HARIDAY CHAITANYA BISWAS v. STATE BANK OF INDIA — 1989 DIGILAW 454 (CAL)

PRABIR KUMAR MAJUMDAR, J. ( 1 ) THE Court.- This writ application is directed against a communication No. 31/pd/988/rnm dated 30th August, 1985 whereby petitioner No. 1 was informed that an extension in service was granted to the petitioner No. 1 upto 6th December, 1986 by an order dated 19th July, 1985 subject to petitioner's continued physical fitness and satisfactory service and after reviewing the performance of the petitioner No. 1 by the controlling authority, the respondent No. 1, the State Bank of India has decided to retire the petitioner No. 1 from the bank's service at the close of business on 30th November, 1985. ( 2 ) THE petitioner No. 1, Hariday Chaitanya Biswas was an Officer of the State Bank of India in the Senior Management Grade Scale IVA and working in the Personal Banking Division in the Calcutta Main Branch of the State Bank of India, the respondent No. 1. The petitioner No. 1 joined the Imperial Bank of India on 12th June, 1944 which is renamed State Bank of India. ( 3 ) THE petitioner No. 1 attained the age of superannuation that is 58 years, on 5th December, 1984. It is alleged by the petitioner No. 1 that after considering his service record and after being satisfied that his retention in service was for the Bank's interest, the Controlling Authority extended the service of the petitioner No. 1 upto 6th December, 1986. It is stated by the petitioner No. 1 that the respondent No. 1 granted him extension as the bank considered the service of the petitioner No. 1 to be necessary and useful in the interest of the bank. ( 4 ) BY a letter dated 19th July, 1985 the Chief Manager, Calcutta Main Branch, informed the petitioner No. 1 that the petitioner No. 1 had been granted an extension of service upto 6th December, 1986 when the petitioner No. 1 would attain 60 years of age subject to the petitioner No. 1's continued physical fitness and satisfactory service. It is alleged by the petitioner No. 1 that the said extension of his service was upon consideration that the continuance of petitioner No. 1 in the bank's service was necessary and desirable in the interest of the bank. It is alleged by the petitioner No. 1 that the said extension of his service was upon consideration that the continuance of petitioner No. 1 in the bank's service was necessary and desirable in the interest of the bank. ( 5 ) IT is alleged by the petitioner No. 1 that strangely enough the bank by the said impugned communication dated 30th August, 1985 informed the petitioner No. 1 that his performance in service had since been reviewed by the Controlling Authority and it was decided to retire him from the bank's service at the close of business on 30th November, 1985. ( 6 ) THE petitioner No. 1, thereafter, in or about October, 1985 sent a representation to the General Manager (Operation) to reconsider the decision taken by it and on or about 4th November, 1985, the Chief Manager informed the petitioner No. 1 that he was advised by the Controlling Authority that his case was duly examined and there was no justification to review the decision taken earlier. ( 7 ) THE petitioner, thereafter, in or about November 1985 preferred an appeal against the said decision and by communication dated 25th March, 1987, the Chief Manager informed the petitioner No. 1 that the appellate authority had disallowed the petitioner No. 1's appeal against the retirement from bank's service before completion of full term of service. ( 8 ) THE petitioner No. 1 has challenged the said impugned communication dated 30th August, 1985 by contending that the Competent Authority having once extended the service of petitioner No. 1 upto the age of 60 years had no power or authority or jurisdiction to make a so called review and to retire the petitioner No. 1 before the completion of the extended term. The contention of the petitioner No. 1 is also that in any event such pretended review could not be made without giving the petitioner No. 1 an opportunity of hearing. It is further contended that if the bank was entitled to make a review of his performance in service and in course of such review if the bank made some adverse finding against the petitioner No. 1 which resulted in taking a decision to retire him before the expiry of extended term, the petitioner No. 1 was entitled to hearing before giving any effect to such decision. It is also contended by the petitioner No. 1 that the said impugned communication was made in total violation of the principles of natural justice and the said order was made without assigning any reason and without complying with the principles of natural justice. ( 9 ) THE case of the respondent State Bank of India is that it was noticed during the extended period of service that the petitioner No. 1 was unable to exercise the desired level of control and supervision over the branch officers and there was perceptible deterioration in the administration of the branch. The bank further found that the petitioner No. 1 appeared to be suffering from a loss of confidence in his abilities and thus allowed the things to deteriorate. It is the further case of the respondent that the bank authorities thereafter reviewed the performance of the petitioner No. 1 in accordance with the norms laid down in the review policy which authorised the bank to review the performance of an officer during the extended period. It is the case of the State Bank of India that the Review Committee found that the performance of the petitioner No. 1 had deteriorated during the extended period of service and took a decision to revoke the extension granted in accordance with the inbuilt provision in the order of extension of service. ( 10 ) IT is the further case of the respondent bank that the petitioner No. 1 accepted the said decision of the Reviewing Authority to retire him from the extended period of service and by a letter dated 9th December, 1985 the petitioner No. 1 asked the Bank Authorities to arrange for payment of monthly pension to him since the petitioner No. 1 had retired from bank's service from 1st December, 1985. It is alleged by the respondent bank that by making such request the petitioner No. 1 is now estopped from contending against the validity of the impugned order. ( 11 ) MR. It is alleged by the respondent bank that by making such request the petitioner No. 1 is now estopped from contending against the validity of the impugned order. ( 11 ) MR. Samaraditya Pal the learned counsel for the petitioner No. 1 has submitted that the said impugned order and/or communication dated 30th August, 1985 is bad for (i)violation of principles of natural justice, (ii)violation of State Bank of India's conduct Rules, and (iii)that the concerned Authority had taken into account the materials on record behind the back of the petitioner No. 1 and without giving any opportunity to make his representation against the materials relied on by the concerned Authority before making the said impugned communication. ( 12 ) MR. Pal has further submitted that the purport of the Clause 19 of State Bank of India Officers (Determination of Terms and Conditions of Service) Order 1979, is that petitioner No. 1 continues to be a permanent employee till he attains the age of 60 years and enjoys all other benefits except the pension in view of the proviso to Clause 19. The learned Counsel submits that if there is any termination of continuous service of any person then he should be given full opportunity of making representation, before the employer takes a decision to terminate his service. ( 13 ) MR. Pal has also submitted that the respondent bank in its affidavit-in-opposition has referred to certain adverse report against the petitioner. Mr. Pal contends that said adverse report was never communicated to the petitioner No. 1 and concerned authority cannot take any decision to retire the petitioner No. 1 on the basis of such alleged and uncommunicated adverse comments or report as to the service rendered by the petitioner No. 1 during the extended period of service, without giving an opportunity to the petitioner No. 1 to meet the alleged adverse remarks. ( 14 ) MR. Pal further contends that such extension of service of the petitioner No. 1 by the said communication dated 19th July, 1985 is not a new appointment or an appointment of temporary nature. ( 14 ) MR. Pal further contends that such extension of service of the petitioner No. 1 by the said communication dated 19th July, 1985 is not a new appointment or an appointment of temporary nature. Even if it is assumed that the employment during the extended period is of a temporary nature giving no right or interest to the incumbent to the post he holds, the recent view of the Supreme Court is that even in such a case the services of the person holding a temporary appointment cannot be terminated without compliance of principles of natural justice. ( 15 ) ON the question of estoppel, it is the submission of the learned Counsel for the petitioner that there is no estoppel against the void order and according to the learned Counsel the impugned communication is void as it offends principles of natural justice. ( 16 ) MR. Pal the learned Counsel for the petitioner has cited several decisions of the Supreme Court as also few decisions of High Courts in the aid of his aforesaid contentions. ( 17 ) MR. Biswaroop Gupta appearing for the State Bank of India has submitted that it would be clear from the Clause 19 of the said Service Order 1979 that petitioner No. 1 was to remain in service for 30 years or on attaining the age of 58 years whichever is earlier. This is a tenure of service of the petitioner No. 1 in terms of the said Clause 19. The said tenure of service of the petitioner No. 1 according to the learned Counsel for the State Bank of India comes to an end on his completion of thirty years service or on his attaining the age of 58 years, whichever is earlier. ( 18 ) MR. Gupta further submits that after superannuation of any employee including the petitioner No. 1 the concerned Authority in terms of said clause19 may extend the service for a period not exceeding two years, but this period will not be taken into account for the purpose of pension and it is further submitted by Mr. ( 18 ) MR. Gupta further submits that after superannuation of any employee including the petitioner No. 1 the concerned Authority in terms of said clause19 may extend the service for a period not exceeding two years, but this period will not be taken into account for the purpose of pension and it is further submitted by Mr. Gupta that grant of an extension of the period of service of an Officer who had attained the age of 58 years or completed 30 years service, may be made at the discretion of the Competent Authority and the person whose service has been so extended has no right to the post or service during this extended period. ( 19 ) MR. Gupta has also submitted that when the petitioner No. 1 has no right to the post during this extended period he is not entitled to any notice or any opportunity of hearing before termination of the appointment. It is also submitted by Mr. Gupta that in the present case the said extension of service by the said communication dated 19th July, 1985 was subject to the petitioner No. 1's continued physical fitness and satisfactory service. Mr. Gupta submits that when such extension is subject to satisfactory service, the competent authority has got power and jurisdiction to review the performance of the petitioner No. 1 who had been granted on extension of service upto 6th December, 1986 subject to satisfactory service. Mr. Gupta has further submitted that the said decision of the bank as communicated by the said letter dated 30th August, 1985 which is being challenged by this writ petition has not been arbitrary and the said decision was arrived at upon proper materials on record. Mr. Gupta also submits that it is the case of the respondent No. 1 that after reviewing the performance of the petitioner No. 1 during this extended period, it was found by the respondent No. 1 on materials on record that the petitioner No. 1's continuance in service was not desirable and accordingly the Competent Authority decided to retire the petitioner No. 1 from his service with effect from 1st December, 1985. ( 20 ) THERE are some facts which are not in dispute. The petitioner No. 1 attained the age of 58 years, the age of superannuation, on 6th December, 1984. ( 20 ) THERE are some facts which are not in dispute. The petitioner No. 1 attained the age of 58 years, the age of superannuation, on 6th December, 1984. After consideration of petitioner No. 1's service record, the appropriate authority extended the service of the petitioner No. 1 upto 6th December 1986 i. e. when the petitioner No. 1 would attain 60 years of age. Such extension of service was subject to petitioner No. 1's continued physical fitness and satisfactory service. By an order dated 30th August, 1985 the petitioner No. 1 was informed that his performance and since been reviewed by the Controlling Authority and it was decided to retire the petitioner No. 1 from the bank service at the close of business on 30th November, 1985. ( 21 ) NOW the question that arises for consideration in this writ application is whether the petitioner No. 1's services can be terminated during the extended period of service i. e. , until the petitioner No. 1 reaches the age of 60 years in the manner as has been done in the present case. It has been contended by the petitioner No. 1 that having once granted extension for the full term of two years, the concerned authority cannot curtail that period or ask the petitioner No. 1 to retire before completion of 60 years. It is further contended that after having granted extension for full two years the petitioner No. 1 acquired the right to the extended period of service and unilateral curtailment of that extended period is by way of penal nature. It is the case of the petitioner No. 1 that such unilateral termination or curtailment of the extended period without complying with the principles of natural justice is illegal and void. ( 22 ) THE respondent bank has come forward with the case that the performance of service of the petitioner No. 1 was reviewed and on the basis of certain report about the petitioner No. 1's performance in service, the concerned authority decided not to allow the petitioner No. 1 further to continue in service during the extended period i. e. , upto December, 1986. ( 23 ) IF the contention of the petitioner No. 1 is accepted that he has got the right to the post or right to service during the extended period of service until he reaches the age of 60 years, then the petitioner No. 1 employment during the extended period cannot be terminated without giving any opportunity of bearing to the petitioner No. 1. ( 24 ) THE relevant provision for extension of service after the age of superannuation is contained in State Bank of India Officers (Determination of Terms and Conditions of Service) Order 1979. The relevant clause 19 is in the following terms : "age of retirement : 19. (1) An Officer shall retire from the service of the Bank on attaining the age of fifty-eight years or upon the completion of thirty years' service or thirty years pensionable service if he is a member of the pension Fund, whichever occurs first. Provided that the competent authority may, at its discretion, extended the period of service of an officer who has attained the age of fifty eight years or has completed thirty years service or thirty years' pensionable service as the case may be, should such extension be deemed desirable in the interest of the Bank, so however, that the service rendered by the concerned officer beyond 58 years of age except to the extent of the period of leave due at that time will not count for purpose of pension. Provided further that an officer may, at the discretion of the Executive Committee, be retired from the Bank's service after he has attained 50 years of age or has completed 25 years service or 25 years pensionable service as the case may be, by giving him three months notice in writing or pay in lieu thereof. Provided further that an officer who has completed 25 years' service of 25 years' pensionable service, as the case may be, may be permitted by the Executive Committee to retire from the Bank's service, subject to his giving three months' notice in writing or pay in lieu thereof unless this requirement is wholly or partly waived. Provided further that an officer who has completed 25 years' service of 25 years' pensionable service, as the case may be, may be permitted by the Executive Committee to retire from the Bank's service, subject to his giving three months' notice in writing or pay in lieu thereof unless this requirement is wholly or partly waived. (2) Notwithstanding anything to the contrary in this order, no officer who has ceased to be in the Bank's service by the operation of, or by virtue of, any provision shall be deemed to have retired from the Bank's service for the purpose of the Imperial Bank of India Employees' Pension and Guarantee Fund Rules or the State Bank of India Employees' Pension Fund Rules unless such cessation of service has been sanctioned as retirement for the purpose of either of the said pension fund rules as may be applicable to him. (3) In case disciplinary proceedings under the relevant rules of service have been initiated against an officer before he ceases to be in the Bank's service by the operation of, or by virtue of, any of the said rules or the provisions of this order, the disciplinary proceedings may, at the discretion of the Managing Director, be continued and concluded by the authority by which the proceedings were initiated in the manner provided for in the said rules "as if the officer continues to be in service, so. . . . . , that he shall be deemed to be in service only for the purpose of the continuance and conclusion of such proceedings. Explanation : An Officer will retire on the last day of the month in which he completes the stipulated service or age of retirement. " ( 25 ) IT appears from the said clause that an officer shall retire from service of the bank on attaining the age of 58 years or upon completion. of 30 years of service or 30 years pensionable service, if he is a member of the Pension Fund, whichever occurs first. ( 26 ) THERE is a Proviso to Clause 19 (1) which is relevant to the questions involved in the present proceedings. of 30 years of service or 30 years pensionable service, if he is a member of the Pension Fund, whichever occurs first. ( 26 ) THERE is a Proviso to Clause 19 (1) which is relevant to the questions involved in the present proceedings. It is stipulated in the proviso that thy competent authority may, at its discretion extend the period of service of an officer who has attained the age of 58 years of has completed 30 years service or 30 years pensionable service as the case may be, should such extension be deemed desirable in the interest of the bank. However, the service rendered by the concerned officer beyond 58 years of age except to the extent of the period of leave due at that time will not count for purpose of pension. ( 27 ) AS I read the proviso I do not find any mention that the officer may be re-employed after the age of 58 years i,e. , the age of superannuation upto a certain period. The proviso speaks very categorically that the competent authority may at its discretion extend the period of service of an officer who has attained the age of 58 years with this condition that the period of leave due at that time will not count for purpose of pension. It appears to me that the competent authority may extend the service of the officer or may not extend the service. The decision is purely at the discretion of the competent authority. If the competent authority decides not to extend the period of service of an officer, such an officer being denied the extension cannot claim the extension as of right. It also appears to me reading the Proviso that such extension may be granted if it is deemed desirable in the interest of the bank. Therefore, the discretion is there because it is for the competent authority to decide whether in the interest of the bank, the service of the officer should be extended or not. It also appears to me reading the Proviso that such extension may be granted if it is deemed desirable in the interest of the bank. Therefore, the discretion is there because it is for the competent authority to decide whether in the interest of the bank, the service of the officer should be extended or not. Once such decision is taken by the concerned authority to extend the service of the officer beyond the age of 58 years upon consideration of the officer's service as also upon the consideration of the interest of the bank, in my view, the officer concerned getting the extension acquires a right to continue in the service during the extended period i. e. , until the expiry of the period extended. ( 28 ) IT may be that, such extension of service may be subject to certain terms and conditions as has been done in the present case, that is, the service of the petitioner No. 1 was extended upto 60 years subject to satisfactory performance of the service of the petitioner No. 1 and subject to his physical fitness. The bank may, however, review the performance of service of the petitioner No. 1 and if the bank decides to retire him before the expiry of the extended period on the ground that his performance of service is not satisfactory, then in my opinion, the bank should give an opportunity to the petitioner No. 1 to make his submission as to why he should not be retired on. the ground of unsatisfactory service. ( 29 ) ACCORDING to my reading of the said clause 19, I am of opinion that the service of the petitioner No. 1 gets extended upto the period as decided by the competent authority, in the present case, upto petitioner No. 1's attaining the age of 60 years. If it is an extension of petitioner's service then the petitioner acquires a right to the service which he had been enjoying upto his attaining the age of 58 years. The proviso only makes this exception that any period of leave due at that time will not count for purpose of pension. Therefore, according to me, this is not really a re-employment of the petitioner No. 1 or offering a temporary assignment to the petitioner No. 1. The proviso only makes this exception that any period of leave due at that time will not count for purpose of pension. Therefore, according to me, this is not really a re-employment of the petitioner No. 1 or offering a temporary assignment to the petitioner No. 1. It appears from the letter of the concerned authority by which the discretion of the concerned authority has been exercised by extending the service of the petitioner upto the age of 60 years, that such extension is subject to physical fitness and satisfactory service. If, however, it is found that the petitioner No. 1 is not physically fit to continue in service or his service during the extended period is not satisfactory, then the services of the petitioner No. 1 may be terminated but after giving an opportunity of hearing or in other words, after due compliance with the principles of natural justice. ( 30 ) I do not consider that the petitioner's appointment during his extended period is of temporary nature or is all together a new appointment upon certain terms and conditions, as sought to be contended by the respondent. ( 31 ) EVEN if it is considered that the petitioner's service is temporary in nature during that extended period, then also such service cannot be arbitrarily or without any reasons be terminated. Such appointment cannot also be terminated without complying with the principles of natural justice i. e. , without giving an opportunity to the petitioner of being heard. ( 32 ) I hold that once an extension of service is granted to the petitioner No. 1 beyond the age of superannuation i. e. 58 years for a specified period, he acquires a right to hold the post during the said period. Any premature termination of service i. e. , termination before the expiry of the period of extension has to be done for good reasons and after complying with the principles of natural justice. If the services of an officer to whom extension has already been granted for a specified period, have been terminated arbitrarily and without complying with the principles of natural justice such officer can seek appropriate relief for redressal of his grievance. If the services of an officer to whom extension has already been granted for a specified period, have been terminated arbitrarily and without complying with the principles of natural justice such officer can seek appropriate relief for redressal of his grievance. ( 33 ) I hold that the termination of the service of petitioner No. 1 before he has attained the age of 60 years without complying with the principles of natural justice is bad and illegal. I, therefore, set aside and quash the impugned order or decision being No. 31/pd/988/rnm dated, 30th August 1985 whereby the petitioner No. 1 was informed that it has been decided to retire the petitioner No. 1 from the bank's service at the close of business on 30th November, 1985. I also quash and set aside the order or communication No. 31/po/2109 BDB dated, 4th November, 1985 and the communication No. 31/pd/2283/rnm dated 17th December, 1985 issued by the Chief Manager of the respondent Bank. ( 34 ) SINCE the petitioner No. 1 during the pendency of this writ petition has attained the age of 60 years upto which he was granted extension of service, there is no question of directing the concerned authority to allow the petitioner No. 1 to continue in service during the extended period. But as I have held that the said decision by which it has been decided by the concerned authority to retire the petitioner No. 1 with effect from 30th November, 1985 is bad, the petitioner No. 1 is entitled to all the benefits including salaries and other allowances to which he would have been entitled, had he continued in service upto the age of 60 years. ( 35 ) BY reasons of the aforesaid, this writ application succeeds. The petitioner No. 1 is also entitled to cost of this application. ( 36 ) THE learned Counsel appearing for the respondent prays for stay of operation of this judgment. Such prayer is refused. All parties are to act on a signed copy of the operative portion of this judgment. Application allowed.