Case: M.P. State Co-op. Dairy Fedn. Ltd. &amp; Another Vs. Rajnesh Kumar Jamindar &amp; Others

taken in the counter-affidavit before the High Court.42. Strong reliance has been placed by Mr. Sreekumar on a recent decision of this Court in Mundrika Dubey and Others v. State of Bihar and Others [(2008) 4 SCC 458] wherein orders of compulsory retirement by way of an economic measure had been found to be in the interest of the employer.43. It may be placed on record that neither there exist any such provision nor such a stand had been taken before the High Court. Furthermore, it is well-settled that while a power is exercised by an authority, ordinarily, the reasons contained in the order should be supported by the materials on records.44. Submission of Mr. Sreekumar, that the High Court should not have interfered with the order of compulsory retirement keeping in view the fact that no malafide has been alleged in the Scrutiny Committee nor any case of discrimination has been made out, cannot be accepted. It is one thing to say that a yardstick has been fixed for the purpose of taking recourse to the power of compulsory retirement but there cannot be any doubt or dispute that such yardstick must be based on relevant criteria. If the relevant criteria, as has been laid down by the State, which has been adopted by the Federation, had not been acted upon, the order must be held to have been suffering from jurisdictional error.45. It may be true that the superior courts in exercise of their power of judicial review ordinarily would not go into the factual findings as to which section of the employees should be brought within the parameters of Regulation 13 of the Regulations and which of them would not, but, in this case, we are concerned with a different question.46. We, therefore, do not find any infirmity in the judgment of the High Court.47. So far as the question of payment of back wages is concerned, we may notice Regulation 49(2) of the Regulations, which reads as under: "49 (2) When the termination or retirement of an employee from his service has been set aside by the court and the employee is reinstated without any further departmental proceeding, then the period of absence from the period of suspension, will be treated s the period on duty for all purposes including the grant of salary and allowances. The amount of subsistence allowance to him if has been paid will be deducted from the payable amount under this sub rule." A bare perusal of the said Regulation would clearly show that it applies in a case where an order of dismissal and/ or compulsory retirement by way of punishment is set aside. It is not a case where order of compulsory retirement had been passed by way of punishment. Respondents - employees herein were not charged with any misconduct. The order of compulsory retirement was issued in terms of the Regulation 13 of the Regulations only.48. Various decisions have been placed before us with regard to grant of back wages. Even the learned Single Judge had granted 50% back wages in favour of 16 employees. The Division Bench did not interfere therewith. We, therefore, fail to understand as to why the Division Bench thought fit to grant 20% back wages in respect of other employees. The decisions placed before us show that this Court keeping in view the facts and circumstances of each case had refused to grant 75% back wages.49. We, therefore, are of the opinion that 50% back wages should have been granted.50. In Civil Appeal arising out of SLP (C) No. 17705 of 2008, as noticed hereinbefore, an additional ground has been taken that Section 47 of the 1995 Act would be attracted in the case of the appellant. Section 47 of the 1995 Act reads as under: "47 - Non-discrimination in Government employment(1) No establishment shall dispense with, or reduce in rank, an employee who acquires a disability during his service:Provided that, if an employee, after acquiring disability is not suitable for the post he was holding, could be shifted to some other post with the same pay scale and service benefits:Provided further that if it is not possible to adjust the employee against any post, he may be kept on a supernumerary post until a suitable post is available or he attains the age of superannuation, whichever is earlier.(2) No promotion shall be denied to a person merely on the ground of his disability:Provided that the appropriate Government may, having regard to the type of work carried on in any establishment, by notification and subject to such conditions, if any, as may be specified in such notification, exempt any establishment from the provisions of this section." 51. The learned counsel submits that his client suffered disability in 1991. The 1995 Act, thus, did not come into force at that point of time. His services were continued not as a disabled person within the provisions of the 1995 Act. He was treated equally and, thus, we see no reason as to why the entire back wages should be granted in his favour whereas all other employees would be given 50% of their back wages.52. Furthermore, such a contention had not been raised before the Division Bench. It may be true that in a given case, this Court may allow the appellant to raise such a contention, as was done in the case of Kunal Singh v. Union of India and Another [(2003) 4 SCC 524] whereupon strong reliance has been placed, but it is not automatic.It is evident from the record that even before the learned Single Judge the said contention was not raised at the first instance. Only in the review petition, the said contention was raised. But, the said review petition was dismissed. As indicated hereinbefore, the said contention was again not raised before the Division Bench. We, therefore, are not inclined to agree with the contention that in terms of the 1995 Act, the appellant should be given 100% back wages.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]28. We have noticed the history of the Federation. It was a part of the Department of the Government. It not only carries on commercial activities, it works for achieving the better economic development of a section of the people. It seeks to achieve the principles laid down in Article 47 of the Constitution of India, viz., nutritional value and health. It undertakes a training and research work. Guidelines issued by it are binding on the societies. It monitors the functioning of the societies under it. It is an apex body.29. We, therefore, are of the opinion that the appellant herein would come within the purview of the definition of `State as contained in Article 12 of the Constitution of India.30. The learned Single Judge called for the records. It was found that the Regulations were amended in conformity with the government circulars and, thus, the said amendment was valid. It was noticed that at least in cases of 16 employees, the average grading being "good", their services could not have been dispensed with.Before us, like before the learned Single Judge and the Division Bench of the High Court, various discrepancies in the report of the Scrutiny Committee as approved by the Review Committee were pointed out. The examples placed before us clearly demonstrate that neither the Scrutiny Committee nor the Review Committee took into consideration the relevant factors germane for the purpose of passing such an order and in fact had taken into consideration irrelevant factors which were not germane therefor.34. Some of the employees, for a number of years, had been shown to be good officers; ACRs of some of whom in some of the years have been "very good". As has been noticed hereinbefore, the Scrutiny Committee as also the Review Committee proceeded to determine each individual case keeping in view the ACRs of the employees concerned from 1980, since when the Federation had started functioning, to the year 2000, when the decision had been taken to compulsorily retire the employees, by amending the Regulations. We have noticed hereinbefore that although criteria adopted by the State were required to be considered for the purpose of determining the suitability or otherwise of the employees to continue in service, the necessity to give special consideration to the performance of the employees for the last five years before the order was passed had been given a completeThe learned Single Judge as also the Division Bench, as noticed hereinbefore, clearly held that for the purpose of weeding out the dead wood, it was absolutely necessary to take into consideration the performance of each of the employees at least for the last two years.35. Each case, thus, was required to be considered on its own merit. The broad criteria, which are not only applicable generally for the aforementioned purpose, were required to be followed but there cannot be any doubt or dispute that the criteria laid down by the State was imperative in character. Thus, the Federation adopted the rules and circulars made or issued by the State Government. The Federation itself having formulated the criteria required to be applied for passing orders of compulsory retirement was, thus, bound thereby. It is now aprinciple of law that the employer would be bound by the rule of game. It must follow the standard laid down by itself. If procedures have been laid down for arriving at some kinds of decisions, the same should substantially be complied with even if the same are directory in nature.It is also aprinciple of law that an authority discharging a public function must act fairly. It, for the aforementioned purpose, cannot take into consideration an irrelevant or extraneous matter which is not germane for the purpose for which the power is sought to be exercised. The Scrutiny Committee as also the Review Committee was required to pose unto themselves a correct question of law so as to enable them to find out a correct answer. It was, therefore, imperative that the criteria laid down in the circulars issued by the State of Madhya Pradesh should have been scrupulously followed.40. Federation, therefore, in our opinion, having regard to the fact that there was no material to show that the respondentsemployees had become dead wood, inefficient or corrupt, must be held to have abused its power.41. `Interest of the Federation as contained in Regulation 13 of the Regulations would not mean that services of a large number of employees should be dispensed with only for the purpose of cutting administrative expenses. Even such a power does not exist in terms of the Regulations nor any such ground had been taken in thebefore the High Court.42. Strong reliance has been placed by Mr. Sreekumar on a recent decision of this Court in Mundrika Dubey and Others v. State of Bihar and Others [(2008) 4 SCC 458] wherein orders of compulsory retirement by way of an economic measure had been found to be in the interest of the employer.43. It may be placed on record that neither there exist any such provision nor such a stand had been taken before the High Court. Furthermore, it isthat while a power is exercised by an authority, ordinarily, the reasons contained in the order should be supported by the materials on records.44. Submission of Mr. Sreekumar, that the High Court should not have interfered with the order of compulsory retirement keeping in view the fact that no malafide has been alleged in the Scrutiny Committee nor any case of discrimination has been made out, cannot be accepted. It is one thing to say that a yardstick has been fixed for the purpose of taking recourse to the power of compulsory retirement but there cannot be any doubt or dispute that such yardstick must be based on relevant criteria. If the relevant criteria, as has been laid down by the State, which has been adopted by the Federation, had not been acted upon, the order must be held to have been suffering from jurisdictional error.45. It may be true that the superior courts in exercise of their power of judicial review ordinarily would not go into the factual findings as to which section of the employees should be brought within the parameters of Regulation 13 of the Regulations and which of them would not, but, in this case, we are concerned with a different question.46. We, therefore, do not find any infirmity in the judgment of the High Court.47. So far as the question of payment of back wages is concerned, we may notice Regulation 49(2) of the Regulations, which reads as(2) When the termination or retirement of an employee from his service has been set aside by the court and the employee is reinstated without any further departmental proceeding, then the period of absence from the period of suspension, will be treated s the period on duty for all purposes including the grant of salary and allowances. The amount of subsistence allowance to him if has been paid will be deducted from the payable amount under this subbare perusal of the said Regulation would clearly show that it applies in a case where an order of dismissal and/ or compulsory retirement by way of punishment is set aside. It is not a case where order of compulsory retirement had been passed by way of punishment. Respondentsemployees herein were not charged with any misconduct. The order of compulsory retirement was issued in terms of the Regulation 13 of the Regulations only.48. Various decisions have been placed before us with regard to grant of back wages. Even the learned Single Judge had granted 50% back wages in favour of 16 employees. The Division Bench did not interfere therewith. We, therefore, fail to understand as to why the Division Bench thought fit to grant 20% back wages in respect of other employees. The decisions placed before us show that this Court keeping in view the facts and circumstances of each case had refused to grant 75% back wages.49. We, therefore, are of the opinion that 50% back wages should have been granted.50. In Civil Appeal arising out of SLP (C) No. 17705 of 2008, as noticed hereinbefore, an additional ground has been taken that Section 47 of the 1995 Act would be attracted in the case of the appellant. Section 47 of the 1995 Act reads asn in Government employment(1) No establishment shall dispense with, or reduce in rank, an employee who acquires a disability during his service:Provided that, if an employee, after acquiring disability is not suitable for the post he was holding, could be shifted to some other post with the same pay scale and service benefits:Provided further that if it is not possible to adjust the employee against any post, he may be kept on a supernumerary post until a suitable post is available or he attains the age of superannuation, whichever is earlier.(2) No promotion shall be denied to a person merely on the ground of his disability:Provided that the appropriate Government may, having regard to the type of work carried on in any establishment, by notification and subject to such conditions, if any, as may be specified in such notification, exempt any establishment from the provisions of this section.The learned counsel submits that his client suffered disability in 1991. The 1995 Act, thus, did not come into force at that point of time. His services were continued not as a disabled person within the provisions of the 1995 Act. He was treated equally and, thus, we see no reason as to why the entire back wages should be granted in his favour whereas all other employees would be given 50% of their back wages.52. Furthermore, such a contention had not been raised before the Division Bench. It may be true that in a given case, this Court may allow the appellant to raise such a contention, as was done in the case of Kunal Singh v. Union of India and Another [(2003) 4 SCC 524] whereupon strong reliance has been placed, but it is not automatic.It is evident from the record that even before the learned Single Judge the said contention was not raised at the first instance. Only in the review petition, the said contention was raised. But, the said review petition was dismissed. As indicated hereinbefore, the said contention was again not raised before the Division Bench. We, therefore, are not inclined to agree with the contention that in terms of the 1995 Act, the appellant should be given 100% back wages.