Central Administrative Tribunal - Lucknow
Rakesh Dhawan vs Income Tax Department on 6 November, 2024
CAT, Lucknow Bench OA No. 332/00555 of 2022 Rakesh Dhawan Vs. U.O.I.&Ors.
CENTRAL ADMINISTRATIVE TRIBUNAL
LUCKNOW BENCH LUCKNOW
Original Application No.555 of 2022
Dated this 6th day of November, 2024
Hon'ble Mr. Justice Anil Kumar Ojha, Member-Judicial
Hon'ble Mr. Pankaj Kumar, Member-Administrative
Rakesh Dhawan, aged about 61 years, Son of late M. K. Dhawan,
Resident of 3/98, Vishesh Khand ,Gomti Nagar. Lucknow.
.....Applicant
By Advocate: Shri Shireesh Kumar
VERSUS
1. Union of India through the Secretary Ministry of Finance,
Government of India, North Block, New Delhi-110001.
2. The Principal Commissioner of Income Tax (AU)-1, Pratyaksh Kar
Bhawan, 57, Ram Teerth Marg, Lucknow.
3. The Additional Commissioner of Income Tax (ReFAC) (AU)-1(1),
Pratyaksh Kar Bhawan, 57, Ram Teerth Marg, Lucknow.
4. The Joint Commissioner, (ReFAC) (AU)-1(1), Pratyaksh Kar Bhawan,
57, Ram Teerth Margh, Lucknow.
5. The Zonal Accounts Officer, Central Board of Direct Taxes, Kunti
Radha Bhawan, 18, Madan Mohan Malviya Marg, Lucknow.
.....Respondents
By Advocate: Smt. Prayagmati Gupta
ORDER(ORAL)
Per Hon'ble Mr. Pankaj Kumar, Member-Administrative In this case relating to annulment of stepping up of pay with retrospective effect and consequent recovery, the applicant has sought the following reliefs:
"(i) To quash the order 12.09.2022 as contained in Annexure No. A-11 to this Original application and declare the applicant entitled to all the consequential service benefits.Page 1 of 6
CAT, Lucknow Bench OA No. 332/00555 of 2022 Rakesh Dhawan Vs. U.O.I.&Ors.
(ii) To quash column no. 14 of the pension payment order dated 10.06.2022 as contained in Annexure No. A-12 to this original application whereby a sum of Rs. 5, 51,137/- has been recovered from the gratuity of the applicant and forthwith reimburse this amount to the applicant.
(iii) To restore the pay of the applicant at the stage of Rs. 78,800/- the pay drawn by him on the date of his retirement and his post retiral benefits such as pension, commutation of pension, gratuity, leave encashment etc. be re-calculated, revised and released in favour of the applicant on that basis along with its arrears with an interest @ 12% p.a. from the date of accrual to the date of actual payment.
(iv) Any other order which is deemed just and proper in the nature and circumstances of the case be also passed in favour of the applicant in the interest of justice along with the cost of this original application."
2. The facts of the case are that the applicant joined as lower Division Clerk (LDC) on 09.03.1987 under the respondents, was allowed promotions upto the post of Income Tax Officer, and retired from service on 31.05.2022. During his service, vide applications dated 28.08.2006 and 01.09.2006, the applicant requested for pay parity with Sunil Kumar Mishra, an official junior to him, and his pay was stepped up by the respondents with effect from 22.01.2002 vide order dated 08.11.2006. After reviewing his service records at the time of retirement, the respondents issued office memorandum (OM) dated 26.05.2022 stating that the stepping up of pay with effect from 22.01.2002 was not in order and revised the applicant's pay from Rs. 78,800/- to Rs. 74,300/-. The applicant submitted his objections on 30.05.2022 to the respondents. He was required to give consent, vide order dated 21.07.2002, to receive pension and other benefits, to which he objected on 27.07.2022. On 12.09.2022, the respondents issued an order reducing the applicant's pay from Rs. 78,800/- to Rs. 74,300/-. Recovery of Rs. 5, 51,137/- was effected through the applicant's Pension Payment Order (PPO) dated 10.06.2022 sent to him vide order dated 13.07.2022. Aggrieved, the applicant has preferred this OA.
3. The applicant contends that he and Sunil Kumar Mishra belong to the same cadre and were drawing pay in identical scales of pay. The Page 2 of 6 CAT, Lucknow Bench OA No. 332/00555 of 2022 Rakesh Dhawan Vs. U.O.I.&Ors. matter relating to pay anomaly arising due to grant of advance increment on passing of departmental examination in Income Tax Department had been under consideration of the Central Board of Direct Taxes (CBDT) which approved stepping up of the applicant's pay. However, the OM dated 26.05.2022 was issued without verification of facts and without authority. The respondents issued a circular dated 03.06.2022 relying on Central Civil Services (Revised Pay) Rules, 1997, 2008 and 2016 which is assailed by the applicant on the ground that it was issued subsequent to order dated 08.11.2006 and cannot be applied retrospectively. The applicant contends further that in terms of State of Punjab vs Rafiq Masih (Whitewasher) (2015) 4 SCC 334, no recovery could have been effected from him.
4. The respondents state that the Zonal Accounts Officer (ZAO), CBDT, while processing the applicant's pension, raised objections on 26.05.2022 to the order dated 08.11.2006 stepping up pay with effect from 22.01.2002 on the ground that as the pay anomaly occurred purely due to grant of advance increment to the junior provisions of FR 22 cannot be invoked for stepping up of pay. Having found that the applicant was wrongly allowed stepping up of pay, his provisional pension was fixed based on basic pay of Rs. 74,300/- vide Form No. 33 dated 04.07.2022 and the pay revised vide order dated 12.09.2022.
5. We have heard both the parties. During the hearing, learned counsel for the applicant submitted that ends of justice shall be served if the respondents are directed to refund the recovery made in terms of Rafiq Masih (supra) and the applicant allowed to make a fresh representation to the respondents on annulment of stepping up of way which may be decided by them within a reasonable period of time. Learned counsel for the respondents, opposing this contention, highlighted the averments made in the counter affidavit. Page 3 of 6 CAT, Lucknow Bench OA No. 332/00555 of 2022 Rakesh Dhawan Vs. U.O.I.&Ors. 6.1 The subject matter of recoveries has been addressed comprehensively by the Hon'ble Supreme Court in Rafiq Masih (supra). In this case, the Apex Court was considering those cases wherein the private respondents were beneficiaries of a mistake committed by the employer, and on account of the said unintentional mistake, employees were in receipt of monetary benefits, beyond their due. Another essential feature in those cases was that the employees were as innocent as their employers, in the wrongful determination of their inflated emoluments - that is - they had not furnished any incorrect information which led to the mistake of making the higher payment, they had not made any misrepresentation, nor they had committed any fraud. The issue for adjudication was whether all the private respondents (employees), against whom an order of recovery (of the excess amount) has been made, should be exempted in law, from the reimbursement of the same to the employer. The issue was settled by the Apex Court vide judgment dated 18.12.2014 in the following manner:
"12. It is not possible to postulate all situations of hardship, which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to herein above, we may, as a ready reference, summaries the following few situations, wherein recoveries by the employers, would be impermissible in law:
(i) Recovery from employees belonging to Class-III and Class-IV service (or Group 'C' and Group 'D' service).
(ii) Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery.
(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."
(emphasis supplied) Page 4 of 6 CAT, Lucknow Bench OA No. 332/00555 of 2022 Rakesh Dhawan Vs. U.O.I.&Ors. 6.2 In the instant case it is not in dispute that the respondents, after having reviewed the applicant's service records on the eve of his retirement due on 31.05.2022, revised the pay in relation to stepping up of pay effective 22.01.2002 and issued order for recovery vide item no. 14 of PPO (Form No. 33) dated 04.07.2022, covering a period of nearly 20 years, i.e., far in excess of 5 years. Considering these facts and circumstances, the recovery made from the applicant is not permissible in terms of the criteria laid down in Rafiq Masih (supra), in our opinion. 6.3 In regard to the issue of revisiting the matter of annulment of stepping of applicant's pay with retrospective effect, we consider that it would be in the interest of justice if the applicant is allowed to make a fresh representation to be decided by the respondents with an open mind on merits.
7.1 In view of the foregoing, the recovery of Rs. 5, 51,137/- made by the respondents from the gratuity payable to the applicant vide item no. 14 of PPO (Form No. 33) dated 04.07.2022 is quashed and set aside and the respondents are directed to refund the recovered amount along with interest as per the bank rate applicable to the applicant within two months of receipt of certified copy of this order.
7.2 It is further directed that the applicant shall have the liberty to submit a fresh representation to the respondents on the matter of annulment of stepping up of pay within two weeks from the date of receipt of certified copy of this order and the respondents shall decide the same with an open mind within a period of two months from the date its receipt with a reasoned and speaking order to be supplied to the applicant forthwith. It is made clear that we have not made any comment on the merits of pay fixation.
7.3 This OA is disposed of in above terms.
Page 5 of 6 CAT, Lucknow Bench OA No. 332/00555 of 2022 Rakesh Dhawan Vs. U.O.I.&Ors. 7.4 Pending MAs, if any, are also disposed of.
7.5 The Parties shall bear their own costs.
(Pankaj Kumar) (Justice Anil Kumar Ojha)
Member (A) Member (J)
Vidya Ben Digitally signed by
Vidya Ben Waghela
Waghela Date: 2024.11.07
11:51:09 +05'30'
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