Principles of Natural Justice and Compulsory Retirement : Union of India & State of Andhra Pradesh v. M.E. Reddy and Related Jurisprudence

Suman Jain, Advocate
Punjab & Haryana High Court, Chandigarh

Date : 18/03/2019 - Location : SJ & Associates #541, Sector 12-A, Panchkula - Phone No. 09216255775, 0172-2971222

Principles of Natural Justice & C.R.: UOI & State of A.P. v. ME Reddy & R.J.

Natural law is one of the most important aspects of administrative law. Historically, administrative bodies were not obliged to incorporate the principles of natural law in their decisions. However, the principle of procedural fairness was incorporated into the functioning of administrative bodies over the centuries. Hence, in current practice, natural law principles are by and large applicable in the decisions given by administrative bodies as they are considered quasi-judicial bodies.[1] This is because their decisions often affect the civil rights of individuals. However, there are certain exceptions wherein natural law principles can be excluded from the decisions of administrative bodies. Examples of this are situations of necessity or where a statue expressly dictates the exclusion of principles of natural justice.

It must be noted that this paper foregoes a comparative analysis with jurisdictions such as the UK and USA as normal retirement is considered a form of age-based retirement and termed compulsory retirement in said jurisdictions due to difference in socio-economic conditions.

However, compulsory jurisdiction is very much an alive issue in the realms of Indian service law jurisprudence, hence the following analysis.

The first case of any import to be decided on the issue of whether it is valid to exclude the principles of natural justice from the practice of compulsory retirement was State of Orissa v. Binapani Dei, AIR 1967 SC 1269, ["Binapani Dei"]. The respondent, Binapani Dei, a member of the Orissa Medical Service, was compulsorily retired when the state revised her date of birth due to dispute about it, with the respondent claiming one and opponents claiming another earlier date. The High Court of Orissa held the impugned order to be invalid. The apex court too opined that the state was in the wrong as the revision in Binapani Deis date of birth was done without any proper notice. Additionally, she was given no opportunity to present her version to the adjudicating authority before the order regarding her date of birth on which the impugned order was based was passed. The Court summed up in the following fashion."

"The State has undoubtedly authority to compulsorily retire a public servant who is superannuated. But when that person disputes the claim he must be informed of the case of the State and the evidence in support thereof and he must have a fair opportunity of meeting that case before a decision adverse to him is taken."[2]

Subsequently, in Union of India v. Col JN Sinha and Anr, AIR 1971 SC 40, ["Col JN Sinha"]. Binapani Dei was distinguished on the basis of the reason that, while in Binapani Dei, the impugned order took away rights of the petitioner that were pre-existing, compulsory retirement takes away no pre-existing rights thus imposing no civil consequences (thus making it unnecessary to impose principles of natural justice on the process).

Col J.N. Sinha is the first and foremost case that must be studied in any discussion of the concept of compulsory retirement. This is the law of the land with respect to compulsory retirement and laid down all major principles regarding the issue. The facts of this case are as follows. Col J.N. Sinha, an Extra-Assistant Superintendent in the Survey of India Service, was compulsorily retired vide the impugned order dated August 13, 1969, issued by the Ministry of Education and Youth Services.While the High Court accepted the respondent- employees plea, this was overturned in the Supreme Court. The Supreme Court held the following things. Firstly, it explained the application of the principles of natural justice to statutory provisions. It expounded through Justices J.C. Shah and K.S. Hegde, that-

"If a statutory provision can be read consistently with the principles of natural justice, the Courts should do so because it must be presumed that the legislatures and the statutory authorities intend to act in accordance with the principles of natural justice. But on the other hand a statutory provision either specifically 'or by necessary implication excludes the application of any or all the principles of natural justice then the court cannot ignore the mandate of the legislature or the statutory authority and read with the concerned provision the principles of natural justice."[3]

Secondly, the court held that the application of principles of natural justice in a particular case "depends upon the express words of the provision conferring the power, the nature of the power conferred, the purpose for which it is conferred and the effect of the exercise of the power." The court also observed that Article 14 of the Constitution was not violated in such a situation. This is because a reasonable distinction was being drawn on the grounds of incompetence. Employees were not being discriminated against at random.

Union of India & State of Andhra Pradesh v. M.E. Reddy, AIR 1980 SC 563, ["M.E. Reddy"]. is a landmark case regarding compulsory retirement and the exclusion of natural justice in the concept of compulsory retirement. This case originated in a writ petition filed by petitioner, M.E. Reddy in the Andhra Pradesh High Court. M.E. Reddy was an IPS officer who was a promotee from the Andhra state police. He was suspended on 11.08.67 pending departmental enquiry into a large number of allegations that had been made against him. The Andhra government then reinstated Mr. Reddy. The Cause of Action for the current case arose when subsequently, in 1975, the government of India acting on the report of the Review Committee (a committee consisted of the Chief Secretary, Home Secretary and the Inspector General of Police, Andhra Pradesh) compulsorily retired M.E. Reddy under sub-rule 3 of rule 16 of the All India Service (Death-cum-Retirement) Rules, 1958 in public interest on the expiry of 3 months notice period from the date of service of order. A Single Judge bench of the Andhra Pradesh High Court quashed the compulsory retirement imposed on petitioner M.E. Reddy and a Division Bench confirmed said order. In the current case, the state of Andhra Pradesh as well as the centre appealed against said decision.

In the final judgment, the apex court accepted the sanctity of principles of natural justice. However, it pointed out that in certain cases, the statute excluded the application of said principles. In those cases, it would be wrong for the courts to ignore the legislatures mandate and interpret the provisions any which way they liked by reading into them principles that had been specifically excluded. The court further examined the nature of this right conferred on the state. The right was held to be an absolute right. However, there were certain conditions subject to which the natural justice can be excluded. First and foremost, it must be in the public interest to do so. The authority must form a bonafide opinion that the measure to retire an employee was taken in public interest. The court further explained this by expounding that the principal aim behind compulsorily retiring a government servant is to weed out the dead wood for the system. Certain officers, for reasons either of poor integrity or plain inefficiency, become a burden on the service. Hence, compulsorily retiring them under rules such as Rule 56(j) of the Fundamental Rules or sub-rule 3 of rule 16 of the All India Service (Death-cum-Retirement) Rules, 1958is a move that balances the individual rights of the retiree (by retiring them at the fag end of their career with full benefits, no punishment and so on) as well as the rights of the state (to maintain a standard of efficiency and initiative in the service). The aim behind the move is not victimization of the person being retired in such a fashion. The court pointed out that an employees right to be in public employment was not an absolute right but a right to hold public employment in consonance with relevant rules. The very basic fact of the matter is that the relevant rules permit this move. Hence, the state did no wrong in ignoring the principles of natural justice in the favour of rules that they were statutorily bound to follow. The court extensively cited the case of Col J.N. Sinha for this purpose. The court also overruled the case of Chief Security Officer, Eastern Railway and Anr. v. Ajoy Chandra Bagchi, (1975) 2 S. L. R. 660, ["Ajoy Chandra Bagchi"].

The honourable court also pointed out that there did exist a safeguard to protect the retiree so it was in fact only exclusion of the statutory principles that the statute in question specified and not of other principles.

"The safety valve of public interest is the most powerful and the strongest safeguard against any abuse or colourable exercise of power under this Rule. Moreover, when the Court is satisfied that the exercise of power under the rule amounts to a colourable exercise of jurisdiction or is arbitrary or mala fide it can always be struck down."[4]

Additionally, there was always recourse to the court if the case was one of malafide intention or arbitrariness.

Lastly, the court observed that since no civil consequences resulted in the form of stigma, reduction in pension or allusions of misbehaviour, the principles of natural justice had no place in this scenario. For this, the court relied heavily on the Col J.N. Sinha case. It also substantiated its decision by following the cases of N.V. Puttabhattaas well as State of Assam and Anr. etc. v. Basanta Kumar Das, AIR 1973 SC 1252, ["Basanta Kumar Das"]. These cases pointed out that the retiree was suffering no civil consequences of any kind. No charge of inefficiency or incompetency is brought against the retiree. The benefits earned by the government servant in question are still given to him. Since the aim behind such order is only public interest, there is no intention of punishing the government servant in question. The court also cited the case of Tara Singh etc. etc. v. State of Rajasthan and Ors, AIR 1975 SC 1487, ["Tara Singh"]. and Mayenghoan Rahamohan Singh v. The Chief Commissioner (Admn.) Manipur and Ors, AIR 1976 SC 2581, ["Mayenghoan Rahamohan Singh"].

The next important decision is that of Baikuntha Nath Das v. Chief District Medical Officer, AIR 1992 SC 1020, ["Baikuntha Nath Das"]. This case, other than upholding Col J.N. Sinha, also directly upheld ME Reddy. It reaffirmed that since there was no punishment or stigma attached to compulsory retirement, there were no civil consequences for the retiree. Consequently, principles of natural justice could be excluded and courts did not have jurisdiction as appellate courts. However, this did not equate to complete exclusion of judicial scrutiny an order which was malafide, vitiated by lack of evidence or arbitrary could still be overturned.

Additionally, in Union of India v. Dulal Dutt, (1993) 2 SCC 179, ["Dulal Dutt"], the apex court reiterated the principle upheld in Col J.N. Sinha and Baikuntha Nath Das and held that the mere fact of an order not being a speaking order could not be used to hold it to be malafide or arbitrary. However, there is confusion regarding this aspect, as despite the aforementioned cases holding that a speaking order was not a requisite, the Supreme Court held the opposite in State Bank of India v. Kashinath Kher, AIR 1996 SC SC 1328, ["Kashinath Kher"]. and Sukhdeo v. Commr., Amravati Division, Amravati, (1996) 3 SCC 103, ["Sukhdeo"].

More recent cases have time and again reiterated this position as the original position reiterated in Col J.N. Sinha and followed through in M.E. Reddy has remained the law of the land.

In the case of Bishwanath Prasad Singh v. State of Bihar, (2001) SCC (L&S) 403, ["Bishwanath Singh"], the Supreme Court justified the purpose of compulsory retirement and the resultant exclusion of the principles of natural justice. It pointed out that the very object of compulsory retirement was to weed out inefficient government servants who were impeding the governments work by their inefficiency. However, by compulsorily retiring them, the government did so in a way that no rights that had already accrued to them were disturbed. No civil consequences came about as a reason. The court summed it up so."

"It was held that the country needs speed, sensitivity, probity, non-irritative public relations and enthusiastic creativity which can be achieved by eliminating the deadwood, the paper-logged and callous."[5]

The Delhi High Court in Leela Sharma v. Govt of NCT, (2010) 170 DLT 170, ["Leela Sharma"] also declared that the governments right to retire an employee is absolute as long as it is a bona fide decision. It pointed out that the practice had come with the object of making government services more efficient. It also upheld the decision in M.E. Reddy regarding uncommunicated adverse remarks. The court held that compulsory retirement was a means of maintaining a balance between the interests of an individual government servant as well as public interest."

"The rule of compulsory retirement has been held to hold the balance between the rights of the individual Government servant and the interest of the public. The rule is intended to enable the Government to energise its machinery and to make it efficient by compulsorily retiring those who, in its opinion, should not be there in public interest."[6]

It is seen that the position in M.E. Reddy has been consistently followed over the years. This is in keeping with development of natural law jurisprudence in related fields. It also recognizes that while the government may have a higher burden than a private party, it is also an employer and thus retains the right to remove employees who have become inefficient.

[1] SP Sathe, ADMINISTRATIVE LAW, 180, (6th edn., 1998).

[2] Para 11, State of Orissa v. Binapani Dei, AIR 1967 SC 1269.

[3] Para 8, Union of India v. Col J.N. Sinha and Anr., AIR 1971 SC 40.

[4] Para 12, Chief Security Officer, Eastern Railway and Anr. v. Ajoy Chandra Bagchi, (1975) 2 S. L. R. 660.

[5] Para 12, Bishwanath Prasad Singh v. State of Bihar, (2001)SCC(L&S)403.

[6] Para 11, Leela Sharma v. Govt of NCT, (2010) 170 DLT 170.

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