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Civil Appeal No.13398 of 2015
NON­REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
  CIVIL APPEAL NO. 13398 OF 2015
Chairman­cum­M.D. ITI Limited              …Appellant
versus
K. Muniswamy & Ors.   ...Respondents
     J  U  D  G  M  E  N  T
ABHAY S. OKA, J .
FACTUAL ASPECTS
1. This   Civil   Appeal   raises   a   very   narrow   controversy.     The
issue   concerns   the   interpretation   of   clause   17(7)(iii)   of   the
Certified Standing Orders (for short, ‘the Standing Orders’) under
the   Industrial   Employment   (Standing   Orders)   Act,   1946   in
respect of the appellant – company.  The appellant – company is
a   Public   Sector   Undertaking   (PSU)   of   the   Government   of   India.
On   11 th
  June   1998,   by   a   circular,   an   amendment   was   made   to
Rule   35   of   the   ITI   Conduct,   Discipline   and   Appeal   Rules,   1975
(for short, ‘the said Rules’).  Amended clause 2(d) of Rule 
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Civil Appeal No.13398 of 2015
35 of the said Rules provided that an employee completing
the   age   of   58   years,   will   continue   in   service   till   the
completion of the age of 60 years, subject to medical fitness
at   the   end   of   each   year.     On   22 nd
  August   2001,   the
Department   of   Public   Enterprises   issued   an   Office
Memorandum (O.M.) directing that the Hon’ble Minister­in­
charge of the concerned administrative Ministry would have
the   authority  to  approve  the  rollback  of  the  retirement   age
for   all   PSUs,   on   the   basis   of   the   decision   of   the   Board   of
Directors of the concerned PSU.   The Board of Directors of
the   appellant   –   company   proposed   to   roll   back   the   age   of
retirement   from   60   to   58   years.     The   said   proposal   was
approved   by   the   concerned   Ministry   on   20 th
  November
2001.
2. A writ petition was filed by the respondents before the High
Court   of   Karnataka   for   challenging   the   rollback.     The   writ
petition   was   partly   allowed   by   the   learned   Single   Judge   by
setting   aside   the   circular   dated   27 th
  March   2002   by   which   the
effect   was   given   to   the   decision   of   rollback   by   carrying   out
necessary   amendments   to   the   said   Rules   and   in   particular,   to
Rule 35.  The learned Single Judge directed the appellant to take
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note   of   various   factors   as   indicated   in   the   judgment   while
considering the issue of the reduction in the retirement age from
60   to   58   years.     Pending   the   decision   of   the   appellant,   a
direction   was   issued   to   the   appellant  to   continue   its   employees
till the age of 60 years.  However, it was clarified that those who
have already attained the age of 58 years, will not get any relief.
Both   parties   filed   writ   appeals   for   challenging   the   judgment   of
the   learned   Single   Judge.     By   the   impugned   judgment,   a
Division   Bench   of   the   High   Court   held   that   the   learned   Single
Judge was not right in setting aside the decision to roll back the
age of retirement.  However, it was held that the rollback cannot
have   the   effect   of   affecting   the   existing   rights   of   employees   and
the   company   recognised   in   terms   of   clause   17(7)(iii)   of   the
Standing Orders.
SUBMISSIONS
3. The   submission   of   the   learned   counsel   appearing   for   the
appellant is that clause (17)(7)(iii) does not confer any right on
any   of   the   employees.     His   submission   is   that   the   said   clause
gives discretion to the appellant–employer to consider the case
of   any   employee   to   permit   him   to   serve   up   to   the   age   of   60
years, subject to medical fitness at the end of each year.   This
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clause   does   not   confer   any   right   on   any   employee   to   be
considered   for   continuation   till   the   age   of   60   years.     His
submission   is   that   the   said   clause   enables   the   appellant   to
continue   the   employment   of   certain   employees,   if   after
considering the exigencies of work, the appellant was desirous
of continuing with their employment.  The learned counsel also
invited   our   attention   to   material   placed   on   record   indicating
reasons for effecting rollback from 60 to 58 years.  The learned
counsel,   therefore,   submitted   that   the   direction   issued   in
paragraph 28 of the judgment, needs to be set aside.
4. The   learned   counsel   appearing   for   the   respondents
and/or   intervenors   urged   that   all   that   paragraph   28   of   the
impugned judgment directs is that the effect should be given to
clause 17(7)(iii) and therefore, there is no reason for this Court
to interfere with the said direction.
OUR VIEW
5. On 11 th
 June 1998, the appellant amended Rule 35 of the
said   Rules   by   which,   the   age   of   retirement   of   the   employees
was   extended  to   60  years.     Considering   the  losses  suffered  by
the appellant, in the year 2001, the appellant engaged services
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Civil Appeal No.13398 of 2015
of   M/s.   Price   Waterhouse   Coopers   to   make   recommendations
regarding  restructuring  the company.   Based on  the figures of
manpower   cost   incurred   by   the   appellant,   the   said   consultant
recommended that  the age of retirement should  be reduced to
58   years,   which   will   achieve   the   objective   of   reduction   of
manpower cost.  In fact, the recommendation of the consultant
was also to reduce the age of retirement to 55 years by March,
2003.     According   to   the   case   of   the   appellant,   in   December
2001,   the   issue   of   rollback   of   the   age   of   retirement   was
discussed with the recognised Unions and office bearers of the
Officers’ Association.   The Division Bench of the High Court in
the   impugned   judgment   has   held   that   the   decision   of   the
appellant to roll back the age of retirement from 60 to 58 years
cannot   be   faulted.     This   part   of   the   impugned   judgment   has
not been assailed by the respondents.  Therefore, what remains
for consideration is only the interpretation of clause 17(7)(iii) of
the Standing Orders.  For ready reference, we are quoting sub­
clause   (7)   of   clause   17   of   the   Standing   Orders,   which   reads
thus:
“17.Service­Termination   of­by   the
Company:
1……………
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Civil Appeal No.13398 of 2015
2……………
3……………
4……………
5……………
6……………
7.  (i)   The age of  Superannuation  shall be
58 years but the Company, however, may
require   an   employee   to   retire   at   any   time
after   he   attains   the   age   of   55   years   on
three   months’   notice   without   assigning
any reasons;
(ii)   The   employee   may   also   at   any   time
after   attaining   the   age   of   55   years
voluntarily   retire   after   giving   three
months’ notice to the Company.
(iii)   The   employee   who   attains   the   age
of   58   years   may   be   continued   in
service upto the age of 60 years subject
to   medical   fitness   at   the   end   of   each
year . ”
                 (emphasis added)
6. First   part   of   sub­clause   (7)   lays   down   that   the   age   of
superannuation shall be 58 years.   However, it gives an option
to   the   appellant   to   retire   an   employee   after   he   or   she   attains
the age of 55 years on three months’ notice without giving any
reasons.  It also gives an option to employees to take voluntary
retirement   on   completion   of   the   age   of   55   years.     The   word
‘may’   has   been   used   in   sub­clause   (7)(iii)   of   clause   17.     It   is
only   an   enabling   provision   that   enables   the   appellant   to
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continue an employee in service who has attained the age of 58
years, up to the age of 60 years, provided he or she is medically
fit.     This   clause   does   not   entitle   any   employee   to   seek
continuation after completion of 58 years of age as a matter of
right.   The aforesaid clause does not create any right in any of
the   employees   to   seek   their   continuation   after   58   years.
However,   discretionary   power   has   been   conferred   on   the
appellant   to   continue   an   employee   who   has   attained   58   years
of age, till completion of the age of 60 years.
7. Paragraph 28 of the impugned judgment reads thus:
“Therefore, while holding that the roll back
from   60   to   58   years   cannot   be   interfered
with   by   this   Court   in   exercise   of   judicial
review   power,   we   make   it   clear   that   the
roll   back   cannot   have   the   effect   of
affecting   the   existing   rights   recognised
in   the   employees   and   the   company   in
terms   of   clause   17(7)   of   the   Standing
Orders.   Point   No.3   is   answered
accordingly.” 
(emphasis added)
8. On   a   plain   reading   of   clause   17(7)(iii),   it   does   not   create
any right in favour of any employee.  The use of the word ‘may’
indicates   that   it   gives   discretion   to   the   appellant   to   continue
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some of the employees after completing the age of 58 years, till
they complete 60 years of age. 
9. Therefore,   we   hold   that   clause   17(7)(iii)   of   the   Standing
Orders   only   enables   the   appellant   –   company   to   continue   any
employee   in   service   till   he   or   she   attains   the   age   of   60   years
subject   to   medical   fitness   at   the   end   of   each   year.     We   also
make   it   clear   that   the   aforesaid   clause   does   not   confer   any
right on the employees to seek extension till the completion of
60   years.     To   this   extent,   paragraph   28   of   the   impugned
judgment stands modified. 
10. The appeal is partly  allowed on  the above terms with no
order as to costs.  Pending applications, if any, stand disposed
of.
……..…………………J.
(Abhay S. Oka)
……..…………………J.
 (Rajesh Bindal)
New Delhi;
March 2, 2023.   
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