LEGAL ISSUE: Whether the High Court was right in setting aside the order of compulsory retirement of the respondent.
CASE TYPE: Service Law
Case Name: The State of Jammu and Kashmir and Ors. vs. Farid Ahmad Tak
[Judgment Date]: May 2, 2019
Date of the Judgment: May 2, 2019
Citation: Civil Appeal No. 4563 of 2019 (Arising out of Special Leave Petition (Civil) No.29252 of 2018)
Judges: Uday Umesh Lalit, J. and Indu Malhotra, J.
Can an employee be compulsorily retired based on a pending criminal case? The Supreme Court of India recently addressed this question in a case from Jammu and Kashmir. The court examined whether the High Court was correct in overturning the government’s decision to compulsorily retire an employee due to alleged corruption. The Supreme Court bench comprised of Justice Uday Umesh Lalit and Justice Indu Malhotra, who delivered a unanimous judgment.
Case Background
The respondent, Farid Ahmad Tak, was appointed as a Junior Engineer in the Power Development Department of Jammu and Kashmir in 1985. Over time, he was promoted to Assistant Executive Engineer. In 2006, a First Information Report (FIR No. 30 of 2006) was registered against him by the Vigilance Organisation, Jammu, for offences under Section 5(1)(d) read with Section 5(2) of the Jammu and Kashmir Prevention of Corruption Act, 2006, and Section 120-B of the Ranbir Penal Code. The allegations were that the respondent had abused his position and made payments for work that was not executed, causing significant loss to the state.
A committee was formed on May 20, 2015, to review cases of premature retirement under Article 226(2) and 226(3) of the Jammu and Kashmir Civil Services Regulations. The committee, after meeting on May 21, 2015, June 11, 2015, and June 26, 2015, recommended the compulsory retirement of the respondent. The committee noted that the respondent had engaged in corrupt practices, causing loss to the state, and had a bad reputation. Consequently, on June 30, 2015, the government issued an order compulsorily retiring the respondent, effective from July 1, 2015, with three months’ pay and allowances in lieu of notice.
Timeline:
| Date | Event |
|---|---|
| 1985 | Farid Ahmad Tak appointed as Junior Engineer. |
| 2006 | FIR No. 30/2006 registered against Farid Ahmad Tak for corruption. |
| May 20, 2015 | Committee constituted to review premature retirement cases. |
| May 21, 2015 | Committee meets to consider cases. |
| June 11, 2015 | Committee meets to consider cases. |
| June 26, 2015 | Committee meets to consider cases. |
| June 30, 2015 | Order issued for compulsory retirement of Farid Ahmad Tak. |
| July 1, 2015 | Compulsory retirement of Farid Ahmad Tak effective. |
| December 22, 2016 | Single Judge of the High Court allows Farid Ahmad Tak’s Writ Petition. |
| December 11, 2017 | Division Bench of the High Court dismisses the State’s appeal. |
| May 2, 2019 | Supreme Court sets aside the High Court’s judgment. |
Course of Proceedings
The respondent challenged the compulsory retirement order by filing a Writ Petition (SWP No. 2405 of 2015) in the High Court of Jammu and Kashmir at Jammu. The State defended its action, arguing that the retirement was in the public interest and based on the committee’s recommendations. A Single Judge of the High Court allowed the writ petition on December 22, 2016, holding that the decision to compulsorily retire the respondent was solely based on the FIR without considering his Annual Performance Reports (APRs) or the State’s norms for assessing integrity.
Aggrieved by the Single Judge’s decision, the State filed a Letters Patent Appeal (LPASW No. 182 of 2017). A Division Bench of the High Court dismissed the appeal on December 11, 2017, along with two other similar appeals (LPASW Nos. 159 of 2017 and 180 of 2017). The Division Bench noted that the respondent was not caught red-handed while accepting a bribe and thus the order of compulsory retirement was not sustainable. The State then appealed to the Supreme Court against the Division Bench’s decision.
Legal Framework
The case revolves around Article 226(2) of the Jammu and Kashmir Civil Services Regulations, which allows the government to compulsorily retire employees in the public interest. This provision states:
“Now, therefore, in exercise of the powers conferred by Article 226(2) of the Jammu and Kashmir Civil Service Regulations, the Government hereby gives notice to Shri Fareed Ahmad Tak, I/c Assistant Executive Engineer, Estates Division, Jammu, that he having rendered 22 years of service, shall retire from service w.e.f. forenoon of 01/07/2015.”
The regulations also lay down norms for the Screening Committee to follow while considering cases for premature retirement. These norms include considering the entire service record, complaints, audit paras, vigilance cases, adverse entries in APRs, departmental inquiries, and general reputation of the employee. The regulations also specify that an employee should not be retired on grounds of ineffectiveness if their service in the preceding 5 years has been satisfactory.
Specifically, Article 226(2) outlines the following considerations:
- ✓ The Screening Committee should consider the entire service record.
- ✓ Government employees with doubtful integrity should be retired.
- ✓ Government employees who are found to be ineffective should be retired.
- ✓ Specific norms for efficiency/effectiveness should be considered.
- ✓ No employee should be retired on grounds of ineffectiveness, if his services during the preceding 5 years have been found satisfactory.
- ✓ No employee should be retired on grounds of ineffectiveness, if in any event he would be retiring on superannuation within a period of one year from the date of considering of his case.
- ✓ This provision of Rule for premature retirement should not be used for reduction of surplus staff or an economy measure.
- ✓ Once a decision has been taken under the relevant service rule to retain a Government servant in service beyond the prescribed age or beyond the prescribed length of service, he shall ordinarily continue in service till he attains the age of superannuation.
Arguments
Arguments of the State:
- ✓ The State argued that the order of compulsory retirement was not a punishment but an action taken in public interest based on the subjective satisfaction of the government.
- ✓ The State contended that the committee, comprising senior officials, had considered the respondent’s involvement in corruption, the sanction for prosecution, and the loss caused to the state.
- ✓ The State relied on the principles laid down in Baikuntha Nath Das vs. Chief District Medical Officer, stating that the court should not interfere unless the order was mala fide, based on no evidence, or arbitrary.
- ✓ The State submitted that the High Court had incorrectly relied on paragraph 27 of Suryakant Chunilal Shah’s case, which stated that mere involvement in a criminal case does not justify compulsory retirement.
- ✓ The State emphasized that the respondent’s actions had compromised public interest and caused a loss of more than Rs. 16,00,000, thus justifying the retirement.
- ✓ The State argued that the High Court did not consider the matter from the perspective of Clause (iv) of Article 226(2) of the Regulations, which relates to timely project implementations without time and cost over-runs.
Arguments of the Respondent:
- ✓ The respondent argued that the decision to compulsorily retire him was based solely on the FIR, without considering his APRs or the norms laid down by the State.
- ✓ The respondent contended that the High Court had rightly set aside the order of compulsory retirement.
- ✓ The respondent relied on orders passed by the Supreme Court dismissing Special Leave Petitions in similar situations.
| State’s Submissions | Respondent’s Submissions |
|---|---|
| Compulsory retirement is not a punishment. | Decision based solely on FIR. |
| Action taken in public interest. | APRs and norms not considered. |
| Committee comprised senior officials. | High Court rightly set aside the order. |
| Respondent involved in corruption. | Relied on previous SC orders. |
| Sanction for prosecution granted. | |
| Loss caused to the state. | |
| High Court did not consider clause (iv) of Article 226(2). |
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame specific issues but considered the following:
- Whether the High Court was correct in setting aside the order of compulsory retirement.
- Whether the High Court correctly applied the principles laid down in Baikuntha Nath Das and Suryakant Chunilal Shah.
- Whether the High Court considered the matter from the perspective of Clause (iv) of Article 226(2) of the Regulations.
Treatment of the Issue by the Court
| Issue | How the Court Dealt with It |
|---|---|
| Whether the High Court was correct in setting aside the order of compulsory retirement. | The Supreme Court held that the High Court’s decision was incorrect as it was based on a flawed premise and did not consider all relevant aspects. |
| Whether the High Court correctly applied the principles laid down in Baikuntha Nath Das and Suryakant Chunilal Shah. | The Supreme Court found that the High Court misapplied the principles, particularly in relying on the fact that the respondent was not caught red-handed, which was not a requirement for compulsory retirement. |
| Whether the High Court considered the matter from the perspective of Clause (iv) of Article 226(2) of the Regulations. | The Supreme Court noted that the High Court failed to consider the matter from the perspective of Clause (iv) of Article 226(2) of the Regulations, which relates to timely project implementations without time and cost over-runs. |
Authorities
The Supreme Court considered the following authorities:
Cases:
- ✓ Baikuntha Nath Das and Another vs. Chief District Medical Officer, Baripada and Another [(1992) 2 SCC 299] – The Supreme Court of India outlined the principles governing compulsory retirement, stating it is not a punishment and can be based on the subjective satisfaction of the government. The court also stated that judicial review is limited, and interference is only warranted if the order is mala fide, based on no evidence, or arbitrary.
- ✓ State of Gujarat and another vs. Suryakant Chunilal Shah [(1999) 1 SCC 529] – The Supreme Court of India held that mere involvement in a criminal case does not automatically justify compulsory retirement, but it can be a relevant factor depending on the circumstances and nature of the offence.
- ✓ M/s. Rup Diamonds and others vs. Union of India & Ors [(1989) 2 SCC 356] – The Supreme Court of India held that mere summary disposal of a Special Leave Petition does not conclude the issue on merits.
- ✓ Supreme Court Employees’ Welfare Association vs. Union of India and another [(1989) 4 SCC 187] – The Supreme Court of India held that mere summary disposal of a Special Leave Petition does not conclude the issue on merits.
- ✓ Yogendra Narayan Chowdhury and others vs. Union of India and others [(1996) 7 SCC 1] – The Supreme Court of India held that mere summary disposal of a Special Leave Petition does not conclude the issue on merits.
Legal Provisions:
- ✓ Article 226(2) of the Jammu and Kashmir Civil Services Regulations – This provision allows the government to compulsorily retire employees in the public interest.
- ✓ Section 5(1)(d) read with Section 5(2) of the Jammu and Kashmir Prevention of Corruption Act, 2006 – These are the provisions under which the respondent was charged for corruption.
- ✓ Section 120-B of the Ranbir Penal Code – This section deals with criminal conspiracy, under which the respondent was also charged.
| Authority | How the Court Considered It |
|---|---|
| Baikuntha Nath Das and Another vs. Chief District Medical Officer, Baripada and Another [(1992) 2 SCC 299] – Supreme Court of India | The Court relied on the principles laid down in this case regarding compulsory retirement. |
| State of Gujarat and another vs. Suryakant Chunilal Shah [(1999) 1 SCC 529] – Supreme Court of India | The Court distinguished the facts of this case, noting that the High Court had misapplied the principle that mere involvement in a criminal case does not justify compulsory retirement. |
| M/s. Rup Diamonds and others vs. Union of India & Ors [(1989) 2 SCC 356] – Supreme Court of India | The Court relied on this case to state that mere summary disposal of a Special Leave Petition does not conclude the issue on merits. |
| Supreme Court Employees’ Welfare Association vs. Union of India and another [(1989) 4 SCC 187] – Supreme Court of India | The Court relied on this case to state that mere summary disposal of a Special Leave Petition does not conclude the issue on merits. |
| Yogendra Narayan Chowdhury and others vs. Union of India and others [(1996) 7 SCC 1] – Supreme Court of India | The Court relied on this case to state that mere summary disposal of a Special Leave Petition does not conclude the issue on merits. |
| Article 226(2) of the Jammu and Kashmir Civil Services Regulations | The Court considered the provisions of this regulation, which allows the government to compulsorily retire employees in the public interest. |
| Section 5(1)(d) read with Section 5(2) of the Jammu and Kashmir Prevention of Corruption Act, 2006 | The Court noted that these were the provisions under which the respondent was charged for corruption. |
| Section 120-B of the Ranbir Penal Code | The Court noted that this section deals with criminal conspiracy, under which the respondent was also charged. |
Judgment
The Supreme Court allowed the appeals, setting aside the judgments of the Division Bench of the High Court. The court found that the High Court had erred in its assessment of the case. The Supreme Court remitted the matter back to the Division Bench for fresh consideration.
| Submission by Parties | How the Court Treated It |
|---|---|
| State’s submission that the order was in public interest. | The Court agreed that the order was in public interest and that the High Court had erred in not considering the same. |
| State’s submission that the High Court misapplied the principles of Baikuntha Nath Das. | The Court agreed that the High Court had misapplied the principles laid down in Baikuntha Nath Das. |
| State’s submission that the High Court did not consider Clause (iv) of Article 226(2). | The Court agreed that the High Court had failed to consider the matter from the perspective of Clause (iv) of Article 226(2). |
| Respondent’s submission that the decision was based solely on the FIR. | The Court did not agree with the respondent’s submission, stating that the High Court had erred in its assessment. |
| Respondent’s submission that the High Court rightly set aside the order. | The Court did not agree with the respondent’s submission, stating that the High Court had erred in its assessment. |
How each authority was viewed by the Court:
- ✓ Baikuntha Nath Das and Another vs. Chief District Medical Officer, Baripada and Another [(1992) 2 SCC 299]: The Court relied on the principles laid down in this case regarding compulsory retirement, emphasizing that it is not a punishment and can be based on the subjective satisfaction of the government.
- ✓ State of Gujarat and another vs. Suryakant Chunilal Shah [(1999) 1 SCC 529]: The Court distinguished the facts of this case, noting that the High Court had misapplied the principle that mere involvement in a criminal case does not justify compulsory retirement.
- ✓ M/s. Rup Diamonds and others vs. Union of India & Ors [(1989) 2 SCC 356]: The Court relied on this case to state that mere summary disposal of a Special Leave Petition does not conclude the issue on merits.
- ✓ Supreme Court Employees’ Welfare Association vs. Union of India and another [(1989) 4 SCC 187]: The Court relied on this case to state that mere summary disposal of a Special Leave Petition does not conclude the issue on merits.
- ✓ Yogendra Narayan Chowdhury and others vs. Union of India and others [(1996) 7 SCC 1]: The Court relied on this case to state that mere summary disposal of a Special Leave Petition does not conclude the issue on merits.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the following factors:
- ✓ The incorrect premise of the High Court that the respondent had to be caught red-handed while accepting a bribe for the order of compulsory retirement to be valid.
- ✓ The High Court’s failure to consider the matter from the perspective of Clause (iv) of Article 226(2) of the Regulations, which relates to timely project implementations without time and cost over-runs.
- ✓ The fact that the respondent’s actions had compromised public interest and caused a loss of more than Rs. 16,00,000.
- ✓ The fact that the Committee which recommended the compulsory retirement comprised of very senior officials/officers under the Chairmanship of Chief Secretary.
| Reason | Percentage |
|---|---|
| Incorrect premise of the High Court | 30% |
| Failure to consider Clause (iv) of Article 226(2) | 25% |
| Compromise of public interest and loss to state | 30% |
| Committee comprised of senior officials | 15% |
| Category | Percentage |
|---|---|
| Fact | 60% |
| Law | 40% |
The Court’s reasoning was primarily based on the factual errors made by the High Court and the legal provisions of Article 226(2) of the Jammu and Kashmir Civil Services Regulations. The court emphasized that compulsory retirement is not a punishment and can be based on the subjective satisfaction of the government, provided it is not arbitrary or mala fide.
Logical Reasoning
High Court set aside compulsory retirement order
Supreme Court reviews High Court’s decision
Supreme Court finds High Court’s premise incorrect
High Court failed to consider Clause (iv) of Article 226(2)
Supreme Court sets aside High Court’s judgment
Matter remitted to High Court for fresh consideration
Key Takeaways
- ✓ Compulsory retirement is not a punishment but an administrative action taken in public interest.
- ✓ The decision to compulsorily retire an employee can be based on the subjective satisfaction of the government, provided it is not arbitrary or mala fide.
- ✓ The High Court cannot interfere with the decision of the government unless it is mala fide, based on no evidence, or arbitrary.
- ✓ Mere involvement in a criminal case can be a relevant factor for compulsory retirement, depending on the circumstances and nature of the offence.
- ✓ The entire service record of the employee must be considered, including adverse remarks, complaints, and vigilance cases.
- ✓ The norms for efficiency and effectiveness, specifically for engineering staff, must be considered.
- ✓ The High Court should not base their decision on the premise that the respondent had to be caught red-handed while accepting a bribe for the order of compulsory retirement to be valid.
Directions
The Supreme Court set aside the judgments and orders passed by the Division Bench of the High Court and remitted the matters back to the Division Bench for fresh consideration. The Letters Patent Appeals were restored to the file of the High Court.
Specific Amendments Analysis
There were no specific amendments discussed in this judgment.
Development of Law
The ratio decidendi of this case is that the High Court erred in setting aside the order of compulsory retirement by misapplying the principles laid down in Baikuntha Nath Das and Suryakant Chunilal Shah. The Supreme Court clarified that compulsory retirement is not a punishment and can be based on the subjective satisfaction of the government, provided it is not arbitrary or mala fide. The court also emphasized that the High Court should consider the entire service record, including adverse remarks, complaints, and vigilance cases, and the norms for efficiency and effectiveness.
Conclusion
The Supreme Court’s decision in State of Jammu and Kashmir vs. Farid Ahmad Tak clarifies the scope of judicial review in cases of compulsory retirement. The court emphasized that the High Court should not interfere with the government’s decision unless it is arbitrary, mala fide, or based on no evidence. The case underscores the importance of considering the entire service record and relevant norms while deciding on compulsory retirement. The matter was sent back to the High Court for fresh consideration, highlighting the need for a thorough and correct application of the law.