COMPULSORY RETIREMENT AS A

MEASURE OF PUNISHMENT
An employee may be retired compulsorily as a measure of punishment. The
authorities, who propose to impose the punishment of compulsory
retirement, shall satisfy themselves, after verifying the service Book of the
employee concerned, that he has put in not less than 10 years of qualifying
service, to make him eligible for pension. Any order passed without
ascertaining the fact whether he is entitled to draw pension, will be bad in
law.

Every employee of the Board, who is compulsorily retired, shall be entitled

to submit, within a period of one month from the date on which the order on
compulsory retirement was communicated to him, a petition of the Board for
review of the orders passed dated .

The Government has no say regarding the review as well as appeal in respect
of the employees of the T.N.E.B. compulsorily retired. The Board itself is
competent to review and examine the appeals of compulsorily retired
employees.

An employee, who has been placed under suspension pending enquiry,

should not be dismissed or removed or compulsorily retired from service
retrospectively from the date on which he was placed under suspension. The
orders in such a case should take effect only from the date of issue of orders
thereof.

No weightage in service shall be admissible to persons compulsorily retired.

REINSTATEMENT OF COMPULSORILY RETIRED

EMPLOYEES
If an employee who was compulsorily retired is reinstated on
appeal, the period between the date of compulsory
retirement and the date of reinstatement will be treated as
duty period and such an employee is entitled to pay and
allowances, less the pension already received.

Even though the period between the dates of compulsory

retirement and reinstatement is treated as duty, deputation
allowance and additional charge allowance need not be
given to an employee, who was on deputation or holding
additional charge on the date of compulsory retirement.

If an employee under suspension continues under

suspension after the date of superannuation in view of the
pending Disciplinary proceedings against him and is fully
exonerated from the charges against him later, he shall be
paid Dearness Allowance as admissible on superannuation
and H.R.A. and C.C.A. as admissible prior to the date of
superannuation for the period from the date of
superannuation till the date on which final orders on the
Disciplinary proceedings were issued.

Whenever a Board employee is compulsorily retired and is

ordered to be reinstated in service consequent on the
examination of the review petition to the Board or on the

basis of orders of a Court, a supernumerary post shall be

created, if the post has already been filled up from the date
of his compulsory retirement, till the date of his rejoining
duty or superannuation.

MATTERS RELATED TO EARNED LEAVE G.P.F AND

D.C.R.G. OF EMPLOYEES COMPULSORILY RETIRED
The employees of the Board, who are retired compulsorily from service as a
measure of punishment, are permitted to en cash the Earned leave at their
credit on the date of such compulsory retirement, subject to a maximum of
240 days.

12. At the time of final retirement of compulsorily retired and reinstated

employee, the Earned leave at credit minus the surrender already allowed on
the date of compulsory retirement can be allowed.

A reinstated person may be required to repay any amount paid to him from
G.P.F. with interest thereon and the amount so repaid shall be credited to his
account in the G.P.F.

D.C.R.G. already paid shall be adjusted against the pay and allowances
admissible to the extent possible. The balance D.C.R.G. may be allowed to
be retained by the employee on payment of simple interest as prescribed for
G.P.F. for the corresponding period. The amount to be retained will be
adjusted against the final D.C.R.G. becoming due on final retirement and the
balance, if any, paid to him.

 The suspension period of employees who have been dismissed or removed

from service and the punishment subsequently modified as one of
compulsory retirement and the suspension period of any employee who has
been compulsorily retired as a measure of punishment shall be regularised as
per service Regulation 57-A/11 of T.N.E.B. Service Regulations.

Compulsory retirement neither punitive nor stigmatic

New Delhi: The Supreme Court said order of compulsory retirement is neither
punitive nor stigmatic and has to be based on subjective satisfaction of government
authority that it is in public interest.
"The order of compulsory retirement is neither punitive nor stigmatic. It is
based on subjective satisfaction of the employer and a very limited scope of
judicial review is available in such cases.
"Interference is permissible only on the ground of non application of mind,
malafide, perverse, or arbitrary or if there is non-compliance of statutory
duty by the statutory authority," a bench of justices KS Radhakrishnan and
AK Sikri said.
The bench made the observation while upholding an appeal filed by Rajasthan
State Road Transport Corporation against the state high court order setting aside
the compulsory retirement given to one of its drivers.
The corporation had introduced provisions of compulsory and voluntary retirement
for its employees and a screening Committee was constituted in 2002 to look into
the conduct and continuance of four employees who had attained the age of 50
years or had completed 25 years of service.
The driver was given compulsory retirement considering his adverse career record
from 1978-90.
He had moved Rajasthan High Court which set aside the compulsory retirement
saying adverse service record pertaining to the period 1978-90 being old and stale
could not be taken into consideration at all for retiring him.

The apex court bench, however, said entire service record is relevant for deciding
as to whether the government servant needs to be eased out prematurely.
"Power to retire compulsorily, the government servant in terms of service rule is
absolute, provided the authority concerned forms a bonafide opinion that
compulsory retirement is in public interest.
"What is to be examined is the `overall performance` on the basis of `entire service
record` to come to the conclusion as to whether the concerned employee has
become a deadwood and it is public interest to retire him compulsorily," the bench
said citing various judgements.

When penalty of dismissal/removal/compulsory retirement is set

aside for non-observance of procedure prescribed under Article 311
of the Constitution.
If an order of dismissal, removal or compulsory retirement from service is held by
a court of law or by the appellate/reviewing authority to have been made without
following the procedure prescribed under Article 311 of the Constitution, and no
further inquiry is proposed to be held, action to regulate his pay and allowances for
the period of absence from duty and to specify whether the said period shall be
treated as duty for any specific purpose will be taken in accordance with FR 54 or
FR 54-A, as the case may be .
In such cases, if it is decided to hold a further inquiry and thus deem the
Government servant to have been placed under suspension from the date of
dismissal/removal/compulsory retirement under Rule 10(3) or (4) of the CCA
Rules, the Government servant will be paid the subsistence allowance from the
date he is deemed to have been placed under suspension under FR 53.

Fundamental rule 54(1)

(1) When a Government servant who has been dismissed, removed or
compulsorily retired is re-instated as a result of appeal review or would have been
so re-instated 9 [but for his retirement on superannuation, while under suspension
or not], the authority competent to order re-instatement shall consider and make a
specific order:(a) regarding the pay and allowances to be paid to the Goverment servant for the
period of his absence from duty including the period of suspension preceeding his
dismissal, removal or compulsory retirement, as the case may be, and
(b) whether or not the said period shall be treated as a period spent on duty.
(2) Where the authority competent to order re-instatement is of the opinion that the
Government servant who had been dismissed, removed or compulsorily retired has
been fully exonerated, the Government servant shall, subject to the provisions of
sub-rule (6), be paid full pay and allowances to which he would have been entitled,
had he not been dismissed, removed or compulsorily retired or suspended prior to
such dismissal, removal or compulsory retirement, as the case may be: Provided
that where such authority is of opinion that the termination of the proceedings
instituted against the Government servant had been delayed due to reasons directly
attributable to the Government servant, it may, after giving him an opportunity to
make his representations 10 [within 60 days from the date on which the
communication in this regard is served on him] and after considering the
representation, if any submitted by him, direct for reasons to be recorded in
writing, that the Government servant shall, subject to the provisions of sub-rule
(7),be paid for the period of such delay, only such amount 11 [not being the whole]
of such pay and allowances as it may determine.

(3) In a case falling under sub-rule (2), the period of absence from duty including
the period of suspension proceeding dismissal, removal or compulsory retirement,
as the case may be shall be treated as a period spent on duty for all purposes.
(4) In the cases other than those covered by sub-rule (2) including the cases where
the order of dismissal, removal or compulsory retirement from service is set aside
by the Appellate or Reviewing Authority solely on the ground of non-compliance
with the requirements of Clause (2) of Article 311 of the Constitution and no
further enquiry is proposed to be held, the Government servant shall subject to the
provision of sub-rules (6) and (7), be paid such 12 [amount (not being the whole)
of the pay and allowances] to which he would have been entitled had he not been
dismissed, removed or compulsorily retired or suspended prior to such dismissal,
removal or compulsory retirement, as the case may be, as the competent authority
may determine, after giving notice to the Government servant of the quantum
proposed and after considering the representation, if any, submitted by him in that
connection within such period 13 [which in no case shall exceed sixty days from
the date on which the notice has been served] as may be specified in the notice:

Fundamental Rule 54 -A
Where the dismissal, removal or compulsory retirement of a Government
servant is set aside by a Court of Law and such Government servant is reinstated without holding any further enquiry, the period of absence from
duty shall be regularised and the Government servant shall be paid pay and
allowance in accordance with the provisions of sub-rule (2) or (3) subject to
the directions, if any, of the court.
(i) Where the dismissal, removal or compulsory retirement of a Government
servant is set aside by the Court solely on the ground of non-compliance with the
requirements of the clause (2) of Article 311 of the Constitution, and where he is
not exonerated on merits, the Government servant shall subject to the provision of
sub-rule (7) of rule 54, be paid such 17 [amount (not being the whole) of the pay
and allowances to which he would have been entitled had he not been dismissed,
removed or compulsorily retired or suspended prior to such dismissal, removal, or

compulsory retirement, as the case may be, as the competent authority may
determine, after giving notice to the Government servant of the quantum proposed
and after considering the representation, if any, submitted by him in that
connection, within such period, 18 [which in no case shall exceed sixty days from
the date on which the notice has been served as may be specified in the notice:
Provided that any payment under this sub-rule to a Government servant other than
a Government servant who is governed by the provisions of Payment of Wages
Act, 1936 (4 of 1936) shall be restricted to a period of three years immediately
preceding the date on which the judgement of the court was passed or the date of
retirement on superannuation of such Government servant, as the case may be.
(ii) The period intervening between the date of dismissal, removal or compulsory
retirement including the period of suspension preceding such dismissal, removal or
compulsory retirement, as the case may be and the date of judgement of the court
shall be regularised in accordance with the provisions contained in sub-rule (5) of
Rule 54.]

If the dismissal, removal, or compulsory retirement of a Government

servant is set aside by the Court on the merits of the case, the period
intervening between the date of dismissal, removal or compulsory retirement
including the period of suspension preceding such dismissal, removal or
compulsory retirement, as the case may be, and the date of re-instatement
shall be treated as duty for all purposes and he shall be paid the full pay and
allowances for the period to which he would have been entitled, had he not
been dismissed, removed or compulsorily retired, as the case may be.
The payment of allowances under sub-rule (2) or sub-rule (3) shall be
subject to all other conditions under which such allowances are admissible.
(5) Any payment made under this rule to a Government servant on his reinstatement shall be subject to adjustment of the amount if any, earned hy
him through an employment during the period between the date of
dismissal, removal or compulsory retirement and the date of re-instatement.
Where the emoluments admissible under this rule are equal to or less than
those earned during the employment elsewhere, nothing shall be paid to the
Government servant.

Case :
In a recently reported decision [Leela Sharma v. Govt of NCT, (2010) 170 DLT 170]
the Delhi High Court examined the concept of 'compulsory retirement' to hold that it was
one of the vital tools for the Government to ensure that inefficient public servants are
discharged and thus the administrative machinery rests its functions upon efficient
workmen.
Approving the concept, the Bench inter alia observed as under;
The concept of compulsory retirement came into force to remove a public
servant whose services are no longer useful to the general administration or in
public interest; if it is felt that for better administration, for augmenting efficiency
it is necessary to chop off the deadwood. The order of compulsory retirement
has to be made having regard to the entire service record of the officer. Even uncommunicated entries in the confidential record can be taken into consideration.
The order of compulsory retirement is not to be treated as a punishment and
carries no stigma. However, it has been held that the order of compulsory
retirement shall not be passed as a shortcut to avoid departmental enquiry when
such course is more desirable. 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. Fundamental Rule 56(j) has been held to confer absolute right
to retire any Government servant on his attaining the age of 55 years if the
authority is of the opinion that it is in the public interest to do so. The Supreme
Court in Bishwanath Prasad Singh Vs. State of Bihar held that the object of such
compulsory retirement is to weed out the worthless who have lost their utility by
their insensitive, unintelligent or dubious conduct impeding the flow and
promoting stagnation. It was held that the country needs speed, sensitivity,
probity, non-irritative public relation and enthusiastic creativity which can
be achieved by eliminating the deadwood, the paper-logged and callous.
It is thus clear that an order of compulsory retirement is an important tool to
keep any organization vibrant and to prevent its clogging and decay by the sheer
weight of long standing employees who have ceased to be the dynamos to
propel the organization further and for achieving its goals. The same enables the
employer to, after the employee has worked for a certain number of years and /

or has attained a certain age but before the age of superannuation, remove him.
It is often found that certain employees after putting in considerable number of
years of service lose their sheen and no longer remain productive. Their
continuance in service is of no use to the organization.
In my opinion the objective of compulsory retirement is laudable. During the
hearing, it was put to the counsel for the petitioner as to whether, considering the
importance of the Schools, is it not desirable to have the concept of compulsory
retirement in Schools. The importance of the Schools cannot be undermined;
they play a vital role in shaping the future/next generation and hence the destiny
of the community and the country. The onus of so shaping and igniting the minds
rests in the hands of teaching faculty of the school. Often it is found and is
human nature that persons who have the requisite qualification and validly join
the noble profession of teaching, either fail to perform or though successful
performers initially, over the years lose the zeal to so shape the destiny of
children they are dealing with. Should the schools be forced to continue such
persons, just to protect the tenure of service of the said persons and that too at
the cost of the future citizens? The answer necessarily has to be in the negative.

Conclusion :
(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 have 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 the 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.
(iv) 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. If a 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.

Thus, the law on the point can be summarised to the effect that an order of
compulsory retirement is not a punishment and it does not imply stigma unless
such order is passed to impose a punishment for a proved misconduct, as
prescribed in the Statutory Rules. The Authority must consider and examine the
over-all effect of the entries of the officer concerned and not an isolated entry, as it
may well be in some cases that in spite of satisfactory performance, the authority
may desire to compulsorily retire an employee in public interest, as in the opinion
of the said Authority, the post has to be manned by a more efficient and dynamic
person and if there is sufficient material on record to show that the employee
rendered himself a liability to the institution, there is no occasion for the Court to
interfere in the exercise of its limited power of judicial review.

Bibliography
Books refferred:
Narinder Kumar: Law relating to government services and
management of discipline proceedings.
A.S. Bhatnagar: guide to departmental problems enquiries,
punishment and appeal.
Electronic resources:
http://legalperspectives.blogspot.in/2010/09/compulsoryretirement-concept.html
http://www.sck.tnerwa.org.in/retirementregulations.html
http://www.mptreasury.org/mpt/public/policyrules/fr/frch9.pdf

Abbreviations:
TNEB - Tamil Nadu Electricity Board
HRA- House Rent Allowance
CCA-Capital Cost Allowance

GPF-General provident fund

DCRG-Death cum Retirement Gratuity

Project report
Service Law:

compulsory

retirement

Submitted To :
Ms. Pooja

Submitted By:
Nishant Sharma

roll no. 199/11

sem: 8th sec: B