CIVIL APPELLATE JURISDICTION : Civil Appeal No. 572 of 1993. From the Judgment and Order dated "29.5.92 of the Central Administrative Tribunal, Calcutta Bench, in O.A No. 455 of 1991. V. R. Reddy, Additional Solicitor General, Mrs. B. Sunita Rao and V.K. Verma for the Appellants. G.S. Chatterjee for the Respondent. The Judgment of the Court was delivered by YOGESHWAR DAYAL, J. Heard. Special leave granted. With the consent of learned counsel for the parties the appeal itself is being disposed of. The brief facts leading to this appeal are as below The respondent joined Indian Railway Stores Service as Class I Officer on 12th June, 1953. He was promoted to the senior scale as District Controller of Stores in 1974, as Additional Controller of Stores in 1980 and as Controller of Stores in 1982. At the relevant time the respondent was posted as Controller of Stores, Metro Railway, Calcutta. A major penalty chargesheet dated 5th December, 1989 was served on the respondent on the charge of finalisation of a tender case of 1983. Another major penalty charge-sheet was served on the respondent on 23rd April, 1990 on the charge of construction of a residential house at Salt Lake, Calcutta during 1981-87 at high cost. The respondent was issued the impugned order dated 24th April, 1990 by the Joint Secretary (E), Railway Board, on behalf of the President, by which the respondent was compulsory retired. The said order could be served on the respondent only on 28th January, 1991 in view of certain court proceedings initiated by him. Feeling aggrieved by the aforesaid order of compulsory retirement of the Railway Board the respondent preferred an application under Section 19 of the Administrative Tribunal Act, 1985 before the Central Administrative Tribunal, Calcutta. In the said application the respondent inter alia prayed for the following reliefs:-
"(a) an order directing the respondents to
withdraw, revoke and cancel the impugned order
dated 24.4.90/29.1.91 issued by the respondent
No.2 and further directing the respondents to
act in accordance with law.
(1)) an order commanding the respondents to
forthwith send unto this Hon’ble Tribunal the
entire records of the case relating to the
passing of the order retiring the applicant
from service under rule 1802 (a) including the
impugned order dated 24.4.90/29.1.91 for their
examination and for quashing the same upon
such
examination for doing conscienable justice to
the applicant.
(c) an order directing the respondents the
continuance or retention of the applicant in
service till he attains the age of
superannuation on 31st July, 1993 with all
consequential benefits." The appellants opposed the said application. It was stated on behalf of the appellants before the Tribunal that in memorandum dated 20th June, 1989 addressed to the respondent it was mentioned that the respondent had disposed of the tender expeditiously, the lowest offer which was filed, could have been availed of within the validity period offered by the firm and the railway would not have been forced to accept a higher rate and it also indicated lack of proper management of the purchase functions under the respondent. The aforesaid lapses on the part of the respondent were brought to the notice of the respondent so that he may be careful in future. Attention of the Tribunal was also drawn by the department towards a statement showing details of present and past vigilance cases involving the respondent. As regards the present case, there was a list of six, three of which were stated to be under investigation. These were regarding alleged favours shown to a firm and possession of disproportionate assets to the tune of over Rs. two lakhs. In the forth case, the CVS (Central Vigilance Commission) advised initiation of a major penalty proceedings on 24th November, 1988. In the fifth case, CVS advised issue of recorded warning on 16th November, 1988. In the sixth case, CVS on reconsideration advised closure on 28th February, 1989. It was submitted before the Tribunal on behalf of the appellants herein that F.R. 56(J) and the corresponding Railway Rule 1802 (a) of the Railway Establishment Code, Volume II, 1987 Edition, under which the respondent was prematurely retired, are identical. The right to retire a government servant prematurely is an absolute one and only requirement is that there should be the formation of an opinion. And in the present case, the opinion has been formed in public interest and the requirement of the rule had been strictly complied with. The Central Administrative Tribunal by the impugned judgment dated 29th May, 1992 allowed the application of the respondent holding that
"the circumstances under which the impugned
order was
passed have been brought out at paras 33, 34
and 35 of this judgment. It is abundantly
clear from a perusal of these paragraphs that
the high level review committee headed by the
Chairman, Railway Board, unanimously
recommended the retention of the applicant,
firstly because his performance record had
been quite good and secondly, because there
was no proven vigilance case leading to
punishment so far and the committee was of the
opinion that the outcome of the more serious
cases now pending against him should be
awaited. This decision showed out application
of mind by review Committee, which obviously
felt that the disciplinary proceedings started
against the applicant from the vigilance angle
should first be concluded before any action
was taken. The competent authority did not
agree with the recommendation of the review
Committee for the retention of the applicant.
He was certainly entitled to do so but in
arriving at any contrary decision, he should
have recorded a speaking order indicating the
reasons of his own opinion. In the
departmental file contains only a single
sentence recorded by the competent authority
viz. ’he should be removed from service
forthwith’, we have no hesitation in holding
that the decision of the competent authority
was arbitrary and that it cannot be
sustained.’
It is against the judgment that the present
appeal has been filed. We may mention that one of the departmental inquiries initiated vide Order No. E(0)1-89/PU-2/17 dated 11/12.10.90 has been concluded by the Commissioner for Departmental Inquiries vide his report dated 16th October, 1992. In this case the charge against the respondent was that ’while functioning as Controller of Stores in Chittaranjan Locomotive Works, Calcutta during the year 1983 committed gross misconduct by his following actions which led to him showing favouritism to M/s. Bharat Traders, Calcutta in the award of contracts for the procurement of Yellow Dextrine on tender No. D2/SF/1O2/GB-10/4063:(i) He passed orders for acceptance of a late offer of M/s. Bharat Traders, treating it as a single tender without obtaining prior approval of the General Manager; (ii) Later he passed orders for awarding of contract to M/s. Bharat Traders without formal Tender Committee’s recommendations; (iii) He waived off the Security Deposit payment by M/s. Bharat Traders without obtaining finance’s concurrence and for which the firm never requested; (iv) He misused purchase powers by exercising option clause, resulting in purchase of much higher quantity than what had been indented. By this aforesaid misconduct, Shri Dulal Dutt failed to maintain absolute integrity and devotion to duty and thereby contravened Rule 3(1)(i) and (ii) of the Railways Services (Conduct) Rules, 1966". The Commissioner for Departmental Inquiries while assessing the evidence in respect of the allegations against the respondent split up the charge into four ingredients as stated in paragraph 6.3 of the report. On ingredient No.1 the Commissioner for Departmental Inquiries held
"Keeping in view the totality of evidence it
is seen that the factual element in the
ingredient No.1 of the charge has been
corroborated. But in the instant case in the
context of extremely critical situation and
purchase of emergency nature, the CO’s
arguments and course of action have mitigated
the alleged gravity of the charge. As the
entire course of action specifically the
adoption of second round of negotiation to
neutralise the Finance objection vide Ex.S.6
was within the knowledge of AAO (S) vide
Ex.S.7, no mala fides have been considered
established against the CO. It is true that in
a normal situation acceptance of revised offer
after the rates are already known and the
Tender Committee has placed their final
recommendation is not in order. The
prosecution argument on that score is quite
acceptable. The prosecution further argued
that the style of noting by the CO on Ex.S.4
indicated that the CO initially approved the
TC proceedings. However, when subsequently
Ex.S.5 was received the whole process of split
orders started. Moreover, instead of ordering
second round of negotiations the CO could have
taken up with the GM personally for his
approval for the single tender to
avoid delay and tide over the emergency within
the shortest spell of time.
6.9.The issue is the course of action to be
taken in view of the revised late offer and
also the criticality of the stock position of
the Yellow Dextrine. There may be a number of
ways to tackle the problem. The CO has opted
for a course of action an analysed earlier and
evident on record. Since the entire issue was
within the knowledge of AAO (S) and the CO has
made a detailed noting vide ExD.3 and S.7, no
mala fide motive was established as already
observed earlier.’ On, ingredient No. 2 it was found as a fact that there was no formal Tender Committee recommendations. On ingredient No. 3 it was found that no specific mala fides were established. On ingredient No. 4 the Commissioner for Departmental Inquiries found that the factual elements of some procedural shortcomings have been corroborated by the documents. In the end the finding given was that certain procedural shortcomings were corroborated in the relevant documents; no mala fides against the CO or loss to the Railways have been proved. The law on the subject of compulsory retirement as recently laid down by this Court in the case of Baikuntha Nath Das and another v. Chief District Medical Officer, Banpada and another, [1992] 2 SCC 299 was noticed by the Tribunal but erroneously distinguished it. In the case of Baikuntha Nath aforesaid this Court has exhaustively dealt with the entire case law on the subject and observed :-
"An order of compulsory retirement has to be
passed by the government on forming the
opinion that it is in the public interest to
retire a government servant compulsorily. The
order is passed on the subjective satisfaction
of the government. The government (or the
Review Committee, as the case may be) shall
have to consider the entire record of service
before taking a decision in the matter of
course
attaching more importance to record of and
performance during the later years. The
record to be so considered would naturally
include the entries in the confidential
records/character rolls, both favourable and
adverse. There may be any number of remarks,
observations and comments, which do not
constitute adverse remarks, but are yet
relevant for the purpose of F.R. 56(j) or a
rule corresponding to it.’
The court also observed
"An order of compulsory retirement is not a
punishment. It implies no stigma nor any
suggestion of misbehaviour. Principles of
natural justice have no place in the context
of an order of compulsory retirement. Since
the nature of the function is not quasi-
judicial in nature and because the action has
to be taken on the subjective satisfaction of
the government, there is no room for importing
the and alteram partem rule of the natural
justice in such a case.’
It was further observed by this Court that :
"However, this does not mean that judicial
scrutiny is excluded altogether. While the
High Court or the Supreme Court would not
examine the matter as an appellate court, they
may interfere if they are satisfied that the
order is passed (a) mala fide or (b) that it
is based on no evidence or (c) that it is
arbitrary in the sense that no reasonable
person would form the requisite opinion on the
given material; in short, if it is found to be
a perverse order. The remedy provided by
Article 226 is no less an important safeguard.
Even with its well known constraints, the
remedy is an effective check against malafide
perverse or arbitrary action" It will be noticed that the Tribunal completely erred in assuming in the circumstances of the case, that there ought to have been a some order for compulsory retirement. This Court has been repeatedly emphassing right from the case of R-L Butail v. Union of India, [1970] 2 SCL 876 and Union of India v. J.N. Sinha [1970] 2 SCC 458 that an order of compulsory retirement is not an order of punishment. It is actually a prerogative of the Government but it should be based on material and has to be passed on the subjective satisfaction of the Government. Very often, on enquiry by the Court the Government may disclose the material but it is very much different from the saying that the order should be a speaking order. No order of compulsory retirement is required to be a speaking order. From the very order of the Tribunal it is clear that the Government had, before it, the report of the Review Committee yet it thought it fit of compulsory retiring the respondent. The order cannot be called either mala fide or arbitrary in law. We are thus constrained to allow this appeal with costs and set aside the impugned order of the Tribunal dated 29th May, 1992 and dismiss the application of the respondent filed before the Tribunal against the impugned order of compulsory retirement of the respondent. V.P.R. Appeal allowed.