UNIVERSITY INSTITUTE OF LEGAL STUDIES

PANJAB UNIVERSITY, CHANDIGARH

COMPULSORY RETIREMENT

A PROJECT REPORT SUBMITTED AS A PART OF CURRICULUM OF

B.COM. LL.B. (HONS.) IN THE SUBJECT OF

“SERVICE LAWS”

SUBMITTED TO: SUBMITTED BY:

MR. AGAMPREET SINGH DEVIKA JOSHI
ROLL NO. 185/19
B.COM. LL. B (Hons.)
SEMESTER 10, SECTION D

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ACKNOWLEDGEMENT
I would like to express our special thanks of gratitude to our professor Mr. Agampreet Singh
who gave me this golden opportunity to do this wonderful project on the topic “Compulsory
Retirement” which helped me in gaining a lot of knowledge on the basic principles and
nuances of Service Laws.

I would also like to thank UILS department for providing all the valuable online resources and
the facilities regarding our studies.

DEVIKA JOSHI
B.COM. LL. B (Hons.), Semester 10

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TABLE OF CONTENTS
INTRODUCTION................................................................................................................................. 4
- DEFINITION OF COMPULSORY RETIREMENT .......................................................... 5
- OBJECT OF COMPULSORY RETIREMENT .................................................................. 5
NATURE AND SCOPE OF COMPULSORY RETIREMENT ....................................................... 7
- GOVERNING PRINCIPLES OF COMPULSORY RETIREMENT ................................ 5
CONDITIONS PRECEDENT FOR COMPULSORY RETIREMENT .......................................... 8
- VALIDITY OF RULE 56(j) OF FR W.R.T COMPULSORY RETIREMENT............... 12
- SCOPE OF JUDICIAL REVIEW IN CASES OF COMPULSORY RETIREMENT .... 13

LATEST CASE STUDY..................................................................................................................... 14

BIBLIOGRAPHY ............................................................................................................................... 17

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INTRODUCTION
“Security of tenure is the condition of efficiency of service. The Administration, to be
competent, must have servants who are not plagued by uncertainty about tomorrow.”

- KRISHNA IYER, J.1

The civil services are one of the most important cogs in the machine that is the Indian ‘system’.
In this country of extreme diversity and socio-cultural variations, the civil services, right from
old times, have managed to maintain order within chaos. As the nature of politics and
organisation of society and government changed over several years, it became imminent for
the bureaucracy to reinvent itself as well. In India’s case, this reinvention was in the hands of
the democratic government – the same that granted the bureaucracy protection through
Constitutional provisions when India became an independent nation. The bureaucracy,
however, remained pretty much the same after India’s independence.

Reforms in the bureaucracy have at best been incremental and very far away from the proposed
revolutionary changes.

Recently, the newly chosen government has taken sweeping action aimed at removing corrupt
central government officials. In exercise of the powers conferred by clause (j) of rule 56 of the
Fundamental Rules, the President of India has retired 12 Officers of the Indian Revenue Service
(Income Tax) in public interest with immediate effect on completing 50 years of age.

The rules are now being implemented more forcefully for gazetted officers including those in
IAS, IPS and other Group A services, Group B officers as well non gazetted services. All the
central Public Sector Units (PSUs) and autonomous bodies have also been asked to replicate
the compulsory retirement policy.

1
Baldev Raj Chadha v. Union of India , AIR 1981 SC 70.

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DEFINITION OF COMPULSORY RETIREMENT

The term or phrase "compulsory retirement" in service law has been generally used in relation
to cases where an employee has been directed that his services are no longer required before
he reaches the normal age of retirement prescribed by the rules. In other words, in substance,
there is a premature end of the relationship of master and servant before the servant reaches the
prescribed age of retirement or superannuation.

Rule 56(j) of the Fundamental Rules deals with premature retirement.2

The service rules of statutory corporations and many Government companies have rules for
premature retirement which are almost identical to FR 56(j).

➢ FUNDAMENTAL RULES (FR) AND SUPPLEMENTARY RULES (SR)

Fundamental Rules together with the Supplementary Rules (popularly known as FRSR) are
considered the Bible of Rules for the central government employees. Fundamental Rules trace
back their origin to the pre-independence time (came to effect from 01-01-1922) and are the
first set of rules which have been governing the terms and conditions of service of the central
government employees till today (of course with amendments from time to time). There are a
total of 130 Fundamental Rules.

On the other hand, Supplementary Rules are the rules framed by the President under various
Fundamental Rules. There are a total of 335 Supplementary Rules.

OBJECT OF COMPULSORY RETIREMENT

The purpose and object of premature retirement of a government employee is to weed out the
inefficient, the corrupt, the dishonest or the dead-wood from Government service.

In Tara Singh v. State of Rajasthan3, It was held that an order of compulsory retirement is
passed on the basis of interest of administrative efficiency. An order of compulsory retirement
doesn’t deprive the Government servants of the benefits earned till the age of retirement.

2
Circular on compulsory retirement, available at:
https://documents.doptcirculars.nic.in/D2/D02est/HandBook_CompulsuryRetirement.pdf (Visited on April 01,
2023)
3
Tara Singh v. State of Rajasthan, AIR 1975 SC 1487.

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But the exercise of power of compulsory retirement must not "haunt" on the public servant but
must act as a check and reasonable measure to ensure efficiency of service.

NATURE AND SCOPE OF

COMPULSORY RETIREMENT IN
INDIA

Compulsory retirement is distinguishable from retirement on reaching the age of

superannuation. Sometimes an employee may not remain fully efficient till the age of
superannuation and therefore before the age of superannuation another period is fixed at which
to consider whether the employee is still efficient to discharge his obligations. If on considering
efficiency, the appointing authority takes a decision that in the public interest, an employee
should be retired, then it is called compulsory retirement.

The difference between compulsory retirement and superannuation age is that after an
employee reaches the age of superannuation, his extension is purely with the appointing
authority even if the employee continues to remain efficient and competent to discharge his
obligations. But at the stage at which compulsory retirement is to be considered an employee
can only be retired if competent authority comes to a decision on considering the circumstances
of the case that an employee should be retired otherwise the public interest would suffer.4

There is no inherent right for passing an order of compulsory retirement and the authority
cannot exercise the right in absence of rules. If the rules so provide and an employee is
compulsorily retired then compulsory retirement is for all purposes a retirement and an
employee will be entitled to proportionate pension and all his dues as if he has been retired on
reaching the age of superannuation.

In some cases, the rules provide compulsory retirement as a lighter punishment than dismissal
along with other punishments. The nature of compulsory retirement as a punishment is different
from compulsory retirement in terms of the relevant rules in that behalf. When compulsory

4
S.Pal, Law Relating to Public Service 210 (Lexis Nexis, Delhi, 4th edn., 2021).

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retirement is a punishment, it is imposed because an employee has committed some misconduct
and a stigma is consequently attached to it. If an employee is compulsorily retired in accordance
with the rules, then the retirement is not on the basis of any misconduct but because it is in
public interest that the employee should be. retired at that stage. Before an employee is
compulsorily retired by way of punishment it is necessary to hold a departmental enquiry after
issuing him a charge sheet, but there is no such requirement when an employee is compulsorily
retired in accordance with the rules which is one of the modes of passing a simple, discharge
order.

Compulsory retirement is really passed after taking into consideration the rights of the
Government servant on the one hand and the interest of the public, ordinarily coincides with
the interest of the Government, on the other.

Compulsory retirement simpliciter does not deprive the Government servant of the benefit
earned by him till the age of his retirement. An order has to be treated as one of compulsory
retirement simpliciter if it involves no civil consequences nor does it cast any stigma on the
Government servant.5

GOVERNING PRINCIPLES OF COMPULSORY RETIREMENT

In Baikuntha Nath Das v. Chief District Medical Officer, Baripada,6 the hon’ble SC has laid
down following principles regarding compulsory retirement:

i. Is not a punishment. — An order of compulsory retirement is not a punishment. It

implies no stigma nor any suggestion of misbehaviour.

ii. On forming opinion that, it is in the public interest to retire. — The order has to be
passed by the Government on forming the opinion that it is in the public interest to
retire a Government servant compulsorily. The order is passed on the subjective
satisfaction of the government.

iii. Principles of natural justice have no place. — The principles of natural justice have no
place in the context of an order of compulsory retirement. This does not mean that
judicial scrutiny is excluded altogether. While the High Court or the Supreme Court of

5
Id. at 211.
6
Baikuntha Nath Das v. Chief District Medical Officer, Baripada, (1992) 2 SCC 299.

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 India would not examine the matter as an appellate court, they may interfere if they are
satisfied that the order is passed:
a. mala fide or
b. that it is based on no evidence or
c. that it is arbitrary in the sense that no reasonable person would form the requisite
opinion on the given material; in short, if it is found to be a perverse order.

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.

v. An order of compulsory retirement is not liable to be quashed by a Court merely on the

showing that while passing it uncommunicated adverse remarks were also taken into
consideration. That circumstance by itself cannot be a basis for interference

In the case of State of Gujarat v. Umedbhai M. Patel,7 it was said that the law relating to
compulsory retirement 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 interest.

ii. Ordinarily, the order of compulsory retirement is not to be treated as a punishment

coming under Article 311 of the Constitution of India.

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.

7
State of Gujarat v. Umedbhai M. Patel, 2001 (3) SCC 314.

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 iv. Any adverse entries made in the confidential record shall be taken note of and be given
due weightage in passing such order.

v. Even uncommunicated entries in the confidential record can be taken into

consideration.

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.

viii. Compulsory retirement shall not be imposed as a punitive measure.

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ON WHAT BASIS IS AN EMPLOYEE
COMPULSORILY RETIRED?
Compulsory retirement involves no civil consequences. The Government servant does not lose
any of the rights acquired by him before retirement while a minimum service is granted to the
Government Servant, the Government is given power to energize its machinery and make more
efficient by compulsory retiring those who in its opinion should not continue in the service of
the Government in the interest of public.8

The conditions precedent for exercise of the power of premature retirement must be fulfilled
for a valid exercise of the power.

The conditions precedent9 are:

A. Formation of opinion that it is in the public interest to order premature

retirement.

In relation to premature retirement most service rules are modelled or FR 56(j) with the result
that the essential pre-condition for exercise of the power is the formation of the opinion that it
is in the public interest to prematurely retire the concerned employee. Formation of such
opinion is, therefore, the condition precedent for exercise of the power. Commenting on this
aspect in the context of FR 56(j), the Supreme Court in J.N. Sinha10 observed:

"That power can be exercised subject to the conditions mentioned in the rule, one of which is
that the concerned authority must be of the opinion that it is in public interest to do so. If that
authority bona fide forms that opinion, the correctness of that opinion cannot be challenged
before Courts. It is open to an aggrieved party to contend that the requisite opinion has not been
formed or the decision is based on collateral grounds or that it is an arbitrary decision."

B. The concerned employee has completed the stipulated period of qualifying service
or has attained the stipulated age.

8
Ashok Kumar Aggarwal v. Union of India, 2021 SCC OnLine Del 4453.
9
J. TS Doabia, The Law Of Services And Dismissals 472 (Lexis Nexis, 6th edn., 2022).
10
Union of India v. Col. J.N. Sinha, (1970) 2 SCC 458.

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Having reached the satisfaction that it is in public interest to retire the employee, the competent
authority must further find out whether the concerned employee has on the relevant date
completed the specified years of qualifying service or has attained the stipulated age.
According to FR 56 (j) if he is in Group a OR Group B service or post in substantive, quasi-
permanent or temporary capacity and had entered government service before attaining the age
of 35 years after he has attained the age of 50 years.

In any other case after he has attained the age of 50.

According to 48 of CCS (Pension ) Rules government servant may be required to retire on

competition of 30 years qualifying service by appointing authority in public interest.

VALIDITY OF RULE 56(j) OF FUNDAMENTAL RULES W.R.T

COMPULSORY RETIREMENT

The validity of Rule 56(j) of Fundamental Rules had been upheld by the Supreme Court in T.G.
Shivacharana Singh v. State of Mysore11. It was held that a Government Servant serving under
the Union of India holds office at the pleasure of the President of India as provided under
Article 310 of the Constitution of India. In the above decision, it was stated that compulsory
retirement is bound to have some adverse effect on the Government servant who is
compulsorily retired but the rule provides that such retirements can be made only after the
officer attains a prescribed age.

➢ Adding to the above analysis, Court stated that if the employer – Union of India is of
the opinion that no useful purpose will be served by continuing an employee into the
services of the Union of India, in the public interest such an employee can be made
compulsorily retired.
➢ Compulsory retirement can be passed looking to the overall service record of the
Government employee.
➢ It can also be passed in public interest with a view to improve efficiency of the
administration or to weed out people of doubtful integrity or corrupt employee but

11
T.G. Shivacharana Singh v. State of Mysore, AIR 1965 SC 280.

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 sufficient evidence was not available to take disciplinary action in accordance with the
rules, so as to inculcate a sense of discipline in the services.

SCOPE OF JUDICIAL REVIEW IN CASES OF COMPULSORY

RETIREMENT

The scope of the same is very limited in cases of compulsory retirement. Only on limited
grounds such as non-application of mind or malafide, the compulsory retirement order can be
challenged. Principles enunciated by the Supreme Court in Pyare Mohan Lal v. State of
Jharkhand12, were to be kept in mind.

In the decision of Supreme Court in Union of India v. Col. J.N. Sinha13, it was observed that:
“Fundamental Rule 56(i) in terms does not require that any opportunity should be given to the
concerned government servant to show cause against his compulsory retirement. A government
servant serving under the Union of India holds his office at the pleasure of the President as
provided in Article 310 of the Constitution. But this ―pleasure doctrine is subject to the rules
or law made under Article 309 as well as to the conditions prescribed under Article 311. Rules
of natural justice are not embodied rules nor can they be elevated to the position of fundamental
rights.”

12
Pyare Mohan Lal v. State of Jharkhand, (2010) 10 SCC 693.
13
Union of India v. Col. J.N. Sinha, (1970) 2 SCC 458.

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LATEST CASE STUDY
Case details

CASE NAME: Captain Pramod Kumar Bajaj v. Union of India and Anr.

CITATION: 2023 LiveLaw (SC) 165 | Civil Appeal No. 6161 of 2022

DATE OF JUDGEMENT: 3rd March, 2023

CORAM: Justice A.S. Bopanna and Justice Hima Kohli

FACTUAL BACKGROUND

Pursuant to a physical disability suffered by him, the appellant, a Permanent Commissioned

Officer in the Indian Army, inducted in 1980, was released from service. He appeared for the
Civil Services Examination in 1989 and was appointed as an Officer in the IRS. On 12.01.2012,
he was promoted to the rank of Commissioner, Department of Income Tax. On 07.07.2014, he
was empanelled for appointment as Member of the Income Tax Appellate Tribunal (ITAT).

In 2015, his name was forwarded to the ACC (appointment committee of the cabinet) along
with his vigilance clearance, for his ITAT Appointment. In 2016, he was empanelled by the
ACC to be appointed as Joint Secretary to the GoI. He had an adverse IB report, which he
challenged before the CAT. The CAT directed the Union to resubmit the adverse IB Report to
the Selection Committee so that it can consider the same. The Union govt. filed a writ petition
before the Allahabad HC assailing order of the CAT. The HC dismissed the petition, directing
the entire process of reconsideration to be completed within a stipulated time period.

On 29.11.2017, a vigilance inspection was carried out at the appellant's office. The vigilance
clearance initially granted to him was withdrawn by the Union Govt. Subsequently, a show
cause notice was issued to him. The appellant approached the CAT. The CAT passed two
interim orders, in essence, directing that the show cause notice and the withholding of the
vigilance clearance should not come in the way of the appellant being considered for the
appointment. In the interim, the Union Govt put his name in the ‘suspect list’, which lists out
Gazetted officers of suspect integrity. The Union Govt challenged the interim orders passed by
CAT before the SC, which came to be dismissed. Thereafter, the appellant filed an application

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before the CAT challenging inclusion of his name in the Suspect List and an interim order was
granted in his favour.

The Tribunal directed his name to be forwarded to the appropriate authority for appointment
to the ITAT. The Union Govt did not comply with the order of CAT and filed a writ petition
before the High Court. The Union Government issued disciplinary proceedings against him
and eventually he was compulsorily retired on 27.09.2019. The same along with the decision
of the Representation Committee not to interfere with the order of compulsory retirement were
challenged before the CAT, which was dismissed and so was the petition filed before the High
Court.

REASONING

Referring to Rule 56(j) of the Fundamental Rules, the Court noted that the Government is
vested with the absolute right to retire an employee, if it is in public interest. A prior notice of
at least three months is required to be provided to the outgoing employee and the provision of
compulsory retirement can be invoked only when the concerned officer has attained 50 years
of age. The Court also noted that the scope of judicial review in respect of an order of
compulsory retirement is limited.

On perusal of the appellant's APARs, the Court noted that for the past one decade till the period
he was retired he was consistently graded as ‘Outstanding’. Moreover, there were no adverse
entries in the APARs, there were no complaints regarding his conduct or character; even his
efficiency and integrity seemed to be unimpeachable throughout his career. However, the
Union Government had argued that there were as many as 9 complaints against the appellant
pending with the Vigilance Directorate. The Court took into note of the fact that though the
Union Government was aware of the complaints, the service record of the appellant did not
reflect the same; his record remained unblemished throughout. The Court did not find anything
significant on record which would demonstrate why he was compulsorily retired.

JUDGEMENT

Supreme Court sets aside order of CBDT passed to compulsorily retire a gazetted officer. Any
exercise of power that exceeds the parameters prescribed by law or is motivated on account of
extraneous or irrelevant factors or is driven by malicious intent or is on the face of it, so patently
arbitrary that it cannot withstand judicial scrutiny, must be struck down. In such a case, this
Court is inclined to pierce the smoke screen and on doing so, we are of the firm view that the

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order of compulsory retirement in the given facts and circumstances of the case cannot be
sustained. The said order is punitive in nature and was passed to short-circuit the disciplinary
proceedings pending against the appellant and ensure his immediate removal. The impugned
order passed by the respondents does not pass muster as it fails to satisfy the underlying test of
serving the interest of the public

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BIBLIOGRAPHY

BOOKS
• J. TS Doabia, The Law Of Services And Dismissals (Lexis Nexis, 6th edn., 2022)
• S.Pal, Law Relating to Public Service (Lexis Nexis, Delhi, 4th edn., 2021)

WEBSITES
• www.scconline.com
• www.livelaw.in
• www.ebcreader.com
• www.jstor.org

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