* THE HON'BLE MR JUSTICE RAMESH RANGANATHAN + WRIT PETITION NO : 21796 AND 28824 OF 1995 % 07-11-2006 W.P.No. 21796 of 1995 # G. Ramakrishna Rao. ….. Petitioner Vs. $ The UCO Bank, H.O. Personnel Dept, Calcutta. Rep., by the Chairman and the Managing Director and two others. ….. Respondents ! Counsel for the petitioner: Sri B. Nalin Kumar ^ Counsel for respondents: Sri A. Srinivasarao < Gist: >Head Note ? [1] 1981(1) All Service Law Journal 188 2 1988(2) LLJ 370 31999(2) ALT 130 4 1983 (1) ALT 408 5 AIR 1993 SC 1916 6 2004(2) SCC 130 7 AIR 1954 SC 369 8 (1987)2 SCC 188 9 1994 Supp(3) SCC 424 10 (1992)2 SCC 299 11 (2001) 2 SCC 305 12 (2002) 3 SCC 641) 13 (2003) 4 SCC 59) 14 (1970) 2 SCC 458 15 (2001) 3 SCC 314 16 1995 Supp (3) SCC 202 17 Judgment in W.P.1368 of 1993 dated 17.8.1995 18 (2006)3 SCC 620 19 1962 Supp (3) SCR 713 20 AIR 1970 SC 214 21 (1990(3) ALT 605 THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN W.P.NOS. 21796 AND 28824 of 1995 COMMON JUDGMENT: Seeking a writ of mandamus to the respondents to permit him to rejoin service as a Scale III officer, to direct them to pay him full salary with effect from 1.4.1993 and to grant him all ancillary and attendant benefits or in the alternative to direct the respondents to pay him compensation of Rs.20.00 lakhs, W.P.No.21796 of 1995 is filed by the petitioner herein. When W.P.No.21796 of 1995 was pending on the file of this Court, the first respondent, in exercise of the powers conferred under Regulation 19(1) and (2) of the UCO Bank (Officers’) Service Regulations, 1979, issued proceedings dated 24.11.1995 retiring the petitioner from service with immediate effect and directed that he be paid an amount equivalent to three months substantive salary/pay and allowances last drawn by him. Seeking a writ of certiorari to quash the said proceedings dated 24.11.1995 and consequently permit him to rejoin service as a Scale III officer, to pay him full salary with effect from 1.4.1993 and grant him all ancillary and attendant benefits or in the alternative to direct the respondents to pay him compensation of Rs.20.00 lakhs, the petitioner filed W.P.No.28824 of 1995. Facts, to the extent necessary, are that the petitioner, a graduate in commerce with C.A.I.I.B, was appointed as a clerk in the respondent bank on 20.7.1964. He was promoted to “D-Grade” officers cadre (Scale-I) on 1.12.1970 and thereafter as a ‘C’ Grade officer (Scale – II) on 1.4.1976. He was promoted as a Scale III officer on 1.7.1983. In 1986 he was appointed as an enquiry officer to enquire into the charges levelled against Sri S.S. Murthy who was then working as the Manager of the Sarojini Devi Road Branch, Secunderabad. On 18.6.1986, when the petitioner was returning home from office, acid was thrown on him which resulted in his face being completely disfigured and in loss of vision in both his eyes. Within an hour, the petitioner was rushed to Osmania General Hospital for treatment. For the next three years, till the end of September, 1989, the petitioner underwent 17 operations, necessitating his hospitalization for a period ranging between two to eight weeks each time. These operations were largely plastic surgeries for correction of the disfigured eyelids, lips, nose, neck and different portions of the face. The petitioner’s efforts to have his vision restored, getting advanced treatment at reputed medical institutions like Rajendra Prasad Eye Center of the All India Institute of Medical Sciences, New Delhi and the L.V. Prasad Eye Institute, Hyderabad were all in vain. The then Chairman and Managing Director of the 1st respondent – Bank visited the petitioner at his residence in the third week of August, 1986 to enquire about his health. The Officers’ Association submitted several memoranda, to the Chief Executive Director of the bank, seeking special leave, full medical aid, compensation etc., to officers victimized on account of such incidents during the course of their duty. While matters stood thus, the petitioner received a letter dated 6.4.1993, from the 3rd respondent, informing him that they had been advised by the 2nd respondent not to extend the facility of special leave beyond 31.3.1993, in view of the telex message dated 1.4.1993 received from the 1st respondent. In the letter dated 6.4.1993 the petitioner was asked to intimate his willingness to accept voluntary retirement on payment of compensation in terms of the bank’s circular dated 29.12.1986. The 3rd respondent informed the petitioner that, in view of the instructions given by the 1st respondent, extension of special leave was not being sanctioned any longer and that the benefit of full medical reimbursement, extended to him till then, was also being discontinued. The petitioner applied for half pay leave, available to his credit, which, according to him, was more than 325 days. The respondents, however, declined to sanction leave stating that the same would not lie when special leave was granted. The petitioner submitted a representation on 11.8.1993 informing that he intended to rejoin service on the expiry of special leave and that, though he was blind, he could work in the administrative office with the help of a stenographer. The Commissioner, Handicapped Welfare, vide letter dated 06.10.1993, also recommended his retention in service, citing several instances of blind persons who were successfully rendering services. The respondents, however, did not permit the petitioner to rejoin duty. The petitioner submitted another representation on 20.12.1993 seeking an opportunity to show his performance with the help of a stenographer and thereafter retain him in service. In response thereto the 3rd respondent, vide letter dated 16.6.1994, asked him to rejoin duty on production of a medical fitness certificate issued by a doctor not below the rank of a Civil Surgeon. The petitioner submitted a medical fitness certificate, dated 17.6.1994, issued by Dr. G. Sreenath, wherein it was opined that his general health condition was good except for visibility. The petitioner reported for duty on 25.6.1994 and is said to have attended office till 29.6.1994 and to have signed in the attendance register. On 29.6.1994 the 3rd respondent informed the petitioner that he would report the matter to the Head Office regarding the nature of duties to be allotted to the petitioner. On the same day the 3rd respondent, vide letter dated 29.6.1994, directed the petitioner not to attend office from 30.6.1994 until instructions were received from the head office. The petitioner did not receive any intimation thereafter from the respondents asking him to rejoin service. The 1st respondent, in exercise of the powers conferred under Regulation 19(1) and (2) of the UCO Bank (Officers’) Service Regulations, 1979, issued proceedings dated 24.11.1995 retiring the petitioner from service with immediate effect. It was also ordered that the petitioner be paid three months substantive salary/pay and allowances last drawn. Petitioner would submit that the respondents neither extended special leave nor granted him sick leave available to his credit, that he was compelled to take voluntary retirement, as stated in the letter dated 6.4.1993, without adequate compensation, that the amount he would receive on voluntary retirement was hardly sufficient to repay the loans which he had borrowed and that, even if he was paid half salary on sick leave, he could not meet all his expenses including his children’s education and repayment of debts. Petitioner would submit that it was not open to the respondents to insist that he should seek voluntary retirement nor could they terminate his services for his refusal to do so and that such acts were illegal, unlawful and in violation of principles of natural justice and fair play. Sri B. Nalin Kumar, learned counsel for the petitioner, would submit that an employee can be compulsorily retired from service only in public interest and that there was no public interest involved in compulsorily retiring the petitioner. Learned counsel would submit that the impugned order dated 24.11.1995, compulsorily retiring the petitioner from service, was an act of victimization and was passed only because he did not accept the offer of voluntary retirement made by the respondent-bank. Learned counsel would submit that the impugned order dated 24.11.1995 cannot be given retrospective effect from 1.4.1993 and that the second proviso to Regulation 19 required notice pay of three months to be paid as on the date of the impugned order and not three months salary based on the pay and allowances as on 31.3.1993. Learned counsel would submit that failure to pay three months salary, in accordance with the pay and allowances applicable on 24.11.1995 when the impugned order was passed, would render the order of compulsory retirement from service illegal and ab initio void and the petitioner must be deemed to have continued in service till he attained the age of superannuation of 60 years on 31.7.2002. Learned counsel would submit that Section 47 of the Prevention of Disabilities Act mandates the employer to provide alternative employment to an employee suffering from the physical disability of loss of vision and, though the petitioner had offered to discharge alternative functions with the help of a stenographer, no attempt was made by the respondent-bank to ascertain as to whether or not the petitioner was in a position to render service to the Bank in an alternative capacity. Learned counsel would submit that, as the provisions of the Disabilities Act are beneficial in nature, they have retrospective operation and must be held to be applicable even to cases where the services of an employee were terminated prior to the date on which the Act came into force. Learned counsel would rely on Baldev Raj Chadha Vs Union of India[1], Mahadevan Vs. Reserve Bank of India[2] a n d Syed Sha Musebulla Alvi Vs. Secretary, G.A.D., Secretariat, Hyderabad[3]. Learned counsel would submit that, under the Regulations, an employee can be compulsorily retired from service only on completion of 30 years of service or on his crossing 55 years of age, that the petitioner completed 30 years of service in July 1994 and 55 years of age in July 1997 and therefore the Bank could not have compulsorily retired him from service with effect from 1.4.1993. Learned counsel would rely on Smt K. Indira Vs. State Bank of India[4] and National Federation of the Blind Vs. Union Public Service Commission[5] to submit that blindness by itself was not a ground to terminate the services of the petitioner. Learned counsel would invoke the doctrine of proportionality, placing reliance on the judgment of the Apex Court in Teri Oat Estates (P) Ltd Vs. U.T. Chandigarh[6], and submit that failure of the respondent-bank to examine as to whether the petitioner was capable of discharging his functions, if provided with alternative employment, was in violation of Articles 14 and 16 of the Constitution of India. Learned counsel would submit that, since the action of the respondent-bank, in compulsorily retiring the petitioner from service on 24.11.1995, was arbitrary and illegal, the petitioner must be deemed to have continued in service till he attained the age of superannuation on 31.7.2002 and till such date he was entitled for pay and allowances, including the benefits of any revision in pay, increments etc., Sri V. Ajay Kumar, learned Standing Counsel for the respondent-Bank, would submit that, while there was nothing on record to establish a link between the acid attack on the petitioner and the disciplinary proceedings in which he was the enquiry officer, the Bank had, nonetheless, taking a sympathetic view, treated his period of absence from June 1986 till March, 1993 as special leave and had paid him salary and allowances as if he had continued to discharge his duties with the respondent bank. Learned Standing Counsel would submit that, in addition, the petitioner had been reimbursed 100% of the medical expenses incurred by him, that it was only with a view to help the petitioner that the bank had offered him voluntary retirement so that he would receive additional monetary benefits besides employment being provided to one of his dependants and that the sympathy shown by the Bank could not be construed as victimization. Learned counsel would further submit that the Bank, on examining the matter in detail, had come to the conclusion that the petitioner was not in a position to discharge even the normal functions required of a bank officer and, as the petitioner chose not to retire voluntarily, the bank had no other alternative but to take action against him under Regulation 19 and compulsorily retire him from service. Learned counsel would submit that, while the impugned order would come into operation only from 24.11.1995, the date on which it was passed, as the petitioner was informed, as early as on 1.4.1993, that the Bank no longer treated the period of his absence as special leave, and since he did not work after 1.4.1993, he was not entitled for payment of salary for the period between 1.4.1993 and 24.11.1995 on the principle of ‘no work no pay’. Learned counsel would submit that the Prevention of Disabilities Act does not have retrospective application and that, while the Bank was sympathetic to the petitioner’s plight, it could not continue to pay him salary and allowances forever, more so when he was not in a position to render any service to the bank. Learned counsel would submit that compulsorily retiring an employee, on his being found unfit to discharge normal duties, was in public interest as no public purpose would be served in retaining such an employee in service when he was not in a position to discharge his normal duties as an officer of the Bank. Learned counsel would submit that the petitioner was informed that the Bank would not grant him special leave from 1.4.1993 and, as he did not attend work thereafter, the three months pay and allowances required to be paid was rightly computed based on the scales of pay as on 1.4.1993 and that the petitioner was not entitled for payment of three months salary based on the subsequent revision of pay scales. Learned counsel would submit that the petitioner was not capable of discharging any alternate duties and that it was not for the petitioner to indulge in a hypothetical exercise of self assessment. Learned counsel would submit that, in any event, these were matters which this Court would not examine in proceedings under Article 226 of the Constitution of India and, since the power exercised by the respondent-Bank, to compulsorily retire the petitioner from service, was reasonable and did not violate any of his constitutional or statutory rights, no interference was called for. Before examining the rival contentions, it is necessary to refer to the relevant statutory provisions. In exercise of the powers conferred by Section 19, read with sub-section (2) of Section 12, of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, the Board of Directors of the UCO Bank, in consultation with the Reserve Bank of India and with the previous sanction of the Central Government, made the UCO Bank (Officers’) Service Regulations, 1979 which came into force on 1.7.1979. The said regulations apply to all officers of the Bank. Regulation 3(c) defines the Board to mean the Board of Directors of the Bank, Regulation 3(d) defines ‘competent authority’ to mean the authority designated for the purpose by the Board, Regulation 3(k) defines pay to mean basic pay including stagnation increment and Regulation 3(l) defines ‘salary’ to mean the aggregate of pay and dearness allowance. Regulation 19 which deals with the age of retirement reads thus:- “(1) The age of retirement of an officer employee shall be as determined by the Board in accordance with the guidelines issued by the Government from time to time – “Provided that the Bank may, at its discretion, on review by the Special Committee/Special Committees as provided hereinafter in sub-regulation(2) retire, if it is of the opinion that it is in the public interest, an officer employee on or at any time after the completion of 55 years of age or on or at any time after the completion of 30 years of total service as an officer employee or otherwise, whichever is earlier” Provided further that before retiring an officer employee, at least three month’s notice in writing or an amount equivalent to three months’ substantive salary/pay and allowances, shall be given to such officer employee; Provided further that an officer aggrieved by the order of the Competent Authority, as provided in sub-regulation(2) may, within one month of the passing of thee order, give in writing a representation to the Board of Directors against the decision of the Competent authority, and on receipt of such representtion fromm the concerned officer, the Board of Directors shall consider his representation and take a decision within a period of three months. Where the Board of Directors decides that the order passed by the Competent Authority is not justified, the concerned officer shall be reinstated as though the Competent Authority has not passed the order; Provided also that nothing in this regulation shall be deemed to preclude an officer employee from retiring earlier pursuant to the option exercised by him in accordance with rules in the Bank. Explanation An officer employee will retire on the last day of the month in which he completes his age of retirement. (2) The Bank shall constitute a Special Committee(s) consisting of not less than three members to review whether an officer employee should be retired in accordance with the first proviso to this regulation. Such Committee(s) shall, ,from time to time, review the case of each officer employee and no order of retirement shall be made unless the Special Committee(s) recommend(s) in writing to the Competent Authority the retirement of the Officer employee. (The guidelines issued by the Government in terms of proviso to Regulation 19(1) & (2) are given in Annexure-7).” Under the proviso to Regulation 19(1) of the UCO Bank (Officers’) Service Regulations, 1979, an officer-employee may be compulsorily retired from service after completion of 55 years of age or at any time after completion of 30 years of total service whichever is earlier. In order to compulsorily retire an officer-employee from service his case must first be reviewed by a Special Committee. Thereafter the Bank in its discretion, and if it is of the opinion that it is in public interest, may compulsorily retire him from service. Under the second proviso to Regulation 19(1), before retiring an officer employee, at least three months notice in writing or an amount equivalent to three months substantive salary/pay and allowances is required to be paid to him. Regulation 19(2) provides for the constitution of a special committee, consisting of not less than three members, to review whether an officer employee should be retired from service in accordance with the first proviso to Regulation 19(1). Regulation 19(2) further provides that no order of retirement shall be made unless the special committee recommends in writing, to the competent authority, that the officer employee be retired from service. In order to compulsorily retire an officer employee from service the statutory regulations of the respondent bank require compliance with the following conditions: (1) The officer employee must have completed either 55 years of age or 30 years of total service whichever is earlier; (2) A special committee, consisting of not less than three members, should be constituted by the Bank to review whether or not the officer employee should be compulsorily retired from service; (3) The special committee must recommend in writing, to the competent authority, that the officer employee be compulsorily retired from service; (4) The competent authority may thereafter in its discretion, and if it is of the opinion that it is in public interest, compulsorily retire the officer employee from service. (5) Before retiring an officer employee, at least three months notice in writing should be given or an amount equivalent to three months substantive salary/pay and allowances should be paid. Compulsory retirement, in service jurisprudence, is of two kinds. Under the various disciplinary rules, compulsory retirement is one of the penalties inflicted on a delinquent employee consequent upon a finding of guilt being recorded in a disciplinary enquiry. Such a penalty involves stigma and can be inflicted only after following the procedure prescribed by the relevant rules or consistent with the principles of natural justice if the field, for inflicting such penalty, be not occupied by rules. There are service rules which confer on the government, or the appropriate authority, an absolute (but not arbitrary) right to retire an employee, on his attaining a particular age or on his having completed a certain number of years of service, on formation of the opinion that in public interest it is necessary to compulsorily retire him from service. In such cases it is neither a punishment nor a penalty and does not entail loss of retiral benefits. (Shyamlal v. State of U.P.[7], Brij Mohan Singh Chopra v. State of Punjab[8], S. Ramachandra Raju v. State of Orissa[9]; Baikuntha Nath Das v. Chief District Medical Officer, Baripada[10]) More appropriately, it is like premature retirement. It does not cast any stigma. As long as the opinion, which constitutes the basis of the order of compulsory retirement, is formed bonafide, and in public interest, the opinion cannot, ordinarily, be interfered with. Such an order may be subjected to judicial review on very limited grounds such as the order being malafide, based on no material or on collateral grounds or having been passed by an authority not competent to do so. The object of such compulsory retirement is not to punish or penalise the employee but to weed out the worthless, the dead wood, the paperlogged and the callous, who have lost their utility for the administration by their insensitive, unintelligent or dubious conduct impeding the flow of administration or promoting stagnation. (Bishwanath Prasad Singh Vs. State of Bihar[11]). That dead wood need to be removed, to maintain efficiency in public service, cannot be disputed. Integrity of the employee is the foremost consideration in public service. If the conduct of an employee is against public interest, or obstructs efficiency in public service, the employer has the right to compulsorily retire such an employee in public interest. The employer’s right to compulsorily retire an employee is a method of ensuring efficiency in public service. The entire service record, character roll or confidential report furnishes the material to the employer to find out whether an employee has outlived his utility in service. It is on consideration of the totality of the material, with emphasis on the later entries in the character roll, is the employer expected to form its opinion whether an employee is to be compulsorily retired from service or not. (State of U.P. Vs. Vijay Kumar Jain[12]). The passing of an order of compulsory retirement is based on the subjective satisfaction of the competent authority, however, on objective considerations. Unless it is shown that the order of compulsory retirement was passed arbitrarily, and without application of mind, or that such formation of opinion to compulsorily retire the employee was based on no evidence or that the order is perverse, Courts would not, normally, interfere. (Jugal Chandra Saikia Vs. State of Assam[13]). While the right conferred on the appropriate authority to compulsorily retire an employee is absolute, that power can be exercised subject to the conditions mentioned in the rule, one of which is that the concerned authority must be of the opinion that it is in public interest to do so. It is open to an aggrieved party to contend that the requisite opinion has not been formed or the decision is based on collateral grounds or that it is an arbitrary decision. Because of his compulsory retirement an employee does not lose any of the rights acquired by him before retirement. Compulsory retirement involves no civil consequences. Various considerations may weigh with the appropriate authority while exercising the power conferred under the rule. In