Ms. Suruchi Mittal SPC for UOI v. SURESH KUMAR

Judgment

1. This writ petition assails judgment dated 15 October 2024, passed by the Central Administrative Tribunal1 in OA 1730/2016.

2. The respondent was appointed as Lower Division Clerk2 in the Institute of Hotel Management, Catering & Nutrition, Pusa3 on 1 December 1980. He was, thereafter, promoted as Upper Division Clerk in 1992 and retired from the said Institute on 31 March 2016.

3. Without issuing any show cause notice to the respondent, the 1 “Tribunal” hereinafter 2 “LDC” hereinafter 3 “Institute” hereinafter Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:03.02.2025 12:46:27 W.P.(C) 1239/2025 following Office Order was passed by the Institute on 18 February

2016. “OFFICE ORDER That as per Para No. 3 of the Internal Audit Report – Provisional received from Senior Accounts Officer, Ministry of Civil Aviation and Tourism, Government of India, the following employees of the Institute are being paid excess amount by making wrong pay fixation under MACP

(1) Shri Suresh Kumar, Upper Division Clerk (2) Shri Rajesh Bansal, Accountant (3) Shri Anil Bhushan Chaddha, Upper Division Clerk Shri Neeraj Jain, UDC Administrative Department is directed to inform the undersigned through the Accountant about the details of excess payments made to the above mentioned employees under MACP. In this regard, appropriate reply has been sent to the Senior Accounts Officer, Ministry of Civil Aviation and Tourism, Government of India. Presently the matter is pending for settlement under the Ministry of Tourism, Government of India. Shri Suresh Kumar Chauhan, UDC is retiring on 31st March 2016. Therefore, by taking immediate action, apart from the retention money of Rs. 1000/- from the gratuity of Shri Suresh Kumar, the excess amount given to him till date should be deducted from his retirement benefit and withheld till the matter is settled. Pension of Shri Suresh Kumar Chauhan, UDC, should be determined on the basis of grade pay of Rs. 4600/- Sd/- Alok Shivpuri Principal”

4. Aggrieved by the aforesaid Office Order, which downwardly refixed the respondent’s pay as well as proposed effecting of recoveries of excess payments made to him, the respondent Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:03.02.2025 12:46:27 W.P.(C) 1239/2025 approached the Tribunal by way of OA 1730/2016.

5. Following the judgment of the Supreme Court in Rafiq Masiq State of Punjab4 and Jagdish Prasad Singh v State of Bihar5, the Tribunal has set aside the downward refixation of the respondent’s pay as well as the decision to effect recoveries from him. The reasoning of the Tribunal reads thus: “14. We have carefully considered the respondents' contentions, particularly the reliance on Rule 71 of the CCS (Pension) Rules, 1972 (incorrectly cited as the CCS (Leave) Rules in the counter reply). Rule 71 is reproduced below: “71. Recovery and adjustment of Government dues (1) It shall be the duty of the Head of Office to ascertain and assess Government dues payable by a Government servant due for retirement. (2) The Government dues as ascertained and assessed by the Head of Office which remain outstanding till the date of retirement of the Government servant, shall be adjusted against the amount of the [retirement gratuity] becoming payable (3) The expression 'Government dues' includes – (a) dues pertaining to Government accommodation including arrears of licence fee [as well as damages for' the occupation of the Government accommodation beyond the permissible period after the date of retirement of the allottee)] if any; those pertaining (b) dues other to Government accommodation, namely, balance. of house building or conveyance or any other advance, overpayment of pay and allowances or leave salary and arrears of income tax deductible at source under the Income Tax Act, 1961 (43 of 1961). Signature Not Verified 4 (2015) 4 SCC 334 5 2024 SCC OnLine SC 1909 Digitally Signed By:AJIT KUMAR Signing Date:03.02.2025 12:46:27 W.P.(C) 1239/2025 Footnote: 1. Substituted by G.I., Dept. of P. & P. W., Notification No. 2/18/87-P. & P.W. (PIC), dated the 20th July, 1988, published as S.O. No. 2388 in the Gazette of India, dated the 6th August, 1988. • Substituted vide D/o. P&PW Notification No.20/16/1998- P&PWO dated the 7th April 2010 published in Gazette of India under SO 829(E) date the 12th April 2010.”

15. A bare perusal of the rule reveals that the recovery pertains to government accommodation dues and does not apply strictly to all dues. Therefore, the argument advanced by the respondents is fallacious. It is undisputed that the direction for the overpayment of wages was issued just two months prior to the applicant's superannuation.

16. The reliance on the undertakings of the two employees mentioned in the impugned order dated 06.01.2015 does not hold much weight. Even if we accept the respondents' argument, there is no evidence to show that the impugned order was based on a reference to the screening committee, which had earlier accorded the applicant the benefit of MACP. It would have been appropriate for the respondents to place the case. before the screening committee and grant the applicant an opportunity to be heard.

17. We also note that an Office Memorandum (OM) dated 02.03.2016, issued by the Government of India, Ministry of Personnel, Public Grievances & Pensions, Department of Personnel and Training, stipulates in clause 5 as follows: "5. The matter has, consequently, been examined consultation with the Department of Expenditure and the Department of Legal Affairs. The Ministries / Departments are advised to deal with the issue of wrongful / excess payments made to Government servants in accordance with above decision of the Hon'ble Supreme Court in CA No.11527 of 2014 (arising out of SLP (C) No.11684 of 2012) in State of Punjab and others etc vs Rafiq Masih (White Washer) etc. However, wherever the waiver of recovery in the above- mentioned situations is considered, the same may be allowed with the express approval of Department of Expenditure in terms of this Department's OM No. 18/26/2011-Estt (Pay-I) dated 6th February, 2014." Moreover, there is nothing on record to show that any 18. inquiry or departmental action was initiated against any delinquent employee responsible for the wrongful recovery. We are also Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:03.02.2025 12:46:27 W.P.(C) 1239/2025 fortified by the recent decision passed by the Hon'ble Apex Court in the matter of Jagdish Prasad Singh v. State Of Bihar on 8 August, 2024, which supports the applicant's case.

19. Based on the above, we quash and set aside the impugned order dated 06.01.2015. The pay fixation made prior to the impugned order is restored. The applicant is entitled to a refund of ₹ 3.10 lakh, already deducted from the gratuity. We also make it clear that any consequential relief pursuant to the restoration of the order shall follow. This exercise shall be completed within three months from today, failing which the applicant shall be entitled to interest at GPF rates.”

6. Aggrieved by the decision of the Tribunal, the petitioner has approached this Court by means of the present writ petition.

7. We have heard Ms. Mittal, learned Counsel for the petitioner at some length.

8. The issue in controversy is squarely covered by the judgment of the Supreme Court in Jagdish Prasad Singh which, inter alia, relies on the earlier decisions of the Supreme Court in Syed Abdul Qadir v State of Bihar6, Rafiq Masih and Thomas Daniel v State of Kerala7.

9. We deem it appropriate to reproduce paras 20 to 24, 27 and 28 of the decision in Jagdish Prasad Singh, thus: “20. Without prejudice to the above findings, we are of the view that no departmental action could have been initiated by the State against the appellant after eight years following his superannuation because the employer employee relationship had come to an end after the appellant's superannuation. The order directing reduction in pay scale and recovery from the appellant was manifestly not preceded by any show cause notice and was thus, passed in gross Signature Not Verified 6 (2009) 3 SCC 475 7 2022 SCC OnLine SC 536 Digitally Signed By:AJIT KUMAR Signing Date:03.02.2025 12:46:27 W.P.(C) 1239/2025 violation of the principles of natural justice. Pursuant to the order dated 20th July, 2009 passed in the Writ Petition No. 6714 of 2009 filed by the appellant, he submitted a representation to the Secretary, Food and Consumer Protection Department, Government of Bihar, which vide order dated 8th October, 2009 was rejected, preceded by a personal hearing. A perusal of the said order would indicate that the Secretary took a view that as per paragraph 11 (supra) of first/second time bound promotion of the appellant had come to an end automatically w.e.f. on 1st January, 1996 and thus, the appellant was required to be redesignated to the post of Marketing Officer and would be entitled to the revised pay of Rs. 5500-9000 w.e.f. 1st January, 1996 as recommended by the Fitment Committee. Thus, even in this order, the promotion conferred to the appellant to the post of ADSO on 10th March, 1991 is not doubted. the Government Resolution,

21. We firmly believe that any decision taken by the State Government to reduce an employee's pay scale and recover the excess amount cannot be applied retrospectively and that too after a long time gap. In the case of Syed Abdul Qadir (supra), this Court held that when the excess unauthorised payment is detected within a short period of time, it would be open for the employer to recover the same. Conversely, if the payment had been made for a long duration of time, it would be iniquitous to make any recovery. The relevant paras of the Syed Abdul Qadir (supra) are extracted hereinbelow : - excess recovery “57. This Court, in a catena of decisions, has granted relief against emoluments/allowances if (a) the excess amount was not paid on account of any misrepresentation or fraud on the part of the employee, and (b) 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. payment

58. The relief against recovery is granted by 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. But, if in a given case, it is proved that the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where the error is detected or corrected within a short time of wrong payment, the matter being in the realm of judicial discretion, courts may, on the facts and circumstances of any particular case, order for Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:03.02.2025 12:46:27 W.P.(C) 1239/2025 recovery of the amount paid in excess.

59. Undoubtedly, the excess amount that has been paid to the appellant teachers was not because of any misrepresentation or fraud on their part and the appellants also had no knowledge that the amount that was being paid to them was more than what they were entitled to. It would not be out of place to mention here that the Finance Department had, in its counter- affidavit, admitted that it was a bona fide mistake on their part. the result of wrong The excess payment made was interpretation of the Rule that was applicable to them, for which the appellants cannot be held responsible. Rather, the whole confusion was because of inaction, negligence and carelessness of the officials concerned of the Government of Bihar. Learned counsel appearing on behalf of the appellant teachers submitted that majority of the beneficiaries have either retired or are on the verge of it. Keeping in view the peculiar facts and circumstances of the case at hand and to avoid any hardship to the appellant teachers, we are of the view that no recovery of the amount that has been paid in excess to the appellant teachers should be made.” (emphasis supplied) Similarly, this Court in ITC Limited v. State of Uttar

22. Pradesh, held as under : - “108. We may give an example from service jurisprudence, where a principle of equity is frequently invoked to give relief to an employee in somewhat similar circumstances. Where the pay or other emoluments due to an employee is determined and paid by the employer, and subsequently the employer finds, (usually on audit verification) that on account of wrong understanding of the officers implementing the rules, excess payment is made, courts have recognised the need to give limited relief in regard to recovery of past excess payments, to reduce hardship to the innocent employees, who benefited from such wrong interpretation.” (emphasis supplied) the applicable rules by In the case of State of Punjab v. Rafiq Masih (White

23. Washer), this Court held as under : - “18. 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 hereinabove, we may, as a ready reference, summarise the following few situations, wherein Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:03.02.2025 12:46:27 W.P.(C) 1239/2025 recoveries by the employers, would be impermissible in law: (i) Recovery from the employees belonging to Class III and Class IV service (or Group C and Group D service). (ii) Recovery from employees who are due to retire within one year, of the order of recovery. the retired employees, or (iii) Recovery from the employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued. (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. (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.” (emphasis supplied)

24. Recently, this Court in Thomas Daniel v. State of Kerala, held that the State cannot recover excess amount paid to the ex- employee after the delay of 10 years. ***** The order dated 8th October, 2009 passed by the State 27. Government directing reduction in the pay scale of the appellant from Rs. 6500-10500 to Rs. 5500-9000 w.e.f. 1st January, 1996 and directing recovery of the excess amount from him is grossly illegal and arbitrary and is hereby quashed and set aside. The impugned order dated 27th August, 2012 passed by the Division Bench of the High Court does not stand to scrutiny and is hereby quashed. Therefore, the appellant shall continue to receive the pension in accordance with the pay scale of Rs. 6500-10500. In case, if any reduction in pension and consequential 28. recovery was effected on account of the impugned orders, the appellant shall be entitled to the restoration/reimbursement thereof with interest as applicable.” (Emphasis as contained in the original judgement) Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:03.02.2025 12:46:27 W.P.(C) 1239/2025

10. Though Ms. Mittal sought to contend that this was a case of erroneous fixation by fraud and misrepresentation, as the respondent was a member of the Committee which has determined the fixation of pay, there is no such allegation against the respondent.

11. The order by which the respondent’s pay was downwardly refixed merely notes that there was a mistake in refixation. Even if the respondent was a member of the Committee which refixed the pay, that does not ipso facto indicate that there was a fraud or misrepresentation.

12. From the time of Commissioner of Police v Gordhandas Bhanji8, the law is that an order has to stand or fall on the basis of what is contained therein and cannot be sought to be improved by arguments made in Court or even by an affidavit. Mohinder Singh Gill v The Chief Election Commissioner9, while relying on Gordhandas Bhanji, held, classically, thus: The second equally relevant matter is that when a statutory “8. functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J. in Gordhandas Bhanji: “Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct Signature Not Verified