Allowed

Raghunath Bharti v. State of U.P. and Others

Allahabad HC10 May 2019WRIA/19789/2010

Case brief

AI extract

What is this about?

The High Court quashed orders directing recovery of excess salary from a retired Class IV employee's pension. The Court held that recovery from Class III/IV employees post-retirement is impermissible without fraud, must follow due process, and violates settled law. Relief granted included quashing the orders and directing refund with 6% interest.

What did the court decide?

Impugned orders quashed; respondents directed to release deducted pension/provident fund/leave encashment/gratuity plus 6% interest per annum from date of retirement within eight weeks.

Raghunath Bharti Vs State of U.P. and Others — Pension and Retirement Benefits | Allahabad HC (2019)

Reserved

Court No. - 25

Case :- WRIT - A No. - 19789 of 2010

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Petitioner :- Raghunath Bharti Respondent :- State Of U.P. And Others Counsel for Petitioner :- N. K. Goswami Counsel for Respondent :- C. S. C.,Amit Dubey,Vimlesh K.Rai

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Hon'ble Prakash Padia,J.

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Heard learned counsel for the petitioner, Smt. Praveen Shukla, learned Standing Counsel for the State as well as Mr. Vimlesh K. Rai, learned counsel for the respondents no.2 and 3.

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The petitioner has preferred the present writ petition with the prayer to issue a writ of certiorari quashing the order dated 5.3.2007 and 2.8.2007 passed by the Executive Engineer, Construction Division, U.P., Jal Nigam, Ballia, with further prayers to issue a mandamus directing the respondents to decide the representation of the petitioner dated 27.8.2008 and to issue a mandamus directing the authority concerned to pay the arrears of pension without deducting any amount and all other retiral service benefits as early as possible. Further prayer was also made to issue a mandamus directing the aforesaid respondents to refund the entire deducted amount.

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The facts in brief as contained in the writ petition are that the petitioner was appointed in Water Work Department in the year 1974 as Class IV employee. The petitioner performed his duties with full satisfaction and without any complaint. The petitioner retired on 28.2.2007 from his service. After retirement petitioner submitted relevant papers for the payment of retiral dues and also for fixation of pension.

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It is contended that no information at any point of time was given to the petitioner that any excess payment was paid to him. No dues certificate was issued in favour of the petitioner on 17.4.2007. The said no dues certificate was amended by the Executive Engineer on 12.9.2007 in view of the letter of the Account Officer (Pension) dated 21.8.2007. By the aforesaid amendment the pay of the petitioner was refixed in his service book. The petitioner has also brought on record a letter dated 9.10.2007 written by the Executive Engineer, to the Chief Engineer stating therein that the petitioner has retired from service on 28.2.2007 and in his service book certain amendments were made regarding pay fixation. According to the revised pay fixation a recovery is made against the petitioner to the extent of Rs.78,165/-. The said amount of recovery was adjusted from outstanding amount of leave encashment of Rs.74,730/-. The remaining amount of Rs.3,435/- was deposited in cash by the petitioner and as such no payment was due upon the petitioner regarding leave encashment. When petitioner came to know regarding the aforesaid order, he made an representation addressed to the Principal Secretary of the department on 27.8.2008.

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It is contended that before retirement of the petitioner from service no notice whatsoever has been received by him regarding excess amount and wholly illegally a sum of Rs.1,86,096/- was deducted from pension and Provident Fund of the petitioner. Subsequent to the filing of the writ petition an amendment application was filed by the petitioner and by the aforesaid amendment application, which was allowed by this Court vide order dated 15.2.2019 the petitioner has challenged the order dated 5.3.2007 as well as order dated 2.8.2007 passed by the Executive Engineer, Construction Div., U.P. Jal Nigam, Ballia.

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It is contended by the petitioner that the impugned orders dated 5.3.2007 and 2.8.2007 are absolutely illegal and are liable to be set aside. It is further contended that no notice or opportunity whatsoever has been given to the petitioner before passing the aforesaid orders. By the aforesaid orders recovery was sought against the petitioner. The petitioner has already retired from service on 28.2.2007 but the aforesaid order of recovery was passed against the petitioner after his retirement and in view of the settled principles of law no recovery could be made after retirement from a Class IV employee.

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A counter affidavit was filed by the respondents no.2 and 3. In the counter affidavit it is stated that the salary of the petitioner was wrongly determined after fifth Pay Commission Report and the same was corrected by the Executive Engineer, Construction Division, U.P., Jal Nigam, Ballia, on 5.3.2007 and ultimately an order was passed in this regard on 2.8.2007 determining the last salary of the petitioner as Rs.47,00/-. The difference of salary from 01.01.1996 to 28.2.2007 was adjusted by passing the aforesaid orders. It is contended that neither the order dated 5.3.2007 nor 2.8.2007 was challenged by the petitioner in the writ petition. It is further contended that an undertaking dated 5.3.2007 was given by the petitioner that he will not object, if any excess amount paid to him, is recovered.

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Heard learned counsel for the parties.

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From perusal of the facts as narrated above, it is clear that till the time the petitioner attained the age of his superannuation i.e. 28.2.2007 no order was passed for recovery from the salary of the petitioner. The case has been carved out in the counter affidavit for the first time that wrong fixation of the salary has been made in the

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service book of the petitioner and as such he was paid his salary in the Grade of Rs.4900/- in place of 4700/-. The salary in the grade of Rs.4900/- was paid to the petitioner from 1.1.1996 till the date of his superannuation dated 28.2.2007 and since the excess payment was made to the petitioner, the necessary corrections were made in the service book of the petitioner and thereafter the recovery was made against the petitioner. It is further contended that petitioner has already given an undertaking on 5.3.2007 and in view of the same he cannot turned around now by saying that the recovery issued against the petitioner is illegal. It is settled law that after retirement of Class IV employee no recovery could be made from him. The petitioner was superannuated from service on 28.2.2007. The order of recovery was made against the petitioner without any departmental enquiry as contemplated under Artilce 351-A of U.P. Civil Service Regulations.

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In so far as the case set up by the respondents that an undertaking has already been given by the petitioner is concerned, such declaration are signed by an employee under compelling circumstances with no real choice in the matter and in one of the case, it was held that the choice is like choosing between the devil and the deep sea.

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The following undertaking has been given by the petitioner on 5.3.2007 that :-

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“m0 iz0 ty fuxe esa ykxw orZeku osrueku@le;eku osruekuksa le;kof/k ij LohÑr vfrfjDr osru o`f);ksa ij vf/k"Bku iqujh{k.k C;wjksa }kjk mBkbZ xbZ vkifRr;ksa ds lanHkZ esa] eSa viuh lgefr nsrk gWwa fd ;fn vf?k"Bku iqujh{k.k C;wjksa }kjk mBkbZ xbZ vkifRr;ksa ij izfrdwy fLFkfr curh gS rks eSa vf/kd fd;s x;s Hkqxrkuksa dks m0 iz0 ty fuxe dks okil dj nwWaxk ,oa mldh olwyh esa eq>s dksbZ vkifRr ugha gksxhA ”

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In my opinion such a declaration would not entitled the State to recover any over-drawals from the pensionary benefits of the petitioner. The pensionary benefits are paid to a superannuated

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person by way of social welfare measure to enable him to live a life with dignity, which is now recognized as a fundamental right guaranteed under the Constitution of India to the every citizen in the country. The retiral benefits are not lightly to be interfered with. Any right of the employer to recover from the pensionary benefits of an employee any excess payment received by the employee due to no fault, fraud or misrepresentation on his part is to be strictly construed. It will be a different thing if the employee has fraudulently obtained excess payment from the employer. In such kind of cases employer rights to recover the excess payment from the pensionary benefits of the employee cannot be doubted on account of the reason that the fraud unreveals everything.

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In so far as the present case is concerned, it is not a case of the respondents that the petitioner has received excess payment by practicing fraud or by making misrepresentation. Further the petitioner was not conscious at any point of time that he was receiving more salary than he was entitled.

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Law is well settled that no recovery could be made from the employees belonging to Class III and Class IV. It is also well settled law that in case excess payment was not made on account of any misrepresentation or fraud on the part of the employee, the same could not be recovered. It is also well settled that no recovery could be made without providing any opportunity or notice.

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In the case of Shyam Babu Verma V. Union of India reported in 1994 (2) SCC 521 it was held by the Supreme Court that although petitioners were entitled to lower scale of pay since they received higher scale of pay due to no fault of theirs, it shall only be just and proper not to recover any excess amount which has already been paid to them.

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In the case of Col. B. J. Akkara Vs. Govt. of India reported in 2006 (11) SCC 709 the Supreme Court held that it has consistently granted relief against recovery of excess wrong payment of emoluments/allowances from an employee, if the excess payment was not made on account of any misrepresentation or fraud on the part 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.

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In the case of Syed Abdul Qadir and Ors. Vs. State of Bihar and Ors. reported in 2009 (3) SCC 475 it was held by the Supreme Court that the relief against the recovery is granted by the courts not because of any right in the employees, but in equity, exercising judicial discretion to relieve the employees from the hardship that will be caused if recovery is ordered.

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In the case of State of Punjab Vs. Rafiq Masih reported in 2015 (4) SCC 334 it was held that even without fraud or misrepresentation on the part of an employee excess payment made to an employee can be recovered only up to one year before the retirement of the employee and not after that. In this case the Supreme Court was of the view that no recovery could be made from Class III and IV employees after his retirement. Relevant paragraph of the aforesaid judgment is quoted below:-

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“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:

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(i) Recovery from employees belonging to Class-III and

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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.

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(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.

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(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.

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(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.”

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In the case of State of Kerala V. M. Padmanabhan Nair reported in 1985 (1) SCC 429 the Apex Court has held that pension and gratuity are no longer any bounty to be distributed by the Government to its employees on the retirement but are valuable rights in their hands, and any culpable delay in disbursement thereof must be visited with the penalty of payment of interest. In said case the Court approved 6% per annum interest on the amount of pension decreed by the trial court and affirmed by the High Court.

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As to the rate of interest on amount of gratuity is concerned, Section 7(3-A) of Payment of Gratuity Act, 1972 provided that if the amount of gratuity payable is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long

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term deposits, as that Government may by notification specify.

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In the case of Y. K. Singla V. Punjab National Bank reported in 2013 (3) SCC 472 the Supreme Court after discussing the issue relating to interest payable on the amount of gratuity not paid within time, directed that interest @ 6% per annum on the unpaid amount of pension from the date it had fallen due and interest @ 8% per annum on the unpaid amount of gratuity from the date of retirement of the employee.

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In the case of D.D. Tewari (dead) through legal representative Vs. Uttar Haryana Bijli Vitran Nigam Ltd. and others reported in 2014 (8) SCC 894 it was held by the Supreme Court that if there is any delay in payment of retiral benefit, the retired employee became entitled for the interest on the same. It was further held by the Supreme Court that pension and gratuity are not to be distributed by the Government to its employee on their retirement but they are valuable rights and property to its employee on their retirement.

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In the case of State of U.P. and others Vs. Dhirendra Pal Singh reported in 2017 (1) SCC 49 , it was held by the Supreme Court that pension and gratuity are not a bounty to be distributed by the Government to its employee on retirement but are valuable rights in their hands, and any culpable delay in disbursement, thereof must be visited with penalty of payment of interest. It was further held in the aforesaid case that departmental proceedings could not be initiated against an employee for alleged discrepancies in the stock in the store of department, which was noticed after a more than five months of retirement. It was held by the Supreme Court in the aforesaid case that in the absence of any departmental enquiry or proceedings as contemplated under Article 351-A of the

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U.P. Civil Service Regulations, no recovery could be made. The paragraph 6 of the aforesaid case is reproduced hereinbelow:-

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“6. Admittedly, no departmental enquiry was initiated in the present case against the respondent for the misconduct, if any, nor any proceedings drawn as provided in Article 351-A of UP Civil Service Regulations. The learned single Judge of the High Court has observed that the document which is the basis of enquiry and relied upon by the State authorities, copy of which was Annexure C.A.-1 to counter affidavit filed in the writ petition, itself reflected that the document showing discrepancy in the stock was dated 26.12.2009, i.e. after about more than five months of retirement of the respondent. In the circumstances, keeping in view Article 351-A of UP Civil Service Regulations, we agree with the High Court that the orders dated 23.07.2015 and 06.08.2015 were liable to be quashed and, to that extent, we decline to interfere with the impugned order.”

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It was further held by the Supreme Court in the aforesaid case that the petitioner is not only entitled for the amount illegally with-held by the respondents but also payment of interest @ 6% on the amount wholly illegally with-held by the respondents.

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A Government servant, particularly one in the lower rungs of service would spend whatever emoluments he receives in order to upkeep of his family. If he receives an excess payment for a long period, he would spend it, genuinely believing that he is entitled to it. As any subsequent action to recover the excess payment will cause undue hardship, if the relief is not granted in the matter. The situation will be otherwise where the employee was aware that the payment received was in excess of what was due or wrongly paid, or where the error is detected or corrected within a short time of wrong payment. In that situation it is settled law that the Courts will not grant relief against recovery.

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In my opinion such kind of reliefs are granted by Courts not

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because of any right of the employees but in equity, in exercise of judicial discretion to relieve the employee from the hardship that will be caused if recovery is implemented.

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The respondents has illegally recovered/not paid the retiral benefits to the petitioner, as such petitioner is entitled for payment of interest. It was argued by the learned counsel for the respondents that no such prayer has been made in the writ petition and as such the aforesaid relief could not be granted to the petitioner. This relief could be granted by the Court specially in its power under Article 226 of the Constitution of India.

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In view of above settled principle of law, this Court is of the view that since the wholly illegally amount has been recovered from the pensionary benefits/post retiral dues of the petitioner without any rhyme or reason, in view of the settled law this Court think it proper to grant the relief for the payment of interest to the petitioner also.

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In view of the aforesaid, the orders dated 5.3.2007 and 2.8.2007 passed by the Executive Engineer, Construction Division, U.P., Jal Nigam, Ballia, are liable to be quashed and the same are hereby quashed. The respondents are directed to release the amount of pension/provident fund/leave encashment/gratuity etc. which was deducted illegally from the post retiral benefits of the petitioner immediately and without any delay along-with interest @ 6% per annum with effect from the date of retirement of the petitioner. Such payment is to be made to the petitioner within a period of eight weeks from the date of communication of this order.

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The writ petition succeeds and allowed.

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Before parting with I put a note of appreciation to Sri Vibhu Rai, learned counsel who has assisted the Court on behalf of

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learned counsel for the petitioner on the request of the Court and argued the case on behalf of the petitioner very well, even not being engaged by the petitioner. I also appreciate his hard work, dedication and proper assistance being extended to the Court in this matter.

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Order Date :- 10.5.2019

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Pramod Tripathi

Raghunath Bharti v. State of U.P. and Others

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What is this about?

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Raghunath Bharti v. State of U.P. and Others

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