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  • 1969 sc. 70", Interpreting s. 237 (b) of the companies act, 1956
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  • 1969 sc. 70", Interpreting s. 237 (b) of the companies act, 1956
Smart Summary

Structured Summary of the Provided Opinion

Factual and Procedural Background

The petitioner is a deputy director of fisheries who filed a petition under Article 226 of the Constitution seeking the records leading to ext. P5 — an order dated 23.10.1975 — and prayed for a writ of certiorari or other appropriate relief to quash that order. Ext. P5 is a brief government order stating that under Rule 60A(1), Part I, Kerala Service Rules, the government "hereby compulsorily retire Shri C. U. Sreedharan, Deputy Director of Fisheries ... In public interest, With immediate effect".

The opinion sets out the petitioner's service history (joined in 1950, promotions culminating in temporary appointment as Joint Director in 1975) and reproduces confidential reports (ext. P2 for 1971 and ext. P3 for 1-1-1973 to 4-4-1973) which portray the petitioner as efficient, intelligent, honest and deserving encouragement. The petitioner alleged an unblemished career and argued it was improbable the government would retire him after meritorious service.

The State (first respondent) replied, asserting the government had the right under Rule 60A to determine what was in the public interest and had so concluded. The learned judge directed a fuller counter‑affidavit; accordingly a second counter‑affidavit was filed on 16 January 1976 alleging certain irregularities by the petitioner (irregular issue of nylon twine to co‑operative societies; loss due to entrustment of a boat and disposal of its engine by a private person; misuse of mechanised fishing boats issued on hire‑purchase). The petitioner contended these averments were vague and may have pre‑dated the positive confidential reports.

The learned judge, uneasy about the validity of ext. P5 given the confidential records, directed further affidavit material. The matter proceeded on that basis before the court whose opinion is summarized here.

Legal Issues Presented

  1. Whether an order of compulsory retirement issued under Rule 60A(1), Part I, Kerala Service Rules (stating retirement "in public interest") is immune from judicial review merely because it asserts the government was satisfied that retirement was in the public interest.
  2. To what extent courts may scrutinise the government’s decision under Rule 60A — specifically whether courts may require disclosure of reasons or examine files to ascertain if relevant material was considered and whether the subjective satisfaction was bona fide.
  3. Whether omission to consider relevant material (for example, positive confidential reports) constitutes a ground for interference with an order of compulsory retirement under Rule 60A.
  4. Whether material averments made in a counter‑affidavit (alleging irregularities by the officer) were sufficient to demonstrate that the government applied its mind to relevant factors and thereby sustain ext. P5.

Arguments of the Parties

Petitioner's Arguments

  • The petitioner had a long, meritorious and unblemished service record with strongly positive confidential reports (ext. P2 and ext. P3) describing him as efficient, diligent, honest and deserving encouragement.
  • It was improbable and incredible that the government would retire such an officer without properly considering this relevant material; the government must have considered these confidential reports in deciding public interest under Rule 60A.
  • The government’s earlier counter‑affidavit suggested an approach that could ignore relevant material; counsel argued this showed non‑application of mind and that the order could be reviewed on limited grounds (relying on jurisprudence that permits scrutiny where the requisite subjective satisfaction is absent, based on collateral grounds, arbitrary, or there is omission to consider relevant factors).
  • Counsel cited authorities (including para. 8 of Union of India v. J.N. Sinha and decisions such as Hochtief Gammon and Khudiram Das) to argue that limited judicial review is permissible and that omission to take into account relevant material (the petitioner’s favorable confidential records) could vitiate the order.

Respondent / Advocate General's Arguments (State)

  • The government has right under Rule 60A, which embodies facets of the pleasure doctrine (Article 310) and is a condition of service; the decision that retirement is "in the public interest" is the government's and must be taken as conclusive by courts if formed bona fide.
  • No enquiry, no notice, and no principles of natural justice are required before exercising power under Rule 60A; the power is exercisable on subjective satisfaction of the government and is not open to judicial re‑weighing.
  • The advocate general argued courts "cannot look behind the order" and cannot undertake a search for reasons; he relied on a number of Supreme Court decisions (summarised under eleven heads in his submissions) to contend very limited judicial interference is the rule.
  • In the second counter‑affidavit the State asserted ext. P5 was passed after considering all aspects and identified specific alleged irregularities (irregular issue of nylon twine; loss from entrustment of a boat and disposal of its engine; misuse of mechanised boats). The State relied on that assertion as demonstrating consideration of relevant matters.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court (as stated in the opinion)
Union of India v. J. N. Sinha and another, AIR 1971 SC 40 Para 8: If the authority bona fide forms the opinion that retirement is in public interest, correctness cannot be challenged; but courts may examine if requisite opinion was formed, if decision based on collateral grounds or arbitrary. The court relied on para 8 as permitting limited judicial inquiry into whether the requisite opinion was formed or whether action was based on collateral/ arbitrary grounds; the court held such grounds would permit interference.
State of Bombay v. Saubhagchand M. Doshi, AIR 1957 SC 892 The opinion lists it as supporting established propositions about rules akin to Rule 60A (pleasure doctrine aspects). The court treated it as one of the authorities establishing general principles that limit judicial scrutiny of such executive decisions; no detailed application beyond that is provided in the text.
Dr. N. V. Putta Bhatta v. State of Mysore, AIR 1972 SC 2185 Referenced among Supreme Court decisions on the scope of judicial review of executive action under rules like Rule 60A. The court cited it as part of supporting authorities for the Advocate General's propositions; no specific distinct application is detailed in the opinion.
M/s. Hochtief Gammon v. State of Orissa and others, AIR 1975 SC 2226 Executive decisions must take into account relevant considerations; courts can ensure the executive acts lawfully; executive cannot avoid scrutiny by failing to give reasons; material must show consideration of relevant facts. The court acknowledged this wider administrative‑law principle and considered it relevant when assessing whether material was before the government to justify a Rule 60A decision; but noted Hochtief Gammon concerned general administrative orders, and its passage informed but did not fully determine the limited scrutiny applicable to Rule 60A orders.
Khudiram Das v. State of West Bengal and others, AIR 1975 SC 550 Subjective satisfaction (under certain statutes) is not wholly immune; courts carved out limited areas for scrutiny (e.g., no application of mind, dishonest/improper purpose, dictation, wrong test, lack of probative materials). The court relied on the paragraph cited to identify categories where subjective satisfaction is reviewable and applied those concepts to conclude omission to consider relevant material could vitiate a Rule 60A order.
Emperor v. Shibnath Banerji, AIR 1943 FC 75 Example of case where authority did not apply its mind at all (ground for invalidating subjective satisfaction). Cited via Khudiram Das as an example supporting the proposition that lack of application of mind negates the required satisfaction; used to support the principle that courts may inquire whether satisfaction was actually formed.
Pratap Singh v. State of Punjab, AIR 1964 SC 72 Authority must have regard to matters required by statute; improper considerations invalidate exercise of power. Referred in support of the broader principle (from Khudiram Das) that satisfaction must be grounded on relevant matters; the court accepted this as part of the legal landscape for review.
Machinder v. Kind, AIR 1950 FC 129 The satisfaction must be grounded on materials "of rationally probative value". The court adopted this proposition, noting that grounds for satisfaction must be such that a rational person could consider them connected to the matter to be decided (applied as part of the review standard).
State of Andhra Pradesh and others v. Chitra Venkata Rao, AIR 1975 SC 2151 Cited by the Advocate General for the proposition that courts cannot look into reasons and cannot undertake a search for reasons in administrative orders. The court examined this decision in the context of conflicting precedents; it recorded the Advocate General's reliance upon it but did not accept that it precluded all inquiry into whether relevant material was considered under Rule 60A.
State of Uttar Pradesh v. Madan Mohan Nagar, AIR 1967 SC 1260 Order explicitly stating an officer "has outlived his utility" was set aside because the order itself attached a stigma. The court contrasted this case with others (e.g., State of U.P. v. Shyam Lal Sharma) to show that where stigma appears on the face of the order, the order can be set aside; used to distinguish the instant facts where ext. P5 contained no stigma.
Barium Chemicals Ltd. and another v. Company Law Board and others, AIR 1967 SC 295 Illustrates that extent of judicial scrutiny varies according to statutory context (company law context referenced). The court cited it to show that the intensity of scrutiny depends on the statute, subject matter and purpose; used to underline that scrutiny under Rule 60A is limited and context‑dependent.
Rohtas Industries Ltd. v. S. D. Agarwal and another, AIR 1969 SC 70 Interpreting s.237(b) of the Companies Act — cited for differing degree of judicial scrutiny in company law context. Mentioned along with Barium Chemicals to illustrate variable scrutiny; no direct factual application beyond that point is made in the opinion.
Jaichand Lal Sethia v. State of West Bengal and others, AIR 1967 SC 483 Cited as part of authorities where courts accepted satisfaction stated in the order as conclusive (i.e., very limited review). Used by the court to explain that some precedents adopt an approach of accepting the order's statement of satisfaction, but the court held Rule 60A scrutiny remains limited yet not utterly ousting review where specified defects exist.
Lakhanpal v. Union of India and another, AIR 1967 SC 908 Part of a group of decisions reflecting acceptance of executive satisfaction in certain contexts. Referred to demonstrate varying lines of authority; the court noted such decisions but emphasised that they do not eliminate the limited review permitted under cases like J.N. Sinha and Khudiram Das.
Ram Manohar Lohia v. State of Bihar and another, AIR 1966 SC 740 Another authority illustrating a context where courts accepted executive satisfaction as conclusive. Included in the discussion of varying levels of judicial scrutiny depending on context; no distinct application beyond that is provided in the opinion.
State of U.P. v. Shyam Lal Sharma, AIR 1971 SC 2151 Where an order of compulsory retirement on its face contains no stigma, courts should not search government files to discover stigma — the order itself is the primary document for examination. The court held this decision does not preclude courts from asking whether relevant material was considered; it limited Shyam Lal Sharma to cases where suggestion is that a punitive motive (stigma) existed despite an innocent‑looking order.
Saksena's case, AIR 1967 SC 1264 Cited to support the proposition that where an order contains no stigmatic words, courts should not delve into files to find stigma. Referenced in the discussion of Shyam Lal Sharma to show the principle that examination is limited to the face of the order unless the order itself shows stigma.
Dalip Singh's case, AIR 1960 SC 1305 Where rule permits compulsory retirement for any reason and no reason is mentioned in the order, the order need not be treated as punitive on the basis of files. Used to support the proposition that absence of imputation in the order means it should not be treated as punitive; the court applied that logic in concluding ext. P5 contained no stigma on its face.
Commr. of Police v. Gordhandas Bhanji, (1952) SCR 135 (AIR 1952 SC 16) Decision discussed as an example where authority acted under dictation of another body (invalidating satisfaction). Cited via Khudiram Das as an instance where satisfaction is vitiated if authority acted under dictation; relied upon to describe categories of reviewable defect.
Simms Motor Units Ltd. v. Minister of Labour and National Service, (1946) 2 All ER 201 Cited as another illustration of invalidation where officer acted under dictation. Used similarly to Gordhandas Bhanji to exemplify situations where the subjective satisfaction is compromised and thus reviewable.
Tara Singh etc. v. State of Rajasthan and others, AIR 1975 SC 1487 Cited for the observation that "public interest" in rules similar to Rule 60A acts as a "safety valve" and satisfaction must be reached on relevant material. The court relied on this to support the proposition that satisfaction under Rule 60A must rest on some relevant material and the court can ask for reasons (or evidence of relevant material) even if none need be stated in the order itself.

Court's Reasoning and Analysis

The court proceeded in a step‑by‑step fashion, synthesising the applicable authorities and applying them to the facts before it:

  1. Acknowledgement of settled propositions: The court accepted many of the Advocate General's submissions as well established — that rules like Rule 60A embody facets of the pleasure doctrine, constitute conditions of service, are not intended as penal action, do not require prior enquiry or notice, and involve the subjective satisfaction of the government which ordinarily is not for courts to re‑weigh.
  2. Scope of judicial review: The court emphasised that judicial scrutiny is limited but not non‑existent. It relied on J.N. Sinha (para 8) to hold courts may inquire whether the requisite subjective opinion was actually formed, whether the decision was based on collateral grounds, or whether it was arbitrary. It further accepted the wider administrative law principles in Hochtief Gammon that executive decisions must take relevant considerations into account and that courts can ensure the executive acts lawfully.
  3. Categories of reviewable defect: The court adopted observations from Khudiram Das to set out concrete instances where subjective satisfaction is reviewable — e.g., no application of mind, dishonesty or improper purpose, dictation by others, disabling oneself from applying mind, wrong test or misconstruction, and the requirement that satisfaction be grounded on materials of rationally probative value.
  4. Omission to consider relevant material: The court added that omission to consider relevant material (particularly substantial material) is a valid ground for interference with an order under Rule 60A. Thus, if material such as meritorious service records were omitted from consideration, an order could be invalid.
  5. Application to facts: The court examined the record and second counter‑affidavit. Because the State’s deputy secretary averred categorically that "the order ext. P5 was passed by the government after considering all the aspects of the matter" and the second counter‑affidavit set out specific alleged irregularities, the court accepted that assertion (finding no reason to disbelieve that the State had considered the confidential records among other aspects). Given this acceptance, the court concluded it was not open to it to substitute its own judgment or re‑weigh the competing materials; its review remained limited.
  6. Limits on file‑searching: The court considered State of U.P. v. Shyam Lal Sharma and related authorities and concluded those decisions do not go so far as to preclude inquiry into whether relevant material was considered. The Shyam Lal Sharma line was confined to the proposition that courts should not search for stigma in files when the order itself contains no stigmatic imputation.
  7. Disposition and remedial posture: Although the petition was dismissed on the basis that the State had averred consideration of relevant aspects, the court expressly recorded concern about the consequences of Rule 60A action on morale and left open the administrative option for the government to reconsider; the court noted that the officer had been reinstated and suspended pending disciplinary proceedings and invited the government to ensure full and fair reconsideration if required.

Holding and Implications

Holding:

DISMISSED. The petition was dismissed subject to the court's observations urging the State to ensure full and fair consideration; there was no order as to costs.

Immediate consequences for the parties:

  • The court accepted the State’s affidavit that the government had considered all aspects and therefore declined to quash ext. P5. The petition seeking certiorari to quash ext. P5 was dismissed.
  • The opinion records that, pursuant to earlier directions, the officer had been reinstated and further action of suspension had been taken pending disciplinary proceedings; the court left such further action and any possible reconsideration to the State government.
  • No costs were awarded.

Broader implications and guidance stated by the court:

  • The court reaffirmed that judicial scrutiny of compulsory retirement orders under rules like Rule 60A is limited but not non‑existent; courts may inquire where the authority did not form the requisite subjective satisfaction, acted on collateral or irrelevant grounds, acted arbitrarily, or omitted to consider relevant material of substance.
  • The court emphasised that "public interest" is a condition precedent and must rest on some relevant material, however slight — if the material is so flimsy as to be no material at all, the action will not be in public interest and is susceptible to challenge.
  • The court warned that using Rule 60A without full and fair consideration could demoralise the service and that such consequences are inimical to public interest; it urged the State to act so as not to demoralise members of the service and to consider whether justice and fairness demand fresh scrutiny.
  • The court did not lay down a new, broad precedent displacing the existing authorities; instead it reconciled and applied existing Supreme Court authorities to clarify that omission to consider relevant material is a ground for interference while otherwise maintaining a limited standard of review.

This summary is strictly confined to the information contained in the provided opinion and does not add material beyond that text.

    C.U. Sreedharan v. State Of Kerala

    1. This is a petition under art. 226 of the constitution by a deputy director of fisheries in the state. He has prayed that the records leading to ext. P5 order dated 23101975 may be called for and a writ of certiorari or any other appropriate writ or direction be issued quashing the same. He has also prayed for incidental reliefs. The order ext. P5 is a very short one. We shall extract it:

    "under r. 60 (a), Part i, Kerala service rules, Government hereby compulsorily retire shri c. U. Sreedharan, Deputy director of fisheries, In public interest, With immediate effect"

    rule 60a (1), Part - i, K. S. R., Is in these terms:

    "60. A (1) notwithstanding anything contained in r. 60, Or in any other provision of these rules, Or in any other law, Or in any contract or other document the government may, In the public interest, Order that an officer may compulsorily be retired at any time after he has attained the age of 48 years."

    sub - rule (2) contains the provision for calculating the pension of an officer compulsorily retired. It is unnecessary to extract that sub - rule as no question arises about the quantum of pension to be paid to the petitioner.

    2. The petitioner had joined the department of fisheries in 1950 as an inspector in the madras state. When the state of kerala was formed, The petitioner who was working as inspector of fisheries opted for service in the kerala state. He came here as inspector in the kerala department of fisheries. He was promoted as superintendent in 1962, Assistant director in the same year, Deputy director (which is a selection post) in 1967 and joint director in the year 1975 on a temporary basis under r. 31 (a) of kerala state and subordinate services rules. Ext p2 is the annual confidential report of the petitioner for the year 1971 containing entries to the effect that bis health and physical capacity, Personality and bearing, Conduct, Aptitude, Knowledge of work, Willingness to assume responsibility, Capacity for decision making, Patience, Tact and courtesy, Control of staff (power of commanding respect and enforcing discipline), Are all "good". The report also contains entries to the effect that he is intelligent, Impartial, Honest and that his judgment is fair. Under the beading "matters of official and public interest in which the officer has specialised himself or taken special interest", The entry in ext. P2 is "generally in all fisheries matters", And it is said further that the officer discharged the duties of his office during the year 'satisfactorily'. What is more, The report concluded with the statement that the petitioner is "an efficient officer" this report was followed by another report, Ext. P3 for the period 1 - 1 - 1973 to 4 - 4 - 1973 in which there are mo e or less entries on the same lines as in ext. P2. We may however specifically advert to the "general remarks" column. Against that, It is said "a capable and hard working officer. Can be trusted with responsible work. Has gained all round experience in fisheries administration matters. Deserves encouragement". No confidential report or any order or remarks which may indicate that the officer was wanting in any respect has been either made available or relied on. In the original petition it was specifically averred that the petitioner had an unblemished career during which several remarks of appreciation and compliments were made in the confidential reports and that it was unbelievable that the government should have decided to retire such an officer and that, After long years of meritorious service. The reply to this averment in the counter affidavit was brief. The first respondent, The state of kerala contended themselves by stating that notwithstanding the entries in the confidential records the government has the right to determine whether it is in the interest of the public to continue an officer in service and that the government had come to the conclusion that it is in the public interest to compulsorily retire the petitioner the view points expressed in a number of judicial decisions, Particularly by the supreme court on the various aspects which should arise in considering the scope and ambit of judicial review when action is taken under a rule similar to r. 60a have been briefly referred to in the counter affidavit and it has been emphasised that the petitioner has no right to continue in service, That r. 60. A is one of the conditions of his service, That there is no question of any enquiry being held, That he is not entitled to any notice, That the principle of natural justice is not attracted when action is taken under r. 60. A, That the right of the government to decide whether it is in the public interest to retire an officer is an absolute right, That though the word 'absolute' is not in r. 60a unlike in the case of r. 56 (j) of the fundamental rules it made no difference, That the decision to be taken by the government is on the basis of a subjective satisfaction of the government, That that decision is not open to question and there is no scope whatever for interference by the court. The learned judge who heard the petition was of the opinion that however limited may be the judicial scrutiny in regard to the validity of an order passed under r. 60 - a, The court is entitled to know the reasons or the grounds that prompted the government to take action under the rule. We do not think the learned judge meant that the grounds or reasons must be disclosed so that this court may consider the weight of those reasons or grounds and come to its own conclusions as to whether those grounds or reasons afforded material for this court to come to the conclusion that it was or was not in the public interest to continue the petitioner in service. What the learned judge meant was that there must be some relevant material which would help the government to come to the conclusion that it was in the public interest that he should be compulsorily retired. The court therefore directed that a fuller counter affidavit must be filed. And accordingly a second counter affidavit has been filed in the case on the 16th january, 1976. The relevant averments in that affidavit are that "the order ext. P5 was passed by the government after considering all the aspects of the matter", And in para. 5, 6 and 7 some details regarding certain alleged irregularities committed by the petitioner have been stated. We may summarise those irregularities. It is said that the petitioner was involved and was responsible for irregular issue of nylon twine to certain co - operative societies. Secondly it is said that the entrustment of a boat with a private person resulted in loss to government because that private person with the collusion of some others removed and disposed of the torpedo engine of the boat to some party in bombay finally it was also mentioned that the petitioner was involved in the misuse of mechanised fishing boats issued on hire purchase system. These averments do not indicate clearly what exactly were the irregularities committed by the petitioner nor do they indicate or specify the time when those irregularities happened. From what we are able to glean these irregularities took place before the entries were made in the confidential records. Ext. P3. We may also mention that these irregularities did not stand in the way of the petitioner being promoted to the high office of the joint director. He had to step down from that post not because he was found to wanting in the discharge of his duties or responsibilities but due to the fact that a more senior officer had returned to the service and he had to make way for him. In these circumstances it the learned judge who wrote the elaborate reference order felt disturbed and doubted the validity of the order ext. P5, It is not surprising. But this type of disturbances in our minds may not afford grounds for interference with orders of compulsory retirement under r. 60 a.

    3. The learned advocate general argued the case at length and raised many points and went to the extent of contending that we cannot look behind the order. He emphasised if the order stated that it is in the public interest to retire the particular government officer that was the end of the matter as far as courts are concerned and it must be taken that it was in the public interest and the action being warranted by rule which embodied conditions of service of the petitioner, No relief can be granted. The advocate general furnished us with a summary of his arguments under several heads running to 11 in number each of which was sought to be supported by a number of decisions of the supreme court. Regarding most of the grounds urged by the advocate general there can be little, If any, Controversy. It is unnecessary to refer to all the decisions relied on by the advocate general to come to the conclusion that most of the grounds urged by him are well - established. Such grounds are that (1) rules similar to r. 60. A of the kerala service rules embodied facet of the pleasure doctrine in art. 310 of the constitution; (2) the rule is not intended for taking penal action; (3) compulsory retirement under r. 60a or similar rules involves no civil consequence; (4) the rule embodies a condition of service; (5) there is no need to give any opportunity to the government servant before action is taken under the rule and that no principle of natural justice is involved; (6) there is no need to conduct any enquiry; (7) after the attainment of the age mentioned in the rule, The government officer has no light to continue in office; (8) the light to be in public employment is a right to hold it according to rules; (9) the absence of the word 'absolute' in r. 60a which occurs in r. 56 0) of the fundamental rules makes no difference and that even in the absence of the word, The power of the government is absolute; (10) the satisfaction to be reached by the government is a subjective satisfaction.

    4. A reference to the decisions of the supreme court in union of india v. J. N. Sinha and another air 1971 s c. 40, The state of bombay v. Saubhagchand m. Doshi air. 1957 s. C. 892 and dr. N. V. Putta bhatta v. The state of mysore and another air. 1972 s. C. 2185 would clearly indicate that the above propositions contended for by the advocate general are established. Even so, It was urged by counsel for the petitioner that an action under r. 60 a is open to scrutiny, Limited though the ambit of the scrutiny may be. He invited our attention to para. 8 of the decision of the supreme court in union of india v. J. N. Sinha and another air. 1971 s. C. 40 and urged that if the government had relied on any collateral ground or had not formed the requisite opinion or had acted arbitrarily, This court will be entitled to interfere. We shall extract the relevant part of para. 8:

    "now coming to the express words of fundamental r. 56 0), It says that the appropriate authority has the absolute right to retire a government servant if it is of the opinion that it is in the public interest to do so. The right conferred on the appropriate authority is an absolute one. That power can be exercised subject to the conditions mentioned in the rule, One of which is that the concerned authority must be of the opinion that it is in public interest to do so. If that authority bona fide forms that opinion, The correctness of that opinion cannot be challenged before courts. It is open to an aggrieved party to contend that the requisite opinion has not been formed or the decision is based on collateral grounds or that it is an arbitrary decision. (underlining is ours)"
    .

    the above observations were made by the supreme court with reference to r. 560) of the fundamental rules and there can therefore be little doubt that this court is entitled to enquire atleast in regard to the matters mentioned in the above passage. But counsel for the petitioner went further and urged that the full ambit of the enquiry by courts as envisaged in the decision in m/s. Hochtief gammon v. State of

    orissa and others air 1975 s. C. 2226 is permissible. The relevant passage is in para. 13. Before we extract that passage, It is necessary to state that those remarks were made with reference to general administrative orders passed by the government. The passage runs thus:

    "13. The executive have to reach their decisions by taking into account relevant considerations. They should not refuse to consider relevant matter nor should take into account wholly irrelevant or extraneous consideration. They should not misdirect themselves on a point of law. Only such a decision will be lawful. The courts have power to see that the executive acts lawfully. It is no answer to the exercise of that power to say that the executive acted bona fide nor that they have bestowed painstaking consideration. They cannot avoid scrutiny by courts by failing to give reasons. If they give reasons and they are not good reasons, The court can direct them to reconsider the matter in the light of relevant matters, Though the propriety, Adequacy or satisfactory character of those reasons may not be open to judicial scrutiny. Even if the executive considers it inexpedient to exercise their powers they should state their reasons and there must be material to show that they have considered all the relevant facts."

    5. Learned counsel for the petitioner also relied heavily on the observations of justice bhagwati in the decision in khudiram das v. The state of west bengal and others air. 1975 sc. 550. In para. 9 of the judgment the supreme court has given indications in what circumstances the subjective satisfaction required for the purposes of action under s. 8 and 3 of the maintenance of internal security act can be interfered with by courts. It is useful to extract that paragraph:

    "9. But that does not mean that the subjective satisfaction of the detaining authority is wholly immune from judicial reviewability. The courts have by judicial decisions carved out an area, Limited though it be, Within which the validity of the subjective satisfaction can yet be subjected to judicial scrutiny. The basic postulate on which the courts have proceeded is that the subjective satisfaction being a condition precedent for the exercise of the power conferred on the executive, The court can always examine whether the requisite satisfaction is arrived at by the authority; if it is not, The condition precedent to the exercise of the power would not be fulfilled and the exercise of the power would be bad. There are several grounds evolved by judicial decisions for saying that no subjective satisfaction is arrived at by the authority as required under the statute the simplest case is whether the authority has not applied its mind at all: in such a case the authority could not possibly be satisfied as regards the fact in respect of which it is required to be satisfied: emperor v. Shibnath banerji, Air 1943 fc. 75 at p. 92 is a case in point. Then there may be a case where the power is exercised dishonestly or for an improper purpose; such a case would also negative the existence of satisfaction on the part of the authority the existence of 'improper purpose', That is, A purpose not contemplated by the statute, Has been recognised as an independent ground of control in several decided cases. The satisfaction, Moreover, Must be a satisfaction of the authority itself, And therefore, If, In exercising the power, The authority has acted under the dictation of another body as the commissioner of police did in commr. Of police v. Gordhandas bhanji,1952 scr. 135: (air. 1952 sc. 16) and the officer of the ministry of labour and national service did in simms motor units ltd. V. Minister of labour and national service, (1946) 2 all er. 201 the exercise of the power would be bad and so also would the exercise of the power be vitiated where the authority has disabled itself from applying its mind to the facts of each individual case by self - created rules of policy or in any other manner. The satisfaction said to have been arrived at by the authority would also be bad where it is based on the application of a wrong test or the misconstruction of a statute. Where this happens, The satisfaction of the authority would not be in respect of the thing in regard to which it is required to be satisfied. Then again, The satisfaction must be grounded 'on materials which are of rationally probative value', Machinder v. Kind, Air. 1950 fc 129. The grounds on which the satisfaction is based must be such as a rational human being can consider connected with the fact in respect of which the satisfaction is to be reached. They must be relevant to the subject matter of the enquiry and must not be extraneous to the scope and purpose of the statute. If the authority has taken into account, It may even be with the best of intention, As a relevant factor something which it could not properly take into account in deciding whether or not to exercise the power or the manner or extent to which it should be exercised, The exercise of the power would be bad. Pratap singh v. State of punjab, Air. 1964 sc 72. If there are to be found in the statute expressly or by implication matters which the authority ought to have regard to then, In exercising the power, The authority must have regard to those matters. The authority must call its attention to the matters which it is bound to consider."

    on the basis of these powerful observations counsel for the petitioner contended that it is evident that relevant material; the meritorious service of the petitioner for the long period of his service and the very good remarks that have been made in the confidential records which are important factors in determining public interest for the purpose of r. 60a do not appear to have been taken into consideration or even adverted to. Before the order ext. P5 was passed. He sought to gain support for this submission on the basis of the stand taken in the first counter affidavit that has been filed in answer to the petition. It was submitted that the stand taken therein indicated that the government was of the view that when once the government was satisfied on whatever grounds, Or even in the absence of grounds, Or by ignoring relevant material that the satisfaction was an honest one, Action could be taken under r. 60 a. This indicated an approach which precluded a fair and just advertence to and consideration of all relevant factors and therefore it was patent that there has been non application of the mind to the relevant factors which, According to counsel was absolutely essential before any action is taken under r. 60. A. Our attention was drawn to the observation of the chief justice of the supreme court in tara singh etc. V. State of rajasthan and others air, 1975 s. C. 1487. In para. 24, The learned chief justice observed that the public interest mentioned in rule similar to r. 60a is a'safety valve'. What is meant is evidently that no action under the rule is permissible without satisfaction being reached that it was in the public interest to take action. Naturally such a satisfaction can be reached only on material and certainly on relevant records and therefore this court can ask for the reasons even though none need be stated in the order under r. 60 - a in order to satisfy itself that there was some relevant material on the basis of which some person even if he is not a 'reasonable person', Could have come to the conclusion that it was in the public interest to retire the officer. Confronted with this position, The learned advocate general argued for the position for which he said there is high authority of the supreme court in the decision in state of andhra pradesh and others v. Chitra venkata rao air. 1975 sc. 2151 that this court cannot look into the reasons and it was further contended by the learned advocate general that this court cannot undertake a search for reasons. It is therefore necessary to examine the decision in state of andhra pradesh and others v. Chitra venkata rao air. 1975 sc. 2151. The learned advocate general compared the view taken in that decision with the one that was taken in an earlier decision in the state of uttar pradesh v. Madan mohan nagar air 1967 sc. 1260 where the order itself stated that the incumbent has been compulsorily retired as "he has outlived his utility". The order was set aside as the court was satisfied that a stigma was attached by reason of the imputation contained in the order. Before we examine those two decisions closely we must advert to another submission of the advocate general with which be prefaced bis arguments. It was urged that the extent of the scrutiny by courts will vary according to the act or the rules and its scope and object in conferring a discretion. It is unnecessary to elaborate on this aspect because it is a well - established rule that scrutiny by courts varies and depends on the statute, The circumstances, The subject matter, The time at which the statute was passed and the purpose for which it was passed. Thus the extent of scrutiny that was undertaken by the supreme court in barium chemicals ltd and another v. Company law board and others air. 1967 sc. 295 which is the same as that reiterated by the supreme court in rohtas industries ltd. V. 5. D. Agarwal and another air. 1969 sc. 70", Interpreting s. 237 (b) of the companies act, 1956 is quite different from that in jaichand lal sethia v. The state of west bengal and others air. 1967 sc. 483 which is the same as that stated by the supreme court in lakhanpal v. Union of india and another air. 1967 sc. 908, And that in ram manohor lohia v. The state of bihar and another air. 1966 sc. 740. In the latter set of decisions the court has practically accepted the statement regarding satisfaction contained in the order as conclusive. The learned advocate general contended that it is the principle of the latter decisions that should be applied in the matter of scrutiny by courts when action is taken under r. 60 a and that when it is stated in the order that the order of compulsory retirement was made 'in the public interest' it must be assumed or taken that the order was passed in public interest. No decision taking such an extreme view has been cited before us by the advocate general. In view of the principles that are established which we have adverted to in para. 3 above it is clear that the scrutiny by courts in regard to action under r. 60a is very limited. We are however equally clear in our minds that if any of the grounds mentioned in para. 8 of the judgment of the supreme court in union of india v. J. N. Sinha and another air 1971 s. C. 40 is made out, This court would be entitled to interfere with the order of compulsory retirement. We further think that what is stated in paragraph - 8 of that judgment are not exhaustive of the circumstances under which interference is possible. Any action under the rule by a state government must be in accordance with law and there must be some grounds on the basis of which it is possible to come to the conclusion that it is in the public interest, And the action must be bona fide after application of the mind to all relevant factors. Omission to consider relevant material will therefore be a valid ground for interference with an order purporting to be under r. 6c a of the kerala service rules.

    6. We are unable to discern anything in the judgment in the state of u. P. V. Shyam lal sharma air 1971 s. C. 2151 which militates against what we have stated above. The question that was considered therein was whether resort could be had to government files to discover any remark amounting to a stigma to set aside an order of compulsory retirement passed under the civil service regulation (1920), Art. 465 - a. The court was asked to look into a memorandum dated 14th february, 1962 addressed to the deputy inspector general of police by the superintendent of police in which it was stated that the head constable concerned "has lost his utility to the department" and "he is considered to be a bad lot incorrigible and no longer useful". It was therefore suggested in the memorandum that the head constable be compulsorily retired. This proposal was approved as is seen from a letter dated 16th march, 1962 and the letter of the 16th march, 1962 was referred to in the order of compulsory retirement which was dated 28th march, 1962. The order dated 28th march, 1962 stated:

    "as per orders contained in the p. H. Q. Letter no. W - 780 - 60 dated 16 - 3 - 62 the compulsory retirement of h. C. /22 c. P. Shyam lal is sanctioned. He is retired compulsorily w. E. F. 1. 4. 62

    the argument of counsel was that the reference in the order of compulsory retirement to the letter dated 16th march, 1962 which in turn referred to the letter dated 14th february, 1962 clearly indicated that the provision for compulsory retirement was used for imposing punishment and that the statements in the letter of the 14th february, 1962 clearly established the required stigma. But this argument was not accepted by the court and the learned chief justice observed as follows in para. 19 and 20:

    19 the ruling in saksena's case, (air 1967 sc 1264) (supra) is also that where there are no words in the order of compulsory retirement which throw any stigma there should not be any inquiry into government files to discover whether any remark amounting to stigma could be found in the files. The reason is that it is the order of compulsory retirement which alone is for examination. If the order itself does not contain any imputation or charge against the officer the fact that

    "considerations of misconduct or misbehaviour weighed with the government in coming to its conclusion whether any action could be taken under r. 278 does not amount to any imputation or charge against the officer"
    . This was the view expressed by this court in dalip singh's case, Air 1960 sc 1305 (supra). In that case, The relevant rule was as follows:

    "the state reserves to itself the right to retire any of its employees on pension on political or on other reasons"
    .

    where the authorities can make an order of compulsory retirement for any reason and no reason is mentioned in the order it cannot be predicated that the order of compulsory retirement has an inherent stigma in the order. In the present case, The fact found is that the order of compulsory retirement could not be said to be on account of malice.

    20. Unless it is established from the order of compulsory retirement itself that a charge or imputation against the officer is made the condition of the exercise of that power or that by the order the officer is losing benefits already earned, The order of retirement cannot be said to be one for dismissal or removal in the nature of penalty or punishment. In the present case, The order of compulsory retirement does not suffer from any such vice. "

    the above judgment was contrasted by the learned advocate general with the decision in the state of uttar pradesh v. Madan mohan nagar air 1967 s. C. 1260 wherein as we indicated earlier, The order itself stated that the officer has outlived his utility. The court was able to spell out the required stigma from this remark in the order of compulsory retirement. The submission was that the decision in the state of u. P. V. Shyam lal sharma air 1971 s. C. 2151 will apply to cases where action is taken by the competent authority under r. 60a whatever be the reasons or grounds that weighed with the authority. If the court cannot delve into the files to find out whether there is any ground discernible from the files from which it is possible to infer a stigma in order to say that the order is vitiated as one imposing a punishment without complying with the provisions under art. 311 of the constitution, The same must apply in regard to the delving into the files to find out whether there are appropriate or relevant reasons or grounds to say that it was in the public interest to retire the officer. We do not think that the decision has gone to that extent. All that has been decided, As we understand the judgment, Is that if the order, On the face of it is innocent, In the sense that there are no statements therein from which it is possible to spell out any stigma, Then the files ought not to be examined to discern whether the action under the rule permitting compulsory retirement bad been prompted by conduct which might have been in the background of the mind of the authority that took action. More than this, We are not able to find from the judgment. The applicability of the decision must therefore be confined to cases where the contention had been raised that the order of compulsory retirement though on the face of it does not indicate any stigma is still really punitive in character because certain things are discernible from the files which indicated that the government proceeded on the basis that the officer has been guilty of misconduct.

    7. Now dealing with the scope and content of r. 60a and the extent of the judicial scrutiny that is possible, We have to begin by observing that the action under r. 60 a is possible only if the action is in the public interest. Public interest is therefore a condition precedent, To use the language of the supreme court, In order that justifiable and valid action may be taken under r. 60 a. This means that there must be some material however slight that material may be, Which is relevant and which would point to the fact that it is not in the public interest to continue the government servant in service. At times, This relevant material or alleged material may be so flimsy or so unsubstantial as to amount to no material at all. In such circumstances, The action will be taken for no reason and therefore will not be in public interest. As was pointed out by the supreme court, If the action was on a collateral ground in the sense a ground which has no relevance in assessing whether the continuance in service of a particular employee would be in the public interest or not, The action would be bad and this court will be entitled to interfere. Arbitrary action, Another aspect pointed out in the same judgment is yet another instance of acting outside the rule. We would like to add that omission to consider the relevant material which must certainly go in the assessment whether it is in the public interest to retire a government servant would also be a ground if such material omitted to be considered was substantial. No doubt, This court cannot weigh the various aspects for and against an employee to determine whether it is in the public interest or not to retire the government servant. The decision must certainly be that of the government, And only that of the government, And therefore the learned advocate general is well - founded in his submission that we are not only unable to sit in judgment but that our scrutiny will be very limited.

    8. Turning to the facts of this case if there had not been the second affidavit and the categorical assertion by the deputy secretary that all aspects had been considered we would have been inclined to take the view that the conclusion that the petitioner should be retired had been reached without adverting to the very relevant material afforded by the entries in the confidential records. But in view of this assertion in the affidavit which has been filed before this court, We have to accept the statement as we see no reason to think that those aspects had not been taken into account. It is not for us, As we said, To balance the very weighty entries in the confidential records, Which all seem to indicate that the petitioner is a very deligent officer, Competent, Responsible and found to be so by the authorities, With the blemishes which are said to exist as stated in para. 6, 7 and 8 of the second counter affidavit. That is a matter for the state government to consider and it is said that they have considered all aspects. We must leave the matter there because we are exercising a very limited jurisdiction in the scrutiny that is permissible in such cases.

    9. But before parting with this case, We would like to state that pursuant to the direction given by the learned judge the officer had been reinstated and further action of suspension taken pending disciplinary proceedings. It is for the government to consider this aspect and all that has been said in this judgment and decide whether there has been a full and fair application of the mind to the various aspects now urged before this court. We cannot do that but the state government can do it and it is for the government to decide whether justice and fairness do not demand a fresh scrutiny. In this connection we would like to add that action under r. 60 - a in the public interest must not result in demoralising the members of the service. Such a result would also be against public interest. The members of the service must feel secure that action without full and fair consideration of all aspects will not be taken under r. 60 - a. We are sure, The government will not act in a manner that would demoralise the members of the service. Though the members of the service may have no right to continue in service after the age mentioned in r. 60 - a the consequences of action under r. 60 - a are indeed very serious as far as the government servant is concerned. These aspects, We hope, Will be borne in mind by the government in deciding whether there should be a reconsideration of the decision to compulsorily retire the petitioner.

    10. Subject to what we have stated in para. 9 above, We dismiss this petition. There will be no order as to costs.

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    C.U. Sreedharan v. State Of Kerala
    (Jul 13, 1976)