Compulsory Retirement as a Measure of Punishment

COMPULSORY RETIREMENT AS A MEASURE OF PUNISHMENT  An employee may be retired compulsorily as a measure of punishment. The authorities, who propose to impose the punishment of compulsory retirement, shall satisfy themselves, after verifying the service Book of the employee concerned, that he has put in not less than 10 years of qualifying service, to make him eligible for pension. Any order passed without ascertaining the fact whether he is entitled to draw pension, will be bad in law.

 Every employee of the Board, who is compulsorily retired, shall be entitled to submit, within a period of one month from the date on which the order on compulsory retirement was communicated to him, a petition of the Board for review of the orders passed dated .

 The Government has no say regarding the review as well as appeal in respect of the employees of the T.N.E.B. compulsorily retired. The Board itself is competent to review and examine the appeals of compulsorily retired employees.

 An employee, who has been placed under suspension pending enquiry, should not be dismissed or removed or compulsorily retired from service retrospectively from the date on which he was placed under suspension. The orders in such a case should take effect only from the date of issue of orders thereof.

 No weightage in service shall be admissible to persons compulsorily retired.

REINSTATEMENT OF COMPULSORILY RETIRED EMPLOYEES  If an employee who was compulsorily retired is reinstated on appeal, the period between the date of compulsory retirement and the date of reinstatement will be treated as duty period and such an employee is entitled to pay and allowances, less the pension already received.

 Even though the period between the dates of compulsory retirement and reinstatement is treated as duty, deputation allowance and additional charge allowance need not be given to an employee, who was on deputation or holding additional charge on the date of compulsory retirement.

 If an employee under suspension continues under suspension after the date of superannuation in view of the pending Disciplinary proceedings against him and is fully exonerated from the charges against him later, he shall be paid Dearness Allowance as admissible on superannuation and H.R.A. and C.C.A. as admissible prior to the date of superannuation for the period from the date of superannuation till the date on which final orders on the Disciplinary proceedings were issued.

 Whenever a Board employee is compulsorily retired and is ordered to be reinstated in service consequent on the examination of the review petition to the Board or on the

basis of orders of a Court, a supernumerary post shall be created, if the post has already been filled up from the date of his compulsory retirement, till the date of his rejoining duty or superannuation.

MATTERS RELATED TO EARNED LEAVE G.P.F AND D.C.R.G. OF EMPLOYEES COMPULSORILY RETIRED  The employees of the Board, who are retired compulsorily from service as a measure of punishment, are permitted to en cash the Earned leave at their credit on the date of such compulsory retirement, subject to a maximum of 240 days.

 12. At the time of final retirement of compulsorily retired and reinstated employee, the Earned leave at credit minus the surrender already allowed on the date of compulsory retirement can be allowed.

 A reinstated person may be required to repay any amount paid to him from G.P.F. with interest thereon and the amount so repaid shall be credited to his account in the G.P.F.

 D.C.R.G. already paid shall be adjusted against the pay and allowances admissible to the extent possible. The balance D.C.R.G. may be allowed to be retained by the employee on payment of simple interest as prescribed for G.P.F. for the corresponding period. The amount to be retained will be adjusted against the final D.C.R.G. becoming due on final retirement and the balance, if any, paid to him.

 The suspension period of employees who have been dismissed or removed from service and the punishment subsequently modified as one of compulsory retirement and the suspension period of any employee who has been compulsorily retired as a measure of punishment shall be regularised as per service Regulation 57-A/11 of T.N.E.B. Service Regulations.

Compulsory retirement neither punitive nor stigmatic New Delhi: The Supreme Court said order of compulsory retirement is neither punitive nor stigmatic and has to be based on subjective satisfaction of government authority that it is in public interest.  "The order of compulsory retirement is neither punitive nor stigmatic. It is based on subjective satisfaction of the employer and a very limited scope of judicial review is available in such cases.  "Interference is permissible only on the ground of non application of mind, malafide, perverse, or arbitrary or if there is non-compliance of statutory duty by the statutory authority," a bench of justices KS Radhakrishnan and AK Sikri said. The bench made the observation while upholding an appeal filed by Rajasthan State Road Transport Corporation against the state high court order setting aside the compulsory retirement given to one of its drivers. The corporation had introduced provisions of compulsory and voluntary retirement for its employees and a screening Committee was constituted in 2002 to look into the conduct and continuance of four employees who had attained the age of 50 years or had completed 25 years of service. The driver was given compulsory retirement considering his adverse career record from 1978-90. He had moved Rajasthan High Court which set aside the compulsory retirement saying adverse service record pertaining to the period 1978-90 being old and stale could not be taken into consideration at all for retiring him.

The apex court bench, however, said entire service record is relevant for deciding as to whether the government servant needs to be eased out prematurely. "Power to retire compulsorily, the government servant in terms of service rule is absolute, provided the authority concerned forms a bonafide opinion that compulsory retirement is in public interest. "What is to be examined is the `overall performance` on the basis of `entire service record` to come to the conclusion as to whether the concerned employee has become a deadwood and it is public interest to retire him compulsorily," the bench said citing various judgements.

When penalty of dismissal/removal/compulsory retirement is set aside for non-observance of procedure prescribed under Article 311 of the Constitution. If an order of dismissal, removal or compulsory retirement from service is held by a court of law or by the appellate/reviewing authority to have been made without following the procedure prescribed under Article 311 of the Constitution, and no further inquiry is proposed to be held, action to regulate his pay and allowances for the period of absence from duty and to specify whether the said period shall be treated as duty for any specific purpose will be taken in accordance with FR 54 or FR 54-A, as the case may be . In such cases, if it is decided to hold a further inquiry and thus deem the Government servant to have been placed under suspension from the date of dismissal/removal/compulsory retirement under Rule 10(3) or (4) of the CCA Rules, the Government servant will be paid the subsistence allowance from the date he is deemed to have been placed under suspension under FR 53.

Fundamental rule 54(1) (1) When a Government servant who has been dismissed, removed or compulsorily retired is re-instated as a result of appeal review or would have been so re-instated 9 [but for his retirement on superannuation, while under suspension or not], the authority competent to order re-instatement shall consider and make a specific order:(a) regarding the pay and allowances to be paid to the Goverment servant for the period of his absence from duty including the period of suspension preceeding his dismissal, removal or compulsory retirement, as the case may be, and (b) whether or not the said period shall be treated as a period spent on duty. (2) Where the authority competent to order re-instatement is of the opinion that the Government servant who had been dismissed, removed or compulsorily retired has been fully exonerated, the Government servant shall, subject to the provisions of sub-rule (6), be paid full pay and allowances to which he would have been entitled, had he not been dismissed, removed or compulsorily retired or suspended prior to such dismissal, removal or compulsory retirement, as the case may be: Provided that where such authority is of opinion that the termination of the proceedings instituted against the Government servant had been delayed due to reasons directly attributable to the Government servant, it may, after giving him an opportunity to make his representations 10 [within 60 days from the date on which the communication in this regard is served on him] and after considering the representation, if any submitted by him, direct for reasons to be recorded in writing, that the Government servant shall, subject to the provisions of sub-rule (7),be paid for the period of such delay, only such amount 11 [not being the whole] of such pay and allowances as it may determine.

(3) In a case falling under sub-rule (2), the period of absence from duty including the period of suspension proceeding dismissal, removal or compulsory retirement, as the case may be shall be treated as a period spent on duty for all purposes. (4) In the cases other than those covered by sub-rule (2) including the cases where the order of dismissal, removal or compulsory retirement from service is set aside by the Appellate or Reviewing Authority solely on the ground of non-compliance with the requirements of Clause (2) of Article 311 of the Constitution and no further enquiry is proposed to be held, the Government servant shall subject to the provision of sub-rules (6) and (7), be paid such 12 [amount (not being the whole) of the pay and allowances] to which he would have been entitled had he not been dismissed, removed or compulsorily retired or suspended prior to such dismissal, removal or compulsory retirement, as the case may be, as the competent authority may determine, after giving notice to the Government servant of the quantum proposed and after considering the representation, if any, submitted by him in that connection within such period 13 [which in no case shall exceed sixty days from the date on which the notice has been served] as may be specified in the notice:

Fundamental Rule 54 -A  Where the dismissal, removal or compulsory retirement of a Government servant is set aside by a Court of Law and such Government servant is reinstated without holding any further enquiry, the period of absence from duty shall be regularised and the Government servant shall be paid pay and allowance in accordance with the provisions of sub-rule (2) or (3) subject to the directions, if any, of the court. (i) Where the dismissal, removal or compulsory retirement of a Government servant is set aside by the Court solely on the ground of non-compliance with the requirements of the clause (2) of Article 311 of the Constitution, and where he is not exonerated on merits, the Government servant shall subject to the provision of sub-rule (7) of rule 54, be paid such 17 [amount (not being the whole) of the pay and allowances to which he would have been entitled had he not been dismissed, removed or compulsorily retired or suspended prior to such dismissal, removal, or

compulsory retirement, as the case may be, as the competent authority may determine, after giving notice to the Government servant of the quantum proposed and after considering the representation, if any, submitted by him in that connection, within such period, 18 [which in no case shall exceed sixty days from the date on which the notice has been served as may be specified in the notice: Provided that any payment under this sub-rule to a Government servant other than a Government servant who is governed by the provisions of Payment of Wages Act, 1936 (4 of 1936) shall be restricted to a period of three years immediately preceding the date on which the judgement of the court was passed or the date of retirement on superannuation of such Government servant, as the case may be. (ii) The period intervening between the date of dismissal, removal or compulsory retirement including the period of suspension preceding such dismissal, removal or compulsory retirement, as the case may be and the date of judgement of the court shall be regularised in accordance with the provisions contained in sub-rule (5) of Rule 54.] 

If the dismissal, removal, or compulsory retirement of a Government servant is set aside by the Court on the merits of the case, the period intervening between the date of dismissal, removal or compulsory retirement including the period of suspension preceding such dismissal, removal or compulsory retirement, as the case may be, and the date of re-instatement shall be treated as duty for all purposes and he shall be paid the full pay and allowances for the period to which he would have been entitled, had he not been dismissed, removed or compulsorily retired, as the case may be.  The payment of allowances under sub-rule (2) or sub-rule (3) shall be subject to all other conditions under which such allowances are admissible. (5) Any payment made under this rule to a Government servant on his reinstatement shall be subject to adjustment of the amount if any, earned hy him through an employment during the period between the date of dismissal, removal or compulsory retirement and the date of re-instatement. Where the emoluments admissible under this rule are equal to or less than those earned during the employment elsewhere, nothing shall be paid to the Government servant.

Case : In a recently reported decision [Leela Sharma v. Govt of NCT, (2010) 170 DLT 170] the Delhi High Court examined the concept of 'compulsory retirement' to hold that it was one of the vital tools for the Government to ensure that inefficient public servants are discharged and thus the administrative machinery rests its functions upon efficient workmen. Approving the concept, the Bench inter alia observed as under;  The concept of compulsory retirement came into force to remove a public servant whose services are no longer useful to the general administration or in public interest; if it is felt that for better administration, for augmenting efficiency it is necessary to chop off the deadwood. The order of compulsory retirement has to be made having regard to the entire service record of the officer. Even uncommunicated entries in the confidential record can be taken into consideration. The order of compulsory retirement is not to be treated as a punishment and carries no stigma. However, it has been held that the order of compulsory retirement shall not be passed as a shortcut to avoid departmental enquiry when such course is more desirable. The rule of compulsory retirement has been held to hold the balance between the rights of the individual Government servant and the interest of the public. The rule is intended to enable the Government to energise its machinery and to make it efficient by compulsorily retiring those who, in its opinion, should not be there in public interest. Fundamental Rule 56(j) has been held to confer absolute right to retire any Government servant on his attaining the age of 55 years if the authority is of the opinion that it is in the public interest to do so. The Supreme Court in Bishwanath Prasad Singh Vs. State of Bihar held that the object of such compulsory retirement is to weed out the worthless who have lost their utility by their insensitive, unintelligent or dubious conduct impeding the flow and promoting stagnation. It was held that the country needs speed, sensitivity, probity, non-irritative public relation and enthusiastic creativity which can be achieved by eliminating the deadwood, the paper-logged and callous.  It is thus clear that an order of compulsory retirement is an important tool to keep any organization vibrant and to prevent its clogging and decay by the sheer weight of long standing employees who have ceased to be the dynamos to propel the organization further and for achieving its goals. The same enables the employer to, after the employee has worked for a certain number of years and /

or has attained a certain age but before the age of superannuation, remove him. It is often found that certain employees after putting in considerable number of years of service lose their sheen and no longer remain productive. Their continuance in service is of no use to the organization.  In my opinion the objective of compulsory retirement is laudable. During the hearing, it was put to the counsel for the petitioner as to whether, considering the importance of the Schools, is it not desirable to have the concept of compulsory retirement in Schools. The importance of the Schools cannot be undermined; they play a vital role in shaping the future/next generation and hence the destiny of the community and the country. The onus of so shaping and igniting the minds rests in the hands of teaching faculty of the school. Often it is found and is human nature that persons who have the requisite qualification and validly join the noble profession of teaching, either fail to perform or though successful performers initially, over the years lose the zeal to so shape the destiny of children they are dealing with. Should the schools be forced to continue such persons, just to protect the tenure of service of the said persons and that too at the cost of the future citizens? The answer necessarily has to be in the negative.

Conclusion : “(i) An order of compulsory retirement is not a punishment. It implies no stigma nor any suggestion of misbehaviour. (ii) 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 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 Court 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.”

Thus, the law on the point can be summarised to the effect that an order of compulsory retirement is not a punishment and it does not imply stigma unless such order is passed to impose a punishment for a proved misconduct, as prescribed in the Statutory Rules. The Authority must consider and examine the over-all effect of the entries of the officer concerned and not an isolated entry, as it may well be in some cases that in spite of satisfactory performance, the authority may desire to compulsorily retire an employee in public interest, as in the opinion of the said Authority, the post has to be manned by a more efficient and dynamic person and if there is sufficient material on record to show that the employee “rendered himself a liability to the institution”, there is no occasion for the Court to interfere in the exercise of its limited power of judicial review.

Bibliography Books refferred:  Narinder Kumar: Law relating to government services and management of discipline proceedings.  A.S. Bhatnagar: guide to departmental problems enquiries, punishment and appeal. Electronic resources:  http://legalperspectives.blogspot.in/2010/09/compulsoryretirement-concept.html  http://www.sck.tnerwa.org.in/retirementregulations.html  http://www.mptreasury.org/mpt/public/policyrules/fr/frch9.pdf

Abbreviations: TNEB - Tamil Nadu Electricity Board HRA- House Rent Allowance CCA-Capital Cost Allowance

GPF-General provident fund DCRG-Death cum Retirement Gratuity

Project report Service Law:

compulsory

retirement

Submitted To : Ms. Pooja

Submitted By: Nishant Sharma

roll no. 199/11 sem: 8th sec: B