Ravi Kant vs Bharat Sanchar Nigam Limited & Ors.

The applicant superannuated from service on 31.01.2019 while working as Accounts Officer (TES Group-B), Bharat Sanchar Nigam Limited, Bettiah.

It is the case of the applicant that at the time of his retirement, his basic pay was fixed at Rs.49,040/- which is reflected from his Last Pay Certificate for the month of January, 2019 but after his superannuation, the respondents have not paid his retiral/pensionary benefits, including pension, Death-cum-Retirement Gratuity (DCRG), leave encashment, commuted value ^Bench of pension and Group Insurance benefits, without assigning any lawful justification. The applicant submitted representations dated 11.06.2019, 21.06.2019 and 07.08.2019 seeking release of the aforesaid benefits, but no payment was made. Consequently, he approached this Tribunal by filing O.A. No. 899/2019, which was disposed of on 12.09.2019 with a direction to the respondents to take a decision regarding release of the retiral dues, including fixation of pension, within 30 days.

Thereafter vide order dated 03.09.2019 applicant’s pensionary benefits were calculated on the basis of a reduced basic pay of Rs.39,850/- instead of the actual basic pay of Rs.49,040/-drawn by him at the time of retirement. It was contended by the applicant that such reduction was wholly arbitrary and without any lawful basis, particularly when no departmental or criminal proceeding was pending against the applicant at the time of his superannuation. The respondents had also recovered an amount of Rs.7,00,200/- from the applicant's DCRG of Rs.15,70,173/-towards alleged overpayment, without issuing any show-cause notice or affording him an opportunity of hearing.

It is contended by the applicant that the aforesaid recovery and withholding of retiral benefits are illegal, arbitrary and contrary to the provisions of Rules 33 and 59(1)(b)(iii) of the CCS (Pension) Rules, 1972, the DoP&T O.M. dated 02.03.2016 and BSNL O.M. dated 01.05.2019, as well as the principles laid down by the Hon'ble Supreme Court in State of Punjab & Ors. v. Rafiq ^Bench Masih (White Washer). It was further submitted that 10% of the applicant's GPF amount had also been withheld without justification and that even provisional pension had not been paid to him. According to the applicant, the respondents cannot make recovery from his retiral dues in such circumstances, particularly without following the prescribed procedure and without affording an opportunity of hearing.

Learned counsel for the applicant submitted that the action of the respondents is also contrary to the decisions rendered in similarly situated cases. Reliance was placed upon the order dated 29.04.2013 passed by this Tribunal in O.A. No.769/2012 in the case of Sri D.N. Chaudhary, which was subsequently upheld by the Hon'ble Patna High Court in C.W.J.C. No.17270/2013 by judgment dated 01.05.2015 and implemented by the respondents. Reliance was also placed upon the order dated 29.05.2018 passed by this Tribunal in O.A. No.386/2018 in the case of Jullius Alfred Tirkey. It was submitted that the applicant's case stands on an even better footing and that the impugned action of the respondents, being arbitrary, illegal and contrary to the statutory provisions and judicial pronouncements, is liable to be set aside, with consequential directions for fixation and payment of the applicant's retiral/pensionary benefits and refund of the amount illegally recovered from his DCRG. Hence, the O.A.

According to the respondents the applicant joined Bihar Telecom Circle on 02.05.2016 at Bettiah, having earlier served in Jharkhand Circle as Accounts Officer (Computer). His Service Book was received from Jharkhand Circle on 11.12.2017, wherein several irregularities were found. Correspondence was accordingly made with Jharkhand Circle for clarification and rectification, and the final compliance was received only on 12.12.2018, about 49 days prior to the applicant's superannuation on 31.01.2019. On receipt of the relevant records, the retiral benefits were processed by the TDM, Bettiah and forwarded to CCA, DoT Cell, Patna for final settlement.

It has been further submitted that the applicant had been granted financial upgradation from E-3 to E-4 scale with effect from 26.12.2009 vide order dated 26.02.2014. Since the applicant had earlier been subjected to disciplinary proceedings, which concluded on 27.08.2013, the financial upgradation was considered thereafter. It is pertinent to mention here under the BSNL Executive Promotion Policy dated 18.01.2007, completion of two weeks prescribed mandatory training was an essential condition for grant of the second increment in the upgraded IDA scale. The training was to be completed within two years from the date of the upgradation to the higher scale. The applicant did not undergo the prescribed mandatory training within the stipulated period. The order granting financial upgradation itself specifically provided that the second increment would not be admissible unless the mandatory training was successfully completed. The applicant, being an Accounts ^Bench Officer and fully conversant with the applicable financial and service rules, was required to register himself through the BSNL training portal, but failed to do so. Consequently, the second increment granted to him was irregular and his pay was required to be regulated in accordance with the applicable rules.

It was contended that scrutiny of the Service Book and other records revealed that the applicant's pay had been fixed at Rs.49,040/-whereas he was entitled only to Rs.39,850/- as on 31.01.2019. The respondents, therefore, rectified the erroneous fixation and restricted the second increment. The revised fixation was duly checked and approved by the competent authority.

The contention of the respondents is that the applicant, being an Accounts Officer, was expected to be well versed with financial rules and the procedure relating to pay fixation, increments and maintenance of Service Books. Despite having knowledge of the terms of the financial upgradation order and the mandatory training requirement, he continued to draw the excess amount and did not bring the alleged anomaly to the notice of the competent authority. Therefore, applicant cannot seek protection against recovery of an amount which was not legally due to him. Accordingly his pay was fixed to Rs.39,850/- and the excess amount of Rs.7,00,200/- was recovered from the applicant's DCRG in accordance with the applicable provisions.

With regard to the applicant's reliance upon the cases of Shri D.N. ^Patna Chaudhary and Shri J.A. Tirkey,it is submitted by the respondents that those cases are distinguishable on facts. Shri D.N. Chaudhary was a technical Officer and the erroneous fixation in his case was treated as a simple financial irregularity, whereas the present applicant himself belonged to the Accounts Cadre and was responsible for financial checks and balances. It was, therefore, contended that the applicant cannot claim parity with those cases, particularly when he was aware of the mandatory training requirement and the consequences of non-compliance.

It was further submitted that the applicant had ample opportunity to verify his Service Book and pay particulars during his service, and as an Accounts Officer he was expected to discharge his corresponding obligation. His failure to disclose the irregular second increment and continued receipt of excess pay, according to the respondents, distinguishes his case from employees who were not conversant with financial rules. Therefore, the provisions relied upon by the applicant, including Rules 33 and 59(1) (b)(iii) of the CCS (Pension) Rules, 1972, were stated to be inapplicable to the facts of the present case.

Respondents have placed reliance upon the Full Bench decision of the CAT, Jabalpur in O.A. No.653/2010, L.P. Jaiswal v. Union of India, decided on 26.07.2016, as well as the decision of the Patna Bench of this Tribunal in O.A. No.196/2013 dated 03.04.2017, affirmed by the Hon'ble Patna High Court in C.W.J.C. No.702/2018 on 29.01.2020. It was submitted that these decisions recognize the authority of the Accounts ^Patna Officer to scrutinize the pay records and correct erroneous pay fixation even for the period preceding retirement. Reliance was also placed upon the judgment of the Hon'ble Supreme Court dated 17.08.2012 concerning recovery of excess payment arising from erroneous pay fixation.

The respondents submitted that the rectification of the applicant's pay and consequential revision of his pensionary benefits were made in accordance with the applicable rules and after verification by the competent authority. Reference was also made to BSNL Corporate Office letter dated 23.07.2021, reiterating that while recovery may be impermissible in certain exceptional circumstances, rectification of an erroneous pay fixation is not prohibited and terminal benefits are required to be finalized on the basis of the corrected pay, therefore, the Original Application is liable to be dismissed.

Two distinct questions arise for determination:

Whether the respondents were competent to correct an erroneous fixation of the applicant's pay after scrutiny of his service record; and

Whether, notwithstanding such correction, the respondents were legally entitled to recover from the applicant the alleged excess payment of Rs. 7,00,200/- from his DCRG.

These two questions require separate consideration and cannot be conflated. The correction of an erroneous pay fixation and recovery of an ^Bench amount already paid pursuant to such previous fixation operate in two different legal fields. The fact that the respondents may possess authority to correct a wrong pay fixation does not, by itself, mean that every amount paid pursuant to the earlier pay fixation can automatically be recovered from the employee in view of the settled law.

As regards the first issue, the contention of the applicant that the respondents were wholly incompetent to examine the correctness of his pay fixation merely because the scrutiny was undertaken after retirement cannot be accepted. Pensionary benefits have necessarily to be determined on the basis of admissible emoluments, and the competent authority is not required to perpetuate an erroneous fixation merely because it had continued for some period. The pre-retirement scrutiny of complete service record is perfectly justified as it is mandatory for proper fixation of pension and grant of legitimate claim of the retiral dues. In the instant case, it is observed that on scrutiny of service book by the CCA Office, DoT Cell, wrong fixation of pay of the applicant was detected during his service period and while indicating the irregularities committed the CCA office sent the same to the Jharkhand CCircle of BSNL for clarification with the intimation to the applicant and ultimately compliance was received from Jharkhand Telecom Circle vide letter dated 12.12.2018 (Annexure-R/1). Undisputedly, the applicant was also communicated the said letter. So it is established that the above refixation was within the knowledge of the applicant. But the applicant did not raise any objection initially and submitted his representations only on 11.06.2019, 21.06.2019 and 07.08.2019. ^Bench Therefore, there is nothing wrong in the respondents carrying out correction of a wrong fixation of salary and the same can be affected by the respondents during complete verification and scrutiny of the service record. There is no illegality or arbitrariness in this part of the action of the Respondents as the wrong done earlier cannot be allowed to be perpetuated.

In these circumstances, this Tribunal finds no sufficient ground to hold that the respondents lacked authority to undertake verification and correction of the pay fixation. The competent authority under extant CCS (Pension) Rule 65 has the power for requisite check of the service records without any limitation. An erroneous fixation, if established on the basis of the service record and applicable rules, cannot be permitted to continue merely on the ground that the employee had already retired. Moreover, there is no violation of the principle of natural justice as the said decision has been communicated to the applicant while he was still in service. It is established that the above refixation was within the knowledge of the applicant and he did not raise any objection initially and submitted his representations after retirement only on 11.06.2019, 21.06.2019 and 07.08.2019.

The applicant's reliance upon Rule 59(1)(b)(iii) of the CCS (Pension) Rules, 1972 does not, in the facts of the present case, warrant restoration of the earlier pay fixation as an indefeasible right. The provision relating to verification of emoluments for the purpose of preparation of pension papers cannot be read in isolation so as to compel the respondents to perpetuate an admitted or duly established error in ^Bench fixation.

The position, however, is materially different when the question of recovery is considered. It is well settled position of law that although an employer may ordinarily be entitled to correct an erroneous payment, recovery of excess payment from an employee may, in appropriate circumstances, be impermissible where such recovery would be inequitable, harsh or arbitrary. The principles laid down therein have subsequently been reflected in the instructions issued by the Government of India in Office Memorandum dated 02.03.2016 issued by the DoPT Government of India.

This provides that the Hon'ble Supreme Court of India in State of Punjab & Ors. v. Rafiq Masih (White Washer), (2015) 4 SCC 334, while observing 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 has summarized the following few situations, wherein recoveries by the employer would be impermissible in law:

The present case falls squarely within the equitable principle governing recovery from a retired employee. The applicant had already superannuated on 31.01.2019 and the amount of Rs.7,00,200/-was recovered from his DCRG after retirement. The recovery was not shown to have arisen from any fraud, misrepresentation or deliberate concealment attributable to the applicant.

The mere fact that the applicant did not immediately object to the communication dated 12.12.2018 cannot be treated as an admission of fraud or misrepresentation on his part. Silence in the circumstances of the case does not create an independent statutory authority in favour of the respondents to recover an amount which, having regard to the principles enunciated by the Hon'ble Supreme Court, is otherwise impermissible to be recovered from a retired employee.

The argument of the respondents that the judgment in Rafiq Masih has no application because the recovery had already been affected is also not acceptable. The legal character of the recovery cannot be altered merely because the department succeeded in deducting the amount from the retiral dues that was well within their financial control before the ^Bench employee could obtain judicial redress. If the underlying recovery is legally impermissible, the fact that it has already been affected cannot validate it.

The subsequent BSNL instructions relied upon by the respondents cannot override or dilute the binding law declared by the Hon'ble Supreme Court of India that has been further formalized by the Government of India by issuing consequential Office Memorandum for compliance. Administrative instructions may regulate implementation, but they cannot authorize recovery in a case where the governing law prohibits such recovery.

The respondents' reliance upon the distinction between correction of pay fixation and recovery is, therefore, only partly justified. They are competent to correct the applicant's pay fixation, subject to the applicable statutory rules and due process. However, such correction cannot be used as the foundation for recovery of past excess payment from the applicant's DCRG when the recovery itself is barred by the principles laid down by the Hon'ble Supreme Court. At this stage, it is necessary to make one further clarification. The direction for refund of the recovered amount does not amount to acceptance of the applicant's claim that his pay fixation must necessarily continue at Rs.49040/-. The question of correctness of the revised fixation and the question of recovery of the past excess payment are legally distinct. For the reasons recorded hereinabove, the revised fixation does not call for interference; the recovery, however, cannot be sustained.

Consequently, the applicant is entitled to refund of the amount of ^Bench Rs. 7,00,200/- recovered from his DCRG on account of the alleged excess payment.

The respondents shall refund to the applicant the amount of Rs. 7,00,200/- recovered from his DCRG towards alleged excess payment arising out of the correction of pay fixation. The aforesaid amount shall be refunded within a period of two months from the date of receipt/production of a copy of this order before the competent authority.

The correction/re-fixation of the applicant's pay at Rs.39,850/-per month, as undertaken by the respondents upon scrutiny of the service record, does not warrant interference in the present Original Application.

The claim of the applicant for re-fixation of pensionary benefits on the basis of Rs. 49040/- is accordingly rejected.

In the facts and circumstances of the case, there shall be no order as to interest or costs.