Deepak Kumar vs Union Of India & Ors.

“i.

To issue an order or direction in the suitable nature, directing the respondent department to refund the recovered amount of Rs.41,187/- from the monthly salary of the applicant December, 2020 alongwith market rate of interest.

ii.

To issue an order or direction in the suitable nature, directing the respondent department to pay the entire pay and allowances of the applicant of the intervening period w.e.f. 06.01.2020 to 28.11.2020 alongwith market rate of interest.

iii.

To issue any other order or direction which this Hon’ble Tribunal may deem fit and proper in the circumstances of the case.”

“In this case, the respondent-employee's case was considered for promotion by the DPC in August 1982. However, the result was kept in a sealed cover in view of the pending disciplinary proceedings against him. According to the employee, on October 11, 1985 the disciplinary proceedings ended in complete exoneration. Thereafter, a DPC was again constitut- ed in March 1986 which, after consideration of the employ- ee's case, recommended him for promotion w.e.f. July 26, 1986. this was obviously contrary even to the instructions contained in the Memorandum. He was entitled to promotion from the date his immediate junior was promoted in or after August 1982 if he was in August 1982 found fit for promotion by the DPC, The Tribunal has, therefore, rightly directed the appellant to open the sealed cover and if the DPC in 1982 had found him fit for promo- tion, to give him the promotion from the date on which his immediate junior was promoted. However, while doing so, the Tribunal has' also directed arrears of salary to be paid for intervening period along with all consequential benefits. Since we have held disagreeing with the decision of the Full Bench of the Tribunal that the .benefit of the arrears of salary will not flow automatically but will depend upon the circumstances in each case, we modify the said order to the extent it directs the payment of arrears of salary, and direct the appellant-authority to consider whether the employee in the circumstances of the case was entitled to any arrears of salary and to what extent. The authority will, of course give reasons for denial of the whole or part of the arrears of salary The appeal is, there- fore, allowed partly with no order as to costs.

In this case, the respondent-employee was not recommend- ed for promotion by the DPC in its meeting held on February-1, 1988 Instead, the DPC had kept the results in a sealed cover because of the pending disciplinary proceed- ings. Admittedly, no charge-memo was served.On the employee till the date the DPC met on February 1, 1988 it was issued only in March 2, 1989. The Tribunal has,-therefor rightly directed the authorities tO open the sealed cover. We are, however, unable to understand the direction of the Tribunal to convene a Review DPC for considering the employee's case as on February 1 1988. If the DPC had considered the case of the employee on February 1, 1988 and withheld the result because of the pending disciplinary proceedings, the proper direction would have been to ask the appellant-authority to open the sealed cover and if the employee was found fit for promotion, to direct the authority to promote him from the date on which his immediate junior was promoted as a result of the recommendation of the DPC on February 1, 1988. In case he is so found fit, he would be entitled to the bene-fits of seniority etc. on a notional basis. However, whether he. would be entitled to the arrears of salary for the intervening period and to what extent will have to be decid- ed by the appellant authority in the light of what we have state above. In case the authority denies to the employee the salary in full or in part, it will, of course, record its reasons for doing so. The appeal is therefore, allowed partly as above with no order as to costs. ..

Civil Appeals Nos. 51-55 of 1990 These appeals are filed against five respondent-employees. Dis ciplinary proceedings as well as criminal prosecution were launched against each of them for lodging false Leave Travel Concession claims and for using forged documents to support them. The employees were suspended from service on 15th July , 1983. They admitted guilt and pleaded revocation of their suspension on depositing the amount of Rs. 1600. They were reinstated in service in November, 1983. Keeping in view the deposit of the amount voluntarily in October 1983, a lenient view was taken and the criminal. prosecutions against them were dropped by the Administration by an order of January 14, 1985. However, this was done without prejudice to the departmental proceedings which were subsequently initiated and the formal chargesheet was issued to the employees on December 24, 1987.

The Departmental Promotion Committee met in July 1986 to consider the cases of the employees for promotion but re- sorted to sealed cover procedure in view of the pendency of the disciplinary proceedings against them. There is no dispute that the formal chargesheet was issued either on August or December 24, 1987. Conflicting months have been mentioned in the decision of the Tribunal. However, we find that the Tribunal has taken a mechani- cal view and applied the decision of the Full Bench and directed the promotions to be given to the employees on the basis of the recommendations, if any, of the DPC of July 1986. We are of the view that in the present case when the DPC met in July 1986, the Committee had before it the record of the refund of the amount by the respondent-employ-ees and the consequent withdrawal of the prosecutions with- out prejudice to the authorities' right to institute depart- mental proceedings.

In view of the aforesaid peculiar facts of the present case, the DPC which met in July 1986 was justified in re- sorting to the .sealed cover procedure, notwithstanding the fact that the charge-sheet in the departmental proceedings was issued in August/December, 1987. The Tribunal was, therefore, not justified in mechanically applying the deci- sion of the Full Bench to the facts of the present case and also in directing all benefits to be given to the employees including payment of arrears of salary. We are of the view that even 'if the results in the sealed cover entitle the employees to promotion from the date their immediate juniors were promoted and they are, therefore, so promoted and given notional 'benefits of seniority etc., the. employees in no case should be given any arrears of salary. The denial of the benefit of salary will, of course, be in addition to the penalty,.if any,. imposed on the employees at the end of the disciplinary proceedings. We, therefore, allow these appeals as above with no order as to costs.”

“19.

In view of all above, especially in view of specific facts of this particular case and provisions of item No.9.5 of Master Circular No.24 and discussions from para 15 onwards, we quash the transfer order dated 06.06.2019 and direct the respondents to allow the applicant to join back at Mughalsarai within a period of one month from the date of receipt of certified copy of this order. The applicant will not be entitled for pay and allowances for the period he remained absent from duty. He can, however, be granted leave of the kind due to him in case he applies for the same. In that case, his pay and allowances will be regulated accordingly.”

II Procedure to deal with the issue of wrongful/excess payments:

In view of the law declared by Courts and reiterated by the Hon’ble Supreme Court in the case of Chandi Prasad Uniyal and Ors Vs State of Uttarakhand and Ors, 2012 AIR SCW 4742, (2012) 8 SCC 417, the Ministries/Departments were advised to deal with the issue of wrongful/excess payments as follows:

i.

In all cases where the excess payments on account of wrong pay fixation, grant of scale without due approvals, promotions without following the procedure, or in excess of entitlements etc. come to notice, immediate corrective action must be taken.

ii.

In a case where the authorities decide to rectify an incorrect order, a showcause notice may be issued to the concerned employee informing him of the decision to rectify the order which has resulted in the overpayment, and intention to recover such excess payments. Reasons for the decision should be clearly conveyed to enable the employee to represent against the same. Speaking orders may thereafter be passed after consideration of the representations, if any, made by the employee.

iii.

Whenever any excess payment has been made on account of fraud, misrepresentation, collusion, favoritism, negligence or, carelessness, etc., roles of those responsible for overpayments in such cases, and the employees who benefitted from such actions should be identified, and departmental/criminal action should be considered in appropriate cases.

iv.

Recovery should be made in all cases of overpayment barring few exceptions of extreme hardships. No waiver of recovery may be allowed without the approval of Department of Expenditure.

v.

While ordering recovery, all the circumstances of the case should be taken into account. In appropriate cases, the concerned employee may be allowed to refund the money in suitable installments with the approval of Secretary in the Ministry, in consultation with the Financial Adviser (FA).

vi.

Wherever the relevant rules provide for payment of interest on amounts retained by the employee beyond the stipulated period etc. as in the case of Travelling Allowance (TA), interest would continue to be recovered from the employee as heretofore.

[Para 3 of DoPT’s OM No 18/26/2011-Estt (Pay-I) dated 06.02.2014]

III Situations wherein recoveries of wrongful/excess payments by the employers would be impermissible in law

Para II(iv) of the above instructions provides inter-alia that recovery should be made in all cases of overpayment barring few exceptions of extreme hardships. The issue was considered by the Hon’ble Supreme Court in the case of State of Punjab & Ors Vs Rafiq Masih (White Washer) etc. in CA No.11527 of 2014 {arising out of SLP(C) No.11684 of 2012}. In this case, the Hon’ble Supreme Court observed that 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. The Hon’ble Supreme Court summarized 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.

[DoPT’s OM No. 18/03/2015-Estt (Pay-I) dated 02.03.2016]