It is equally well
established and needs no authority that the burden of proving mala fides is on
the person making the allegations and such burden is "very heavy".
Malice cannot be inferred or assumed. It has to be remembered that such a charge
can easily be "made than made out" and hence it is necessary for the
courts to examine it with extreme care, caution and circumspection. It has been
rightly described as "the last refuge of a losing litigant". (Vide
Gulam Mustafa v. State of Maharashtra; Ajit Kumar Nag v. GM (PJ), Indian Oil
a case of this nature the appellant has not alleged malice of fact.
The requirements to
comply with the directions contained in the said circular letter dated
14.08.1981 were necessary to be complied with in a case of this nature.
Non-compliance whereof would amount to malice in law. [See Managaer, Government
Branch Press and Another v. D.B. Belliappa (1979) 1 SCC 477, Smt. S.R.
Venkataraman v. Union of India and Another (1979) 2 SCC 491 and P. Mohanan Pillai
v. State of Kerala and Others (2007) 9 SCC 497]
when an order suffers from malice in law, neither any averment as such is
required to be made nor strict proof thereof is insisted upon. Such an order
being illegal would be wholly unsustainable.
the reasons aforementioned, the impugned order is set aside. The appeal is
allowed. However, in the facts and circumstances of the case, there shall be no
order as to costs.
15 [S.B. Sinha]
[Dr. Mukundakam Sharma]