Vasudevan Pillai. C (Ex-Hav 2577720-W) vs Union Of India on 29 May, 2025

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Kerala High Court

Vasudevan Pillai. C (Ex-Hav 2577720-W) vs Union Of India on 29 May, 2025

1. The present writ petition is directed against the judgment of the Armed Forces Tribunal, Regional Bench, Kochi in O.A.No.179 of 2020 dated 24.05.2023 whereby the following claims of the petitioner in the O.A. have been rejected:

1. To call for the records leading annexure A5 & annexure A7 in so far as it denies full DCRG and commuted pension in accordance with 7 th CPC and to set aside the same.

2. To direct the respondents to grant full DCRG amount including recovered amount with 8% interest from the date of discharge till the days of payment

3. To direct the responded to sanction and disburse commutative value of pension as admissible in accordance with 7th CPC and disburse the same forthwith.

4. To declare that the recovery initiated against the applicant without notice is illegal and arbitrary and unsustainable

5. Any other appropriate order or direction as this Hon'ble Tribunal deem fit in the interest of justice.

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2. The aforementioned claims were based upon the following pleadings, that the petitioner - applicant was enrolled under Army service as Sepoy on 11.09.1978 and after having completed seventeen(17) years twenty(20) days of qualified service, was discharged from the Army service in 1995 and thereafter, was granted service pension as per the pension payment order dated 01.10.1995. Thereafter, was re-enrolled under the Senior Record Officer, DSC Records, Mill road, Kannur, Kerala, as Sepoy with effect from 23.05.1996. After having rendered twenty(20) years, nine(9) months and nine(9) days of service, was discharged from the Defence Security Court(DSC) on 28.02.2017 and was granted a service pension vide order dated 31.05.2017 Annexure-A1.

3. On 25.10.2018 submitted a representation of having not received the revised pensionary benefit ie., commuted value of pension and Death Cum Retirement Gratuity in accordance with 7th Central Pay Commission's recommendation. The aforementioned request was rejected by 2025:KER:37566 WP(C) NO. 20649 OF 2023 5 the respondents vide order dated 08.11.2018 Annexure-A3 on the ground that the pensioner was required to exercise the option within four(4) months from the date of issuance of Principal Controller of Defence Accounts (PCDA) circular dated 07.09.2017.

4. The applicant once again submitted an option on 21.11.2018 and even a representation to the Adalath was also submitted on 19.06.2019 Annexure-A4, but received the communication from the 2nd respondent dated 27.07.2019 rejecting the claim of the petitioner on the ground of non-receipt of Pension Payment Order (PPO).

5. As per the Gratuity Act, a person having rendered twenty(20) years or more service are entitled to half month of emoluments for completion of every six(6) monthly period of qualifying service subject to a Maximum of thirty three(33) times of emoluments, petitioner was entitled to Rs.4,21,275/- (Rupees four lakhs twenty one thousand two hundred seventy five only) but was paid Rs.3,83,187/- (Rupees three lakhs eighty three thousand one hundred eighty seven 2025:KER:37566 WP(C) NO. 20649 OF 2023 6 only) for 16 ½ months emoluments. But on the premise that the applicant - petitioner was paid excess of the gratuity amounting to Rs.1,48,095/- (Rupees one lakh forty eight thousand ninety five only), recovery proceedings along with the interest at the rate of 16% was initiated. Petitioner preferred an O.A.NO.179 of 2020 with the aforementioned relief which has been dismissed by assigning following reasonings:

"We are of the view that merely on the reason that the respondents again advised the applicant to submit an option certificate, it cannot be said that the respondents were liable to act upon the said form in violation of the statutory restriction under Regulation 154 of the Pension Regulations for the Army, 2008. Therefore, we cannot find fault with the inaction from the part of the respondents on the fresh option form which is said to have been filed by the applicant on 20 December 2019. The respondents are supposed to go by rules only. In the above view, we find that the applicant is not entitled to get commuted value of pension, more particularly after about six years.

10. As regards the second and third points, we find that Regulation 177 of the Pension Regulations for the Army, 2008 is the regulation which 2025:KER:37566 WP(C) NO. 20649 OF 2023 7 governs retirement/death gratuity. Regulation 177 reads as follows:

"177.(a) Retirement/Death gratuity shall be admissible as applicable to regular Army personnel under Chapter VII for actual qualifying service rendered.

                          (b)        Individual    who    has        previous
            service,      the        retirement     gratuity        shall   be
            admissible         for    service     rendered     in    Defence

Security Corps including previous service, if any, subject to maximum of 16% months emoluments."

It is well discernible from the aforesaid regulation that maximum gratuity that be given to the applicant including for his previous service is subject to maximum of 16½ months' emoluments only. If that be so, if the respondents have paid gratuity of 21 months' emoluments, instead of 16/½ recovery of excess amount months' emoluments, the more than 16% months' emoluments is justifiable, and there is no illegality, irregularity or impropriety in the recovery of Rs. 1,48,095/- from the applicant as excess amount paid as gratuity.

In the above analysis, the applicant is not entitled to get any relief in this original Application. The O.A. is devoid of merits and is dismissed accordingly."

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6. Sri. Harish Kumar, learned counsel appearing on behalf of the petitioner submitted that the order Annexure- A7 recovering the gratuity is not sustainable in the eyes of law and without jurisdiction, for, no opportunity of hearing has been granted. In support of the contention relied upon State of Punjab and Other v. Rafiq Masih (White Wahser) [2015 (4) SCC 334]. Petitioner was discharged on 28.2.2017 whereas the 7th Central Pay Commission was adopted by the Defence only in November, 2017.

7. Learned Armed Forces Tribunal had erroneously relied upon Regulation 177 of the Pension Regulations for the Army, 2008, which has no role to play, for, Ext.P4 form of option was given on 21.11.2018 ie., within one(1) year of adoption of 7th Pay Commission. Though this document was not placed on record but with the permission has been placed record, the respondents have not denied receipt of the aforementioned option in the counter affidavit but have relied upon the circular which was referred to in the order 2025:KER:37566 WP(C) NO. 20649 OF 2023 9 Annexure-A3 that it has to be submitted within four(4) months whereas that circular is only applicable to the serving employees. However, the Tribunal much less the authorities have failed to notice Clause (b) of Regulation 154 of Pension Regulation for Army, 2008, Part-II which do not restrict any period for submission of the document, therefore, there is an abdication.

8. On the other hand, learned counsel appearing on behalf of the respondent supported the findings of the learned Tribunal and submitted that Tribunal had no occasion while adjudicating the lis in the absence alleged request submitted on 21.11.2018. Even otherwise, the circular issued and attached as Annexure-R1 with the counter affidavit as well as referred to Annexure-A3 restricts the timeline of four months. Petitioner failed to do so and rightly so O.A. has been dismissed.

9. As far as recovery of gratuity is concerned, it was submitted that there is no timeline for recovery of the gratuity, for, once on receipt of the audit report if found to be in excess, amount can be recovered without compliance of the principles of 2025:KER:37566 WP(C) NO. 20649 OF 2023 10 natural justice. Therefore the ratio decidendi culled out in Rafiq Masih (supra) would not be applicable.

10. We have heard the learned counsel for the parties and appraised the paper book.

11. Regulation 154 of Pension Regulation for the Army, 2008, reads as under:

154. (a) Officer retired on attaining the prescribed age of retirement and Personnel Below Officer Rank who are discharged on completion of tenure or age of retirement or of service limit and desires payment of commuted value of pension being authorised at the time of issue of the pension payment order, and desires payment of commuted value of pension being authorized at the time of issue of the pension payment order may express his wish for commutation of pension before the date of retirement/discharge so as to reach the application to the Principal Controller of Defence Accounts (Pensions) not later than three months before the date of release/retirement/discharge. In such case the service personnel has no option to withdraw the request for commutation of pension. In such case the service personnel has no option to withdraw the 2025:KER:37566 WP(C) NO. 20649 OF 2023 11 request for commutation of pension.

Provided that in the case of an individual who applies for commutation of pension before his retirement/discharge, the Government shall have no liability for the payment of commuted value of pension if the individual dies before his retirement/discharge, or forfeits claim to pension before such retirement/discharge.

(b) The individual can submit application for commutation of pension under these Regulations any time after the date of release/retirement/discharge or invalidment from service."

12. It is evident that the 7th Pay Revision was adopted by the Defence Department only in November, 2017 and the option was exercised in 21.11.2018. The circular restricting the submission of documents for four(4) months was basically for the serving officials whereas the case of the petitioner being already discharged, sub-rule(b) of Regulation 154 of Pension Regulations for the Army, 2008, would be applicable, without fixing of timeline for submission of documents. This aspect has totally been ignored by the learned Tribunal much less emphasis has been laid on Regulation 177 of 2025:KER:37566 WP(C) NO. 20649 OF 2023 12 the Pension Regulations for the Army, 2008, which has no applicability in the instant case. Thus the request of the petitioner with regard to granting the benefit of 7 th Pay Commission as sought was liable to be granted and it is so ordered. As far as the recovery of gratuity, we are in agreement with the arguments of Sri.Harish Kumar in view of the ratio decidendi culled out in Rafiq Masih (supra) in paragraph No.12, the same reads as under:

"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, summarise 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.

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(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."

13. The order Annexure-A7 dated 23.10.2019 reveals that no opportunity of hearing was granted before effecting the recovery of Rs.1,48,095/- (Rupees one lakh forty eight thousand ninety five only) with the interest at the rate of 16%. Accordingly, Annexure-A5 and Annexure-A7 are quashed. Order of the Tribunal set aside.

Writ petition is allowed. Applicant - petitioner is entitled to the commutation of the pension by granting the benefit of 7 th Pay Commission which came into force in the Army only on 2025:KER:37566 WP(C) NO. 20649 OF 2023 14 November, 2017, as he had submitted the option only on 21.11.2018. The recovery of gratuity is also held to be illegal and ordered to be adjusted or repaid to the petitioner with the same amount of interest which was charged. Let this exercise be undertaken within a period of two(2) months from the date of receipt of certified copy of this judgment.

Sd/-

AMIT RAWAL JUDGE Sd/-

MURALEE KRISHNA S. JUDGE nak 2025:KER:37566 WP(C) NO. 20649 OF 2023 15 APPENDIX OF WP(C) 20649/2023 PETITIONER ANNEXURES Annexure A5 A TRUE COPY OF THE ORDER FROM THE 2ND RESPONDENT DATED 27/07/2019 BY THE 2ND RESPONDENT'S OFFICE ALONG WITH THE COPY OF THE CORRIGENDUM PPO NO: 194201701118 DATED 25/09/2018.

Annexure A7 A TRUE COPY OF THE ORDER DATED 23/10/2019 ISSUED BY THE SECOND RESPONDENT.

Annexure A1 A TRUE COPY OF THE PPO NO S/27586/17 DATED 31/5/2017 ISSUED BY THE 2ND RESPONDENT. Annexure A2 A TRUE COPY OF THE REPRESENTATION DATED 25/10/18 SUBMITTED BY THE APPLICANT. Annexure A3 A TRUE COPY OF THE ORDER DATED 08/11/18 ISSUED BY THE 2ND RESPONDENT.

Annexure A4 THE APPLICANT GAVE A REPRESENTATION TO ADALATH ON 19/06/2019 BY THE APPLICANT. Annexure A6 A TRUE COPY OF THE REPRESENTATION DATED 17/10/2019 SUBMITTED BY THE APPLICANT. Exhibit P1 A TRUE COPY OF THE ORIGINAL APPLICATION O.A. NO. 179/2020 DATED 1/6/2020 Exhibit P2 A TRUE COPY OF THE COUNTER STATEMENT DATED 11/04/2023 Exhibit P3 A TRUE COPY OF THE ORDER DATED 24/05/2023 IN O.A.NO.179/2020 PASSED BY THE ARMED FORCES TRIBUNAL REGIONAL BENCH, KOCHI Exhibit P4 A TRUE COPY OF THE OPTION CERTIFICATE DATED 21/11/2018 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT Exhibit P5 A TRUE COPY OF THE OPTION CERTIFICATE DATED 4/11/2019 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT RESPONDENT EXHIBITS Exhibit R1 The true copy of the PCDA Circular No 584 dated 07 September 2017 is produced.

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