Supreme Court says compulsory retirement does not imply employee misconduct

The Supreme Court has ruled that compulsory retirement is neither a punishment nor a stigma and does not amount to a finding of misconduct against an employee, news agency Press Trust of India reported.

A bench of Justices Manmohan and Shree Chandrashekhar made the observation while upholding the Chhattisgarh government's decision to compulsorily retire five of 14 employees. It said such a decision is based on the competent authority's assessment that retaining an employee is no longer in the public interest.

“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 said the executive has the authority to assess whether an officer is no longer useful to the administration or whether the officer's continuation would harm administrative efficiency. However, the assessment cannot be based on conjecture or whim and must rely on objective and relevant material on record.

On Friday, the Supreme Court upheld the Chhattisgarh High Court's April 12, 2023, order affirming a single-judge bench's decision on the state government's 2017 circular under which the employees were compulsorily retired, PTI reported. It rejected their argument that other similarly placed employees had not been retired.

“An employee cannot successfully assail an order of compulsory retirement merely by contending that another officer possessing a comparable service record was not subjected to similar action,” the court said. It added that an employee's usefulness, integrity, efficiency and overall service record must be assessed individually by the competent authority.

The bench said action against one employee cannot be held unconstitutional or discriminatory merely because another similarly placed employee was not subjected to the same action.

Referring to the right to equality under Article 14 of the Constitution, the court said an illegality or omission that benefited one person cannot be used as grounds for extending the same benefit to another. “If a wrong has been committed in an earlier case, it cannot be relied upon to perpetuate a similar wrong in subsequent cases,” it said.

The court said that when the government prescribes norms or criteria for exercising such powers, judicial review is limited to examining whether those standards were followed. A compulsory retirement order must be supported by relevant material, including annual confidential reports, integrity assessments, performance evaluations and other service records concerning the employee's usefulness and suitability for continued service.

The bench said courts cannot reassess or reweigh the material as if they were hearing an appeal against the administrative decision. A court must only examine whether relevant material existed, whether the competent authority considered it and whether a reasonable person could have reached the same conclusion.

“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. Judicial intervention is justified only when a compulsory retirement decision is based on no evidence, shows a failure to apply the mind, is clearly arbitrary or unreasonable, or is affected by bad faith, the bench added.

In the case of the five employees, the Supreme Court said due process had been followed. The screening committee's recommendations were based on an objective assessment of their usefulness, efficiency and suitability, aimed at maintaining administrative standards and efficiency in public service, according to PTI.

The court found that the same standards had been applied to all similarly placed employees and that no discriminatory treatment or selective use of the criteria had been established. The screening committee identified five employees whose overall service records fell below the prescribed standard and whose recent confidential reports showed unsatisfactory performance, declining efficiency or lack of usefulness in public service. The remaining nine employees met the standards and were retained.

In conclusion, the Supreme Court upheld the compulsory retirement of the five employees, finding that the decision was based on relevant service records, followed due process and applied the prescribed criteria uniformly.- Ends