Rahman Khan Vs the State of Chhattisgarh

I. quash the letter/order/notice dated 21/6/23 (Annexure P/1) and letter/order/notice dated 5/6/23 (Annexure P/2), issue by respondents and further please to direct the respondents not to recovery any amount from the petitioner.

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II. direct the respondents to make the payment of pension regularly without any recovery of amount.

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III. Any other relief which this Hon'ble Court deems fit and proper under the facts and circumstances of the case may also be passed in favour of the petitioner and the cost of the petition may be awarded in favour of the petitioner.”

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The short question involved in the writ petition is, whether the respondents are justified in directing recovery against the petitioner (retired Government servant) on 31.03.2009, after expiry of more than 14 years from the date of his retirement in

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the light of Rule 14(7) of the Chhattisgarh General Provident Fund Rules, 1955 (for short, ‘GPF Rules 1955’) read with Rules 65 & 66 of the Chhattisgarh Civil Services (Pension) Rules, 1976 (for short, ‘Pension Rules 1976’)?

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The petitioner stood superannuated on 31.03.2009 from the post of Assistant Teacher from the Education Department. During his tenure, he contributed the amount on provident fund under the Provident Fund Act. However, on 21.06.2023, respondent No.5/Principal informed the petitioner that he has incurred negative balance of Rs.1,92,220/- in his GPF account.

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Return has been filed on behalf of the State/respondents opposing the writ petition stating inter alia that in view of the negative balance of Rs.1,92,220/- as on the date of retirement of the petitioner in his GPF account as has been informed through the respondents by the Accountant General, the petitioner is not entitled for the said amount and, thus, the writ petition deserves to be dismissed.

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Learned counsel appearing for the petitioner, would submit that the petitioner had already retired from the service way back on 31.03.2009 and after more than 14 years from the date of his retirement, respondent No.5 has informed the petitioner that his PF account has incurred a negative balance of Rs.1,92,220/after expiry of 14 years from the date of retirement of the

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petitioner, hence, recovery of the same is not permissible in view of Rule 14(7) & 29 of the GPF Rules 1955 read with Rules 65 & 66 of the Pension Rules 1976. Learned Counsel further submits that in view of provisions contained in Rules 65 & 66 of the Pension Rules 1976, no recovery from gratuity / pension can be taken place except in accordance with provisions in the Pension Rules 1976 and after expiry of more than 14 years from the date of retirement of the petitioner, the impugned recovery order has been passed on 21.06.2023, therefore, same is liable to be quashed. He place reliance upon a Division Bench decision of the Madhya Pradesh High Court in the matter of Ramnarayan Sharma v. State of M.P. and others, W.A.No.357/2016, decided on 06.03.2017 .

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Learned State Counsel appearing for the respondents/State supports the impugned order and would submit that office of the Accountant General informed the respondent-authority that there is negative balance of Rs.1,92,220/- incurred by the petitioner in his PF account, therefore, the impugned recovery order has been issued against the petitioner. Learned Counsel further contended that allowing a person to retain excess payment from public money which was paid as a result of mistake and void action, would cause unjust enrichment, hence, therefore, the Court must permit for recovery of such amount, as this Court would be in consonance with the

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principles of restitution which has been approved in cases of unjust enrichment.

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I have heard learned counsel for the parties and considered their rival submissions made herein-above and also went through the record and relevant rules/law carefully.

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Admittedly, the petitioner stood superannuated on 31.03.2009 from the post of Assistant Teacher from the Education Department. It is also not in dispute that after more than 14 years from retirement of petitioner from service, impugned recovery order/notice has been issued to him stating therein that he has incurred negative balance of Rs.1,92,220/- in his PF account.

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Now, the question would be, whether recovery can take place after more than 14 years from the date of retirement of the petitioner?

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In this regard, sub-rule (7) of Rule 14 of the GPF Rules 1955 may be noticed herein profitably, which states as under: -

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“(7) In case a subscriber is found to have drawn from the fund an amount in excess of the amount standing to his credit on the date of the drawal, the overdrawn amount, irrespective of whether the overdrawal occurred in the course of an advance or a withdrawal or the final payment from the fund,

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shall be repaid by him with interest thereon, in one lump-sum, or in default, be ordered to be recovered, by deduction in one lump-sum, from the emoluments of the subscriber. If the total amount to be recovered is more than half of the subscriber’s emoluments, recoveries shall be made in monthly instalments of moieties of his emoluments till the entire amount together with interest, is recovered. From this rule, the rate of interest to be charged on overdrawn amount would be 2- 1/2% over and above the normal rate of Provident Fund balances under sub-rule (1). The interest realised on the overdrawn amount shall be credited to Government account under a distinct sub-head “Interest on overdrawal from Provident Fund”.”

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A careful perusal of above sub-rule (7) of Rule 14 would show that the word “emoluments” has been employed therein. The word “emoluments” has been defined in Rules 3(1)(d) and 30 of the Pension Rules, 1976, which state as under: -

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“3(1)(d) ‘ Emoluments ’ means emoluments as defined in Rule 30;

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Emoluments .—The expression ‘emoluments’ means pay as defined in Rule 9(21) of the Fundamental Rules (including dearness pay, if any, as determined by the order of the Government issued from time to time) which a Government servant was receiving immediately before his retirement or

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on the date of his death, as the case may be.

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Explanation .—(1) For those Government servants who are drawing pay in the revised pay scales, under the Chhattisgarh Revision of Pay Rules, 1990 or Chhattisgarh Revision of Pay Rules, 1998, or pay scales of U.G.C. or All India Council of Technical Education or All India Services the expression ‘ emoluments ’ means basic pay as defined in Rule 9(21)(a)(i) of the Fundamental Rules, which a Government servant was receiving immediately before his retirement and will also include dearness pay and personal pay, if any, as determined by the order of State Government, from time to time.”

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However, the expression “emoluments” employed in Rule 14(7) of the GPF Rules 1955 implies that the rule making authority had Government servant, who is in service, in mind and not a retired Government servant in mind while conferring the power of recovery. Thus, it can be held that the Provident Fund Rules do not empower in express terms the recovery to be made for adjustment of debit balance in the GPF account from retiral dues and gratuity. Their Lordships of the M.P. High Court in Ramnarayan Sharma (supra), while dealing with similar question held as under: -

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“8.5 From the definition of emoluments it becomes clear that the same refers to the pay

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which a Govt. servant receives till his retirement. Thus, the expression “emoluments” employed in Rule 14(7) of GPF Rules necessarily implies that the rule making authority had in service Govt. servant in mind and not a retired Govt. servant in mind while bestowing power of recovery. Thus, it can safely be concluded that the Provident Fund Rules do not empower in expressed terms recovery to be made for adjustment of debit balance in the GPF account from gratuity.”

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At this stage, it would be appropriate to refer to the provisions contained in Rules 65 & 66 of the Pension Rules of 1976, which state as under: -

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“ 65. Recovery and adjustment of Government dues.- (1) It shall be the duty of every retiring Government servant to clear all Government dues before the date of his retirement.

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(2) Where a retiring Government servant does not clear the Government dues and such dues are ascertainable:-

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(a) an equivalent cash deposit may be taken from him, or

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(b) out of the gratuity payable to him, his nominee or legal heir, an amount equal to that recoverable on account of ascertainable Government dues shall be

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deducted.

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Explanation .- The expression ‘ascertainable Government dues’ includes balance of house building or conveyance advance, arrears of rent and other charges pertaining to occupation of Government accommodation, over-payment of pay and allowances and arrears of income-tax deductable at source under the Income Tax Act, 1961 (No. 43 of 1961).

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66. Furnishing of surety by retiring Government servant.-

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(1) (a) If any of the Government dues (other than those referred to in Rule 65) remain unrealised and unassessed for any reasons, the retiring Government servant may be asked to furnish in Form 8 a surety of a suitable permanent Government servant, holding a pensionable post.

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(b) If the surety furnished by him is found acceptable, the grant of his pension and gratuity shall not be delayed.

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(2)(a) If the retiring Government servant is unable or unwilling to furnish a surety, a suitable cash deposit may be taken from him, or such portion of gratuity payable to him, as may be considered sufficient may be held over till the outstanding dues are assessed and adjusted.

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(b). The cash deposit to be taken or the amount of gratuity to be withheld shall not exceed the estimated amount of the outstanding dues plus twenty-five per cent thereof.

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(c) Where it is not possible to estimate the approximate amount recoverable from the retiring Government servant the amount of deposit to be taken or the portion of gratuity to be withheld shall be limited to ten per cent of the amount of gratuity or one thousand rupees, whichever is less.

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(3)(a) Efforts shall be made to assess and adjust the recoverable Government dues within a period not exceeding 6 months from the date of retirement of the Government servant and, if no claim is made on Government account against the Government servant within such a period, it shall be presumed that no Government claim excluding claim of house rent and water charges is outstanding against him.

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(b) The Government dues as assessed shall be adjusted against the cash deposit or the amount withheld from the gratuity and the balance, if any, shall be released to the retired Government servant after the expiry of the period referred to in clause (a).

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(c) Where a pensioner has furnished a surety, the surety shall be released after the expiry of

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the period referred to in clause (a), provided that dues assessed up to that time have been recovered.

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(4) The Government dues which remain unrealised within the period referred to in clause (a) of sub-rule (3) and such other dues, the claim for which is received after that period, shall be recoverable from the retired Government servant through legal procedure :

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Provided that in respect of house rent and water charges, the amount, if any, the claim for which is received after the period of 12 months from the date of retirement of the Government servant shall not be recoverable from the retired Government servant.”

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A careful perusal of the above-quoted provisions would show that recoverable Government dues shall be adjusted within a period of six months from the date of retirement and if no claim is made within that period, it shall be presumed that no Government claim is outstanding against him excluding water charges and house rent, and the amount of water charges and house rent shall be recovered within a period of one year from the date of retirement and thereafter, for such recovery, legal procedure has to be adopted. As such, Rules 65 & 66 of the Pension Rules of 1976 do not empower the State and its authorities to make any recovery of Government dues from pension/gratuity after expiry of six months/one year as per

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Rules 65 & 66 of the Pension Rules of 1976.

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As such, the provisions contained in Rules 65 & 66 of the Pension Rules of 1976 would show that they provide for recovery of Government dues and do not empower the State or its functionaries to make any adjustment of Government dues from pension/gratuity after expiry of 6 months as per subrule (3)(a) of Rule 66 of the Pension Rules of 1976 and water charges & house rent after a period of one year as provided in the proviso to Rule 66(4) of the Pension Rules of 1976.

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17. The M.P. High Court in Ramnarayan Sharma (supra) while considering Rules 65 & 66 of the Pension Rules of 1976 held that after expiry of 6 months (for recoverable dues) or 12 months (for water charges & house rent) from the date of retirement, the only mode available for recovering ascertainable and unascertainable Government dues is by taking recourse to legal procedure which means filing the suit for recovery in the court of competent civil jurisdiction, and observed as under in paragraphs 8.9, 8.12 & 8.13:-

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“8.9 Rule 66 circumscribes the generic power under Rule 65. The said Rule provides that if any Govt. dues (other than those referred in Rule 65) remained unrealised and unassessed, surety may be taken from the retiring Govt. servant and the amount of

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pension and gratuity should be released without any delay. Rule further provides that in case of inability expressed by retired Govt. servant to furnish the surety, suitable cash deposit may be taken from him or a portion of gratuity which is sufficient to meet out the standing dues should be withheld.Rule further provides that where the dues are unascertainable then withholding of gratuity should be limited to 10%.

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8.12 Scheme of Rule 66 can be bifurcated in two parts. The first part pertains to recovery of ascertainable dues and the second of unascertainable dues. In case of ascertainable dues the mode of taking cash deposit or surety or recovery from gratuity at the time of retirement is permissible. However, in case of unascertainable except dues relating to house rent and water charge, period of six months from the date of retirement is provided for the Govt. to assess and calculate the exact amount of dues. For adopting the same procedure of adjustment against the cash deposit or partly withheld gratuity within the period of six months. Whereas in case of unascertainable dues pertaining to house rent and water charges long period of 12 months is prescribed for completing the process of assessment and calculation.

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8.13 After the period of 6 months / 12 months from the date of retirement the only mode available for recovering ascertainable and unascertainable Govt. dues is by taking recourse to legal procedure which means filing the suit for recovery in the court of competent civil jurisdiction.”

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In view of above discussions, if the facts of the present case are examined, it is quite vivid that in the present case, the petitioner had already retired from service on 31.03.2009, whereas impugned recovery order/notice was issued to him on 21.06.2023, ie, after 14 years from his retirement which is very much beyond the prescribed period, i.e, six months from the date of retirement and which had already expired way back. As such, the amount in question cannot be directed to be recovered vide impugned order/notice without following the prescribed procedure of approaching the civil Court of competent jurisdiction.

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Accordingly, action of the respondents in making recovery for adjustment of GPF debit balance directing recovery of Rs.1,92,220/- from the petitioner is declared unlawful. Consequently, impugned order/notice Annexure P-1 dated 21.06.2023 is hereby set-aside/quashed. However, the respondents are at liberty to take the recourse of lawful mode to recover the alleged excess amount, if any, as shown in

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Annexure P/1.

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