IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.7514 of 2002 MADAN PRASAD Versus BIHAR STATE ELECTRICITY BOARD & ORS ----------- For the petitioner : M/s Narendra Kumar Jha & Nilesh Kumar Nirala, Advocates For the B.S.E.Board: Mr.Ram Kishore Singh, Advocate ---------- O R D E R 12/ 14.8.2008 Heard learned counsel for the petitioner and learned counsel for the respondent Board. In this writ application the petitioner has prayed for quashing of Annexure– 1, the letter of the Joint Secretary of the respondent Board dated 26.12.2000 by which his 90% provisional pension was fixed at the rate of Rs.1312/- per month, calculated on the basis of average of last ten months’ pay by fixing his last pay drawn at the rate of Rs.2975, instead of calculating his 90% pension on the basis of average of ten months’ pay on the basis of his actual last pay drawn at the rate of Rs.3200/- upon which his 90% pension comes to Rs.1440/-. Petitioner has further prayed for a direction to the respondents to fix his final pension on the basis of his last pay drawn at the rate of Rs.3200/-. He has further prayed - 2 - for a direction for payment of his full gratuity with exemplary interest and cost of litigation. During the pendency of the writ application, final pension of the petitioner was fixed at the rate of Rs.1457/- treating his last pay drawn as Rs.2900/- vide Pension payment Order No. 570 dated 25.3.2003. Therefore petitioner brought the same on record as Annexure–9 with a supplementary affidavit and challenged the same and prayed for its quashing. Petitioner also brought on record the consequential order vide memo no. 571 dated 25.3.2003 as Annexure-10 with the said supplementary affidavit by which an amount of Rs.83493.10 was ordered to be deducted from his gratuity as excess paid to him on account of alleged wrong fixation of his pay in the higher scale and challenged the same with prayer of its quashing also and for a direction for payment of the said amount. Case of the petitioner is that he was initially appointed as typist on 3.12.1964 under the respondents. Thereafter, he was promoted to selection grade scale of typist with effect from 12.4.1977. Later on, he was promoted to post of Head Clerk with effect from 7.4.1978. He was also granted super selection grade scale in the grade of Head Clerk with effect from 1.8.1988. Finally - 3 - petitioner superannuated from service of the respondent Board with effect from 30.5.2000, from the post of Office Superintendent. It is an admitted position that at the time of his promotion to selection grade scale of typist petitioner was granted benefit of 12% of his pay as stagnation pay. He contends that at the time of his promotion to the grade of Head Clerk, he was not given any benefit. However, on completion of three years from the date of grant of selection grade scale, petitioner was given 12% benefit of pay while granting him super selection grade scale of Head Clerk with effect from 1.8.1988. Learned counsel for the petitioner contends that, admittedly, the benefit of 12% pay was granted to the petitioner while granting him selection grade scale in the grade of typist with effect from 12.4.1977, and thereafter again with effect from 1.8.1988 while granting him super selection grade scale in the grade of Head Clerk. For twelve years thereafter, while the petitioner was in service, no objection was ever raised by the respondents with regard to grant of the said 12% benefit to him at two stages. He further contends that the said benefit granted to the petitioner at two stages was strictly in terms of the Standing Orders of the Board No. 1045 dated - 4 - 19.11.1974, read with 125 dated 7.5.1983 and 660 dated 9.9.1983 which superseded the embargo put upon such grant of second benefit by Standing order No. 515 dated 7.5.1976. He contends that, as it later transpired, after the superannuation of the petitioner, there was some audit inspection. In the audit inspection some objection was raised with regard to fixation of pay of the petitioner with grant of 12% benefit at the said two stages. Said audit objection was forwarded by the Secretary of the Board, along with the service book of the petitioner to the General Manager-cum- Chief Engineer, Gaya through his letter dated 7.2.2001, vide Annexure–6, with a direction to fix the pay of the petitioner accordingly, to enter the same in his service book, and return the same. However, the General Manager-cum-Chief Engineer, through his letter dated 13.4.2001, vide Annexure– 7, replied to the above letter of the Secretary, pointing out that the fixation of pay by grant of 12% benefit to the petitioner at the two stages was strictly according to the Standing Orders of the Board and correct. But, accepting the audit objections, respondents have fixed the pension of the petitioner at the lower rate and have ordered for recovery of alleged excess paid to him, from his gratuity, as stated above. He further - 5 - contended that the said grant of 12% benefit to the petitioner was perfectly correct and according to the Standing Orders of the Board. He also contends that before fixing of the pension at the lower rate and before ordering for recovery of excess paid from his gratuity, no notice or show cause was given to the petitioner and as such there has been a violation of Principles of Natural Justice in the matter. Petitioner also brought an example on record of similar grant of benefit to an employee by the Board vide Annexure- 5. He lastly submitted that, in any case, since the benefit at two stages was granted on the basis of interpretation of the Standing Orders of the Board by competent authorities, the amount paid to him on that basis, in view of the authoritative pronouncement by the Full Bench of this court in the case of Ram Binod Singh Vs. Bihar State Electricity Board [2007 (3) PLJR 398], is not recoverable from his pensionary benefits. A counter affidavit has been filed in the case on behalf of the respondent nos. 1 to 3. In the counter affidavit reference has been made to a number of standing orders of the Board. It has been averred that paragraph no.3 of Standing Order No. 515 dated 7.5.1976 prohibited double benefit of 12%, one at the stage of grant of - 6 - selection grade and another at the stage of promotion. Although it has been accepted that the said double benefit was later on permitted by Standing Order No. 125 dated 7.5.1983, but the same was to operate prospectively, as clarified by Circular No. 524 dated 2.8.1985. A further clarification was issued, vide Circular No. 660 dated 9.9.1983, clarifying that the earlier two office orders, namely Office Order No. 4562 dated 19.11.1974 and Officer Order No. 3992 dated 8.8.1975 were still in operation and did not stand modified by Standing Order No. 125 dated 7.5.1983. Therefore, the time gap of 3 years for grant of such benefit second time was still in operation. It is contended that since Standing Order No. 125 dated 7.5.1983 was not to operate retrospectively, petitioner was not entitled for grant of such benefit second time on his promotion as Head Clerk on 7.4.1978 and his case is not covered by the said standing order. As the petitioner was aware of the rules and regulations of Board, he was fully responsible for the said wrong fixation. Thus the respondents have justified the fixation of pension of the petitioner at the lower rate and order for recovery of excess paid to him from his gratuity. Respondents have also relied upon a judgment of this court reported in 2003 (3) - 7 - P.L.J.R. 681, in which the said Standing Order No. 125 dated 7.5.1983 was held to be operating prospectively. However, in the case liberty to the Board to recover the excess paid was denied. It is said that in appeal the judgment was approved and further the Board was also allowed to recover the excess paid. Various standing orders and office orders of the Board have been brought on record by the parties. Standing Order No. 4562 dated 19.11.1974 has been produced by petitioner as Annexure–9 along with his rejoinder to counter affidavit; Standing Order No. 515 dated 7.5.1976 has been produced by him as Annexure–2, Standing Order No.125 dated 7.5.1983 as Annexure–3 and Office Order No. 660 dated 9.9.1983 as Annexure–4 with the writ application. Respondents have brought on record the Office Order No. 524 dated 2.8.1985 with their counter affidavit as Annexure– A. However, in view of the stand of the parties, the detail consideration of the said standing orders/office orders, individually, is not required in the case. It is an admitted position that Standing Order No. 4562 dated 19.11.1974 provided for fixation of pay, on promotion from lower post to higher post, with 12% benefit of pay, on completion of 3 years only. It is also an - 8 - admitted position that paragraph no.3 of Standing Order No. 515 dated 7.5.1975 laid down that where promotional avenues are available, double benefit of fixation shall not be allowed. It is also an admitted position that Standing Order No. 125 dated 7.5.1983 specifically modified the said paragraph 3 by laying down that the benefit of 12% shall be given in promotions also, if the promotional pay-scale was higher than the one given for removal of stagnation. It is also an admitted position that the Officer Order No. 660 dated 9.9.1983 was clarificatory in the nature, clarifying that the Officer Order No. 4562 dated 19.11.1974, and another order are general in nature and still in operation and do not stand modified by the Office Order No. 125 dated 7.5.1983. It is also an admitted position that the Officer Order No. 524 dated 2.8.1985 was also clarificatory in nature, clarifying that the Standing Order No. 125 dated 7.5.1983 had only prospective operation. Learned counsel for the respondent Board has rightly submitted that this Court has already accepted in the case of Md. Siddique Vs. B.S.E.Board reported in 2003 (3) PLJR 681 that the said Standing Order No. 125 dated 7.5.1983 operates only prospectively and therefore the issue of effect of operation of the said - 9 - Standing Order is not open for consideration without challenging the correctness of the said judgment of this Court. It appears that, due to this concluded finding in respect of the said Standing Order No. 125 dated 7.5.1983 given by this Court in the case of Md. Siddique (supra), petitioner has averred at the end of paragraph-8 of his rejoinder to the counter affidavit that “In the light of the above, the only notional reduction of pay can be done but the amount paid cannot be recovered.” In view of the said judgment of this Court, perhaps, in context of Office Order No. 524 dated 2.8.1985, clarifying the prospective nature of Standing Order No. 125 dated 7.5.1983, a further averment was made by the petitioner in paragraph 6 of the said rejoinder that “This executive order do not appear to have been issued by the approval/order of the Board when Standing Order No. 125 dated 7.5.1983 has been issued with the approval of the Board. Thus, the executive order issued deciding the cut-off date is hereby challenged and prayed to be quashed as the same is not applicable in the case of retired employee when there has been no modification about the cut- off date in the Standing Order No. 125 dated 07.05.83.” However, at the time of hearing of the case, learned counsel for the petitioner has - 10 - neither referred to this pleading nor made any submissions on these lines challenging the said Office Order No. 524 dated 2.8.1985 or questioning the correctness of the said judgment of this Court in the case of Md. Siddique (supra). Therefore, in view of the undisputed legal position that Standing Order No. 125 dated 7.5.1983 operates only prospectively, it has to be examined whether petitioner was legally entitled for the benefit of 12% of pay, for the second time, on his promotion or not. It is not in dispute that the benefit of 12% pay, granted to the petitioner while granting him selection grade pay-scale in the grade of Clerk with effect from 12.4.1977 was legal and valid. Dispute is only with regard to the benefit of 12% of pay, granted the second time, to the petitioner in the grade of Head Clerk. Parties agree that if the same was granted to the petitioner from a date subsequent to 7.5.1983, the same will be covered by Standing Order No. 125 and will be in accordance with law and perfectly valid. On the other hand, it is also not disputed that if the said benefit was granted to the petitioner, the second time, prior to the said date of coming into operation of Standing Order No. 125, it will be in teeth of Standing Order No. 515 dated 7.5.1976. Now, to find out the exact - 11 - date of the grant of 12% benefit of pay to the petitioner in the grade of Head Clerk, the pleadings of the parties have to be scrutinised. In paragraph 10 of the writ application, petitioner has said that at the time of his promotion to the grade of Head Clerk on 7.4.1978 he was not given the benefit of 12% of pay due to non-completion of three years period in accordance with the pay fixation rules. In paragraph 11 he has said that he was further promoted to the Super Selection Grade Head Clerk on 1.8.1988 and the promotional benefit of 12%, subject to maximum of Rs.150/- was allowed to him as per the pay fixation rules after completion of 3 years. However, the petitioner has not brought on record any document to show the exact date of grant of the said benefit of 12% to him in the grade of Head Clerk. Even the letter of the General Manager-cum-Chief Engineer (Annexure–8) is devoid of its enclosures, which were the relevant pages of service book of the petitioner. The said letter does not mention the date of grant of said benefit to the petitioner, except holding the same as perfectly legal, and enclosing the relevant pages of his service book in proof of the same. Unfortunately, the petitioner has annexed the said letter with his writ application, in support of - 12 - his case, but without its enclosures, which could conclusively establish this fact. As against the said pleading of the petitioner, in paragraph 5 of the counter affidavit it is said that the petitioner was granted selection grade on the post of typist on 12.4.1977 and was thereafter was promoted as Head Clerk on 7.4.1978. It has been further said that “The petitioner availed 12% pay fixation benefit to the maximum of Rs.150/- in selection grade on 12.4.1977 and again at the time of promotion.” It is reiterated in paragraph-8 thereof that the petitioner “again availed 12% pay fixation benefit when he was promoted to the post of Head Clerk on 7.4.1978.” Unfortunately, respondents have also not brought on record any material to establish this fact conclusively. Thus, in view of deficient pleadings on this score, and there being no document on record to establish the same, it is not possible for this Court to come to definite finding with regard to validity of grant of 12% benefit of pay to the petitioner, the second time, in the grade of Head Clerk. Hence, the matter has necessarily to be left open for the petitioner to satisfy the authorities of the Board that, in fact, he got the said benefit after the Standing Order No. 125 dated 7.5.1983 came into effect. If the petitioner - 13 - is able to establish the same, the re-fixation of his pay and fixation of his pension at a lower rate will not be sustainable. Liberty in this regard is therefore granted to the petitioner and the respondents are directed to pass necessary consequential orders in this regard at the earliest, if satisfied. So far as petitioner’s challenge to the order of recovery of alleged excess amount of salary drawn from his gratuity is concerned, the submissions made by the learned counsel in this regard has substance. The issue with regard to right of an employer to recover excess amount paid to any employee on account of wrong fixation of pay etc. is no longer res integra. By an authoritative pronouncement by a Full Bench of this Court in the case of Ram Binod Singh Vs Bihar State Electricity Board (reported in 2007(3)PLJR 398 the issue has been put at rest. Paragraph 26 of the said judgment may be usefully quoted here below :- ”26. The relevant provisions of the Indian Contract Act, particularly Section 72 cover cases of mistake of fact as well as law and provide for recovery. The principle of restitution in case of unjust enrichment is also an accepted principle for ensuring justice in appropriate case. Hence, in law, the position appears to be clear that there is no legal bar in ordering for recovery from retired employees where they have received - 14 - money benefits on account of mistake at the ministerial level in the matter of fixation of pay, grant of increments or time bound promotion when the conditions precedent for such promotions were clearly non est. However, it has been correctly submitted on behalf of the petitioners that the theory of simple mistake or error to justify recovery will not hold good where the grant did not suffer from patent illegality of perversity so as to attract the Wednesbury Principle or the vice of malafide in law. For example, where two interpretations of a provision were possible and one was consciously approved and adopted by the competent authority meant to be applied generally to all concerned, any error in such decision of the competent authority if corrected at a later stage may be ordered to apply only prospectively. Moreso, if the decision has been followed for many years. In other words, if on reinterpretation or adjudication the earlier view permitting the grant of monetary benefits is found to be by a competent authority and bonafide but wrong, mistaken or erroneous, then ordinarily no recovery should be made unless the excess payment already made is covered by the two exceptions pointed out in the case of Madan Mohan Prasad (supra). But if the grant was by way of undue favour, arbitrary, malafide, ultra vires and/or void ab initio, recovery of public money should be the normal course. In such cases of clear disobedience of policy or rules by ministerial action or clear dishonest decision causing undue loss to public money, action against the concerned authority may also be justify to prevent and discourage plunder of public money by sheer disregard of clear law. The constitutional schemes of rule of law and fairness in public action support recovery in such cases unless law of limitation or - 15 - waiver etc. are successfully invoked to show that they prevent such a course in the facts of any particular case.” In the present case, it is not in dispute that the grant of benefit of 12% of pay to the petitioner in the grade of Head Clerk was by the competent authority. It is also admitted position that paragraph-3 of Standing Order No. 515 dated 7.5.1976 stood modified by Standing Order No. 125 dated 7.5.1983. From the pleadings of respondents in the counter affidavit and the subsequent office orders issued by the Board, it is amply clear that some confusion had prevailed in the Board with regard to the date with effect from which the said Standing Order No. 125 dated 7.5.1983 was to be applicable, which necessitated clarification. In that of view of the matter, it cannot be held that the decision of the competent authority of the Board granting benefit of 12% of pay to the petitioner, the second time, in the grade of Head Clerk was not bonafide, even if, for argument sake, the same is considered to be wrong, mistaken or erroneous. In the circumstances, in view of the law laid down by the Full Bench, this Court holds that the respondents were not legally justified in passing orders, as contained in Annexure–10, for - 16 - recovery of the amount of Rs.83,493.10 from the gratuity of the petitioner on account of alleged excess salary paid to him due to alleged wrong grant of benefit of 12% of pay to him in the grade of Head Clerk. Consequently, Annexure-10 is hereby quashed. The respondents are directed to pay the amount of gratuity of the petitioner, so withheld by virtue of the said Annexure–10, within two months from the date of receipt/production of copy of this order. In the result, this writ application is allowed in terms of the aforesaid directions and observations. There shall be no orders as to costs. ( J. N. Singh, J. ) A.H.