V.C. Shroff vs Gujarat Electricity Board

N.H. Bhatt, J.—These two petitions are directed against the common respondent, the Gujarat Electricity Board, hereinafter referred to as

the Board. The petitioner in the former petition is one V. C. Shroff, who was at the time of his premature retirement an executive engineer in the

selection grade under the Board. The petitioner in the latter petition is one P. J. Pandya, who too was an executive engineer under the Board in the

selection grade. Both these petitioners were made to retire compulsorily on the completion of the 55th year of their life. In these two petitions, each

petitioner challenges the said order of premature retirement essentially on the ground that the order is passed in violation of the mandatory

provisions of Regulation No. 72 framed by the Board in exercise of statutory authority vested in it. On the other hand, the respondent-Board, has

tried to support the orders in question by urging that the orders are within the strict framework of the said Regulation No. 72. The only question,

therefore, that arises for our determination in these two petitions, heard together with the concurrence of both the learned advocates for the two

petitioners in two separate petitions and the counsel for the Board, is whether the impugned orders are in contravention of the provisions of

Regulation No. 72 of the Board.

Before we deal with this question, a preliminary objection raised in both these petitions on behalf of the Board deserves to be dealt with. After

the impugned orders had come to be passed, both these petitioners had collected from the Board the amounts of gratuity that was available to

them. The Board, therefore, contended that after having taken the orders lying down and accepted the resultant benefit of gratuity without any

demur, the present petitions are barred under the principles of acquiescence, though Mr. Patel did not like to adopt this particular technical phrase

and he, therefore, urged that because of the acceptance of the orders by availing themselves of the amount of gratuity, they were estopped from

challenging the very orders. We find little merit in this preliminary objection because the principle of estoppel arises if and only if, the other side is,

because of the representation, made to alter its position to its disadvantage. By paying the gratuity, the Board has not materially altered its position.

The question of acquiescence also does not arise. In these circumstances, it would be reasonable to infer that the petitioners who have without

much loss of time approached this Court by filing the present petitions, had accepted the amounts of gratuity with reservations and without any

intention to acquiesce in and accept finally the orders of premature retirement.

In order to have the clear picture of the controversy, Regulation No. 72 as amended with effect from 11-12-75 deserves to be quoted verbatim

:

An employee is liable to compulsory retirement on the date of his completion of 58 years of age unless specifically re-employed by the Board for

a specific period.

Such of the staff in whose cases the retiring age is above 58 years should provisionally be continued till that date as personal to them.

Provided that -

(i) an appointing authority may, without assigning any reasons, retire an employee by giving him notice of not less than three months in writing or

three months'' salary in lieu of such notice.

(a) if he is a ''workman'' as defined in the I.D. Act or after the date on which he attains the age of 55 years; and

(b) if he falls in categories other than that mentioned at (a) above, on or after the date on which he attains the age of 50 years.

(ii) An employee may after giving notice of not less than three months in writing to the appointing authority or three months'' salary in lieu of such

notice retire from service after he has attained the age of 55 years if he is a workman as defined in the I.D. Act and in any other case, after he has

attained the age of 50 years.

(iii) An employee may be retained in service after the date of compulsory retirement only with the previous sanction of the Board on public grounds

which must be recorded in writing.

Note : The following criteria and procedure should be observed to ensure uniform and equitable application of this provision :

(i) Six months before an employee of the Board attains the age of 50/55 years his record should be carefully examined by the authority competent

to make appointment to the post which he is holding whether in an officiating or substantive capacity and a decision should be taken as to whether

he should be retired on attaining the age of 50/55 years.

(ii) In a case in which the competent authority concerned has reasonable cause to believed that the employee of the Board is lacking in integrity, it

would be appropriate to consider him for premature retirement.

(iii) In a case in which an employee''s integrity is not in doubt, but his physical or mental condition is such as to affect adversely his efficiency or

ability for further service, it should be appropriate to consider him for premature retirement.

Normally, an employee of the Board shall not be asked to obtain medical certificate of physical/mental fitness before continuing him beyond the

age of 50/55 years. However, where an employee is reported to be suffering from any disability, infirmity or disease which makes it desirable to

have a medical opinion, the competent authority may use his discretion to require him to appear for medical examination.

(iv) Subject to the considerations mentioned in sub-paragraphs (ii) and (iii) above, an employee with a satisfactory record of service should not be

retired prematurely.

(v) Once it is decided to retain an employee in service beyond the age of 50/55 years, he should be allowed to continue upto the age of 55/58

years without any fresh review, unless such a review is justified by special reasons, such as his subsequent work or conduct or the state of his

physical health, which may make his earlier retirement clearly desirable.

Notwithstanding anything contained in the foregoing clauses, an employee of the Board under suspension on a charge of misconduct shall not be

required or permitted to retire on reaching the date of compulsory retirement, but shall be retained in service till the inquiry into the charge is

concluded and a final order is passed thereupon by competent authority. The competent authority should decide whether the period of such

compulsory retention in service should count for provident fund and gratuity. Normally such period will count for provident fund and gratuity.

On behalf of the petitioners, it was urged that as per the clear import of the Regulation No. 72, an employee has got a right to service till the

completion of 58 years of his life and that the premature retirement provided was subject to the specified circumstances mentioned in notes 2, 3

and 4 which notes are provided there as the criteria and procedure to be followed to ""ensure uniform and equitable application of the provision"" for

premature retirement.

On behalf of the Board, it was contended that the operative part of the regulation is the proviso and the notes appended to the said operative

provision are more or less directory guidelines laid down and they would not have the force of law. Analogical support was sought from similar

notes appended to the Bombay Civil Service Rules, which are statutorily framed and Mr. Patel for the Board urged that these notes are akin to the

notes to those Rules. The distinction between the two sets of notes is too obvious to be emphasised. Those notes are departmental instructions or

guidelines issued by the Executive to the subordinates, but they have no force of law. In the case on hand, the notes are an integral part of the main

provision and, therefore, stand on the same footing. They would have the same rigorous force as the main provision has. In other words, the entire

Regulation No. 72 is to be interpreted as a whole unit after allowing the full scope and play of the notes on the enabling provision that provides for

premature retirement.

However, in this connection Mr. Patel invited our attention to the judgment of the Division Bench of this Court that decided the Special Civil

Application No. 1142 of 1976 on 30-11-76. I was a party to that judgment, sitting with the then Chief Justice S. Obul Reddi. Certain

observations were made in that judgment, which are pressed into service by Mr. Patel in support of his submission that the notes are only

procedural provisions and cannot override the wide power conferred by the proviso enabling the Board to prematurely retire an employee. The

particular words that were pressed into service are quoted below :

Firstly, the ambit of the main provision providing for the compulsory retirement cannot be in anyway circumscribed or narrowed down by

recourse to a provision made in the note or a procedural provision made .... To this extent Mr. Mehta is on a firmer foundation, but the fact

remains that what has been provided for in these notes is only the procedural aspect to facilitate the implementation of the main provision, which, as

said above, clothes the appointing authority with a power to retire an officer either on his attaining the age of 50 years or any time thereafter.

Mr. Patel, therefore, urged that the Division Bench of this Court on an earlier occasion had unequivocally ruled that ""notes"" could not narrow down

the wide ambit and scope of the main proviso dealing with the absolute right of the appointing authority to retire an employee prematurely.

We are afraid, Mr. Patel reads in the observations of the judgment of the earlier Division Bench more than what it expresses or implies. The

argument that was then advanced before the Division Bench was that in view of the note (i), appended to the Regulation No. 72, an enquiry during

six months preceding the completion of 50 years of age of the employee was a condition precedent to taking action of retiring an employee

prematurely. It was also urged by Mr. Mehta in that case that because of some observations made in note (v), the force of the proviso was

considerably toned down. Dealing with the scope of the notes (i) & (v), the above-mentioned observations had come to be made by the Division

Bench. No observations could be shorn of the context and pressed into service. Reading paragraph 6 of the said judgment, we find it crystal clear

that the Division Bench had clearly ruled that the ambit and amplitude of the proviso was not in anyway narrowed down or circumscribed by what

was provided for in ""notes (i) and (v) "". The scope of notes (ii) and (iii) was not at all under consideration when those particular observations were

made. We are, therefore, not in a position to agree with the submission of Mr. Patel that the earlier Division Bench has made an absolute

proposition of law that ""notes (i) to (v)"" did not in any way limit the absolute connotation of the proviso permitting premature retirement. If we turn

to paragraph 7 of the earlier judgment, the position becomes very clear. It was very clearly observed there that the case of the said employee of

the Gujarat Electricity Board was completely covered by the standards laid down in notes (ii) and (iii). Pertinently we note the following

observations in this connection :

We have no hesitation in saying that there is some material of probative value placed by the Board on record in order to meet with the allegation

of the petitioner that the order in question was made de hors the provisions of Regulation No. 72 or it was made without any application of mind to

the relevant considerations .... The authority is not bound to disclose any reasons as stated above and in these circumstances we are unable to

agree with Mr. Mehta that the order in question is beyond the purview of the Regulation No. 72 or that it is based on materials which are irrelevant

or that it is the outcome of non-application of mind.

We, therefore, clearly hold that the earlier judgment relied upon by Mr. Patel for the Board does not stand in any good stead to the Board in this

case.

On examining the scheme of the Regulation No. 72 as a whole, it is to be necessarily inferred that the notes (ii), (iii) and (iv) which are said to

have been overlooked by the Board in passing the impugned orders, are not dealing with purely adjectival or procedural aspect. As said by us

above, positive criteria were laid down by the Board while framing the Regulation No. 72 ""to ensure the uniform and equitable application of this

provision"". Notes (i) to (v) together deal with both procedure and criteria. In the earlier decision, the Division Bench of this Court, examined the

scope of the procedural provisions, namely, notes (i) and (v). The notes (ii), (iii) and (iv) deal with criteria, which are the substantive part of the

regulation and not its procedural part. It is to be recalled here with emphasis that the Board, while framing these notes was inspired by a very noble

motive of avoiding the charge of discrimination or lack of equity. It is with this noble idea that the positive and substantive guidelines were provided

for. Note (ii) deals with an employee, who is found to be lacking in integrity and obviously this would certainly be a ground to treat an employee as

dead wood, liable to be chopped off mercilessly. Similarly, note (iii) deals with the physical or mental condition of an employee that prevent him

from dealing with his duties efficiently. By any canon of reason, this ground also cannot be quarreled with and affords a good basis for dispensing

with the services of an employee. After laying down those two positive and clearly identifiable grounds, the Board further proceeded to lay down

in note (iv) that an employee, who does not fall within the categories mentioned in notes (ii) and (iii) shall not be retired prematurely. In the light of

notes (ii) and (iii), the only import that can be given to this note (iv) is that barring these obviously reasonable criteria set out in notes (ii) and (iii),

there should be no ground which should make the appointing authority retire any employee prematurely. The negative expression of note (iv)

makes the intention of the regulation-making authority, namely, the Board, quite clear. It says in emphatic terms that an employee who does not fall

within the categories mentioned in notes (ii) and (iii) above, should not be retired prematurely. Though the ancillary verb ""should"" has been

employed here, it partakes of the character of ""shall"". In other words, note (iv) which is as much a substantive part of the regulation as the proviso

permeating premature retirement very clearly lays down that an employee, who is not lacking in integrity and who is not senile would be allowed to

enjoy the recognised right of continues service upto the age of superannuation, which is the age of completion of 58th year of his life. The

conclusion is further reinforced by the fact that the initial part of regulation No. 72 recognises the right of an employee to continue to serve till he

reaches the age of 58. This right in specified and exceptional circumstances is allowed to be withheld or withdrawn, but from the very nature of

things, it is to be an exception rather than a rule. We have, therefore, no doubt that the imperative language of note (iv) clearly lays down that an

employee whose record of service is otherwise satisfaction cannot be retired prematurely.

Mr. Patel, however, in this connection invited our attention to the two judgments of the Supreme Court. One is the case of the Union of India

(UOI) Vs. Col. J.N. Sinha and Another, . It was a case where the fundamental Rule 56(j) operative in the sphere of the Government of India, had

come to be examined. In very clear terms, the Supreme Court dealt with the solitary question that was raised before that Court. The initial part of

the judgment makes it clear that the only contention that was presented for the decision of the Supreme Court was whether the High Court was

right in holding that in making the impugned order (of premature retirement), the appellant (the Government) had violated the principles of natural

justice. It is made clear in paragraph 2 of the judgment that no other contention was advanced before the Supreme Court. It is in this context that

the Supreme Court stated that the failure on the part of the concerned authority to give an opportunity to the 1st respondent to show cause against

his compulsory retirement was a matter of no concern. The Supreme Court very clearly ruled there that a compulsory retirement, though bound to

have some adverse effect on the Government servant who was compulsorily retired, cannot be said to have subjected the Government servant to

any adverse civil consequences. We do not find that this authority in anyway supports the submission made by Mr. Patel for the Board.

The second authority pressed into service by Mr. Patel is the case of State of Assam and Another, etc. Vs. Basanta Kumar Das, etc. etc., . It

was also a case of premature retirement. In that case, the rule, called memorandum in that case, was to the effect that no Government servant will

be entitled to the benefit of the increased age of compulsory retirement unless he had been permitted to continue in service after the age of 55 years

after the appointing authority is satisfied that he is efficient and physically fit for further Government services. Unlike the case on our hand, the

Government servant had no right to continue in Government employment beyond 55 years. A right was reserved to the Government to extend the

tenure of service upto 58 years on certain considerations, but this was held to be not a matter of any right. It was in this context that the five

appeals that were there before the Supreme Court preferred by the State of Assam had come to be allowed. Various earlier decisions of the

Supreme Court on the question had been elaborately considered and particularly the case of Kailash Chanda v. Union of India, dealing with Rule

2946(2) (a) of the Railway Establishment Code was considered. In that earlier decision it was observed as follows :

Thus, after the age of 55 is reached by the servant the authority has to exercise its discretion whether or not to retain the servant and there is no

right in the servant to be retained, even if he continues to be efficient.

Mr. Patel relied upon this authority for the purpose of supporting his submission that after an employee reached the age of 55, he had no right to

continue in employment. As observed by us earlier, the Regulation No. 72 which applies to the petitioners in these two petitions is couched in

different language. It starts with the recognition of a right of an employee to continue in employment till he reaches the completion of his 58th year

of life. The proviso is there recognising the right of the appointing authority to cut short that span and obviously this power is by way of an

exception, as said by us above. These two authorities, therefore, pressed into service by Mr. Patel, which deal with different rules and regulations,

cannot lend any help to the Board in the case on hand.

Reverting to his alternative submission, Mr. Patel urged that note (iv) to that Regulation No. 72, however, dealt with ""a satisfactory record of

service"". He implored that in the case of both these petitioners, the record of service of each of them had been screened minutely along with that of

all other persons of the same cadre and that the Board manned by very responsible people, including the highest officers having day-to-day

acquaintance with the working of these petitioners, had reached the conclusion that the petitioners were not ""found satisfactory to continue in

service"". Mr. Patel submitted that this conclusion clearly showed that even by strict interpretation of note (iv), the position of either of the

petitioners was not in anyway saved. He urged that the Board had examined the record of service and had come to a definite conclusion that each

of the two petitioners in these two petitions had not a satisfactory record of service at his back and consequently the operative part of the

regulation was attracted and consequently the impugned orders could not be challenged. In order to appreciate the submission of Mr. Patel, we

would like to quote certain portions from the affidavit-in-reply filed in Special Civil Application No. 13 of 1977 and also from the reply filed in the

other petitions. The Board says :

(In the Spl. C.A. 13/77.)

...... With reference to paragraph 3, I say that the service record of the petitioner is not satisfactory for continuance beyond 55 years (para 5) ......

I say that the Board in bona fide exercise of power under Regulation 72 passed the impugned orders on the full appraisal and assessment of and

comprehensive view of his confidential report which includes warning for misuse of Boards vehicle unauthorisedly for personal use and total

performance of the petitioner (para II) ....

The words ''satisfactory record of service'' though not capable of an easy definition, it can be said that it is a sum total of various qualities and

attributes of an employee such as integrity, devotion to duty and the manner in which he discharges his official duties ... All these and other factors

may have to be taken into account in assessing total performance. (para 11)

...... It is such a body which is the final authority which has made the impugned order"" (para 12)

In the Special Civil Application No. 171 of 1977, the reply was filed only at the preliminary stage. We quote the following portion from paragraph

18 of the reply ''I rely on what has been stated hereinabove and say that the petitioner''s work was not found satisfactory for continuance in service

beyond 55 years''. (para 18)

From the excerpts from the affidavit-in-reply quoted above and from the tenor of those affidavits, it is crystal clear that the Board had

examined the case of the petitioners as if on them was to be conferred the extended bonus of further employment. From this angle, the positive

merits were thought to be essential or requisites and with this end in view the cases of both these petitioners clearly appear to have been viewed.

The Board, the affidavits very clearly show, was examining the case of the petitioners from the angle of positive merit and the criterion that was

adopted was whether they possessed the requisite positive merits evidenced by the satisfactory record and not from the point of view of their

disability to continue. We have also ruled above that note (iv) in the context of notes (ii) and (iii) and in the context of the initial provision made for

the service upto 58 years of life lays down as a measure of policy that ordinarily an employee is entitled to continue till he reaches the age of

superannuation on completion 58th year of his life. The Board has laid wrong emphasis and has viewed the cases of these two petitioners from the

angle of positive merits. The Board appears to have examined their cases from the angle to see whether they were good enough to get the benefit

of extended service so to say. Mr. Patel, argued that the paramount idea behind premature retirement is to chop off dead wood. When this is the

guiding principle behind premature retirement, the approach to the problem assumes a different dimension and angle. While examining the case of a

person what is required to be seen is whether he is bad enough to be hopped off from service. Positive merits are not to be insisted upon at this

stage. There are three clear stages in such situations. An employee may be positively good, an employee may be positively bad and an employee

may be neither good nor bad. The underlying principle of Regulation No. 72 is that those who are eminently efficient obviously are not liable to be

removed. Those who are positively bad must be chopped off. The middle class, namely, the class of those who are not, figuratively speaking dead

wood, are to be allowed to live the normal tenure. This appears to be the intention of the Board while framing Regulation No. 72. We have no

doubt that the Board had examined the cases of these two petitioners from the standard of positive merits, but they have not addressed themselves

to the question of a third middle category referred to just now above. It is an admitted position before us that they were not so prematurely retired

because they were lacking in integrity or because there was erosion in their physical or mental condition. Only thing that could be a available to the

Board was the presence of a positively bad record that would make the petitioners unsuitable and consequently liable to be cut off from the service

after 55 years of age. This is not the case here. We would emphasise again that as per the regulation premature retirement is a harsh treatment and

in the present state of regulation could be resorted to only as a matter of exception. Unless exceptional circumstances of the type envisaged above

are there, the harsh treatment of premature retirement cannot be resorted to.

Judging the cases of these two petitioners in above light, we find that the orders passed and impugned in these two petitions are liable to be set

aside. We accordingly allow both these petitions, set aside the impugned orders and direct the respondent to treat the petitioners in each of these

petitions as continuing in service of the Board. The rule is accordingly made absolute in each matter with costs.

Mr. V. B. Patel, the learned counsel appearing for the Board in both these petitions, at this stages seeks leave to appeal to the Supreme Court.

We find that in these petitions, there is a substantial question of law of general importance, which, in our opinion, requires to be decided by the

Supreme Court. A certificate under Art. 133 of the Constitution of India is, therefore, granted in both these petitions. To enable the Board to seek

suitable redress from the Supreme Court, the operation of the orders in these two petitions is stayed for a period of eight weeks from today.

Rule made absolute : Orders set aside

Note : In this matter, the respondent Board preferred appeal in Supreme Court by special leave of this Court. The appeals numbers are Supreme

Court Civil Appeal Nos. 268(N) /78 and 269(N) /78. The appeals were withdrawn before effective hearing. The Supreme Court passed the

following order :

The appeals are dismissed as withdrawn with no order as to costs. 16-2-78.