1. There are two proceedings before us. One of them, though described as a 'First Appeal' is in effect a reference by the City Civil Court, Bombay, under the proviso to Section 113 of the Code of Civil Procedure, for the determination of a constitutional issue. The issue is whether the second proviso to Regulation 67 of the Municipal Service Regulations, framed by the Municipal Corporation of Greater Bombay, is void as offending Articles 14 and 16 of the Constitution.
2. The plaintiff, Miss S. R. Dethe, who was appointed as a Sister in the K.E.M. Hospital on January 1, 1945, attained the age of 55 on October 16, 1967. On February 26, 1968, when she was holding the post of an Assistant Matron, she received a notice dated February 15, 1968, under the signature of the Assistant Dean of the hospital, stating that she had completed 55 years of age and that 'she will be required to retire from the service of the Municipal Corporation of Greater Bombay with effect from the 1st of June 1968', The K.E.M. Hospital is run by the Bombay Municipal Corporation.
3. On May 17, 1968, the plaintiff brought the present suit in the City Civil Court, Bombay (S.C. suit No'. 3236 of 1968), for a declaration that the notice terminating her service was void and for an injunction restraining the Corporation from enforcing it. Her case is that the termination of her service amounted to dismissal, that the order of termination was mala fide, that the Assistant Dean had no power to dismiss her, that the second proviso to Regulation 67 was beyond the powers of the Standing Committee and that the proviso was unconstitutional as it conferred an arbitrary power on the Competent Authority to retire Corporation servants between the ages of 55 and 58.
4. The learned Judge of the City Civil Court decreed the suit by his judgment of January 9, 1970 on the sole ground that the second proviso to Regulation 67 is unconstitutional. All other contentions have been answered in favour of the Corporation.
5. The appeal filed by the Corporation against that decision was allowed by Vimadalal J. on April 21, 1970 and the decree of the trial Court was set aside. The learned Judge took the view that the trial Court was in error in deciding the constitutional issue without giving notice to the Advocate General under Order XXVIIA, Rule 1 of the Civil Procedure Code and in not referring the ease for the opinion of the High Court under the proviso to Section 113 of the Code. How-over, while setting aside the decree of the trial Court, Vimadalal J. treated the judgment of the trial Court on the constitutional issue as a Statement of the Case and the appeal as a Reference made by the trial Court to this Court. Such references have to be heard by a Division Bench and, therefore, the reference is placed for hearing before us.
6. Along with this reference, we have another matter before us involving a similar question. A Miscellaneous Petition (No 905 of 1969) was filed fey an employee of the Bombay Municipal Corporation on the Original Side of this Court. The petitioner therein was appointed as a clerk on April 6, 1939. On July 21, 1968, when he was working as a Head Clerk, he completed 55 years of age. On September 5, 1969, a notice was served on him by the Corporation retiring him with effect from December 6, 1969.
7. That petition came up for hearing before Tulzapurkar J., but since the question arising therein was involved in the Reference, he has referred the petition to a Division Bench.
8. Mr. Bhalekar appeared for the plaintiff in the Reference, while Mr. Paranjpe appeared for the petitioner in the Miscellaneous Petition. Mr. Bhalekar agrees that the reply-affidavit filed by the Corporation in the Miscellaneous Petition may be read in the Reference.
9. It is urged on behalf of the petitioners-so we will call them-that the second proviso to Regulation 67 of the Municipal Service Regulations, framed by the Bombay Municipal Corporation, is unconstitutional and void, as it offends against the guarantees contained in Articles 14 and 16 of the Constitution. Though Article 16 was mentioned prominently in the initial formulation of points, the argument centred round the violation of Article 14, In fact, the violation of Article 16 is said to be in this case a consequence of the violation of Article 14, the former being but an instance of the right available under the latter. Regulation 67 is in these terms:
Every Municipal Officer or Servant, including the Honorary Staff, at the Municipal Medical Colleges and Hospitals shall retire at the age of 58 years.
Provided that a Municipal servant may, after attaining the age of 55 years voluntarily retire after giving 3 months' notice to the appropriate authority or without such notice, if he desires to retire on attaining the age of 55 years and attains that age after 11th February 1963, but within 4 months from the date of Corporation's confirmation to this Rule. Provided also that the competent authority may require a Municipal servant to retire, after he attains the age of 55 years on 3 months' notice without assigning any reason. Such a Municipal servant will be deemed to have retired on attaining the age of superannuation for Provident Fund, Pension etc , benefit.
Note :-(1) The Rule will not apply to a Municipal Officer or a servant, who is granted leave after attaining the age of 58 years, as provided in Rule 101.
(2) No claim to compensation from a Municipal Officer or servant who is required to retire under this Rule will be entertained.
(3) A notice in writing of the impending retirement from service shall be given to every Municipal Officer or servant to whom these Regulations apply at least two months prior to the actual date of retirement and one month prior to the date of retrenchment.
(4) Three months' notice contemplated in the proviso to this rule can be given even before the Officer or servant attains the age of 55 years so that the Officer or servant concerned may retire or be made to retire on the day, he attains the age of 55 years.
10. Before considering the validity of the second proviso, we must dispose of two contentions raised by Mr. Singhvi on behalf of the Municipal Corporation. His first contention, which is in the nature of a preliminary objection, is that the petitioners have no locus standi to complain of inequality, implicit or otherwise, in the Regulation, because in fact they have not been discriminated against.
11. We are unable to sustain this objection. It is true that the challenge to a statute on the ground that it violates the guarantee of equality cannot be made or considered in vacuum. Therefore, there has to be a clear averment of discrimination and he who alleges discrimination must plead facts which are essential for sustaining the charge that the statute deals differently with persons who are similarly situated. There is a presumption of constitutionality of statutes and if that presumption is not displaced by the person who alleges unequal treatment, the challenge must fail on merits. That is the sense in which, in Chiranjitlal Chowdhuri v. The Union of India : 1SCR869 Fazl-Ali J. and Mukerji J. said at pages 885 and 915 respectively, that the petitioner had not discharged the onus which lay on him and was, therefore, liable to fail on that narrow ground.
12. In the instant cases, the petitioners have made the necessary averments on which the charge of discrimination can be founded. In the suit, it is alleged (see para. 8 of the plaint) that the plaintiff was singled out for discriminatory treatment and no similar notice was served on any other employee attached to the K.E.M. Hospital. According to the plaintiff, all others were allowed to continue in service upto the age of 58 and, therefore, the action taken against her was capricious. In para. 10 of the plaint, it is alleged that the provision contained in the second proviso is arbitrary as it confers an unguided discretion on the Competent Authority to pass orders of compulsory retirement. Similar averments have been made in the Miscellaneous Petition.
13. Both of the petitioners have been retired compulsorily before the age of superannuation and therefore, they are entitled to have their cases reviewed judicially for the purpose of finding out whether the protection of the equality clause has been denied to them. The petitions cannot be dismissed in limine on the ground that their challenge cannot be entertained.
14. The second point made by Mr. Singhvi is that the question raised by the petitioners has been held to be concluded by the Supreme Court and, therefore, the contention is not open to the petitioners. There is no substance in this objection either. In Shivacharana v. State of Mysore : (1967)IILLJ246SC from which Mr. Singhvi seeks to derive support, the question was whether the fixation of a compulsory age of retirement infringed Articles 14 and 16, if the age of superannuation was higher than the age fixed for premature compulsory retirement. In para. 5 of the judgment, the learned Chief Justice observes that the particular 'contention can no longer be entertained; because it is concluded by a long series of decisions of this Court'. Reference is then made to the decision in Moti Ram v. N. E. Frontier Railway : (1964)IILLJ467SC , in which it was stated that so far as the question of compulsory retirement was concerned, it must be taken to be concluded by several decisions of the Court.
15. It is clear from the judgment in Shivacharan's case as also from the decisions to which it refers that what was held concluded was the challenge to the fixation of a compulsory age of retirement on the ground that it denied equal treatment to servants who were similarly situated. In the very nature of things, a challenge of the present nature cannot be held concluded for all times and in all circumstances. Whether a rule like the one contained in the impugned proviso is discriminatory must depend on its own language and context. And the question whether the proviso confers unguided discretion on the authority concerned has to be determined in reference to the terms of the statute, its history and the well-known facts surrounding it. On such a question, which is peculiar to the impugned statute, there can be no binding precedents. One can only take the aid of decisions on statutes which are in pari materia.
16. Mr. Singhvi relied on two other judgments of the Supreme Court in support of the same submission. The first of those judgments was delivered by Hegde J. in Union of India v. Col. J. N. Sinha (1970) Civil Appeal No. 381 of 1970, decided on August 12, 1970 (Supreme Court) and the second was delivered by Shielat J. in R. L. Butail v. The Union of India (1970) Civil Appeals Nos. 1614 to 1616 of 1968, decided on September 8, 1870 (Supreme Court). In these cases also, what was held concluded was the challenge to the provision fixing the compulsory age of retirement. A question like the one before us was not held concluded in either of these decisions.
17. We will now proceed to consider the validity of the challenge to the second proviso of Regulation 67 on the ground that it violates Articles 14 and 16. The meaning and scope of Article 14 has been explained in several decisions of the Supreme Court which are referred to by Das C.J. in Ram Krishna Dalmia v. Tendolkar J. : 1SCR279 . Dalmia's case and the other cases which are, noticed therein have laid down that (1) Article 14 forbids class legislation but it does not forbid reasonable classification, and (2) that the classification must satisfy two tests for its validity: (i) there must be intelligible distinguishing characteristic as between the different classes and (ii) the differentia must have a rational relation to the object sought to be achieved by the statute.
18. After stating the pertinent law on the subject in the form of six propositions, the learned Chief Justice has classified the decisions into five categories. Out of these, the first, third, fourth and the fifth are relevant for our purposes.
19. In the first class fall cases in which the statute itself indicates the persons or things to whom its provisions are intended to apply. The basis of such classification 'may appear on the face of the statute or may be gathered from the surrounding circumstances known to or brought to the notice of the Court', The Court has then to examine whether the classification is based on some differentia which distinguishes such persons or things from those left out of the group and whether such differentia has a reasonable relation to the object of the statute. If the classification satisfies these tests, the validity of the law has to be upheld.
20. In the third class would fall cases in which the statute does not make any classification but leaves it to the discretion of another authority to select and classify persons or things to whom its provisions are to apply. In such a case, the Court has to examine if the statute has laid down any principle or policy for the guidance of the exercise of discretion in the matter of the selection or classification. If it is found that the statute does not lay down any principle or policy for guiding the discretion, the statute has to be struck down on the ground that it confers an arbitrary and uncontrolled power enabling the authority concerned to discriminate between persons or things similarly situated.
21. The fourth class covers cases in which the statute may not itself make a classification but may lay down a principle or policy for the guidance of the exercise of the discretion in the matter of selection or classification. Such laws are upheld.
22. The fifth class of cases is that in which the statute does not make a classification but lays down the principle or policy for the guidance of the authority which has to exercise the discretion. If in making the classification the authority concerned does not follow the policy or the principle, the particular action but not the statute is struck down as unconstitutional.
23. It is urged on behalf of the petitioners that the second proviso to Regulation 67 which empowers the Competent Authority to require a municipal servant to retire compulsorily after he attains the age of 55 by giving him three months' notice without assigning any reason, confers unguided and arbitrary power on the Competent Authority to pick and choose persons from the same class and subject some of them to unfair premature retirement, while retaining others similarly situated till they attain the age of 58, which is fixed as the age of superannuation.
24. Now, it is clear that Regulation 67 does not explicitly provide guidance to the Competent Authority as to which class of employees, among those who have-reached the age of 55, should be continued in service and who should be compulsorily retired. But it is not necessary that the guide-lines for making such a choice should be furnished expressly by the statute itself.
25. In Jyoti Pershad v. Union Territory of Delhi : 2SCR125 it was held that (p. 1609):
It is not, however, essential for the legislation to comply with the rule as to equal protection, that the rules for the guidance of the designated authority, which is to exercise the power or which is vested with the discretion, should be laid down in express terms in the statutory provision itself. ...Such guidance may thus be obtained from or afforded by (a) the preamble read in the light of the surrounding circumstances which necessitated the legislation, taken in conjunction with well-known facts of which the Court might take judicial notice or of which it is appraised by evidence before it in the form of affidavits, Kathi Raning v. State of Saurashtra A.I.R. S.C. 128 being an instance where the guidance was gathered in the manner above indicated, (6) or even from the policy and purpose of the enactment which may be gathered from other operative provisions applicable to analogous or comparable situations or generally from the object sought to be achieved by the enactment.'
26. In Pannalal Binjraj v. Union of India : 1SCR233 Section 5(7A) of the Income-tax Act, 1922 under which power was given to the Commissioner of Income-Tax to transfer any case from one Income-tax Officer subordinate to him to another was challenged as being violative of Article 14 of the Constitution. It was urged that no rules were framed and no directions given which would regulate or guide the discretion of the Commissioner on the basis of which matters could be transferred, and therefore, the power was naked and arbitrary. This contention was rejected by the Supreme Court on the ground that the very purpose of the Act was to levy, assess and collect income-tax and, therefore, it followed that all the provisions of the Act had been designed with the object of achieving that purpose. .No rules or directions having been laid down in regard to the exercise of that power in particular cases, the appropriate authority has to determine what are the proper cases in which such power should be exercised having regard to the object of the Act and the ends to be achieved...the Commissioner of Income-tax or the Central Board of Revenue, as the case may be, has to exercise its discretion with due regard to the exigencies of tax collection.(p. 408)
27. In K.L. Gupte v. Corporation, Greater Bombay : 1SCR274 in which the constitutionality of certain provisions of the Bombay Town Planning Act, 1955 was challenged on the ground that they were discriminatory, it was held that (p. 312) :
In all such cases, where large powers are given to certain authorities the exercise whereof may make serious inroads into the rights of property of private individuals, we have to see whether there is any guidance to be collected from the Act itself, its object and its provisions , in the light of the surrounding circumstances which made the legislation necessary taken in conjunction with well known facts of which the court might take judicial notice.
Paragraph 29 of the judgment shows that the affidavit filed on behalf of the Municipal Corporation was taken into account for the purpose of finding out whether the provisions of the Act conferred an arbitrary authority on the Municipal Commissioner. It was on the basis of that affidavit, amongst other things, that it was held that there was enough guidance in the Town Planning Act to enable the Municipal Commissioner to come to the conclusion whether a particular commencement certificate should be granted or not and, therefore, the power exercisable under the Act was neither uncanalised nor arbitrary.
28. Mr. Paranjpe however relies upon the judgment of the Supreme Court in Gopal Narain v. State of Uttar Pradesh A.I.R. S.C. 870 in which Section 128(1) of the U.P. Municipalities Act, 1916 was impugned as offending Article 14 of the Constitution, In para. 7 of the judgment it is observed that '... a court should be on its guard not to enter into the domain of speculation with a view to cover up an obvious deficiency in a legislation,...' Now it is true that in an attempt to discover the policy or the purpose of an enactment, Courts cannot embark on speculation. But as observed in the very passage on which counsel relies: '... While a court should be on its guard not to enter into the domain of speculation... it may legitimately discover such a policy, if it is clearly discernible on a fair reading of the relevant provisions of the Act.' After referring to the previous decisions in Kathi Raning v. State of Saurashtra, P. Balakotaiah v. Union of India A.I.R.  S.C. 282 and Pannalal Binjraj v. Union of India in which guidance was held to be implicit in the provisions of the impugned Acts, the judgment proceeds (p. 374) : .But it is neither possible nor advisable to lay down precisely how a court should cull out such a policy from an Act in the absence of an express statutory declaration of policy. It would depend upon the provisions of each Act, including the preamble. But what can be 4 posited is that the policy must appear clearly either expressly or by necessary implication from the provisions of the statute itself.
29. Paragraph 12 of the judgment in Gopal Narain's case shows that while considering the challenge under Article 14, the Supreme Court took the assistance of an affidavit which was filed on behalf of the Municipal Board and the map annexed thereto. It was on the basis of that material that it was concluded that for a large number of years a particular area was treated as a separate geographical unit for the purpose of taxation and therefore, the differential treatment accorded to that area was justified and the notification imposing certain taxes on that particular area only did not infringe Article 14 of the Constitution.
30. It is thus clear that it is permissible to look at the surrounding circumstances and the reply-affidavit of the Corporation for finding out whether the power conferred by the second proviso to Regulation 67 is uncanalised and uncontrolled or whether sufficient guidance is available to the Competent Authority for exercising its discretion to retain some employees and retire others after they have attained the age of 55.
31. Let us first consider the historical background of Regulation 67, its object and its purpose. In the reply-affidavit of the Corporation which was filed in the Miscellaneous Petition, reference is made to the circumstances in which the Regulation was passed by the Standing Committee and then approved by the Corporation. Correspondence (exh. 7) reflecting those circumstances has been admitted by Vimadalal J. by consent of parties.
32. The correspondence between the Municipal Commissioner and the Corporation shows that on November 8, 1962 the Commissioner wrote a letter to the Corporation regarding the feasibility of raising the age of retirement from 55 to 57, because there was an acute dearth of experienced persons and 'The question of fixing the age of superannuation for Public Servants has been reviewed by Government as well as Local Authorities primarily on considerations of public interest'. The Commissioner further stated in his letter that 'The Corporation is expanding its activities in all respects and a dearth of qualified and experienced personnel is often felt, in many departments and is likely to continue for a long period. There is a general acute shortage of trained, scientific and technical personnel and it does not at times become possible to carry out development schemes and other technical and specialised jobs expeditiously. Further, the National emergency and the growing demands arising therefrom will now claim the attention of the younger people and the present staff at all levels of the Municipal administration may have to be retained in service so as to ensure smooth running of the Municipal Sennces, As it is, we have had, recently to re-employ certain retiring Municipal officers in the interest of Municipal Services. Having regard to all this, it is felt that the age of compulsory retirement for employees of the Corporation be raised to 57 years for all classes of employees, by amending Rule 67 of the Municipal Service Regulations as indicated in the enclosed statement'. (Italics are ours).
33. On November 14, 1962, the Standing Committee passed a resolution referring the matter back to the Commissioner. In the meanwhile, the Government of Maharashtra had decided to raise the age of superannuation of its employees from 55 to 58 and falling in line therewith, the Municipal Commissioner wrote two letters, dated January 19, 1963 and February 19, 1963, to the Corporation recommending that the age of superannuation of the Corporation employees should also be raised from 55 to 58. Along with the letter of February 19, the Commissioner enclosed a copy of the notification issued by the Government of Maharashtra on February 11, 1963. Paragraph 4 of that notification provides expressly that notwithstanding that the age of superannuation was raised to 58, the appointing authority could require a Government servant to retire after he attained the age of 55 years, on three month's notice, without assigning any reason and that this power should normally be exercised for the purpose of retiring employees who have attained the age of 55 years and 'arc found unsuitable for retention in Government service''.
34. On April 11, 1963, the Commissioner having been asked by the Corporation to submit his proposal to the Standing Committee did so, but while forwarding the proposal for raising the age of retirement to 58, he did not incorporate in the amendment proposed by him, a provision similar to the one contained in para. 4 of the Maharashtra Government notification which confers a power to retire some employees on their attaining the age of 55.
35. On April 30, 1963, the Standing Committee passed a resolution asking for incorporation of a provision similar to the one contained in para. 4 of the Maharashtra Government notification and therefore on May 31, 1963 the Commissioner sent a fresh proposal by incorporating the provision that the appointing authority could require a Corporation servant to retire compulsorily after he attained the age of 55, on three month's notice, without assigning any reason. The further provision in para. 4, however, that the power was to be exercised for compulsorily retiring employees who were 'found unsuitable for retention' in service was not included in the recommendation.
36. On June 10, 1963, the Standing Committee approved of the proposal and on June 28, 1963, the Corporation confirmed it. The proposal made by the Commissioner thus became a Regulation of the Corporation. That, in brief, is the history of Regulation 67.
37. It is thus clear that the fundamental reason for raising the age of superannuation from 55 to 58 was 'to ensure smooth running of Municipal Services' a reason based 'primarily on consideration of public interest'. The power of compulsorily retirement which is an integral part of the scheme under which the age of superannuation was raised from 55 to 58 must be exercised for the purpose of the Regulation and that purpose is to secure greater efficiency in Municipal Services. The power therefore can be exercised by the Competent Authority only if it is satisfied that the exercise of the power is 'in the interest of Municipal Service'. As the power has to be exercised with due regard to the exigencies of public service, it is not a power to discriminate unlawfully. The retention of public servants in service after a particular age depends primarily upon their efficiency and as observed by Hegde J. in Union of India, v. Col. J. N. Sinha, '' There is no denying the fact that in all organizations and more so in Government organizations, there is, a good deal of dead wood. It is in public interest to chop off the same'. If 'public interest' was the express foundation on which the age of superannuation was raised from 55 to 58, public interest must continue to be the governing factor for retention of employees between the ages of 55 and 58. In other words, the power of compulsory retirement is designed to ensure the weeding out of employees who are not fit to be continued any longer.
38. There is a presumption that all discretionary power will be exercised justly and reasonably and in furtherance of the object underlying the power. Public officials, particularly, must be presumed to discharge their duties honestly and in accordance with law (New York ex rel. Lieberman v. Van De Carr) (1905) 50 Law ed. 305. Besides, abuse of power cannot be easily assumed where the discretion is vested in high officials (See Matajog 'Dobey v. H.C. Bhari A.I.R  S.C. 44 and Pannalal Binjraj v. Union of India). In the instant case, the Circular issued by the Deputy Municipal Commissioner on June 15, 1967, shows that no employee could be retired compulsorily without obtaining the prior approval of the Municipal Commissioner. If in any particular case the power is shown to have been exercised arbitrarily or mala fide, the exercise of the power may have to be struck down but not the proviso under which the discretionary power is conferred.
39. Mr. Singhvi has drawn our attention to three decisions which are in point on the question of guidance. Those decisions are reported in Ram Dass v. State of Bihar : AIR1966Pat148 , Gurmukh Singh v. State  1 L.L.J. 267 which is a decision of the High Court of Rajasthan, and Bishi Bam v. Union of India  Lab. I.C. 1317 which is a decision of the Delhi High Court. In these cases, the statute conferred what was apparently a naked power to continue some employees and retire others compulsorily. No express guidance was furnished by the statute as to what criterion should govern the discretion and yet it was held that it was implicit that the governing factor was public interest and. therefore, the power to exercise the discretion was neither unanalyzed nor unbridled.
40. It is urged by Mr. Paranjpe that for the purpose of finding out whether a statute contains guide-lines for the exercise of a discretionary power, it may be permissible to look at its preamble and its history, but we cannot look at the correspondence between the Commissioner and the Corporation, because correspondence is not any more history than the speeches made by legislators on the floor of the House regarding the object and purpose of an enactment. Now, the reason for which we have referred to what passed between the Commissioner on the one hand and the Standing Committee and the Corporation on the other is to show for what object and purpose it was thought necessary to amend the Regulation by raising the age of superannuation. The executive authority of the Corporation vests in the Commissioner and it is in the exercise of that authority that he initiates proposals for the consideration of the Corporation. The reason cited by the Commissioner, therefore, that it was in 'public interest' to raise the age of superannuation is not an idle expression of opinion but is germane to the consideration of what is the true reason and object of Regulation 67. In a loose sense, that reason is a preamble to the Regulation,
41. This discussion will not be complete without reference to the Full Bench decision in K.R. Gupta v. B.K. Talwar : AIR1970All296 . In that case, the constitutionality of paragraph (1) of the proviso to Clause (1) of Fundamental Rule 56 was challenged as violating Articles 14 and 16, Under the proviso, the appointing authority could at any time, without assigning any reason, require a Government servant to retire on three months' notice after he attained the age of 55. The majority held that there was nothing in paragraph (1) of the proviso to indicate as to which was the group of persons sought to be isolated within the ambit of that paragraph, that a 'carte blanche' was given to the Executive Authority to exercise its discretion to retire some employees and retain others as it liked and, therefore, the provision was unconstitutional.
42. It is true that the Rule considered by the Allahabad High Court is in material respects similar to the impugned provision. But that decision is distinguishable for more than one reason. In the first place, towards the end of para. 36 of his judgment, Pathak J., who along with Gulati J. constitutes the majority, has stated that there was nothing in the Rule itself or in the context of the case which could be relied upon to show, either expressly or by necessary implication, that the power to retire Government servants prematurely was controlled by any pertinent consideration. According to the learned Judge, 'The language of the impugned provision and its contextual surrounding do not clearly point to any pertinent principle in conformity with which the services of a Government servant may be terminated' and further that 'There is also nothing in the history of the rules from which assistance can be derived in this respect'. It is thus clear that neither the context nor the history of the Rule furnished any guide-lines to the Authority for the exercise of its discretion. We have held that the history of Regulation 67 shows that enough guidance is available to the Competent Authority for exercising its discretion to retire some employees compulsorily. The test in our case is the requirement of 'public interest'.
43. The second point of distinction is that Rule 56(a) of the Fundamental Rules provides that an employee 'may be retained in service after the date of compulsory retirement with the sanction of the Government on public grounds, which must be recorded in writing', but he must not be retained after the age of 60 years except in very special circumstances'. The words 'compulsory retirement' have been used in this clause as meaning the age of 58 which was really the age of superannuation. Pathak J. observes in para, 34 of his judgment that 'Compared with the parent provision in Clause (a) of Fundamental Rule 56, there is nothing in Paragraph (1) of the proviso to indicate what is the group of persons sought to be isolated within the ambit of that paragraph. Any such guiding consideration is conspicuous by its absence.' Thus, in one part of the Rule the power was expressly qualified so as to be exercisable in public interest while in another part of the same Rule an untrammelled power was conferred. In our case, there is no such antithesis. In addition, the power of compulsory retirement is a part of the scheme under which the Corporation raised the age of superannuation from 55 to 58 and the latter step was thought necessary on considerations of 'public interest'. We have held that the same considerations must govern the retention of employees between the ages of 55 and 58.
44. There is a third point of distinction and that leads to an almost independent topic. We have before us a Circular issued under the signature of the Deputy Municipal Commissioner on June 15, 1967, which reads thus:
Subject : Superannuation.
M.C. has directed that the Heads of Departments shall properly scrutinise proposals for the continuation of employees beyond the age of 55 years in order to see that only fit persons are continued in service and that all employees are not continued as a matter of routine.
In continuation of this office circular No. MES/4562 dated the 4th March 1965, HDs. are, therefore, requested to see that really fit persons are continued beyond the age of 55 years and that employees who have a bad record during the 3 years preceding the age of 55 years should be made to retire after giving them 3 months' notice and obtaining prior approval of M.C. to the proposals in time.
S. M. Y. Sastry
D. M. C. (S).
There was no such circular in the Allahabad case. What is the legal effect of the circular is a question which we will presently consider, but there is no doubt that the Municipal Commissioner had directed the Heads of Departments to retain after the age of 55, such employees only as were found fit. Employees who had a bad record during three years preceding the age of 55 were to be considered unfit for further continuance.
45. It is urged on behalf of the petitioners that the Municipal Commissioner has no power to issue such a circular, that circulars are liable to be altered from time to time without formality and can at best furnish a fluctuating guide-line and if the statute did not contain enough guidance it must be considered as being still-born and subsequent executive directions could not inject life into it.
46. It is necessary to consider the relevant provisions of the Bombay Municipal Corporation Act (Act III of 1888) for determining whether the Commissioner has power to issue any such circular. Under Section 80A(2) of the Act, save as otherwise provided in the Act, the power of appointing municipal officers and servants vests in the Municipal Commissioner. Clause 1 of that section and Section 80B contain provisions limiting the power of the Commissioner to make appointments. Section 64(5) of the Act provides, to the extent it is material, that subject, whenever it is in the, Act expressly so directed, to the approval or sanction of the Corporation or the Standing Committee and subject to all other restrictions, limitations and conditions imposed by the Act, the entire executive power for the purpose of carrying out the provisions of the Act vests in the Commissioner. Under Clause (a) of Section 64(5), the Commissioner has to perform all the duties and exercise all the powers specifically imposed or conferred upon him by the Act. Under Clause (b) of Section 63(3), the Commissioner has to prescribe the duties of, and exercise supervision and control over, the acts and proceedings of all municipal officers and servants, and subject to the regulations at the time being in force under Section 81, dispose of all questions relating to the service of the said officers.
47. The question is whether the circular issued on the authority of the Municipal Commissioner, furnishing guide-lines to the Heads of Departments for retiring Municipal employees compulsorily between the ages of 55 and 58, is within the powers of the Commissioner and has, therefore, a binding force and authority. Now, in the first place, the entire executive authority of the Corporation vests in the Municipal Commissioner. Secondly, the Commissioner has the power under Clause (b) of Section 64(3) to
prescribe the duties of, and exercise supervision and control over, the acts and proceedings of all municipal officers and servants,... and subject to the regulations at the time being in force under Section 81 dispose of all questions relating to the service of the said officers and servants.. .
By virtue of these provisions, the Commissioner would be entitled to issue instructions to the Municipal officers and servants and those instructions would bind them. Such instructions must, undoubtedly, be within the framework of the rules and regulations made by the Corporation, but so long as the Commissioner acts within that frame-work the instructions issued by him would have binding authority. If, for example, it appeared in this case that the Corporation wanted to depart from the model provided by Note 6 of Rule 161 of the Bombay Civil Services Rules and the object of the Corporation was to continue all employees till they attained the age of 58 regardless of their suitability or fitness, it would not have been open to the Commissioner to issue a circular of the present nature subjecting- the employees to a weeding out process. We have, however, held that though the second proviso to Regulation 67 does not contain an express guide-line, the power conferred on the Competent Authority by that proviso can be exercised only for retiring employees who are found unfit for retention after the age of 55. The Commissioner would therefore have the power to issue a circular of the present type.
48. The second proviso is at least clear on this: that the Corporation did not want to continue every servant in its employment after the age of 55 till he attained the age of 58. If such a power were intended to be conferred, the provision that any employee could be compulsorily retired between the ages of 55 and 58 by three months' notice without assigning any reason would be meaningless. The Corporation therefore had in its reckoning a class of employees who should not be continued after the attainment of the age of 55. Intrinsically, the test contemplated for continuance was one of the fitness and suitability. All that the Commissioner did by issuing the Circular was to fill up the gap and make explicit what was implicit.
49. In our opinion, therefore, the Circular issued on the authority of the Commissioner being in furtherance of the Regulation framed by the Corporation and not in derogation of it, is within the competence of the Commissioner and it must therefore bind all subordinate officers and servants who are amenable to the jurisdiction of the Commissioner.
50. Two arguments were advanced by Mr. Bhalekar in regard to the validity of Regulation 67 which remain to be noticed. It is contended in the first, place, that the Commissioner, the Standing Committee and the Corporation had before them Rule 161 of the Bombay Civil Services Rules and yet, the provision in Note 6 of that rule authorising the appropriate authority to retire a Government servant compulsorily 'in the public interest' was not adopted in Regulation 67. The inference arising from this which is pressed upon us is that the Corporation wanted to assume a wide and unqualified right to retire its employees compulsorily. It seems to us impossible to accept this contention. The circumstance that the second proviso to Regulation 67 does not expressly qualify the power of retiring Corporation servants compulsorily between the ages of 55 and 58 by providing that the power was to be exercised in public interest would not justify the conclusion that the power was exercisable for any other purpose. Through Regulation 67 the Corporation has expressly assumed the power to retire its employees compulsorily by giving them 3 months' notice, without assigning any reason. Therefore, the power possessed by the Government of Maharashtra under Rule 161 of the B.C.S. Rules was in terms adopted. The variation is that Regulation 67 lacks the express guidance contained in Note 6 under which the power is exercisable in the public interest. We have held that the power conferred by Regulation 67 is not unguided. No inference can therefore be raised that the very intendment of the Regulation was to assume an untrammelled power.
51. The second point made by Mr. Bhalekar is that though the power to retire a Corporation servant compulsorily is conferred by Regulation 67 on the '' Competent Authority', that expression is not defined in the Regulations and, therefore, any superior officer not necessarily of standing or experience could exercise the power. To that extent, says counsel, there is no guarantee that the discretion would be properly exercised and the provision, being vague and uncertain, is capable of being used with discrimination. Now in the suit with which Mr. Bhalekar is concerned, evidence was led by the Corporation through Mr. Redkar, an Assistant Dean of the K.E.M. Hospital, that in regard to the plaintiff, the Dean was the Competent Authority. That evidence was not challenged and therefore the charge that the power conferred by the second proviso was capable of being abused cannot be sustained. We are quite clear that by 'Competent Authority' is meant the administrative head of the department concerned. One must remember that ordinarily, the power of dismissal, removal or compulsory retirement is exercised in public Corporations by an authority not lower than that which makes the appointment.
52. For these reasons, we hold that the second proviso to Regulation 67 does not confer arbitrary or unguided power on the Competent Authority and is therefore valid. The Circular of the Commissioner which contains binding executive instructions is a step in furtherance of the Regulation and is within his competence. It serves to emphasise that the discretion of the Competent Authority is not a power to discriminate unlawfully.
53. The City Civil Court will now proceed to dispose of the suit in the light of our judgment. If it becomes necessary to allow amendment of the pleadings for the decision of any outstanding point, it may do so.
54. The Miscellaneous Petition will stand dismissed.
55. In the circumstances, there will be no order as to costs in both the proceedings.