“State of U.P. v. Sri Shyam Lal Sharma, (1971) 2 SCC 514 laid down various propositions regarding implication and effect of orders of compulsory retirement.
“First, in ascertaining whether the order of compulsory retirement is one of punishment it has to be ascertained whether in the order of compulsory retirement there was any element of charge or stigma or imputation or any implication of misbehaviour or incapacity against the officer concerned. Secondly, the order for compulsory retirement will be indicative of punishment or penalty if the order will involve loss of benefits already earned. Thirdly, an order for compulsory retirement on the completion of 25 years of service or an order of compulsory retirement made in the public interest to dispense with further service will not amount to an order for dismissal or removal as there is no element of punishment. Fourthly, an order of compulsory retirement will not be held to be an order in the nature of punishment or penalty on the ground that there is possibility of loss of future prospects, namely that the officer will not get his pay till he attains the age of superannuation, or will not get an enhanced pension for not being allowed to remain a few years in service and being compulsorily retired.”
The exposition in Shyam Lal would squarely apply.”
– Hon’ble Justice A.M. Khanwilkar, Nisha Priya Bhatia v. Union of India, [Civil Appeal No. 2365 of 2020].