JUDGMENT
G.S. Singhvi, J.
1. This appeal under Clause x of the Letters Patent is directed against order dated 27.1.1999 of the learned Single Judge vide which he dismissed the writ petition filed by the appellant for quashing the order of his premature retirement.
2. The appellant joined service in the erstwhile State of Punjab as Veterinary Assistant on 3.5.1965. After re-organisation of the State in 1966, his services were allocated to the newly created State of Haryana. The, post held by him was upgraded and re-designated as veterinary Surgeon w.e.f. 1.2.1978. He was promoted to Haryana Veterinary Service Class-II (senior Scale) on ad hoc basis w.e.f. 1.5.1990 in the pay scale of Rs. 2375-3600. By an order dated 23.5.1994, his pay was fixed in the Selection Grade i.e. Rs. 4100-5300 w.e.f. 1.4.1992.
3. While he was posted as Sub Divisional Officer (Animal Husbandry) at Nuh, F.I.R. No. 10 dated 3.1.1994 was registered against the appellant at Police Station, Nuh under Sections 7/13 and 49 of the Prevention of Corruption Act, 1988 (for short, the 1988 Act) on the allegation that he had demanded illegal gratification of Rs. 900/- from one Niyaz Mohammad for releasing his salary. He was arrested by the police on 3.1.1994, but was released on bail by Judicial Magistrate, 1st Class, Nuh vide his order dated 4.1.1994. The application filed by the State for cancellation of bail was disposed of by Special Judge, Gurgaon vide his order dated 6.6.1994. The learned Special Judge observed that the Judicial Magistrate, 1st Class did not have the jurisdiction to entertain the bail application of the appellant, but, at the same time, he held that no useful purpose would be served by taking the appellant in custody and then releasing him on bail. On that premise, he exercised the power under Section 438 of the Code of Civil Procedure, 1973 and directed that in the event of arrest, the appellant be released on bail to the satisfaction of the investigating officer/arresting officer.
4. On account of the registration of the criminal case, the appellant was placed under suspension vide order dated 6.1.1994. After one year, one month and fifteen days, he was reinstated vide order dated 21.2.1995/6.3.1995. By another order of the same date, the State Government prematurely retired him from service by invoking Rule 5.32-A (c) of the Punjab Civil Services Rules, Volume-II read with Rule 3.26(d) of the Punjab Civil Services Rules, Volume-I, Part-1, as applicable to the employees of the State of Haryana.
5. The appellant challenged his premature retirement by filing a writ petition under Article 226 of the Constitution of India which was registered as C.W.P. No. 4008 of 1995. He pleaded that the action of the government was tainted by arbitrariness, violation of the rules of natural justice and non-application of mind. He averred that his service record did not contain any adverse entry and no material was available before the State Government for forming an opinion that he had outlived his utility or had become a dead-wood or otherwise unfit for further retention in public service.
6. In their written statement, the respondents pleaded that premature retirement of the appellant as not punitive in nature and, therefore, it was not necessary to comply with the rules of natural justice. They further pleaded that decision to retire the appellant was taken by the competent authority in accordance with the relevant service rules.
7. During the pendency of the writ petition, the appellant was tried in the Court of Special Judge, Gurgaon, who acquitted him vide judgment dated 14.9.1996. He held that the complaint made by Niyaz Mohammad against the appellant was motivated because the latter had initiated action against him on the charge of remaining absent from duty. The learned Special Judge further held that there was no independent corrobora-tion of the allegation made by Niyaz Mohammad and the prosecution failed to establish the guilt of the accused. A copy of the judgment of Special Judge, Gurgaon was placed by the appellant on the record of the writ petition along with C.M. No. 21202 of 1996. He also placed on record copy of order dated 8.8.1997 passed by Financial Commissioner and Secretary to Government. Haryana, Animal Husbandry Department vide which the period of suspension was treated as duty period for all intents and purposes and he was held entitled to full pay and allowances for that period.
8. The learned Single Judge dismissed the writ petition by observing that the service of the appellant had been terminated after considering his over-all performance and that in exercise of jurisdiction under Article 226 of the Constitution of India, the High Court cannot sit in appeal over the decision of the competent authority. The learned Single Judge further held that order of compulsory retirement is not a punishment and there was no valid ground to interfere with order dated 21.2.1995/6.3.1995.
9. Shri W.R. Dua assailed the order of the Single Judge by arguing that the reasons assigned by him for upholding the premature retirement of the appellant are legally untenable. He pointed out that the solitary reason which prompted the State Government to retire the appellant was the registration of criminal case under the 1988 Act and argued that once he was acquitted by Special Judge, Gurgaon, the foundational fact constituting the basis of the government’s decision would be deemed to have become nonexistent and the learned Single Judge committed a serious error by approving the action taken by the State Government in exercise of power vested in it under Rule 5.32A(c) of the Punjab Civil Services Rules, Volume-II read with Rule 3.26(d) of the Punjab Civil Services Rules, Volume-I, Part-I, Shri Dua emphasized that the service record of the appellant did not contain any adverse factor which could justify formation of an opinion that he had outlived his utility for public service and this aspect was altogether ignored by the learned Single Judge while observing that decision to prematurely retire him was taken by the competent authority after considering his over-all performance. The learned counsel then argued that the appellant had earned 70% good reports in 10 years preceding his premature retirement and, therefore, the State Government had no justification to invoke Rule 5.32A(c) of the Punjab Civil Services Rules, Volume-11 read with Rule 3.26 (d) of the Punjab Civil Services Rules, Volume-I, Part-I.
10. Shri Jaswant Singh, Senior Deputy Advocate General, Haryana fairly stated that the Annual Confidential Reports (for short, the ACRs) of the appellant do not contain any adverse remark. He also conceded that in the ACRs of ten years preceding his premature retirement, the appellant was rated as good officer and that in the proposal prepared by Director. Animal Husbandry, Haryana on 19.10.1993 for consideration of the appellant’s case for extension in service beyond 55 years, his all ten ACRs were shown as good. In reply to the Court’s query, Shri Jaswant Singh stated that the only reason which prompted the Screening Committee to recommend the premature retirement of the appellant was the registration of criminal case on the complaint made by Niyaz Mo-hammad and that no other material was available before the Committee which could justify formation of an opinion that the appellant had become dead-wood or that his retention in service was not in public interest.
11. We have given serious thought to the respective arguments and have gone through the record of the appeal and the files produced by the learned Senior Deputy Advocate General.
12. Chopping of the dead wood and retrention in service only those employees, who are efficient and honest is the primary object underlying the statutory provisions and executive instructions which enable the competent authorities to retire the employees before attaining the age of superannuation. The Courts have generally upheld the government’s right to prematurely retire an employee and also recognised the fact that the scope of judicial review in such matters is extremely limited – Shyamlal v. State of Ut-tar Pradesh A.I.R. 1954 S.C. 369; Union of India v. Col. J.N. Sinha, A.I.R. 1971 S.C. 40; M.E. Reddy v. Union of India, A.I.R. 1980 S.C. 563; Baikuntha Nath Das v. Chief District Medical Officer, Baripada, 1992(2) S.C.C. 299: Bishwanath Prasad Singh v. State of Bihar, 2001(2) S.C.C. 305; State of Gujarat v. Umedhai M. Patel, A.I.R. 2001 S.C. 1109 and State of U.P. v. Vijay Kumar jain,1 2002(3) S.C.C. 641.
13. In Baikuntha Nath Das v. Chief District Medical Officer, Baripada (supra) the Supreme Court referred to various judicial precedents on the subject of compulsory retirement and culled out the following propositions;-
(i) An order of compulsory retirement is not a punishment. It implies no stigma nor any suggestion of misbehaviour.
(ii) The order 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.
(iii) Principles of natural justice has no place in the context of an order of compulsory retirement. This does not mean that judicial scrutiny is excluded altogether. While the High Court or this 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 arbitrary in the sense that no reasonable person would from the requisite opinion on the given material in short; if it is found to be perverse order.
(iv) The Government (or the Review Committee as the case may be shall have to consider the entire record or 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 considered would naturally include the entries in the confidential records/character rolls both favourable and adverse. If government servant is promoted to a higher post notwithstanding the adverse remarks, such remarks lose their sting. More so, if the promotion is based upon merit (selection) and not upon seniority.
(v) An order of compulsory retirement is not liable to be quashed by a Court merely on the showing that while passing it uncommunicated adverse remarks were also taken into consideration. That circumstance by itself cannot be a basis for interference.”
14. In State of Gujarat v. Umedhbai M. Patel (supra), a two Judges Bench of the Supreme Court reviewed the case law on the subject and laid down the following principles:-
(1) Whenever the services of a public servant are no longer useful to the general administration, he can be compulsorily retired for the sake of public interest.
(2) Ordinarily, the order of compulsory retirement is not to be treated as a punishment coming under Article 311 of the Constitution.
(3) For better administration, it is necessary to chop off dead wood, but the order of compulsory retirement can be passed after having due regard to the entire service record of the officer.
(4) Any adverse entries made in the confidential record shall be taken note of and be given due weight in passing such order.
(5) Even uncommunicated entries in the confidential record can also be taken into consideration.
(6) The order of compulsory retirement shall not be passed as a short cut to avoid departmental enquiry when such course is more desirable.
(7) If the officer was given a promotion despite adverse entries made in the confidential record that is a fact in favour of the officer.
(8) Compulsory retirement shall not be imposed as a punitive measure.”
15. In State of U.P. v. Vijay Kumar Jain (supra), the Supreme Court considered the ambit and scope of the employer’s right to retire an employee and observed as under;-
“If the conduct of a government employee becomes unbecoming to the public interest or obstructs the efficiency in public services, the Government has under FR 56(c) read with Expln (2) an absolute right to compulsorily retire such an employee in public interest. The Government’s right to compulsorily retire an employee is a method to ensure efficiency in public service and while doing so the Government is entitled under Fundamental Rule 56 to take into account the entire service record, character roll or confidential report with emphasis on the later entries in the character roll of an employee. In fact, entire service record, character roll or confidential report furnishes the materials to find out whether a government servant has outlived his utility in service. It is on consideration of totality of the materials with emphasis on the later entries in the character roll that the Government is expected to form its opinion whether an employee is to be compulsorily retired or not.”
16. In Bishwanth Prasad Singh v. State of Bihar (supra) a three Judges Bench of the Supreme Court highlighted the distinction between compulsory retirement by way of punishment and compulsory retirement in public interest in the following words:-
“Compulsory retirement in service jurisprudence has two meanings. Under the various disciplinary rules, compulsory retirement is one of the penalties inflicted on a delinquent government servant consequent upon a finding of guilt recorded in disciplinary proceedings. Such penalty involved stigma and cannot be inflicted expect by following procedure prescribed by the relevant rules or consistently with the principles of natural justice if the field for inflicting such penalty be not occupied by any rules. Such compulsory retirement in the case of a government servant must also withstand the scrutiny of Article 311 of the Constitution. Then there are service rules, such as Fundamental Rule 56(j) of the Fundamental Rules, which confer on the Government or the appropriate authority, an absolute (but not arbitrary) right to retire a government servant on his attaining a particular age or on his completing a certain number of years of service on formation of an opinion that in public interest it was necessary to compulsorily retire him. In that case, it is neither a punishment nor a penalty with loss of retiral benefits, Compulsory retirement in public interest under service rules is like premature retirement. It does not cast any stigma. The government servant shall be entitled to the pension actually earned and other retiral benefits. So long as the opinion forming basis of the order for compulsory retirement in public interest is formed bona fide, the opinion cannot be ordinarily interfered with by a judicial forum. Such an order may be subjected to judicial review on very limited grounds such as the order being mala fide, 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 to weed out the worthless who have lost their utility for the administration. ” (Underlining is mine)
17. In Daya Nand v. State of Haryana, 1995(1) S.L.R. 57, a Full Bench of this Court interpreted Rule 5.32-A(C) of the Punjab Civil Services Rules, Volume II and Rule 3.26(d) of the Punjab Civil Services Rules, Volume I, Part I, as applicable to the State of Haryana and which have been invoked by the State Government to prematurely retire the employees and held as under:-
“The approach of the Division Bench in K.K. Vaid’s case that the instructions of 1983 aforesaid were against the letter and spirit of Rule 3.26 (a) as mentioned in para 9 of the judgment cannot be accepted as laying down good law. The concept of weeding out dead wood’s as embedded in Rule 3.26(a) or (d), is inherent but that is not the only ground available therein to pass order. The same is to be read alongwith the other grounds as mentioned in J.N. Sinha’s case and Baikunth Naih’s case i.e., the object of these rules is also to maintain high standard of efficiency and initiative in the State Services. There should be spirit of dedication and dynamism in the working of the State Services. Officers who are lax corrupt, inefficient or not upto the mark and have outlived utility should be weeded out. Thus, the view expressed that Rule 3.26 will be attracted only to chop off dead wood is not correct/There may be varied reasons to be taken into consideration, that would constitute public interest that an order as required under Rule 3.26(d) can be passed as briefly noticed above.
18. The Full Bench over-ruled the judgment of the Division Bench in K.K. Vaid v. State of Haryana,9 1990(1) R.S.J. 193 which had struck down the instructions issued by the Government of Haryana challenging the retirement of those having less than 70% or above good record in the last 10 years by recording the following observations;-
“The approach of the Division Bench in K.K. Void’s case that the instructions of 1983 aforesaid were against the letter and spirit of Rule 3.26(a) as mentioned in para 9 of the judgment, cannot be accepted as lying down good law. The concept of weeding out dead wood as embedded in Rule 3.26(a) or (d), is inherent but that is not the only ground available therein to pass order. The same is to be read alongwith the other grounds as mentioned in J.N. Sinha’s case and Baikunth Nath’s case i.e., the object of these rules is also to maintain high standard of efficiency and initiative in the State Service. There should be spirit of dedication and dynamism in the working of the State Services. Officers who are lax, corrupt, inefficient or not upto the mark and have outlived utility should be weeded out. Thus the view expressed that Rule 3.26 will be attracted only to chop off dead wood is not correct. There may be varied reasons to be taken into consideration, that would constitute public interest that an order as required under Rule 3.26(d) can be passed as briefly noticed above.
xx xx xx xx xx xx xx xx xx
Thus we conclude that the decision in K.K. Void’s case does not lay down good law and the instructions, issued by the State on August 13, 1983 that the extension beyond the age of 55 years be granted to the officials/officers with the condition that more than 70% of the last ten years confidential reports are good are not contrary to Rule 3.26 (a) or (d) of the Rules, as discussed above.
19. In State of Gujarat v. Surya Kant (Chunila) Shah, (1999)1 S.C.C. 529, the Supreme Court upheld the order of Gujarat High Court quashing the order of premature retirement and observed as under: –
“Public interest in relation to public administration means that only honest and efficient persons are to be retained in service while services of dishonest or corrupt or those who are almost dead wood, are to be dispensed with.
In order to find out whether any government servant has outlived his utility and is to be compulsorily retired in public interest for maintaining an efficient administration, an objective view of overall performance of that government servant has to be taken.
Performance of a government servant is reflected in annual character roll entries and, therefore, one of the methods of discerning efficiency, honesty or integrity of a government servant is to look to his character roll entries for the whole tenure from inception to the date on which decision for his compulsory retirement is taken. If character roll is studded with adverse entries or overall categorization of employee is poor and there is material also to cast doubts upon his integrity, such government servant cannot be said to be efficient. Efficiency is a bundle of sticks of personal assets, thickest of which is the stick of integrity. If this is missing, while bundle would disperse. A government servant has, therefore, to keep his belt tight.
Purpose of adverse entries is primarily to forewarn a government servant to mend his ways and to improve his performance. Adverse entries are required to be communicated so that the government servant to whom adverse entry is given may have either opportunity to explain his conduct so as to show that adverse entry is wholly uncalled for, or to silently brood over the matter and on being convinced that his previous conduct justified such an entry, to improve his performance.
xx xx xx xx xx xx xx xx
There being no material before the Review Committee, in as much as, there were no adverse remarks in the character roll entries, the integrity was not doubted at any time, the character roll entries subsequent to respondent’s promotion were not available, it could not come to a conclusion that the respondent was a man of doubtful integrity nor could have anyone else come to the conclusion that the respondent was a fit person to be retired compulsorily. The order in the circumstances of the case, was punitive having been passed for a collateral purpose of the respondent’s immediate removal rather than in public interest.”
20. In M.S. Bindra v. Union of India (1998)7 S.C.C. 310, the Supreme Court quashed the order of premature retirement and held as under;-
“Want of any material is almost equivalent to the next situation that from the available materials no reasonable man would reach such a conclusion. While evaluating the materials the authority should not altogether ignore the reputation in which the officer was held till recently. The maxim nemo first repente turpissimus (no one becomes dishonest all of a sudden) is not unexceptional but still it is a salutary guideline to judge human conduct, particularly in the field of administrative law. The authorities should not keep the eyes totally closed towards the overall estimation in which the delinquent officer was held in the recent past by those who were supervising him earlier. To infer an officer as one of doubtful integrity it is not enough that doubt fringes on a mere hunch. That doubt should be of such a nature as would reasonably and consciously be entertainable by a reasonable man on the given material. Mere possibility is hardly sufficient to assume that it would have happened. There must be preponderance of probability for the reasonable man to entertain doubt regarding that possibility. Only then there is justification to ram an officer with the label doubtful integrity.”
21. In Ram Ekbal Sharma v. State of Bihar and Anr., 1990(3) S.C.C. 504, the Supreme Court held that in an appropriate case, the Court lift the veil to find out the real cause for the decision to prematurely retire an employee. The relevant extracts of that judgment read as under;-
“On a consideration of the above decisions the legal position that now emerges is that even though the order of compulsory retirement is couched in innocuous language without making any imputations against the government servant who is directed to be compulsorily retired from service, the Court, if challenged, in appropriate cases can lift the veil to find out whether the order is based on any misconduct of the government servant concerned or the order has been made bonafide and not without any oblique or extraneous purposes. Mere form of the order in such cases cannot deter the court from delving into the basis of the order if the order in question is challenged by the concerned government servant as has been held by this Court in Annop Jaiswal case 1984(2) S.C.C. 369.”
22. In C.W.P. No. 2091 of 1996 I.C. Jain v. State of Haryana and Ors, decided on 22.5.1998 a Division Bench of this Court applied the ratio of the aforementioned decisions for quashing the retirement of the petitioner. That decision has been approved by the Supreme Court in Punjab and Haryana High Court v. I.C. Jain, J.T. 1999(3) S.C. 266. While doing so, their Lordships of the Supreme Court held that the retirement of the respondent (writ petitioner) which was founded on the charges of misconduct and which constituted the subject matter of regular enquiry was punitive in character.
23. In the light of the propositions laid down in the cases referred to hereinabove, it is to be seen whether the decision of the State Government to prematurely retire the appellant is legally correct and the learned Single Judge did not commit any error by dismissing the writ petition.
24. A recapitulation of the facts borne out from the pleadings of the parties and the files produced by the learned Senior Deputy Advocate General shows that in the ten years preceding his retirement from service, the appellant had not earned any adverse remarks in his ACRs. Rather, the grading given by the competent authorities in all these years was good. It is also not the case of the respondent that during these year any departmental enquiry was held against the appellant for major misconduct and he was punished. The file of the Screening Committee produced by Shri Jaswant Singh shows that the sole reason for retiring the appellant before attaining the age of superannuation was the registration of criminal case which as mentioned above, ended in his acquittal on 4.9.1996. The observation made by the learned Special Judge that the complaint made by Niyaz Mohammad was motivated goes a long way to show that the appellant was made a victim of conspiracy hatched by an employee against whom the appellant had initiated action on the charge of remaining absent from duty. Notwithstanding this, the learned Single Judge upheld the premature retirement of the appellant by making the stock observation that the competent authority had taken the decision after considering his entire service record. In our opinion, the learned Single Judge committed a serious legal error by upholding the premature retirement of the appellant ignoring the fact that his acquittal by the Special Judge had the effect of removing the substratum/foundation of the decision taken by the State Government.
25. We are further of the view that the retirement of the appellant was totally arbitrary and unjustified in as much as the government had acted hastily by showing him the door without taking into consideration the fact that in his entire service career, he had not earned any adverse report and the grading given in the last ten year’s was good.
26. In the result, the appeal is allowed. The order of the learned Single Judge as also order dated 21.2.1995/6.3.1995 passed by the State Government Civil Services Rules, Volume-II read with Rule 3.26(d) of the Punjab Civil Services Rules, Volume-I, Part-I are set aside.
27. At this stage, the learned Senior Deputy Advocate General gave out that the appellant had reached the age of superannuation in 1997. This has not been controverted by the learned counsel for the appellant. Hence, we direct the respondents to fix the ap pellant’s pay in the revised scale made applicable w.e.f. 1.1.1996 and then pay the ar rears to him for the period between the date he was relieved from service and the date of his superannuation. While doing so, the competent authority may deduct the element of pension already paid to him. The retiral benefits should be recalculated keeping in view the revised fixation of his pay and the arrears to him within a period of four months from the date of submission of certified copy of this order.