Holding

A tenure post such as the Director of AIIMS cannot be prematurely retired; the concept of superannuation does not apply, rendering the Institute's retirement order illegal.

Summary

Dr. L.P. Agarwal was appointed Director of AIIMS for a five‑year term or until he turned 62, whichever came first, and was confirmed in the post in February 1980. In November 1980 the Institute‑Body retired him immediately in the public interest, paying three months' salary in lieu of notice. He challenged the retirement before the Delhi High Court, arguing that the Director’s post is a tenure post and cannot be prematurely retired, while the respondents relied on Regulation 30(3) of the AIIMS Regulations and Fundamental Rule 56(i) to justify the action. The Supreme Court held that a tenure post ends only on the expiry of its fixed term or on justifiable grounds, and the concept of superannuation or premature retirement does not apply to such posts. Consequently, the Court set aside the Institute’s resolution, awarded the appellant salary arrears, and allowed the appeal with costs.

Issues considered

Whether the incumbent of the post of Director, AIIMS can be prematurely retired before the completion of his tenure.
Whether Regulation 30(3) of the AIIMS Regulations or Fundamental Rule 56(i) of the Fundamental Rules can be invoked to retire a tenure post.
Whether the appointment clause of "five years or till age 62" converts the post into a non‑tenure appointment.
Whether the Institute‑Body had the authority to retire the Director in the public interest without notice.
Whether the resolution of the Institute‑Body effecting the retirement was valid and lawful.

Legislation cited

Fundamental Ruless. 56(i)

Subjects

tenure postpremature retirementsuperannuationAIIMSpublic interestservice lawrecruitment rules

Judgment

DR. L.P. AGARWAL A
v.
UNION OF INDIA AND ORS;

[l<ULDIP SINGH AND DR. A.S. ANAND, JJ.]

JULY 21, 1992 B

Civil Service-All India Institute of Medical Sciences Regulations,
1958--R.egulations 30(2), 30(3) 35 read with Rule 56(i) of the Fundamental
Rules-Post of Director, AIIMS-Tenure post-"Tenure''--Constmction
-Retirement before completion of tenure-Legality of. C
- The appellant was appointed as Director, AIIMS, with effect from
18.2.1979 for a period of five years or till he attained the age of 62 years
whichever was earlier. With effect from 19.2.1980 he was confirmed in the
said post.
D
On 24.11.1980 the appellant was prematurely retired from service in
public interest by giving him three months pay and allowances, in lieu of
notice.

The appellant challenged the order of the Institute-Body filing a writ E
--{ petition under Article 226 of the Constitution of India before the H~gh
Court.

The respondents contended before the High Court that the appellant
was retired under Regulation 30(3) of the All India Institute of Medical
Sciences Regulations, 19S8 in public interest after he attained the age of F
SS years; that Fundamental Rule S6(j) was also applicable to the All\\fS
f-- - employees by virtue of Regulation 3S of the Regulations; that even if
Regulation 30(3) was not attracted, the Institute had the power to prema-
turely retire the appellant, in public interest, under Fundamental Rule
56(j); and that despite the fact that the appellant was on a tenure post G
there was no bar to prematurely retire him by invoking either Regulation
30(3) of Fundamental Rule S6(j).

The appellant on the other hand contended before the High Court
that the post of Director of the AIIMS is a tenure post under the Recruit-
ment Rules of the Institute and he was appointed to the said post by way H
567
568 SUPREME COURT REPORTS (1992] 3 S.C.R.

A of direct recruitment; that his tenure could not be cut short by bringing in
y
the concept of superannuation or premature retirement which was alien '
to a tenure post.

The High Court dismissed the writ petition, against which the
present appeal by special leave was filed before this Court.
B
The appellant reiterated the contentions made by him before the
High Court, in this appeal.
')-
On the question, "whether the incumbent of the post of Director,
C AIIMS could be pematurely retired before the completion of his tenure?"

-
Allowing the appeal of the employee-doctor, this Court,

HELD 1.01. 'Tenure' means a term during which an office is held. It
is a condition of holding the office. Once a person is appointed to a tenure
post, his appointment to the said office begins when he joins and it comes 1-..
D to an end on the completion of the tenure unless curtailed on justifiable
grounds. Such a person does not superannuate, he only goes out of the
office on completion of his tenure. The question of prematurely retiring
him does not arise. [577F]

1.02. Under the Recruitment Rules the post of Director of the AIIMS ·
E is a tenure post. The said rules further provide the method of direct recruit·
. )-
merit for filling the post. These service-conditions make the post of Director
a tenure post and as such the question of superannuating or prematurely
retiring the incumbent of the said post does not arise. The age of 62 years
provided under proviso to Regulation 30(2) of the All India Institute of
F Medical Sciences Regulations, 1958 only shows that no employee of the
AIIMS can be given extension beyond that age. This has obviously. been
done for maintaining efficiency in the Institute-Services. [577C]

1.03. Simply because the appointment order of the appellant men-
G tions that "he is appointed for a period of five years or till he attains the
age of 62 years", the appointment does not cease to be a tenure-post. Even
an outsider (not an existing employee of the AIIMS) can be selected and
appointed to the post of Director. Can such person be retired prematurely
curtailing his tenure of five years? Obviously not. The appointment of the .~
appellant was on a five years tenure but it could be curtailed in the event
H of his attaining the age of 62 years before completing the said tenure. The
DR. AGARWAL v. U..0.1. [KULDIP SINGH, J.] 569

High Court failed to appreciate the simple alphabet of the service A
jurisprudence. [577D-E]

1.04. Concept of superannuation which is well understood in the
service jurisprudence is alien to tenure appointments which have a fixed
life span. The appellant could not therefore have been prematurely retired
and that too without being put on any notice whatsoever. [577G-HJ B
1.05 Since the appellant has since attained the age of 62 years, there
is no question of reinstating him in the office of the Director of the AIIMS.
He shall, however, be entitled to his salary less the non practising al-
lowance, for the period from December 1, 1981 to January 21, 1984. [578D]
c
Dr. Boo/ Chand v. The Chancellor, Kurukshetra University, [1968] 1
S.C.R. 434 and Dr. D.C. Saxena v. State of Haryana, [1987] 3 S.C.R. 346,
distinguished.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 227 of · D
1982.

WITH

C.M.P No. 7004/85, I.A. No. 1/91.

From the Judgment and Order dated 7.12.81 of the Delhi High Court E
in C.W.No. 1673 of 1980.

- Appellant-In-Person.

J.D.Jain, AK.Ganguli, Ms. Indira Sawhney, C.V. Subba Rao and
A.Mariaputham for the Respondents. F

The Judgment of the Court was delivered by

KULDIP SINGH, J. Dr. L.P. Agarwal was appointed as Director, All;
India Institute of Medical Sciences, New Delhi (AIIMS) with effect from
February 18, 1979. The appointment order dated April 6, 1979 stated that G
he was appointed as Director "fo! a period of five years, or till he attains
the age of 62 years, whichever is earlier". He was coafirmed in the said post
with effect from February 19, 1980. By an order dated November 24, 1980
be was retired from service, in the public interest, with immediate effect,
by giving him three months pay and allowances, in lieu of notice. H
570 SUPREME COURT REPORTS (1992] 3 S.C.R.

A The Recruitment Rules governing the post of Director provide direct
recruitment as the only method of recruitment to the said post. The post
of Director, under the Rules, is a tenure post for five years inclusive of one
year probation.

The question for our consideration is whether the incumbent of the
B post of Director, AIIMS can be prematurely retired before the completion
of his tenure ? In other words whether the service law concept of "prema-
ture retirement in public interest" is applicable to a tenure post filled by
way of direct recruitment.

c Dr. L.P. Agarwal entered the service of the AIIMS as a Professor of
Ophthalmology on February 23, 1959 at the age of 37 years. He was
appointed Dean of the AIIMS on November 19, 1977 being the senior-most
-
member of the staff. He was also appointed Chief Organiser of Dr.
Rajendra Prasad Eye Centre in the AIIMS. The post of the Director of ,L
D the AIIMS fell vacant in November, 1978 and nominations of suitable
candidates were invited from all the Vice-Chancellors of the Indian
Universities and also from Institutions of Medical Education and Medical
Research in the Country. The Special Selection Committee met on
February 7, 1979 and recommended the name of Dr. L.P. Agarwal for
appointment as Director. The recommendation was accepted by the In-
E )--
stitute-Body and was approved by the Government of India. The then ...
president of the AIIMS, thereupon issued the memorandum dated April

F
6, 1979 appointing Dr. L.P. Agarwal as Director of the AIIMS with effect .
from February 18, 1979, the date from which he was officiating as Director.
The said memorandum reads as under:-· -
"All India Institute of Medial Sciences"
-~
Ansari Nagar
New Delhi-10016.
6th April, 1979
G
Subject : Appointment of Director and Professor of Ophthal-
mology of AIIMS, New Delhi.
;""-
MEMORANDUM

H With the approval of the Central Government as conveyed by
DR. AGARWAL v. U.O.I. [KULDIP SINGH, J.] 571

its letter No. V.16012/38178-ME (PG) dated 4.4.1979, Dr. L,P. A
Agarwa), Chief Organiser & Professor of Ophthalmology, Dr.
R.P. Centre for Ophthalmic Sciences, New Delhi, is hereby
appointed as Director & Professor of Ophthalmology, All India
Institute of Medical Sciences, New Delhi, with effect from
18.2.1979, for a period of five years, or till he attains the age B
of 62 years, whichever is earlier.

He will be paid remuneration at the rate of Rs. 3,500 per month
(fixed) with effect from the date aforesaid mentioned.

Sd/- Dr. M.M.S. Sidhu
... President All India Institute of Medical Sciences,
c
Ansari Nagar, New Delhi- 29"

According to Dr. Agarwal he was congratulated by the Institute-
Body and also by the President of the AIIMS for doing effective and
efficient work during the period of probation. He earned excellent report D
for the year 1979-80. He was confirmed in the post of the Director of the
AIIMS with effect from February 19, 1980 by a resolution of the Institute-
Body passed in the meeting held on February 14, 1980. The confirmation
order dated February 15, 1980 reads as under :-

"Dr. M.M.S.SIDHU, E
M.P. PRESIDENT

- ALL INDIA INSTITUTE OF MEDICAL SCIENCES,
ANSARI NAGAR, NEW D.ELHI- 16
F
15th February, 198Q

MEMORAD UM

Subject: Confirmation of Prof.L.P. Agar\val, Director, AIIMS,
New Delhi ..
G
__......,_ On satisfactory completion of usual probationary period, th(}
Institute at their meeting held on 14th February, 1980 has
approved the confirmation of Dr. L.P. Agarwal in the post of
Director of the All India Institute of Medical Sciences, w.e.f.
19.2.80 (Forenoon). Accordingly, Dr. L.P. Agarwal is con• H
572 SUPREME COURT REPORTS (1992) 3 S.C.R.

A firmed in the post of Director, AIIMS w.e.f. 19.2.1980
(Forenoon).

The other conditions of his service shall remain unaltered.

Sci/- M.M.S. Sidhu
B PRESIDENT
15.2.1980"

Unfortunately for Dr. LP.Agarwal, the Institute-Body in its meeting ")--
held on November 24, 1980 decided to premattirely retire him from ·
service. The resolution is reproduced hereunder :-
c
"RESOLUTION

The Institute resolves, in the public interest, to retire Dr. L.P.
Agarwal, Director, All India Institute of Medical Sciences, New
Delhi, with immediate effect, by giving him three months' pay
D and allowances, in lieu of notice".

Dr. LP. Agarwal challenged the above quoted resolution of the
Jnstitute-Body by way of a writ petition under Article 226 of the Constitu-
tion of India before Delhi High Court on several grounds. On the basis of
•
E the rival contentions of the parties, the High Court formulated the follow-
ing points for its consideration:-

1. Who was ,the appointing authority of the petitioner and in
consequence the authority who could compulsorily retire the
petitioner when the compulsory retirement is not by way of a
F penalty imposed after disciplinary action ?

2. Whether the prior approval of the Central Government was
necessary to compulsorily retire the Dire~tor of the Institute.

3. Whether the Director of the Institute and for the matter of
G that the petitioner could be compulsorily retired under Regula-
tion 30 (3) ? Alternatively, whether compulsory retirement is
permissible under F.R. 56G) read with Regulation 35 ? If so,
what would be the effect of the stand of the contesting respon-
dents that the petitioner was compulsorily retired by virtue of
H the provisions of Regulations 30(3).
DR. AGARWAL v. U.0.1. [KULDIP SINGH, J.] 573

4. Whether the provisions of Regulation 30(3) or alternatively A
of F.R. 56G) would apply to a tenure post and, particularly, to
the tenure post to which the petitioner was appointed ?

5. Whether the resolution to compulsorily retired the petitioner
was properly and legally moved at the meeting of the Institute
Body held on Ncvember 24, 1980 ? B
6. Whether the decision to compulsorily retire the petitioner
was arrived at by considering relevant material germane to the
issue of compulsory retirement ?

- 7. Whether the decision to compulsorily retire the petitioner is
vitiated by ma/a fides and amounts to e'lrbitrary exercise of
C

ppwer.

8. Whether the petitioner, even if it is held that he has been
validly compulsorily retired from the post of Director, con- D
tinues to hold the post of a Professor of Ophthalmology in the
Institute."

A Division Bench of the Delhi High Court by its judgment dated
December 7, 1981 rejected all the contentions raised by the petitioner and
decided all the points against him. The writ petition was dismissed leaving E
the parties to bear their own respective costs. This appeal by way of special•
leave is against the judgment of the Division Bench of the Delhi High
Court.

The appellant contended before the High Court and reiterated in the
special leave petition before this Court that he was appointed by the Janta F
Government and after tJ:ie change of the Government he was removed from
the post of Director on the ground that he had close links with the Janta
party, Shri C.B. Gupta and Shri Raj Narain. He alleged ma/a fide against
the then Health Minister and various other authorities. As mentioned
above, the High Court rejected all the contentions raised by the appellant G
including the challenge based on legal and factual ma/a fide.

It is not necessary for us to go into the various points formulated and
decided by the High Court as we are of the view that the appellant must
succeed on the sole question which we have posed in the beginning of this •
judgment. H
.574 SUPREME COURT REPORTS [1992) 3 S.C.R.

A Regulation 30 of the All India Institute of Medical Sciences Regula-
tions, 1958 (Regulations) which deals with superannuation and pre-mature
retirement reads as under :-

"30 (1) The age of superannuation of the employees of the
Institute other than members of the teaching faculty and class
B IV employees shall be 58 years. Provided that the non-faculty
employees may be granted extension of service or re-employ-
ment upto the age of 60 years under very special circumstances
for reasons to be recorded in writing on the merits of each such
case and subject to physical fitness and continued efficiency of
c the employee concerned.

(2) the age of superannuation of the members of the teaching
taculty and class IV employees shall be 60 years. Provided that
-
tlie services of the members of the teaching faculty may be
retained upto the age of 62 years in cases of persons who are
D exceptionally talented for reasons to be recorded in writing on
the merits of each such case and subject to physical fitness and
continued efficiency of the person concerned.

3. Notwithstanding anything in sub-regulations (1) and (2), the
appointing authority shall, if it is of the opinion that it is in the
E public interest so to do, have the absolute right to retire any
employee of the Institute by giving him notice of not less than
three months in writing or three month's pay and allowance in
lieu of such notice :
.......
(i) if he is a Group A or Group B service or post and had
F
entered the service of the Institute before attaining the age of
thirty five years; after he has attained th'e age of fifty years; and

(ii) in any other case, after he has attained the age of fifty-five
G years : Provided that nothing in this sub-regulation shall apply
to an employee in Group D service or post who entered service
on or before the 1.12.62.

(4) *** *** ***

H EXPLANATION :
DR. AGARWAL v. U.0.1. [KULDIP SINGH, J.] 575

In this regulation the expression member of the teaching facul- A
ty, means "Professors, Associate Professors, Assistant Profes-
sors and Lecturers" and such other employees of the Institution
as may be declared to be member of teaching faculty by the
Central Government. "

Regulation 35 of the Regulations which provides for other conditions B
of service is reproduced as under :-

"35. In respect of matters not provided of in these regulations,
the rules as applicable to Central Government Servants regard-

- ing the general conditions of service, pay, allowanc~s including
travelling and daily allowances, leave salary, joining time,
foreign service terms etc., and orders and decisions issued in
C

this regard by the Central Government from time to time shall
apply mutatis mutandis to the employees of the Institute."

The respondents argued before the High Court that the appellant D
was retired by the AIIMS under Regulation 30{3) of the Regulations in
public interest after he attained the age of 55 years. It was further con-
tended that fundamental Rule 560) was also applicable to the AIIMS
employees by virtue of Regulation 35 of the Regulations. It was argued that
even if Regulation 30(3) was not attracted the Institute had the power to E
prematurely retire the appellant, in public interest, under fundamental
Rule 560) applicable to the Central Government employees. It was con-
tended that despite the fact that the appellant was on a tenure post there
was no bar to prematurely retire him by invoking either Regulation 30(3)
or fundamental Rule 56G).
F
The appellant on tlie other hand contended before the High Court
and reiterated the same before us that the post of Director of the AIIMS
is a tenure post under the Recruitment Rules of the Institute and he was
appointed to the said post by way of direct recruitment. According to him
his tenure could not be cut short by bringing in the concept of superan- G
nuation or premature retirement which is allien to a tenure post.

The High Court rejected the contention of the appellant on the
following reasoning:-

"Though the Director's post is mentioned as a tenure post in H
576 SUPREME COURT REPORTS [1992] 3 S.C.R.

A the amended schedule to the recruitment rules relied upon
(and at this stage we make no comment as to whether the said
rules are statutory), the petitioner's appointment itself was for
a period of 5 years or the date when he attains the age of 62
years, whichever is earlier...........In our view, reading the order
of appointment of the petitioner the concept of superannuation
B is to be clearly found to be existing. The order of appointment
does not state that the petitioner was being appointed Director
for a period of 5 years or on a tenure of 5 years. The tenure
mentioned in the appointment order is 5 years or attainment
of the age of 62 years, whichever is earlier. The age of 62 years
c mentioned in the appointment order is obviously in conse-
quence of the proviso to Regulation 30(2) which permits the
normal age of superannuation to the extended from 60 years
-
to 62 years for members of the teaching faculty· in cases of
persons who are exceptionally talented, subject of course to
their physical fitness and continued efficiency. The petitioner
D
a
cannot be heard to say that he was appointed for tenure of
.5 years. The post may or may not be tenure post what is relevant
is the terms on which the petitioner was appointed.........We now
turn to the argument regarding what the petitioner claims to •
be a statutory rules which respondents 1 to 3 say is not a
E statutory rule. We need not express any firm opinion as to
whether the rule relied upon is or is not statutory. The Schedule
relied upon is of the Recruitment Rules. It states that the post
of the Director is as Class I post to be filled direct recruitment.
The upper age limit for the post is 50 years and the tenure is
---
5 years inclusive of one year probation. As the Supreme Court
F
had held in Dr. Boo/ Chand's case the tenure of 5 years fixed·
by the rules is a limitation placed upon the appointing authority
and does not create an indefeasible right in the person ap-
pointed a5 Director to a five year term. In any case, as we have
held earlier, the petitioner is bound by the terms of his own
G appointment which was to the ·effect that the tenure was to be
of five years or till the petitioner attained the age of 62 years:
whichever was earlier. In~eed, the manner in which the ap-:
pointment order is worded makes it clear that the appointing
authority was conscious of the limitation placed upon it that
H
DR. AGARWAL v. U.0.1. [KULDIP SINGH, J.) 577

the tenure should not be more than 5 years. That is why it fixed A
the maximum period of tenure at 5 years or till the petitioner
attained the age of 62 years, whichever expired earlier".

We have given our thoughtful consideration to the reasoning and the
conclusions reached the High Court. We are not inclined to agree with the B
same. Under the Recruitment Rules the post of Director of the AIIMS is
a tenure post. The said rules further provide the method of direct recruit-
ment for filling the post. These service-conditions make the post of Direc-
tor a tenure post and as such the question of superannuating or
prematurely retiring the incumbent of the said post does not arise. The age
of 62 years provided under Proviso to Regulation 30(2) of the Regulations C
- only shows that no employee of the AIIMS can be given extension beyond
that age. This has obviously been done for maintaining efficiency in the
Institute-Services. We do not agree that simply because the appointment
. order of the appellant mentions that "he is appointed for .a period of five
years or till he attains the age of 62 years", the appointment ceases to be D
to a tenure-post. Even an outsider (not an existing employee of the AIIMS)
can be selected and appointed to the post of Director. Can such person be
retired prematurely curtailing his tenure of five years? Obviously not. The
appointment of the appellant was on a Five Years Tenure but it could be
curtailed in the event of his attaining the age of 62 years before completing
the said tenure. The High Court failed to appreciate the simple alphabet E
of the service jurisprudence. The High Court's reasoning is against the
clear and unambiguous language of the Recruitment Rules. The said rules
provide "Tenure means for five years inclusive of one year probation" and
the post is to be filled "by direct recruitment". Tenure means a term during ·
which an office is held. It is a condition of holding the office. Once a person F
is appointed to a tenure post, his appointment to the said office begins
when he joins and it comes to an end on the completion of the tenure
unless curtailed on justifiable grounds. Such a person does not superan-
nuate, he only goes out of the office on completion of his tenure. The
question of prematurely retiring him does not arise. The appointment
order gave a clear tenure to the appellant. The High Court fell into error G
in reading "the concept of superannuation" in the said order. Concept of
superannuation which is well understood in the service jurisprudenr..e is
alien to tenure appointments which have a fixed life span. The appellant
.could not therefore have been prematurely retired and that too without
being put on any notice whatsoever. Under what circumstances can an H
578 SUPREME COURT REPORTS (1992] 3 S.C.R.

A appointment for a tenure be cut short is not a matter which requires our
immediate consideration in this case because the order impugned before
the High Court concerned itself only with premature retirement and the
High Court also dealt with that aspect of the matter only. This Court's
judgment in Dr. Boo; Chand, v. The Chancellor, Kurukshetra University,
[1968] 1. S.C.R. 434 relied upon by the High Court is not on the joint
B involved in this case. In that case the tenure of Dr, Bool Chand was
curtailed as he was found unfit to continue as Vice-Chancellor having
regard to his antecedents which were not disclosed by him at the time of I~
his appointment as Vice-Chancellor. Similarly the judgment in Dr. D. C.
Saxena v. State of Haryana, (1987] 3 S.C.R. 346 has no relevance to the facts
C of this case.

We, therefore, allow the appeal with costs, set aside the judgment of
-
the High Court, allow the writ petition of the appellant and quash the
resolution of the Institute-Body dated November 24, 1980 and the conse- ~
quent order retiring the appellant. Since the appellant has already attained
D the age of 62 years, there is no question of reinstating him in the office of
the Director of the AIIMS. He shall, however, be entitled to his salary less
the non-practising allowance, for the period from December 1, 1981 to
January 21, 1984. Respondents 1 and 2 are directed to pay the arrears of
the salary to the appellant within three months from today. The appellant
E shall also be entitled to 12% interest on the said arrears. We quantify the
costs as Rs. 10,000.

V.P.R. Appeal allowed.
.......