Can the Centre Reject VRS Despite State's Approval? Supreme Court Explains the Law

The Supreme Court has held that the Central Government has the final authority in deciding requests for voluntary retirement (VRS) under Rule 16(2A) of the All India Service (Death-cum-Retirement Benefits) Rules, 1958, and is not bound by the recommendation of the State Government.

A Bench of Justices P S Narasimha and Alok Aradhe, however, clarified that this power is not absolute and must be exercised within the framework laid down under the rules and the Department of Personnel and Training (DoPT) guidelines.

"Exercise of discretion by the Central Government under proviso to Rule 16(2A) is guided by Guideline 3(ii) of the DoPT Guidelines. Incorporation of discretion in the rule is deliberate and intended to guide exercise of power," the Bench said.

Can the Centre reject VRS even if the State recommends it?

Yes, the Court said. It held that the Central Government is required to take an independent decision while considering a VRS request, even where the State Government has recommended acceptance or expressed the view that no major penalty is likely to be imposed.

The Bench rejected the appellant's argument that the Centre could not have taken a different view after the State Government, in its 2019 communication, recommended acceptance of his VRS on the ground that no major penalty would be imposed.

Court observed that it would be incongruous to suggest that a VRS request could automatically take effect without a genuine and well-considered exercise of discretion by the Central Government.

The Bench further clarified that even where the State Government believes disciplinary proceedings may warrant a major penalty such as removal or dismissal, the Central Government is still expected to independently assess the matter under Rule 16(2A).

"We are of the opinion that the Rule contemplates exercise of power with responsibility to ensure good governance, balancing discipline with freedom of employee and fairness in action," the Bench said.

When can the Centre refuse a VRS request?

Court noted that the DoPT guidelines provide that where disciplinary proceedings are pending or are contemplated for imposition of a major penalty, a request for voluntary retirement "may not ordinarily be accepted."

However, the use of the expression "may not ordinarily" leaves room for discretion.

"Phrasing of the guideline accords the Central Government the vital discretion to apply its mind on case to case basis and in a given case it may accept the notice of the officer for VRS despite the possibility of imposition of a major penalty," the Bench observed.

Why did the Supreme Court interfere in this case?

The case arose from the Ministry of Home Affairs' (MHA) decision rejecting the voluntary retirement application of Abdur Rahman, a 1997-batch Maharashtra cadre IPS officer. Rahman had faced disciplinary proceedings over his participation in protests against the Citizenship (Amendment) Act (CAA) in 2019, allegations relating to a second marriage, and a complaint of harassment made by another complainant's wife.

Examining the record, the Supreme Court found that as on the relevant date, only one of the three complaints - relating to the CAA protests - could validly be said to be under contemplation by the disciplinary authority.

The Bench held that the Centre rejected Rahman's VRS request on the ground that he was not clear from the vigilance angle without properly examining the complaints or engaging with the State Government's opinion.

"Under these circumstances, the decision and order of the Central Government in rejecting the notice for voluntary retirement on the ground that the appellant was not clear from a vigilance angle suffers from non application of mind. Further, the Central Government did not engage with the State Government's opinion in its letter," Court said.

The Bench also took note of the long and unexplained delay in concluding the disciplinary proceedings. It observed that although chargesheets had subsequently been issued, the proceedings remained pending for years without any conclusion, giving the matter "a new dimension".

Holding that the Central Government had not examined the complaints in sufficient detail while rejecting the VRS request in 2019, Court directed it to reconsider the application afresh in light of all relevant facts and subsequent developments.

Allowing Rahman's appeal, the Supreme Court set aside the high court judgment, which had affirmed the Central Administrative Tribunal's decision upholding the rejection of his VRS request. It directed the Ministry of Home Affairs (MHA) to pass a fresh order within three months.

Case Title: Abdur Rahman Vs Union of India & Ors

Bench: Justices P S Narasimha and Alok Aradhe

Date of Judgment: May 26, 2026