Central Administrative Tribunal - Ernakulam
C.Gopalan vs Wing on 21 March, 2012
CENTRAL ADMINISTRATIVE TRIBUNAL
ERNAKULAM BENCH
O.A No. 1017/2011
Wednesday, this the 21st day of March, 2012.
CORAM
HON'BLE Dr K.B.S.RAJAN, JUDICIAL MEMBER
HON'BLE Ms. K.NOORJEHAN, ADMINISTRATIVE MEMBER
C.Gopalan, S/o Keeran,
Driver, O/o the SSPO's, Calicut Division,
Calicut-673 003. - Applicant
(By Advocate Mr V.Sajith Kumar)
v.
1. Union of India represented by Secretary
to the Government,
Department of Post, Ministry of Communication,
Government of India, New Delhi-110 001.
2. The Chief Post Master General,
Kerala Circle, Thirivananthapuram-695 033.
3. Senior Superintendent of Post Office,
Calicut Postal Division,
Calicut-673 001.
4. Senior Post Master, Head Post Office,
Calicut-673 001.
5. Special Deputy Tahsildar,
KSFE, Kallai Road, Calicut-673 003. - Respondents
(By Advocate Mr Sunil Jacob Jose, SCGSC for R.1 to 4)
(By Advocate Mr Lal George for R.5)
This application having been finally heard on 15.03.2012, the Tribunal on
21.03.2012 delivered the following:
O R D E R
HON'BLE Dr K.B.S.RAJAN, JUDICIAL MEMBER A prohibitory Order dated 17th March, 2011 had been passed by the Collector/Authorized Officer of the State of Kerala addressed to the Senior Superintendent of Post Office, Kozhikode stating the the applicant herein has failed to pay the arrears due from him on account of certain loan borrowed by him as also failed to liquidate his liability as a guarantor of sum, both totalling Rs 2,02,414/-, and as such, the applicant has been prohibited and restrained until further order from receiving from the Senior Superintendent the salaries and allowances due from the Senior Superintendent to the applicant. Accordingly, the Senior Superintendent has withheld the gratuity payable to the applicant who stood retired on 30-11-2011. The act on the part of the Senior Superintendent of Post Office has been challenged by the applicant on the ground that the said authority has no jurisdiction or power to withhold gratuity both under the provisions relating to gratuity by which payment of gratuity is governed and also on the basis of authoritative pronouncement of the Apex Court and other courts.
2. To explain a little more elaborately, the Applicant , a driver in the office of the Respondents, borrowed a sum of Rs 80000/- from K.S.F.E, and as per the records of the said organization, he became a defaulter from 22-11-2008. He had also stood guarantee to another individual by name Mr. Apputty in respect of a loan taken by him and on the latter's failure to repay the loan, that liability also fell on the applicant. Provision exists under Section 7 read with section 19 and 80 of the Revenue Recovery Act for issue of Prohibitory Orders by the Authorized Officer. Invoking the said provisions the Authorized Officer had issued the Prohibitory Order as stated above and for recovery of the amount from the Gratuity of the applicant and in pursuance of the same, the Senior Superintendent of Post Offices has thus withheld the DCRG payable to the applicant under the provisions of the CCS(Pension) Rules. And, the applicant has challenged the same before this Court.
3. Initially, it was only the Postal Authorities that had been impleaded as respondents. However, since the relief sought in the Application included quashing of the Recovery Order issued by the Special Tahsildar, K.S.F.E. the applicant moved a Misc. Application for impleading the Special Tahsildar, K.S.F.E. and the same was allowed.
4. Respondents have contested the O.A. The Assistant Superintendent of Post Offices in his reply on behalf of the Postal Authorities maintained that in pursuance of the prohibitory order, the amount has been withheld, while the impleaded respondent relied upon the provisions in the Revenue Recovery Act for his action.
5. Counsel for the applicant submitted that the power of the authority under the Revenue Recovery Act cannot be questioned as long as the same does not come in conflict with any other provisions of the Act. For example, Gratuity has to be paid in tact, save for adjustment of government dues, which are provided for in the very Rules. The term Government Dues is duly defined in the Rules and the same restricts the expression Government only to Central Government. Recovery of DCRG by the Revenue Officer may be enjoying power to issue prohibitory order in respect of DCRG payable under the KSR Rules, but not under the CCS(Pension) Rules, 1972. If it were that the said Revenue Recovery Act contained a non-obstanti clause, it could perhaps be possible to contend such an order by the authorized officer is permissible. Even then it is doubtful for, the Apex Court has held categorically that DCRG is incapable of being attached against even any decree of competent court, as long as the character of the said DCRG remained in tact. In the case of Union of India vs Wing Commander Hingorani (1987) 1 SCC 551, the Apex Court had referred to to its earlier decision in Jyoti Chit Fund (AIR 1976 SC 1163), and extracted the passage relating to the time upto which the DCRG retains its character. In that case, the Apex Court held that DCRG like pension and provident fund amounts retains the character until it reaches the hands of the employee. The reality of protection is reduced to illusory formality if interpreted otherwise.
6. The counsel, after referring to the above case, cited a recent decision of the Apex Court in the case of Radhey Shyam Gupta vs Punjab National Bank (2009) 1 SCC 376 wherein the life span of the character of DCRG money is extended. The Apex Court has held that except for the decision in Jyoti Chit Fund and Finance Case where a contrary view was taken, the consistent view taken thereafter supports the contention that merely because the fact that gratuity and pensionary benefits had been received by the applicant in cash, it could no longer be identified as such retiral benefits paid to the applicant. The counsel for the applicant further argued that in their counter, the respondents have relied upon the decision of the Kerala High Court in the case of Manni vs Divisional Forest Officer wherein, the act of the authorized officer in recovering the dues from DCRG in respect of liabilities towards KSFE had been held valid. The counsel stated that a perusal of the judgment would show that the DCRG in that case related to the State Government service unlike the case of the applicant herein and that the KSR provides for such a recovery based on the consent given by the parties. That judgment thus, has no application, argued the counsel for the applicant.
7. Counsel for the respondents 1 to 4 justified their stand quoting the order passed by the authorized officer, while counsel for respondent No. 5, the KSFE relied upon the decision in the case of Manni (supra).
8. Arguments were heard and documents perused. Encroachment upon the DCRG money of a Central Government employee is prohibited by the statutory rules vide the CCS (Pension) Rules. These Rules provide as under:-
"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 oustanding till the date of retirement of the Governemt 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, if any;
(b) dues other than those pertaining 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)."
9. In addition, certain dues such as dues payable to local bodies and cooperative societies have been held to be not Government dues. (Ministry of Finance U.O. No. 2896-ETA/60 dated 31-08-1960 in File No. 10(14)E V/60. And, the expression 'Government dues' does not include dues while on deputation save when the Central Government Servant gives in writing admitting the dues and for adjustment for such recovery from the DCRG, vide Ministry of Finance OM No. F 14(9)-E V/66 dated 02-09-1967. Agreeing for such adjustment when the applicant herein was not a deputationist to KSFE would not give any lever to the respondents to recover or adjust the dues by the applicant to KSFE from the DCRG payable to the applicant.
10. Expressions "Government" and "government dues" referred to in Rule 71 and 73 are defined in Rule 3 of the CCS(Pension) Rules, 1972 as under:-
(i) Government means the Central Government
(ii) Government dues means dues as defined in sub rule (3) of Rule 71.
11. In fact, even in respect of Central Government dues, if there be a dispute and the government servant refuses to admit the dues as payable, or refuses to agree for adjustment of such dues from his gratuity, such dues could be recovered either by persuading him to agree for such adjustment or else only by seeking recourse to courts of law. (Ministry of Finance letter No. F 7(28) E V/53 dated 25-08-1958.)
12. As regards following the precedents, Jyoti Chit Fund (supra) case refers to the Gratuity payable under the Payment of Gratuity Act, which Act does not govern the applicant, as his case is covered only under the CCS(Pension) Act, 1972. Again, in so far as the decision in the case of Radhey Shyam Gupta (supra) is concerned, the same too relates to a nationalized bank which is not governed by the CCS(Pension) Rules, 1972. We may, of course, follow the ratio therein, subject to the conditions that the same is not inconsistent with the statutory provisions. For, as held by the Apex Court in the case of State of Madhya Pradesh vs Devendra (2009) 14 SCC 80, "14. Needless to say, the directions are subject to provisions of the Act, the Regulations and the Code. In case of conflict statute itself prevails.
13. In so far as the decision of Radhey Shyam Gupta (supra) relied upon by the counsel for the applicant, the ratio could be applied to the facts of the case as the Pension Rules, as stated above give some immunity to the Gratuity from attachment or recovery/adjustment save certain government dues.
14. In so far as DCRG governed by the CCS (Pension) Rules, 1972, the Apex Court has dealt with the same in the case of Jarnail Singh vs Secy, Ministry of Home Affairs (1993 (1) SCC 47, wherein the Apex Court has inter alia held as under:-
"Rule 69(1)(c) provides that no gratuity shall be paid to the Government servant until the conclusion of the departmental or judicial proceedings and issue of final orders thereon. This provision is indicative of the power to withhold payment of gratuity and its payment being subject to the final outcome of any pending departmental or judicial proceeding against the Government servant. Rules 71 and 73 relating to recovery and adjustment of Government dues and the express provision in Rule 73(3) for adjustment of dues against the amount of death-cum-retirement gratuity payable to the Government servant also reinforce this conclusion. Article 366 of the Constitution of India contains the definitions for the purpose of the Constitution and there in clause (17) is defined `pension' to include gratuity as well. This definition of `pension' in the Constitution also indicates that conceptually the term `pension' includes gratuity. In Rule 3(1)(o) of the Central Civil Services (Pension) Rules, 1972, the term `pension' is defined to include gratuity except when the term `pension' is used in contradistinction to gratuity, in consonance with the basic concept."
15. The dues in respect of which the prohibitory orders for withholding of DCRG have been passed do not come within the above definition.
16. The only point left to be considered is that the agreement executed between KSFE and the applicant provides for recovery of the dues by KSFE from the DCRG. The question is whether the same could be stultified by the applicant taking shelter under the protection available under the Pension Rules and whether the Tribunal could be a party for breach of such contract. Answer to this question is not far to seek. As discussed above, the CCS(Pension) Rules do not provide for adjustment from the DCRG of dues other than Government dues. As such, any term in the agreement or contract agreeing for such adjustment is contrary to the provisions of the Rules. In the case of Union of India vs A.K. Pandey (2009) 10 SCC 552 the Apex Court has held as under:-
"20. It is well established that a contract which involves in its fulfilment the doing of an act prohibited by statute is void. The legal maxim a pactis privatorum publico juri non derogatur means that private agreements cannot alter the general law. Where a contract, express or implied, is expressly or by implication forbidden by statute, no court can lend its assistance to give it effect. (See Melliss v. Shirley Local Board (1885) 16 QBD 446.) What is done in contravention of the provisions of an Act of the legislature cannot be made the subject of an action."
17. Thus, even if the applicant has consented for such a recovery, since there is a statutory prohibition for such adjustment (save government dues), that part of the contract is not capable of execution.
18. Now a word about the obligation on the part of the employer, i.e. the Postal Authorities to execute the provisions of the Pension Rules governing the government servants with intent and spirit. They can act upon such prohibitory orders or other directions issued on the strength of the Statutes of the State Government only if these are not inconsistent with the Central Statutes. Otherwise, they are not under any legal obligation to the authorities to act contrary to the statutory provisions. This point is stressed here, as in many cases, the KSFE on the basis of the decision in Manni (supra) may, in all expectation, be getting agreement executed from the Central Government employees for such adjustment as they do in the case of State Government Employees. The marked difference being that whereas the State Government rules provide for such adjustment, while the CCS(Pension) Rules, 1972 do not so provide, such an agreement cannot be entered into and even if the employee agrees, the Respondents cannot execute that part of the agreement as the same is contrary to the rules.
19. As such, the OA succeeds. It is declared that the direction given by the Senior Superintendent of Post Offices to the Senior Post Master, Calicut HO vide order dated 14-07-2011 is without jurisdiction and is violative of the provisions relating protection of gratuity available under the CCS(Pension) Rules, 1972. Accordingly the same is quashed and set aside. As such, the applicant is entitled to the release of the withheld DCR Gratuity or other terminal benefits. Respondent No. 2 and 3 are directed to release the withheld terminal benefits of the applicant within a period of 2 months from the date of communication of this order. Failure to release the same within the aforesaid period would entail the liability of payment of interest @ 9% from the 01-01-2012 (one month after the date of retirement of the applicant) till the date of payment. In case such delay is caused due to negligence or the recalcitrant attitude of any of the authorities in the Respondents' organization, as held in the case of Lucknow Development Authority vs M.K. Gupta (1994) 1 SCC 243 wherein the Apex Court has held that direction may be given to the department concerned to pay the amount from the public fund immediately but to recover the same from those who are found responsible for such unpardonable behaviour by dividing it proportionately where there are more than one functionaries.
20. Under the above circumstances, there shall be no orders as to costs.
K.NOORJEHAN Dr K.B.S.RAJAN ADMINISTRATIVE MEMBER JUDICIAL MEMBER trs