Supreme Court on Enhancement of Age of Retirement or Superannuation

 

INTRODUCTION 

 

On today’s show, we will discuss the case of New Okhla Industrial Development Authority and Another v. B.D. Singhal and Others, 2021 SCC OnLine SC 466, wherein the Supreme Court examined the correctness of a decision by the State of UP to give prospective effect to the enhancement in the age of superannuation from 58 years to 60 years. 

 

The facts of the case are not relevant for the purposes of this show and hence, we will not be discussing them. What is pertinent are the observations of the Court in relation to prospective enhancement of age of superannuation. The Court also examined whether retrospective effect could be given to such decision. Let us discuss the important observations of the Court in this regard. 

 

OBSERVATIONS BY THE COURT 

 

Firstly, the Court observed that enhancement of age of superannuation is a matter of policy and date of effect of such enhancement is also something that falls within the policy domain. 

 

Secondly, according to the Court, over such policy matters, the jurisdiction lies in the domain of the Executive. The Executive or the State Government are equipped to handle such matters and it can even leave out some of its organizations or departments while implementing its policy decisions. There are financial and logistical implications attached with such policy matters and the Executive alone is competent to take a call on them. 

 

Thirdly, the Court also observed that in deciding a cut-off date, it is inevitable that some employees would stand on one side of the line while the others would be positioned otherwise. There is certainly an element of hardship in such decision but the same cannot be a ground to hold that the entire decision is arbitrary. All the factors have to be seen cumulatively by the State and the Courts are certainly not equipped to interfere in such matters. 

 

Fourthly, the Court explained that the employees of a State Government will have a vested right to the increased age of superannuation only after their Service Regulations or Rules are modified to such extent depending upon the date that has been prescribed by the State Government for application of such amendment/modification. Whether the Government wants to implement a decision prospectively or retrospectively is something on which no vested right could be claimed by any employee and is solely the decision of the Government/Executive.

 

Fifthly, it was contended that the recommendatory proposal for enhancement of age of superannuation was pending since a long time and therefore, the State Government is now estopped from claiming that it cannot implement the decision to enhance the age of superannuation with retrospective effect. According to the Court, the Doctrine of Promissory Estoppel cannot be invoked in the present case as a mere proposal could not be construed as a promise.

 

Sixthly, the Court also explained that the doctrine of Legitimate Expectations will also not be applicable in the present case as the State Government/Executive is merely required to act according to what it has put forth in the public domain in a fair and transparent manner. In the present case, there was never any intention to implement the proposal for enhancing the age of superannuation from a retrospective effect and hence, there was no legitimate expectation that could have arisen.

 

Therefore, in light of the above, the Hon’ble Supreme Court upheld the decision of the State Government to enhance the age of superannuation with prospective effect.

 

Those were the observations of the Court. So, what are my concluding remarks?

 

CONCLUSION

 

I concur with the reasoning of the Court that the judiciary should not interfere in policy matters. Policy decisions have widespread impact both on the people in general and upon the working of the Executive/Government. The Judiciary does not have tools to ascertain whether a particular policy decision is feasible to implemented or not. The Government/Executive consults the stakeholders, looks into its own strengths and weaknesses, and thereafter takes a policy decision. Age of retirement has significant financial implications. Asking the Executive to implement the same in a retrospective is unreasonable in my opinion. If we start adopting such logic, then every decision will have to be ultimately implemented from the date the India got independence because that is as far as the spectre of retrospectivity could travel.