Seshavataram K.V. vs State of Hyderabad (Public Works Department)

Ansari, J.—The appeal is against the judgment by a learned Judge of this Court, dismissing a petition to vacate the order by the Government of the former State of Hyderabad, whereby the appellant had been compulsorily retired from the State service.

In 1923 the appellant was appointed an overseer on probation in the Public Works Department and in 1944 was promoted as a supervisor. In 1949 he was a Sub-Engineer and in 1954 was allowed to cross the efficiency bar with retrospective effect from 1 October, 1952. It is alleged that in May 1952 two contractors had sent a petition to the P.W.D. authorities accusing the appellant of taking bribe and of partiality. A departmental enquiry was then conducted, but the Chief Engineer had found the aforesaid charges not to have been established. While the above matter was pending, reports had appeared in the newspaper that the property acquired by the petitioner was not commensurate with the appellant''s income, whereupon he was directed to see the P.W.D. Minister. During the interview he was asked to submit statements which he did. Apparently the appellant had succeeded in showing the acquisitions to be within his legal income; for his retirement has not proceeded on the ground of his having improperly acquired properties. He complains that on 26 May, 1955 the P.W.D. Secretary informed him that he was being compulsorily retired from the service and the orders would be issued in a short while. He appealed to the Chief Minister against the proposed action, but on 27 May, 1955 received a communication that his representation was disallowed. On 31 May, 1955 the order retiring the petitioner from service under rule 293 of the Hyderabad Civil Service Rules was given with permission to avail himself of the leave and on 7 June, 1955 he was asked to hand over the charge. It is stated that after handing over the charge a representation against the order was again made to the Chief Minister, but with no success. Also the appeal against it to the Rajpramukh was dismissed. This order of retirement has been challenged on the ground of having been passed mala fide, in violation of the provisions of Art. 311 and the rules, under which it was made, to be violative of Art. 14 of the Constitution. The State''s case is that although during the enquiry as to how the immovable properties of such value and been acquired by the appellant, it was found that no action could be taken against him, yet the P.W.D. Secretary had put up a note suggesting that in view of the bad reputation the appellant''s retirement under rule 293, Hyderabad Civil Service Rules, might be considered. It was found that the appellant had then completed 30 years and 10 months of service and eventually a proposal was put up by the department that he should be retired from Government service. The proposal was accepted by the Finance Department and finally on 31 May, 1955 the Government passed the order compulsorily retiring him. The charge of the order being mala fide or having (sic) the provisions of Art. 311 were denied. It was further contended that the rule under which the retirement has been directed is not contrary to the guarantee of equal protection.

The learned Judge has found that the order of retirement was not contrary to the Hyderabad Civil Service Rules. He has further found the complaint of the Finance Department not having been consulted to be without substance. He has also held the direction about giving three months'' notice in the relevant rule not be mandatory. The complaint concerning Art. 14 having been violated has been rejected and the learned Judge has finally found that there was no mala fide in the action taken by the Government. Accordingly he dismissed the petition.

The learned counsel for the appellant has urged three grounds before us for vacating the order retiring his client. The first is that the provisions in the rules about giving three months'' notice is a condition precedent to the exercise of the power of compulsory retirement and the aforesaid condition not having been fulfilled, the particular order against the appellant was not in accordance with the rule and therefore ultra vires. The next argument is that because the order was punitive the State was bound by Art. 311 to afford the appellant a reasonable opportunity of showing cause against the proposed action, which has not been done and the order was therefore in contravention of constitutional safeguards under Art. 311. The last grounds is that the order was mala fide, discriminatory and therefore violative of Art. 14. Before dealing with these arguments it will be of advantage to have extracts from the relevant rules on which the arguments proceed. Rule 292 of the Hyderabad Civil Service Rules reads as follows :-

"Government servants in superior service have the option of retiring after completing 25 years'' qualifying service.

Note. - This rule applies to Government servants in superior service, who having been in service on 31 May, 1951, have opted for the old Pension Rules. The Government servants in superior service who entered service on or after 1 June, 1951 or who having been in service on 31 May, 1951 elected to come under the Revised Pension Rules, 1951, and all Government servants in inferior service, will have the option to retire only after completing 30 years'' qualifying service in accordance with sub-rule 2 of rule 1 of the Revised Pension Rules, 1951."

Then rule 293 is in these terms :

"A Government servant cannot be given retiring pension against his will unless the Government in Finance Department so approve. In ordering retirement on completion of 25 years of qualifying service under these rules or of 30 years'' qualifying service in the case of pensioners coming under the Revised Pension Rules, 1951, Government will not be bound to give reasons for retirement.

Note. - Government retain an absolute right to retire a Government servant after he had completed 25 years'' or 30 years'' qualifying service, as the case may be, according the Pension Rules applicable to him, without giving reasons and no claims to special compensation on this account will be entertained."

It is common ground that the appellant''s retirement was in exercise of powers contained in rule 293 and it is not disputed that he having been in service on 31 May, 1951 had elected to come under the Revised Pension Rules, 1951. The counsel for the appellant has also argued that under the relevant rule the consent of the Finance Department to the retirement was necessary and that has not been taken in the particular case. The earned Judge hearing the writ petition has found that the official record shows the Finance Department had approved it and the finding must stand in this appeal. The counsel then urged that three months'' notice is a condition precedent to the exercise of the power and that has not been done. The rule on which he relies reads thus :

"Section I - Pension

(i) The amount of superannuation, invalid and compassionate gratuity and pension will be the appropriate amount set out in the annexure.

(ii) An officer may retire from service any time after completing 30 years'' qualifying service, provided that he shall give in this behalf a notice in writing to the appropriate authority at least three months before the date on which he wishes to retire. Government may also require an officer to retire any time after he has completed 30 years'' qualifying service, provided that the appropriate authority shall give in this behalf a notice in writing to the officer at least three months before the date on which he is required to retire."

It was argued that the words "provided that" in the above rule show the notice to be a condition precedent to the exercise of the powers and any order without complying with the condition would be void as being without jurisdiction. In this connexion reliance was placed on the meaning of the meaning of the word "provided" contained in the Oxford Concise Dictionary, which says the word to mean "on condition that." We find that argument to be without force. It is not disputed that the note to rule 293 contains no such qualification on the Government''s rights to retire. Indeed the note emphasizes the right to be an absolute one which can be exercised without giving reasons. It follows that a public servant after completing the required number of years ceases to have the right of being continued in service. The right to retire having thus become absolute, any further requirement would then be merely procedural or in the nature of a collateral safeguard. It follows that the requirement of giving three months'' notice in the Pension Rules is a collateral provision in the interest of both the parties, whose observance does not control the exercise of the right. It further follows that the infringement of this safeguard like that of warranty would entitled the party complaining against it to such advantages as he would have otherwise enjoyed, but would not vitiate the main order. It is idle to deny that all guarantees in employment do not go to the very root and cover only incidental matters. The distinction is substantial and too much cannot be built on the form in which the incidental safeguards are incorporated in the relevant rule. We there hold that the not to rule 293 having vested the Government with an absolute right any requirement of notice does not operate as condition on its exercise, for that would clash with the absolute investiture. Therefore, the requirement of notice of three months is in the nature of collateral advantage of knowing beforehand when the retirement is to become effective and to make appropriate arrangements. Its infringement would only entitle the party complaining to such benefits, as he would otherwise have got, had the provisions been complied with. That being the proper interpretation of the several rules, the failure to give the required notice in the case would not be fatal to the order of retirement. The learned counsel of the appellant has the argued that the deprivation of this benefit would be punitive and client would be entitled to a notice of the proposed punishment under Art. 311(2) of the Constitution, which has not been done. In this connexion he has relied on the observations of the Supreme Court in the case of Parshotam Lal Dhingra Vs. Union of India (UOI), In that case the appellant had been reverted from the post of Signal and Tele-communication Engineer (Telegraphs) in Class II Service, where he was officiating, to his substantive post in Class III service. A learned Judge of the High Court had allowed a writ petition against the aforesaid order, but in Letters Patent appeal the judgment was reversed. In the appeal to the Supreme Court, Das, C.J., who delivered the majority judgment of the Court has follows at pp. 560-561 :

"Shortly put, the principle is that when a servant has right to a post or to a rank either under the terms of the contract of employment, express or implied, or under the rules governing the conditions of his service, the termination of the service of such servant or his reduction to a lower post is by itself and prima facie a punishment, for it operates as a forfeiture of his right to hold that post or that rank and to get the emoluments or other benefits attached thereto. But if the servant has no right to the post, as where he is appointed to a post, permanent or temporary either on probation or on an officiating basis and whose temporary service has not ripened into a quasi-permanent service as defined in the Temporary Service Rules, the termination of his employment does not deprive him of any right and cannot, therefore, by itself be a punishment. One test for determining whether the termination of the service of a Government servant is by way of punishment is to ascertain whether the servant, but for such termination, had right to hold the post. If he had a right to the post as in the three cases hereinafter mentioned, the termination of his service will by itself be a punishment and he will be entitled to the protection of Art. 311. In other words and broadly speaking, Art. 311(2) will apply to those cases where the Government servant, had he been employed by a private employer, will be entitled to maintain an action for wrongful dismissal, removal or reduction in rank. To put it in another way, if the Government has, by contract, express or implied, or, under the rules, the right to terminate the employment at any time, then such termination in the matter provided by the contract or the rules is, prima facie and per se, not a punishment and does not attract the provisions of Art. 311."

His lordship has further observed at p. 562 :

"In short, if the termination of service is founded on the right following from contract or the service rules, then prima face, the termination is not a punishment and carries with it no evil consequences and so Art. 311 is not attracted. But even if the Government has, by contract or under the rules, the right to terminate the employment without going through the procedure prescribed for inflicting the punishment of dismissal or removal or reduction in rank, the Government may nevertheless choose to punish the servant and if the termination of service is sought to be founded on misconduct, negligence, inefficiency or other disqualification, then it is a punishment and the requirements of Art, 311 must be complied with. As already stated, if the servant has got a right to continue in the post then, unless the contract of employment or the rules provide to the contrary, his services cannot be terminated otherwise than for misconduct, negligence, inefficiency or other good and sufficient cause. A termination of the service of such a servant on such rounds must be a punishment and therefore, a dismissal or removal within Art. 311, for it operates as a forfeiture of his right and he is visited with the evil consequences of loss of pay and allowances."

The third passage on which the counsel relies in the judgment is also to be found at the same page :

"The real test for determining whether the reduction in such cases is or is not be way of punishment is to find out if the order for the reduction also visits the servant with any penal consequences."

It was argued before us that had the appellant been a private employee the termination order would entitle him to damages for breach of his contractual right and therefore according to the test laid in the authority cited above the appellant''s order of retirement is bad because of the failure to comply with the provisions of Art. 311. Reliance has further been placed on P. Balakotaiah Vs. The Union of India (UOI) and Others, where Venkatarama Ayyar, J., has held that if a person had a right to continue in office either under the service rules, or under special agreement, a premature termination of his service would be punishment and likewise if the order would result in loss of benefits already earned and accrued, that would also be punishment. It is well to remember that the aforesaid pronouncements of the Supreme Court do negative the argument often urged that a compulsory retirement in any case does not amount to dismissal or removal under Art. 311(2), because it entails no forfeiture of the rights and benefits that have already accrued. The authorities further clarify the position that a compulsory retirement, where a person had a right to continue in office, except on grounds of misconduct, negligence, inefficiency or other disqualification, is a punishment. They, however, do not hold that a compulsory retirement, where a public servant has no right to continue in office, is also a punishment. The earlier authorities concerning this aspect like Shyamlal v. State of U.P. 1959 II L.L.J. 19 and The State of Bombay Vs. Saubhagchand M. Doshi, have not been dissented from. In other words, the test of the order not resulting in loss of benefits already earned and accrued is not conclusive in all cases and Art. 311(2) is attracted where the public servant who has been retired has a right to continue in the post except on grounds of misconduct. The test, therefore, is whether a right to continue in the post except for misconduct, negligence, inefficiency or other good and sufficient cause, is claimed. It follows that when such a right is not claimed, because the State has an absolute right to retire, the constitutional guarantee contained in Art. 311(2) is not attracted. The question therefore in this case is whether the appellant has a claim to such a right and not whether his retirement would be actionable, had he been a private employee. Obviously he has no such right to continue, because note to rule 293 makes the absence of such right clear. His right to continue in the post is terminable without proof of the grounds enumerated above and therefore Art. 311(2) is not attracted. Therefore, this plea for allowing the appeal fails. We now come to the last ground, i.e., whether the retirement was mala fide. In our opinion, any decision of the question is not necessary, for if the right be in the Government, the motive for its exercise is not relevant. As has been held in Parshotam Lal Dhingra Vs. Union of India (UOI), if a right exists under the contract or the rule to terminate the service, the motive operating on the mind of the Government is wholly irrelevant. It may be that the particular exercise of the right complained against has been discriminatory and so violative of Art. 14 of the Constitution; but that the appellant has not succeeded in establishing that in the case. Article 14 had been invoked to challenge the constitutionality of rule 293, but then it is firmly established that reasonable classification is not infringement of the guarantee of equal protection. Rule 293 has not been shown to be arbitrary and whimsical and in these circumstances the complaint fails.

Consistently with the view we have taken it is clear that this public servant is entitled to his pay for three months which he would have got, had the retirement been preceded with notice for such a period. This liability is to seriously controverted. The infringement of the provision as to notice would also not deprive the appellant of his right to other incidental matters which he would have got, had he continued in his service during the aforesaid period. We think adequate justice would be done in the case if we declare him entitled to the arrears of pay for the three months during which the notice to him to retire would have rune and also to such incidental rights as he might be entitled to. Beyond this direction there is no force in the appeal which is dismissed. Having regard to the circumstances of the case, the parties should bear their own costs.