Partly allowed

Union of India v. Hanumantharayappa

Karnataka HC25 Jun 2021WP/1883/2021

Case brief

AI extract

What is this about?

The Karnataka High Court disposed of a writ petition regarding the recovery of an erroneously granted annual increment. The court held that recovery from a retired employee after a lapse of over five years was impermissible under the White Washer's case. It modified the Tribunal's order to reduce interest rate and extend refund time.

What did the court decide?

The Tribunal's order quashing the recovery notice was accepted; the order was modified to reduce interest from 15% p.a. to 6% p.a. and extended the refund timeline to two months. Pay refixation remain

Union of India Vs Hanumantharayappa — Pension and Retirement Benefits | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 25^TH DAY OF JUNE, 2021

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PRESENT

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THE HON’BLE MR.JUSTICE ARAVIND KUMAR

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AND

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THE HON’BLE MR.JUSTICE N.S.SANJAY GOWDA

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W.P.No.1883/2021 (S-CAT)

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BETWEEN:

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UNION OF INDIA,

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REP. BY ITS SECRETARY, DEPARTMENT OF POSTS, DAK BHAVAN, PARLIAMENT STREET, NEW DELHI - 110 001.

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THE SUPERINTEND OF POST, CHIKAMAGALUR, CHIKMAGALUR - 577 101.

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THE POST MASTER, CHIKAMAGALUR - HO, CHIKMAGALUR - 577 101.

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DIRECTOR POSTAL SERVICE, S.K.REGION, BENGALURU - 560 001.

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DIRECTOR OF ACCOUNTS (POSTAL), KARNATAKA CIRCLE, GPO BUILINGS, BENGALURU - 560 001.

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… PETITIONERS

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(BY SRI. B. PRAMOD, ADV.)

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AND:

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HANUMANTHARAYAPPA, S/O LATE THIMMANNA, AGED ABOUT 62 YEARS, RET POSTMASTER GRADE-II, KADUR - 572 113, RES CAMP BARAGUR, SIRA TALUK, TUMKUR- 572 113.

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… RESPONDENT

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(BY SRI. H.BASAVARAJU, ADV.)

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THIS PETITION IS FILED UNDER ARTICLE 226 AND 227 OF CONSTITUTION OF INDIA, PRAYING TO DECLARE THE ORDER 07.11.2019 PASSED IN OA BY THE CENTRAL ADMINISTRATIVE TRIBUNAL BANGALORE BENCH, BENGALURU (ANNEXURE-A) IS ILLEGAL, NON SPEAKING, ARBITRARY AND UNTENABLE AND SET ASIDE IT, ETC.

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THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, ARAVIND KUMAR, J. , MADE THE FOLLOWING:

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ORDER

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A short point that arises for consideration in this petition is, whether annual increment granted to the respondent herein on 01.07.2006 could be withdrawn on the ground that same had been granted erroneously?

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Respondent entered into service on 19.04.1978 as Postal Assistant under Tumakuru Postal Division and on 23.04.1994, Time Bound One Promotion (TBOP) i.e.,

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financial up-gradation on completion of 16 years of qualifying service in same cadre was granted. Respondent herein was granted financial up-gradation under Biennial Cadre Review on 01.01.2006. Since he was on leave from 21.12.2005 to 25.01.2006 and assumed duty on 26.01.2006, revised pay was fixed on 26.01.2006 and on the ground that Rule 10 of Central Civil Services (Revised Pay) Rules, 2008 (for short, ‘2008 Rules’) provides for one uniform date of annual increment namely 1^st July of every year and employees completing six months and above in the revised pay structure as on 1^st July would be eligible to be granted increment, whereas as the respondent herein was on leave from 21.12.2005 to 25.01.2006 and had assumed duty on 26.01.2006, his revised pay was fixed on 26.01.2006 and as such respondent herein was not entitled to annual increment from 01.07.2006 and proceedings for recovery of the amounts paid was initiated by issuance of communication dated 13.06.2018 vide Annexure-A8.

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Same was challenged before the Central

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Administrative Tribunal (for short, ‘the Tribunal’) and Tribunal held that without issuing any notice and after lapse of 12 years, writ petitioners could not have recovered the amount arbitrarily. Hence, impugned notice came to be quashed and writ petitioners were directed to repay the money recovered within one month without interest and beyond that, interest was ordered to be paid @ 15% p.a. Hence, this writ petition.

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We have heard Sri B.Pramod, learned counsel appearing for petitioners and Sri H.Basavaraju, learned counsel appearing for respondent.

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It is the contention of learned counsel appearing for petitioners that on account of incorrect fixation of increment, respondent had been paid excess amount and in view of the undertaking given by the respondent to the effect that as a result of incorrect fixation of pay, if any excess payment detected in the light of discrepancies noticed subsequently, same would be refunded,

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respondent is bound by such undertaking and in view of the law laid down in the case of High Court of Punjab & Haryana & Others Vs. Jagdev Singh passed in Civil Appeal No.3500/2006 disposed of on 29.07.2016 that when such an undertaking is given, exception carved out for recovery in the case of State of Punjab & Others Vs.

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Rafiq Masih (White Washer’s case) reported in AIR 2015 SC 696 would not be applicable, petitioners have rightly recovered the excess amount paid. He would also submit that when Rule 10 of 2008 Rules when read along with undertaking given on 13.09.2008 - Annexure-R4, the respondent cannot be heard to contend that he would not repay the excess amount drawn or the department would not be entitled to recover the same. Hence, he prays for allowing of the writ petition by quashing the order passed by the Tribunal.

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Per contra, learned counsel appearing for respondent would support the impugned order.

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Having heard the learned advocates appearing for the parties, we notice from the records that in the instant case annual increment came to be granted to respondent on 01.07.2006 and it was fixed as on 26.01.2006 since applicant was on leave from 21.12.2005 to 25.01.2006. Undisputedly, thereafter revised payscale has been extended on the advent of 2008 Rules. In the background of the said revised pay scale rules brought into force, the payscale of the respondent was also revised and at the point of time an undertaking was obtained on 13.09.2008 - Annexure-R-4. However, when annual increment came to be granted on 01.07.2006, there was no such undertaking obtained from the respondent.

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In the White Washer ’s case (supra), Hon’ble Apex Court has held that while it is not possible to postulate all situations of hardship where payments have mistakenly been made by an employer, in the following situations, a recovery by the employer has been held would be impermissible in law:

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“(i) Recovery from employees belonging to Class-III and Class-IV service (or Group ‘C’ and Group ‘D’ service

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(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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The Apex Court in Jagdev Singh ’s case (supra), after having noticed White Washer ’s case, held that principle enunciated in proposition (ii) in White Washer ’s case cannot be applied to a situation where the officer to whom the payment was 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 and if

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such an officer has given an undertaking while opting for the revised payscale he would not be entitled to stave off recovery proceedings if any initiated since he would bound by his undertaking. In the instant case if petitioners had been able to demonstrate or establish that at the time of granting annual increment on 01.07.2006 to the respondent, such an undertaking had been obtained, definitely we would have accepted the contention raised by the learned counsel for the petitioners. Undisputedly no such undertaking was obtained. Further, the argument of petitioner’s counsel that undertaking given by the applicant when revised payscale was granted i.e., on 13.09.2008 Annexure-R4, which was sought to be pressed into service, to be construed as an undertaking even for previous period or for all increments granted even previous thereto is an argument which cannot be accepted inasmuch the undertaking will have to be necessarily in respect of annual increment which was granted.

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In the aforesaid background, when the judgment of the Apex Court in White Washer ’s case (supra) is perused, it would leave no manner of doubt that recovery sought therein had been prohibited on account of undertaking given by employee. Whereas in the instant case, undertaking given by the applicants was for the revised payscales effected in 2008 on account of said rules coming in to force with effect from 2008. Hence, we are of the considered view that claim of the petitioners herein would not fall outside the five clauses as stated thereunder.

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In this background, we have to necessarily hold that action of the petitioners in trying to recover the annual increment which was granted to the applicant in the year 2006 which was sought to be recovered in the year 2018 after a lapse of 12 years was impermissible as held in White Washer ’s case (supra) and proposition number (ii) laid down, therein which is to the effect that recovery from retired employees or employees who are due to retire within one year of the order of recovery would be

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impermissible. is squarely applicable, since respondent in the instant case has retired on 31.05.2018 and impugned notice AnnexureA8 came to be issued on 13.06.2018 and for this reason also, contention of learned counsel for the petitioners cannot be accepted and it stands rejected.

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We have noticed from the impugned order passed by the Tribunal that it has directed the petitioners herein to refund the amount within one month and beyond that, it has directed the petitioners to pay interest @ 15% p.a. which is highly excessive. Hence, to that extent, we modify the order of the Tribunal and direct the petitioners herein to refund the amount within two months from today, failing which it shall carry interest @ 6% p.a. payable from the date of recovery made.

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However, we make it clear that insofar as fixation of pay from Rs.62,200 to Rs.60,400/- is concerned, the same is not disturbed and the petitioners would be at liberty to proceed accordingly in the background of refixation of the pay.

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Accordingly, writ petition stands disposed of. No

order as to costs.

Sd/-

JUDGE

Sd/JUDGE