Judgment-

V. N. KAHRE, J.

( 1 ) THE appellant before us, started his service career as a Sub-Auditor in the erstwhile Holkar Estate, Indore with effect from 5/02/1943. Subsequently on reorganisation of States in the year 1956 the appellant continued to serve in the office of Accountant General, Madhya Pradesh, Gwalior. The appellant while working as Auditor was accorded selection grade. However, subsequently the appellant was compulsorily retired from service by notice dated 23rd of August, 1974 issued under Rule 48 (b) of C. C. S. Pension Rules, 1972 hereinafter referred to as the Rules.

( 2 ) THE appellant challenged the impugned notice compulsorily retiring him from service by filing a Civil Suit in the Court of Sub-Judge, Gwalior for a declaration that the order compulsorily retiring him from service is illegal and inoperative, being arbitrary and mala fide. The trial Court decreed the suit and the aforesaid decree was affirmed by the First Lower Appellate Court. The High Court in the Second Appeal filed at the instance of the respondents set aside the decree and judgments of the trial Court and the First Appellate Court holding that the order compulsorily retiring the appellant from service did not suffer from infirmity either on account of arbitrariness or mala fides. That is how the plaintiff appellant has come up in appeal before us.

( 3 ) COUNSEL for the appellant reiterated the argument advanced before the Court below characterising the order compulsorily retiring the appellant from service as arbitrary and mala fide. It was urged that the service record of the appellant being unblemished, the impugned order compulsorily retiring the appellant deserves to be held as arbitrary. The law in regard to the compulsory retirement of the Government servants in terms of service rule is almost settled by now by number of decisions of this Court. Repeatedly it has been held that the power to retire compulsorily a Government servant in terms of the service rules is absolute provided the concerned authority forms an opinion bona fide that it is necessary to pass order of compulsory retirement in the public interest. This Court in the case of Baikuntha Nath Das v. Chief District Medical Officer, Baripada, (1992) 2 SCC 299 : (1992 AIR SCW 793) after considering the number of decisions of the Apex Court referred the following principles for testing the validity of order of compulsory retirement.

"34. The following principles emerge from the above discussion :

(I) An order of compulsory retirement is not a punishment. It implies no stigma nor any suggestion of misbehaviour.

(II) The order has to be passed by the Government on forming the opinion that it is in the public interest to retire a Government servant compulsorily. The order is passed on the subjective satisfaction of the Government.

(III) Principles of natural justice have no place in the context of an order of compulsory retirement. This does not mean that judicial scrutiny is excluded altogether. While the High Court or this Court would not examine the matter as an appellate Court, they may interfere if they are satisfied that the order is passed (a) mala fide, or (b) that it is based on no evidence, or (c) that it is arbitrary - in the sense that no reasonable person would form the requisite opinion on the given material; in short, if it is found to be a perverse order.

(IV) The Government (or the Review Committee, as the case may be) shall have to consider the entire record of service before taking a decision in the matter - of course attaching more importance to record of and performance during the later years. The record to be so considered would naturally include the entries in the confidential records/character rolls, both favourable and adverse. If a Government servant is promoted to a higher post notwithstanding the adverse remarks, such remarks lose their sting, more so, if the promotion is based upon merit (selection) and not upon seniority.

(V) An order of compuls