JUDGMENT

Rajendra Babu, J.-Pursuant to the recommendations of the Fifth Central Pay Commission, Government of India issued an Office Memorandum (OM) No. 25012/2/87 -Col (A) dated 13th May, 1998 enhancing the retirement age of Central Government Employees to sixty years from fifty-eight years. It was also provided that OM would come into force with effect from the date of Notification of amendment to the relevant rules and regulations. To a similar effect Department of Public Enterprises, Ministry of Industry, Government of India issued another OM No. 18(6)/98-GM-GL-002 dated 19th May, 1998 making it clear that such increase in age of retirement would come into force from the date the relevant rules and regulations of the PSEs concerned are amended by the concerned Public Sector Enterprises. As per this OM the Board of Directors of the Fertilizer Corporation of India Ltd. (FCIL) considered the matter and passed a resolution on 6th July 1998. Relevant portion of which reads:

"..The Board noted that FCIL was referred to BFIR in April 1992 and declared sick in November 1992. No revival package has been approved by BFIR so far. Gorakpur Unit is closed since June 1990 carrying surplus of 1322 men as on 1-7-1998 and Korba, which was wound up, is carrying surplus of 54 men. Besides, FCIL is carrying surpluses in the Corporation all over for which a voluntary retirement scheme providing special financial incentive to induce employees to seek early retirement is in operation since 1998 and so far 1524 persons have availed the benefit under the scheme as on 30-6-1998. FCIL is totally dependent on Govt. support for critical capital expenditure, working capital and to meet the huge operating losses by its units. Wages of the employees have not been revised; as a result there has been a flight of talent. The only little incentive was promotion which will also be blocked in case age of retirement is enhanced from 58 years to 60. Enhancing the age of retirement involves financial implications, which will further jeopardize the revival proposal of the Corporation before the BIFR.

In view of the above the Board unanimously decided not to raise the age of retirement from 58 to 60 years..."

This decision was communicated to the concerned Ministry on 21st August 1998 and the Department of Fertilizers, Ministry of Chemicals and Fertilizers, Government of India granted exemption vide its letter dated 30th December 1999 from increasing the age of retirement from 58 to 60 years.

2. In the meanwhile the appellants herein superannuated on their attaining the age of 58 years as per the terms of the service contract. Appellants herein moved the High Court for a direction to the Respondents herein not to retire them from services before they attained the age of sixty years and till such time not to interfere with the functioning and discharge of their duties. The High Court dismissed the petition and hence this appeal by special leave.

3. It is urged on behalf of appellants that the OM dated 13th May 1998 by itself increased the retirement age and the policy set out therein is mandatory and binding on FCIL to enhance the retirement age. This OM is applicable only to employees in Government Civil Services and not to employees in the Public Sector Enterprises. Hence by reason of this OM, the appellants cannot contend that they are entitled to continue in service till they attain the age of 60 years. It is only by OM issued by the Department of Public Enterprises dated 19th May 1998 the said policy was made applicable to be effective from the date of modification of relevant Rules regarding the same.

4. By OMs dated 25th January 1991 and 08th April 1991, the Ministry of Program Implementation and Department of Public Enterprises made it clear that all instructions/guidelines issued by the Government of India would be of two kinds - a) Directives issued in the name of President of India and b). Guidelines. Directives would be issued by the Administrative Ministry in