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Judgment
By Justice Rajiv Joshi, Member (Judicial):
Heard Mr. Anil Kumar Singh, assisted by Shri Sunil, learned counsel for the applicant and Shri K.K. Srivastava, learned counsel for the respondents at the time of hearing.
The instant Original Application under Section 19 of the Central Administrative Tribunal Act, 1985 has been filed for the following reliefs:
I. To quash the order dated 06/10.01.2020, by which all the benefits of pay fixation availed by the applicant has been withdrawn. passed by respondent-2.
II. To issue order and further order or direction in suitable nature which this Hon’ble Court may deem fit and proper in the circumstances of the case.
III. Award the cost of the petition to this petitioner.
The brief facts as apparent from the record of Original Application, are that the applicant was earlier the employee of Indian Army and upon retirement from the rank of Havaldar on 01.12.2003, got re-employed in the respondents’ department. At the time of retirement, the applicant pay scale of Rs.3600-100-5100 as per 5th Pay Commission. On 03.05.2007, the applicant being Ex-serviceman was appointed as Fire Engine Driver-A under the respondents.
The Govt. Of India introduced Modified Assured Career Progression Scheme (hereinafter referred as MACP Scheme) vide OM dated 19.05.2009. As per the Scheme, the applicant was entitled for the benefits of 1st & 2nd MACP were due on 03.05.2017 and 03.05.2027 respectively. In the meantime, the pay of the applicant was fixed by the respondents vide letter dated 18.08.2013 after approval of respondent-4. However, vide order dated 06.07.2018, the respondents sought certain clarification with regard to pay fixation of Ex-serviceman. Accordingly, the respondent-3 issued a letter dated 02.08.2018, by referring the aforesaid letter dated 06.07.2018, by which, it was directed that pay fixation of persons who retired as Personnel Below Officer Rank (hereinafter Referred as PBOR) and got re-employment in civil posts, in the revise structure of 6th Pay Commission is to be regulated as per the provisions laid down in OM dated 05.04.2010 and this letter was forwarded to all the concerned Unit for pay fixation in respect of re-employed ex-serviceman. Subsequently, the respondents passed the order dated 06/10.01.2020, by which all the benefits of pay fixation availed by the applicant has been withdrawn and excess payment was directed to be recovered. Hence, this original application has been filed, challenging order dated 06/10.01.2020.
On the other hand, counter affidavit has been filed on 21.02.2022, wherein it has been stated that the applicant had retired from the Indian Army prior to 1 January 2006 as PBOR and was later re-employed in civil posts under the respondents after that date. Learned counsel for the respondents further argued that initially, pay fixation for such re-employed personnel was governed by a Department of Personnel and Training (DoPT) Office Memorandum (OM) dated 05 April 2010. According to paragraph 3(v) of this OM ‘the personnel/officers, who had retired prior to 1.1.2006 and who have been re-employed after 01.01.2006, their pay on reemployment will be fixed by notionally arriving at their revised basic pay at the time of retirement as if they had retired under the revised pay structure. This will be done with reference to the fitment table of the Defence Service Rank/Civilian service post (as the case may be) from which they had retired and stage of basic pay at the time of their retirement. Their basic pay on re-employment will be fixed at the same stage as the notional last basic pay before retirement so arrived at. However they shall be granted the grade pay of the re-employed post. The maximum basic pay cannot exceed the grade pay of the re-employed post plus pay in the pay band of Rs. 67000 i.e. the maximum of the pay band PB-4. In all these cases, the non-ignorable part of the pension shall be reduced from the pay so fixed."
Using this method, Ordnance Factory Kanpur fixed the pay of such applicant at levels higher than the entry-level pay of their reemployed posts. Later clarifications from the Controller General of Defence Accounts (CGDA) and the Principal Controller of Accounts (Factories), Kolkata, reaffirmed that for PBORs, the entire pension and pension equivalent benefits could be ignored when fixing pay. However, this interpretation began to change with subsequent DoPT instructions issued in 2017. The DoPT OMs dated 21 February 2017 and 01 May 2017 introduced a revised interpretation. They specified that non-commissioned ex-servicemen (PBORs) who retired before age 55 and were re-employed after 01.01.2006 should have their pay fixed at the entry level of the reemployed post, similar to direct recruits appointed after 01.01.2006. Importantly, this removed the earlier benefit of pay protection based on last drawn pay. Following further examination, the CGDA, New Delhi issued a letter on 06 July 2018 clarifying the correct application of rules. It emphasized that while paragraph 3(v) of the 2010 OM allowed notional pay fixation, this provision was intended for higher-level officers (Group ‘A’) and not for PBORs. Instead, PBOR cases should be governed by paragraph 4 of the same OM, which states that when pension is fully ignored, pay must be fixed at the entry level of the post.
Subsequently, the PCA (Factories), Kolkata confirmed that the earlier method of granting pay protection to PBORs was incorrect. It clarified that paragraph 3(v) of the 2010 OM does not apply to PBORs, and their pay must instead follow the entry-level fixation rules applicable to direct recruits. As a result of these revised interpretations and directives, the benefits previously granted to the applicant namely higher pay fixation based on notional last pay were ordered to be withdrawn. Their pay was to be re-fixed at the appropriate entry level, and any excess salary already paid due to the earlier method was to be recovered. Thus, referring to the entire facts of the case as contended in the counter, prayer was made to dismiss the OA being devoid of merits.
Mr. Anil Kumar Singh, assisted by Shri Sunil, learned counsel for the applicant assailed the impugned order on the ground that the respondents had withdrawn the benefit of higher pay scale which was granted to the applicant through upgradation done on account of fixation of pay illegally and arbitrary. The pay fixation of ex-service men on re-employment is to be fixed vide DoPT OM No 3/19/2009 – estt. (pay) (ii) dated 05.04.2010 and this provision was also adopted in the instant case of the applicant, being the personnel who retired prior to 1.1.2006 and who have been re-employed after 1.1.2006 after grade pay introduction. The pay fixation of the applicant was done at the end of the respondents in accordance with the Ordnance Factory Board, Kolkata vide letter no 01/6th CPC – 2010/PCC/A/A dated 08.06.2010 and the letter dated MIE/17 pay fixation / dated 23.09.2010 by which it was approved for the pay grade and pay slip was issued by the respondents.
Learned counsel for the applicant argued that after a gap of 10 years of pay fixation and after about 13 years of continuous payment, the aforementioned arbitrary impugned order was passed. It was also argued that the aforesaid exercise was done by the respondents, without affording any opportunity of hearing to the applicant even without passing any order in writing. The applicant represented against the aforesaid act of the respondents but for no avail.
Learned counsel for the applicant further submitted that applicant is a Group C employee. Recovery order was passed without affording any opportunity of hearing to the applicant and without issuing any show cause notice. It is further argued that there was no mis-representation made on the part of the applicant in obtaining the pay fixation and thus, recovery is not permissible.
Learned counsel for the applicant further submitted that the issue involved in this Original Application has already been decided by a Co-ordinate Bench of this Tribunal in O.A. No.151/2020 (Deo Raj Singh & Ors. Vs. General Manager Ordnance Factory & Ors.) vide its order dated 30.04.2026 and as such, this case may also be disposed of in view of the observations made in O.A. No.151/2020.
On the other hand, learned counsel for the respondents vehemently opposed the contention of the learned counsel for the applicants and submitted that although initially the pay of the applicant was fixed under paragraph 3(v) of the DoPT OM dated 05.04.2010 by extending the benefit of notional pay fixation, subsequent DoPT OMs dated 21.02.2017 and 01.05.2017 clarified that PBORs re-employed after 01.01.2006 were required to have their pay fixed at the entry level of the re-employed post, particularly where their pension was being fully ignored.
Learned counsel for the respondents further submitted that the CGDA, New Delhi, vide letter dated 06.07.2018, clarified that paragraph 3(v) of the OM dated 05.04.2010 was not applicable to PBORs and that their cases were to be governed by paragraph 4 of the said OM. The PCA (Factories), Kolkata, also confirmed that the earlier grant of pay protection to PBORs on the basis of their notional last pay was erroneous. Consequently, the respondents were justified in withdrawing the excess benefit, refixing the applicant’s pay at the appropriate entry level and recovering the excess amount paid pursuant to the earlier erroneous fixation. On these grounds, learned counsel for the respondents prayed for dismissal of the Original Application.
We have considered the submissions so raised by the learned counsel for both the parties and perused the records.
From perusal of the records, it appears that the issue involved in this Original Application is now no more res integra as the similar issue fell for consideration before Co-ordinate Bench of this Tribunal in O.A. No.151/2020 (Deo Raj Singh & Ors. Vs. General Manager Ordnance Factory & Ors.) vide its order dated 30.04.2026 with the following observation and directions:-
9.We have considered the rival submissions of the learned counsel for the parties and perused the records.
10.As the facts of the case have already been narrated above, the same are not reiterated for the sake of brevity. The applicants were the employees of Indian Air Force and upon their retirement from there, got re-employed with the respondents. It is apparent from the record that their pay was fixed by the department and regular salary was paid. It is further apparent from the record that upon acceptance of the report of the 6th Pay Commission, their pay was refixed in accordance with the DoPT’s OM pertaining to the year 2010. Subsequently, the impugned order dated 06.01.2020 was issued by the competent authority wherein it was recorded that the pay of the applicants was wrongly fixed at the end of the respondents due to which the applicants have been paid excess amount and that the said wrong fixation was required to be overturned and the excess amount paid to be recovered. Applicants approached this Tribunal through the instnat OA challenging the order dated 06.01.2020 and interim protection was granted to the applicants vide order dated 27.08.2021 to the extent that the respondents were directed not to give effect to the order dated 06.01.2020. However, while the interim protection was granted on 27.08.2021, on 21.08.2021 itself, the respondents had issued the order refixing the pay of the applicants and furthermore, order dated 25.08.2021 was also issued by the respondents imposing recovery of excess amount from the applicants. Subsequently, the applicants challenged the orders dated 21.08.2021 and 25.08.2021 in this OA itself, by way of Amendment Application. Vide order dated 25.11.2021, the Tribunal granted another interim protection to the applicants so much so that the respondents were again directed to not recover any amount from the applicants.
11.The controversy involved in the present case is that when the applicants were re-employed in the respondents’ department, their pay was fixed by the respondents in accordance with the DoPT’s OM dated 05 April 2010. However, subsequently, the respondents refixed the pay in accordance with the latest clarifications issued with respect to fixing the pay of the re-employed employees. The respondents have averred that upon the issuance and implementation of subsequent clarifications, upon inspection, it was realized that the pay of the applicants were fixed wrongly at the end of the respondents, therefore, impugned orders were passed amending the error and refixing the pay of the applicants and the excess amount which was paid to the applicants due to wrong fixation of pay was ordered to be recovered from them.
12.Here, it is pertinent to mention that it is an admitted fact that in getting their pay refixed, the applicants had neither misrepresented nor was there any fraud committed on their part. Further, the applicants are Group C employees who have already retired or on the verge of the retirement and thus, if deduction is to be made from the salary of the applicants at this juncture, it would be difficult for them to meet their basic needs.
13.It is worthwhile to mention that it is settled law that firstly, no recovery can be made unless any fraud or misrepresentation is alleged on the part of any person from whom the recovery is being sought to be made and secondly, if at all there is any justification for making any recovery, then the same has to be inflicted upon the person who made the wrong pay fixation. Thirdly, imposition of any recovery to a person or refixation of his pay without issuance of a show cause notice or without providing any opportunity of hearing is bad in the eyes of law and violative of the principles of natural justice.
14.Furthermore, in the case of Rafiq Masih (supra), Hon’ble Supreme Court has been pleased to observe 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 ClassIV 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”.
15.Admittedly, in the instant case, applicants are Group ‘C’ employees and had not committed any fraud or misrepresentation in getting the pay scale. Therefore, reducing their pay and recovering such a huge amount from them especially when a few of them have already retired or are on the verge of retirement is certainly not justifiable. Therefore, we are of the considered opinion that the applicants are liable to be granted the benefit as has been claimed by them.
16.Now, as far as the issue of refixation of pay of the applicants is concerned, the respondents have contended that the pay of the applicants was fixed wrongly and therefore it was necessary to be corrected and refixed. Here, it is pertinent to mention that as far as distinction between commissioned and non-commissioned employee in the Ordnance Factory is concerned, when the applicants were reemployed, they were allowed all the benefits without making any distinction on that basis. After a lapse of about 14 years, the impugned orders were passed citing that rules applied to fix the salary of the applicants were only applicable to non-commissioned. Respondents are also applying the rule / instructions / clarifications issued after making fixation in the year 2006 retrospectively. The act of the respondents applying the clarification retrospectively after a long gap of about 13 or 14 years is not permissible and hence no refixation at this stage can be made.
17.Accordingly, in view of the aforesaid deliberations and contemplations, the instant original application is allowed. Impugned orders dated 06.01.2020, 21.08.2021 and 25.08.2021 (only in respect of the applicants) passed by the respondents are hereby quashed and set aside in view of law laid down in the case of State of Punjab and others Vs. Rafiq Masih (supra) and the entire amount already recovered shall be refunded to the applicants within a period of 3 months from the date of receipt of certified copy of this order, with simple interest @ 6% per annum after restoring their pay to the original scale as they were drawing prior to the refixation.
As the facts and controversy involved in this Original Application is squarely covered by the aforesaid Order/Judgment, this Original application is disposed of finally in terms of the orders/directions issued in Original Application No.151/2020 (Deo Raj Singh & Ors. Vs. General Manager Ordnance Factory & Ors.) passed by a Co-ordinate Bench of this Tribunal, which shall be applicable in this case mutatis mutandis.
Accordingly, in view of aforesaid judicial pronouncements, impugned order dated 06/10.01.2020 is hereby set aside. The respondents are directed to refund the entire amount, if recovered from the applicant, within a period of three months from the date of receipt of a copy of this order with simple interest @ 06 percent per annum after restoring the pay of the applicant to the original scale as he was drawing prior to the re-fixation.
Resultantly, instant Original Application stands allowed.
All MAs pending in this O.A. also stand disposed off.
No order as to costs.