Pension recovery from retired officials is impermissible : High court of Judicature at Calcutta

Sujan Kumar Ghosh V. State Of West Bengal High Court Of Judicature At Calcutta Writ Petition No. 5600Of 2010 14 02 2017 Sujan Kumar Ghosh State Of West Bengal HON BLE JUSTICE SAMAPTI CHATTERJEE J. 2017CLJ 122 2017CLJ 177 2 EDULC 21 2017 LIC 3490 2017) 4 SLR 212 3 WBLR 490 2017 CAL HC 227 LQ CalHC 2017 165 Samapti Chatterjee J.—The petitioner has filed the present writ petition assailing the decision of the Director of School Education West Bengal passed on 14th 17th December 2009 thereby holding that the petitioner is liable to refund Rs. 1 40 840 as per the direction of Director of Pension and Provident Fund and Group Insurance under memo dated 16.05.2006 the pension payment order 2. The petitioner s case in a nutshell is as follows : That the petitioner was appointed as an Assistant Teacher on 3rd May 1967 at Jote Shibrampur Shikshaniketan under District South 24 Parganas South 24 Parganas. On 16th May 2006 the Pension Payment Order was issued wherefrom it revealed that a sum of Rs. 1 40 840 had been shown as overdrawn amount. Further the pension of the petitioner was sanctioned under a lesser pay scale that was allowed to the petitioner when he was in service It is submitted that during his service tenure the petitioner was never informed regarding the wrong fixation of the petitioner s pay scale by the authority. Unfortunately after retirement from the pension payment order the petitioner came to know that a sum of Rs. 1 40 840 has been deducted towards the overdrawn amount The petitioner made representation before the authority thereby ventilating his grievances. Since the authorities were sitting tight over the petitioner s representation therefore without finding any alternative the petitioner of 2008. That writ petition was disposed of by this Hon ble Court on 15th May 2008 thereby directing the Director of School Education West Bengal to dispose of the petitioner s representation by passing a reasoned order in accordance with law within eight weeks after giving an opportunity of hearing to the petitioner Pursuant to the said order the hearing was held by the Director of School Education West Bengal. On the basis of such hearing the impugned order was issued by the said Director of School Education thereby holding that the authority is entitled to recover from the petitioner s gratuity amount a sum of Rs. 1 40 840 which has been wrongly overdrawn by the petitioner Submissions of the Learned Advocates 3. Mr. Ekramul Bari learned Advocate appearing for the petitioner submitted that it is trite law as laid down by the Hon ble Supreme Court in catena of decisions which has been followed by the Hon ble Division Bench as well as the Hon ble Single Bench of this Hon ble Court in several matters. that recovery from the retired employees is impermissible which however has been done in the instant case. In support of his contention learned Advocate for the petitioner relied on the decisions reported in 1994 SCC 521 and 2009 Supreme Court Cases 475 Supreme Today 671 etc.) Paragraph 12 at pages 19 and 20 of the aforesaid decision is quoted below : Para 12 It is not possible to postulate all situations of hardship which would govern employees on the issue of recovery where payment have mistakenly been made by the employer in excess of their entitlement. Be that it may bases on the decisions referred to herein above we may as a ready reference summarise the following few situations herein recoveries by the employers would be impermissible in law i) Recovery from employees belonging to Class III and Class IV service Recovery from retired employees or employees who are due to retire within one year of the order of 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 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 4. Learned Advocate for the petitioner also relied on a Hon ble Division Bench decision delivered on 9th September 2013 in W.P. S.T. No.216 of 2013 43 SCD 829 where the Hon ble Supreme Court directed the respondent petitioner to refund excess amount on the basis of the undertaking given by him on 16th July 1987 and was promoted as Additional Civil Judge on 28 August 1997 in the judicial service of the State. By a notification dated 28 September 2001 a pay scale of Rs.10000 325 15200 was allowed under the Haryana Civil Service and Haryana Superior Judicial Service Revised Pay Rules 2001. Under the rules each officer was required to submit an undertaking that any excess which may be found to have been paid will be refunded to the Government either by adjustment against future payments due or otherwise 3. The Respondent furnished an undertaking and was granted the revised pay scale and selection grade of Rs.14300 400 18000 300. While opting for the revised pay scale the Respondent undertook to refund any excess payment if it was so detected and demanded subsequently. The revised pay scale in the selection grade was allowed to the Respondent on 7 January 2002 4. The Respondent was placed under suspension on 19 August 2002 and eventually was compulsorily retired from service on 12 February 2003 5. In the meantime this Court in Civil Writ 1022 of 1989 accepted the recommendations of the First National Judicial Pay Commission and Haryana Superior Judicial Service Revised Pay Rules 2003 were notified on 7 May 2003 6. In view thereof the pay scales of judicial officers in Haryana were once again revised with effect from 1 January 1996. An exercise was undertaking for adjustment of excess payments made to judicial officers following the notification of the revised pay rules. On 18th February 2004 a letter for the recovery of an amount of Rs.1 22 003 was served upon the Respondent pursuant to the direction of the Registrar of the High Court 7. The Respondent challenged the action for recovery in writ proceedings under Article 226. The petition was allowed by the impugned judgment of the High Court. The High Court found substance in the grievance of the Respondent that the excess payment made to him towards salary and allowance prior to his retirement could not be recovered at that stage there being o fraud or misrepresentation on his part 9. In Shyam Babu Verma it is held by a Three Judge Bench that since the petitioners received the higher scale due to no fault of theirs it shall only be just and proper not to recover any excess amount already paid to them. On the basis of that Shyam Babu Verma case subsequently no recovery was made by the authority Thereafter in Syed Abdul Qadir Case a Three Judge Bench of the Hon ble Supreme Court held that recovery of excess amount is prohibited by the authorities where there is no misrepresentation or fraud on employee s part and excess amount has been paid by applying a wrong principle or wrong interpretation of a rule order. Such relief is granted not because employee has any right but because the Court exercises its equity jurisdiction so as to avoid hardship to an employee who is not at fault 10. Subsequently in Chandi Prasad Uniyal and Ors v. State of Uttarakhand and Ors. Case reported in 8 thereby laying down five criteria when recovery can be made or not against the employee. Those five criteria have been quoted above It is not out of place to mention that the series of matters challenging the overdrawal appeared before the Learned Singh Judge of this Court the Learned Single Judge referred the matter before the Hon ble Chief Justice The Hon ble Chief Justice constituted Larger Bench comprising of the Hon ble The Chief Justice and other Hon ble Judges. The Larger Bench disposed of the matter without answering the reference thereby sending the matter to the Learned Single Judge as the issues referred in those matters have already been decided in "Rafiq Masih" case 11. Thereafter series of matters were decided by the Learned Single Judge on the basis of those five criteria laid down in "Rafiq Masih" case CHN Page 136 where the Hon ble Division bench relying on the Hon ble Supreme Court decision reported in AIR 1957 SC 1269 held that even if undertaking was given but after retirement deduction from the gratuity amount without giving any opportunity of hearing to the petitioner when the petitioner was in service cannot be sustained since it is an administrative order which causes civil consequences. Accordingly the Hon ble Division Bench affirmed the Trial Court Judgment without any interference 13. In Col. B.J. Akkara v. Govt. of India 11 SCC 709 the Hon ble Apex Court held that it has consistently granted relief against recovery of excess wrong payment of emoluments allowances from an employee if the excess payment was not caused due to any misrepresentation or fraud on the part of the employee or 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 a rule order which is subsequently found to be erroneous. Such relief is granted by Courts not because of any right of the employees but in equity in exercise of judicial discretion to relieve the employee from the hardship that will be caused if recovery is implemented. A Government servant particularly one in the lower rungs of service would spend whatever emoluments he receives for the upkeep of his family. If he receives an excess payment for a long period he would spend it genuinely believing that he is entitled to it. As any subsequent action to recover the excess payment will cause undue hardship relief is granted in that behalf. But where the employee was aware that the payment received was in excess of what was due or wrongly paid or where the error is detected or corrected within a short time of wrong payment Courts will not grant relief against recovery. The matter is in the realm of judicial discretion 14. The form of declaration clearly means that even at the highest recovery of excess payment could be made by the State from the salary bill of the petitioner during the tenure of his service. In my opinion such a declaration would not entitle the State to recovery any over drawals from the pensionary benefits of the petitioner after 15. I draw support to my view taken above from the decision of a Division bench of this Court in the Court of Asutosh Bhattacharya v. The State of West Bengal 2 CLT 339 in which the Hon ble Division Bench considered the decisions in Shyam Babu Verma Syed Abdul Qadir Chandi Prasad Uniyal and held that no recovery can be made from a retired employee who is due to retire within one year from the order of recovery 16. In view of the discussions above I hold that no recovery could be made from the retiral benefits of the petitioner and the deduction of the sum of Rs. 1 40 840 was clearly contrary to law 2 CAL LT Page 339 HC) and by Hon ble Single Bench decision reported in 3 CAL LT Page 308 (Dhirendra Nath Purkait v. The State of West Bengal and Ors 17. In my considered view the cited decision of the Hon ble Division Bench of the Hon ble Supreme Court under Article 141 was rendered in a different fact situation. In that cited decision the petitioner respondent was a suspended employee of the subordinate judiciary under High Court of Punjab and Haryana. The respondent furnished an undertaking and he was granted the revised pay scale and selection grade. Subsequently the recommendation of the First National Judicial Pay Commission was accepted by the Hon ble Court. Thereupon the Haryana Civil Services and Haryana Superior Judicial Service Revised Pay Rules 2003 were notified on 7th May 2003 In the said backdrop the pay scale of Judicial Officers in Haryana were once again revised with effect from 1st January 1996 where the petitioner exercised his undertaking for adjustment of excess payment made to Judicial Officers following the notification of the Revised Pay Rules. But in the case in hand the facts is totally different No such recommended Pay Commission has ever been accepted by the petitioner. Here the petitioner s pay scale was sanctioned according to ROPA and such benefit of ROPA was revised time to time as per subsequent ROPA 18. On the basis of that in the latest judgment in Rafiq Masih Case the Hon ble Court laid down five criteria. Therefore in my considered view since the facts of the case in hand and the fact of the case in Shyam Babu Verma and Sahib Ram Verma are same and the decision rendered subsequently in Rafiq Masih case where the Hon ble Supreme Court laid down five criteria the authority are not entitled to recover a sum of Rs 1 40 840 from the petitioner. Therefore the impugned decision for recovery from the petition after retirement cannot be upheld by this Hon ble Court 19. Accordingly I have no hesitation to hold that the impugned order issued by the respondent authority is bad in law which is set aside and quashed. The respondent authorities are directed to refund the said amount of Rs 1 40 840 with interest at the rate of 8% per annum to the petitioner to be calculated from the date of retirement till the date of actual payment without any delay but positively within a period of eight weeks from the date of communication of this order failing which additional interest @ 2% per annum shall be payable to the the formalities 20. With the aforesaid directions this writ petition is disposed of without any order as to costs 21. Urgent photostat certified copy of this judgment if applied for be supplied to the parties after fulfilling all Disclaimer: Legitquest has made all efforts to avoid any omission and or mistake in publishing this document and adding editorial and other enhancements. 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Summary:    sujan-kumar-ghosh-v-state-of-west-bengalThe question as to whether pension recovery from retired officials is permissivle in cause of overdrawn money was examined by  THE HIGH COURT OF JUDICATURE AT CALCUTTA , consisting of Justice samapti chatterjee in the matter of  Mr. Sujan Kumar Ghosh Vs. State of West Bengal [2017 CAL HC 227]  on 14.02.17. The facts of the case were that the petitioner was appointed as an Assistant Teacher on 3rd May, 1967 at Jote Shibrampur, Shikshaniketan under District-South 24 Parganas. After 39 years of service upon attending the age of superannuation the petitioner retired from his service on 1st June, 2006. It is revealed that pay of the petitioner was time to time refixed by the respondent no.3 the District Inspector of School (S.E) South 24- Parganas. On 16th May, 2006 the Pension Payment Order was issued wherefrom it revealed that a sum of Rs. 1,40,840/- had been shown as overdrawn amount. Further the pension of the petitioner was sanctioned under a lesser pay scale that was allowed to the petitioner when he was in service.during his service tenure the petitioner was never informed regarding the wrong fixation of the petitioner’s pay scale by the authority. Unfortunately, after retirement from the pension payment order the petitioner came to know that a sum of Rs. 1,40,840/- has been deducted towards the overdrawn amount. The learned counsel on behalf of the petitioner contended that recovery from the retired employees is impermissible, which however, has been done in the instant case. It is not possible to postulate all situations of hardship, which would govern employees on the issue of recovery, where payment have mistakenly been made by the employer, in excess of their entitlement. The learned counsel on behalf of the respondent contended that since the undertaking has been given by the petitioner therefore the authority is entitled to recover the excess amount paid to the petitioner even after the retirement.