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Judgment
The present Original Application has been filed by the applicant under section 19 of the Administrative Tribunal Act, 1985 seeking following reliefs:-
“(i)An order be passed quashing the impugned order dated 28.05.2024 as well as the order dated 15.10.2024 passed by the respondent No. 3.
(ii)An order or direction in the nature of mandamus commanding the respondents to refund the amount of Rs. 04,98,928/- has been directed to be recovered towards the alleged excess payment of salary made to the applicant which cannot be made in the light of the judgment delivered by the Hon’ble Supreme Court in State of Punjab and other Versus Rafeek Masih (whitewasher) and others reported in 2015 (4) SCC 322.
(iii)Any other and further order may be passed as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case.
(iv)The cost of the present original application may also be awarded in favour of the applicant as against the respondents”.
The brief facts of the case are as follows:-The applicant was working as Senior Technician (T.L. Fitter) under the respondents. He retired from service on 31.05.2024 on attaining the age of superannuation. After his retirement, respondent No. 3 passed the impugned order directing recovery of Rs. 4,98,928/- from his pensionary dues on account of alleged excess payment of salary. Aggrieved by the said order, the applicant filed Writ Petition No. 18441 of 2024 before the Hon’ble Allahabad High Court. The writ petition was dismissed on the ground that the High Court had no jurisdiction over the subject matter, with liberty to the applicant to approach the appropriate forum. Therefore, the applicant has filed the present Original Application before this Tribunal.
Per contra, the respondents have filed their counter affidavit contending therein that that the applicant was initially appointed on a Group ‘D’ post as Khalasi in the respondents’ department. He was subsequently promoted as Skilled Technician-III in the pay scale of Rs. 950-1500 on 24.01.1990. Thereafter, he was promoted as Technician-II in the pay scale of Rs. 4000-6000 vide order dated 19.07.1993 and again promoted as Technician-II in the pay scale of Rs. 4500-7000 vide order dated 12.12.1995. Thus, the applicant had already received three regular promotions by 12.12.1995. After introduction of the MACP Scheme, the applicant was erroneously granted the benefit of first MACP with Grade Pay of Rs. 4200/- in the year 2008. The applicant continued to draw the said Grade Pay and retired from service on 31.05.2024 on attaining the age of superannuation. Since the applicant had already received three regular promotions, he was not entitled to the benefit of MACP. The error in his pay fixation came to the notice of the respondents at the time of his retirement. Accordingly, vide order dated 28.05.2024, respondent No. 3 refixed his pay after correcting the earlier erroneous fixation. Consequently, an amount of Rs. 4,98,928/- was recovered from his retiral dues. The applicant submitted a representation dated 14.10.2024 against the said refixation, which was decided by respondent No. 3 vide order dated 15.10.2024. The respondents submitted that the applicant was not entitled to the benefit of MACP as he had already received three regular promotions and, therefore, the pay was rightly refixed and the excess amount was rightly recovered. Hence, according to the respondents, the applicant is not entitled to any relief in the present O.A.
The applicant has filed Rejoinder Affidavit to the Counter Affidavit as filed by the respondents refuting the contentions made by the respondents in their Counter Affidavit while reiterating the averments made in the O.A. and nothing new has been added.
I have heard Shri B.N Singh Rathore, learned counsel for the applicant and Shri Pramod Kumar Rai, learned counsel for the respondents and perused the records.
Submission of learned counsel for the applicant is that the recovery was made without issuing any show-cause notice to the applicant and without giving him any opportunity of hearing. It is submitted that, in the absence of such notice and reasonable opportunity of hearing, the recovery from the applicant is not permissible. Learned counsel for the applicant further submitted that, immediately after coming to know about the recovery, the applicant submitted a representation dated 28.05.2024, requesting the respondents to refund the amount of Rs. 4,98,928/- recovered from his retiral dues and the said representation has been rejected by the respondents in erroneously ground. Learned counsel for the applicant further submitted that the applicant is a retired Government employee and the alleged excess payment was not made due to any fraud, misrepresentation or concealment of facts on his part. If any excess payment was made, it was due to an error on the part of the respondents in fixing his pay and pensionary benefits. The applicant had no role in calculating or fixing his pay or pensionary benefits and had received the amount in good faith. Learned counsel for the applicant placed reliance upon the judgment of the Hon’ble Supreme Court in State of Punjab and Others Vs. Rafiq Masih (White Washer) and Others, (2015) 4 SCC 334, and submitted that recovery of excess payment from a retired employee is not permissible, particularly when the excess payment was not made due to any fraud or misrepresentation on the part of the employee. According to learned counsel for the applicant, the case of the applicant is covered by the principles laid down in Rafiq Masih (supra), as the applicant is a retired employee and there is no allegation of fraud, misrepresentation or concealment of facts against him. Learned counsel for the applicant also relied upon the judgment of the Hon’ble Supreme Court in Thomas Daniel Vs. State of Kerala and Others, (2022) 5 SCC 470, and submitted that where excess payment has been made due to a mistake on the part of the department and there is no fraud or misrepresentation on the part of the employee, recovery of such excess amount, particularly after retirement and where it causes hardship to the employee, should not ordinarily be made. It was further submitted that the respondents have not placed any material on record to show that the applicant was responsible for the alleged excess payment or he had knowledge that the amount paid to him was in excess of his entitlement. The applicant was also not given any opportunity to explain his case before the recovery was made. Therefore, the impugned recovery is also violative of the principles of natural justice. Thus, learned counsel prayed that the respondents be directed to refund the amount of Rs. 4,98,928/- recovered from the retiral dues of the applicant.
In rebuttal, learned counsel for the respondents opposed the claim of the applicant and submitted that the recovery made from the applicant was lawful and was made towards the excess amount paid to him due to an incorrect grant of financial upgradation under the MACP Scheme. Learned counsel for the respondents further submitted that the applicant had already received three regular promotions before the introduction of the MACP Scheme. He was promoted as Skilled Technician-III on 24.01.1990, as Technician-II on 19.07.1993 and again as Technician-II in the higher pay scale on 12.12.1995. Therefore, the applicant was not entitled to any further financial upgradation under the MACP Scheme. It was further submitted that the benefit of first MACP with Grade Pay of Rs. 4200/- was wrongly extended to the applicant in the year 2008. The said benefit was not admissible to him as he had already received three regular promotions. The respondents noticed the mistake at the time of his retirement and, accordingly, refixed his pay vide order dated 28.05.2024. Learned counsel for the respondents next submitted that the pay was refixed only to correct the earlier erroneous fixation and the amount of Rs. 4,98,928/- was found to have been paid in excess. Therefore, the respondents were justified in correcting the pay fixation and recovering the excess amount. It was also submitted that the applicant cannot claim a benefit to which he was not entitled under the applicable rules merely because the same was wrongly granted to him earlier. The fact that the applicant continued to receive the higher Grade Pay for some time would not create any legal right in his favour. Thus learned counsel for the respondents submitted that there is no illegality in the impugned order and the present O.A. is liable to be dismissed.
I have carefully considered the rival submissions advanced by learned counsel for the parties and have perused the entire material available on record.
The facts which are not in dispute are that the applicant retired from service on 31.05.2024 on attaining the age of superannuation. It is also not the case of the respondents that the applicant had made any fraud, misrepresentation or concealment of facts for obtaining the benefit of Grade Pay of Rs. 4200/-. The respondents themselves have stated that the benefit of first MACP was wrongly granted to the applicant due to an error in pay fixation by the department.
It is also clear from the record that the applicant continued to receive the said benefit for a long period from the year 2008. The applicant was neither responsible for fixing his pay nor for granting the MACP benefit. The pay and Grade Pay were fixed by the competent authority of the respondents. Therefore, the mistake, if any, was on the part of the respondents and not on the part of the applicant.
It is also an admitted position that the alleged excess payment continued for a considerable period and the applicant retired from service before the recovery was made. The recovery was thereafter made from his retiral dues/gratuity. The applicant was not issued any show-cause notice or given any opportunity to explain his case before making the recovery.
The Hon’ble Supreme Court in the case of Rafiq Masih (supra) has held as under:-
”It is not possible to postulate all situations of hardship, which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to herein above, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law:
(i)Recovery from employees belonging to Class-III and Class-IV service (or Group ‘C’ and Group ‘D’ service).
(ii)Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery.
(iii)Recovery from employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued.
(iv)Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.
(v)In any other case, where the Court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer’s right to recover”.
The same principle has been reiterated by the Hon’ble Supreme Court in Thomas Daniel (supra). The Hon’ble Supreme Court has held that
“(9)This Court in a catena of decisions has consistently held that if the excess amount was not paid on account of any misrepresentation or fraud of the employee or if such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order which is subsequently found to be erroneous, such excess payment of emoluments or allowances are not recoverable. This relief against the recovery is granted not because of any right of the employees but in equity, exercising judicial discretion to provide relief to the employees from the hardship that will be caused if the recovery is ordered. This Court has further held that if in a given case, it is proved that an employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where error is detected or corrected within a short time of wrong payment, the matter being in the realm of judicial discretion, the courts may on the facts and circumstances of any particular case order for recovery of amount paid in excess.
(10)In Sahib Ram v. State of Haryana and Others1 this Court restrained recovery of payment which was given under the upgraded pay scale on account of wrong construction of relevant order by the authority concerned, without any misrepresentation on part of the employees. It was held thus :
“5.Admittedly the appellant does not possess the required educational qualifications. Under the circumstances the appellant would not be entitled to the relaxation. The Principal erred in granting him the relaxation. Since the date of relaxation, the appellant had been paid his salary on the revised scale. However, it is not on account of any misrepresentation made by the appellant that the benefit of the higher pay scale was given to him but by wrong construction made by the Principal for which the appellant cannot be held to be at fault.
Under the circumstances the amount paid till date may not be recovered from the appellant. The principle of equal pay for equal work would not apply to the scales prescribed by the University Grants Commission. The appeal is allowed partly without any order as to costs.”
(11)In Col. B.J. Akkara (Retd.) v. Government of India and Others2 this Court considered an identical question as under:
“27.The last question to be considered is whether relief should be granted against the recovery of the excess payments made on account of the wrong interpretation/understanding of the circular dated 76 1999. This Court has consistently granted relief against recovery of excess wrong payment of emoluments/allowances from an employee, if the following conditions are fulfilled:
(a)The excess payment was not made on account of any misrepresentation or fraud on the part of the employee.
(b)Such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order, which is subsequently found to be erroneous.”
In the aforesaid judgment, Hon’ble Apex Court further observed as under:-
“18.It is not possible to postulate all situations of hardship which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to hereinabove, we may, as a ready reference, summarize the following few situations, wherein recoveries by the employers, would be impermissible in law:
(i)Recovery from the employees belonging to Class III and Class IV service (or Group C and Group D service).
(ii)Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery.
(iii)Recovery from the employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued.
(iv)Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.
(v)In any other case, where the court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer's right to recover.”
In the present case, the respondents may correct the pay fixation in accordance with the applicable rules, if otherwise permissible, but the recovery of Rs. 4,98,928/- from the retiral dues of the applicant cannot be sustained. The applicant had received the amount in the normal course and there is no material to show that he was aware that the benefit granted to him was erroneous. There is another important aspect of the matter. Before making the recovery from the retiral dues of the applicant, no notice or opportunity of hearing was given to him. The respondents have not shown that the applicant was given an opportunity to explain his position before the amount was recovered. Thus, the recovery was also made without following the principles of natural justice.
In view of the above discussion, I am of the considered view that the recovery made from the retiral dues of the applicant cannot be sustained. The applicant was a retired employee, there is no allegation of fraud or misrepresentation against him and the alleged excess payment was made due to an error on the part of the department. The case of the applicant is, therefore, covered by the principles laid down by the Hon’ble Supreme Court in Rafiq Masih (supra) and Thomas Daniel (supra).
Accordingly, the Original Application is allowed and the impugned order dated 28.05.2024, to the extent it directs recovery of Rs. 4,98,928/- from the retiral dues of the applicant and the consequential order dated 15.10.2024 cannot be sustained and are liable to be set aside to that extent. Thus, it is quashed. The respondents are directed to refund Rs. 4,98,928/- to the applicant within a period of three months from the date of receipt of a certified copy of this order. In case the amount is not refunded within the aforesaid period, the applicant shall be entitled to 6 % per annum simple interest on the said amount from the date of expiry of the three month period till the date of actual payment. There shall be no order as to costs. All associated MAs stands disposed of.