Central Administrative Tribunal - Mumbai
Dated This Thursday vs Union Of India Through on 16 August, 2012
1 O.A. No. 515/2010 CENTRAL ADMINISTRATIVE TRIBUNAL BOMBAY BENCH, MUMBAI ORIGINAL APPLICATION NO.:- 515 of 2010 Dated this Thursday, the 16th day of August, 2012 CORAM:- HON'BLE SMT. CHAMELI MAJUMDAR, MEMBER(J) Kulbhushan R. Sood, B-9, 1st Floor, Rachana Garden, Domodar Colony, Bhangarwadi, Lonavala, Pune, Maharashtra. ... Applicant (By Advocate Shri C.M. Jha) Versus 1. Union of India through its General Manager, Central Railway, Head Quarter Office CST, Mumbai. 2. Divisional Railway Manager, Central Railway, Head Quarter Office CST, Mumbai. 3. Secretary, Railway Board, Railway Bhavan, New Delhi. ... Respondents (By Advocate Shri S.C. Dhawan) O R D E R Per: Smt. Chameli Majumdar, Member(J)
The Applicant is a retired employee of Railway and is aggrieved by the letter No.BB/P/Loco/SETT/KBS dated 13.07.2009 issued by the Respondent No.2 being the Divisional Railway Manager, Central Railway, CST, Mumbai whereby the Respondents recovered mileage benefits amounting to Rs.26,386/-from his settlement dues under 6th Pay Commission after about two years of his retirement considering him as non-running staff.
The Applicant has also challenged the Railway Board 2 O.A. No. 515/2010 letter dated 14.01.2004 being contrary to various orders of Railway Board.
2. Briefly stated the facts of the case is that the Applicant, while working as Driver 'A' category in Grade Rs.6000-9800, was declared medically unfit for 'A-1' category by the Senior DMO, Kalyan vide certificate dated 17.09.2004. At the time of such medical decategorization, the Applicant was working in the post of Driver 'A' which belongs to 'running category'. The Applicant, thereafter, was posted on a supernummary post as a Senior Crew Controller vide office order dated 02.09.2005. Alongwith the Applicant, eight others in the said order were declared medically decategorised and posted as Senior CC/TLC/LPC in terms of Railway Board letter dated 09.01.1998. It is also mentioned in the said order that they were eligible for payment of allowances in lieu of kilometerage of 120 kms. per day and they were not eligible for TA/DA and special pay.
3. It appears from Exhibit A-6 that after reviewing the cases of medically decategorised Drivers drafted for the post of Power/Crew Controller, regarding admissible benefits, the Competent Authority decided that the option might be called from the affected employees whether they were willing to continue in the current post with revised pay or to be dealt afresh as medically decategorised employees.
3 O.A. No. 515/20104. The Applicant exercised his option vide letter dated 04.12.2006 and conveyed to continue in the current post with revised pay and requested to allow him to retire with all running staff benefits.
5. The Applicant retired on 30.12.2007 and he was paid all his retirement benefits considering him as a running staff. Thereafter, the Respondents made recovery from his settlement dues as aforesaid without any show cause notice being issued to him prior to such recovery.
6. According to the Applicant, after such recovery, the Respondents issued the show-cause notice dated 13.07.2009 and asked the Applicant an explanation as to why the said amount should not be recovered from the settlement dues (VI CPC) as Government dues which was paid wrongly to the Applicant treating him as running staff which is contrary to the Railway Board letter dated 14.01.2004. The Applicant has impugned the said letter in this original application.
7. I have heard Shri C.M. Jha, learned counsel appearing for the Applicant and Shri S.C. Dhawan, learned counsel appearing for the Respondents and perused the documents including written notes of submissions filed on behalf of the parties. The learned counsel for the Applicant relied on the following judgments viz. i) Sahib Ram v/s The State of Haryana & Ors., 1994 (5) SLR 753 SC; ii) State of Bihar 4 O.A. No. 515/2010 & Ors. v/s Pandey Jagdishwar Prasad, 2009, 1 SCC (L&S) 589; iii) Yogeshwar Prasad & Ors. v/s NIO Education Planning & Admn. & Ors., 2011, 2 SCC (L&S) 533; iv) Jai Gopal Sharma v/s Punjab State Electricity Board & Ors., 2006 SCC (L&S) 575 and v) Shyam Babu Verma & Ors. v/s Union of India & Ors., 1994, 2 SCC 521 and the learned counsel for the Respondents relied on the following judgment i.e. Union of India & Ors. v/s Sujatha Vedachalam & another, 2000 SCC (L&S) 882.
8. R.B.E. No.9/98, being annexed as Exhibit A-5 to this Original Application, is the scheme for filling up the post of loco-running super vizer/Inspectors and Power Controllers/Crew Controllers. Clause (g) of paragraph 2 is relevant for adjudication of the present dispute in controversy. Clause (g) of para 2:
"(g) Medically decategorised drivers will be eligible to be drafted to perform the duties of Power/Crew Controllers. In their case, the tenure rule of three years under para (f) above will not be applicable. However, if their performance is not found satisfactory, in addition to action under D&AR, as they cannot go back to running duties, they will be considered for alternative jobs following the rules applicable to medically decategorised employees."
9. Railway Board letter dated 14.01.2004 was issued with reference to the instructions contended in paragraph 2(g) of Railway Board letter dated 09.01.1998. The Railway Board letter dated 14.01.2004 says that medically decategorised Drivers drafted to 5 O.A. No. 515/2010 perform duties of post of Power/Crew Controller ceased to be running staff and therefore, are not eligible to any benefit specifically admissible to running staff.
10. The Respondents issued office order No.26/2005 dated 02.09.2005 whereby the Applicant was posted as Senior Crew Controller being declared medically decategorised and he was declared eligible for payment of running staff allowance. Admittedly, this office order was issued after the Railway Board letter dated 14.01.2004 was issued. The Applicant was given all the benefits on his superannuation on 30.12.2007 as a running staff. After about two years of his retirement, the Respondents recovered Rs.26,386. The learned counsel for the Applicant has referred to paras 1305, 1306 & 1307 of Indian Railway Establishment Manual. Para 1307 states as follows:
"In order to determine the same scale of pay for the purpose of absorbing a disabled/ medically decategorised running staff in the alternative employment, an amount equal to such percentage of pay in lieu of running allowance as may be in force may be added to the minimum and maximum of the scale of Pay of the running staff. If the scale of Pay so arrived at is not identical with the scale of Pay already existing, the same may be replaced by the equivalent existing scale of pay."
11. The learned counsel for the Applicant submits that the Railway Board letter dated 14.01.2004 cannot override the terms already declared in the Railway Board letter dated 09.01.1998 which was issued after consultation and agreement of All India Railway Men's 6 O.A. No. 515/2010 Federation (AIRF) and National Federation Of Indian Railway Men (NFIR). The said letter got the approval of President of India.
12. The learned counsel for the Respondents submits that the Railway Board letter dated 14.01.2004 was a clarification of Railway Board letter dated 09.01.1998.
13. I am not inclined to go into the question of legality and validity of the Railway Board letter dated 14.01.2004. The said Railway Board letter has been acted upon and has not been set aside by any Competent Court of Law.
14. In the case of Registrar, Co-operative Societies, Haryana & ors. v/s Israil Khan & ors, 2010 (3) SLR 359, the Hon'ble Supreme Court summarised the stand taken by the Apex Court in various judgments including Sahib Ram v/s State of Haryana & others (supra) and Shyam Babu Verma & others v/s Union of India & others (supra) and held that there is no principle that the excess payment should not be recovered from the employee but the Hon'ble Supreme Court used its judicial discretion to refuse recovery of excess payment of emoluments/ allowances from employees under following conditions:
a] The excess payment was not made on account of any misrepresentation or fraud on the part of the employee. b] Such excess payment was made by the employer by 7 O.A. No. 515/2010 applying a wrong principle for calculating the pay/allowance or on the basis of particular interpretation of rule/order which is subsequently found to be erroneous.
15. The Hon'ble Supreme Court in the above mentioned case Registrar, Co-operative Societies, Haryana & ors. v/s Israil Khan & ors (supra) has held "8. In Col. B.J. Akkara (Retd.) v. Govt. of India this Court explained the reason for extending such concession thus: (SCC pp. 728 29, para 28) '28. Such relief, restraining back recovery of excess payment, is granted by courts not because of any right in the employees, but in equity, in exercise of judicial discretion to relieve the employees from the hardship that will be caused if recovery is implemented. A government servant, particularly one in the lower rungs of service would spend whatever emoluments he receives for the upkeep of his family. If he receives an excess payment for a long period, he would spend it, genuinely believing that he is entitled to it. As any subsequent action to recover the excess payment will cause undue hardship to him, relief is granted in that behalf. But where the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or where the error is detected or corrected within a short time of wrong payment, courts will not grant relief against recovery. The matter being in the realm of judicial discretion, courts may on the facts and circumstances of any particular case refuse to grant such relief against recovery.'
9. What is important is, recovery of excess payments from employees is refused only where the excess payment is made by the employer by applying a wrong method or principle for calculating the pay/allowance, or on a particular interpretation of the applicable rules which is subsequently found to be erroneous. But where the excess payment is 8 O.A. No. 515/2010 made as a result of any misrepresentation, fraud or collusion, courts will not use their discretion to deny the right to recover the excess payment."
16. The Hon'ble Supreme Court also in the case of Sayed Abdul Qadir & ors. v/s State of Bihar & ors., 2009, 1 SCC (L&S) 744 held "59. Undoubtedly, the excess amount that has been paid to the appellant teachers was not because of any misrepresentation or fraud on their part and the appellants also had no knowledge that the amount that was being paid to them was more than what they were entitled to. It would not be out of place to mention here that the Finance Department had, in its counter-affidavit, admitted that it was a bona fide mistake on their part. The excess payment made was the result of wrong interpretation of the Rule that was applicable to them, for which the appellants cannot be held responsible. Rather, the whole confusion was because of inaction, negligence and carelessness of the officials concerned of the Government of Bihar. Learned counsel appearing on behalf of the appellant teachers submitted that majority of the beneficiaries have either retired or are on the verge of it. Keeping in view the peculiar facts and circumstances of the case at hand and to avoid any hardship to the appellant teachers, we are of the view that no recovery of the amount that has been paid in excess to the appellant teachers should be made.
60. Learned counsel also submitted that prior to the interim order passed by this Court on 7-4-2003 in the special leave petitions, whereby the order of recovery passed by the Division Bench of the High Court was stayed, some installments/amount had already been recovered from some of the teachers. Since we have directed that no recovery of the excess amount be made from the appellant teachers and in order to maintain parity, it would be in the fitness of things that the amount that has been recovered from the teachers should be refunded to them.
61. In the result, the appeals are allowed in 9 O.A. No. 515/2010 part; the impugned judgment so far as it relates to the direction given for recovery of the amount that has been paid in excess to the appellant teachers is set aside and that part of the impugned judgment whereby it has been held by the Division Bench that the amended provisions of FR 22-C would apply to the appellant teachers is upheld. We direct that no recovery of the excess amount, that has been paid to the teachers of secondary schools, be made, irrespective of the fact whether they have moved this Court or not. We also direct that the amount that has been recovered from some of the teachers, after the impugned judgment was passed by the High Court, irrespective of the fact whether they have moved this Court or not, be refunded to them within three months from the date of receipt of copy of this judgment."
17. The Hon'ble Apex Court in number of cases exercised its equity jurisdiction and held that after superannuation excess or wrong payment may not be recovered from the retired employee because such recovery will cause hardship to the retired employee who is not at fault.
18. In the instant case, the Respondents sought to argue that this recovery has been made from the settlement dues granted under the recommendations of the 6th Pay Commission. Therefore, there is no question of causing any hardship to the Applicant due to such recovery. The Respondents referred to the judgment of Union of India & others v/s Sujatha Vedachalam & another (supra). The learned counsel for the Respondents referred to para 1014 of Indian Railway Establishment Manual which provides:
"1014. An erroneous payment may be either due 10 O.A. No. 515/2010 to a wrong interpretation of financial rules or to oversight. The following procedure should be observed in regard to either:
(a) when a wrong interpretation of a financial rule has been followed in an Accounts Office, the new interpretation should be given effect to from the date which the competent authority may decide when giving the correct interpretation. If no date is specifically fixed, the correct interpretation should be given effect to from the date it is stated by the competent authority; and
(b) when erroneous payments have been passed through oversight in the Accounts Office, payments made less than twelve months ago should be recovered and orders of competent authority obtained with regard to previous overpayments."
19. In the instant case payment towards running allowance was made vide office order dated 02.09.2005 and it was continued to be made till the date of the retirement of the Applicant. Retiral dues of the Applicant was also calculated taking into account the running allowance. Clause (b) of para 1014 of IREM relied by the Respondents provides that when erroneous payment have been passed through oversight in the Accounts Office, payments made less than twelve months ago should be recovered and orders of competent authority obtained with regard to previous overpayment.
Assuming correct interpretation of Railway Board letter dated 09.01.1998 was given with regard to payment of running allowance payable to medically decategorised employees vide Railway Board letter dated 14.01.2004, even then office order dated 02.09.2005 by which the 11 O.A. No. 515/2010 Applicant was posted as Senior Crew Controller, clearly mentioned that the Applicant will be eligible for payment of allowances in lieu of 120 kms. per day. Therefore, it would not be open to the authorities to recover such overpayment towards running allowance after almost 4 years. The Railway Board order para 1014 only contemplates recovery of excess payment made less than 12 months ago, even it is assumed that such payment was passed erroneously through oversight in the Accounts Office.
20. Admittedly in the instant case the excess payment was made not as a result of any misrepresentation or fraud on the part of the employee concerned. Recovery has been sought to be made without issuing show cause notice to the affected retired employee. The error, if any, was detected after 4 years and that too after the Applicant retired from service. Therefore, the Applicant being a retired employee will be definitely exposed to hardship in as much as the Pay Commission recommendations for upward revision or enhancement of retiral benefits are made only to mitigate the hardship of the retired employees in view of steep price rise of the bare necessities of daily life.
21. Having regard to the discussion made above, in my view, the impugned letter is not sustainable and accordingly, the same is quashed and set aside. The 12 O.A. No. 515/2010 Respondents are directed to refund the recovered amount to the Applicant within six weeks from the date of receipt of a copy of this order.
22. Original Application stands allowed in terms of above directions. No order as to costs. (Smt. Chameli Majumdar) Member(J) ssn.