Holding

Extension of service beyond superannuation is a discretionary privilege, not a legal right, and the Bank may refuse it if the officer lacks continued utility, good health, or integrity; the High Court cannot review that discretion.

Summary

The respondent, an officer of State Bank of Bikaner & Jaipur, retired at the statutory age of 58 and sought an extension of service under Regulation 19(1) of the Bank's Officers' Service Regulations, 1979. The Bank refused, citing lack of continued utility, good health, and integrity, and the High Court dismissed his petition under Article 226 without examining the merits. A Division Bench reversed, holding that the Bank had applied an improper criterion of "desirability in the interest of the Bank" and awarded relief. The Supreme Court allowed the Bank's appeal, clarifying that extension beyond superannuation is a discretionary privilege, not a legal right, and may be denied if the officer fails the three statutory parameters; the High Court cannot review the Bank's discretionary decision. Consequently, the High Court judgment was set aside and the appeal was allowed.

Issues considered

Whether an officer has a legal right to extension of service beyond the age of superannuation under Regulation 19(1) and its proviso.
Whether the Bank's refusal to extend service on grounds other than "desirability in the interest of the Bank" is arbitrary and violative of Article 14 of the Constitution.
Whether the High Court under Article 226 can review the Bank's discretionary decision to deny extension.
What criteria must the Bank consider when exercising its discretion to extend service.

Legislation cited

Constitution of Indias. Article 14, s. Article 226
State Bank of Bikaner & Jaipur (Officers') Service Regulations, 1979s. Regulation 19(1)

Subjects

extension of servicesuperannuationdiscretionary powerArticle 14Article 226service regulationsretirement agecontinued utilitygood healthintegrity

Judgment

~
•,
'
STATE BANK OF BIKANER & JAIPUR & OTHERS
A
V,
JAG MOHAN LAL

SEPTEMBER 13, 1988

B [G,L. OZA AND K. JAGANNATHA SHETI'Y, JJ,]

Labour and Services: State Bank offlikaner & Jaipur (Officers)
Service Regulations, 1979: Regulation No, 19--Extension of Service
beyond age of superannuation-Whether discretionary,

Regulation 19(1) of the State Bank ofBikaner & Jaipur (Officers')
c Service Regulations 1979 requires the officers to retire from the service
of the Bank on attaining the age of fifty-eight years or on completion of
•,
thirty years of service whichever occurs first. A note added below that
regulation- states that the existing practice of utilising the service of
officers beyond 58 years will continue in respect of those who joined !..__
D service before 19th July, 1969. The proviso thereto, however, confers
discretion on the competent authority to extend the period of service of
such retiring officers in the interest of the hank, .,

The respondent, an officer of the said Bank, who retired from
service on September 30, 1982 on attaining the age of superannuation of
E 58 years was not granted extension of service. He sought relief from the
High Court under Article 226 of the Constitution. The Bank resisted the
Petition on the ground that his continued utility in the service of the
Bank was found restricted. By the time the petition came up for consi-
deration the respondent had attained 60 years of age. The Single Judge,
therefore, dismissed the petition without going into the merits. The
F Division Bench, however, accepted the appeal and gave relief to the
respondent on the view that the extension of the petitioner could have
been refused only if he was found unsuitable on the ground of continued
utility or good health or integrity and not whether it was desirable in the
interest of the Bank. Since the Bank applied a different criteria
altogether it held the order arbitrary and based on collateral grounds.
G
Allowing the appeal of the Bank by Special Leave,

HELD: I. I The High Court has misconstrued the legal right ,{{

claimed by the respondent. [1031B] 'f j

H L2 In the scheme provided in Regulation 19(1) an officer of the
1026
)

•·· STATE BANK OF BIKANER v. JAG MOHAN 1027
~

Bank has a legitimate right to remain in service till he attains the age of
A
superannuation. But ·beyond that age, he has no such right unless his
service is extended by the Bank. The further rights of parties are
regulated by the proviso thereto. [1031F-G]
•,

1.3 The proviso preserves discretion to the Bank. It is a discre·
thin avail~ble with every ·employer, every management, State or B
otherwise . .If the Bank considers that the service of an officer is
desirable in the interest of the Bank, it may allow him to continue
in service beyond the age of superannuation. If the Bank considers·
that the service Of, an officer is not required beyond superannuation,
it is an end of the matter. It is no reflection on the officer; It carries no
stigma. [1032C-Dl
c
State of Assam v. Basanta Kumar Das, [1973] 3 SCR 158; Kai/ash
Chandra v. Union of India, [1962] I SCR 374; B.N. Mishra v. State,
[1965] l SCR 693 and State.of Assam v. Pramadhar, [1971] l SCR 503,
referred to.
D
2. The Bank, however, is required to consider the case of
individual officers with due regard to (i) continued utility, (ii) good
health, and (iii) integrity beyond reproach of the officer. If the officer
lacks one or the other, the bank)s not bound to give him extension of
service. [10320-E)
E
In the instant case the Bank had shown to the High Court that the
case of the respondent was considered and he did not tit in the said
guidelines. The High Court does not sit in an appeal against that
decision. The High Court under Article 226. cannot review that
decision. l1032E)
F
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3175
of 1986.

From the Judgment and Order dated 17.8.1985 of the Rajasthan
High Court in D.B.S.A. No. 161of1985.
G
Satish Chandra and A.V. Rangam for the Appellants.

-V.M. Tarkunde and S.K. Jain for the Respondent.

The Judgment of the Court was delivered by
., H
1028 SUPREME COURT REPORTS [1988] Supp. 2 S .C.R.

A JAGANNATHA SHETTY, J. By obtaining special leave, the
State Bank of Bikaner & Jaipur ("Bank") has appealed to this Court
against the judgment dated September 17, 1985 of the Division Bench
of Rajasthan High Court in Special Civil Appeal No. 161of1985. The
question raised in this appeal is as to the nature of right of the respon-
dent to get an extension of service beyond the age of superannuation.
B
The respondent was an officer of the Bank. His service condi-
tions were regulated by what is termed as State Bank of Bikaner &
Jaipur (Officers') Service Regulations, 1979. The regulations came
into force with effect from October 1, 1979. Regulation No. 19 pro-
vides for the age of retirement. It also preserves discretion to the Bank
C to extend the period of service of any officer beyond the age of retire-
ment. The relevant portion of Regulation 19 reads:

"Age of Retirement:

19(1) An officer shall retire from the service of the Bank
D on attaining the age of fifty eight years or up to the comple-
tion of thirty years' service, whichever occurs first.

Note: However, the existing practice of utilising the
service of officers beyond the age of 58 years by consider-
ing individual cases for grant of extension will continue
E only in respect of employees who joined the service as
workmen or as officers before the 19th July, 1969. Further,
such employees may be granted extension in service
instead of re-employment as is the case in the State Bank of
Mysore and State Bank of Saurashtra. A suitable diary
note should be made in this regard and carried over at inter-
F vals, to ensure that this factor is not over-looked at the time
when the cases of -employees who joined on or after 19th
July, 1969 come up for consideration (RER/32/80 dated
20.5.1980).

Provided that the competent authority may, at its
G discretion, extend the period of service of an officer who
has attained the age of fifty-eight years or has completed
thirty years' service as the case may be, should such exten-
sion be deemed desirable in the interest of the Bank." -

The aforesaid 'note' to Regulation 19 refers to the existing
H practice in the Bank and that 'note' was added ·by uotification dated
May20, 1980.
•
•· STATE BANK OF BJKANER v. JAG MOHAN [SHETTY, J.J. 1029

] By letter dated June 14, 1979, the Bank intimated the respon-
dent that he was granted extension of service up to September 28, 198c
that is, till he completed 58 years of age. By further letter dated July 1,
A

1982 the respondent was informed that he would be attaining superan-
nuation age of 58 years on September 30, 1982 and would stand retired
on that date. Accordingly, he was retired from service with effect from
September 30, 1982. · B

After an unsuccessful attempt for reconsideration of the case,
the respondent took up the matter before Managing Director of the
Bank. There also he could not succeed. He was informed that his case
did not fit in the guidelines of the Bank.

The respondent moved the High Court for relief under Article c
226 of the Constitution. The Bank resisted the petition contending
inter alia:

"The extension is considernd on three parameters-
D
(i) continued utility;

(ii) good health, and

(iii) integrity beyond reproach.
E
since, in the case of the officials whose names have been
submitted in the list-D, all the three tests have been ful-
filled, their services were extended. In the case of the
petitioner, his services were not extended because in the
·view of the competent authority, his continued utility in the
service of the Bank was found to be restricted. It is submit· F
ted that it is not open to the petitioner to claim that he
should be granted extension in the service as a matter of
right. In this context, it is submitted that when orders were
issued to the petitioner on the 4th February, 1981 posting
him as Branch Manager of a local branch at Jaipur, the
petitioner instead of acting in a responsible manner and G
taking over charge of the branch, immediately proceeded
on leave and went on extending it from time to time, Ui'ti-
mately, the respondent Bank had to cancel the posting on
the 1st May, 1981. Moreover, the guidelines for granting
extension stipulated that continuance of the officer's
service in his existing grade/capacity would be useful to the H
•
1030 SUPREME COURT REPORTS [1988] Supp. 2 S.C.R. -·
A Bank in all its field of activities in a manner that the Bank is
not restricted in continuing· to entrust him with the
responsibilities relating to the normal placement
commensurate with his seniority and grade and as the
petitioner did not satisfy this criteria, the Bank did not
grant him extension jn service."
B
But by the time the petition came up for consideration, the
Respondent attained 60 years of age. The learned single Judge without
going into the merits of the matter dismissed the petition. He observed
that it would be unnecessary to enter into the merits since the respon-
dent has completed 60 years. The matter was taken up in appeal before
a Division Bench of the High Court. The Division Bench accepted the
c appeal and gave relief to the respondent. It was commented:

"The order of refusing to give extension to the
petitioner appellant was because the extension was not
deemed desirable in the interest of the Bank vide Annex. 3
D letter dated July 29, 1982. Hence it is obvious that while
considering the case of the petitioner the Bank took into
consideration the criteria whether his extension shall be
desirable in the interest of the bank and the Bank did not
apply its mind as to whether his services were found unsuit-
able on the ground of continued utility and health or in-
E tegrity. It appears that the Bank keeping in mind the note
which was added to sec. 19( 1) and only relying on the first
proviso Resolution 19(1) they have decided the case of
petitioner for extension of service. This clearly shows that
there was no serious application of mind while dealing with
the case of extension of the petitioner is based on collateral
F grounds and it also arbitrary as the Bank has applied diffe-
rent criteria which ought not to have been applied in the
case of the petitioner. The Bank has not formed the
opinion for not extending the services of the petitioner on
any material or relevant consideration, but has applied a
different criteria altogether and, therefore, the order is
0 based on collateral and '!rbitrary grounds. The extension of
the petitioner could have been refused only if he was found
unsuitable on the ground of continued utility or good
health or integrity and not whether it was desirable in the
interest of the Bank."

H And observep:
•· STATE BANK OF BIKANER v. JAG MOHAN [SHETTY, J.] 1031

"It is true that the right of extension of service is not a legal
A
right, but it is a benefit. However, this benefit is not a
concession, but is a privilege to which an ·officer is entitled
afteryeats of hard work in the Bank."

It seems to us that the High Court has misconstrued the legal
right claimed by the respondent. The right to get extension of service B
beyond the age of superannuation has received consideration of this
Court in several cases.' In State.of Assam v. Basanta Kumar Das, [1973]
3 SCR 158, after reviewing almost all the earlier decisions Kai/ash
Chandra v. Union of India, [1962] 1 SCR 374; B.N. Misra v. State,
[1965] 1SCR693 and State of Assam v. Pramadhar, [1971] 1SCR503,
this Court said (at 165):
c
"A Government servant has no right to continue in service
beyond the age of suporannuation and if he is retained
beyond that age, it is only in exercise of the discretion of
the Government.
D
xxxx xxxxx xxxxx xxxx

xxxx xxxxx xxxxx

the fact that certain persons were found fit to be continued
in service does not mean that others who were not so found E
fit had been discriminated against. Otherwise; the whole
idea of continuing only efficient people in service even
after they had completed 55 years becomes only meaning-
less<'

What do we have here in this case to distinguish those principles F
or not to apply those principles? In our opinion, there is none. In the
scheme provided herein the respondent or any other officer of the
Bank has a legitimate right to remain in service till he attains the age of
superannuation. But beyond that age, he has no such right unless his
service is ·extended by the Bank. The further rights of parties are /
regulated by the proviso to Regulation 19(1). It reads: G

"Provided that the competent authority may at its discre-
tion, extend the period of service of an officer who has
attained the age of fifty eight years or has completed thirty
years' service as the case may be, should such.extension be
deemed desirable in the interest of the Bank.'' H
(Emphasis supplied)
1032 SUPREME COURT REPORTS [1988] Supp. 2 S.C.R.
... '
Look at the language of proviso and the purpose underlying. The
A
B~rtK may in its discretion extend the service of any officer. On what
ground? For what purpose? That has been also made clear in the
proviso itself. It stales "should such extension be deemed desirable in
the interest of the Bank". The sole purpose of giving extension of
service is, therefore, to promote the interest of the Bank and not to
B confer any benefit on the retiring officers. Incidentally the extension
may benefit retired officials. But it is incorrect to state that it is .a
conferment of benefit or privilege on officers. The officers upon
attaining the age of superannuation or putting the required number of
years of service do not earn that benefit or privilege. The High Court
has completely misunderstood the nature of right and purpose of the
proviso. The proviso preserves discretion to the Bank. It is a discretion
c available with every employer, every management, State or otherwise.
If the Bank considers that the service of an officer is desirable in the
interest of the Bank, it may allow him to continue in service beyond
the age of superannuation. If the Bank considers that the service of an
officer is not required beyond superannuation, it is an end of the
D matter. It is no reflection on the officer. It carries no stigma.

The Bank, however, is required to consider the case of individual
officers with due regard to (i) continued utility; (ii) good health; and
(iii) integrity beyond reproach of the officer. If the officer lacks one or
the other, the Bank is not bound to give him extension of service. In
E this case, the Bank has shown to the High Court that the case of
Respondent was considered and he did not fit in the said guidelines. The
High Court does not sit in an appeal against the decision. The High
Court under Article 226 cannot review that decision.

It was however, argued for the respondent that the Bank falls
F within the concept of 'State' for the purpose of enforcement of funda-
mental rights. The Bank, therefore, cannot extend the service of some
and reject the case of others similarly situated. The concept of Article
14 of the Constitution is relied upon. The argument in our opinion,
proceeds on a wrong premise. The Bank has no obligation to extend
the services of all officers even if they are found suitable in every
G respect. The interest of.the Bank is the primary consideration for
· giving extension of service. With due regard to exigencies of service,
the Bank in one year may give extension to all suitable retiring offi-
cers. In dnother year, it may give extensio.n to some and not to all. In a
subsequent year, it may not give extension to any one of rhe officers.
The Bank may have a lot of fresh recruits in one year. The Bank may
.
,.
H not need the services of all retired persons in another year. The Bank
•· STATE BANK OF BIKANER v. JAG MOHAN [SHETTY, J.[ '1033

may have lesser work load in a succeeding year. The retiring persons A
cannot in any year demand that "extension to all or none". If we
concede that right to retiring persons, then the very purpose of giving
extension in the interest of the Bank would be defeated. We are,
therefore, of opinion that there is no scope for complaining arbitrari-
ness in the matter of giving extension of service to retiring persons.
B
In the result, we allow the appeal and set aside the judgment of
the High Court. In the circumstances of the case, we make no order as
to costs.

P.S.S. Appeal allowed.