“Grave Doubts On Integrity Justify Compulsory Retirement”: Delhi High Court Upholds Centre’s Action Against IAS Officer Amidst Multiple CBI Cases, Quashes Tribunal Order
Sanchayita Lahkar
The Delhi High Court, Division Bench comprising Justice C. Hari Shankar and Justice Ajay Digpaul upheld the compulsory retirement of a senior Indian Administrative Service (IAS) officer. The court quashed the earlier order of the Central Administrative Tribunal which had set aside the compulsory retirement. The bench declared that the action taken under Rule 16(3) of the All-India Services (Death-cum-Retirement Benefits) Rules, 1958, was sustainable in light of grave doubts on the officer's integrity, multiple ongoing investigations, and public interest.
The Division Bench rendered its judgment on a writ petition filed by the Union of India and the State Government of Chhattisgarh challenging the Tribunal's decision. The compulsory retirement order against the officer had been passed after a second review committee observed serious integrity concerns, including multiple FIRs and pending criminal investigations.
The writ petition was filed against the Central Administrative Tribunal's order dated 5 April 2018 in OA 2208/2017, which had set aside the compulsory retirement of Babulal Agrawal, a 1988 batch IAS officer. The Union of India and the State of Chhattisgarh, through orders dated 9 August 2017 and 11 August 2017 respectively, had compulsorily retired the officer under Rule 16(3) of the All-India Services (Death-cum-Retirement Benefits) Rules, 1958.
The officer had previously been involved in multiple investigations by several government agencies including the Department of Income Tax, Central Bureau of Investigation, Enforcement Directorate, and the Economic Offences Wing. Allegations against him included financial misappropriation, possession of disproportionate assets, misuse of public office, and criminal conspiracy.
As per the record, a search operation by the Income Tax Department on 4 February 2010 led to the seizure of cash and jewellery, which was later returned after verification. This was followed by reopening of his assessment proceedings resulting in a tax demand, which was ultimately quashed.
Following this, suspension orders were issued against him for violating Rule 3(1) of the All-India Services (Conduct) Rules, 1968. Between 2010 and 2017, various FIRs were registered against him:
- FIR No. 6/2010 by EOW/ACB alleged routing of over Rs. 62 crores through 446 bank accounts linked to shell companies and his family-run firm. Though a closure report was filed, this FIR initiated further scrutiny.
- An ECIR was filed by the Enforcement Directorate in 2011 for offences under the Prevention of Money Laundering Act, 2002. A closure report followed.
- A CBI FIR dated 31 December 2010 alleged criminal conspiracy and misuse of office, resulting in recovery of Rs. 15 lakhs.
- Another FIR by CBI in 2010 involved alleged misappropriation of Rs. 21 crores of public funds under a World Bank-aided malaria control program.
- A 2017 FIR by CBI alleged that the officer conspired to settle his previous cases through a bribe of Rs. 1.5 crore.
The second review committee was convened on 13 April 2017, following the officer's arrest in the 2017 CBI case. It noted "grave doubts on the integrity of the officer" and recommended compulsory retirement in public interest. The decision was approved by the Appointments Committee of the Cabinet.
The officer challenged this order before the Tribunal, arguing that his previous Annual Confidential Reports (ACRs) showed excellent performance and that FIRs do not constitute proof of misconduct. He further contended that a second review was impermissible after the first committee in 2015 had allowed him to continue.
The Division Bench began by stating the object of Rule 16(3), stating that it permits retirement of officers "in public interest to preserve the efficiency of the services and to safeguard its integrity from the corrosion of corruption." The court cited M.E. Reddy v Union of India stating that the rule "merely seeks to strike a just balance between the termination of the completed career of a tired employee and maintenance of top efficiency in the diverse activities of the administration."
The bench clarified that judicial review of such orders is limited to assessing "mala fides, arbitrariness, or a lack of material." The court referred to the Supreme Court’s judgment in Baikuntha Nath Das v Chief District Medical Officer, Baripada to restate the principle that "principles of natural justice have no place" in such cases.
On the legality of a second review, the court cited State of U.P. v Chandra Mohan Nigam, stating that a second review is permissible in "exceptional circumstances," particularly when fresh material emerges that casts doubt on an officer's integrity. The court recorded:
"Claims of arbitrariness based on the mere conduction of a second review are devoid of merit." It added that the officer's arrest in February 2017 was a "circumstance which, irrefutably, took place after the conduction of the 2015 review."
Regarding the argument based on the officer's favourable ACRs, the bench recorded that:
"The phrase 'entire service record' cannot be interpreted to the exclusion of complaints against an officer or allegations of involvement in criminal cases."
The bench observed that ACRs were in fact reviewed by the committee, alongside complaints, service history, and pending investigations. The court found "no merit" in the contention that the officer’s retirement should be based solely on ACRs or performance reviews.
Further, addressing the Tribunal’s reliance on Umedbhai M. Patel, the court distinguished the facts, noting that in Umedbhai, the officer faced no pending complaints or serious allegations, whereas in the present case, "there are multiple investigations by premier agencies including CBI and ED."
The court rejected the notion that compulsory retirement can only be based on completed disciplinary or criminal proceedings. It stated:
"The very phrase – 'doubtful integrity' – implies the satisfaction of a threshold which is significantly lower than if the officer's conviction... is to be interpreted as a pre-requisite."
It stated that "Rule 16(3) permits immediate action in cases where the delinquent official is suspected of being engaged in activities that require intervention in public interest."
The Division Bench set aside the Tribunal’s order dated 5 April 2018 and upheld the compulsory retirement orders passed by the Union of India on 9 August 2017 and the State Government of Chhattisgarh on 11 August 2017.
"The Tribunal has erroneously set aside the order of compulsory retirement passed against Babulal," the court recorded.
The writ petition was allowed. Pending applications were disposed of and no order as to costs was made.
Advocates Representing the Parties
For the Petitioners: Amit Tiwari, CGSC with Ayushi Srivastava and Ayush Tanwar, Apoorv Shukla, Standing Counsel with Prabhleen A. Shukla
For the Respondents: Biswajit Bhattacharya, Senior Advocate with Utsav Saxena, Kartikey Singh, Rahul Aggarwal, and Ronit Bose
Case Title: Union of India and Anr. v. Babulal Agrawal
Neutral Citation: 2025: DHC:2650-DB
Case Number: W.P.(C) 7150/2018, CM APPLs. 27279/2018, 32767/2018 & 48900/2018
Bench: Justice C. Hari Shankar , Justice Ajay Digpaul
[Read/Download order]
