Compulsory Retirement is Not Employee Misconduct, Rules Supreme Court

The Supreme Court has clarified in a significant judgment that the compulsory retirement of an employee is neither a punishment nor a stigma. According to a Press Trust of India report, the Court stated that such action does not imply that the employee has committed any misconduct.

A bench comprising Justice Manmohan and Justice Shri Chandrashekhar made this observation while upholding the Chhattisgarh government's decision to compulsorily retire 5 out of 14 employees. The Court noted that such decisions are taken when the competent authority determines that retaining the employee in service is no longer in the public interest.

The bench stated, "An order of compulsory retirement is not punitive or stigmatizing in nature. Such an order does not cast any doubt on the conduct of the employee nor does it confirm any misconduct." The Court further added that the executive has the power to decide whether an officer is no longer useful to the administration or if their continued service would prejudice administrative efficiency.

However, the Court cautioned that this assessment must not be based on mere conjecture or be arbitrary, but must be based on objective and relevant material available on record. On Friday, the Supreme Court upheld the Chhattisgarh High Court's order dated April 12, 2023, which supported the decision of compulsory retirement taken under the state government's 2017 circular.

During the case, the employees argued that other employees in similar positions had not been retired. According to the PTI report, the Court rejected this argument. The Court stated that an employee cannot challenge an order of compulsory retirement merely because similar action was not taken against other officers with a similar service record.

The Court clarified that the utility, integrity, efficiency, and overall service record of an employee must be evaluated individually by the competent authority. Action against one employee cannot be termed unconstitutional or discriminatory simply because similar action was not taken against another similar employee.

Referring to the right to equality under Article 14 of the Constitution, the Court said that an illegal benefit or error granted to one person cannot become a basis for another person to claim a benefit. The Court stated that if an error occurred in a previous case, it cannot be used to continue the same error in subsequent cases.

The Court further stated that when the government sets standards or criteria for exercising such power, judicial review is limited only to whether those standards were followed. For an order of compulsory retirement, relevant material such as annual confidential reports, integrity assessment, performance evaluation, and other service records regarding the employee's utility are necessary.

The bench clarified that courts cannot re-evaluate the material as if they were hearing an appeal against an administrative decision. The Court should only examine whether relevant material was available, whether the competent authority considered it, and whether a reasonable person could have reached the same conclusion. As long as these requirements are met, the Court will not substitute the perspective of the authority entrusted with the decision-making process.