Lalitha Devi v. The Deputy Commissioner of (Conciliation),DMS Compound, Teynampet, Chennai

IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 15..07..2009C O R A MThe Honourable Mrs. Justice Prabha SridevanandThe Honourable Mr. Justice C.T. SelvamWrit Appeal Nos.200 to 202 of 2008Lalitha Devi .. Appellant in W.A. No.200 of 2008/PetitionerR.Ellappan.. Appellant in W.A. No.201 of 2008/PetitionerThe Handloom Export Promotion Council Employees' Union, rep. by itsPresident, INTUC Office,No.45, Royapettah High Road,Chennai-14. .. Appellant in W.A. No.202 of 2008/Petitioner versus1.The Deputy Commissioner of (Conciliation),DMS Compound, Teynampet, Chennai-6.2.The Management of Handloom Export Promotion Council, rep. by itsExecutive Director,34, Cathedral Garden Road, Nungambakkam, Chennai-34. .. Respondents in W.As.200&201/2008/Respondents1.Government of Tamil Nadu,Rep. by its Secretary,Labour and Employment Department,Fort St.George, Chennai-9.2.The Deputy Commissioner of (Conciliation),DMS Compound, Teynampet, Chennai-6.3.The Management of Handloom Export Promotion Council, rep. by itsExecutive Director, https://hcservices.ecourts.gov.in/hcservices/ 34, Cathedral Garden Road, Nungambakkam, Chennai-34... Respondents in W.A.202/2008/RespondentsPrayer : Writ Appeals filed under Clause 15 of the LettersPatent against the common order passed by a learned singleJudge of this Court dated 31.1.2008 in W.P. Nos.22138,18603 and 17963 of 2007.W.P.No.22138/07: Writ of Declaration, declaring Rule 39 ofthe Service Rules of the Handloom Export promotion Councilin so far as giving option to the Second Respondent forextension of service beyond 58 years upto 60 years to theemployees even if employees are found medically fit asillegal, arbitrary and violative of Articles 14 to 21 ofthe Constitution of India and consequently to direct theSecond Respondent to continue the petitioner upto 60years.W.P.No.18603/07:Writ of Certiorarified Mandamus, aftercalling for the records pertaining to the order inHepc/VI/Admn/Extn.of service/07 dated 30.4.2007 of theSecond Respondent, quash the same and consequently directthe second respondent to continue the petitioner in Serviceupto 60 years.W.P.No.17963/07: Writ of Mandamus,directing the 1stRespondent to refer the Industrial Dispute relating to ageof retirement of the employees of the third respondent foradjudication by Industrial Tribunal/Labour Court andconsequently to forbear the third respondent until thedispute is adjudicated from retiring its employees at 58years without express permission under section 33(1)(a) ofthe I.D.Act from the Competent Authority.Mr. N.G.R. Prasad for Mr. V. Ajay Khose(for appellants in all the appeals)M. Dhandapani, Spl. Govt. Pleader(for respondent-1 in W.A. Nos.200 & 201/2008 andrespondent-2 in W.A. No.2002/2008)Mr. A.L. Somayaji, Senior Counsel for Mr. M.R. Raghavan(for respondent-2 in W.A. Nos.200 & 201/2008 andrespondent-3 in W.A. No.202/2008) https://hcservices.ecourts.gov.in/hcservices/ J U D G M E N TPrabha Sridevan, J.The Employees' Union and two employees of the Handloom ExportPromotion Council are the appellants herein. The core dispute turnsupon the construction of Rule 39 of the Handloom Export PromotionCouncil, which reads as follows :-"39. Retirement.– Every employee shall normally retireon attaining the age of 58 years. The Committee may,however, extend the period of service of an employee beyondthe age of 58 years by one year at a time upto the age of60, provided he continues to remain medically fit."This will be referred to as the 'Retirement Rule' hereafter.2. The Employees' Union, which is the appellant in W.A. No.202of 2008, filed a writ petition for a mandamus to refer the industrialdispute relating to the age of retirement of the respondent-Councilemployees and to forbear the third respondent until the dispute isadjudicated from retiring its employees on their attaining 58 yearswithout permission under Section 33(1)(a) of the Industrial DisputesAct, 1947. The appellant in W.A. No.200 of 2008, viz. Lalitha Devi,a Superintendent in the respondent-Council, prayed for a declarationto declare the aforesaid Rule 39 as illegal, arbitrary and violativeof Articles 14 and 21 of the Constitution. The appellant in W.A.No.201 of 2008, viz. Ellappan, a Junior Accountant in the respondent-Council, prayed for a certiorarified mandamus to call for and quashthe order passed by the Management of the respondent-Council dated30.4.2007, by which his application for extension of service and tocontinue him in service was rejected. All the three writ petitionswere heard together and dismissed by the learned single Judge with adirection to the Deputy Commissioner of Conciliation to send thefailure report to the State Government under Section 12(4) of theI.D. Act and a further direction to refer the dispute relating to theretirement age within a time stipulated therefor.3. The Service Rules of the Council have been in force from 1993and were amended in the year 2001. On 16.8.2004, the Union resolvedto place certain demands, which included raising of the age ofsuperannuation from 58 to 60 years. The respondent-Council amendedits Service Rules by deleting the provision for extension of periodof service. This was in the year 2007. It is thereafter that thethree writ petitions were filed.4. Learned counsel appearing for the appellants submitted thatthe aforesaid rule gives an uncanalised power to the Committee to https://hcservices.ecourts.gov.in/hcservices/ grant orders of extension or decline to grant orders of extensioncapriciously without there being any guidelines. If the rule stoodas it is, the Management may pick and choose arbitrarily, employeesfor favouring with orders of extension. Learned counsel submittedthat it cannot be denied that the provision for extension gave aright to the appellants, even though it may be inchoate and allrights cannot be taken away without complying with the provisions ofthe I.D. Act and therefore, the rule must be read with the provisionfor extension, ignoring the attempt to delete it and if it is soapplied, then all the employees, including the two writ appellantsherein, will be entitled to extension. Learned counsel submittedthat in all other similar organizations, the retirement age is 60 andthere is nothing why the Council should have a different policy.Learned counsel submitted that the only criterion to decide whetherto extend or not to grant extension is the health condition of theemploye and if the employee concerned is of robust health, then theemployer is bound to grant extension. Learned counsel relied mainlyon A.I.R. 1981 S.C. 1829 [Air India vs. Nergesh Meerza], where a rulerelating to extension beyond the age of superannuation was quashed asgiving the authority uncanalized power. 5. Learned senior counsel appearing for the respondent-Councilsubmitted that in the present case, the rejection order was issued tothe employees concerned before applying the rule without deletion.Learned senior counsel relied on A.I.R. 1961 S.C. 1346 [KailashChandra vs. Union of India] to support the case of the Council. 6. The entire case depends on how we read the aforesaid rule.On a reading of the rule, it is clear that every employee shallnormally retire on attaining the age of 58 years. Therefore, the ageof 58 is the age of retirement. 60 is an exception. With thisposition, there cannot be any quarrel. The appellants seem to thinkthat their right to continue upto 60 years was taken away by therespondent-Council. On the contrary, the right to continue past 58years should be granted by the respondent-Council. Therefore, thismuch is clear and that is,the age of retirement is 58 years. This isthe normal rule. 7. The rule also indicates how the extension is to be ordered.It shows that there can be extension of one year at a time upto theage of 60. That means, each employee may be granted an extensiononce at 58 years, to continue upto 59 and again at 59, to continueupto 60 years. The Committee will decide whether to continue aparticular employee beyond 58 years. This is where they exercisetheir discretion. But the discretion is further qualified by thefact that even though they have the power to extend the service of aperson beyond 58 years, they shall not do so if the employeeconcerned is not medically fit or if the employee does not continue https://hcservices.ecourts.gov.in/hcservices/ to remain medically fit. Therefore, this means that all those whoare not medically fit will not be granted extension; it also meansthat all those who are medically fit need not necessarily be grantedextension. If the rule intended to give extension to all employeesbeyond 58 years of age, the words "normally retire" at the age of 58becomes almost meaningless. The rule could have been easily framedas "the Committee shall extend the period of service of an employeewho is medically fit, beyond the age of 58 years by one year at atime upto the age of 60". But here, the right to extend falls withinan area of discretion which is hemmed by the fact that thatdiscretion shall not be exercised in the case of a person who ismedically unfit. Now the question is, does this rule give anuncanalised power to the Committee?8. We will look at the decisions cited before us. In A.I.R.1981 S.C. 1829 (supra), Rule 46 was the offending rule and itprovided that the employees of the Council would retire uponattaining the age of 58 years. But notwithstanding the same, theservice of an employee may, at the option of the Managing Director,but on the employee being found medically fit, be extended. TheSupreme Court quashed this rule on the ground that the ManagingDirector has been given an uncontrolled, unguided and absolutediscretion to extend or not to extend the period of retirementafter 35 years and that the words "at the option" may give room for discrimination and that the retirement of an Air Hostesswould be entirely at the mercy and sweet will of the ManagingDirector.9. In A.I.R. 1961 S.C. 1346 (supra), the offending rule readthus :-"A ministerial servant who is not governed by sub-clause (b) may be required to retire at the age of 55 yearsbut should ordinarily be retained in service if hecontinues to be efficient up to the age of 60 years. Hemust not be retained after that age except in very specialcircumstances which must be recorded in writing and withthe sanction of the competent authority." We find that this rule is actually more tilted towards the employeebecause it says that the servant may be required to retire at 55, butshould ordinarily be retained in service till 60. In spite of thisterminology, the Supreme Court held that "a ministerial servantfalling within this clause may be compulsorily retired on attainingthe age of 55, but when the servant is between the age of 55 and 60,the appropriate authority has the option to continue the employee'sservice subject to the condition that his service continues to beefficient. But the authority is not bound to retain him even if the https://hcservices.ecourts.gov.in/hcservices/ servant continues to be efficient". The Supreme Court held that theright conferred by the first part of the rule which speaks of the ageof the retirement is not in any way limited or cut down by the secondpart of the rule. In the Retirement Rule on hand, the provisionrelating to retirement is a sentence by itself. Thereafter, there isthe provision for the option. In Kailash Chandra's case, the SupremeCourt has also referred to a possible construction of a sentence ifthe intention had been otherwise. Then the Supreme Court noted thatthe language should have been "may be required to retire at the ageof 55 years provided, however, that he shall be retained in serviceif he continues to be efficient upto the age of 60". If the sentencehad been constructed in that way, the Supreme Court was of theopinion that the right conferred on the authority to retire a servantat 55 would have been truncated. In the above sentence, the employee"may" be required to retire at 55, whereas in the Retirement Rule onhand, he "shall normally retire at 58". Then, the above sentencereads "he shall be retained in service if he continues to beefficient". Whereas in this Retirement Rule, the Committee mayextend the period of service of an employee provided he is medicallyfit. As far as the word "ordinarily" is concerned, the Supreme Courthas observed as follows :"... Reading these words without the word "ordinarily"we find it unreasonable to think that it indicates anyintention to cut down at all the right to require theservant to retire at the age of 55 years or to create inthe servant any right to continue beyond the age of 55years if he continues to be efficient. They are much moreappropriate to express the intention that as soon as theage of 55 years is reached the appropriate authority hasthe right to require the servant to retire but that betweenthe age of 55 and 60 the appropriate authority is given theoption to retain the servant but is not bond to do so. 8. This intention is made even more clear and beyonddoubt by the use of the word "ordinarily". "Ordinarily"means "in the large majority of cases but not invariably".This itself emphasises the fact that the appropriateauthority is not bound to retain the servant after heattains the age of 55 even if he continues to be efficient.The intention of the second clause therefore clearly isthat while under the first clause the appropriate authorityhas the right to retire the servant who falls within clause(a) as soon as he attains the age of 55, it will, at thatstage, consider whether or not to retain him further. Thisoption to retain for the further period of five years canonly be exercised if the servant continues to be efficient; https://hcservices.ecourts.gov.in/hcservices/ but in deciding whether or not to exercise this option theauthority has to consider circumstances other than thequestion of efficiency also; in the absence of specialcircumstances he "should" retain the servant; but what arespecial circumstances is left entirely to the authority'sdecision. Thus, after the age of 55 is reached by theservant the authority has to exercise its discretionwhether or not to retain the servant; and there is no rightin the servant to be retained, even if he continues to beefficient." The word "normally" used in this sentence may also be construed inthe same manner. 10. Similar rules as the Retirement Rule in the case on hand arenot unknown in service jurisprudence. In 1989 (Supp) 1 S.C.C. 221[State Bank of Bikaner vs. Jag Mohan Lal], the rule provided that theofficer shall retire from service on attaining the age of 58 years orupto the completion of 30 years of service, whichever accruesfirst ... provided that the competent authority may at its discretionextend the period of service of an officer ... should such anextension be deemed desirable in the interest of the Bank. TheSupreme Court held as follows :"9. ... The right to get extension of service beyondthe age of superannuation has received consideration ofthis Court in several cases. In State of Assam v. BasantaKumar Das, (1973) 1 SCC 461, after reviewing almost all theearlier decisions Kailash Chandra v. Union of India, AIR1961 SC 1346; B.N. Mishra v. State of U.P., AIR 1965 SC1567 and State of Assam v. Premadhar, (1970) 2 SCC 211,this Court said (at 165):A Government servant has no right to continue inservice beyond the age of superannuation and if he isretained beyond that age, it is only in exercise of thediscretion of the Government. ...The fact that certain persons were found fit to becontinued in service does not mean that others who werenot so found fit had been discriminated against.Otherwise, the whole idea of continuing only efficientpeople in service even after they had completed 55 yearsbecomes only meaningless.10. What do we have here in this case to distinguishthose principles or not to apply those principles? In our https://hcservices.ecourts.gov.in/hcservices/ opinion, there is none. In the scheme provided herein therespondent or any other officer of the Bank has alegitimate right to remain in service till he attains theage of superannuation. But beyond that age, he has no suchright unless his service is extended by the Bank. Thefurther rights of parties are regulated by the proviso toRegulation 19(1). It reads :Provided that the competent authority may at itsdiscretion, extend the period of service of an officerwho has attained the age of fifty eight years or hascompleted thirty years' service as the case may be,should such extension be deemed desirable in the interestof the Bank. (Emphasis supplied)11. Look at the language of proviso and the purposeunderlying. The (sic) Bank may in its discretion extend theservice of any officer. On what ground? For what purpose?That has been also made clear in the proviso itself. Itstates "should such extension be deemed desirable in theinterest of the Bank". The sole purpose of giving extensionof service is, therefore, to promote the interest of theBank and not to confer any benefit on the retiringofficers. Incidentally the extension may benefit retiredofficials. But it is incorrect to state that it is aconferment of benefit or privilege on officers. Theofficers upon attaining the age of superannuation orputting the required number of years of service do not earnthat benefit or privilege. The High Court has completelymisunderstood the nature of right and purpose of theproviso. The proviso preserves discretion to the Bank. Itis a discretion available with every employer, everymanagement, State or otherwise....13. It was however, argued for the respondent that theBank falls within the concept of 'State' for the purpose ofenforcement of fundamental rights. The Bank, therefore,cannot extend the service of some and reject the case ofothers similarly situated. The concept of Article 14 of theConstitution is relied upon. The argument in our opinion,proceeds on a wrong premise. The Bank has no obligation toextend the services of all officers even if they are foundsuitable in every respect. The interest of the Bank is theprimary consideration for giving extension of service. Withdue regard to exigencies of service, the Bank in one year https://hcservices.ecourts.gov.in/hcservices/ may give extension to all suitable retiring officers. Inanother year, it may give extension to some and not to all.In a subsequent year, it may not give extension to any oneof the officers. The Bank may have a lot of fresh recruitsin one year. The Bank may not need the services of allretired persons in another year. The Bank may have lesserwork load in a succeeding year. The retiring persons cannotin any year demand that "extension to all or none". If weconcede that right to retiring persons, then the verypurpose of giving extension in the interest of the Bankwould be defeated. We are, therefore, of opinion that thereis no scope for complaining arbitrariness in the matter ofgiving extension of service to retiring persons." 11. In (2006) 5 S.C.C. 153 [D.C. Aggarwal vs. State Bank ofIndia], the Supreme Court has again referred to Jag Mohan Lal's caseand had held it had been pointed out earlier that the rule underwhich extension of service can be granted beyond the normal age ofretirement does not invest a legal right in the employee to begranted such an extension and also that it was not a conferment of abenefit or privilege on an officer merely because the officer has putin the requisite number of years of service and that if the bankconsiders that continuance of the service of an officer is desirablein the interest of the bank, it may allow him to continue beyond theage of superannuation, but if the bank considers that it is notrequired, that is the end of the matter and that further non-extension of service has no reflection on the calibre and it carriesno stigma. Similarly, again in (2008) 5 S.C.C. 1 [P. Venugopal vs.Union of India], the Supreme Court observed that under the servicerules of an establishment, there may be provision for extension ofservice after attaining the age of superannuation and it is wellsettled that in the event of refusal by an employer to grant anextension, the employee cannot justifiably claim to be deprived ofany right or privilege. The employer has a discretion to grant ornot to grant such extension having regard to the interest of theemployer or the establishment and in this case, they have followedthe judgment in Jag Mohan Lal's case. Therefore, even after thejudgment in Nergesh Meerza's case, the Supreme Court has upheldclauses similar to the one on hand and held that the extension ofservice beyond the age of superannuation is entirely within thediscretion of the employer. 12. Therefore, we have to consider the applicability of all thejudgments harmoniously and we find that in (2003) 6 S.C.C. 277 [AirIndia Cabin Crew Association vs. Yeshaswinee Merchant], which wasagain a case concerning an air hostess, the Supreme Court rejectedmost of the attacks made on the provision on the ground that it was a https://hcservices.ecourts.gov.in/hcservices/ discrimination only on ground of sex. While referring to NergeshMeerza's case, they have held that the Supreme Court in that case hadrejected the challenge to the lower retirement age for female fieldstaff as discrimination based only on sex, but struck down twoservice conditions, one which provides for termination of service ofan air hostess on attaining the age of 35 and the other providing forextension of service beyond 35 years upto 45 years "only at the sweetwill and discretion of the Managing Director". Therefore, where thedecision depends only on the whim of one individual, it issusceptible to arbitrariness and caprice. It is not so in the caseof such decision being taken by a committee or a competent authorityor a bank, as appears to be the case in those Supreme Court decisionswere such clauses relating to extension of service beyond the age ofretirement have been upheld. We find that the principle expressed inKailash Chandra's case has been followed in Jag Mohan Lal's case in1989 and even as recently as 2006 in D.C. Aggarwal's case, theSupreme Court has upheld this ratio that the rule relating toextension of service beyond the normal age of retirement is not alegal right of the employee to be granted such an extension andrefusal thereof will not entitle the employee to claim that he wasdeprived of a right or privilege. Therefore, this is how we have tounderstand the decisions of the Supreme Court that have been referredto above. 13. We have also looked into the files. One more factor that wehave to take note of is that the employees understood the implicationof the rules and have also obtained one extension by invoking thesaid rule and they have attacked the rule as arbitrary when thesecond extension was not granted. This is one more reason why we arenot persuaded to accept the case of the appellants. Further, wefind that in W.A. No.201 of 2008, the Minutes of the 171st Meeting ofthe Executive Committee of the Council is recorded. 12 Members werepresent at the said meeting; four were granted leave of absence andthree were not present. The Committee considered the representationof Ellappan for extension of service and it is recorded that theextension of service needs to be considered on the basis of merit ofindividuals. After a careful consideration, they had resolved toreject the application taking note of the fact that his retirementwill pave the way for a few promotions. We are not going into thecorrectness of this decision. We have referred to this only to showthat unlike the Air India case (supra), where the discretion toextend or not to extend was solely with the Managing Director. Inthe present case, there is first a decision amongst the Finance andStaff Sub Committee and the Members deliberate on it. In fact, wefind that all the Committee Members excluding one resolved to rejectthe request. Therefore, this allegation of uncanalised power andsweet will and pleasure does not appear to be present in this case.It is the Committee which decides and as the Supreme Court has https://hcservices.ecourts.gov.in/hcservices/ observed in the cases cited above, all employees retire on attaining58 years as per the rule that exists and the decision to extend neednot be bestowed upon everyone who is healthy, but the condition ofhealth is a must if extension is to be granted. It is admitted bythe Council that the dispute relating to retirement age is pendingbefore the industrial forum. Learned senior counsel appearing onbehalf of the respondent-Council agrees that if 60 is accepted as theretirement age after the award of the Tribunal, then these twoappellants will also get the benefit.14. For all these reasons, we are unable to interfere with theorder dismissing the writ petitions filed by the appellants herein,though we have given different reasons for the same. The writappeals are accordingly dismissed. There shall be no order as tocosts. Consequently, M.P. Nos.1, 1 and 1 of 2009 in the respectivewrit appeals are closed.Sd/Asst.Registrar/true copy/Sub Asst.Registrar abTo1.The Secretary,Labour and Employment Department,Government of Tamil Nadu,Fort St.George, Chennai-9.2.The Deputy Commissioner of (Conciliation),DMS Compound, Teynampet, Chennai-6.3.The Executive Director,Management of Handloom Export Promotion Council,34, Cathedral Garden Road,Nungambakkam, Chennai-34. 1 cc To Mr.V. Ajay Khose, Advocate, SR.315841 cc To Mr.M.R. Raghavan, Advocate, SR.31281W.As.200 to 202 of 2008 vsv(co)pmk.22.7.2009.