WA No. 1662 of 1997 · Kerala High Court

..3.....R.P.NO.30/2004 23. T.GANGADHARAN, SENIOR ACCOUNTANT, PALAKKAD DISTRICT CO-OPERATIVE BANK, PALAKKAD. 24. SALGAMMA MATHEW, JUNIOR ACCOUNTANT, PALAKKAD DISTRICT CO-OPERATIVE BANK, PALAKKAD. 25. K.ARU, SENIOR ACCOUNTANT, PALAKKAD DISTRICT CO-OPERATIVE BANK, PALAKKAD. 26. K.SUMATHY, SENIOR ACCOUNTANT, PALAKKAD DISTRICT CO-OPERATIVE BANK, PALAKKAD. 27. K.GIRIJA, JUNIOR ACCOUNTANT, PALAKKAD DISTRICT CO-OPERATIVE BANK, PALAKKAD. 28. T.RADHAKRISHNAN, JUNIOR ACCOUNTANT, PALAKKAD DISTRICT CO-OPERATIVE BANK, PALAKKAD. 29. VALSALA, SENIOR ACCOUNTANT, PALAKKAD DISTRICT CO-OPERATIVE BANK,PALAKKAD. 30. P.O.VISWANATHAN, SENIOR ACCOUNTANT, PALAKKAD DISTRICT CO-OPERATIVE BANK, PALAKKAD. 31. P.R.OMANA, SENIOR ACCOUNTANT, PALAKKAD DISTRICT CO-OPERATIVE BANK, PALAKKAD. 32. SECRETARY TO GOVERNMENT, DEPARTMENT OF CO-OPERATION GOVERNMENT OF KERALA, TRIVANDRUM. 33. THE REGISTRAR OF CO-OPERATIVE SOCIETIES, TRIVANDRUM. 34.

THE ADDL.REGISTRAR OF CO-OPERATIVE SOCIETIES (AUDIT), TRIVANDRUM. 35. THE DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES, PALAKKAD. BY GOVT.PLEADER SRI. SANDESH RAJA – R32 TO R35 ADV. SRI.K.RAMAKUMAR )Sr.) FOR R1 TO R31 THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 07/08/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:Kss J.B.KOSHY & K.P.BALACHANDRAN, JJ.--------------------------------------W.A.No.1662 OF 1997 -------------------------------------Dated 7th August, 2008JUDGMENTKoshy,J . The writ petitioners are employees of the fifth respondentBank (appellant in this appeal). Ext.P1 is the service regulations of theemployees of the District/Central Co-operative Banks in Kerala. Rule 20of the above rules deals with the increment and fixation of pay. Rule 20reads as follows: “20. INCREMENT AND FIXATION OF PAYa) An employment will be entitled for incrementon completion of each year of service in theparticular scale including the period ofprobation.

In cases where the probation isextended for inefficiency or unsatisfactoryperformance the 2nd annual increment can bedrawn only from the date of declaration ofsatisfactory completion of probation.b) In computing the period of services, absencefrom duty on grounds of suspension aspunishment, leave on loss of pay withoutMedical Certificate for absence, without leaveor notice will be excluded. Leave on loss ofpay will not be counted for increment.c) Increment shall be granted on the date onwhich a year of service is completed whetheror not the employee is on leave (other thanloss of pay without medical certificates) W.A.1662/19972NOTE: If the increment falls on any day duringthe month the said increment shallbecome due from the first day of themonth.2 a) When an employee is promoted to anotherpost carrying a higher scale of pay, hisinitial pay in the higher scale shall be fixedat the stage next above the pay notionallyarrived at lower scale of pay by increasingthe actual pay drawn by him in the lowerscale of pay by one increment.

Whereverthere is a change of pay the lower scale ofpay refixation of pay will be allowed in thehigher scale. b) If a promoted employee had officiated in thehigher grade for any period before thepromotion to the higher grade to which hewas subsequently promoted, such periodwill be counted for increment in thepromoted grade.c) In case where the application of Rule 20(2)gives rise to anomalies in as much as aJunior employee gets his pay, refixed at astage higher than the pay drawn by asenior employee in the higher post in thesame scale of pay in the normal course, theanomaly will be removed by raising the payof the senior employee at the stage aboveto that fixed for the junior employee in thehigher post. The usual increment of thesenior employee be drawn on the date onwhich it would have fallen due if therefixation was not done. No refixation willbe allowed to compensate other casesof higher pay or increment drawn by junioremployees.” W.A.1662/19973According to the petitioners, one of their juniors Sri.

Ramaswamy onhis promotion as Junior Accountant was drawing a higher salary andanother junior Sri.R.Kannappan who is junior to the petitioners as Senior Accountant was also drawing higher salary. In view of theabove, applying Ext.P1, General Manager of the Bank issued Exts.P4and P5 increasing the salary of the Junior Accountants and SeniorAccountants by stepping up their pay equivalent to Sri. Ramaswamyand Kannappan. It has also come out in evidence that the salary onthe basis of Exts.P4 and P5 were given to the petitioners on aspecific undertaking that they will repay if audit objection is raised. Undertakings were given by the writ petitioners stating that if theamount given as per Exts.P4 and P5 by stepping up of their salaryequivalent to Sri. Ramaswamy is demanded back due to auditobjection, it can be recovered from them and they will not object tothe recovery. By Ext.P2, audit objection was raised questioningstepping up of their pay.

Consequently, it was decided by the Bank torecover the amount. Then the writ petitioners approached this courtquestioning the above proposed recovery. 2. The question essentially to be decided is whetherstepping up of salary by Exts.P4 and P5 is correct and whether Ext.P2 W.A.1662/19974audit objection is correct. In Ext.P2 audit report it was pointed out inparagraphs 7(a) and (b) as follows: “7.(a) The Pay of 35 Junior Accountantsfixed w.e.f. 31.3.95 on the basis of fixation ofpay of S.Ramaswamy on his promotion as Junior Accountant is not in accordance with the Provision of Rule 20-2(c) of the SubsidiaryRules, regarding the Service Conditions ofemployees and hence objected in audit. Theamount paid for the period 31.3.95 to 31.3.96amounting to Rs.6,49,441/= should berecovered from 35 employees with interest atthe lending rate as per list enclosed (AnnexureI). The payment of excess Salary may bestopped forthwith and their pay should beregularised accordingly.

(b) The Pay of 16 Senior Accountantsfixed on the basis of re-fixation of pay of Sri.R.Kannappan, Senior Accountant witheffect from 1.11.93 is not in accordance with Rule 20-2(c) of Subsidiary Rules regardingService Conditions of employees and henceobjected in audit. The amount paid for theperiod 1.11.93 to 31.3.96 amounting toRs.89,688/= should be recovered from theemployees with interest. The payment ofexcess salary may be stopped forthwith andtheir pay should be regularised accordingly. On perusal of the concerned file, it is seen that16 employees are given refixation of payinstead of 5 employees as recommended in theoffice note. The list of employees enclosed in Annexure II.” The learned Judge found that stepping up of salary was correct andfound as follows: W.A.1662/19975“Thus, it is clear that if the anomalyis directly as a result of application of Rule 28-A, then the senior officer is entitled to get hispay refixed equal to that of his junior officer.

But, if the junior officer draws higher rate ofpay than the junior by virtue of fixation of payunder the normal rules or any advanceincrement granted to him, then the seniorofficer is not entitled to get his pay stepped up. Thus, M/s.S.Ramaswamy and R.Kannappanwere granted higher scale of pay only becauseRule 20(2) of the Rules was applied. Theprinciple underlying Rule 20(2) as I understandit, is that a person will be drawing the maximumscale of pay in the lower scale at the time of hispromotion. On promotion to the higher scale ofpay there may not be any increase in hisemoluments. Therefore, to give him a higheremolument on promotion, he will be grantedone more increment fixing it notionally. That iswhat happened in the case ofM/s.S.Ramaswamy and R.Kannappan. By suchprocess the petitioners who are seniors to thosetwo persons were getting lesser pay. Such ananomaly is sought to be rectified by applyingRule 20(2)(c) of Ext.P1 Rules.

That is what thefifth respondent did initially. The auditobjection did not take into consideration thebasic principle underlying these rules. Thepresent stand of the fifth respondent and the Government in their counter affidavit is alsoagainst these basic principles and cannot besustained.” This is questioned by the appellant Bank in this writ appeal. W.A.1662/199763. Now, we will come to the facts of this case. Sri. Kannappan joined the service of the Bank as Peon on 18.11.1978.Sri. Ramaswamy joined the service of the Bank as Peon on 25.11.1978.Writ petitioners were appointed as clerks after 15.7.1982. As far as Gangadharan (petitioner No.23) is concerned, he was appointed on15.7.1982 as clerk and his basic pay on the date of appointment wasRs.400/=. On 15.7.1982, before pay revision, Sri. Ramaswamy wasgetting an amount of Rs.584/= as a peon because of his prior service. Therefore, when Sri. Gangadharan was appointed as a clerk on basicpay of Rs.400/=, Sri.

Ramaswamy was getting a basic pay of Rs.584/-.With regard to Smt. Valsala (petitioner No.29), she was appointed on15.7.1982 on a basic pay of Rs.400/=. We have already seen that Sri. Ramaswamy was getting Rs.584/= on that date. Smt.P.L.Vijayalakshmi (petitioner No.21) was appointed on 8.6.1984on a basic pay of Rs.400/=. As on that date, Sri. Ramaswamy wascontinuing as peon on a basic pay of Rs.600/=. Sri. Ramaswamy waspromoted as a clerk on 26.11.1985 with a starting basic pay ofRs.689/=. Smt. Anitha (petitioner No.22) was appointed as a clerk on21.6.1986 on a basic pay of Rs.400/=. Consequently, Sri. Ramaswamy was promoted as Junior Accountant on 31.3.1995 ona basic pay of Rs.3,275/=. On that date, Sri. Gangadharan was gettinga basic pay of Rs.2,545/=, Smt. Valsala was getting Rs.2,685/=, W.A.1662/19977Smt. Vijayalakshmi was getting Rs.2,685/= and Smt. Anitha wasgetting Rs.2355/-. Therefore, on the date of appointment of thepetitioners as clerks, they were getting a lesser salary than that wasreceived by Sri.

Ramaswamy as a peon. At the time of promotion as Junior Accountant also Sri. Ramaswamy was getting a higher pay. Asrightly pointed out by the learned single Judge, if the seniors weregetting higher wages as per the normal increments, that cannot betreated as an anomaly. In view of the long service, though in thelower post, Ramaswamy and Kannappan were getting higher salaryeven when the petitioners were appointed and consequently when thepetitioners were promoted as Junior Accountants also they weregetting higher pay in the lower post than the petitioners. It is truethat whenever an employee at lower grade is promoted, at the time ofpromotion they will be given one increment, that is the promotionalincrement, for the purpose of fixation of pay and such employees maysometimes get higher amount than their juniors in that post and itcannot be treated as an anomaly. In this connection, we also refer to Rule 20 of Ext.P1 rules itself, wherein it can be seen that they are entitled toget higher salary in view of Rule 20(2)(a) and in such case it cannot bestated as anomaly (See Rule 20(2)(c)).

In this connection, we also refer tothe decision of the Supreme Court in Union of India and another v.R.Swaminathan and others ((1997) 7 SCC 690) wherein the W.A.1662/19978Hon'ble Supreme Court was considering the question of stepping upof salary with reference to the Fundamental Rule 22 and Hon'ble ApexCourt held as follows: “As the Order itself states, the stepping upis subject to three conditions: (1) Both the juniorand the senior officers should belong to the samecadre and the posts in which they have beenpromoted should be identical and in the samecadre; (2) the scales of pay of the lower andhigher posts should be identical; and (3) anomalyshould be directly as a result of the applicationof Fundamental Rule 22(1)(a)(1). The higher payreceived by a junior is on account of his earlierofficiation in the higher post because of localofficiating promotions which he got in the past. Because of the proviso to Rule 22 he may haveearned increments in the higher pay scale of thepost to which he is promoted on account of hispast service and also his previous pay in thepromotional post has been taken into account infixing his pay on promotion.

It is these twofactors which have increased the pay of thejuniors. This cannot be considered as ananomaly requiring the stepping up of the pay ofthe seniors.” The General Manager issued Exts.P4 and P5 only subject to the auditreport and further action. When audit report was received, the Boardof Directors decided to recover the same as stepping up of pay wasgiven against the mandates of Rule 20(2)(c) and there was noanomaly to be rectified. It is argued by the counsel for the writpetitioners that a new case is being argued. We are unable to accept W.A.1662/19979the above contention as all the time the contention of the Bank wasthat there was no anomaly at all. Ramaswamy and Kannappan werejuniors and they were getting higher salaries. They were promotedfrom the post of Peon to Clerk and when writ petitioners wereappointed as Clerks, they were getting lower salary than Ramaswamyand Kannappan. Ramaswamy and Kannappan were getting higherpay even before the promotion as Junior Accountant and SeniorAccountant than the writ petitioners.

When they were promoted as Junior Accountant and Senior Accountant, they will get higher payand it is not an anomaly at all warranting stepping up of pay. However, we make it clear that the recovery of excess pay should beeffected only in easy instalments despite their undertakings. In the above circumstances, we allow the writ appeal andset aside the impugned judgment. J.B.KOSHY JUDGE K.P.BALACHANDRAN JUDGEtks