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Judgment
ORDER
Per: Mr. Shri Krishna, Member (A)
The applicant, a retired employee of South East Central Railway, Nagpur Division, has filed this OA under Section 19 of the Administrative Tribunals Act, 1985 to claim for the following reliefs:-
“8.a This Hon’ble Tribunal may graciously be pleased to call for the records of the case from the respondents and after examining the same quash and set aside the letters dated 24/26.12.2016 and letter dated 10.02.2020 (communicated vide letter dated 10.03.2020) with all consequential benefits.
b. This Hon’ble Tribunal may further be pleased to direct the respondents to restore the basic-pay of the applicant of Rs.87100/-and accordingly direct the respondents to fix the pension and pensionary benefits of the applicant and pay the arrears arising out therefrom along with interest @Rs.12% p.a.
c. This Hon’ble Tribunal may further be pleased to hold and declare that the respondents are not entitled to recover any amount from the applicant in pursuance of the impugned letters and the respondents be directed to refund the amount of Rs.214168/- alongwith interest @12% with effect from 01.01.2020 till the date of actual payment.
d. Costs of the application be provided for.
e. Any other and further order as this Hon’ble Tribunal deems fit in the nature and circumstances of the case be passed.”
It is the case of the applicant that he retired on superannuation on 31.12.2019. The respondents vide impugned order dated 24/26.12.2016 have reduced his basic pay from Rs.87700/- to Rs.85100/- from the year 2006 which is after a period of 13 years. It has been submitted that the impugned order has been passed just four days before the retirement of the applicant and amount of Rs.2,14,168/-has been illegally recovered from the retirement dues of the applicant.
It is averred that the pay of the applicant was correctly fixed in the year 2006. The applicant had earned promotion on 16.09.2005 and was entitled to promotional increment on the said date. The applicant was aware about the upcoming change in the uniform date of increment of 1st July as on 16.09.2005. Since postponement of promotional increment on the day of normal increment was beneficial, the applicant was advised to opt for promotional increment in February, 2006, which was his normal date of increment. The applicant was, accordingly, granted promotional increment and normal increment in February, 2006. Because another increment fell due on 01st July, 2006 on account of change in the date of increment, the applicant was granted further increment on 01st July, 2006. Now the applicant’s increment granted in February, 2006 is apparently withdrawn, with the result the applicant has completely lost his promotional increment, to which he was entitled to upon earning the promotion. If at all the respondents had problem in granting next increment immediately on 01st July, 2006, the respondents could have preponed the promotional increment of applicant from February, 2006 to September, 2005. However, this is not done. Thus, the impugned action of the respondents had resulted in complete wiping of applicant’s promotional increment.
It is submitted that without prejudice to the aforesaid impugned action of recovery is in gross violation of the judgment of the Hon’ble Supreme Court in the case of State of Punjab and Others Vs. Rafiq Masih White Washer and Others, (2015) 4 SCC 334. The applicant’s recovery is made by the said judgment, in that the period of recovery is in excess of 5 years. The recovery is also made at the time of retirement of the applicant. Therefore, the impugned recovery deserves to be quashed and set aside.
After issuance of notice, the respondents have filed their reply and contested the OA. It has been submitted that the pay fixation on promotion as Senior Section Engineer in scale of Rs.7450-11500 was erroneously fixed at Rs.8350/- i.e. date of increment 01.02.2006 on option made by the applicant whereas his date of promotion is 16.09.2005 (admittedly in the old pay scale). It is, therefore, submitted that the action of the respondents of rectifying the serious error is permissible in law and hence the action is well within law. The OA, therefore, deserves to be dismissed with cost.
It is submitted that as the promotion gets effective from September, 2005, he would get fixation on 16.09.2005 in old scale Rs.7450-11500 @ Pay 8125. The pre-revised pay on 01.01.2006 comes to Rs.8125(scale 7450-11500) which is fixed at Rs.15120 plus Grade Pay 4600 in the VIth Pay Commission on 01.01.2006 thereafter on 01.07.2006 at Rs.15720 + 4600. He was granted IIIrd MACP w.e.f. 01.09.2008 in pay scale Rs.17610 + 4800. Thus, the pre-revised pay on 31.12.2015 is Rs.22800 + Grade Pay 4800 which gets fixed at Rs.72100 as on 01.01.2016 in the VIIth Pay Commission followed by increments upto 01.12.2019 and finally pay as on 31.12.2019 stands at Rs.85100/- after increment and certified by Associate Accounts, based on the last pay drawn at Rs.85100/-.
It has been submitted that all the above irregularities have been rectified and pay was correctly revised at Rs.85,100/- before the retirement of the applicant.
It has been further submitted that the pay reduced from 01.01.2006 to 31.12.2019, the overpayment had been prepared and after vetting by Associate Accounts, the same was recovered from his settlement dues to the extent of Rs.2,14,168.
The applicant has filed rejoinder reiterating and elaborating the averments made in the OA. Further, no new points have been made.
During arguments, learned counsel for the applicant has submitted that before passing the impugned order and recovering an amount of Rs.2,14,168/-, no show cause notice was given to the applicant which is in violation of the principles of natural justice. He further submitted that the impugned order has been passed in violation of the judgment of Hon’ble Supreme Court in the case of Rafiq Masih White Washer (supra) and the consequent OM issued by the DoPT F.No.18/03/2015-Estt.(Pay-1) dated 02.03.2016. Therefore, it is in the violation of principles of natural justice. He has placed reliance on the following judgement :
(i)Thomas Daniel V. State of Kerala and Others, Hon’ble Supreme Court of India, Civil Appeal No.7115 of 2010 decided on 02.05.2022.
Learned counsel for the respondents Dr. V.S. Masurkar on the other hand has vehemently argued that the applicant was issued pay slips by the department every month and the applicant has not produced the said pay slips. He submitted that the applicant was very well aware that he is getting excess pay to which he is not entitled. He submitted that no employee can take the benefit of the excess pay which is over and above his entitlement. He submitted that the impugned order was issued on 24.12.2019 while the applicant was retiring on 31.12.2019 but the applicant did not challenge it for 3 years and file the OA on 19.01.2021. He submitted that for correction of error in the pay fixation, no show cause notice is required to be issued as it is not a penalty and, therefore, there is no violation of principles of natural justice.
Dr. Masurkar further submitted that the promotion order dated 15.09.2005 by which he was promoted as Senior Section Engineer (P.Way) in the scale of Rs.7450-11500 has been supressed by the applicant and, therefore, the OA should be dismissed on the ground of suppression of facts. He submitted that the applicant has made representation dated 17.09.2005 requesting for pay fixation in the higher scale after getting his normal increment in February, 2006 and, therefore, his pay in the higher grade of Rs.7450-225-11500 should be fixed. Thus, the higher pay was fixed by the respondents as per the representation of the applicant.
Dr. Masurkar has placed reliance on the following judgments :
(i)State of Kerala and Another Vs. P.V. Neelakandan Nair and Others, (2005) 5 SCC 561.
(ii)Registrar, Cooperative Societies Haryana and Others Vs. Israil Khan and Others, (2010) 1 SCC 440.
(ii)High Court of Punjab and Haryana and Others Vs. Jagdev Singh, (2016) 14 SCC 267.
We have heard learned counsel for the parties and perused the pleadings and documents filed on record.
It is not in dispute that the basic pay of the applicant in the month of October, 2019 was Rs.87,700/-which has been reduced to Rs.85,100/- vide impugned order without giving him any opportunity of being heard. Shri Shirke, learned counsel for the applicant submitted that though the impugned communication is dated 24/26.12.2016 (Annexure A-1) but it is a typographical error as it talks of the applicant retiring on 31.12.2019. In his reply, Dr. V.S. Masurkar, learned counsel for the respondents submitted that the impugned communication is dated 24/26.12.2016 only as it talks of that applicant will be retiring on 31.12.2019 and, therefore, there is no typographical mistake. However, from the representation of the applicant dated 27.12.2019 (Annexure A-4), he has mentioned that he has received the said letter dated 26.12.2019 in which it has been mentioned that one extra increment is given in fixation of 06th Pay Commission w.e.f. 01.01.2006 and his last pay has been reduced to Rs.85,100/- from Rs.87,000/-without giving any proper period for explaining from his side as the impugned communication was received just four days before his retirement when he was due to retire on 31.12.2019. The contention of the respondents is that the applicant himself has requested for pay fixation in the higher scale after getting his normal increment in February, 2006 to Rs.7450-225-11500/- vide his letter dated 17.09.2005 and, therefore, the department has every right to refix the same when it came to their notice.
It is not in dispute that the applicant is a Group ‘C’ employee. Even assuming that the said pay was fixed after his representation dated 17.09.2005, it is not the case of the respondents that the applicant has made any wrong representation or played any fraud with the respondents. The Railway has very robust system of Accounting as they have full fledged Accounts and Finance Department and they have full fledged service under them called as ‘Indian Railway Accounts Service’ (IRAS) and, therefore, the respondents cannot take the plea that his pay was fixed as per his representation dated 17.09.2005. If that is the case then any employee can claim any salary and the respondents will give the same to the employee when it is not permissible. It is also not in dispute that the pay was fixed in 2006 on the basis of his increment. Thus, he was getting pay in accordance with the 6th Pay Commission till the impugned order was passed.
The Hon’ble Supreme Court in the case of Rafiq Masih (White Washer) and Others (supra)in para 18(i) has held that recovery from the employees belonging to Class III and Class IV service (or Group C and Group D service)cannot be recovered when the same is given for more than 5 years. Pursuant to the above judgment of Hon’ble Supreme Court, the DoPT has issued instructions vide Office Memorandum dated 02.03.2016 with respect to ‘Recovery of wrongful/excess payments made to Government servants.’
Subsequently, the Hon’ble Supreme Court in the case of Thomas Daniel Vs. State of Kerala and Others (supra) has held as under:
“(13)In State of Punjab and Others v. Rafiq Masih (White Washer) and Others wherein this court examined the validity of an order passed by the State to recover the monetary gains wrongly extended to the beneficiary employees in excess of their entitlements without any fault or misrepresentation at the behest of the recipient. This Court considered situations of hardship caused to an employee, if recovery is directed to reimburse the employer and disallowed the same, exempting the beneficiary employees from such recovery. It was held thus:
“8.As between two parties, if a determination is rendered in favour of the party, which is the weaker of the two, without any serious detriment to the other (which is truly a welfare State), the issue resolved would be in consonance with the concept of justice, which is assured to the citizens of India, even in the Preamble of the Constitution of India. The right to recover being pursued by the employer, will have to be compared, with the effect of the recovery on the employee concerned. If the effect of the recovery from the employee concerned would be, more unfair, more wrongful, more improper, and more unwarranted, than the corresponding right of the employer to recover the amount, then it would be iniquitous and arbitrary, to effect the recovery. In such a situation, the employee's right would outbalance, and therefore eclipse, the right of the employer to recover.
xxx xxx xxx
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, summarise 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.”
(14)Coming to the facts of the present case, it is not contended before us that on account of the misrepresentation or fraud played by the appellant, the excess amounts have been paid. The appellant has retired on 31.03.1999. In fact, the case of the respondents is that excess payment was made due to a mistake in interpreting Kerala Service Rules which was subsequently pointed out by the Accountant General.
(15)Having regard to the above, we are of the view that an attempt to recover the said increments after passage of ten years of his retirement is unjustified.”
Therefore, the reliance placed by the respondents on the judgements of State of Kerala and Another vs. P.V. Neelakandan Nair and Others (supra), High Court of Punjab and Haryana and Others Vs. Jagdev Singh (supra) and Registrar, Cooperative Societies Haryana and Others Vs. Israil Khan and Others (supra) is of no help to them as the Hon’ble Supreme Court in the case of Jagdev Singh (supra) in para 11 of the judgment has held that the proposition laid down by the Hon’ble Supreme Court in Rafiq Masih (supra) in clause (ii) cannot apply to the situation wherein the officer to whom the payment Central Administrative Tribunalwas made in the first instance was clearly placed on notice that any payment found to have been made in excess would be required to be refunded. In that case, the officer furnished an undertaking while opting for the revised pay scale. He is bound by the undertaking.
We find that the applicant herein has never given any such undertaking. He only made a request that he was promoted as SSE(P.Way) in the scale of Rs.7450-225-11500 vide order dated 16.09.2005 and, therefore, requested for pay fixation in the higher scale. Moreover, in the case of Jagdev Singh (supra), the officer was a Civil Judge (Junior Division) who was promoted as Additional Civil Judge, while in the case under consideration, the applicant is a Group ‘C’ employee which is covered by clause (i) of judgment of Hon’ble Supreme Court in the case of Rafiq Mashi (supra).
We find from the pay slip of the applicant for the month of October, 2019 that in the month of October, he was given basic pay of Rs.87,700/- and, therefore, it appears that impugned communication was issued in 2019 and not in 2016. The respondents have not disputed the representation of the applicant dated 27.12.2019 in which he has mentioned that he has received the impugned communication on 26.12.2019.
Therefore, we are of the considered opinion that reducing of the basic pay of the applicant from Rs.87,700/- to Rs.85,100/- and recovering of Rs.2,14,168/- is not in accordance with rules and cannot be sustained. Therefore, the impugned communications are quashed and set aside. The respondents are directed to refund the amount of Rs.2,14,168/-, if it has been recovered from the applicant and restore his basic pay to Rs.87700/- and issue revised PPO accordingly. The said exercise shall be carried out within a period of 90 days from the date of receipt of a certified copy of the order. However, the claim of the applicant to grant interest @12% p.a. on the arrears arising out therefrom is rejected.
Accordingly, the Original Application is partly allowed. Pending MAs, if any, stand closed. No order as to costs.