The State of Bombay vs Saubhagchand M. Doshi
Rewritten Version Notice: This is a rewritten version of the original judgment.
Court: Supreme Court of India
Case Number: Civil Appeal No. 182 of 1955
Decision Date: 25 September 1957
Coram: Bhuvneshwar P. Sinha, J. L. Kapur, A. K. Sarkar, T. L. Venkatarama
In this case the Supreme Court of India considered an appeal filed by the State of Bombay against Saubhagchand M. Doshi. The judgment was delivered on 25 September 1957. The bench consisted of Justices Bhuvneshwar P. Sinha, J. L. Kapur and A. K. Sarkar. The petitioner was the State of Bombay and the respondent was Saubhagchand M. Doshi. The case is reported in 1957 AIR 892 and 1958 SCR 571. The matter involved the interpretation of a provision of the Government servant‑Compulsory retirement law and whether it amounted to dismissal or removal within the meaning of Article 311(2) of the Constitution of India. The specific provision examined was Rule 165‑A of the Bombay Civil Services Rules, as amended by the Saurashtra Government, which allowed the government to retire any servant after he had completed twenty‑five years of qualifying service or had reached the age of fifty, without giving any reason, provided that the retirement was exercised only when it was in the public interest, such as in cases of inefficiency or dishonesty.
On 30 October 1952 the Government of Saurashtra issued an order that retired the respondent under the authority of Rule 165‑A. The respondent challenged the order before the High Court, contending that the order was passed without any notice of charges of misconduct or inefficiency and without any enquiry, thereby violating Article 311(2). He argued that although he had reached the age of fifty, the rule required that retirement be exercised only on grounds of inefficiency or dishonesty, and that an order retiring him before superannuation was in substance a dismissal or removal that required compliance with the procedural safeguards of Article 311(2). He further submitted that the part of Rule 165‑A permitting termination without reason or enquiry was repugnant to Article 311(2) and therefore ultra vires.
The Supreme Court held that Rule 165‑A was not violative of Article 311(2) and was intra vires. The Court concluded that an order issued under Rule 165‑A did not constitute a dismissal or removal and hence Article 311(2) was not applicable. Accordingly the order dated 30 October 1952 was upheld as valid. The Court relied on the earlier decision in Shyam Lal v. State of Uttar Pradesh (1955) SCR 26, which had explained and applied the same principle.
C. Chatterjee, J. B. Dadachanji and Rameshwar Nath appeared as counsel for the respondent. The judgment of the Court was delivered by Justice Venkatarama Aiyar on 25 September 1957. The present proceeding is an appeal from the order of the High Court of Saurashtra in a writ petition filed by the respondent. The High Court had set aside an order dated 30 October 1952 that retired the respondent from government service. The respondent had first been appointed in 1948 as Superintendent of State Guest Houses, a post then known as “Memandari,” in the State of Junagadh while that territory was administered by the Government of India. He was subsequently confirmed in that appointment. In 1949 the State of Junagadh was merged into the State of Saurashtra, and the respondent’s services were taken over by the new State. After the merger he was periodically assigned to different positions. On 15 June 1950 he was appointed Sales Tax Officer for Madhya Saurashtra, Rajkot, and he received confirmation in that post on 16 April 1952. On 30 October 1952 the Government of Saurashtra, claiming authority under Government Resolution No 60 of 1948 as then in force, issued an order that compulsorily terminated the respondent’s services. The respondent immediately filed a writ application before the High Court of Saurashtra challenging the legality of that order. He argued that the order had been made without any notice of charges of misconduct or inefficiency and without any inquiry, and therefore contravened Article 311(2) of the Constitution. The learned judges of the High Court accepted his contention, holding that the order was in substance a dismissal and, because no inquiry had been held, it was illegal and void. The respondent obtained a decree setting aside the order of compulsory retirement. The present appeal has been filed against that decree on a certificate under Article 133(1)(c). For convenience the Court now refers to the statutory rules that are material to the question. Rule 161 of the Bombay Civil Services Rules, which had been adopted by the State of Saurashtra with certain modifications, provides that, except as otherwise provided in the rule, the date of compulsory retirement of a government servant who is not an inferior servant is the date on which he attains the age of fifty‑five years. The rule further provides that a servant may be retained in service after that date only with the prior sanction of the Government, and that any such public ground for retention must be recorded in writing. It is relevant to note that the respondent was not an inferior servant, and consequently Rule 161 applied to him. In addition there existed Rule 165‑A, which stated that a competent authority may remove any government servant who is subject to the rules from service or may require such servant to retire on the grounds of misconduct, insolvency or inefficiency, provided that before any such order is issued the procedure mentioned in Note I to Rule 33 of the Bombay Civil Services, Conduct, Discipline and Appeal Rules is observed.
In the judgment the Court referred to the procedural requirements set out in Rule 55 of the Civil Services (Classification, Control and Appeal Rules, 1930), which had been reproduced in Appendix I to the applicable Rules and was further explained by Government instructions contained in Appendix II. The Court expressly quoted the material portion of Rule 55, which began by stating that, without prejudice to the Public Servants Inquiries Act of 1850, no order of dismissal, removal or reduction could be made against a member of the Service—except where the order was based on facts that had already resulted in a criminal conviction—unless the member had first received a written notice of the grounds on which action was contemplated and had been given a reasonable opportunity to defend himself. The rule required that the contemplated grounds be framed as definite charge or charges, that these charges be communicated to the person charged together with a statement of the allegations supporting each charge and any other circumstances that might be considered in passing the order. The rule further obliged the person charged to submit, within a reasonable time, a written statement of his defence and to indicate whether he wished to be heard in person. If the person desired a personal hearing or if the authority directed it, an oral enquiry was to be held. During that enquiry oral evidence was to be taken on any allegation not admitted, and the person charged was entitled to cross‑examine witnesses, to give evidence personally and to have witnesses called as he saw fit, subject to the condition that the officer conducting the enquiry could refuse to call a witness for a special and sufficient reason that had to be recorded in writing. The rule concluded that the proceedings must contain a sufficient record of the evidence and a statement of the findings together with the grounds for those findings. The Court summarized that the effect of these provisions was that whenever the Government sought to remove or retire a servant on grounds of misconduct, insolvency or inefficiency before the statutory retirement age of fifty‑five, a formal enquiry in accordance with Rule 55 was mandatory. The respondent contended that he was only fifty years old on 30 October 1952 and that, because the required enquiry under Rule 55 had not been conducted, the order compelling his retirement was illegal. The Court then noted that Rule 165‑A had been amended by the Saurashtra Government on 28 September 1950 and again on 15 January 1952, and that on the relevant date the amended rule, with irrelevant portions omitted, read: “Government is pleased to direct that the proviso and the Note to Bombay Civil Services Rule 165‑A shall”.
The Government declared that the proviso and the Note to Bombay Civil Services Rule 165‑A would not apply to its own servants, but it issued a separate set of orders that would apply to those servants. Under those orders the Government retained an absolute right to retire any Government servant once the servant had completed twenty‑five years of qualifying service or had reached the age of fifty years, whichever occurred first. The retirement could be effected without giving any reason, and no claim for special compensation on that ground would be entertained. The Government further stated that it would not exercise this right except when it was in the public interest to discontinue the further services of a servant, for example on grounds of inefficiency or dishonesty. The rule was therefore intended to be used in two situations: first, against a servant whose efficiency had declined but against whom it was not desirable to bring formal charges of inefficiency, or against a servant who had ceased to be fully efficient so that the value of his services was clearly disproportionate to his salary, yet not to such an extent as to justify retirement on compassionate grounds; and second, in cases where corruption was clearly established even though no specific instance could be proved under the Bombay Civil Services Conduct, Discipline and Appeal Rules.
According to this rule the Government possessed the power to terminate the services of an officer without assigning any reason, provided the officer had completed twenty‑five years of service or had attained the age of fifty. The order of compulsory retirement that was issued on 30 October 1952 was made on the basis of this rule, and the respondent had turned fifty on that date. Consequently the order fell within the scope of the authority conferred on the State by the rule and therefore had to be upheld unless the rule itself was held to be ultra vires. The respondent argued before the Court below that a retirement order issued before the age of superannuation was, in substance, a dismissal or removal and therefore had to satisfy the requirements of Article 311(2) of the Constitution. He contended that Rule 165‑A, insofar as it authorised the Government to terminate service without any reason and without an enquiry, was repugnant to Article 311(2) and consequently ultra vires. The learned Judges of the Court below accepted this contention.
Subsequent to that decision the Supreme Court considered, in Shyam Lal v. State of Uttar Pradesh, whether an order of compulsory retirement constituted a dismissal or removal within the meaning of Article 311(2). The Court held that such an order did not amount to a dismissal or removal and was therefore not covered by the protection of that article. If that decision is applicable to the present case—as the appellant maintains—there can be no doubt that the order dated 30 October 1952 is valid and that the appeal must succeed. Counsel for the respondent advanced the opposing argument.
It was submitted that the earlier decision does not apply to the present appeal, and the reasoning for this submission was set out as follows: The rule governing compulsory retirement that appears in Note I to article 465‑A, which was examined in Shyam Lal’s case, states that the Government possesses an absolute right to retire any officer after he has completed twenty‑five years of qualifying service, without providing any reasons, and that no claim to special compensation on that basis will be entertained. Rule 165‑A differs from this provision in a material respect, because after adopting the language of Note I, it adds that the right will not be exercised except on grounds of inefficiency or dishonesty. An order of retirement made under Note I to article 465‑A therefore carries no stigma and no imputation against the character or ability of the officer whose services are terminated. By contrast, a termination effected under Rule 165‑A must reflect on the officer’s efficiency or capacity, and when a person’s services are terminated before reaching the age of superannuation on grounds of inefficiency or dishonesty, such termination can be regarded only as dismissal or removal. The argument drew support from observations recorded in Shyam Lal’s case at page 41, which explained that removal, used synonymously with dismissal, generally implies that the officer is considered blameworthy or deficient, meaning he has been guilty of misconduct or is lacking in ability, capacity, or the will to discharge his duties properly. The action of removal, therefore, is founded on personal grounds against the officer, involving the levelling of some imputation or charge that the officer may contest. The passage further noted that there is no such element of charge or imputation in the case of compulsory retirement. It was added that while the power of compulsory retirement may be invoked when the authority cannot substantiate misconduct that could be the real cause for action, the directions in the final sentence of Note I to article 465‑A make it abundantly clear that an imputation or charge is not a condition for exercising the power, and hence a compulsory retirement bears no stigma or implication of misbehaviour or incapacity.
The counsel then argued that the principle to be drawn from these observations is that when a retirement involves a stigma or an imputation of misconduct or incapacity, it must be treated as dismissal, and accordingly, an order of retirement under Rule 165‑A should be held to constitute dismissal or removal. This line of argument was described as proceeding on a misconception of what was decided in Shyam Lal’s case, where the issue for determination was simply whether an order of retirement was one of dismissal or removal within the meaning of article 311(2), and the court had held that it was not.
In considering the decision reached in Shyam Lal’s case (1), the Court observed that the sole question for determination was whether an order of retirement should be classified as a dismissal or removal within the scope of Article 311(2). The Court concluded that such an order was not a dismissal or removal. The binding principle articulated in that judgment explained that, according to the service rules, an order of dismissal constitutes a punishment imposed on a government servant when it is found that the servant has been guilty of misconduct, inefficiency, or similar wrongdoing. Dismissal is penal in nature because it results in the loss of pension that would otherwise have accrued for service already rendered. An order of removal is placed on the same footing as dismissal, producing identical consequences, the only distinction being that a dismissed servant is ineligible for re‑appointment whereas a removed servant retains that eligibility. By contrast, an order of retirement is differentiated from both dismissal and removal because it is not a form of punishment prescribed by the rules and it does not carry penal consequences. The retired individual remains entitled to a pension proportionate to the period of service credited to his name.
The Court then turned to the policy underlying Article 311(2), which mandates that when the government proposes to take punitive action against a servant that would cause forfeiture of benefits already earned, the servant must be afforded a hearing and an opportunity to show cause. The Court held that this safeguard cannot be invoked where the order is not punitive and does not lead to loss of accrued benefits. In such situations, there is no justification for disregarding the terms of employment and the service rules. Consequently, the Court identified the true test for deciding whether an order terminating a servant’s services is a dismissal or removal: whether the order entails any loss of previously earned benefits. Applying this test, the Court determined that an order made under Rule 165‑A cannot be characterised as a dismissal or removal because it does not deprive the servant of the proportional pension due for past service.
The Court addressed the respondent’s contention that Rule 165‑A differs from Note I to Article 465‑A in Shyam Lal’s case (1) by expressly limiting the power to situations of misconduct or inefficiency. The Court explained that when the government chooses to retire a servant before he reaches the age of superannuation, it does so for a valid reason, typically misconduct or inefficiency. The Court noted that, in Shyam Lal’s case (1), the government gave the officer notice of charges of misconduct and inefficiency and invited him to explain, although a formal enquiry was not conducted. The Court held that the stipulation that no action be taken except in cases of misconduct or inefficiency merely restated what was already implicit in Note I to Article 465‑A.
In this case, the Court observed that while Rule 165‑A expressly stated that action could be taken only in cases of misconduct or inefficiency, this provision merely made explicit what was already implied in Note I to Article 465‑A. The Court explained that misconduct and inefficiency are relevant factors both when an order constitutes dismissal, removal, or retirement, but a distinction existed. In instances of retirement, such factors supplied only the background for the decision, and any inquiry, if it were to be held, served merely to satisfy the authorities who were to act; there was no statutory duty to conduct a formal inquiry. By contrast, when an order amounted to dismissal or removal, the very basis of the order lay upon those factors, and consequently the inquiry had to be formal, must adhere to the rules of natural justice, and had to comply with the requirements of Article 311(2). The Court further noted that questions of this character could arise only when the service rules prescribed both a fixed age of superannuation and a separate age for compulsory retirement, and the servant’s service was terminated in the interval between those two ages. However, where no rule fixed a compulsory retirement age, or where a compulsory retirement rule existed but the servant was retired before that prescribed age, such termination could be regarded solely as dismissal or removal within the meaning of Article 311(2). The Court held that the provision of Rule 165‑A relied upon by the respondent did not, upon proper construction, impose any limitation on the power previously conferred on the State to terminate a servant’s services without assigning a reason. Rather, the rule functioned as departmental instruction to be followed when action was proposed under it, and it clarified that any inquiry into the charges was intended only for the satisfaction of the authorities. Accordingly, the Court concluded that Rule 165‑A was not violative of Article 311(2), was intra vires, and that the impugned order dated 30 October 1952, issued under the authority of that rule, was valid.
The Court also addressed a contention raised by the respondent that, under the service rules applicable in the State of Junagadh, the age of superannuation was sixty years, that Article XVI of the Instrument of Accession required that permanent members of the public services in the various States be continued on conditions no less advantageous than those on which they held office at the accession date, and that, by virtue of this covenant, the respondent was entitled to remain in service until attaining the age of sixty. The respondent relied upon the decision in Bholanath J. Thaker v. State of Saurashtra (1) to support this position. The Court observed, however, that no such claim had been advanced in the writ petition and that it was now untimely to raise it. Consequently, the Court allowed the appeal, set aside the order of the lower Court, dismissed the respondent’s petition, and ordered that each party bear its own costs. The appeal was thus allowed.