SHEELA (W/o LATE RAMACHANDRAN) v. STATE OF KERALA & OTHERS

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR** **TUESDAY, THE 30TH DAY OF AUGUST 2016/8TH BHADRA, 1938** ## **WP(C).No. 35448 of 2014 (E)** **----------------------------** ## **PETITIONER(S): -------------** **SHEELA** **W/O.LATE RAMACHANDRAN, CHANDRAKANTHAM, T.C.65/64, THIRUVALLOM.P.O., THIRUVANANTHAPURAM-27.** **BY ADV. SRI.R.T.PRADEEP** **RESPONDENT(S):** **--------------** ## **1. THE STATE OF KERALA** **REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, DEPARTMENT OF FINANCE, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001.** **2. THE KERALA FINANCIAL CORPORATION REPRESENTED BY ITS MANAGING DIRECTOR, HEAD OFFICE, VELLAYAMBALAM, THIRUVANANTHAPURAM-33.** **3. GENERAL MANAGER** **THE KERALA FINANCIAL CORPORATION, HEAD OFFICE, VELLAYAMBALAM, THIRUVANANTHAPURAM-33.** **R2&3 BY ADV. SRI.K.JAJU BABU (SR.) R2&3 BY ADV. SMT.M.U.VIJAYALAKSHMI, SC, KERALA FINANCIAL CORPORATION R1 BY ADV. GOVERNMENT PLEADER SMT.BEENA R2,R3 BY ADV. SRI.VENUGOPAL M.R., SC, KERALA FINANCIAL CORPORATION R BY SRI.T.V.GEORGE, SC, KFC** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25-08-2016, ALONG WITH WPC. 11680/2015 AND CONNECTED CASES, THE COURT ON 30.08.2016, DELIVERED THE FOLLOWING:** **WP(C).No. 35448 of 2014 (E) ----------------------------** ## _**APPENDIX**_ **PETITIONER(S)' EXHIBITS** **-----------------------** **P1- TRUE COPY OF THE ORDER OF APPOINTMENT OF PETITIONER DATED 14.12.2001.** **P2- TRUE COPY OF SERVICE ORDER DATED 15.7.2009 BY WHICH PETITIONER WAS PROMOTED AS FAIR COPY SUPERINTENDENT.** **P3- TRUE COPY OF THE RELEVANT PAGE OF SSLC BOOK OF PETITIONER.** **P4- TRUE COPY OF THE REPRESENTATION DATED 20.12.2014 BY THE PETITIONER BEFORE THE 2ND RESPONDENT.** **P5- TRUE COPY OF JUDGMENT DATED 19.7.2012 IN W.P[C]NO.9514/2011 BY THIS HON'BLE COURT.** **RESPONDENT(S)' EXHIBITS -----------------------** **R1(a)- TRUE COPY OF THE DECISION DATED 22.08.2014.** **R2(a)- TRUE COPY OF THE EXTRACT OF MINUTES OF 577TH BOARD MEETING HELD ON 27.12.2014.** **R2(b)- TRUE COPY OF THE LETTER DATED 17.01.2015 SUBMITTED BY THE CORPORATION BEFORE THE ADDITIONAL CHIEF SECRETARY (FINANCE).** **R2(c)- TRUE COPY OF THE LETTER DATED 06.02.2015 ISSUED BY THE ADDITIONAL CHIEF SECRETARY(FINANCE) TO THE CORPORATION.** **//TRUE COPY//** **P.A.TO JUDGE** **sm** **C.R.** ## **A.K.JAYASANKARAN NAMBIAR, J.** ## **-------------------------------** **W.P.(C).NO.35448 OF 2014, W.P.(C).NOS.11680, 14111, 19520, 28009, 29584, 31222 & 35634 OF 2015 & W.P.(C).NO.18039 OF 2016 ----------------------------------Dated this the 30[th] day of August, 2016** ## **J U D G M E N T** As the issue involved in all these writ petitions is the same, they are taken up together for consideration and disposed by this common judgment. For the sake of convenience, the reference to the facts and exhibits is from W.P.(C).No.31222/2015. 2. The petitioners are employees of the Kerala Financial Corporation, which is a statutory corporation established in terms of the State Financial Corporations Act, 1951, [hereinafter referred to as the 'SFC Act']. Under Section 9 of the SFC Act, the general superintendence, direction and management of affairs and business of the Financial Corporation is to vest in a Board of Directors which is empowered to do all acts and things, as may be exercised or done by the Financial Corporation. Section 48 of the SFC Act enables the Board, in consultation with the Small Industries Development Bank of **W.P.(C).No.35448/2014 & connected cases** **2** India, and with the previous sanction of the State Government, to make regulations to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of the Act. In exercise of the powers under Section 48 of the SFC Act, the respondent Corporation has framed the Kerala Financial Corporation Staff Regulations, 1966, providing for the terms and conditions of appointment and service of the staff of the Kerala Financial Corporation, and to provide for their duties, conduct and remuneration payable to them. As per Regulation 19 of the said Staff Regulations, 1966, every employee is to retire from the service of the Corporation on completion of 58 years of age, provided that in exceptional cases, the Board can consider the case of any particular employee for extension of service beyond the age of 58 years, or for re-employment thereafter, till he attains the age of 60 years. It would appear that, by Ext.P2 Board Resolution, dated 27.12.2014, the Board of Directors of the respondent Corporation, taking note of the enhancement of retirement age to 60 years in other Government companies and statutory Corporations, proposed an enhancement of the retirement age of permanent employees of the Kerala Financial Corporation also from 58 years to 60 years. The Resolution made it **W.P.(C).No.35448/2014 & connected cases** **3** clear, however, that the decision therein was subject to approval from the Government. Thereafter, the respondent Corporation forwarded the proposal to the State Government, for its approval. By Ext.P4 communication dated 6.2.2015, the State Government rejected the request for enhancement of retirement age of employees, on the ground that the issue of enhancement of retirement age was a matter of policy, and the State Government had decided to continue the status quo with regard to the retirement age fixed for its employees under the Regulations. In the writ petitions, the aforesaid decision of the State Government is impugned inter alia on the ground that, in other Government companies and statutory Corporations, under the control of the State Government, the Government has chosen to enhance the retirement age of its employees to 60 years, and therefore, there ought not to be a disparity, in the age of retirement, when it comes to employees of the respondent Corporation alone. It is also pointed out that the decision of the Government in Ext.P4 was not based on a consideration of the relevant factors, and, hence, the said decision, even if stated to be a policy decision, is irrational, and liable to be set aside. **W.P.(C).No.35448/2014 & connected cases** **4** 3. The writ petitions were admitted by this Court, and during the pendency of the writ petitions, pursuant to an interim direction issued from this Court, the State Government once again considered the matter of enhancement of retirement age of the employees of the respondent Corporation from 58 to 60 years, based on the proposal forwarded to them by the Board of Directors of the respondent Corporation. By an order dated 6.4.2016, produced as Ext.R2(b) along with the counter affidavit of the respondent Corporation, the Government, after considering all the relevant aspects, decided not to enhance the present retirement age of the employees of the Kerala Financial Corporation, and to maintain status quo with regard to the retirement age in the respondent Corporation, till further orders. Based on the said decision of the Government, the respondent Corporation, at its 583[rd] Board Meeting held on 28.6.2016, decided to revoke its earlier decision dated 27.12.2014 [Ext.P2], and maintain status quo in the matter of fixation of retirement age of employees under the respondent Board. 4. I have heard Sri.R.T. Pradeep and Sri.D. Sajeev, the learned counsel for the petitioners in all these writ petitions and **W.P.(C).No.35448/2014 & connected cases** **5** Sri.M.R.Venugopal, the learned Standing counsel for the respondent Kerala Financial Corporation. I have also heard the learned Sri.Suresh Babu, the learned Government Pleader for the official respondents. 5. On a consideration of the facts and circumstances of the case as also the submissions made across the bar, I am of the view that for the reasons that follow, the writ petitions, in their challenge against the decision of the Government, dated 6.2.2015, to maintain status quo in the matter of enhancement of retirement age of the employees of the Corporation from 58 years to 60 years, must necessarily fail. At the very outset, it must be noted that the retirement age of the employees of the respondent Corporation is fixed at 58 years under the Kerala Financial Corporation Staff Regulations, 1966. Any modification to the provisions of the Regulations can only be in the manner indicated in clause 4 of the Regulations, which deals with the power of the Board to amend the Regulations. Regulation 4 reads as follows: “ **4. Board's power to change Regulations:-** The Board may amend the Regulations herein laid down from time to time after consultation with the Reserve Bank of India and with the previous Sanction of the Government of Kerala in the manner prescribed in **W.P.(C).No.35448/2014 & connected cases** **6** Section 48(1) of the Act. Any new Regulation or alteration in an existing regulation shall be issued in the form of a circular for circulation among the staff; Provided that no new Regulation or an alteration in an existing Regulation shall operate to reduce the scale of pay of an employee in which he is entitled to draw pay in a substantive capacity on the day the new Regulations or alteration comes into force.” It will be apparent from a reading of the above Regulation that, for an enhancement of retirement age from 58 years to 60 years to take effect, the Board of the respondent Corporation has to comply with the procedure of obtaining a previous sanction from the Government of Kerala, as also a consultation with the Reserve Bank of India. It is only thereafter that a Regulation which is in force, can be amended. In the instant case, it is not in dispute that the Board of Directors had neither obtained the prior sanction from the State Government, nor had a consultation with the Reserve Bank of India, for the purposes of amending the Regulations. The contention of the petitioners herein that the Board Resolution, dated 27.12.2014, conferred on them a legitimate expectation with regard to enhancement of retirement age, cannot therefore be legally countenanced. It is also significant to note that even the Board Resolution dated 27.12.2014 only decided to enhance the age of retirement from 58 years to 60 years, subject to approval from the Government. In other words, this is not a case **W.P.(C).No.35448/2014 & connected cases** **7** where the respondent Corporation had independently decided to enhance the age of retirement, and thereafter, placed the matter before the State Government for approval. The decision of the Board itself was conditional on an approval from the Government. The State Government, while considering the proposal put forward by the Board of Directors of the respondent Corporation, took note of the various aspects of the matter and, by Ext.P4 dated 6.2.2015, rejected the proposal of the Board of Directors, and decided to maintain status quo with regard to the retirement age of the employees of the respondent Board. The said decision was later reiterated by the Government despite a reconsideration of the matter at the instance of this Court. It is also relevant to note that, the Board of Directors of the respondent Corporation too subsequently revoked their earlier decision dated 27.12.2014, recommending the enhancement of retirement age of the employees of the respondent Board. The resultant position, as of today, is that, there is no Resolution by the Board of Directors of the respondent Corporation, that even proposes an enhancement of retirement age of the employees of the respondent Corporation from 58 years to 60 years. On the facts of these cases therefore, the petitioners cannot have any legal right to insist that the **W.P.(C).No.35448/2014 & connected cases** **8** retirement age of employees under the respondent Corporation should be enhanced from 58 years to 60 years. 6. It is brought to my notice by counsel for the petitioners that, during the pendency of the writ petitions, by virtue of an interim order, some of the petitioners had continued in service, even after the attainment of the age of superannuation of 58 years, based on interim orders passed by this Court. It is further stated that these interim orders were later modified, and the petitioners made to retire subject to the condition that if they succeeded in the writ petitions, they would be entitled to all benefits flowing from the said decision including reinstatement in service, wherever applicable. As I have found that the petitioners do not have a right to insist for an enhancement of the age of retirement to 60 years, the petitioners will not be entitled to any benefits for the service rendered, beyond the date on which they attained the age of superannuation of 58 years, on the strength of the interim orders passed by this Court. 7. Before parting with these cases, it would be apposite to recall the judgment of the Supreme Court in **K. Nagraj and Others** **W.P.(C).No.35448/2014 & connected cases** **9** ## **v. State of Andhra Pradesh and another – [(1985) 1 SCC 523],** where, the Supreme Court examined the rationale underlying the prescription of retirement age in public service and sounded a note of caution for the Courts to exercise restraint in interfering with any such prescription unless the age stipulated is so unreasonably low as to make it arbitrary and irrational. The Supreme Court accepted the proposition that there ought to be an age of retirement in public service, and that, if the same is prescribed, it would be accepted as reasonable unless it was found wholly unacceptable being arbitrary or irrational. At paragraph 7 of the judgment of the Supreme Court, it was noticed as under: “ **7** . ...... The fact that the stipulation as to the age of retirement is a common feature of all of our public services establishes its necessity, no less than its reasonableness Public interest demands that there ought to be an age of retirement in public services The point of the peak level of efficiency is bound to differ from individual to individual but the age of retirement cannot obviously differ from individual to individual for that reason. A common scheme of general application governing superannuation has therefore to be evolved in the light of experience regarding performance levels of employees, the need to provide employment opportunities to the younger sections of society and the need to open up promotional opportunities to employees at the lower levels early in their career. Inevitably, the public administrator has to counter balance conflicting claims while determining the age of superannuation. On the one hand, public services cannot be deprived of the benefit of the mature experience of senior **W.P.(C).No.35448/2014 & connected cases** **10** employees; on the other hand, a sense of frustration and stagnation cannot be allowed to generate in the minds of the junior members of the services and the younger sections of the society. The balancing of these conflicting claims of the different segments of society involves minute questions of policy which must as far as possible, be left to the judgment of the executive and the legislature. These claims involve considerations of varying vigour and applicability. Often, the Court has no satisfactory and effective means to decide which alternative, out of the many competing ones, is the best in the circumstances of a given case. We do not suggest that every question of policy is outside the scope Of judicial review or that, necessarily, there are no manageable standards for reviewing any and every question of policy. Were it so, this Court would have declined to entertain pricing disputes covering as wide a range as cars to mustardoil. If the age of retirement is fixed at an unreasonably low level so as to make it arbitrary and irrational, the Court's interference would be called for, though not for fixing the age of retirement but for mandating a closer consideration of the matter. "Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Article 14.' [E.P. Royappa v. State of T.N., SCC p. 38, para 85 : SCC [L&S] p. 200]. But, while resolving the validity of policy issues like the age of retirement, it is not proper to put the conflicting claims in a sensitive judicial scale and decide the issue by finding out which way the balance tilts. That is an exercise which the administrator and the legislature have to undertake. As stated in 'The Supreme Court And The Judicial Function' (Edited by Philip B. Kurland, Oxford & IBH Publishing Co., p. 13): "Judicial self-restraint is itself one of the factors to be added to the balancing process, carrying more or less weight as the circumstances seem to require". It would also be relevant to recall the decision of the Supreme Court in **B. Bharat Kumar and Others v. Osmania University and** **W.P.(C).No.35448/2014 & connected cases** **11** **others – [(2007) 11 SCC 58]** , where, the Supreme Court observed that it is not for the Court to formulate a policy as to what the age of retirement should be, as, by doing so, we would be trailing into the dangerous area of the wisdom of the Legislation. If the State Government, in its discretion, which is permissible to it under the Scheme, decides to restrict the age and not increase it to 60, it is perfectly justified in doing so. In line with the observations of the Supreme Court in the aforementioned cases, I am of the view that inasmuch as the State Government has, in the instant cases, taken a policy decision not to enhance the age of retirement in a statutory corporation, in which the State Government holds a substantial stake [97.19% of the total Shareholding], and in the absence of anything to suggest that the said policy decision of the State Government is irrational or unreasonable, this Court ought not to interfere with the said policy decision taken by the State Government. These writ petitions therefore fail, and are accordingly dismissed. ## **A.K.JAYASANKARAN NAMBIAR JUDGE** prp/