JUDGMENT 1. - This writ application is directed against an order of compulsory retirement dated June 15, 1990 as passed by the General Manager, Sirohi District Commercial Cooperative Bank Ltd. (hereinafter referred to as 'the Bank') pursuant to a decision dated June 9, 1990 were sought to be challenged before us holding inter alia that instead of resorting to a proper disciplinary proceedings in accordance with law, the respondents passed an order of compulsory retirement against the writ petitioner in a mala fide manner and for a collateral purpose. 2. Even though the petitioner was earlier appointed on the post of Godown Keeper in the year 1974 he was promoted to the post of Branch Manager in May, 1981 to which post he was serving on the date of his purported compulsory retirement. It is contended by the writ petitioner that he completed 50 years of age on September 16, 1988 and there was no adverse entry in his service record. It was the Registrar of the Cooperative Societies purportedly acting under Rule 41 of the Cooperative Societies Rules who insisted upon the adoption by the Cooperative Societies of a Disciplinary Action and Appeal Rules. The respondent No. 3 Sirohi District Commercial Cooperative Bank Ltd. adopted the same from July 1, 1987 by resolution dated September 9, 1987. It is these rules which serve the purpose of Service Rules of the Employees in respect of the said Cooperative Bank. Rule 20 makes provision for retiring the employees on attainment of 50 years of age. This rule reads as follows:- "The Chief Executive Officer may, after giving three months' previous notice in writing or by payment of three months pay and allowances in lieu of notice, require an employee to retire from service on the date on which he completes 20 years of service or on date on which he attains the age of 50 years, whichever is earlier or any other date thereafter, subject to prior written approval of the Registrar, Cooperative Societies, Rajasthan, Jaipur." 3. The Chief Executive has been defined in rule 2(k) as under:- "Chief Executive means the Managing Director or General Manager or Manager or Secretary or such other officer to whom the administration of the institution is entrusted according to the bye-laws of the institution." It has been submitted that the General Manager of the respondent No. 3 is the Chief Executive Officer of the Bank and has been empowered to pass orders under rule 20. It is further submitted that the Disciplinary Action and Appeal Rules also, which is an integral part of the Service Rules, mentions careless, laziness etc. as minor mis-conduct, while giving false information has been described as major misconduct. Compulsory retirement has been mentioned as one of the punishments pursuant to an employee found guilty in disciplinary proceedings following a proper charge-sheet, enquiry and a personal hearing. Under Rule 6 of the Disciplinary Rules there is a provision for compulsory retirement which gives out inter alia that:- "Service record of all the employees who have completed 25 years of service or attained 50 years of age will be examined every year and in case of poor performance, they may be retired from service after giving them the required notice pay. The record of service will be examined by the Committee or by the Board of Directors/Registrar, Cooperative Societies as the case may be." 4. The Boards of Directors has been mentioned as the appellate authority for any decision taken by the Chief Executive Officer in an appropriate disciplinary proceedings. 5. The respondent No. 2, the Registrar of Cooperative Department, Government of Rajasthan, also by an order dated July 17, 1989 purportedly exercising his powers conferred under Rule 41 of the Rules laid down that in case an employee who is found to be lazy or inefficient or against whom serious charges exist or against whom adverse remarks exist in the CRs can be compulsorily retired on attaining the age of 50 years. It has further been laid down that the decision will be taken by the Board of Directors but the same shall not be implemented without the approval of the Registrar. A copy of this order is contained in Annexure 1. 6. It has further been laid down that the decision will be taken by the Board of Directors but the same shall not be implemented without the approval of the Registrar. A copy of this order is contained in Annexure 1. 6. In a meeting of the Board of Directors called on June 9, 1990, there was an agenda No. 10 pertaining to compulsory retirement in respect of those employees who have attained 50 years of age. It was mentioned in the notice that information about such employees shall be furnished in the meeting and the agenda circulated for the said meeting is at Annexure 2 to the writ application. The Board in its meeting held on June 9, 1990 passed a resolution to compulsorily retire the petitioner. The decision to compulsorily retire the petitioner has been taken on three specific charges which are as under:- (a) That he while seeking appointment in the Bank concealed that he was dismissed from service from the Punjab National Bank. It was said that therefore the petitioner is guilty of rule 1(6)15 of the Disciplinary Rules. (b) He did not give charge of the godown of M/s Vijay Drug House and did not inform the authorities that the dates of the drugs were about to expire. It was said that he is guilty of misconduct enumerated in rule 1(6)16. (c) He had charge of accounts but did not see put the interest (half yearly) on the fix deposits due to which the Bank was put to loss in December, 1988. 7. The resolution further states that though the petitioner was suspended in connection with the charge of Vijay Drug House, the former Board of Directors had reinstated him but now it is established that the petitioner is guilty of this charge and misconduct. When it was pointed out that the prior approval of the Registrar as regards retirement was necessary so as to retire an employee the Board resolved that no such permission in case of the writ petitioner was necessary. The resolution further said that the petitioner be compulsorily retired after giving three months notice but in the minutes circulated 'or pay' have been added. This was done so that the petitioner may not have any opportunity to seek legal redressal. The resolution further said that the petitioner be compulsorily retired after giving three months notice but in the minutes circulated 'or pay' have been added. This was done so that the petitioner may not have any opportunity to seek legal redressal. His further contention is that from a comparison of the original minutes of the said resolution it would be revealed that there was no mention of 'or pay' in the same. He relied upon Annexure 3 as copy of the minutes which was circulated. 8. It is his contention that had there been a proper inquiry giving an opportunity of being heard, he would have satisfied and proved his innocence. He further contended that he did not conceal any fact and he did not give any false information while seeking employment. No form was prescribed for seeking appointment in the respondent Bank. He was dismissed from the Punjab National Bank and his dismissal was challenged before the Central Industrial Tribunal which converted "dismissal into termination". The petitioner had already challenged the award of the said Tribunal in a writ proceeding and the writ petition was pending and thus no false information was given by him to the Cooperative Bank. He was put under suspension on March 25, 1988 in connection with the charge mentioned in the resolution as per Annexure 3 about the Vijay Drug House. His suspension was effected under undue pressure from the Cooperative department authorities. 9. It is indeed true that in Baikuntha Nath Das and another v. Chief District Medical Officer, Baripada and another, 1992(2) SCC 299 : 1992(2) SCT 92 (SC), it was held that the opinion of the authority regarding compulsory retirement is a subjective satisfaction which has to be formed on the basis of entire record of service. The order of compulsory retirement does not amount to punishment and hence principles of natural justice need be required to be observed in passing an order of compulsory retirement. A judicial review of the order is open only on grounds of mala fides, arbitrariness and perversity. In this sphere of administrative law there is generally no scope for importing the principle of audi alteram partem. It has further been reiterated that an order of compulsory retirement is not a punishment. It implies no stigma nor any suggestion of misbehaviour. A judicial review of the order is open only on grounds of mala fides, arbitrariness and perversity. In this sphere of administrative law there is generally no scope for importing the principle of audi alteram partem. It has further been reiterated that an order of compulsory retirement is not a punishment. It implies no stigma nor any suggestion of misbehaviour. Principles of natural justice have no place in the context of an order of compulsory retirement. Hence the nature of the function is quasi judicial in nature. However, this does not mean that judicial scrutiny is excluded altogether. While the High Court or the Supreme Court would not examine the matter as an appellate court, they may interfere if they are satisfied that the order is passed (a) mala fide or (b) that it is based on no evidence or (c) that it is arbitrary in the sense that no reasonable person would form the requisite opinion on the given material; in short, if it is found to be a perverse order. The remedy provided under Article 226 of the Constitution is no less an important safeguard. Even though there are well known constraints, the remedy is an effective check against mala fide, perverse or arbitrary action. What is normally required to be communicated is adverse remarks in the service career but not every remark, comment or observation in the confidential rolls. 10. In Allahabad Bank Officers Association and another v. Allahabad Bank and others, AIR 1996 SC 2030 : 1996(3) SCT 263 (SC), on the question, when compulsory retirement can be treated as order of punishment, it was observed by the Supreme Court that even though there were observations made by the Chairman agreeing with the remark of the Special Committee to the effect that there was "want of application to Bank's work" and "lack of potential" in officer and "he was found not dependable", the order does not cast a stigma and cannot be said to be an order of punishment. It was observed that mere reference to the rule, even if it mentions grounds for compulsory retirement, cannot be regarded as sufficient for treating the order of compulsory retirement as an order of punishment. In such a case, the order can be said to have been passed in terms of the rule and, therefore, a different intention cannot be inferred. It was observed that mere reference to the rule, even if it mentions grounds for compulsory retirement, cannot be regarded as sufficient for treating the order of compulsory retirement as an order of punishment. In such a case, the order can be said to have been passed in terms of the rule and, therefore, a different intention cannot be inferred. So also, if the statement in the order refers only to the assessment of his work and does not at the same time cast an aspersion on the conduct or character of the Government servant, then it could not be properly held that the order of compulsory retirement is in reality an order of punishment. Whether the statement in the order is stigmatic or not will have to be judged by adopting the test of how a reasonable person would read or understand it. 11. Looking to the facts of the present case we find that the respondent authorities not only resorted to a proceeding de hors the statutory rules but stigmatised the petitioner in giving him three specific charges but instead of proceeding the whole hog with a disciplinary inquiry, without following the principles of natural justice fair play and audi alteram partem, chose to rely upon rule 6 in passing an order of compulsory retirement. In the facts and circumstances of the present case we do not think that such an order can be allowed to be sustained in accordance with law. That apart, the Registrar of the Cooperative Societies' prior permission was also not taken in the instant case. Since a stigma is attached to this order of compulsory retirement we cannot refrain from making an observation that it is an order of punishment in reality. If a formal inquiry is made finding him guilty and thereafter order of compulsory retirement is passed, then also such an order, even if it does not contain any allegation or stigmatic statement, should be regarded as attracting the provisions of Article 311 and the Court would interfere in such cases, inasmuch as the real intention of the respondents would not be to compulsorily retire one of its employees but to punish him. 12. 12. In Chandulal v. Management of M/s Pan American World Airways, AIR 1985 SC 1128 services of certain workmen were terminated on the ground of loss of confidence and it was held that the order attached a stigma on the workmen as want of confidence indicated an adverse facet in his character, namely that they had failed to behave up to the expected standard of conduct and it otherwise amounted to dereliction on the part of the workmen. 13. In Kamal Kishore Lakshman v. Management of M/s Pan American World Airways, AIR 1987 SC 229 almost the view as in Chandulal's case (ibid) was taken. In Jagdish Prasad v. Sachiv, Zila Ganna Committee, Muzaffarnagar, AIR 1986 SC 1108 the Supreme Court held that as the order of termination was passed on the charges of concealment of the fact that the employee was removed from his earlier service on charge of corruption and was, therefore, not suitable for employment, it did cast a stigma on his service career. In Jagdish Mitter v. Union of India, AIR 1964 SC 449 the order of discharge stated that the employee was found undesirable to be retained in Government service and the Supreme Court held that it did cast a stigma on the employee and, therefore, it was not a mere order of discharge but an order of dismissal. In State of U.P. v. Madan Mohan Nagar, AIR 1967 SC 1260 the Supreme Court quoted the following observations from Jagdish Mitter's case (ibid) and held that the same test must apply to the case of compulsory retirement also : "No doubt the order purports to be one of discharge and as such can be referred to the power of the authority to terminate the temporary appointment with one month's notice. But it seems to us that when the order refers to the fact that the appellant was found undesirable to be retained in Government service, it expressly casts a stigma on the appellant and in that sense must be held to be an order of dismissal and not a mere order of discharge." "It seems that anyone who reads the order, in a reasonable way, would naturally conclude that the appellant was found to be undesirable, and that must necessarily import an element of punishment which is the basis of the order and is its integral part. When an authority wants to terminate the services of a temporary servant, it can pass a simple order of discharge without casting or attaching any stigma to his character. As soon as it is shown that the order purports to cast an aspersion on the temporary servant, it would be idle to suggest that the order is a simple order of discharge. The test in such cases must be does the order cast aspersion or attach stigma to the officer when it purports to discharge him ? If the answer to this question is in the affirmative, then notwithstanding the form of the order, the termination of service must be held, in substance, to amount to dismissal." 14. It was further observed in the case of Allahabad Bank (ibid) that if the order of compulsory retirement casts a stigma on the Government servant in the sense that it contains a statement casting aspersion of his conduct or character, then the court will treat that order as an order of punishment, attracting provisions of Article 311(2) of the Constitution. The reason is that as a charge or imputation is made the condition for passing the order, the court would infer therefrom that the real intention of the Government was to punish the Government servant on the basis of that charge or imputation and not to exercise the power of compulsory retirement. But mere reference to the rule, even if it mentions ground for compulsory retirement, cannot be regarded as sufficient for treating the order of compulsory retirement as an order of punishment. In such a case, the order can be said to have been passed in terms of the rules and, therefore, a different intention cannot be inferred. So also, if the statement in the order refers only to the assessment of his work and does not at the same time cast an aspersion on the conduct or character of the Government servant, then it will not be proper to hold that the order of compulsory retirement is in reality an order of punishment. Whether the statement in the order is stigmatic or not will have to be judged by adopting the test of how a reasonable person would read or understand it. 15. Whether the statement in the order is stigmatic or not will have to be judged by adopting the test of how a reasonable person would read or understand it. 15. In Surjit Singh v. Chairman and Managing Director, United Commercial Bank and others, 1995(2) SCC 474 , it was held that if as per Regulations the disciplinary authority was either the Divisional Manager or the Assistant General Manager (Personnel) and if the action was taken by either of them and the appellant has an opportunity to appeal to the Deputy General Manager or any other officer of the same rank, and thereafter had right of review before the General Manager although the Divisional Manager and Assistant General Manager (Personnel) were available for taking the action, the appellant was denied the right of appeal and also the right of review which lay only against the appellate order. The impugned order of dismissal passed by the Bank, therefore, did suffer from an inherent defect. That apart, when there was an appellate or the higher authority against whose order there was no provision of any appeal but such an authority exercised the power of the disciplinary authority in a given case, it resulted in discrimination against the employee concerned. It was particularly so, when there was no guideline as to when the higher authority or the appellate authority should exercise powers of the disciplinary authority. In that case the dismissal of the employee of the Nationalised Bank was set aside but instead of ordering reinstatement straightaway, notwithstanding expression of loss of confidence by the Bank there was a direction for reinstatement with a sum of Rs. 50,000/- in lieu of arrears of salary with continuity of service and without loss of seniority. 16. In that case the dismissal of the employee of the Nationalised Bank was set aside but instead of ordering reinstatement straightaway, notwithstanding expression of loss of confidence by the Bank there was a direction for reinstatement with a sum of Rs. 50,000/- in lieu of arrears of salary with continuity of service and without loss of seniority. 16. The learned Advocate for the petitioner however contended before us that the ratio decided in this particular case should not be made applicable to the facts of the instant one, inasmuch as there was a case of discrimination against the employee concerned and that apart in the name of compulsory retirement what was really struck was an order of punishment on certain charges which were not really probed through a proper disciplinary enquiry, it is indeed correct that in the facts of the present case, the Board took a decision prior to the order of compulsory retirement being passed by the General Manager, but since we are holding that both the orders are not sustainable in law and are liable to be struck down as mala fide, we think in the interest of justice that the writ petitioner would be entitled to his normal salaries till the date of his superannuation. 17. Regard being had to the present case we have no hesitation in coming to a positive finding that the General Manager of the Sirohi District Commercial Cooperative Bank by resorting to an order of compulsory retirement in the case of the writ petitioner, not only did exceed his powers as conferred on him as per the statutory rules but he abused it and that the decision taken by the Board of Directors of the Bank of June 9, 1990 so as to direct the General Manager of the said Cooperative Bank to resort to an order of compulsory retirement is also arbitrary, mala fide and is liable to be set aside. 18. We would, therefore, set aside the order of compulsory retirement as passed on the writ petitioner dated June 15, 1990 as passed by the General Manager, Sirohi District Commercial Cooperative Bank Ltd. and also strike down the decision dated June 9, 1990 taken by the Board of Directors of the Bank with liberty to the respondents to proceed in accordance with law. 19. The writ petition stands allowed accordingly, with costs assessed at Rs. 1,000/-.Petition allowed. *******