The Union Of India And ORS v. C.P.Babu
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISIDCTION [CIRCUIT BENCH AT PORT BLAIR] **** PRESENT: HON'BLE JUSTICE ARINDAM MUKHERJEE AND HON'BLE JUSTICE BISWAROOP CHOWDHURY WP.CT/36/2024 THE UNION OF INDIA AND OTHERS ... PETITIONERS
VERSUS
C. P. BABU ... RESPONDENT For the Petitioners :
Mr. V. D. Sivabalan For the Respondent :
Mr. Arul Prasanth Heard on :
September 03, 2024 Judgment delivered on :
September 09, 2024 ARINDAM MUKHERJEE, J.
This judicial review arises out of an order dated 19th April, 2024 passed by the Central Administrative Tribunal, Kolkata Bench, Circuit Bench at Port Blair in OA No. 351/00534/2023 by which the learned Central Administrative Tribunal (in short 'CAT') had set aside the order of recovery of excess payment said to have been made to the
respondent by his employer, the petitioner herein on the re-fixation of respondent's pay.
I.
FACTS OF THE CASE:
a) The respondent joined the Andaman Lakshadweep Harbour Works (in short 'ALHW') on 24.06.1985 as a Overseer (Civil), Group-C. The respondent then became the Engineering Assistant on regular basis with effect from 11.03.1990 which post was later on redesignated on 07.03.1994 as Junior Engineer (Civil). He was promoted to Group-B (Gazetted) post on 01.01.1996. b) On 09.08.1999 the Assured Carrier Progression (in short 'ACP') Scheme was introduced. The qualifying period of service for receiving such ACP was 12 years and 24 years. The ACP was replaced by a Modified Assured Career Progression (in short 'MACP') Scheme on 01.09.2008. Under the MACP, the benefits were to be received after 10 years, 20 years and 30 years of service.
c) The pay of the respondent was re-fixed vide office order No. 332/2020 dated 15th July, 2020 with a specific stipulation to have the excess payment, if any, be recovered.
d) On 06.03.2023 upon finding that the respondent was given excess payment while his scale of pay was refixed an order of recovery was passed. Pursuant to such order, the recovery of a part of the
excess payment was made from the salary of the respondent for two months i.e. March and April, 2023.
e) The respondent thereafter approached the Central Administrative Tribunal, who by an interim order dated 25.04.2023 restrained the petitioner from any further recovery. The outstanding recovery amount is Rs. 5,43,563/- at the present. II.
ARGUMENTS OF THE PETITIONERS:
a) The petitioner says that on 15.07.2020 when the respondent's pay was refixed by the Office Order No. 332 of 2020 dated 15.07.2020 it was clearly stated therein that any excess amount paid on such refixation, if detected subsequently will be recovered from the respondent. The respondent accepted such order which was specifically issued in his name and duly received the refixed pay with all arrears and connected benefits without reserving his right in any manner whatsoever. On such acceptance of order and receipts of the refixed pay and emoluments, the petitioner and the respondent altered their position with such stipulation to recover excess payment in future. The Office Order No. 332 of 2020 dated 15.07.2020 was, therefore, acted upon without reserving any exception thereto. This was end of the matter as held in the judgment reported in 1973 (4) SCC 163 (M.K.Krishnaswamy etc vs. Union of India and another ). The
excess payment was detected subsequently and order for recovery of the same was rightly passed on 06.03.2023.
b) Pursuant to such order of recovery a portion of the excess payment was made to the respondent has been recovered from the monthly salary of the respondent for the months of March and April, 2023 which was subsequently stopped in view of the Tribunal's order dated 25.04.2023.
c) The petitioner says except the outstanding excess amount of Rs. 5,43,563/- all others payments which fell due on the respondent's retirement on 30.04.2024 has been paid.
d) The Tribunal, therefore, erred in law as well as on facts while setting aside the order directing recovery of excess amount from the respondent. The petitioner, therefore, submits that the order impugned of the Tribunal dated 19.04.2024 should be set aside. III. SUBMISSIONS OF THE RESPONDENT:
a) The respondent on the other hand submits that no recovery of excess amount can or could have been made from the respondent in view of the ratio laid down in the judgment of the Hon'ble Supreme Court reported in (2015) 4 SCC 334 (State of Punjab and other vs Rafiq Masih (White Washer) and others) which was considered by the Tribunal and forms the pivot of its order impugned. Relying upon paragraph 18 of the said judgment, it is submitted by the respondent
that the respondent had joined as class-III employee in 1985. Although, he was later on promoted as a class-II employee and retired from the service in such position on 30.04.2024 but the refixation that had taken place in 2020 was for the entire period starting from 1985. So the benefits relate to the period when the respondent was a Class III employee. The recovery has been sought to be made without earmarking the period in which such excess amount was paid. Thus, excess payment said to have been made should be considered to include that granted to the respondent while he was a Class-III employee when it is not clear for which the recovery relates to. It has to be, therefore, construed that at least a part of the excess payment sought to be recovered relates to the period while the respondent was a class-III employee since pay re-fixation was made right from the inception of respondent's service in 1985. The ratio laid down in Rafiq Masih (supra), therefore, squarely apply to the respondent thought he may have retired as a class-II employee.
b) The respondent also relied upon the judgment reported in (2009) 3 SCC 475 ( Sayed Abdul Qadir and others vs. State of Bihar and others) and submits that there was no misrepresentation or fraud perpetrated by the respondent and as such the excess amount, if any, paid to the respondent is a mistake on the part of the employer and could not have been recovered unless the respondent had availed the same by misrepresentation or fraud.
c) The respondent had also relied upon the judgment reported in (2012) 8 SCC 417 (Chandi Prasad Uniyal and others vs. State of Uttarakhand and others) wherein the same principal as in Sayed Abdul Qadir (supra) has been reverberated. The respondent also says that Chandi Prasad Uniyal (supra) has been considered and approved in Rafiq Masih (supra) and as such there being no misrepresentation or fraud from the side of the petitioner, the excess payment could not have been recovered.
d) The respondent also says that the stipulation in the Office Order bearing No.332/2020 dated 15th July, 2020 which stipulates the condition in which the excess payment cannot be made binding upon the respondent. In view of an office memorandum dated 16.02.2014 was operating in field and the office order No. 332/2020 re-fixing the respondent's pay should be read in the context of the office memorandum dated 16.02.2014. The said Office memorandum dated 16.02.2014 clearly stand in the way of recovering excess amount, if any, from the respondent. The Office Order dated 16.02.2014 has also been issued in conformity with the ratio laid down in Sayed Abdul Qadir (supra) and Chandi Prasad Uniyal (supra). e) The respondent also states that the recovery has been sought to be made just about a year prior to the respondent's retirement on attaining age of superannuation and as such the same cannot be made following the principal laid down in Rafiq Masih (supra). It will be of
immense hardship to the respondent if a recovery is made from the respondent, a retired employee.
f) The respondent has also relied upon a judgment delivered by a coordinate Bench of this Court on 20.03.2024 in WP.CT/20/2024 (The Union of India and others vs. Mathew John and others). Relying upon the said judgment, the respondent says that the respondents in the said case were similarly situated as that of the respondents. The employees therein (respondent) in Mathew John (supra) belong to the same department and as such the ratio laid down therein in binding on the petitioners. The petitioners have accepted the said judgment and order by not recovering any money from the employees in that case. The petitioners are as such bound by the same. The petitioner, therefore, cannot recover any excess amount said to have been made to the respondent on re-fixation of pay from the respondent.
g) The respondent also says that the recovery is sought to be made for alleged excess payment from 1999 to 2020. Except for about 2 years, the recovery as sought to be made is for the period beyond 3 years and as such the claim on the basis whereof the recovery has been ordered is for the majority period barred by limitation. In fact recovery for the period of 1999 is sought to be made after 23 years which is clearly impermissible in law.
h) The respondent also says that from the particulars provided by the petitioner in course of hearing of this petition clearly shows that the amount withheld on account of excess payment from the retiral benefits of the respondent is from the amount due on account of gratuity payable to the petitioner in view of the provisions of the Payment of Gratuity Act, 1972 (hereinafter referred as to 'the 1972 Act') and rules framed thereunder. The gratuity amount of a retired employee cannot be withheld unless the employee is charged with the offence as mentioned in section 4(6) of the 1972 Act. The petitioner, therefore, have committed gross illegality while withholding the gratuity amount of the respondent.
IV.
ANALYSIS WITH REASONS:
a) The ratio laid down in Rafiq Masih (supra) has been subsequently considered by the Hon'ble Supreme Court in the judgment reported in (2016) 14 SCC 267 ( High Court of Punjab and Haryana vs. Jagdev Singh). In the said judgment, it has been clearly laid down that in case of an employee to whom the payment is made in the first instance by clearly placing the employee on notice that any payment found to have been made in excess would be required to be refunded. This is an additional ground than those specified in the judgments of Sayed Abdul Qadir (supra) and Chandi Prasad Uniyal (Supra). In the instant case, the Office Order No. 332 of 2020 by which
the pay refixation was made was issued specifically in the name of the respondent with the stipulation "subject to the condition that excess payment made, if any, is found in the later stage due to incorrect pay fixation shall be recovered/adjusted from his future payments". So the respondent was put to notice at the first instance as held in Jagdev Singh (supra).
b) The respondent accepted this Office Order without reserving his right that no recovery or adjusted in future shall be made if excess payment is found in the later stage. The respondent, therefore, accepted the said office order as a whole and received the benefits thereunder. On the respondent receiving such refixed pay without reserving his right against recovery/adjustment in future, in case of excess payments is detected, has changed his position and also made the petitioners' to change their position as the petitioners made such payment with the stipulation to recover/adjust any excess payment to have been made on being detected in future. That apart such acceptance by the respondent has brought an end to the matter as held in M.K.Krishnaswamy (supra).
c) The respondent, therefore, was put to notice at the first instance and upon accepting the order thereby receiving the benefit under the same should be construed to have received the same with the undertaking to allow recovery/adjustment of excess amount, if any
paid to him on being detected at a later stage even if he has not executed a letter of undertaking. The respondent's case, therefore, squarely come under the exception culled out in Jagdev Singh (supra) from the grounds in Rafiq Masih (supra) after having taken into consideration the same.
d) The conditions laid down in paragraph 18 of the Rafiq Masih (supra) in that view of the matter is not applicable to the respondent's case. The ratio laid down in Rafiq Masih (supra) which is the foundation of the order of the Tribunal assailed therein is not applicable. The Tribunal had passed the order impugned without noticing the judgment in Jagdev Singh (supra) and the underline condition in the Office Order No. 332 of 2020. e) The judgment and order of the coordinate Bench of this Court in Mathew John (supra) does not clearly indicate the category of the employees considered therein, about any stipulation as to recovery of any excess amount being on having been detected later on being made known to the employees in that case while granting them the benefit and whether the recovery was sought to be made within one year prior to the retirement of the employee. It is also not clear as to whether recovery from the employees in Mathew John (supra) were Class III or Class IV employees and was within the period of 1 (one) year from their respective dates of superannuation.
f) In any event, Mathew John (supra) did not also notice the judgment in Jagdev Singh (supra) and the exception culled out therein from the ratio laid down in Rafiq Masih (supra). The respondent, therefore, cannot be conclusively said to be in similar circumstanced as of the employees whose case was considered in Mathew John (supra). It cannot also be said in view of discussion as aforesaid that the petitioners are estoppel from challenging the order of the Tribunal on having accepted the order of the coordinate Bench in Mathew John (supra) as the facts of the instant case is different from that considered in Mathew John (supra).
g) The respondent retired from service on 30.04.2024 on reaching the age of superannuation. The recovery order was passed on 06.03.2023 i.e. more than 1 year before the respondent's retirement. The ratio laid down in Rafiq Masih (supra) in this respect is not applicable in the respondent's case.
h) So far as the limitation of the claim as urged by the respondent is concerned, it is clear that pay refixation was made on 15.07.2020 for the period beginning from the initial appointment of the respondent in 1985. The period and the amount that was decided to be paid by refixing the respondent's pay has been clearly stipulated in the annexure of the Office Order dated 15.07.2020. it is clear that the period between 1999 and 2020 was taken into account and additional
amount have been paid to the respondent on the refixation of pay for such period only on 15th July, 2020. As the payments were made subsequent to 15.07.2020 for the period between 1999 and 2020, the excess payment for such period was made after 15.07.2020. The recovery order has been passed on 06.03.2023 i.e. within 3 years from such excess payment having been made that too when the respondent was in service and was not within one year from his retirement. The cause of action to recover the excess payment, therefore, for the period between 1999 and 2020 arose subsequent to 15.07.2020 and on detection of excess payment. It cannot, therefore, be said that recovery has been sought to be made after three years and is barred by limitation when the same is ordered to be recovered.
i) With regard to withholding the gratuity, the respondent is correct in his submission that the gratuity amount cannot be withheld save and accept for the reasons as prescribed under section 4(6) of the 1972 Act. However, no prejudice have been caused to the respondent on such amount being withheld as the respondent has been paid other retiral benefits including leave salary which is in excess of the amount withheld. So the withheld amount could have been shown or treated against the leave salary amount by treating the gratuity amount to have been paid in full. It would require only accounting adjustment by re-shifting the entries without any substantive change in figures or statements.
which remained unrecovered after the interim order dated 30.04.2023 passed by the Tribunal. The respondent has also not challenged the quantum of recovery sought to be made by the petitioners. j) So far as the issue of hardship as contended by the respondent is concerned, the respondent having retired on 30th April, 2024 have been paid all benefits except the withheld excess amount. On an aggregate the respondent has received a sum in excess of Rs.1 crore on his retirement and as such recovery of excess amount which is found to have been actually paid in excess will cause no hardship to the petitioner.
V.
CONCLUSION:
a) In the light of the discussion as aforesaid no illegality is noticed in the act of the petitioners in recovering of any excess payment made to the respondent in terms of the Office Order No. 332 of 2020 dated 15.07.2020 which has been detected subsequent to the payment of such amount to the respondent. The respondent has also not challenged the calculation of the excess amount to demonstrate that the amount sought to be recovered is not the excess amount or that the amount sought to be recovered was not paid to the respondent. b) In the aforesaid facts and circumstances, the petition is allowed. The order dated 19.04.2023 passed by the Central Administrative Tribunal, Kolkata Bench, Circuit Bench at Port Blair in OA No.
351/00534/2023 being the order impugned is set aside. The petitioners will be free to recover the sum of Rs.5,43,563/- in a suitable manner without causing any future hardship to the respondent. This also dispose of the O.A. No. 351/00534/2023 filed before the Central Administrative Tribunal, Kolkata Bench.
c) WP.CT/36/2024 is accordingly disposed of, however, without any order as to costs.
d) Urgent Xerox certified copy of this judgment be supplied to the learned Counsel appearing for the respective parties upon compliance of usual formalities.
[ ARINDAM MUKHERJEE, J. ] I agree.
[ BISWAROOP CHOWDHURY, J. ] Later.
The stay of the order of recovery as prayed for by the respondent is considered and refused.
[ ARINDAM MUKHERJEE, J. ] [ BISWAROOP CHOWDHURY, J. ]