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Judgment
Namit Kumar, J.
The petitioner has filed the instant petition under Articles 226/227 of the Constitution of India, seeking issuance of a writ of certiorari for quashing the action of the respondents reducing the basic pay of the petitioner from Rs.16,070/- per month to Rs.12,610/- per month; pension and gratuity payment orders dated 13.11.2018 (Annexures P-8 & P-9), which have been passed by taking the basic pay of the petitioner as Rs.12,610/- instead of Rs.16,070/- and effecting recovery of Rs.3,20,481/- from the gratuity of the petitioner. Further, seeking issuance of a writ of mandamus directing the respondents to calculate and pay pension and gratuity to the petitioner by taking his basic pay as Rs.16,070/-; to pay the gratuity without any deduction; and to pay the petitioner full amount of pension and gratuity, with arrears thereof, with interest @ 18% per annum from the date it became due till actual payment.
Briefly stated, the facts of the case, as have been pleaded in the petition, are that the petitioner was selected and appointed as Peon on ad hoc basis in the erstwhile Punjab State Electricity Board (now Punjab State Power Corporation Limited) in the year 1976 and posted at Mohali. Thereafter, the petitioner was designated as Bill Distributor on ad hoc basis in the year 1977 and posted at D/S Sub Division Kharar. The services of the petitioner were regularized as Bill Distributor in the year 1982 and he was posted at Rupnagar. Subsequently, the petitioner was promoted as Lower Division Clerk in the month of July 1998 and was posted in Malerkotla Distribution Division of Sangrur Circle. In the month of April 1999, the petitioner was transferred to Rupnagar Circle as LDC and was assigned the work of Counter Cashier. Thereafter, the petitioner was promoted as Cashier in the month of October 1999 and was posted in Mianpur Sub Division of Rupnagar Division. In the year 2010, the petitioner was dealt with departmentally and a regular enquiry was ordered against him and after conclusion of enquiry, punishment of cut of 10% for five year in the total pension was imposed upon the petitioner, vide order dated 01.11.2011 (Annexure P-2). Thereafter, on attaining the age of superannuation, the petitioner retired from service on 31.12.2011. After retirement of the petitioner, respondent No.2, vide order dated 03.06.2013 (Annexure P-6), ignoring the order dated 01.11.2011 (Annexure P-2) and without giving any reason, sanctioned only 40% provisional pension to the petitioner. The petitioner approached the respondents for grant of post retirement benefits, but all in vain. Thereafter, the petitioner approached this Court by filing CWP No.10454 of 2016 titled as ‘Sarwan Ram (Retd. Cashier) Vs. Punjab State Power Corporation Limited, Patiala and others’ for issuance of directions to the respondents to release full pension and other post retirement benefits to the petitioner. Since during the pendency of the said petition, pension and other benefits were paid to the petitioner by the respondents, therefore, the said petition was disposed of by this Court, vide order dated 21.02.2019 (Annexure P-7), with liberty to the petitioner to approach the respondents in case any grievance has been left unaddressed. After going through the pension and gratuity payment orders dated 13.11.2018 (Annexures P-8 & P-9), the petitioner came to know that his pension, gratuity and other benefits have been calculated by considering his basic pay as Rs.12,610/- per month and basic pension as Rs.6305/- per month and a sum of Rs.3,20,481/- has also been recovered from the gratuity of the petitioner, whereas the petitioner was drawing basic pay of Rs.16,070/- per month and basic pension was calculated as Rs.8037/- per month at the time of his retirement. In pursuance to the order dated 21.02.2019, passed by this Court, the petitioner submitted representation to the respondents for payment of pension and gratuity to the petitioner as per basic pay of Rs.16,070/-instead of Rs.12,610/- and to pay full amount of gratuity without any deduction but to no avail. On inquiry, the petitioner came to know that his basic pay has been reduced from Rs.16,070/- to Rs.12,610/- by withdrawing the increments since 2001 for not passing the type test in 2nd language. Hence, the instant petition.
Reply on behalf of the respondents has been filed, wherein it has been stated as under :-
“xx xx xx xx xx
4.That in response to his grievance it is humbly submitted that the petitioner was promoted to the post of LDC in July, 1998. As per the instructions issued by the office of Secretary, Patiala dated 20.11.2000, one common cadre of LDC (Typists) was created after merger of LDCs and Typists, and according persons working as LDCs were required to perform the work of typing in addition to their official duties assigned. Copy of instructions dated 20.11.2000 is annexed herewith and marked as Annexure R-1.
5.That after the aforesaid Instructions dated 20.11.2000, further instructions dated 05.02.2001 were issued by the office of Secretary, Patiala, specifying that in view of aforesaid merger and creation of common cadre of LDC (Typists), each LDC working on PSEB was required to pass the typing test within one year of issuance of such instructions for grant of further annual increments. Copy of instructions dated 05.02.2001 is annexed herewith and marked as Annexure R-2.
6.That further memo no. 177760 dated 13.07.2001 clarified that passing of aforesaid type test would be exempted only for LDCs recruited before 25.08.1989 and also for LDCs recruited after 25.08.1989 and crossed age of 50 years. Same can be gathered from memo dated 10.11.2003, true translated/typed copy of which is annexed herewith and marked as Annexure R-3.
7.That thus the petitioner was required to pass the requisite type test for grant of annual increments since 2001 and since he never passed such test, the requisite reduction of basic pay, basic pension and recovery has been legally made by the respondents. The petitioner does not fall in any of the exemption clause as well as petitioner was 47 years old at the time of passing of relevant instructions.
8.That it is humbly submitted herein that the petitioner never applied to the respondent Corporation for taking the type test. Similar situated LDCs, after the merger of aforesaid cadre and making type test mandatory for future annual increments, duly applied, took and passed the said type test and accordingly earned/were granted annual increments as per the aforesaid instructions.
9.That the petitioner was during service also found involved in fraud in his duty as cashier and imposed penalty of cut of 10% on pension.
10.That the petitioner has not qualified the typing test mandatory for the post of LDC and while processing the case for final pension, service book of the petitioner was sent for final audit to the office of AO/EAD, PSPCL Patiala. During the audit, the factum of non-passing of typing test came to light, thereafter objection was raised vide memo no. 7594 dated 16.08.2018, true translated copy attached herewith as Annexure R-4. Thereafter everything was verified and requisite reductions and recoveries wef 01.08.2001 was made, copy whereof is annexed herewith and marked as Annexure R-5. xx xx xx xx xx”
In nutshell, the stand of the respondents is that the petitioner, after his promotion as LDC, was governed by the instructions issued upon the merger of the cadres of LDCs and Typists, whereby passing the prescribed typing test was made mandatory for earning future annual increments. Since, the petitioner neither qualified the typing test nor fell within the exempted category, the reduction of pay, pension and the consequential recovery effected on the basis of the audit objection are legal and in accordance with the applicable instructions.
Learned counsel for the petitioner has submitted that at the time of his retirement in the year 2011, the petitioner was drawing the basic salary of Rs.16,070/-, however, after a period of more than 06 years from the date of his retirement, the respondents issued the impugned pension and gratuity payment orders dated 13.11.2018 (Annexures P-8 & P-9), whereby the petitioner’s pay has been arbitrarily re-fixed by reducing his basic pay and an amount of Rs.3,20,481/- has been recovered from the gratuity payable to the petitioner. He has further submitted that the alleged recovery has been effected without issuance of any show cause notice or granting any personal hearing in a unilateral manner, which is in violation of the principles of natural justice. In support of his contentions, learned counsel for the petitioner has placed reliance upon the judgment passed by the Hon’ble Supreme Court in State of Punjab and others Vs. Rafiq Masih (White Washer) and others : 2015(1) S.C.T. 195 and judgment passed by this Court in B.P. Sharma Vs. Uttar Haryana Bijli Vitran Nigam Limited and others : 2022(4) S.C.T. 388.
On the other hand, learned counsel for the respondents, while reiterating the averments made in the reply filed on behalf of respondents, has submitted that the petitioner was required to pass the type test for grant of annual increments w.e.f. the year 2001 and since he failed to qualify the said type test during his service tenure, he was not entitled to the annual increments granted to him. Therefore, the respondents lawfully re-fixed the petitioner's basic pay and basic pension and effected recovery of the excess amount paid. He has further submitted that the excess payment made without authority of law can be recovered. In support of his contention, he has placed reliance upon the judgment passed by the Madras High Court in W.P. (MD) No.14857 of 2016 titled as ‘P. Ganga Parameshwaran (Died) through his LR Vs. The Government of Tamil Nadu and others’ decided on 03.07.2025.
I have heard learned counsel for the parties and perused the relevant documents.
Admittedly, the petitioner retired from service, on attaining the age of superannuation, on 31.12.2011 and after a period of more than 06 years from the date of his retirement, the impugned pension and gratuity payment orders dated 13.11.2018 (Annexures P-8 & P-9) have been issued by the respondents, whereby the pay of the petitioner has been re-fixed by reducing his basic pay and even an amount of Rs.3,20,481/- has been recovered from the gratuity payable to the petitioner on the ground that the petitioner had not passed the requisite typing test since 2001.
It is very surprising that despite the respondents stand that passing the prescribed type test was a mandatory condition for the post of Lower Division Clerk (LDC)/Typist, they neither called upon the petitioner to qualify the said test nor took any action in that regard from the year 2001 onwards. On the contrary, the respondents continued to grant annual increments to the petitioner throughout his service tenure. Even at the time of the petitioner's retirement in the year 2011, his retiral benefits were processed and provisional pension was released to the petitioner vide order dated 03.06.2013 (Annexure P-6) on the basis of the pay last drawn by him. It was only after a lapse of more than 06 years from the date of the petitioner's retirement, while processing his case for final pension, that the respondents purportedly noticed that the petitioner had not qualified the prescribed type test. Consequently, the impugned pension and gratuity payment orders dated 13.11.2018 (Annexures P-8 and P-9) were issued, whereby the petitioner's pay was re-fixed and recovery was ordered from his gratuity.
The facts and circumstances of the present case suggests that it was nowhere the case of the respondents that there was any fraud or misrepresentation on the part of the petitioner to enure the benefit of fetching excess payment, rather the same was being paid by the respondents at its own. Further, if an excess amount was paid to the petitioner while he was in service, the same cannot be recovered from him after a period of more than 06 years from the date of his retirement.
The Hon’ble Supreme Court in Rafiq Masih’s case (supra) has laid down circumstances where no recovery can be effected from an employee despite excess payment. The circumstances enumerated in the judgment are not conclusive. The circumstances where the Court has categorically held that no recovery shall be effected are reproduced as below :-
“12.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 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.”
In view of the above, this Court is of the considered view that the case of the present petitioner is squarely covered by the principles and parameters laid down in Clauses (i), (ii), (iii) and (v) of para 12 of the judgment of Hon’ble Supreme Court passed in Rafiq Masih’s case (Supra).
A Coordinate Bench of this Court has already dealt with and adjudicated upon an identical issue in B.P. Sharma’s case (supra). In the said case, the petitioner was retired from service on 31.03.2006. At the time of his retirement, the petitioner was not eligible for promotion in view of the experience requirement prescribed under the applicable rules. However, pursuant to the clarification issued by the respondents, vide letter dated 06.01.2017, the petitioner was found entitled to the benefit of the ACP, and the said benefit was accordingly extended to him vide order dated 28.03.2017. After the grant of the benefits of ACP, the consequential benefits were also extended to the petitioner including the arrears and his pay was also re-fixed accordingly. After the grant of the benefit to the petitioner, the respondents realized that the petitioner has already retired even prior to the issuance of the policy, and the said policy was implemented retrospectively qua the petitioner. Consequently, the benefit of ACP extended to the petitioner on 28.03.2017 was withdrawn by the respondents by passing the impugned order dated 06.10.2021 and directed that excess amount paid to the petitioner, be recovered. While allowing the petition filed by the petitioner against the said recovery, a Coordinate Bench of this Court observed as under :-
“8.The only question which arises for determination in the present petition is whether, the excess amount paid to the petitioner can be recovered. Nothing has come on record that the petitioner misrepresented in any manner to claim the benefit, which was extended to him on 28.03.2017 by which, the benefit of ACP was extended to him with retrospective effect. Once, there is no misrepresentation on part of the petitioner, the excess amount paid by the respondents themselves, cannot be recovered keeping in view the settled principle of law settled by the Hon'ble Supreme Court of India in Civil Appeal No.7115 of 2010 titled as Thomas Daniel versus State of Kerala and others, decided on 02.05.2022. According to the said judgment, once an employee has not misconducted himself or has misrepresented or has not played any fraud so as to get the benefit, though not entitled for, the excess amount paid cannot be recovered. The relevant paragraph of the said judgment is as under:-
“(9)This Court in a catena of decisions has consistently held that if the excess amount was not paid on account of any misrepresentation or fraud of the employee or if such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order which is subsequently found to be erroneous, such excess payment of emoluments or allowances are not recoverable. This relief against the recovery is granted not because of any right of the employees but in equity, exercising judicial discretion to provide relief to the employees from the hardship that will be caused if the recovery is ordered. This Court has further held that if in a given case, it is proved that an employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where error is detected or corrected within a short time of wrong payment, the matter being in the realm of judicial discretion, the courts may on the facts and circumstances of any particular case order for recovery of amount paid in excess.”
9.Further, even as per the judgment of the Hon'ble Supreme Court of India in State of Punjab and others Vs. Rafiq Masih (White Washer) etc., 2015(1) S.C.T., 195, once an employee has already retired, no excess amount paid can be recovered. xx xx xx xx”
The Hon’ble Division Bench of this Court, while considering the similar issue, in its judgment passed in Manmohan Singh Vs. State of Punjab : 1996(2) SCT 431 has observed as under :-
“5.xx xx xx We are of the considered view that this petition is liable to succeed by quashing the orders as contained in Annexures P6 and P9. It is not open for the Government at this belated stage to review the fixation of the salary of the petitioner, specially after his retirement. Moreover before passing the orders Annexures P6 and P9 no opportunity of hearing was ever afforded to the petitioner. The respondents cannot be allowed to reduce the salary of the petitioner after more than 20 years, specially when it was duly verified earlier and that at no point of time it was ever objected to by the respondents that the salary of the petitioner was not being fixed in accordance with the rules. It will be a big hardship to the petitioner if the respondents are permitted to reopen the case. We are not in agreement with the argument of Shri S.S. Shergill that since the information was to be supplied by respondent No.4, therefore, the Government could not pass the orders earlier with regard to the alleged correct fixation of the salary of the petitioner. Respondent No.4 had been sending the pension papers of the petitioner to respondent No.2 and at no relevant time the petitioner was ever informed that his salary has not been correctly fixed. Resultantly, we repel the argument of Shri S.S. Shergill and declare that the petitioner is entitled to the grant of retirement benefits and other benefits as laid down in the Pension Scheme of 1992, which has come into force with effect from 5.2.1987.”
To the similar effect is the judgment passed by Single Bench of this Court in Roshan Lal Vs. State of Haryana : 1994(1) SCT
Para 11 of the said judgment reads as under :-
“11.Points 2, 3 and 4 are inter-connected and are being dealt with together. Assuming that the interpretation that was put by the respondents on the Instructions dated 11.4.1965 (Annexure P-3) while fixing the pay in the pay scale of Rs.400-20-500 was incorrect and the one that is being put now is correct, the point for consideration that arises is whether the Government can be permitted to reopen the matter almost 20 years the petitioner was granted a particular pay by interpreting the Instructions differently. To my mind, the Government is estopped from reopening the matter at such a belated stage specially at the fag end of the career of an individual. As observed above, it was only 2-3 months prior to the retirement of the petitioner that the pay was sought to be refixed which was fixed earlier almost 20 years back. In a particular factual position, as it comes into existence by the order of the Government, an incumbent plans his future and starts acting according. It will be wholly arbitrary and inequitable if after such a long lapse of time the Government is permitted to reopen the matter and start making deductions from salary, which would naturally affect the pension also. Coupled with the above, is the fact that no opportunity was given to the petitioner before passing the impugned order reducing the pay. Such an order would be a nullity being violative of principles of natural justice.”
Further, the impugned pension and gratuity payment orders dated 13.11.2018 (Annexures P-8 & P-9) have been issued by the respondents in violation of the principles of natural justice as neither any show cause notice was issued to the petitioner nor he was granted an opportunity of personal hearing.
The judgment cited by learned counsel for the respondent in P. Ganga Parameshwaran’s case (supra) is clearly distinguishable and not applicable to the facts of the present case.
In view of the above, the present petition is allowed and the impugned pension and gratuity payment orders dated 13.11.2018 (Annexures P-8 & P-9), whereby the pay of the petitioner has been re-fixed by reducing the basic pay and amount of Rs.3,20,481/- has been recovered from the gratuity of the petitioner, are set aside. The respondent-Corporation is directed to refund the amount deducted from the gratuity and pension, to the petitioner, within a period of 02 months from the date of receipt of certified copy of this order.