Central Administrative Tribunal - Cuttack
Krushna Chandra Acharya vs Employees State Insurance Corporation on 25 May, 2022
OA 563/2019
1
CENTRAL ADMINISTRATIVE TRIBUNAL
CUTTACK BENCH
No. OA 563 of 2019
Present: Hon'ble Mr.Swarup Kumar Mishra, Judicial Member
1. Krushna Chandra Acharya, aged about 46 years,
Son of Udayanath Acharya, Qr. No.B/35, ESIC Staff
Colony, IRC Village, Nayapalli, Bhubaneswar (Group
'C')
2. Parthasarathi Das, aged about 56 years, Son of Late
Girish Chandra Das, At-Sriramnagar, PO/PS-
Madhupatna, Dist.-Cuttack.
3. Pradeept Kumar Pattnaik, aged ab out 50 years, Son
of Late B.N.Pattnaik, Qr. No. B/24, ESIC Staff
Colony, IRC Village, Nayapalli, Bhubaneswar.
4. Pahali Naik, aged about 57 years, Son of Late Anam
Naik, Qr. No.A/5, ESIC Staff Colony, IRC Village,
Nayapalli, Bhubaneswar.
5. Ajaya Kumar Satpathy, aged about 59 years, Son of
Bidhyadhar Satpathy, H/o Anirudha out,
At/PO/PS-Chandikhole, Dist.-Jajpur.
6. Goutam Charan Barik, aged about 57 years, Son of
Birabara Barik, N4/280, IRC Village, Nayapalli,
Bhubaneswar.
7. Baidyanath Majhi, aged about 51 years, ESIC Staff
Colony, J.K.Pur, Dist-Rayagada.
8. K.Sibaprasad Rao, aged about 50 years, Son of Late
K.Puru, Pattapole, Tantisahi, PO-Buxibazar, PS-
Cantonment Road, Dist.-Cuttack.
9. Niranjan Behera, aged about 49 years, Son of
Narayuan Behera, At/PO-Godisahi, PS-Baranga,
Dist.-Cuttack.
10. Manas Ranjan Acharya, aged about 47 years, Son of
Balaram Acharya, Vill/PO-Bali, PS-Gurudijhatia,
Dist.-Cuttack.
......Applicant
VERSUS
OA 563/2019
2
1. Union of India, represented through Ministry of
Labour & Employment, Employees State Insurance
Corporation, Regional Office, Panchadeep Bhawan,
Janpath, Bhubaneswar represented by its Regional
Director, ESI Corporation, Panchadeep Bhawan,
Janpath, Bhubaneswar - 22
2. Director General, Employees State Insurance
Corporation, Headquarters Office, Panchadeep
Bhawan, CIG Marg, New Delhi - 2.
......Respondents
For the applicant : Mr. B. P. Swain, counsel
Mr. L. Jena, counsel
For the respondents : Mr. A. P. Ray, counsel
Heard on : 17.05.2022 Order on : 25.05.2022
ORDER
Per Mr.Swarup Kumar Mishra, J.M. The applicants (38 in numbers) have filed this original application challenging the order of recovery dated 5.8.2019 (Annexure A/2) inter alia praying as under :
"......to issue a direction on Respondents No. 1 and 2 not to take any recovery action as per the office order at Annexure A/1 in case of the applicants of this OA.
And that this Hon'ble Tribunal may kindly pass any other direction/directions as deemed fit and proper in the interest of justice."
2. The brief of the case is that the applicants are Group 'C' and 'D' employees under the respondents. In terms of the extant rules OA 563/2019 3 they were availing leave encashment from time to time since 1980 to the year 2017.
3. Subsequently, the respondents decided to adopt the recommendation of the 7th Central Pay Commission came into effect from 2016. In the said recommendation the facilities of encashment of leave was scrapped away with effect from 01.01.2016. Thereafter Respondent No. 2 issued order dated 24.07.2018 (Annexure A/1) directing Respondent No. 1 to recover the payments made towards leave encashment to the employees of the corporation for the period from 2016 to 2017. Respondent No. 1 issued order dated 05.08.2019 (Annexure A/2) directing to refund the amount of leave encashment. Representations submitted did not yield any result this OA has been filed seeking the aforesaid relief.
4. Respondents have filed their counter in which they have inter alia stated that the applicants are governed by the provision made in Section - 17 (2) (a) wherein it was decided to discontinue the practice of the leave encashment to the ESIC employees, with effect from the date of implementation of the 7th CPC in ESIC and also to recover leave encashment facility given to any officer or staff, after implementation of 7th CPC. The respondents submitted that since 7th CPC was implemented w.e.f. 01.01.2016 and arrears of pay and other benefits were given to the applicants w.e.f. 01.01.2016, the order of withdrawal of leave encashment and consequential recovery cannot be treated on a different footing and the applicants are liable to refund amount they had availed in the year 2016 and 2017. Hence they have prayed for dismissal of the OA.
OA 563/2019 45. The applicants have filed rejoinder more or less reiterating the same stand taken in the OA.
6. Arguments advanced by the respective parties having been heard, perused the pleadings and documents filed in support thereof including the citations relied on by the respective parties.
7. Learned counsel for the applicants relying on the decision of Hon'ble Apex Court in the case of State of Punjab versus Rafiq Masih (white washer) in CA No. 11527 of 2014 submitted that since the applicants belong to Group 'C' & 'D', the recovery from them is bad in law. On the other hand learned counsel for the respondents submitted that the said judgment is not applicable to the case of the applicants since it only relates to the cases where the payment has been mistakenly made by the employers. In the present case the order being the outcome of a policy decision is binding upon the employer and employees are concerned.
8. Learned counsel for the respondents submitted that in a similar matter in OA No. 425/2019, Hon'ble CAT Chennai Bench had dismissed the same prayer made by the applicant. Learned counsel for the applicant submitted that the said case was disposed of at admission stage without even taking into consideration the judgements of Hon'ble Apex Court in various cases relating to retrospective effect of recovery since it affects the rights and benefits which have already been earned or acquired under the existing rules as held by Hon'ble Supreme Court in State of MP and ors versus Yogendra Srivastava (CA No. 3156 of 2007) and Chairman, Railway Board and ors versus C. R. Rangadhamaiha & ors (CA No. 4174-82 of 1995).
OA 563/2019 59. Admitted fact of the matters is that the applicants received the benefit of leave encashment as per prevailing policy of the respondent department. The recommendation of 7th Pay Commission was made effective from 01.01.2016 although it was done in the year 2018. The respondent department vide order dated 09.07.2018 decided to discontinue the present practice of leave encashment retrospectively from 01.01.2016 and also decided to recover the amount already claimed by the applicants in the year 2016 & 2017. It is the stand of the learned counsel for the applicants that they having not misrepresented any fact or availed the said benefit due to fault on their part, the recovery is bad in eye of law as held by Hon'ble Apex Court in Rafiq Masih (white washer)versus State of Punjab (AIR 2015 SCC 1267). The point to be decided is whether such recovery can be done from retrospective effect. It is fact that the applicants have enjoyed the benefits of pay commission recommendation w.e.f. 01.01.2016. The said recovery has been carried out by the respondents as a matter of policy decision arrived by the respondent department arising out of recommendation of the 7th Pay Commission. As regards to the applicability of law laid down in Rafiq Masih (supra), it is observed that that there is no straight jacket formula for recovery of dues from the applicant. The amount sought to be recovered is not huge that would cause undue hardship to the applicants. The applicants are also not retired employees (at the time of filing of case) or the period of recovery is more than three year. As far as the decisions relied upon by the applicants counsel i.e. Hon'ble Supreme Court in State of MP and ors versus Yogendra Srivastava and Chairman, Railway Board and ors OA 563/2019 6 versus C. R. Rangadhamaiha & ors, those are not applicable to the facts and circumstances of the present cases since as they deal with fixation of pay and payment of non practicing allowance respectively.
10. This Tribunal is in agreement with the observation made by the CAT, Chennai Bench in OA No. 425/2019 while dealing with similar case. In the said case it was held as under:
"7. From the facts and circumstances of the case pleaded by the applicants, it appears that the decision to modify the leave encashment facility and bring it in line with the prevailing rules of the Government of India had been taken in the context of the implementation of the 7th CPC recommendations w.e.f. 01.01.2016. It is evident from the relevant section of the ESI Act cited above that the conditions of service of the staff of the 2nd respondent corporation shall be in accordance with the rules and orders applicable to the officers and employees of the Central Government drawing corresponding scales of pay. Although, the proviso to the rule enables departure in respect of any matter with the prior approval of the Central Government, it does not mean that the Central Government could not review an approval so granted in the light of subsequent developments.
8. It is not in dispute that the Central Government employees are not provided encashment of earned leaves except for LTC purposes upto a ceiling and at the time of retirement upto 300 days. Admittedly also, the employees of the second respondent had been granted the benefit of the 7th Pay Commission recommendations w.e.f 01.01.2016 similar to Central Government employees. They would have accordingly been paid the arrears of the difference in pay. If the implementation of the Seventh CPC pay scales in respect of the applicants could be given retrospective effect from 01.01.2016, so could the withdrawal of the leave encashment facility which could not be treated on a different footing. No legitimate grievance is made out against the proposal of recovery of the excess payment made against leave encashment as it could not be contended that the employees were entitled to arrears of pay but no liability to refund any amount as part of a package that came into effect w.e.f. 01.01.2016.
9. OA is misconceived and is accordingly dismissed."
11. No documents has been produced from the side of the applicants that the above order of CAT, Chennai Bench has been challenged and set aside by higher forums. In view of the above OA 563/2019 7 discussion and settled position of law, this Tribunal finds that the present OA is squarely covered by the observation in the above order of CAT Chennai Bench and accordingly we do not find any illegality on the part of the respondents for effecting recovery from the applicants warranting interference by this Tribunal.
12. The OA is accordingly dismissed being devoid of merit but in the circumstances without order to cost.
(SWARUP KUMAR MISHRA) MEMBER (J)