Mehraj-ud-din Wani & Ors. vs Union Territory Of Jammu & Kashmir & Ors.

JUSTICE RITU TAGORE, MEMBER [JUDL.]

The applicants have approached this Tribunal aggrieved of Circular No. DSEK-Acctt/2094 dated 17.06.2021, whereby directions have been issued for recovery of the alleged excess pay released to them on account of grant of pay protection. The applicants also seek a declaration that they are entitled to protection of pay under Article 77-D of the Jammu & Kashmir Civil Service Regulations, 1956 and a restraint against recovery of the amounts already paid to them.

The applicants are serving/served employees of different departments of the Government of Jammu & Kashmir. Central Administrative Tribunal^{Their common case is that, while already holding} Government employment, they responded to recruitment advertisements issued for posts in the School Education Department as “in-service” candidates. Their applications were routed through the prescribed proper channel. After their selection and appointment, the concerned recruiting authority, namely the Jammu & Kashmir Services Selection Board/Public Service Commission, as the case may be, specifically communicated to the Administrative Department that the applicants had applied through proper channel and were required to be treated as in-service candidates. Acting upon such communications, the concerned authorities issued consequential directions to the respective Chief Education Officers and Drawing & Disbursing Officers, and the applicants were accordingly granted protection of their earlier pay under Article 77-D of the Jammu & Kashmir Civil Service Regulations, 1956.

The record placed by the applicants further shows that, in respect of the individual applicants, their applications Central Administrative Tribunal^{were forwarded by their respective parent departments} through proper channel and that the Service Selection Board/Public Service Commission thereafter confirmed their status as in-service candidates. The relevant communications of the recruiting authorities are placed on record as Annexures VII, XIV, XVIII, XXIII, XXVIII, XXXII, XXXVIII, XLIV, XLVIII, LII, LVI, LXV, LXIX and LXXV, while the consequential communications issued by the Administrative Department/Directorate of School Education are placed as Annexures VIII, IX, XV, XIX, XXIV, XXIX, XXXIV, XXXIX, XLV, XLIX, LIII, LVII, LXVI, LXX and LXXVI.

The individual cases, though arising from different departments and different recruitment processes, proceed on the same factual foundation. Applicant No.1 was initially appointed as Junior Assistant in the Rural Development Department, District Cadre Baramulla, vide order dated 25.03.2015, and thereafter applied for the post of Junior Assistant in the School Education Department as Central Administrative Tribunal^{an in-service candidate. His application was forwarded} through proper channel. The Service Selection Board thereafter, vide its communication dated 30.05.2019, confirmed his status as an in-service candidate, whereafter consequential departmental communications were issued and pay protection was extended to him.

Applicants Nos.2 to 6 and Applicants Nos.13 and 14 had initially been appointed in the Jammu & Kashmir Police Department and thereafter participated in recruitment for posts in the School Education Department as in-service candidates. Their applications were forwarded by their parent department through proper channel. Following their selection, the Service Selection Board communicated to the Administrative Department that they had applied through proper channel and were required to be treated as in-service candidates. Consequential departmental communications followed and the benefit of pay protection under Article 77-D was thereafter extended to them.

Central Administrative Tribunal^{06.Applicants Nos.7 and 9 to 12 were already serving in the} School Education Department and thereafter came to be selected for higher posts, including Lecturer (10+2) in different disciplines, through the Public Service Commission as in-service candidates. Their applications had been forwarded by the competent authorities, and the Public Service Commission subsequently confirmed their status as in-service candidates. The Administrative Department and the Directorate of School Education thereafter issued consequential directions, pursuant to which their pay was protected under Article 77-D.

Applicant No.8 had initially been appointed in the Jammu & Kashmir Police Department and thereafter applied for the post of General Teacher in the School Education Department, District Cadre Kulgam, as an in-service candidate. His application was forwarded through proper channel; the Service Selection Board subsequently confirmed his status as an in-service candidate and consequential directions were issued by the Directorate of Central Administrative Tribunal^{School Education. Applicant No.15, who had initially} been appointed as Forest Guard in the Forest Department, similarly applied for the post of General Teacher as an in-service candidate, routed his application through proper channel and, following confirmation by the Service Selection Board and consequential departmental directions, was granted pay protection. Thus, the applicants' case is that their status as in-service candidates was not claimed by them unilaterally but was repeatedly recognized and acted upon by the competent authorities.

Learned Senior Counsel appearing for the applicants submits that the benefit of pay protection was not extended to the applicants inadvertently or on the basis of any unilateral representation made by them. According to him, the applicants had disclosed their existing Government employment, applied through proper channel and were specifically treated as “in-service” candidates by the recruiting authorities. The competent departmental authorities thereafter examined their cases and, upon Central Administrative Tribunal^{consideration of the relevant record, extended the benefit} of pay protection under Article 77-D of the Jammu & Kashmir Civil Service Regulations, 1956. It is, therefore, submitted that the applicants cannot now be treated as having procured any undue benefit by concealment, fraud or misrepresentation.

Learned Senior Counsel further submits that the impugned circular proceeds on a generalized premise that the benefit of pay protection extended to in-service candidates was not admissible under SRO-202 of 2015.However, the case of the applicants is squarely covered by Article 77-D of J&K CSR, 1956. SRO-202 of 2015 does not denude the applicants of the right of pay protection as guaranteed under Article 77-D. According to him, such a generalized determination cannot substitute an individual examination of the cases of the applicants, particularly when their applications were admittedly processed through proper channel, their status as in-service candidates was specifically recognized by the recruiting authorities and Central Administrative Tribunal^{the benefit was thereafter extended by the competent} departmental authorities.

Learned Senior Counsel places particular reliance upon Article 77-D of the Jammu & Kashmir Civil Service Regulations, 1956 and submits that the provision specifically deals with fixation of pay where a Government servant is appointed to another service, cadre or department on direct recruitment basis. It is contended that the applicants, having been in Government service immediately prior to their subsequent appointments and having applied as in-service candidates through proper channel, fall within the ambit of the said provision, subject to the conditions contained therein. Reliance is also placed upon the judgment of the Hon’ble Supreme Court in Asma Shaw v. Islamia College of Science and Commerce, Srinagar & Others, Civil Appeal No.4951 of 2023, decided on 08.08.2023, wherein the Hon’ble Supreme Court considered Article 77-D and examined the scope of the provision in the context of appointment of a Central Administrative Tribunal^{Government servant to another service/cadre or} department on direct recruitment basis.

Learned Senior Counsel also submits that the reliance placed by the respondents upon the judgment of the Hon’ble High Court of Jammu & Kashmir and Ladakh in Sita Ram and Others v. Union Territory of Jammu & Kashmir and Others, WP(C) No.2416/2024 c/w WP(C) No.3034/2024, decided on 04.04.2025, is misplaced and that the said judgment is distinguishable on facts as well as in principle. According to learned Senior Counsel, in Sita Ram (supra), the petitioners did not dispute the factual premise that the benefit extended to them had been erroneously granted and that the higher pay scale had been extended to them in ignorance of the withdrawal of SRO 59 of 1990. The controversy in that case, therefore, arose in the context of an admitted erroneous grant and principally concerned the authority of the employer to correct such an error and the consequential question of recovery.

Central Administrative Tribunal^{12.Learned Senior Counsel submits that the present case} stands on an entirely different footing. According to him, the applicants do not admit, either expressly or impliedly, that the pay protection extended to them was wrongly or erroneously granted. On the contrary, their specific case is that the benefit was extended after their applications had been routed through proper channel, after the recruiting authorities had recognized them as “in-service” candidates and after the competent departmental authorities had considered the relevant material and consciously extended pay protection under Article 77-D. It is, therefore, argued that the basic premise on which Sita Ram (supra) proceeded, namely, the existence of an admitted or established erroneous grant, is itself absent in the present case. Learned Senior Counsel submits that the principle laid down in Sita Ram (supra) that an employer may correct a benefit which is demonstrably erroneous cannot be mechanically applied to presume that every benefit granted in the past was erroneous. The respondents must Central Administrative Tribunal^{first establish, in relation to each applicant, that the} original grant was contrary to the governing statutory provision or rules. It is further submitted that the applicants are entitled to an opportunity of hearing before any such adverse determination is made.

Learned Senior Counsel further submits that the distinction between the two cases is material because the applicants are not seeking perpetuation of a benefit which they concede to be illegal. They seek continuation of a benefit which, according to them, was lawfully extended after scrutiny and verification by the competent authorities. It is, therefore, contended that the respondents cannot rely upon the general proposition that an employer may rectify its own mistake unless the foundational question—whether there was, in fact, a mistake in the original grant in the case of each applicant—is first determined in accordance with the applicable rules and upon consideration of the relevant record. In this regard, learned Senior Counsel also relies upon paragraph 13 of Central Administrative Tribunal^{Sita Ram (supra), wherein the Hon’ble High Court} observed, in substance, that where an employee resists correction, the employer is required to provide such employee an opportunity of being heard.

Learned Senior Counsel further submits that the impugned action visits the applicants with serious civil and financial consequences, as it seeks to disturb their existing pay fixation and recover amounts already paid to them. Reliance is placed upon State of Orissa v. Dr. (Miss) Binapani Dei, AIR 1967 SC 1269, Canara Bank v. Debasis Das, (2003) 4 SCC 557 and Dharampal Satyapal Ltd. v. Deputy Commissioner of Central Excise, Gauhati, (2015) 8 SCC 519, to contend that an administrative action having civil consequences cannot ordinarily be taken behind the back of the affected person and that the affected employee must be afforded a reasonable opportunity of meeting the case against him.

Learned Senior Counsel also submits that the Law Department had already examined the issue of pay Central Administrative Tribunal^{protection to in-service candidates and rendered its} opinion vide U.O. No. LD(Ser)2015/69-GAD dated 09.10.2017, placed on record as Annexure LXXVIII with the O.A. According to him, the said opinion constitutes an important part of the official record and cannot be brushed aside while considering the legality of the impugned circular. It is submitted that the respondents were specifically directed by this Tribunal to place on record the latest status regarding the action, if any, taken upon the said opinion, but no material has been placed before the Tribunal demonstrating that the said opinion was subsequently withdrawn, modified or superseded.

The respondents, in their reply, have opposed the claim. Their preliminary objection is that the applicants have raised disputed questions of fact which, according to them, cannot be adjudicated in the present proceedings. They also contend that no cause of action has accrued to the applicants and allege that the applicants have not approached the Tribunal with clean hands.

Central Administrative Tribunal^{17.On merits, the respondents contend that the applicants} were appointed as in-service candidates under SRO-202 of 2015 and that their entitlement to salary is governed by the said SRO. According to the respondents, SRO-202 of 2015 provides for payment of the minimum of the scale of pay along with the applicable grade pay during the period of probation and does not contain any provision granting pay protection to an in-service candidate. The respondents, therefore, contend that the applicants cannot claim payment beyond what is admissible under the said SRO.

The respondents further submit that the question of pay protection to employees appointed as in-service candidates was taken up with the Director Finance, School Education Department, for clarification regarding the applicability of SRO-202 of 2015, but that the clarification was still awaited. They contend that, in the absence of such clarification, the benefit of pay protection under Article 77-D could not have been extended and that Central Administrative Tribunal^{the circular dated 17.06.2021 was issued after due} consideration and deliberation.

I have heard learned counsel for the parties and carefully gone through the pleadings and the material placed on record.

The controversy, in my considered view, requires examination from two distinct but interrelated facets. The first is as to whether the respondents, in exercise of their executive/administrative powers, are competent to revisit or correct the grant of a benefit if, upon subsequent scrutiny, audit or verification, it is found that such benefit was extended contrary to the governing rules or that an employee was otherwise not entitled to the benefit. The second, and equally important, question is as to whether such benefit, once granted to an employee after consideration and verification of the relevant record, can be withdrawn to his civil prejudice without first determining that the grant was erroneous in his individual case and without affording him an opportunity of being Central Administrative Tribunal^heard.

So far as the first aspect is concerned, there can hardly be any quarrel with the proposition that the Executive Government is not denuded of its authority to examine and correct an erroneous decision or an erroneous fixation of pay merely because such decision had earlier operated in favor of an employee. A benefit which is demonstrably contrary to the applicable statutory rules cannot acquire legality merely by lapse of time, nor can an employee claim a vested right to perpetuate an illegality or an error committed by the administration.

The aforesaid principle was recognized by the Hon’ble High Court of Jammu & Kashmir and Ladakh in Sita Ram & Others v. Union Territory of Jammu & Kashmir & Others (supra). The Hon’ble High Court upheld the authority of the employer to correct an erroneous grant and observed that there is nothing which prevents the employer from correcting a mistake in granting a pay scale or fixing salary, such mistake being Central Administrative Tribunal^{capable of detection either by the employer itself or} during audit or scrutiny. The principle underlying the judgment is that an employee cannot claim a right to perpetuate a benefit which is demonstrably contrary to the applicable rules merely because the benefit had earlier been extended by the employer.

The aforesaid principle, however, has to be applied in the factual context in which it was laid down. In Sita Ram (supra), the factual foundation was materially different from the one obtaining in the present case. The petitioners therein did not dispute that the benefit had been extended erroneously and in ignorance of the withdrawal of SRO 59 of 1990. The Court was, therefore, dealing with a situation where the erroneous nature of the original grant was not itself the subject of the same factual controversy as arises before me in the present matter. The judgment consequently cannot be read as laying down a proposition that once an administrative authority issues a general direction stating that a particular benefit was wrongly Central Administrative Tribunal^{extended, the original grant in every individual case} automatically stands established as erroneous without examination of the relevant record.

The distinction assumes significance in the present case. The applicants do not admit that the pay protection extended to them was erroneously granted. Their specific case is that they were existing Government employees, that they applied through proper channel as in-service candidates, that their status was recognized by the recruiting authorities and that the competent departmental authorities thereafter acted upon the relevant record and extended the benefit of pay protection under Article 77-D. The record, as presently placed before me, also contains individual communications relating to the applicants through which their status as ‘in-service’ candidates was recognized and consequential departmental action was taken.

Thus, the question before me is not whether the Government possesses the power to correct an admitted or Central Administrative Tribunal^{demonstrably erroneous pay fixation. There can be no} serious dispute about that proposition. The anterior question is whether the benefit granted to these applicants was, in fact, erroneous under the applicable statutory provision or rules. That question cannot be answered merely by referring to the general proposition contained in Sita Ram (supra). It requires examination of the individual circumstances in which the benefit was granted, the material considered by the competent authority at that time, the status of the applicants as in-service candidates and the applicability of Article 77-D and SRO-202 of 2015 to their respective cases.

In this context, the distinction between correcting an established error and presuming an error is of considerable importance. The respondents are undoubtedly entitled to scrutinize the earlier grant and, if upon such scrutiny it is found that the benefit was contrary to the governing rules, to take appropriate action in accordance with law. What cannot follow merely from the issuance of the impugned Central Administrative Tribunal^{circular is an automatic conclusion that every applicant} who had earlier been granted pay protection was wrongly granted such benefit. The legal validity of the original grant remains an issue requiring determination in accordance with the applicable statutory framework.

The requirement of observance of natural justice assumes particular importance in the present factual setting because the proposed action is not merely a clerical correction of an undisputed arithmetical error. The applicants assert a substantive entitlement under Article 77-D and rely upon the circumstances in which their cases were processed and the benefit was originally extended. The respondents, on the other hand, seek to proceed on the basis that such benefit was not admissible under SRO-202 of 2015. The determination of this controversy necessarily requires consideration of the material forming the basis of the original grant as well as the statutory provisions governing the same.

In State of Orissa v. Dr. (Miss) Binapani Dei (supra), Central Administrative Tribunal^{the Hon’ble Supreme Court recognized that even an} administrative order involving civil consequences must be made consistently with the principles of natural justice, after informing the affected person of the case against him and affording him an opportunity of meeting the same.

The principle was subsequently reiterated in Canara Bank v. Debasis Das (supra), wherein the Hon’ble Supreme Court emphasized the applicability of natural justice to administrative action involving civil consequences. Likewise, in Dharampal Satyapal Ltd. v. Deputy Commissioner of Central Excise, Gauhati (supra), the Hon’ble Supreme Court reiterated that the principles of natural justice are not excluded merely because the action is administrative in character and that the question of prejudice has to be considered in the facts of the particular case.

Tested on the aforesaid principles, I find considerable force in the submission of learned Senior Counsel for the applicants that, while the respondents undoubtedly Central Administrative Tribunal^{possess the authority to scrutinize the grant of pay} protection and to correct a demonstrable error, they cannot treat the impugned circular itself as conclusive proof of an error in the case of every applicant. Before an adverse decision is taken against an individual applicant, the competent authority must identify the precise defect in the original grant, examine the material on the basis of which the benefit was extended and determine the applicant’s entitlement with reference to the applicable rules.

The opportunity of hearing in the present case is, therefore, not an empty procedural formality. The applicants may have an explanation concerning the manner in which their applications were routed, their treatment as in-service candidates, the communications issued by the recruiting authorities, the departmental orders by which pay protection was extended and the applicability of Article 77-D to their respective appointments. These matters may have a direct bearing upon the determination of their entitlement.

Central Administrative Tribunal^{32.I am conscious that natural justice is not a rigid or} inflexible doctrine and that its application depends upon the facts and circumstances of each case. At the same time, where an administrative decision proposes to withdraw an existing financial/service benefit on the premise that the original grant was erroneous, and where the affected employee disputes that very premise, the authority cannot dispense with hearing merely by assuming that the employee’s explanation would make no difference.

The requirement of hearing in such circumstances is not an empty procedural formality. The applicants may have an explanation regarding the circumstances in which the benefit came to be granted, the documents considered by the competent authority at the relevant time, their eligibility under the applicable instructions and the precise manner in which the respondents now contend that an error was committed. These are matters which may have a bearing on the ultimate decision.

Central Administrative Tribunal^{34.I am cognizant that the principles of natural justice are not} rigid or inflexible and are to be applied having regard to the facts and circumstances of each case. The Hon’ble Supreme Court has also recognized that violation of natural justice does not invariably lead to automatic nullification of every administrative action, particularly where no prejudice is demonstrated. At the same time, the authority cannot dispense with the requirement of hearing by presuming that the representation of the affected person would be of no consequence.

In the present case, the question of prejudice cannot be answered against the applicants at this stage. Their very entitlement to the benefit and the correctness of the original decision granting such benefit are matters which, according to the applicants, require examination of the record. The proposed withdrawal directly affects their financial and service interests. In such circumstances, denial of an opportunity of hearing cannot be treated as a mere technical irregularity.

Central Administrative Tribunal^{36.I also find substance in the applicants' reliance upon the} Law Department opinion dated 09.10.2017. The said opinion has been placed on record as Annexure LXXVIII with the O.A. The previous order of this Tribunal specifically directed the learned counsel for the respondents to obtain and place on record the latest status regarding the action, if any, taken by the concerned department on the said opinion. The record presently before me does not demonstrate that the opinion was subsequently superseded, modified or withdrawn. The respondents shall, therefore, take the said opinion into consideration while undertaking the individual exercise directed hereinafter, along with any subsequent decision, clarification or order, if any, dealing with the said opinion.

The two principles, therefore, operate harmoniously and not in conflict. The first principle is that no employee can claim a right to perpetuate an erroneous benefit merely because the error was committed by the employer and not by the employee. The second principle is equally well Central Administrative Tribunal^{settled, namely, that before an existing benefit is} withdrawn on the ground that it was erroneously granted, the authority must determine that question in accordance with law and, where such determination entails civil consequences, ordinarily afford the affected employee a reasonable opportunity of being heard.

Consequently, the impugned circular cannot be sustained insofar as it has been applied to the applicants mechanically and without any individual determination of the correctness or otherwise of the benefit earlier granted to them and without affording them an opportunity to represent their case.

However, I am not inclined to quash the impugned circular in its entirety. The authority of the respondents to issue instructions for verification and scrutiny of the benefits extended under the applicable rules, and to correct any benefit which, upon proper examination, is found to have been erroneously extended, cannot be said to be unavailable to the administration. At the same time, Central Administrative Tribunal^{such power has to be exercised in accordance with law} and consistently with the principles of natural justice wherever the proposed action adversely affects an employee who has already been extended the benefit.

Accordingly, the impugned circular shall remain operative; however, the same shall not be implemented or acted upon to the prejudice of the applicants, including by withdrawing, reducing or otherwise adversely affecting the pay protection already extended to them, unless and until the respondents undertake an individual exercise in respect of each applicant in the manner indicated hereinbelow.

It is clarified that I have not adjudicated upon the ultimate entitlement of the applicants to pay protection under Article 77-D, nor have I expressed any final opinion as to whether the original grant was right or erroneous. The competent authority shall take an independent decision on the basis of the relevant record and the applicable rules, uninfluenced by any observation contained in this order Central Administrative Tribunal^{touching upon the ultimate merits of such entitlement.}

Accordingly, the Original Application is disposed of with the following directions:

Pending miscellaneous application(s), if any, shall also stand disposed of.

There shall be no order as to costs.

The Registry shall consign the record to the Record Room after due compliance.