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Judgment
O R D E R
The present O.A has been filed by the applicant under section 19 of the Administrative Tribunal Act, 1985 seeking following reliefs:-
“(i)Quash the impugned order dated 25.03.2022 passed by respondent no.2 (Annexure A-1 to this O.A. in Compilation No.-I).
(ii)Directing the respondents to refund the recover amount of Rs.11,83,917/-which has been recovered from the gratuity and pension with 12% interest per annum to the applicant from the date of recovery to the date of actual payment is being made to the applicant.
(iii)To grant any other relief, which this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of the case.
(iv)Award the cost of the application in favour of the applicant”.
The brief facts of the case are as follows:-The applicant, a Group-C employee, retired on 31.08.2015 as Store Issuer with Grade Pay of Rs.2,800/-. After retirement, the respondents proposed recovery of Rs.11,83,917/- towards alleged excess payment for the period from 01.01.1986 till retirement. The applicant contends that no excess payment was made to him and the recovery was initiated after retirement without proper notice or opportunity. The applicant further contends that his pension was illegally reduced by fixing it on a lower Grade Pay and recovery from a retired Group-C employee is contrary to the Government and Railway Board instructions. He relies upon the judgment dated 24.02.2014 passed by the Hon’ble Allahabad High Court in Writ-A No.41431 of 2013 and the Railway Board letter dated 26.12.2017 regarding refund of recovery made from retired employees. The applicant also states that his gratuity was withheld and, despite his representations, was not released. He had earlier filed OA No.643 of 2021, which was disposed of on 10.12.2021 with a direction to the respondents to decide his representation by a reasoned and speaking order. He has, therefore, prayed for refund of the recovered amount, refixation of pension on the basis of Grade Pay of Rs.2,800/-, payment of consequential arrears and release of his retiral benefits.
Per contra, the respondent Bank has filed its counter affidavit stating therein that applicant was initially engaged as a Casual Labourer and was granted temporary status w.e.f. 01.01.1982. He was given first ad hoc promotion in the pay scale of Rs.950-1500 w.e.f. 28.12.1996 and thereafter second ad hoc promotion in the pay scale of Rs.4500-7000 w.e.f. December, 1998. The respondents further submitted that the benefit of pay protection was earlier granted to the applicant pursuant to the interim order dated 12.08.2013 in OA No. 1024/2003 passed by the CAT, Allahabad Bench but the same was ultimately dismissed by this CAT, Allahabad Bench on 21.10.2016. Therefore, the excess pay and consequential retiral benefits paid to the applicant were required to be re-determined in accordance with the rules. Relying upon the Railway Board letter dated 09.06.2011 and the letter dated 11.11.2013 issued by the General Manager (Personnel), Gorakhpur, the respondents submitted that only one promotion was permissible in the Construction Organisation. Accordingly, the applicant’s pay was required to be re-fixed by withdrawing the excess ad hoc promotion, and his pension and retiral benefits were to be calculated on the basis of such re-fixation. Thus, respondents have rightly recovered the excess amount paid to the applicant. Therefore, the OA is liable to be dismissed.
A rejoinder affidavit has also been filed by the applicant, in which the facts stated in the Original Application have been reiterated and the contents of the counter affidavit have been denied. Nothing new has been stated in the rejoinder affidavit.
I have heard Sri A.D. Singh, learned counsel for the applicant, and Sri Ajay Kumar Rai, learned counsel for the respondents, and have perused the record.
Learned counsel for the applicant submitted that the applicant retired as a Group-C employee on 31.08.2015 and there is no allegation of fraud, misrepresentation or concealment of facts against him. The alleged excess payment was made by the respondents themselves due to their own pay fixation and, therefore, the same cannot be recovered from the applicant after his retirement. It was further submitted that the alleged excess payment relates to a period of more than five years and the recovery from a retired Group-C employee is contrary to the law laid down by the Hon’ble Supreme Court in State of Punjab and Others Vs. Rafiq Masih (White Washer) and Others, (2015) 4 SCC 334 and Thomas Daniel Vs. State of Kerala and Others, (2022) 5 SCC 470. He, therefore, prayed that the recovery may be quashed and the amount already recovered from the applicant may be refunded along with consequential benefits.
Per contra, learned counsel for the respondents submitted that the applicant was initially engaged as a Casual Labourer and was granted temporary status w.e.f. 01.01.1982. He was subsequently granted first and second ad hoc promotions. It was submitted that, as per the Railway Board letter dated 09.06.2011 and the letter dated 11.11.2013 issued by the General Manager (Personnel), Gorakhpur, only one promotion was permissible in the Construction Organisation. Therefore, the second ad hoc promotion and the consequential pay fixation were not permissible and the applicant’s pay was required to be re-fixed. Learned counsel for the respondents further submitted that the benefit of pay protection was earlier granted to the applicant pursuant to the interim order dated 12.08.2013 passed by the CAT, Allahabad Bench, but the applicant’s OA No.1024/2003 was ultimately dismissed by the CAT,Allahabad Bench on 21.10.2016. Consequently, the excess amount paid to the applicant was liable to be adjusted/recovered. It was, therefore, submitted that the action taken by the respondents was in accordance with the applicable rules and instructions and the OA is liable to be dismissed.
I have carefully considered the rival submissions advanced by learned counsel for the parties and have perused the entire material available on record.
The facts which are not in dispute are that the applicant was a Group-C employee and retired from service on 31.08.2015 from the post of Store Issuer. It is also not the case of the respondents that the applicant had committed any fraud, misrepresentation or concealment of facts for obtaining the benefit of the pay or Grade Pay granted to him. The respondents themselves have stated that the benefit granted to the applicant was required to be withdrawn on account of the subsequent decision regarding his entitlement to more than one ad hoc promotion.
It is also clear from the record that the applicant continued to receive the said benefit for a long period. The pay and other benefits were fixed and granted by the competent authorities of the respondents. There is nothing on record to show that the applicant had any role in fixing his pay or he had furnished any incorrect information for obtaining the said benefit. Therefore, the alleged excess payment cannot be attributed to any fraud or misrepresentation on the part of the applicant.
It is further an admitted p osition that the applicant had already retired from service when the recovery was sought to be made. The alleged excess payment relates to a period commencing from 01.01.1986 and continuing till his retirement. Thus, the alleged excess payment had continued for a period of more than five years. The recovery was sought to be made from the retiral benefits of the applicant after his retirement.
The Hon’ble Supreme Court in the case of Rafiq Masih (supra) has held 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 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”.
The same principle has been reiterated by the Hon’ble Supreme Court in Thomas Daniel (supra). The Hon’ble Supreme Court has held that
“(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.
(10)In Sahib Ram v. State of Haryana and Others1 this Court restrained recovery of payment which was given under the upgraded pay scale on account of wrong construction of relevant order by the authority concerned, without any misrepresentation on part of the employees. It was held thus :
“5.Admittedly the appellant does not possess the required educational qualifications. Under the circumstances the appellant would not be entitled to the relaxation. The Principal erred in granting him the relaxation. Since the date of relaxation, the appellant had been paid his salary on the revised scale. However, it is not on account of any misrepresentation made by the appellant that the benefit of the higher pay scale was given to him but by wrong construction made by the Principal for which the appellant cannot be held to be at fault.
Under the circumstances the amount paid till date may not be recovered from the appellant. The principle of equal pay for equal work would not apply to the scales prescribed by the University Grants Commission. The appeal is allowed partly without any order as to costs.”
(11)In Col. B.J. Akkara (Retd.) v. Government of India and Others2 this Court considered an identical question as under:
“27.The last question to be considered is whether relief should be granted against the recovery of the excess payments made on account of the wrong interpretation/understanding of the circular dated 76 1999. This Court has consistently granted relief against recovery of excess wrong payment of emoluments/allowances from an employee, if the following conditions are fulfilled:
(a)The excess payment was not made on account of any misrepresentation or fraud on the part of the employee.
(b)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.” In the aforesaid judgment, Hon’ble Apex Court further observed as under:-
“18.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 hereinabove, we may, as a ready reference, summarize the following few situations, wherein recoveries by the employers, would be impermissible in law:
(i)Recovery from the employees belonging to Class III and Class IV service (or Group C and Group D service).
(ii)Recovery from the retired employees, or the employees who are due to retire within one year, of the order of recovery.
(iii)Recovery from the 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 the present case, even if the respondents are entitled to re-fix the pay of the applicant in accordance with the applicable rules, the recovery of the amount already paid to the applicant, particularly from his retiral benefits, cannot be sustained in view of the principles laid down by the Hon’ble Supreme Court in Rafiq Masih (supra) and Thomas Daniel (supra). In such circumstances, the recovery would cause undue hardship to the applicant. The case of the applicant, therefore, clearly falls within the categories in which recovery of excess payment has been held to be impermissible by the Hon’ble Supreme Court.
In view of the discussion made hereinabove, the Original Application is allowed and the impugned order dated 25.03.2022 is hereby quashed. The recovery of Rs.11,83,917/- proposed to be made from the applicant towards alleged excess payment cannot be sustained and is hereby quashed. The respondents are directed to refund the amount, if already recovered from the retiral dues of the applicant, within a period of three months from the date of receipt of a certified copy of this order. In case the amount is not refunded within the aforesaid period, the applicant shall be entitled to interest at the GPF rate applicable from time to time on the said amount, from the date of expiry of the aforesaid three-month period till the date of actual payment. There shall be no order as to costs. All pending Misc. Applications, if any, also stand disposed of.