Compulsory retirement order is neither punitive nor stigmatic in character: SC

NEW DELHI: The Supreme Court has ruled that compulsory retirement of a government employee is neither punitive nor stigmatic and does not imply a finding of misconduct, provided the decision is based on relevant material and the competent authority's assessment of public interest.

A bench of Justices Manmohan and Shree Chandrashekhar made the observation while upholding the Chhattisgarh government's decision to compulsorily retire five of its 14 employees under a 2017 government circular.

"...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," the bench said.

The court clarified that the decision to retire an employee compulsorily must be based on the competent authority's subjective satisfaction that the employee's continued retention in service is no longer conducive to public interest.

It said the executive has the authority to assess whether an officer has become "dead wood" or whether their continued service would affect administrative efficiency. However, such an assessment cannot be based on conjecture or whim and must be supported by objective and relevant material on record.

The bench also rejected the employees' argument that the action was discriminatory because other similarly placed employees had not been compulsorily retired.

It held that the assessment of an employee's utility, integrity, efficiency and overall service record is an individualised exercise. The fact that one employee is retired while another with a comparable service record is retained does not, by itself, make the decision unconstitutional or discriminatory.

Invoking Article 14 of the Constitution, the bench said the principle of equality does not recognise a claim to "negative equality". An illegality or omission in favour of one person cannot be cited as grounds for extending the same treatment to another.

The court further said that judicial review of compulsory retirement orders is limited to examining whether the government has followed the prescribed norms and criteria.

It added that such decisions must be supported by relevant material, including Annual Confidential Reports, integrity assessments, performance evaluations and other entries in the employee's service record.

The Supreme Court upheld the Chhattisgarh High Court's April 12, 2023 order, which had affirmed a single-judge bench's decision upholding the state government's 2017 circular providing for compulsory retirement.

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.