HIGH COURT OF ORISSA: CUTTACK ORIGINAL JURISDICTION CASE NO.14002 OF 2001 In the matter of an application under Articles 226 and 227 of the Constitution of India. ----- Jadumani Rout … Petitioner. -Versus- Managing Director, Orissa State Seeds Corporation Limited & another. … Opp. Parties. For Petitioner : M/s. B.Routray, A.K.Baral B.N.Satpathy, A.Panda, D.Mohapatra & B. Singh For Opp. Parties : Mr.J.Pattnaik, Sr. Advocate M/s S.N.Sahu, U.C.Behura, J.Patnaik, A.A.Das, B.Mohanty & T.K.Patnaik ---------- P R E S E N T: THE HONOURABLE SHRI JUSTICE A.S.NAIDU AND THE HONOURABLE SHRI JUSTICE B.N.MAHAPATRA Date of hearing: 07.01.2009 : Date of judgment: 16.02.2010 B.N.MAHAPATRA, J The writ petitioner calls in question the legality and propriety of the notice dated 15.09.2001 (Annexure-10) issued by Opp. Party No.2, Company Secretary, Orissa State Seeds Corporation Ltd., Bhubaneswar (for short ‘the Corporation’) calling upon him to retire from service on superannuation with effect from 30.11.2001 at the age of 58 and further prays to fix his scale of pay at Rs.1600-2660/- with four advance increments and to grant him all consequential service benefits in terms of his order of appointment as well as the Rules of the Corporation treating his age of superannuation to be 60 years. 2. Bereft of unnecessary details the facts and circumstances giving rise to the present writ petition are that the petitioner while continuing as Senior Operator on deputation basis in the Corporation, the Board of Directors (for short, ‘the Board’) of the Corporation on 18.7.1995 in the greater interest of the Corporation decided to absorb him on permanent basis in the scale of pay of Rs.1600-2660/- with four advance increments as per Annexure-6. Pursuant to said decision of the Board, and order dated 16.2.1996 of the Director of Horticulture, the petitioner was absorbed permanently in the Corporation with the condition as per Annexure-7 that his services will be governed by the Rules of the Corporation. On 15.9.2001, the Company Secretary issued a letter (Annexure-10) to the petitioner stating therein that as per the O.S.S.C. Service Rules, 1988 approved by the Board of Directors in their 43rd meeting held on 25.6.1988 the petitioner was due to retire from the service on superannuation with effect from 30.11.2001 A.N. at the age of 58, his date of birth being 03.11.1943. Hence, the writ petition. 3. Mr.B.Routray, learned counsel appearing on behalf of the petitioner vehemently argued that the impugned notice under Annexure-10 asking the petitioner to retire from service on superannuation at the age of 58 is not sustainable as the same has been issued contrary to the Service Rules 2 of the Corporation in vogue at the relevant time. According to Rule 7(iii) of the Orissa State Seeds Corporation Service Rules, 1988 (for short ‘the Rules’), an employee has to retire from service on superannuation at the age of 60 with an exception that in case the efficiency of an employee is found by the Board to have been impaired then he would be asked to retire on completion of 58 years after giving three months’ prior notice. The notice of retirement under Annexure-10 does not reveal that the petitioner was asked to retire on completion of 58 years on the ground that the Board had found efficiency of the petitioner to have been impaired. It is clarified in the order dated 08.10.1996 (Annexure-7) that the services of the petitioner would be governed by OSSC Rules, 1988 in all respects. The performance of the petitioner was quite satisfactory throughout his incumbency having no adverse entry in the CCR. It is argued that the Board has not taken a decision to retire the petitioner at the age of 58. There is no such provision under the statute empowering the Board of Directors to delegate the powers of the Board to the Managing Director with regard to the premature retirement. The authorization given to the Managing Director by the Board of Directors under Annexure-A/1 to take a decision in the matter of retirement does not speak about the premature retirement. More so, after enactment of the OSSC Service Rules, 1988 the executive instructions contained in Annexure-A/1 are invalid in the eye of law. Non-service of three months’ prior notice, as required under Rule 7(iii) of the Rules, to the petitioner vitiates the impugned notice of retirement. No opinion as required under the Rules was formed before issuance of such 3 notice of premature retirement to the petitioner. Hence, the plea of the opp. parties that a decision was taken by the Managing Director before asking the petitioner to go on compulsory retirement is an arbitrary and capricious decision, which warrants interference by this Court. Relying on the decision of the apex Court, in Mohinder Singh Gill & Anr. Vs. The Chief Election Commissioner, New Delhi & Ors., AIR 1978 SC 851, it was argued that when a statutory functionary passes an order based on certain grounds its validity must be judged by reasons so mentioned, and cannot be supplemented by fresh reasons by way of affidavit or otherwise. Therefore, the impugned notice asking the petitioner to retire from service with effect from 30.11.2001 at the age of 58 instead of 60 is bad in law and is liable to be set aside. The petitioner should be deemed to be in continuous service till the date he attained the age of superannuation, i.e., 60 years. It was further argued that the petitioner had not been paid his scale of pay of Rs.1600-2600/- with four advance increments in terms of the minutes of the 65th Meeting of the Board held on 18.07.1995 (Annexure- 6) pursuant to which order under Annexure-7 was passed. 4. Mr.J.Pattnaik, learned Senior Advocate appearing on behalf of the opposite parties submitted that the Managing Director of the Corporation before taking a decision not to allow the petitioner to continue beyond 58 years made assessment of the performance of the petitioner in the light of the Resolution dated 06.06.1998 of the Government of Orissa. A 4 comparative statement showing performances of the petitioner was also prepared and placed before the Managing Director for consideration. On consideration of the same, the Managing Director found the efficiency of the petitioner to have been impaired. Thereafter, the notice of retirement dated 15.09.2001 was issued to the petitioner asking him to retire from service with effect from 30.11.2001. Subsequently, on 22.09.2001, the Board of Directors in their 87th meeting considered the matter and approved the decision of the Managing Director. Therefore, there was no violation of Rule 7(iii) of the Rules, in retiring the petitioner on superannuation with effect from 30.11.2001 at the age of 58. Under the Regulations of the Corporation, the Managing Director is the competent authority in the matter of retirement of its employees. This power was conferred on the Managing Director by virtue of delegation of powers in the 39th Meeting of the Board of Directors held on 20.06.1987. It was contended that compulsory retirement given to the petitioner was in accordance with the settled principles of law, and no infirmity can be attributed to the same. In support of his contention, Mr. Pattnaik relied upon several decisions of the apex Court as well as this Court in Shyamlal-v-State of Uttar Pradesh and another, AIR 1954 S.C.369; Allahabad Bank Officers Association and another-v-Allahabad Bank and others AIR 1996 SC 2030; High Court of Punjab and Haryana -v- Ishwar Chand Jain and another etc, AIR 1999 SC 1677; Registrar (Administration), High Court of Orissa, Cuttack V. Sisir Kanta Satapathy (dead) by L.Rs. & Anr., AIR 1999 SC 3265; State of Gujarat-v- 5 Umedbhai M.Patel, AIR 2001 SC 1109; State of U.P. and others-v-Vijay Kumar Jain, AIR 2002 SC 1345; State of Punjab and others-v-Balbir Singh, AIR 2004 SC 4655; and Sahadeb Patnaik Vs. State of Orissa, 40(1974) CLT 977. Mr. Pattnaik, further submitted that law is well settled that if adequate notice is not given to the concerned employee then at best he would be entitled to pay for the said period, but the same cannot invalidate the notice of retirement. In support of his contention, Mr. Pattnaik relied upon the decision of this Court in Shyam Charan Mohanty Vs. State of Orissa & Ors., 38(1972) CLT 49. It was also submitted that fixation of pay of the petitioner is pending with the Corporation awaiting clearance of the Government for implementation of the revised scale of pay in respect of employees of the Corporation. 5. To resolve the controversies involved, it is felt necessary to examine the order of permanent absorption of the petitioner under Annexure- 6, the notice of retirement dated 15.09.2001 under Annexure-10 as well as the provisions of Rule 7(iii) of OSSCS Rules, which are as follows:- Annexure-6“EXTRACT OF THE MINUTES OF THE 65TH MEETING OF THE BOARD OF DIRECTORS OF OSSC LTD. HELD ON 18.07.1995 XX XX XX Item No.12 PERMANENT ABSORPTION OF SHRI JADUMANI ROUT, SENIOR OPERATOR IN THE O.S.S.C. LIMITED: The Board considered the proposal for absorption of Shri Jadumani Rout, Senior Operator on permanent basis and decided to absorb him as Supervisor in the scale of pay of Rs.1600--2660/- with four advance increments over and above the pay being drawn by him in greater interest of the Corporation. 6 XX XX XX” (Emphasis supplied) Annexure-10 “To Sri Jadumani Rout, Supervisor, D.R.Seed Store, Chandaka, BBSR. Sub:- Issue of retirement notice. Sir, As per OSSC Service Rules, 1988 approved by the Board of Directors in their 43rd meeting held on 25.6.88, you are due to retire from the service of the Corporation on 30.11.2001 AN on attaining the age of superannuation of 58 years being your date of birth is 3.11.1943 as recorded in your Service Book. So you are desired to clear all the Corporation dues if any outstanding with you and the pensionary documents may please be submitted at the earliest for taking further action in the matter and you keep yourself ready to handover the charges. Yours faithfully Sd/- Company Secretary” Rule-7(III) of Orissa State Seed Corporation Service Rules, 1988 “After an employee has reached an age of 58 years he may be retired after giving him three months notice in writing in case his efficiency is found by the Board to have been impaired. Subject to this an employee shall retire in completion of 60 (Sixty) years.” (Emphasis supplied) 6. In Polestar Electronic (P) Ltd. V. Addl. Commissioner, Sales Tax & Anr., AIR 1978 SC 897, the apex Court held that the well settled principle of law of interpretation is that a statutory enactment must ordinarily be construed according to the plain natural meaning of its language and that no words should be added, altered or modified unless it is necessary to do so in order to prevent a provision from being 7 unintelligible, absurd, unreasonable, unworkable or totally irreconcilable with the rest of the statue. A plain reading of Rule 7(iii) makes it amply clear that in normal course an employee has to retire on superannuation at the age of 60 years. However, in case efficiency of an employee is found by the Board to have been impaired, he can be retired on superannuation at the age of 58 years with three months’ prior notice in writing. The impugned notice of retirement reveals that as per the OSSC Rules, 1988 approved by Board of Directors on 25.06.1988, the petitioner was made to retire on attaining the age of superannuation from the Corporation service with effect from 30.11.2001 AN at the age of 58, his date of birth being 03.11.1943. The said notice does not indicate any reason as to why the petitioner was asked to retire at the age of 58 instead of 60. 7. The order dated 08.10.1996 (Annexure-7) reveals that the petitioner was absorbed permanently in the Corporation and his service has to be governed by the Rules of the Corporation. So far as the retirement of the petitioner is concerned, Rule 7(iii) of the Rules contains the provision for retirement which were in force at the time of permanent absorption of the petitioner and also at the time when the impugned notice of retirement was issued. 8. The main thrust of contention of the opp. parties is that on review of performance of the petitioner it was found by the Managing Director that efficiency of the petitioner had been impaired for which he was asked to retire on superannuation on completion of 58 years. 8 9. Needless to say that if an employee is appointed permanently to a post, right accrues in his favour in terms of the order of his appointment and the Rules prevailed at the relevant date. For any reason, if the employer decides to take away such right(s) of the employee, the reason should be intimated to the employee. The reason should not rest in the minds of the employer. The same should be translated into words so as to enable the employee to know the reason for which any right accrues in his favour, in terms of order of his appointment and the prevalent Rule is taken away. Law is well settled that the requirement to record reason can be regarded as one of the principles of natural justice and should govern exercise of powers by administrative authorities. The apex Court in S.N.Mukherjee-v- Union of India, AIR 1990 SC 1984, held that the recording of reasons by an administrative authority serves a salutary purpose namely; it excludes chances of arbitrariness and ensures a degree of fairness in the process of decision-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. The need for recording of reasons is greater in a case where the order is passed at the original stage. Reason is the heartbeat of every conclusion. It introduces clarity in an order and without the same it becomes lifeless. [See Raj Kishore Jha V. State of Bihar (2003) 11 SCC 519]. Even in respect of administrative orders Lord Denning, M.R. in Breen V. Amalgamated Engg. Union (1971) 1 All ER 1148, observed: “The 9 giving of reasons is one of the fundamentals of good administration.” In Alexander Machinery (Dudley) Ltd. V. Crabtree (1974) ICR 120 (NIRC) it was observed: “Failure to give reasons amounts to denial of justice”. In Vasant D. Bhavsar V. Bar Council of India (1999) 1 SCC 45, the apex Court held that an authority must pass a speaking and reasoned order indicating the material on which its conclusions are based. In the instant case, the impugned order does not say anything about the reason as to why the petitioner was made to retire from service at the age of 58, though the normal age of retirement on superannuation is 60 years. 10. Law is also well settled that validity of an order is to be judged by the reasons mentioned therein and it cannot be developed either by oral submission or by filing affidavit. The apex Court, in Mohinder Singh Gill & Anr. Vs. The Chief Election Commissioner, New Delhi & Ors., AIR 1978 SC 851, held as follows:- “The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose J. in Gordhandas Bhanji (AIR 1952 SC 16) (at p. 18): Public orders publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the 10 acting and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. Orders are not like old wine becoming better as they grow older.” Admittedly, the notice of retirement does not say that the petitioner was made to retire compulsorily as his efficiency was found by the Board to have been impaired. A fresh reason cannot be assigned by way of affidavit to validate the earlier order. 11. This Court in Sahadeb Pattnaik (supra), while dealing with a case of compulsory retirement placed reliance on T.G.Shivvacharana Singh Vs. State of Mysore, AIR 1965 SC 280; Union of India Vs. Col. J.N.Sinha & Anr., AIR 1971 SC 40; and Benudhar Das Vs. Union of India & Anr., ILR 1973 Ctc. 387 and held that the criteria and procedure indicated in the administrative instructions are to be followed rigidly and only in case of doubtful integrity and lack of physical and mental efficiency, the proviso is to be applied. A high-power committee is to be constituted to review the case of each individual officer. It is for the State Government to determine whether the petitioner’s retirement was in public interest. If the authority with bona fide intension forms an opinion, its correctness cannot be challenged before courts. It is open to an aggrieved party to contend that the requisite opinion has not been formed or that the decision is based on collateral grounds or that it is an arbitrary or capricious decision. When such a dispute is raised by an employee, it is open to the Government to place relevant material before the Court to establish that the impugned action was 11 not arbitrary or based on collateral grounds. If there are some materials germane to the issue in supporting the action taken by the Government, then the High Court cannot sit in appeal and declare that the action is invalid as being based on insufficient materials or on the ground that it could come to a different conclusion on the same materials. The High Court can, however, interfere if the decision of the government is based on no materials or on materials on which a reasonable person cannot come to that conclusion. 12. Challenging that the impugned order is arbitrary and capricious one, Mr. Routray referred to paragraph 15 of the writ petition, and submitted that the performance of the petitioner was quite satisfactory and there was no adverse remark as regards efficiency of the petitioner during his incumbency. In reply to the said averment, the opp. parties, in paragraph 10 of the counter affidavit stated that the Corporation was in great financial crisis and the Government of Orissa vide Resolution dated 06.06.1998 decided and directed all Public Sector Undertakings to reduce their staff strength and also to prepare a Scheme for voluntary retirement of the employees. In such circumstance, comparative assessment of CCRs/ performances of the petitioner was made. On such assessment, when the M.D. found the performance of the petitioner unsatisfactory, he decided to issue the impugned notice of retirement to the petitioner. 12 13. Merely saying that the CCR of an employee is not satisfactory is not enough. Nothing has been brought by the opp. party to the notice of the Court to substantiate the stand of un-satisfactory performance of the petitioner till 15.09.2001 when the impugned notice of retirement was issued. On the other hand, the entries made in CCR of the petitioner give a different picture. On being asked, learned counsel for opp. parties produced the original CCR of the petitioner, relevant portions of which are extracted below. “2000-2001 Sl. No. HEADING REMARKS 1. REPORT ON HEALTH QUALITIES AND ABILITIES : Good health. Possesses administrative and technical ability. Have zeal to work. Can take responsibility. Takes good decision. Noting & drafting good. Very popular among the staff for his amiable nature. 2. REPORT ON KNOWLEDGE AND PERFORMANCE : Aware of rules, regulations and procedure. Capable of acquiring knowledge and apply the same. Capable of dealing and disposing the case smoothly. A good Supervisor to look after the work. Technically sound. 3. DEFECTS, IF ANY NOTICED, POINTED OUT AND RESULTS THEREOF : Not noticed 4. INTEGRITY : Beyond doubt 5. GRADING : Very Good 1999-2000, 1998-1999 & 1997-1998 1. a) State of health : Sound b) Attendance & discipline : Punctual and quite disciplined c) Clearance of routine : Very good d) Noting : Does not arise e) Drafting : Does not arise f) Disposal : Quick g) Knowledge of rules and regulations : Very much sound h) Ability to deal with cases : Dealing with technical cases is outstanding i) Integrity : Beyond doubt 2. Steps taken to point out defects if : No defects noticed 13 any with result 3. General remarks (Officer) conduct, fitness for promotion or other assignment over all rating etc. : Being a sincere, responsible and experienced person, adequately equipped with technical knowledge, worked with determination and shouldered responsibility. Capable of providing effective results being a competent technical personnel. In view of his good performance in all respects during the period under report, I ranked him outstanding. Deserves promotion to higher post.” Almost similar remarks have been given in the preceding years. Remarks in the Character Roll for the year 2000-01 were given by the M.D., O.S.S.C. and for the years 1999-2000, 1998-99, 1997-98 and 1996-97 by the Manager, Cold Storage and was confirmed by the Chief Processing Manager of the Corporation. Comparison of the remarks entered in the CCR of the petitioner for the above years does not at all indicate that the petitioner’s efficiency was found to have been impaired in any way. There was no adverse entry in the character roll nor the integrity was doubted at any point of time. On the other hand, entries in the character roll reveal that the petitioner possessed administrative and technical ability having zeal to work; could take responsibility and good decision; noting and drafting was good; he was aware of rules, regulations and procedure; capable of dealing and disposing of the cases smoothly; he was a good supervisor to look after the work; technically sound and no defect was noticed in his work. Even outstanding rank has been given to him. Moreover, it appears from the original record produced before the Court that the name of the petitioner was recommended for continuance in service beyond the age of 58 years to meet the shortage of staff strength and to utilize the long service experience of the petitioner for benefit of the Corporation. Even the office note dated 14.09.2001 speaks of such 14 recommendation. But all of a sudden on 15.09.2001, the decision was taken by the Managing Director to serve the notice of retirement on the petitioner. The stand that a comparative chart showing performance of the petitioner had been prepared keeping in view the Government Resolution dated 06.06.1998 for the purpose of taking a decision in the matter of compulsory retirement of the petitioner is not relevant as Rule 7(iii) does not provide for such consideration. Executive instruction cannot supersede the statutory provision. Therefore, action of the opp. parties taking the same into consideration vitiates the decision making process. Law is well settled that when the statute provides for a particular procedure to be followed to do a certain thing, the same should be done in that manner or not at all and other modes of performance are necessarily forbidden. (See: Sukhdev Singh & Ors. Vs. Bhagatram Sardar Singh Raghuvanshi & Anr., AIR 1975 SC 1331; Hukam Chand Shyam Lal Vs. Union of India & Ors., AIR 1976 SC 789; Sangeeta Singh Vs. Union of India & Ors., AIR 2005 SC 4459; Hira Cement Workers Union Vs. State of Orissa & Ors., 92 (2001) CLT 184; Krushna Chandra Sahoo Vs. Bank of India & Ors., AIR 2009 Orissa 35 and Rabindranath Das v. State of Orissa & others in O.J.C. No.8913 of 1997 decided on 10.12.2009) Further, nothing was