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Judgment
Present Original Application has been filed under Section 19 of the Administrative Tribunals Act, 1985, seeking the following reliefs:-
“i)issue an order or direction for quashing/setting aside the impugned Recovery Certificate dated 10.07.2025 issued by Respondent No.3.
ii) Issue an order or direction directing the respondent no.3 not to initiate or proceed with any recovery against the applicant in the absence of any adjudicated liability and in violation of law.
iii) Issue any other suitable order or direction which this Hon’ble Tribunal may deem fit and proper under the facts and circumstances of the case.
iv) award the cost of the application to the applicant.”
Brief facts of this case are that the Applicant was appointed on 01.06.1982 as Postal Assistant. She was promoted to HSG Grade-1 and 2 and was posted as Deputy Postmaster-II Bareilly Post Office. The Applicant was compulsorily retired from service on 13.09.2022. During her service period a charge sheet dated 05.06.2018 was served upon the applicant on the charges that the applicant cooperated with the main offender one Shri Yudhishthir Kumar Sharma who caused financial loss of Rs. 28,56,610/- to the department, by signing two cheques as second officer without enquiring about the demands for issuing cheques for withdrawal. The disciplinary proceeding initiated pursuant to the charge sheet dated 05.06.2018 is still pending for decision and now is being continued under Rule of CCS (Pension Rules) 2021 [Old Rule 9 of CCS (Pension Rules), 1972] as the applicant has already been retired from service. During pendency of the said proceeding a recovery certificate dated 24.02.2020 was issued by the Senior Superintendent of Post Offices, Bareilly Division, Bareilly, to recover a sum of Rs. 28,56,610/- from the Applicant under Public Accounts Default Act, 1850. Against the aforesaid Recovery Certificate dated 24.02.2020 issued by the respondent no.3, the applicant filed Original Application No. 285 of 2020, Smt. Anjani Agarwal Vs. Union of India and others, and the same was allowed by this Tribunal vide its order dated 04.12.2023. In the aforesaid order dated 04.12.2023 it has been observed by this Tribunal that the respondents will, however, be at liberty to recover the loss caused to the department from the applicant by following the due procedure as established under the law and also following the principles of natural justice. Pursuant to the aforesaid recovery certificate dated 10.07.2025, a recovery citation dated 22.07.2025 has been issued by the Respondent no.5.
I have heard learned counsel for the parties.
Submission of learned counsel for the applicant is that the charge sheet dated 05.06.2018 is still pending for decisions and the allegations of charge of misappropriation of public money has not been proved against the applicant till date. Unless there is a proven allegation of charge of misappropriation of public money, no recovery can be made from the applicant. It is further argued that no opportunity of hearing was afforded to the applicant by the respondent no.3 after passing of the judicial order dated 04.12.2023 by this Tribunal before issuing the impugned recovery certificate dated 10.07.2025. The impugned recovery certificate dated 10.07.2025 is illegal and arbitrary as no coercive step under the Revenue Recovery Act, 1890 can be resorted to against the applicant unless proper quantification of his liability towards the loss of public money for any negligent act has been made out. Thus, it is contended that issuance of the fresh recovery notice, without any fresh legal basis and without conclusion of the pending Rule 8 of the CCS (Pension) Rules, 2021 proceedings is nothing but a re-litigation of the same issue already adjudicated by this Tribunal. It is thus barred by res-judicata and constitutes judicial indiscipline.
Submission of learned counsel for the respondents is that the applicant while working as Deputy Postmaster-II, Bareilly Head Post Office during the period 01.06.2017 to 21.02.2018 issued jointly two cheques along with Shri Yudhishthir Kumar Sharma, Duty Postmaster-I, Bareilly HO without any requisition. Due the above lapse on the part of the applicant, Shri Yudhishthir Kumar Sharma succeeded in misappropriating Government money in collusion with the applicant through the above two cheques, resulting in loss to the Government. Accordingly, the applicant was placed under suspension by SSPOs Bareilly vide order dated 28.03.2018. A charge sheet under Rule-14 of CCS (CCA) Rules, 1965 was issued vide memo dated 05.06.2018. As the applicant was later compulsorily retired on appeal preferred in another case disciplinary proceeding, this continued under Rule-9 of CCS (Pension) Rules, 1972 (now Rule-8 of CCS Pension Rules, 2021), and the proceeding is still pending. The second charge sheet was issued vide memo dated 26.07.2019 for issuing 13 cheques exceeding requisitioned amounts, an inquiry officer was appointed and the Inquiry Report dated 02.11.2020 held the charges proved. Based on the gravity of misconduct, major penalty of "Dismissal from Service" was imposed by DPS Bareilly Region upon the applicant vide memo dated 22.02.2021.The applicant filed an appeal before PMG Bareilly, and the penalty was modified to "Compulsory Retirement" vide memo dated 13.09.2022. The matter was also reported to CBI, and a case under RC0062019A0004 was registered by CBI, ACB, Lucknow. The applicant has been identified as a Principal Offender in the said fraud case alongwith other principal offenders as would be clear from Annexure CA-1.
Learned counsel for the respondents further argued that as the Government sustained a loss of ₹28,56,610/- because of laxity of the applicant a Recovery Citation (RC) was issued to District the Bareilly under the PAD Act, Magistrate, 1850 vide SSPOS Bareilly memo dated 24.02.2020. The applicant challenged this in Writ Petition No.10884/2020 before the Hon'ble High Allahabad. The petition was dismissed on 07.07.2020, leaving it open to the applicant to pursue her remedy as may be available to her under law. Thereafter, the applicant filed O.A. No. 285/2020, wherein this Tribunal quashed the recovery order dated 24.02.2020, with a liberty to the department to recover the loss caused to the Government from the applicant in accordance with law. Subsequently, to recover the sustained loss, a fresh Recovery Citation under the Revenue Recovery Act, 1890 was issued vide memo dated 10.07.2025 for ₹28,56,610/-. Aggrieved by this, the applicant has filed the present O.A. No. 740/2025 before this Tribunal. It is stated that the fresh Recovery Certificate dated 10.07.2025 is not a re-litigation of the same issue, as the previous Recovery Certificate under PAD Act was quashed solely due to statutory repeal, not on merits of the loss. Thus, it is argued that the O.A. is liable to be dismissed because the respondent has not committed any illegality or infirmity in the case of the applicant.
I have considered the averments made by learned counsel for the parties and perused the entire documents on record.
Before cogitating upon the merit of the present case, it would be relevant to refer to the observations made by the Division Bench of this Tribunal in the previous O.A. filed by the applicant i.e. O.A./285/2020 (Smt. Anjani Agarwal vs UOI & ors). Paragraph 7 to 17 of the order dated 04.12.2023 passed in the aforesaid O.A. is as following:-
7.Submission of the learned counsel for the applicant is that the alleged loss caused to the Department was on account of the irregularities committed by one Sri Y.K. Sharma and not by the applicant. In support of her claim, the applicant argues that neither her name has been shown in the FIR nor her name has come in the inquiry as conducted by the respondents and as such, the action of the respondents for placing the applicant under suspension was not justified from any corner whatsoever. Further, the learned counsel for the applicant argued that the respondent no. 3 passed an order behind the back of the applicant by means of which recovery proceedings have been initiated against the applicant by invoking Rule 4 of the PAD Act 1850, whereas the provision mandate that the person or persons at the head of the office to which any public accountant belongs may proceed against any such public accountant and his securities for any laws or defalcation in his accounts as if the amount thereof were an arrears of land revenue due to the Government. The learned counsel appearing on behalf of the applicant also pleads that the respondents have not called for any explanation from the applicant prior to issuing the impugned order dated 24.02.2020 and as such, the action of the respondents is bad in the eyes of law. He also highlighted that respondents have violated the provisions of Article 14, 15, 16, 21, 309 and 311 of the Constitution of India as well as the respondents have also failed to follow the principles of natural justice and as such, the action of the respondents is faulty one and is not legally sustainable in the eyes of law. Thus, the OA deserves to be allowed. Lastly, it was argued that PAD Act has been repealed, repealing Act came into effect w.e.f. 8.8.2019, the recovery order has been passed on 24.2.2020 which cannot be passed. Since PAD Act was not in existence at the time of passing of impugned order, amount under impugned order has also not been quantified, thus, impugned order is liable to be set-aside.
8.On the other hand, learned counsel appearing on behalf of the respondents submitted that applicant is a main offender in the aforementioned fraud case. On account of the irregularities/negligence on the part of one Sri Y.K. Sharma, he succeeded to embezzle the huge Government money, in collusion with the applicant. In addition to above, CBI has also lodged an FIR against the applicant wherein the applicant has been identified as a main offender in the said fraud case. The learned counsel further argued that in another disciplinary proceedings conducted against the applicant, she has been dismissed from service vide order dated 22.02.2021. In view of this matter, the learned counsel has focused his argument that the action taken by the respondents against the applicant is perfectly legal and valid and as such, OA is liable to be dismissed.
9.The learned counsel for the applicant has placed reliance the following case laws in support of his argument:-
(i)D.C. Bhatia and Others Vs. Union of India and another reported in 1995 1 Supreme Court Cases 104, Supreme Court of India.
(ii)Sushil Kumar Bajpai Vs. Union of India and Others Writ-A no. 38165 of 2011, High Court of Allahabad.
(iii)Ram Darash Chauhan Vs. The Union of India and Others, OA no. 1451 of 2010, Central Administrative Tribunal Allahabad Bench.
10.We have considered the rival submission made on behalf of both the parties.
11.Hon’ble Supreme Court in the case of D.C. Bhatia (supra) has held as under:-
“53.The provisions of a repealed statute cannot be relied upon after it has been repealed. But what has been acquired under the Repealed Act cannot be disturbed. But if any new or further step is needed to be taken under the act, that cannot be taken even after the Act is repealed.
62.In the judgment under appeal, it has been held that the provisions of section 3(c) will not be applicable to the cases which were pending before the Court. No argument was advanced on this point by any of the parties. We make it clear that we have not expressed any opinion on this controversy.”
12.In the case of Sushil Kumar Bajpai (supra) the Hon’ble High Court at Allahabad has held as under:-
“In view of the aforesaid fact, we are satisfied that the recovery cannot be made against the petitioner unless and until a liability to that effect of the loss of government amount is fixed upon the petitioner.
Learned Counsel for the Union of India on the other hand states that the impugned order has rightly been passed but he failed to substantiate the fact as to why fresh disciplinary proceeding has not been initiated as per direction of the Central Administrative Tribunal. After considering the rival submissions made by both side as well as perusing the record of the case, it is apparent that no fresh disciplinary proceeding was initiated as per direction of Central Administrative Tribunal and the petitioner is not a Public Accountant as defined in Section 2 of the Public Accountant Default Act, 1850 and as per Division Bench judgment of this Court in the case of Smt. Madhubala Bharti (supra) the proceeding of recovery cannot be initiated against the petitioner unless and until a liability to that effect of the loss of government amount is fixed upon him and even the Public Accountant Default Act, 1850 (Act No.12 of 1850) has been repealed by the Central Government on 02.09.2019 through a bill called as Repealing and Amending Bill, 2019 as the said Act has become obsolete.”
In the case of Ram Darash Chauhan (supra) this Tribunal has held as under:-
“……..I am of the view that without giving any details of the inquiry and without even informing the applicant, the respondents have not only come to the conclusion of culpability of the applicant but decided to recover that amount from him. Respondents did not have any power under the Public Accounts Default Act, 1850 (PAD Act, 1850) to suo-moto proceed in the matter without conducting an inquiry and order recovery from a Government employee. It is nothing but a misuse of powers by the respondents. The applicant under duress had deposited a sum of Rs. 6,73,000/- and thereafter challenged the order of the respondents before this Tribunal. In the present case, the respondents have moved in a dubious manner by conducting an inquiry behind the back of the applicant and coming to the conclusion that the applicant was responsible for the alleged misappropriation without affording opportunity of hearing and giving him an opportunity to explain. 18. Considering the entire conspectus of the case, I am of the view that the respondents cannot proceed to recover an amount allegedly misappropriated by the applicant without giving any notice and without conducting an inquiry following due process of law.”
Admittedly, the PAD Act has been repealed by issuing a gazette by the Government of India on 08.08.2019 and as such, the proceedings taken under the Act would futile exercise of process of law and the same is not legally sustainable in the eyes of law. Nothing was shown by the learned counsel for the respondents that the applicant’s case is covered under the saving clause.
It is noteworthy to state here that unless there is a proven allegation of charge of misappropriation of public money, no recovery can be made from the employee of the Government. It is trite law that no coercive steps under the Revenue Recovery Act can be resorted to against a person being a government servant unless proper quantification of his liability towards the loss of public money for any negligent act has been made out. In the instant case, the liability was fixed upon the applicant without following the due procedure as established under law. The procedure also prescribes that no coercive method under the Revenue Recovery Act can be resorted to against a Government servant unless proper quantification of his liability for loss of public money by the competent statutory authority in accordance with law has been made.
16.In view of the discussions made hereinabove and also in view of the pronouncements of Hon’ble Courts, referred to above, the OA deserves to be allowed and is accordingly allowed. Order dated 24.02.2020 (Annexure no 1) is hereby quashed and set aside. Respondents will, however, be at liberty to recover the loss caused to the Department from the applicant by following the due procedure as established under the law and also following the principles of natural justice. No order to costs.
17.All the associated MAs stand disposed of.”
Apparently, under the same circumstances, when the applicant had approached before the Division Bench of this Tribunal, the recovery order dated 24.02.2020 was quashed and the department was given the liberty to recover the loss caused to it from the applicant by following the due procedure as established under the law and the principles of natural justice. What the respondents have done instead is to issue a fresh recovery order dated 10.07.2025. Although they have taken note of the judgement and order dated 04.12.2023 passed in the aforesaid O.A. but they have failed to abide by the specific direction given in it regarding following the due procedure as established under the law before making such a recovery. The observations are specific that “unless there is a proven allegation of charge of misappropriation of public money, no recovery can be made from the employee of the Government. It is trite law that no coercive steps under the Revenue Recovery Act can be resorted to against a person being a government servant unless proper quantification of his liability towards the loss of public money for any negligent act has been made out. In the instant case, the liability was fixed upon the applicant without following the due procedure as established under law.”
No quantification of the loss attributable solely to the applicant has been resorted to by the respondent concerned subsequent to the order of this Tribunal by following the due procedure and in accordance with the principles of natural justice. Only a fresh order for recovering the loss of Rs.28,56,610/- has been reissued. The respondents have themselves averred that the applicant is co-accused. In such a situation, firstly, only after the pending departmental proceedings are completed, the respondents should take any step with regard to making any recovery from the applicant taking into account the kind and extent of proven misconduct/liability, and, secondly, any amount that is directed to be recovered from the guilty employee should be painstakingly calculated and logically reasoned out as being attributable to the act of the employee so that no arbitrary amount is made to be recovered from them that might cause them any undue hardship.
In view of the aforesaid discussions, the impugned order dated 10.07.2025 is hereby quashed. The respondents should take note of the observations made hereinabove and strictly follow the directions given in the order dated 04.12.2023 passed in O.A./285/2020 before passing any recovery order against the applicant in the future.
Accordingly, the O.A. stands allowed. All associated M.A.s also stand disposed of. No order as to costs.