Disposed

D. Aravindan Pillai v. Principal Accountant General (Audit)

Kerala HC24 Jun 2024OP (CAT)/115/2023

Case brief

AI extract

What is this about?

A retired Section Officer challenged recovery of pension overpaid by the State Bank of India due to its own mistake. The High Court held recovery must be confined to three years per the Division Bench ruling in Saradamani, finding the Tribunal's order perverse for allowing unlimited-period recovery; other claims raised first time were rejected and the OP(CAT) disposed of.

What the court decided

AI extract

D. Aravindan Pillai Vs Principal Accountant General… — Banking and Recovery | Kerala HC (2024)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL &

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THE HONOURABLE MR. JUSTICE EASWARAN S. MONDAY, THE 24^TH DAY OF JUNE 2024 / 3RD ASHADHA, 1946 OP (CAT) NO. 115 OF 2023

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AGAINST THE ORDER DATED 26.07.2023 IN OA NO.896 OF 2016 OF CENTRAL ADMINISTRATIVE TRIBUNAL,ERNAKULAM BENCH

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PETITIONER/APPLICANT:

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D. ARAVINDAN PILLAI AGED 77 YEARS S/O LATE G.DAMODARANPILLAI, , SECTION OFFICER (RETD.), OFFICE OF THE PRINCIPALACCOUNTANT GENERAL (AUDIT) RESIDING AT PUTHENPURACKAL HOUSE, MANAYILKULANGARA, THIRUMULLAVARAM, KOLLAM, PIN - 691012

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BY ADV C.S.GOPALAKRISHNAN NAIR

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RESPONDENTS/RESPONDENTS:

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1 PRINCIPAL ACCOUNTANT GENERAL (AUDIT) (GENERAL AND SOCIAL SECTOR), THIRUVANANTHAPURAM, PIN - 695001

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2 PAY AND ACCOUNTS OFFICER OFFICE OF THE ACCOUNTANT GENERAL (A AND E) M.G.ROAD,THIRUVANANTHAPURAM, PIN - 695039

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3 CHIEF CONTROLLER OF ACCOUNTS CENTRAL PENSION ACCOUNTING OFFICE, TRIKOOT II COMPLEX, BHIKAJICAMA PLACE, R.K.PURAM, NEW DELHI, PIN - 110066

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4 UNION OF INDIA REPRESENTED BY ITS SECRETARY, DEPARTMENT OF PENSION & PENSIONER'S WELFARE, SOUTH BLOCK, NEW DELHI, PIN - 110001

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5 CHIEF MANAGER STATE BANK OF INDIA, CENTRALIZED PENSION PROCESSING CENTRE, L.M.S.COMPOUND ,VIKASBHAVAN P.O., THIRUVANANTHAPURAM, PIN - 695033

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6 BRANCH MANAGER STATE BANK OF INDIA, RAMANKULANGARA, KOLLAM, PIN - 691012

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THIS OP (CAT) HAVING BEEN FINALLY HEARD ON, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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OP (CAT) NO. 115 OF 2023

JUDGMENT

AMIT RAWAL, J.

The present O.P.(CAT) is directed against the judgment of the Central Administrative Tribunal(CAT) dated 26.07.2023 rendered in O.A.No.896 of 2017 filed by the petitioner-applicant.

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Petitioner is an Ex service man and retired from service on 30.4.2005 as Section officer in the pay band of Rs. 6500-10500. The pay scale was revised with effect from 1.1.2006. Subsequent to the retirement of the petitioner the post of section officer was re-designated as Assistant Audit Officer with a revised pay band Rs. 9300-34800 with a grade pay of Rs.4800 w.e.f. 1.1.2006. Pension was fixed at Rs.4535/initially and had a pension account in the State Bank of India. .Petitioner was informed vide letter dated 20.8.2016, an amount of Rs. 4,15,688 was paid in excess and would be debited from the next pension processing date.

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On perusal of Annexure A6, it is evident that an amount of Rs.6100/- each for two months and another Rs.18,142/- from the arrears due to the petitioner on account of the revision of pension w.e.f. 1.1.2016 was recovered. Thus

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OP (CAT) NO. 115 OF 2023

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a total amount of Rs.30,342/- has been recovered from the petitioner towards the excess payment. On this background , approached the Tribunal seeking following prayers:

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(i) To call for the records leading up to the issue of Annexure A6 and quash the same.

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(ii) To declare that the applicant is entitled for a monthly pension of Rs.9375/-, which is the 50% of the minimum in the pay band plus grade pay [Rs.9300-34800 plus Rs.4800/-] applicable to the re-designated post of Section Officer as Assistant Audit Officer w.e.f. 1.1.2006.

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(iii) To direct the respondents to grant a monthly pension of Rs.9375/- which is 50% of the minimum in the pay band plus grade pay [Rs.9300-34800 plus Rs.4800/-] applicable to the redesignated post of Section Officer as Assistant Audit Officer w.e.f. 1.1.2006 with all consequential benefits including arrears with interest @12% per annum within a stipulated period.

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(iv) To direct the respondents to refund the amount recovered OF from the applicant towards alleged excess payment. (v) Grant such other relief or reliefs that may be prayed for or that are found to be just and proper in the nature and circumstances of the case.

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According to the contention of the Bank, while paying pension, inadvertently added 50% of the Dearness Allowance (DA) as Dearness Pension [4535,(basic pension)+ Rs. 2268(50% of 4535)] and DA was paid at Rs. 6803. This mistake came to the notice of the bank only in July 2016 and by that time pensioner had been paid Rs. 4,37,640 in excess. Bank is authorized by the pensioner to recover the excess payment made to him vide the Letter of Undertaking executed by him at

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OP (CAT) NO. 115 OF 2023

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the time of commencement of pension payment and cannot challenge the recovery proceedings initiated against him.

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Learned Tribunal on analysis of the evidence much less the provisions of the Limitation Act and judgments cited across the Bar, held that the steps taken by the bank in recovering excess amount is justified even beyond three (3) years.

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Learned counsel for the petitioner submitted that the limitation has to be confined to three(3) years and even as per paragraph No.3 of the judgment of the Division Bench, Bank cannot be permitted to recover beyond three(3) years. It is for that reason no cross O.P.(CAT) has been filed in this Court challenging the direction of the CAT. Recovery cannot be made from the pension of the retired employees, recovery based on the so called undertaking is also impermissible as laid down in Naini Gopal Vs. Union Of India as well as various other judgements like Mohammed Yusuf vs. Mahranna Pratap University &Anr .

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Learned counsel appearing on behalf of the

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respondent - Bank submitted that it was not a case of employer-

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OP (CAT) NO. 115 OF 2023

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employee relationship and therefore the ratio decidendi culled out in State of Punjab and Others v. Rafiq Masih (White

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Washer) [(2015) 4 SCC 334] would not be applicable much less by confining it to be for three years. In support of the contention relied upon the judgment in Panjab National Bank Vs. Surendara prasad Sinha (1992 KHC 232) as well as the Division Bench judgment of this Court in Assistant General Manager, SBI (CPPC), TVM. and Another Vs. S.Saradamani and Others (2021(4) KHC 97).

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We have heard counsel for the parties and appraised the paper book.

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Section 3 and Section 17 of the Limitation Act reads

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as under:

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“3. Bar of limitation.—

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(1) Subject to the provisions contained in sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence.

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(2) For the purposes of this Act —

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(a) a suit is instituted —

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(i) in an ordinary case, when the plaint is presented to the proper officer;

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(ii) in the case of a pauper, when his application for leave to sue as a pauper

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OP (CAT) NO. 115 OF 2023

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is made; and

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(iii) in the case of a claim against a company which is being wound up by the court, when the claimant first sends in his claim to the official liquidator;

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(b) any claim by way of a set off or a counter claim, shall be treated as a separate suit and shall be deemed to have been instituted —

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(i) in the case of a set off, on the same date as the suit in which the set off is pleaded;

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(ii) in the case of a counter claim, on the date on which the counter claim is made in court;

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(c) an application by notice of motion in a High Court is made when the application is presented to the proper officer of that court.

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XXXXXXXX XXXXXXXX

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10. Effect of fraud or mistake.—

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(1) Where, in the case of any suit or application for which a period of limitation is prescribed by this Act,—

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(a) the suit or application is based upon the fraud of the defendant or respondent or his agent; or

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(b) the knowledge of the right or title on which a suit or application is founded is concealed by the fraud of any such person as aforesaid; or

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(c) the suit or application is for relief from the consequences of a mistake; or

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(d) where any document necessary to establish the right of the plaintiff or applicant has been fraudulently concealed from him,

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the period of limitation shall not begin to run until plaintiff or applicant has discovered the fraud or the mistake or could, with reasonable diligence, have discovered it; or in the case of a concealed document, until the plaintiff or the applicant first had the means of producing the concealed document or compelling its production:

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Provided that nothing in this section shall enable any suit to be

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OP (CAT) NO. 115 OF 2023

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instituted or application to be made to recover or enforce any charge against, or set aside any transaction affecting, any property which—

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(i) in the case of fraud, has been purchased for valuable consideration by a person who was not a party to the fraud and did not at the time of the purchase know, or have reason to believe, that any fraud had been committed, or

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(ii) in the case of mistake, has been purchased for valuable consideration subsequently to the transaction in

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which the mistake was made, bya person who did not know, or have reason to believe, that the mistake had been made, or

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(iii) in the case of a concealed document, has been purchased for valuable consideration by a person who was not

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a party to the concealmentband, did not at the time of purchase know, or have reason to believe, that the document had been concealed.

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(2) Where a judgment-debtor has, by fraud or force, prevented the execution of a decree or order within the period of limitation, the court may, on the application of the judgment-creditor made after the expiry of the said period extend the period for execution of the decree or order:Provided that such application is made within one year from the date of the discovery of the fraud or the cessation of force, as the case may be.”

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As per the facts culled out in Punjab National Bank

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( supra ), it was a case where there was a dispute between the loanee and the debtor. The guarantor had an account by way of FD with the Bank and despite the fact that the claim against the principle debtor and the guarantor had become time barred, but owing to the fact that the amount was lying in the FD, recovered the amount beyond the period of three(3) years. It is in that context, provisions of Section 3 was applicable.

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However, in this case there was no fault or mistake of the petitioner but of the Bank. Section 17 deals with the

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OP (CAT) NO. 115 OF 2023

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mistake. The recovery as per the ratio decidendi culled out in the judgment of the Division Bench in Assistant General Manager, SBI (CPPC), TVM is three years. The directions in the aforesaid judgment in Paragraph No. 49 reads as under:

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“49. To sum up, we hold as follows :

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(1) The substantive right of the petitioners/Bank to recover the money paid in excess to the original applicant in ways other than judicial remedy is not destroyed by reason of the rules of limitation. The finding of the Tribunal that the Bank is only entitled to recover the excess payment made to the applicant, for a period of three years prior to the date when the Bank served notice of recovery on the applicant, by reason of the rules of limitation, is not sustainable on account of the settled law that Section 3 of the Limitation Act only bars the remedy, but does not destroy the right which the remedy relates to. Since the substantive right survives and continues to be available in other ways the Bank is entitled to adjust, the excess amount paid to the pensioner, from the amount in his or her account even if it is time barred. The contra finding of the Tribunal will stand overruled.

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(2) There exists a principal-agent relationship between the Southern Railway (the employer) and the Bank in the matter of disbursement of pension to the employees of the former. In the facts and circumstances of this case, the Southern Railway is bound by the transactions made by the Bank with the original applicant. As the public law remedy based on equity and justice deduced

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OP (CAT) NO. 115 OF 2023

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in Rafiq Masih (supra) is enforceable against the Southern Railway (the employer), the Bank, which stands in the shoes of the Railways for the purpose of disbursal of pension, is bound by the guidelines issued by the Apex Court in this case. Since the Apex Court in Jagdev Singh (supra) has not interfered with the directions contained in paragraph 18 of the judgment in Rafiq Masih (supra) regarding clauses (i), (iii), (iv) and (v), those directions in public law remedy would be invokable in case of this nature.

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(3) Since the recovery of the amount, paid in excess for the period from November 2013 to February 2016, from the original applicant

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would be harsh and iniquitous as the effect of the recovery will be more unfair and more improper than the corresponding right of the petitioners to recover the amount it is impermissible in law to permit the petitioners to recover the excess payment made to the original applicant prior to 8.2.2016. This, we hold so, as the principles in White Washer's case (supra) as modified in Jagdev Singh (supra) will apply to the facts and circumstances of this case.

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(4) However, we hold that the petitioners are entitled to recover the excess payment made to the original applicant for the period from 8.2.2016 to 8.2.2019. They are at liberty to realise the amount in 30 instalments. ”

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Learned tribunal erred in allowing the respondent/bank to recover the excess amount without specifying the period of limitation. Thus the order of the

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OP (CAT) NO. 115 OF 2023

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tribunal is illegal and perverse. Bank is allowed to recover the excess amount upto period of three years.

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As other claims have not been previously addressed before the tribunal and are introduced for the first time here, are hereby rejected. OP(CAT) stands disposed off.

Sd/-

AMIT RAWAL

JUDGE

sab

Sd/EASWARAN S.

JUDGE

OP (CAT) NO. 115 OF 2023

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APPENDIX OF OP (CAT) 115/2023

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PETITIONER ANNEXURES

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Annexure A6 TRUE COPY OF THE LETTER NO. CPCC/ TVM/ARREAR/RO5045654 DT:20.8.2016 ISSUED BY THE 5TH RESPONDENT Annexure2 TRUE COPY OF THE PPO NO.626990500247 Annexure A2 PPO NO. 626990500247/1912646/A1 DT:6.6.2016 ISSUED BY THE 3RD RESPONDENT Annexure A3 TRUE COPY OF THE FITMENT TABLES Annexure A4 TRUE COPY OF THE REPRESENTATION DT.7.6.2016 SUBMITTED BY THE PETITIONER Annexure A5 TRUE COPY OF THE LETTER NO.OE(CASH)/PEN/16-17/31 DT.20.6.2016 ISSUED BY THE 1ST RESPONDENT Annexure A7 TRUE COPY OF THE PENSION SLIP FOR THE MONTH OF AUGUST 2016 ISSUED BY THE 6TH RESPONDENT Annexure A8 TRUE COPY OF THE REVISION ARREARS CALCULATION SHEET ISSUED BY THE 6TH RESPONDENT Annexure A9 TRUE COPY OF THE PENSION SLIP FOR THE MONTH OF SEPTEMBER 2016 ISSUED BY THE 6TH RESPONDENT Annexure A10 TRUE COPY OF THE OM. F.NO. 18/03/2015ESTT. (PAY -1) DT:2.3.2016 Annexure R1(a) TRUE COPY OF THE CIRCULAR NO.03-STAFF ENTT.II/2011 ISSUED BY THE OFFICE OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA

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OP (CAT) NO. 115 OF 2023

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Annexure B1	A TRUE TYPED COPY OF THE SPECIAL SEAL
	AUTHORITY NO.626990500247 DATED 29.04.2005 ISSUED BY THE CENTRAL PENSION ACCOUNTING OFFICE AUTHORIZING THE PAYMENT OF PENSION TO THE APPLICANT.
Annexure B2	A TRUE TYPED COPY OF THE UNDERTAKING EXECUTED BY THE APPLICANT
Annexure B3	A TRUE COPY OF THE CIRCULAR NO.RBI/2015- 16/340 DATED 17.3.2016
Annexure A13	TRUE COPY OF THE OM NO. 38/37/2016- P&PW (A) DT:12.5.2017
Annexure A14	TRUE TYPED COPY OF THE CIRCULAR DT:2.6.2021 MERGING THE POST OF SECTION OFFICER WITH AAO AND SHOWING THE GRADE PAY AS RS.4,800/- W.E.F.27.5.2009.
Annexure A 15(a)	TRUE COPY OF THE CONCORDANCE TABLE NO.26
Annexure A 15(b)	TRUE COPY OF THE CONCORDANCE TABLE NO.28
Exhibit P1	A TRUE COPY OF THE OA NO.896/2016 FILED BY THE PETITIONER BEFORE THE TRIBUNAL
Exhibit P2	TRUE COPY OF THE REPLY STATEMENT WAS FILED ON BEHALF OF 1STAND 2ND RESPONDENTS
Exhibit P3	TRUE COPY OF THE REPLY STATEMENT FILED ON BEHALF OF 5TH AND 6TH RESPONDENTS
Exhibit P4	TRUE COPY OF THE REJOINDER FILED BY THE APPLICANT
Exhibit P5	TRUE COPY OF THE ADDITIONAL REJOINDER FILED BY THE APPLICANT
Exhibit P6	A TRUE COPY OF THE ORDER DATED 26.07.2023 IN OA NO.896/2016

D. Aravindan Pillai v. Principal Accountant General (Audit)

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D. Aravindan Pillai v. Principal Accountant General (Audit)

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