Central Administrative Tribunal - Mumbai
Machindra J Bamne vs Labour on 19 November, 2024
1 OA No. 146/2024
Central Administrative Tribunal
Mumbai Bench: Mumbai
ORIGINAL APPLICATION NO.146/2024
Order reserved on: 06.08.2024
Order pronounced on: 19.11.2024
Hon'ble Mr. Justice M.G. Sewlikar, Member (J)
Hon'ble Mr. Shri Krishna, Member (A)
Machindra J. Bamne, Age 45 years, A2/2004, Sheth
Midori, Hanuman Tekdi, Shiv Vallabh Road, Ashokvan,
Dahisar (East) Mumbai- 400 068. -Applicant
(By Advocate Mr. K.K. Holambe Patil a/w Mr. Vishal
Shirsat)
Versus
1. Union of India, Through its Secretary, Ministry of
Labor & Employment, North Block, New Delhi-110 001.
2. Central Board of Trustees, Through its Chairman,
Ministry of Labor and Employment, Shram Shakti Bhavan,
Rafi Marg, New Delhi- 110 001.
3. Neelam Shami Rao, Central PF Commissioner and
CEO, Central Board of Trustees (EPFO), 14, Bhikaji Cama
Place, New Delhi- 11 00 66.
4. Additional Central Provident Fund Commissioner,
Zonal-2, 6th Floor, Vardhman Commercial Complex, Road
No. 16, Wagle Estate, MIDC, Thane, Thane- 600 604.
5. Regional PF Commissioner, Kandivali, Bhavishya
Nidhi Bhavan, 4th to 7th Floor, MTNL, telephone Exchange
bldg.., Dr. B.R.A. Road, Charkop Sector No. 8, Charkop
Market), Boraspada Road, Kandivali West, Mumbai,
Maharashtra- 400067.
2 OA No. 146/2024
6. Regional PF Commissioner, Bhavishya Nidhi Bhavan,
P.B. No. 572, Highlands, Silva Cross Road, Attavar,
Mangaluru, Karnataka- 575002.
- Respondents
(By Advocate: Ms. Ranjana Todankar)
ORDER
By Mr. Shri Krishna, Member (A) The applicant, aggrieved by the impugned order to deduct amount of Rs.7,13,406/- from his salary on account of overpayment to one member, has filed this OA under Section 19 of the Administrative Tribunals Act, 1985 to claim following reliefs:-
"8.(a)That this Hon'ble Tribunal be pleased to revoke and/or set aside the impugned Order No.ZO/Mumbai/II/2023- 24/35(8)2021/OPRC/KE/471 dated 14th July 2023 passed by Respondent No. 4 and Order No. MH/PF/RO/KND(East)/OPRC/2023-24/20 dated 28th July 2023 passed by Respondent No.5;
(b)Any other or further order may be pass in the interest of justice;
(c) Cost of this Application may be provided."
2. Brief facts as stated in the OA are that the applicant was attached as Dealing Assistant with the respondent No. 4's office at Kandivali. He was one of the officers who was looking after 3 OA No. 146/2024 processing and dealing with the claims of various employees of various companies. Jet Airways was one of such companies. The claims of employees of the above company were handled by the applicant along with others.
2.1 The claim of Mr. Jose Uzcategut Wainer International Worker who was one of the employees of JET Airways has PF Account with the respondents' department. He filed Form No. 19 offline claim for withdrawal of benefits accrued in his account amounting to Rs. 78,41,948/-. 2.2 The claim was processed by the applicant after deducting 10% TDS which comes to Rs. 7,84,195/- and amount of Rs. 70,57,753/- was transferred to the said employee's bank account with Axis Bank.
2.3 Subsequently, the amount of Rs. 70,57,753/- transferred to Claimant's Bank was returned to office of the respondents. Later on, the settlement amount of Rs. 78,41,948/- was credited to the Claimant's account on 04th April, 2019 without deducting the TDS amount of 4 OA No. 146/2024 Rs.7,84,195/- which was already credited to Income Tax Account.
2.4 It is the case of the applicant that whenever any settled claim is refunded / returned to the bank, the said amount is credited in the account of the employee by Cash Section, which reflects in the system. The said refunded / returned amount by the bank is to be reprocessed and the said amount is to be again deposited in the bank account of the employee concerned. The said process is called as re- issue of intimation. The re-issue of intimation is always processed by Cash Department and intimation regarding payment through NEFT (return/rejected) undelivered intimation appears in the system. Subsequently, the hard copy of the re-issue intimation is forwarded by Cash Section to the concerned Dealing Assistant, the applicant in the present case. The applicant has received such memo dated 8th November, 2018. After perusal of the said hard copy, the applicant processed re-issue claim and forwarded 5 OA No. 146/2024 to the higher authority. The contents of this re-issue are system generated and are under the control of Cash Department. The applicant received a letter dated 02nd August, 2023 from respondent no. 5 along with the impugned order and other documents. By the said impugned order, respondent nos. 4 and 5 were directed to deduct overpayment to the tune of Rs. 7,13,406/- from the salary of applicant and Rs. 3,84,141/- from the salary of Mr. Vijay Jarpe, Assistant PF Commissioner.
2.5 The applicant vide letter dated 11th August, 2023 submitted his representation in respect of the impugned orders which was rejected by respondent no. 5 and applicant was directed to remit the amount of Rs. 7,13,406/-. 2.6 The applicant demanded information under RTI Act 2005 regarding the status of the amount of Rs. 7,84,195/- deducted as TDS against PAN of Mr. Jose Uzcategut Wainer - the Claimant. However, he has not received any information regarding the TDS which was deducted by the 6 OA No. 146/2024 applicant and deposited in the Income tax Account against the said PAN of Mr. Jose Uzcategut Wainer. The applicant was served with the Minutes of the Meeting of "Over Payment Review Committee" ("OPRC") held on 14th July, 2023. In the said meeting, the Committee has resolved and directed respondent no. 4 to investigate whether there was any manual intervention / system issue at the time of settlement of the claim and also whether there was any fraudulent intent involved. The said committee also directed respondent no. 4 to fix the responsibility of over payment. 2.7 It is the case of the applicant that respondent no. 4 is not following the directions of OPRC to fix the responsibility of the over payment by following due process of law and more particularly by studying as to whether there was manual intervention or there was system issue. It has been submitted that had the respondent no. 4 complied with the directions of OPRC and investigated as to whether there was any manual 7 OA No. 146/2024 intervention / system issue, then respondent no. 4 ought to have come to the conclusion that there was system issue and none of employees are responsible for the said over payment. It has been further submitted that impugned order passed by respondent No.4 regarding the deduction of overpayment is without assigning any reasons.
2.8 It has been further submitted that the contention of the applicant in his
representation dated 05th October, 2023 that UDA clause does not apply to international workers since these accounts are not to be treated as inoperative accounts as per the Notification PIB dated 14th May 2012, released by Ministry of Labour and Employment, Government of India which has not been considered by respondent No.4. Respondent No.4 simply says that such Gazette Notification is not available. Non-availability of the Gazette is no ground for rejection of the explanations / representations made by the applicant. It has been submitted that as per the 8 OA No. 146/2024 head office letter No.IWU/7(17)209/2816 dated 25th February, 2012 Para 8(vii), the provisions of Inoperative Account would not be applicable to International Workers Accounts. The said legal provision has not been considered by respondent No.4. It has been submitted that respondent No.4 erred in holding that Para 83 of EPF Scheme 1952, only deals with international worker under which para 72 deals with payment of provident fund for IW workers and the same is not amended. He further submits that the respondent No.4 erred in not considering the representation of the applicant that TDS once deducted had been recouped at the time of re- issue of amounts and as such there was no scope for manual intervention. The erroneous payment is purely software issue.
2.9 It has been further contended that respondent No.4 has committed an error in not considering the representation of the applicant that (1) manual accounting procedure; (2) constitution of overpayment review committee; 9 OA No. 146/2024 (3) methodology prescribed for arriving at overpayment; (4) action of recovery of amount from the staff and officers in respect of the alleged over payment etc are not be considered, if any Rules are not framed in accordance with Section 21(3) of the EPF and MP Act 1952. It has been further submitted that as per Circular dated 30th September 2015, the recovery of overpayment from officials will be made only when the responsibility of such over payment are fixed by OPRC and not otherwise. In the present case, OPRC has not fixed the responsibility of the applicant in respect of the disputed overpayment and, as such, the impugned order is illegal. 2.10 It has been further averred that another officer Mr. Vijay Jarpe from whose salary alleged over payment has been started deducting had challenged the said impugned order before the Central Administrative Tribunal vide OA No. 310/00895/2023 in which Chennai Bench has granted interim stay to the operation and execution of the impugned order challenged 10 OA No. 146/2024 therein qua Mr. Vijay Jarpe. Finally, it has been submitted that in view of the above facts, impugned order should be quashed and set aside.
3. On notice, the respondents have filed their reply and contested the OA. It has been contended by the respondents that the Overpayment Committee has observed that Form -19 ((Offline Claim for withdrawal of benefit) has been settled on 05.10.2018 in respect of one Mr. Jose Uzcategut Wainer having PF Code No. KDMAL/ 39804/41228 for total amount of Rs. 78,41,948/- in which 10% TDS amount of Rs. 7,84,195/- was deducted at the time of settlement and settled amount of Rs. 70,57,753/- was transferred to member's bank Account No 912010010145080 with Axis Bank, Sakinaka, Andheri (E) branch (IFSC UTIB0000741). The Cash Section confirmed that the TDS amount of Rs 7,84,194/- is deposited with Income Tax Department against PAN Card No. AAYPU7040E of Mr. Jose Uzcategz Wainer. 3.1 It is further contended that subsequently, due to some reason net PF 11 OA No. 146/2024 settlement after deduction of TDS i.e. Rs 7057753/- was returned back on 08.11.2018. As per the re-credit advise generated by Cash Section the settlement amount of Rs 7841948/- was credited to the member's PF account KDMAL/39804/41228 on 04.01.2019. Further Re- issue claim Form 19 vide receipt claim ID KDMAL191100002217 dated 22.11.2019 for resettlement of returned amount was settled for Rs 7841948 on 25.11.2019 without deducting TDS. Thus, all these resulted in excess payment of Rs 784195/- to the member. Excess interest was paid to the member while settlement of his PF dues. As per records, member's date of birth is 19.03.1950 and date of cessation of PF membership is 18.03.2015. As per para 72(6) and as per para 60(6) of the scheme, no interest shall be credited to the account of the member from the date on which it has become inoperative Account. However, at the time of settlement interest was credited upto September 2018 which resulted in excess payment of interest amounting 12 OA No. 146/2024 to Rs 313352/-, as such the total overpayment amount was Rs. 10,97,547/-.
3.2 It is further contended that as per OPRC Minutes, the committee has directed the RPFC-1, Regional Office, Kandivali to fix the responsibility of overpayment in the said case as per 110 Circular No. WSU/28 (1) 2003/Del.Vol II/13112 dated 06.10.2015. Accordingly, respondent No.5 fixed the responsibility of overpayment to recover Rs. 7,13,406/- i.e. 65% of the overpaid amount. i.e. Rs. 10,97,547/- from Shri Machindra Bamne, SSSA and Rs. 3,84,141/- i.e. 35% of the overpaid amount i.ec. Rs. 10,97,547- from Shri. Vijay Japre, APFC (being UDA Claim) It has been submitted that the overpaid amount is public money and cannot be waived off. 3.3 It is contended by the respondents that it is necessary for the cash section to enter complete amount including TDS in system software to re-credit the amount in member's account. 13 OA No. 146/2024 3.4 Respondents contend that while processing re-issue claim, Dealing Assistance (Applicant official) has selected wrong reason option of exit as "other cause beyond the control of the member" which is a manual intervention while selecting the wrong option which caused overpayment. Therefore, it prima facie reflects as clerical error at the level of initiator and supervisory error at the level of approver. In response to applicant's letter dated 05.10.2023, Regional Office, Kandivali (E) has replied to the Applicant vide letter No. MH/PF/RO/KND(East)/OPRC/2023-24 dated 25.10.2023 stating that all the issues raised by OPRC minutes dated 14.07.2023 & 04.09.2023 have been replied.
3.5 Respondents denied that the Applicant has not received any information regarding the TDS which was deducted by the Applicant and deposited in the income tax account against the said ΡΑΝ ΛΛΥPU7040E of Mr. Jose Uzcategut Wainer-the Claimant. It has been submitted that 14 OA No. 146/2024 vide letter MH/PF/RO/KND-II/RTI/324/2023-24/ 482 dated 08.12.2023 the Regional Office, Kandivali (E) has already informed the same to the Applicant.
3.6 The Regional Office, Kandivali (E) has properly analyzed the case and come to the conclusion that it is clerical error, and no fraudulent intent is involved, however, it is public money and liability has to be fixed. 3.7 Respondents contend that the member has been paid Rs 10,97,547/- excess at the time of settlement of claim on 05.10.2018 and re-issue claim on 22.11.2019 and the said fact reported by the Account Division to the Overpayment Review Committee, Kandivali Mumbai vide letter no MH/PF/RO/KND-II/GR 156/39804 /41228/2023- 24/138 dated 06.06.2023. The Regional Office, Kandivali has forwarded the said case to the Chairmen of Overpayment Review Committee i.e. Addl CPFC, Thane Zone as per Head Office directions vide No WSU/28(1)2003/Delegation/Vol- II/17072 dated 05.01.2017 & No. Manual/28(1)2019 15 OA No. 146/2024 /Delegation /Vol-III dated 29.01.2019, the RPFC-In charge of the concerned RO shall submit the overpayment cases to ACC (Zones) for appropriate action and ACC (Zone) should conduct such reviews on a monthly basis. Accordingly, the Chairmen of the OPRC committee has fixed the responsibility vide OPRC minutes No ZO/Mum- II/2023-24/35(8)2021/OPRC/KE /471 dated 14.07.2023 for settlement of claim as per ratio 65% & 35% of the overpaid amount in respect of Dealing Assistant & Assistant PF Commissioner respectively as per Head Office letter no WSU/28(1)2003/Dcl/Vol II/13112 Dated 06.10.2015. 3.8 Respondents further contend that as per circulars referred as above, there is no directions to call the applicant to the meeting or to take his views in writing before ordering for recovery of excess payment while fixing the responsibility of overpaid amount from Head Office, New Delhi. However, in response to applications dated 16.08.2023 and 05.10.2023 against over payment which was replied vide this 16 OA No. 146/2024 office letter No MH/PF/RO/KND (East)/OPRC/2023-
24/28 DATED 04.09.2023 &No MH/PF/RO/KND(East)/OPRC/2023- 24/44 dated 31.10.2023, respectively. 3.9 Respondents further contend that it is
an admitted fact that the committee has directed to RPFC-I to investigate whether there was any manual intervention/system issue at the time of settlement of claim whether there was any fraudulent intent involved, it is informed that RO, Kandivali has called clarification from EDP cell and accordingly, EDP cell informed vide letter dated No/MIL/PF/KND- EasUEDP/2023-24/51 dated 30.08.2023 that after pulling of Assistant Director (IS) from the ROs and barring the backend entry to the application software, EDP is only handling Admin/Super admin functionalities and also there is no Data Processing Assistant for any technical input and neither there is any data processing involved. Further, there is no functionality available to investigate any manual intervention/system issue 17 OA No. 146/2024 at the time of settlement of claim and to determine fraudulent intent involvement in the case of overpayment. However, as part of re issue settlement procedure, it is necessary for cash section to enter complete amount including TDS in system software to re-credit the amount in member's account. While processing re-issue claim, Dealing Assistance (Applicant official) has selected reason of exit as "other cause beyond the control of the member" which has to be checked at approver level which is a manual intervention for IDS deductions. The Dealing Assistant i.e. the applicant in this OA selected the wrong option which caused overpayment. Therefore, it prima facie reflects as a clerical error at the level of initiator and supervisory error at the level of approver. Hence, RO, Kandivali has properly analyzed the case and also reported to the OPRC committee No. MH/PF/RO/KND (East)/OPRC/2023- 24/30 dated 06.09.2023 that it is clerical error, and no fraudulent intent is involved.
18 OA No. 146/2024
4. The applicant has not filed any rejoinder to the reply affidavit filed by the respondents.
5. During arguments, counsel for both the sides argued on the basis of pleadings filed on record and no new point was raised.
6. We have heard learned counsel for both the sides at length and perused the pleadings and documents filed on record.
7. The applicant claims that he was not responsible for overpayment of Rs.10,97,547/- credited to the account of Mr. Jose Uzcategut Wainer. He submits that no investigation was carried out whether it was due to system failure or a manual error. His further contention is that he has no role in overpayment as the same is processed by the cash section and, therefore, the recovery of Rs.7,13,406/- being 65% of overpaid amount ordered by the impugned order is bad in law.
8. The respondents, on the other hand, have submitted that the overpayment has been made as 19 OA No. 146/2024 the applicant has selected wrong reason option of exit as "other cause beyond the control of the member." They have further justified that as per the order of Employees' Provident Fund Organisation dated 30.09.2015, in the case of overpayment in settlement of claim, 65% overpaid amount to be recovered from the delinquent employee and 35% from the section supervisor and, accordingly, the order was passed on 28.07.2023 on the basis of recommendation of Over Payment Review Committee (OPRC) dated 14.07.2023. The applicant has challenged both these orders.
9. We find that the respondents in the reply affidavit have categorically stated that while processing reissue claim, Dealing Assistant (the applicant in the OA) has selected wrong reason option of exit as "other cause beyond the control of the member" which has to be checked at approval level which is a manual intervention for TDS deduction. The Dealing Assistant selected the wrong option which caused 20 OA No. 146/2024 the overpayment. Therefore, it is a prima facie clerical error at the level of initiator and supervisory error at the level of approver. The Regional Office (RO), Kandivali (E) has properly analyzed the case and also reported the Review Committee that it is a clerical error, there is no system failure and no fraudulent intent is involved.
10. The above assertion of the respondents has not been controverted by the applicant. Thus, the applicant appears to have accepted that there was a clerical error on his part. We have no doubt that if the public money is lost because of mistake on the part of any employee, it has to be recouped by recovering the same from the delinquent employee. However, the principles of natural justice must be followed. The submission of the respondents that there is no directions to call the applicant to the meeting or to take his views in writing before ordering for recovery of excess payment while fixing the responsibility of overpaid amount 21 OA No. 146/2024 from Head Office, New Delhi cannot be a ground for not hearing the applicant before ordering the recovery. Since the applicant was not given any opportunity of being heard before the impugned order was passed, we are of the view that the same has been passed in violation of principles of natural justice. Therefore, the impugned orders cannot be upheld. We, therefore, set aside the impugned orders. However, the respondents will be at liberty to take any further action as permissible in law after following the principles of natural justice.
11. In the result, the Original Application is allowed. Pending MAs, if any, stand closed. No order as to costs.
(Shri Krishna) (Justice M.G.Sewlikar)
Member (A) Member (J)
nk/ma.
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