IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 15..07..2009 C O R A M The Honourable Mrs. Justice Prabha Sridevan and The Honourable Mr. Justice C.T. Selvam Writ Appeal Nos.200 to 202 of 2008 Lalitha Devi .. Appellant in W.A. No.200 of 2008/Petitioner R.Ellappan .. Appellant in W.A. No.201 of 2008/Petitioner The Handloom Export Promotion Council Employees' Union, rep. by its President, INTUC Office, No.45, Royapettah High Road, Chennai-14. .. Appellant in W.A. No.202 of 2008/Petitioner versus 1. The Deputy Commissioner of (Conciliation), DMS Compound, Teynampet, Chennai-6. 2. The Management of Handloom Export Promotion Council, rep. by its Executive Director, 34, Cathedral Garden Road, Nungambakkam, Chennai-34. .. Respondents in W.As.200&201/2008/Respondents 1. Government of Tamil Nadu, Rep. by its Secretary, Labour and Employment Department, Fort St.George, Chennai-9. 2. The Deputy Commissioner of (Conciliation), DMS Compound, Teynampet, Chennai-6. 3. The Management of Handloom Export Promotion Council, rep. by its Executive Director, https://hcservices.ecourts.gov.in/hcservices/ 34, Cathedral Garden Road, Nungambakkam, Chennai-34. .. Respondents in W.A.202/2008/Respondents Prayer : Writ Appeals filed under Clause 15 of the Letters Patent against the common order passed by a learned single Judge of this Court dated 31.1.2008 in W.P. Nos.22138, 18603 and 17963 of 2007. W.P.No.22138/07: Writ of Declaration, declaring Rule 39 of the Service Rules of the Handloom Export promotion Council in so far as giving option to the Second Respondent for extension of service beyond 58 years upto 60 years to the employees even if employees are found medically fit as illegal, arbitrary and violative of Articles 14 to 21 of the Constitution of India and consequently to direct the Second Respondent to continue the petitioner upto 60 years. W.P.No.18603/07:Writ of Certiorarified Mandamus, after calling for the records pertaining to the order in Hepc/VI/Admn/Extn.of service/07 dated 30.4.2007 of the Second Respondent, quash the same and consequently direct the second respondent to continue the petitioner in Service upto 60 years. W.P.No.17963/07: Writ of Mandamus,directing the 1st Respondent to refer the Industrial Dispute relating to age of retirement of the employees of the third respondent for adjudication by Industrial Tribunal/Labour Court and consequently to forbear the third respondent until the dispute is adjudicated from retiring its employees at 58 years without express permission under section 33(1)(a) of the I.D.Act from the Competent Authority. Mr. N.G.R. Prasad for Mr. V. Ajay Khose (for appellants in all the appeals) M. Dhandapani, Spl. Govt. Pleader (for respondent-1 in W.A. Nos.200 & 201/2008 and respondent-2 in W.A. No.2002/2008) Mr. A.L. Somayaji, Senior Counsel for Mr. M.R. Raghavan (for respondent-2 in W.A. Nos.200 & 201/2008 and respondent-3 in W.A. No.202/2008) https://hcservices.ecourts.gov.in/hcservices/ J U D G M E N T Prabha Sridevan, J. The Employees' Union and two employees of the Handloom Export Promotion Council are the appellants herein. The core dispute turns upon the construction of Rule 39 of the Handloom Export Promotion Council, which reads as follows :- "39. Retirement.– Every employee shall normally retire on attaining the age of 58 years. The Committee may, however, extend the period of service of an employee beyond the age of 58 years by one year at a time upto the age of 60, provided he continues to remain medically fit." This will be referred to as the 'Retirement Rule' hereafter. 2. The Employees' Union, which is the appellant in W.A. No.202 of 2008, filed a writ petition for a mandamus to refer the industrial dispute relating to the age of retirement of the respondent-Council employees and to forbear the third respondent until the dispute is adjudicated from retiring its employees on their attaining 58 years without permission under Section 33(1)(a) of the Industrial Disputes Act, 1947. The appellant in W.A. No.200 of 2008, viz. Lalitha Devi, a Superintendent in the respondent-Council, prayed for a declaration to declare the aforesaid Rule 39 as illegal, arbitrary and violative of Articles 14 and 21 of the Constitution. The appellant in W.A. No.201 of 2008, viz. Ellappan, a Junior Accountant in the respondent- Council, prayed for a certiorarified mandamus to call for and quash the order passed by the Management of the respondent-Council dated 30.4.2007, by which his application for extension of service and to continue him in service was rejected. All the three writ petitions were heard together and dismissed by the learned single Judge with a direction to the Deputy Commissioner of Conciliation to send the failure report to the State Government under Section 12(4) of the I.D. Act and a further direction to refer the dispute relating to the retirement age within a time stipulated therefor. 3. The Service Rules of the Council have been in force from 1993 and were amended in the year 2001. On 16.8.2004, the Union resolved to place certain demands, which included raising of the age of superannuation from 58 to 60 years. The respondent-Council amended its Service Rules by deleting the provision for extension of period of service. This was in the year 2007. It is thereafter that the three writ petitions were filed. 4. Learned counsel appearing for the appellants submitted that the aforesaid rule gives an uncanalised power to the Committee to https://hcservices.ecourts.gov.in/hcservices/ grant orders of extension or decline to grant orders of extension capriciously without there being any guidelines. If the rule stood as it is, the Management may pick and choose arbitrarily, employees for favouring with orders of extension. Learned counsel submitted that it cannot be denied that the provision for extension gave a right to the appellants, even though it may be inchoate and all rights cannot be taken away without complying with the provisions of the I.D. Act and therefore, the rule must be read with the provision for extension, ignoring the attempt to delete it and if it is so applied, then all the employees, including the two writ appellants herein, will be entitled to extension. Learned counsel submitted that in all other similar organizations, the retirement age is 60 and there is nothing why the Council should have a different policy. Learned counsel submitted that the only criterion to decide whether to extend or not to grant extension is the health condition of the employe and if the employee concerned is of robust health, then the employer is bound to grant extension. Learned counsel relied mainly on A.I.R. 1981 S.C. 1829 [Air India vs. Nergesh Meerza], where a rule relating to extension beyond the age of superannuation was quashed as giving the authority uncanalized power. 5. Learned senior counsel appearing for the respondent-Council submitted that in the present case, the rejection order was issued to the employees concerned before applying the rule without deletion. Learned senior counsel relied on A.I.R. 1961 S.C. 1346 [Kailash Chandra vs. Union of India] to support the case of the Council. 6. The entire case depends on how we read the aforesaid rule. On a reading of the rule, it is clear that every employee shall normally retire on attaining the age of 58 years. Therefore, the age of 58 is the age of retirement. 60 is an exception. With this position, there cannot be any quarrel. The appellants seem to think that their right to continue upto 60 years was taken away by the respondent-Council. On the contrary, the right to continue past 58 years should be granted by the respondent-Council. Therefore, this much is clear and that is,the age of retirement is 58 years. This is the normal rule. 7. The rule also indicates how the extension is to be ordered. It shows that there can be extension of one year at a time upto the age of 60. That means, each employee may be granted an extension once at 58 years, to continue upto 59 and again at 59, to continue upto 60 years. The Committee will decide whether to continue a particular employee beyond 58 years. This is where they exercise their discretion. But the discretion is further qualified by the fact that even though they have the power to extend the service of a person beyond 58 years, they shall not do so if the employee concerned is not medically fit or if the employee does not continue https://hcservices.ecourts.gov.in/hcservices/ to remain medically fit. Therefore, this means that all those who are not medically fit will not be granted extension; it also means that all those who are medically fit need not necessarily be granted extension. If the rule intended to give extension to all employees beyond 58 years of age, the words "normally retire" at the age of 58 becomes almost meaningless. The rule could have been easily framed as "the Committee shall extend the period of service of an employee who is medically fit, beyond the age of 58 years by one year at a time upto the age of 60". But here, the right to extend falls within an area of discretion which is hemmed by the fact that that discretion shall not be exercised in the case of a person who is medically unfit. Now the question is, does this rule give an uncanalised power to the Committee? 8. We will look at the decisions cited before us. In A.I.R. 1981 S.C. 1829 (supra), Rule 46 was the offending rule and it provided that the employees of the Council would retire upon attaining the age of 58 years. But notwithstanding the same, the service of an employee may, at the option of the Managing Director, but on the employee being found medically fit, be extended. The Supreme Court quashed this rule on the ground that the Managing Director has been given an uncontrolled, unguided and absolute discretion to extend or not to extend the period of retirement after 35 years and that the words "at the option" may give room for discrimination and that the retirement of an Air Hostess would be entirely at the mercy and sweet will of the Managing Director. 9. In A.I.R. 1961 S.C. 1346 (supra), the offending rule read thus :- "A ministerial servant who is not governed by sub- clause (b) may be required to retire at the age of 55 years but should ordinarily be retained in service if he continues to be efficient up to the age of 60 years. He must not be retained after that age except in very special circumstances which must be recorded in writing and with the sanction of the competent authority." We find that this rule is actually more tilted towards the employee because it says that the servant may be required to retire at 55, but should ordinarily be retained in service till 60. In spite of this terminology, the Supreme Court held that "a ministerial servant falling within this clause may be compulsorily retired on attaining the age of 55, but when the servant is between the age of 55 and 60, the appropriate authority has the option to continue the employee's service subject to the condition that his service continues to be efficient. But the authority is not bound to retain him even if the https://hcservices.ecourts.gov.in/hcservices/ servant continues to be efficient". The Supreme Court held that the right conferred by the first part of the rule which speaks of the age of the retirement is not in any way limited or cut down by the second part of the rule. In the Retirement Rule on hand, the provision relating to retirement is a sentence by itself. Thereafter, there is the provision for the option. In Kailash Chandra's case, the Supreme Court has also referred to a possible construction of a sentence if the intention had been otherwise. Then the Supreme Court noted that the language should have been "may be required to retire at the age of 55 years provided, however, that he shall be retained in service if he continues to be efficient upto the age of 60". If the sentence had been constructed in that way, the Supreme Court was of the opinion that the right conferred on the authority to retire a servant at 55 would have been truncated. In the above sentence, the employee "may" be required to retire at 55, whereas in the Retirement Rule on hand, he "shall normally retire at 58". Then, the above sentence reads "he shall be retained in service if he continues to be efficient". Whereas in this Retirement Rule, the Committee may extend the period of service of an employee provided he is medically fit. As far as the word "ordinarily" is concerned, the Supreme Court has observed as follows : "... Reading these words without the word "ordinarily" we find it unreasonable to think that it indicates any intention to cut down at all the right to require the servant to retire at the age of 55 years or to create in the servant any right to continue beyond the age of 55 years if he continues to be efficient. They are much more appropriate to express the intention that as soon as the age of 55 years is reached the appropriate authority has the right to require the servant to retire but that between the age of 55 and 60 the appropriate authority is given the option to retain the servant but is not bond to do so. 8. This intention is made even more clear and beyond doubt by the use of the word "ordinarily". "Ordinarily" means "in the large majority of cases but not invariably". This itself emphasises the fact that the appropriate authority is not bound to retain the servant after he attains the age of 55 even if he continues to be efficient. The intention of the second clause therefore clearly is that while under the first clause the appropriate authority has the right to retire the servant who falls within clause (a) as soon as he attains the age of 55, it will, at that stage, consider whether or not to retain him further. This option to retain for the further period of five years can only be exercised if the servant continues to be efficient; https://hcservices.ecourts.gov.in/hcservices/ but in deciding whether or not to exercise this option the authority has to consider circumstances other than the question of efficiency also; in the absence of special circumstances he "should" retain the servant; but what are special circumstances is left entirely to the authority's decision. Thus, after the age of 55 is reached by the servant the authority has to exercise its discretion whether or not to retain the servant; and there is no right in the servant to be retained, even if he continues to be efficient." The word "normally" used in this sentence may also be construed in the same manner. 10. Similar rules as the Retirement Rule in the case on hand are not unknown in service jurisprudence. In 1989 (Supp) 1 S.C.C. 221 [State Bank of Bikaner vs. Jag Mohan Lal], the rule provided that the officer shall retire from service on attaining the age of 58 years or upto the completion of 30 years of service, whichever accrues first ... provided that the competent authority may at its discretion extend the period of service of an officer ... should such an extension be deemed desirable in the interest of the Bank. The Supreme Court held as follows : "9. ... The right to get extension of service beyond the age of superannuation has received consideration of this Court in several cases. In State of Assam v. Basanta Kumar Das, (1973) 1 SCC 461, after reviewing almost all the earlier decisions Kailash Chandra v. Union of India, AIR 1961 SC 1346; B.N. Mishra v. State of U.P., AIR 1965 SC 1567 and State of Assam v. Premadhar, (1970) 2 SCC 211, this Court said (at 165): A Government servant has no right to continue in service beyond the age of superannuation and if he is retained beyond that age, it is only in exercise of the discretion of the Government. ... The fact that certain persons were found fit to be continued in service does not mean that others who were not so found fit had been discriminated against. Otherwise, the whole idea of continuing only efficient people in service even after they had completed 55 years becomes only meaningless. 10. What do we have here in this case to distinguish those principles or not to apply those principles? In our https://hcservices.ecourts.gov.in/hcservices/ opinion, there is none. In the scheme provided herein the respondent or any other officer of the Bank has a legitimate right to remain in service till he attains the age of superannuation. But beyond that age, he has no such right unless his service is extended by the Bank. The further rights of parties are regulated by the proviso to Regulation 19(1). It reads : Provided that the competent authority may at its discretion, extend the period of service of an officer who has attained the age of fifty eight years or has completed thirty years' service as the case may be, should such extension be deemed desirable in the interest of the Bank. (Emphasis supplied) 11. Look at the language of proviso and the purpose underlying. The (sic) Bank may in its discretion extend the service of any officer. On what ground? For what purpose? That has been also made clear in the proviso itself. It states "should such extension be deemed desirable in the interest of the Bank". The sole purpose of giving extension of service is, therefore, to promote the interest of the Bank and not to confer any benefit on the retiring officers. Incidentally the extension may benefit retired officials. But it is incorrect to state that it is a conferment of benefit or privilege on officers. The officers upon attaining the age of superannuation or putting the required number of years of service do not earn that benefit or privilege. The High Court has completely misunderstood the nature of right and purpose of the proviso. The proviso preserves discretion to the Bank. It is a discretion available with every employer, every management, State or otherwise. ... 13. It was however, argued for the respondent that the Bank falls within the concept of 'State' for the purpose of enforcement of fundamental rights. The Bank, therefore, cannot extend the service of some and reject the case of others similarly situated. The concept of Article 14 of the Constitution is relied upon. The argument in our opinion, proceeds on a wrong premise. The Bank has no obligation to extend the services of all officers even if they are found suitable in every respect. The interest of the Bank is the primary consideration for giving extension of service. With due regard to exigencies of service, the Bank in one year https://hcservices.ecourts.gov.in/hcservices/ may give extension to all suitable retiring officers. In another year, it may give extension to some and not to all. In a subsequent year, it may not give extension to any one of the officers. The Bank may have a lot of fresh recruits in one year. The Bank may not need the services of all retired persons in another year. The Bank may have lesser work load in a succeeding year. The retiring persons cannot in any year demand that "extension to all or none". If we concede that right to retiring persons, then the very purpose of giving extension in the interest of the Bank would be defeated. We are, therefore, of opinion that there is no scope for complaining arbitrariness in the matter of giving extension of service to retiring persons." 11. In (2006) 5 S.C.C. 153 [D.C. Aggarwal vs. State Bank of India], the Supreme Court has again referred to Jag Mohan Lal's case and had held it had been pointed out earlier that the rule under which extension of service can be granted beyond the normal age of retirement does not invest a legal right in the employee to be granted such an extension and also that it was not a conferment of a benefit or privilege on an officer merely because the officer has put in the requisite number of years of service and that if the bank considers that continuance of the service of an officer is desirable in the interest of the bank, it may allow him to continue beyond the age of superannuation, but if the bank considers that it is not required, that is the end of the matter and that further non- extension of service has no reflection on the calibre and it carries no stigma. Similarly, again in (2008) 5 S.C.C. 1 [P. Venugopal vs. Union of India], the Supreme Court observed that under the service rules of an establishment, there may be provision for extension of service after attaining the age of superannuation and it is well settled that in the event of refusal by an employer to grant an extension, the employee cannot justifiably claim to be deprived of any right or privilege. The employer has a discretion to grant or not to grant such extension having regard to the interest of the employer or the establishment and in this case, they have followed the judgment in Jag Mohan Lal's case. Therefore, even after the judgment in Nergesh Meerza's case, the Supreme Court has upheld clauses similar to the one on hand and held that the extension of service beyond the age of superannuation is entirely within the discretion of the employer. 12. Therefore, we have to consider the applicability of all the judgments harmoniously and we find that in (2003) 6 S.C.C. 277 [Air India Cabin Crew Association vs. Yeshaswinee Merchant], which was again a case concerning an air hostess, the Supreme Court rejected most of the attacks made on the provision on the ground that it was a https://hcservices.ecourts.gov.in/hcservices/ discrimination only on ground of sex. While referring to Nergesh Meerza's case, they have held that the Supreme Court in that case had rejected the challenge to the lower retirement age for female field staff as discrimination based only on sex, but struck down two service conditions, one which provides for termination of service of an air hostess on attaining the age of 35 and the other providing for extension of service beyond 35 years upto 45 years "only at the sweet will and discretion of the Managing Director". Therefore, where the decision depends only on the whim of one individual, it is susceptible to arbitrariness and caprice. It is not so in the case of such decision being taken by a committee or a competent authority or a bank, as appears to be the case in those Supreme Court decisions were such clauses relating to extension of service beyond the age of retirement have been upheld. We find that the principle expressed in Kailash Chandra's case has been followed in Jag Mohan Lal's case in 1989 and even as recently as 2006 in D.C. Aggarwal's case, the Supreme Court has upheld this ratio that the rule relating to extension of service beyond the normal age of retirement is not a legal right of the employee to be granted such an extension and refusal thereof will not entitle the employee to claim that he was deprived of a right or privilege. Therefore, this is how we have to understand the decisions of the Supreme Court that have been referred to above. 13. We have also looked into the files. One more factor that we have to take note of is that the employees understood the implication of the rules and have also obtained one extension by invoking the said rule and they have attacked the rule as arbitrary when the second extension was not granted. This is one more reason why we are not persuaded to accept the case of the appellants. Further, we find that in W.A. No.201 of 2008, the Minutes of the 171st Meeting of the Executive Committee of the Council is recorded. 12 Members were present at the said meeting; four were granted leave of absence and three were not present. The Committee considered the representation of Ellappan for extension of service and it is recorded